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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
September 14, 1999
Date of Report (Date of earliest event reported)
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LOUISIANA-PACIFIC CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware 1-7107 93-0609074
(State of incorporation) (Commission file number) (IRS employer
identification number)
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111 S.W. Fifth Avenue, Portland, Oregon 97204
(Address of principal executive offices, including zip code)
(503) 221-0800
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
On September 14, 1999 (the "Effective Date"), Louisiana-Pacific
Acquisition Inc. (the "Offeror"), a wholly owned subsidiary of Louisiana-Pacific
Corporation ("Louisiana-Pacific"), completed a tender offer (the "Offer") for
all outstanding shares ("Shares") of Le Groupe Forex Inc., a Quebec company
("Forex"), at Cdn. $33.00 per Share (the "Offer Consideration"). The Offeror
acquired approximately 95.9% of the outstanding Shares in the Offer.
Louisiana-Pacific intends to take appropriate steps to acquire all untendered
Shares at the same price as promptly as practicable. The Offer was made pursuant
to a Circular Bid, a copy of which (excluding certain schedules thereto) is
filed as Exhibit 99.1 to this report and incorporated herein by this reference.
Louisiana-Pacific agreed to make the Offer, directly or through a wholly
owned subsidiary, pursuant to an amended and restated support agreement, dated
August 12, 1999 (the "Support Agreement"), between Louisiana- Pacific and Forex.
Concurrently with entering into the Support Agreement, Louisiana-Pacific entered
into an amended and restated lock-up agreement (the "Lock-Up Agreement") with
certain persons (collectively, the "Shareholder Group") who owned approximately
42.4% of the Shares outstanding (on a fully diluted basis). Pursuant to the
Lock-Up Agreement, the members of the Shareholder Group agreed, among other
things, to tender their Shares pursuant to the Offer. The Support Agreement and
the Lock-up Agreement are filed as Exhibits 2.1 and 2.2, respectively, to this
report and incorporated herein by this reference.
The Offer Consideration was determined through arm's-length negotiations
between representatives of Louisiana-Pacific and representatives of Forex and
the Shareholder Group. The aggregate purchase price for all Shares is
approximately Cdn. $760,000,000 (U.S. $517,000,000 on the basis of the exchange
rate in effect on the Effective Date). With respect to Shares purchased in the
Offer, approximately Cdn. $524,000,000 was paid on the Effective Date and
approximately Cdn. $198,000,000 is payable in four equal annual installments,
together with interest thereon. The portion, if any, of the purchase price for
untendered Shares that will be payable on a deferred basis had not been
determined as of the date of this report.
Funding of the portion of the Offer Consideration paid on the Effective
Date was provided from a combination of Louisiana-Pacific's existing cash
balances and borrowings under a new $300 million loan facility with Bank of
America, N.A. and a new $250 million loan facility with Centric Capital
Corporation. The agreements under which these loan facilities were made
available are filed as Exhibits 99.2 and 99.3, respectively, to this report and
incorporated herein by this reference.
Forex is one of the largest North American producers of oriented strand
board. Forex's tangible assets include land, buildings and improvements,
machinery and equipment and furniture and fixtures. Louisiana-Pacific presently
intends, in general, to continue using such assets in the conduct of
Louisiana-Pacific's oriented strand board business.
Item 5. Other Events.
On August 24, 1999, Louisiana-Pacific issued a press release announcing
its agreement to purchase Evans Forest Products, Ltd. A copy of the press
release is filed as Exhibit 99.4 to this report and is incorporated herein by
this reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired. The financial statements
and accountants' report required to be filed by Item 7(a) of Form
8-K will be filed by an amendment to this report no later than
November 28, 1999.
(b) Pro Forma Financial Information. The pro forma financial information
required to be filed by Item 7(b) of Form 8-K will be filed by an
amendment to this report no later than November 28, 1999.
(c) The following exhibits are filed herewith:
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2.1 Amended and Restated Support Agreement, dated August 12, 1999, between
Louisiana-Pacific and Forex (incorporated herein by reference to Exhibit
2.1 to the Current Report on Form 8-K filed by Louisiana- Pacific on
August 18, 1999).
2.2 Amended and Restated Lock-up Agreement, dated August 12, 1999, among
Louisiana-Pacific and each of the parties identified in Schedule B thereof
(incorporated herein by reference to Exhibit 2.2 to the Current Report on
Form 8-K filed by Louisiana-Pacific on August 18, 1999).
99.1 Circular Bid, dated August 16, 1999, of the Offeror (incorporated herein
by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by
Louisiana-Pacific on August 18, 1999).
99.2 Letter Agreement, dated September 8, 1999, between the Offeror and Bank of
America, N.A., together with related Guaranty Agreement by
Louisiana-Pacific in favor of Bank of America, N.A.
99.3 Loan Agreement, dated September 10, 1999, between the Offeror and Centric
Capital Corporation, together with related Guaranty of Louisiana-Pacific
in favor of Centric Capital Corporation.
99.4 Press release, dated August 24, 1999, issued by Louisiana-Pacific.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LOUISIANA-PACIFIC CORPORATION
By: /s/ Gary C. Wilkerson
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Gary C. Wilkerson
Vice President and General Counsel
Date: September 29, 1999
- 3 -
Exhibit 99.2
September 8, 1999
Louisiana-Pacific Acquisition Inc.
c/Louisiana-Pacific Corporation
111 SW 5th Avenue, Suite 4200
Portland, OR 97204
Attn: Mark Tobin
Re: Credit Facility
Ladies/Gentlemen:
BANK OF AMERICA, N.A. ("Lender") is pleased to make available to
Louisiana-Pacific Acquisition Inc., a Quebec company ("Borrower") a credit
facility to help finance the acquisition of Le Groupe Forex, Inc. ("Target") on
the terms and subject to the conditions set forth below. Terms not defined
herein have the meanings assigned to them in Exhibit A hereto.
1. The Facility.
(a) The Commitment. Subject to the terms and conditions set forth
herein, on the Closing Date, Lender agrees to make a loan (the
"Loan") to Borrower in a principal amount not exceeding $300,000,000
(the "Commitment"). Any amount of such Commitment that is not
borrowed on the Closing Date shall terminate on the Closing Date.
Any part of the Loan that is repaid may not be reborrowed.
(b) The Loan, Conversions, Continuations. The Loan shall be made and
maintained in the form of borrowings of Base Rate Loans and Offshore
Rate Loans. Borrower may request that the Loan be (i) made as or
converted to a Base Rate Loan by irrevocable notice to be received
by Lender not later than 9:00 a.m. on the Business Day of the
borrowing or conversion, or (ii) made or continued as, or converted
to, an Offshore Rate Loan by irrevocable notice to be received by
Lender not later than 9:00 a.m. one Business Day prior to the
Business Day of the borrowing, continuation or conversion. If
Borrower fails to give a notice of conversion or continuation prior
to the end of any Interest Period in respect of any Offshore Rate
Loan, Borrower shall be deemed to have requested that such Loan be
converted to a Base Rate Loan on the last day of the applicable
Interest Period. Requests for the initial borrowing and for any
continuations or conversions thereafter shall be made pursuant to
forms substantially in the forms of notices for borrowings,
continuations and conversions attached to the Credit Agreement.
Each Base Rate or Offshore Rate Loan shall be in a minimum principal
amount of $5,000,000 or a multiple of $1,000,000 in excess thereof.
There shall not be more than five different Interest Periods in
effect at any time.
(c) Interest. At the option of Borrower, Loans shall bear interest at a
rate per annum equal to (i) the Offshore Rate plus 0.575%; or (ii)
the Base Rate. Interest on Base Rate Loans when the Base Rate is
determined by Lender's "prime rate" shall be calculated on the basis
of a year of 365 or 366 days and actual days elapsed. All other
interest hereunder shall be calculated on the basis of a year of 360
days and actual days elapsed.
Borrower promises to pay interest (i) for each Offshore Rate Loan,
(A) on the last day of the applicable Interest Period, and, if the
Interest Period is longer than three months, on the respective dates
that fall every three months after the beginning of the Interest
Period, and (B) on the date of any conversion of such Loan to a Base
Rate Loan; (ii) for Base Rate Loans, on the last Business Day of
each calendar quarter; and (iii) for all Loans, on the Maturity
Date. If the time for any payment is extended by operation of law or
otherwise, interest shall continue to accrue for such extended
period.
After the date any principal amount of any Loan is due and payable
(whether on the Maturity Date, upon acceleration or otherwise), or
after the date any other monetary obligation hereunder shall have
become due and payable, Borrower shall pay, but only to the extent
permitted by law, interest (after as well as before judgment) on any
such amounts as shall remain unpaid at a rate per annum equal to the
Base Rate plus 1%. Such interest shall be payable on demand.
In no case shall interest hereunder exceed the amount that Lender
may charge or collect under applicable law.
(d) Evidence of Loans. The Loans and all payments thereon shall be
evidenced by Lender's loan accounts and records; provided, however,
the Loans shall be evidenced by a promissory note in the form of
Exhibit B hereto, instead of or in addition to such loan accounts
and records. Such loan accounts, records and promissory note shall
be conclusive absent manifest error of the amount of the Loans and
payments thereon. Any failure to record any Loan or payment thereon
or any error in doing so shall not limit or otherwise affect the
obligation of Borrower to pay any amount owing with respect to the
Loans.
(e) Upfront Fee. Borrower shall pay to Lender an upfront fee in the
amount of $100,000 on the Closing Date.
(f) Repayment. Borrower promises to pay all Loans then outstanding on
the Maturity Date.
Borrower shall make all payments required hereunder not later than
11:00 a.m. on the date of payment in same day funds in United States
Dollars at the office of Lender located at 1850 Gateway Blvd.,
Concord CA, 94520, ABA# 121 000 358, Incoming Money Transfer Account
No. 12331-83980, Ref: Louisiana-Pacific Acquisition Inc., or such
other address as Lender may from time to time designate in writing.
All payments by Borrower to Lender hereunder shall be made to Lender
in full without set-off or counterclaim and free and clear of and
exempt from, and without deduction or withholding for or on account
of, any present or future taxes, levies, imposts, duties or charges
of whatsoever nature imposed by any government or any political
subdivision or taxing authority thereof. Borrower shall reimburse
Lender for any taxes imposed on or withheld from such payments
(other than taxes imposed on Lender's income, and franchise taxes
imposed on Lender, by the jurisdiction under the laws of which
Lender is organized or any political subdivision thereof).
(g) Mandatory Prepayments. Within 30 days after receipt by
Louisiana-Pacific, Borrower, Target or any successor to Target
(provided that Target or such successor is a subsidiary of Borrower
or Target at the time of such receipt), Borrower shall prepay the
outstanding principal of the Loan in an amount equal to 100% of the
proceeds (net of underwriting discounts and commissions or placement
fees, investment banking fees, legal fees, accounting fees, and
other customary fees, commissions, expenses and costs associated
therewith payable, in each case, to Persons not affiliates of any
such Person) of any sale for cash of debt securities by any such
Person or the incurrence by any such Person of indebtedness for
borrowed money of a term of longer than one year. Any such
prepayment shall be applied to prepay any Loans constituting Base
Rate Loans or Offshore Rate Loans, as selected by the Borrower;
provided that Borrower pays all Breakage Costs (if any) associated
with such prepayment on the date of such prepayment. Prepayments of
Offshore Rate Loans must be accompanied by a payment of interest on
the amount so prepaid.
(h) Voluntary Prepayments. Borrower may, upon three Business Days'
notice, in the case of Offshore Rate Loans, and upon same-day notice
in the case of Base Rate Loans, prepay Loans on any Business Day;
provided that Borrower pays all Breakage Costs (if any) associated
with such prepayment on the date of such prepayment. Prepayments of
Offshore Rate Loans must be accompanied by a payment of interest on
the amount so prepaid. Prepayments must be in a principal amount of
at least $5,000,000 or a whole multiple thereof.
2. (a) Conditions Precedent to the Loan. As a condition precedent to the
Loan hereunder, Lender must receive the following from Borrower in
form satisfactory to Lender:
(i) (a) the enclosed duplicate of this Agreement duly executed and
delivered on behalf of Borrower and (b) the Guaranty Agreement
duly executed and delivered on behalf of Louisiana-Pacific;
(ii) a certified borrowing resolution or other evidence of (a)
Borrower's authority to borrow and (b) Louisiana-Pacific's
authority to perform the undertaking set forth in the Guaranty
Agreement;
(iii) a certificate of incumbency of Borrower and Louisiana-Pacific;
(iv) an opinion of counsel to (a) Borrower and (b)
Louisiana-Pacific, in each case covering such matters as shall
be requested by Lender;
(v) a promissory note as contemplated in Paragraph 1(d) above;
(vi) the upfront fee contemplated in Paragraph 1(e) above; and
(vii) such other documents and certificates as Lender may reasonably
request.
(b) Conditions to the Loan and Certain Continuations and Conversions. As
a condition precedent to the Loan:
(i) Borrower must furnish Lender with a notice of borrowing;
(ii) each representation and warranty set forth in Paragraph 3
below shall be true and correct in all material respects as if
made on the date of such borrowing; and
(iii) no Default or Event of Default shall have occurred and be
continuing on the date of such borrowing.
As a condition precedent to the conversion or continuation of the Loan
into or as an Offshore Rate Loan:
(i) Borrower must furnish Lender with a notice of conversion or
continuation; and
(ii) no Default or Event of Default shall have occurred and be
continuing on the date of such conversion or continuation.
Each notice of borrowing and notice of conversion or continuation
shall be deemed a representation and warranty by Borrower that the
applicable conditions referred to above have been met.
3. Representations and Warranties. Borrower represents and warrants that:
(a) Existence and Qualification; Power; Compliance with Laws. It is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has the
power and authority and the legal right to own and operate its
properties, to lease the properties it operates and to conduct its
business, is duly qualified and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such
qualification, and is in compliance with all laws except to the
extent that noncompliance does not have a Material Adverse Effect.
(b) Power; Authorization; Enforceable Obligations. The execution,
delivery and performance of this Agreement and the other Loan
Documents by Borrower are within its powers and have been duly
authorized by all necessary action, and this Agreement is and the
other Loan Documents, when executed, will be legal, valid and
binding obligations of Borrower, enforceable in accordance with
their respective terms. The execution, delivery and performance of
this Agreement and the other Loan Documents are not in contravention
of law or of the terms of Borrower's organic documents and will not
result in the breach of or constitute a default under, or result in
the creation of a lien under any indenture, agreement or undertaking
to which Borrower is a party or by which it or its property may be
bound or affected.
(c) No Default. No Default or Event of Default has occurred and is
continuing.
(d) Use of Proceeds. The proceeds of the Loan will be used solely to
help finance the acquisition of Target and the stock of Target does
not constitute "margin stock" within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System.
(e) Year 2000. Louisiana-Pacific has undertaken a project to evaluate
the extent to which the business or operations of Louisiana-Pacific
and its subsidiaries will be affected by the Year 2000 Problem and
to take corrective action with respect thereto (the "Year 2000
Project"). The description of the Year 2000 Project set forth in
Louisiana-Pacific's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999, including any statements as to the status, cost
or results thereof or the anticipated effects of the Year 2000
Problem on Louisiana-Pacific and its subsidiaries, is accurate in
all material respects. The "Year 2000 Problem" as used herein means
any significant risk that computer hardware or software used by
Louisiana-Pacific and its subsidiaries in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or
other utilization of data or in the operation of mechanical or
electrical systems of any kind will not, when presented with dates
or time periods occurring after December 31, 1999, function at least
as effectively as when presented with dates or time periods
occurring prior to January 1, 2000.
(f) Full Disclosure. No written statement made by Borrower to Lender in
connection with this Agreement, or in connection with the Loan,
contains any
untrue statement of a material fact or omits a material fact
necessary to make the statement made not misleading.
(g) Credit Agreement Representations and Warranties. All representations
and warranties set forth in Article V of the Credit Agreement are
true and correct.
4. Covenants. So long as the Commitment shall remain outstanding, or the
principal of and interest on the Loan or any other amount payable
hereunder or under any other Loan Document remains unpaid or unsatisfied,
Borrower shall maintain, at all times, Net Worth of greater than $0.00.
5. Events of Default. The following are "Events of Default:"
(a) Borrower fails to pay any principal of the Loan as and on the date
when due; or
(b) Borrower fails to pay any interest on any Loan, or any fees due
hereunder, or any portion thereof, within five business days after
the date when due; or Borrower fails to pay any other fees or amount
payable to Lender under any Loan Document, or any portion thereof,
within five days after the date due; or
(c) Any representation or warranty in any Loan Document or in any
certificate, agreement, instrument or other document made or
delivered by Borrower or Louisiana-Pacific pursuant to or in
connection with any Loan Document proves to have been incorrect when
made or deemed made; or
(d) Borrower fails to comply with the covenant set forth in Paragraph 4
above; or
(e) Any "Event of Default" specified in Article VIII of the Credit
Agreement occurs and is continuing, without giving effect to any
waiver thereof pursuant to the Credit Agreement, it being agreed
that each such "Event of Default" shall survive any termination,
cancellation, discharge or replacement of the Credit Agreement.
Upon the occurrence of an Event of Default, Lender may declare the
Commitment to be terminated, whereupon the Commitment shall be terminated,
and/or declare all sums outstanding hereunder and under the other Loan
Documents, including all interest thereon, to be immediately due and
payable, whereupon the same shall become and be immediately due and
payable, without notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor, or other notices or demands
of any kind or character, all of which are hereby expressly waived;
provided, however, that upon the occurrence of any event specified in
Section 8.01(d) or (e) of the Credit Agreement, the Commitment shall
automatically terminate, and all sums outstanding hereunder and under each
other Loan Document, including all interest thereon, shall become and be
immediately due and payable, without notice of default, presentment or
demand for payment, protest or notice of nonpayment or dishonor, or other
notices or demands of any kind or character, all of which are hereby
expressly waived.
6. Miscellaneous.
(a) All financial computations required under this Agreement shall be
made, and all financial information required under this Agreement
shall be prepared, in accordance with generally accepted accounting
principles consistently applied.
(b) Unless otherwise specified, all references herein and in the other
Loan Documents to any time of day shall mean the local (standard or
daylight, as in effect) time of San Francisco.
(c) All Breakage Costs shall be for the account of Borrower.
(d) If at any time Lender determines that (i) deposits in the amount of
any requested Offshore Rate Loan for any requested Interest Period
are not available to Lender in the offshore dollar interbank market,
or (ii) the Offshore Rate does not accurately reflect the funding
cost to Lender of lending such Loans, Lender's obligation to make
Offshore Rate Loans shall cease for the period during which such
circumstance exists.
(e) Borrower shall reimburse or compensate Lender, upon demand, for all
costs incurred, losses suffered or payments made by Lender which are
applied or reasonably allocated by Lender to the transactions
contemplated herein (all as determined by Lender in its reasonable
discretion) by reason of any and all future reserve, deposit,
capital adequacy or similar requirements against (or against any
class of or change in or in the amount of) assets, liabilities or
commitments of, or extensions of credit by, Lender; and compliance
by Lender with any directive, or requirements from any regulatory
authority, whether or not having the force of law.
(f) No amendment or waiver of any provision of this Agreement or of any
other Loan Document and no consent by Lender to any departure
therefrom by Borrower shall be effective unless such amendment,
waiver or consent shall be in writing and signed by a duly
authorized officer of Lender, and any such amendment, waiver or
consent shall then be effective only for the period and on the
conditions and for the specific instance specified in such writing.
No failure or delay by Lender in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other rights, power or
privilege.
(g) Except as otherwise expressly provided herein, notices and other
communications to each party provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed
or sent by telecopy or electronic mail to the address provided from
time to time by such party. Any such notice or other communication
sent by overnight courier service, mail or telecopy shall be
effective on the earlier of actual receipt and (i) if sent by
overnight courier
service, the scheduled delivery date, (ii) if sent by mail, the
fourth Business Day after deposit in the U.S. mail first class
postage prepaid, and (iii) if sent by telecopy, when transmission in
legible form is complete. All notices and other communications sent
by the other means listed in the first sentence of this paragraph
shall be effective upon receipt. Notwithstanding anything to the
contrary contained herein, all notices (by whatever means) to Lender
pursuant to Paragraph 1(b) hereof shall be effective only upon
receipt.
(h) This Agreement shall inure to the benefit of the parties hereto and
their respective successors and assigns, except that Borrower may
not assign its rights and obligations hereunder. Lender may at any
time (i) assign all or any part of its rights and obligations
hereunder to any other Person with the consent of Borrower, such
consent not to be unreasonably withheld, provided that no such
consent shall be required if the assignment is to an affiliate of
Lender or if an Event of Default exists, and (ii) grant to any other
Person participating interests in all or part of its rights and
obligations hereunder without notice to Borrower. Borrower agrees to
execute any documents reasonably requested by Lender in connection
with any such assignment. All information provided by or on behalf
of Borrower to Lender or its affiliates may be furnished by Lender
to its affiliates and to any actual or proposed assignee or
participant.
(i) Borrower shall pay Lender, on demand, all reasonable out-of-pocket
expenses, legal fees (including the allocated costs for in-house
legal services) and other costs and expenses incurred by Lender in
connection with the arrangement, negotiation, closing, ongoing
administration and enforcement of this Agreement or any instruments
or agreements executed in connection herewith.
(j) Borrower agrees to indemnify, save and hold harmless Lender, its
affiliates, and their respective directors, officers, agents,
attorneys and employees (collectively the "Indemnitees") from and
against: (i) any and all claims, demands, actions or causes of
action that are asserted against any Indemnitee by any Person
relating directly or indirectly to a claim, demand, action or cause
of action that such Person asserts or may assert against Borrower or
any of its affiliates, officers or directors; (ii) any and all
claims, demands, actions or causes of action arising out of or
relating to, the Loan Documents, any predecessor loan documents, the
Commitment, the use or contemplated use of the proceeds of any Loan,
or the relationship of Borrower and Lender under this Agreement;
(iii) any administrative or investigative proceeding by any
governmental authority arising out of or related to a claim, demand,
action or cause of action described in clause (i) or (ii) above; and
(iv) any and all liabilities, losses, costs or expenses (including
legal fees, which shall include the allocated costs for in-house
legal services) that any Indemnitee suffers or incurs as a result of
the assertion of any foregoing claim, demand, action, cause of
action or proceeding, or as a result of the preparation of any
defense in connection with any foregoing claim, demand, action,
cause of action or proceeding, in all cases, whether or not an
Indemnitee is a party to such claim, demand, action, cause of action
or proceeding, including
those liabilities caused by an Indemnitee's own negligence; provided
that no Indemnitee shall be entitled to indemnification for any loss
caused by its own gross negligence or willful misconduct or for any
loss asserted against it by another Indemnitee.
(k) If any provision of this Agreement or any other Loan Document shall
be held invalid or unenforceable in whole or in part, such
invalidity or unenforceability shall not affect the remaining
provisions hereof or thereof. This Agreement supersedes all prior
agreements and oral negotiations with respect to the subject matter
hereof.
(l) This Agreement may be executed in one or more counterparts, and each
counterpart, when so executed, shall be deemed an original but all
such counterparts shall constitute but one and the same instrument.
(m) This Agreement and the other Loan Documents are governed by, and
shall be construed in accordance with, the laws of the State of
California and the applicable laws of the United States of America.
Borrower hereby submits to the nonexclusive jurisdiction of the
United States District Court and each state court in the City of San
Francisco for the purposes of all legal proceedings arising out of
or relating to any of the Loan Documents or the transactions
contemplated thereby. Borrower irrevocably consents to the service
of any and all process in any such action or proceeding by the
mailing of copies of such process to Borrower at its address set
forth beneath its signature hereto. Borrower irrevocably waives, to
the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
(n) BORROWER AND LENDER EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR
RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(o) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
Please indicate your acceptance of the Commitment on the foregoing terms and
conditions by returning an executed copy of this Agreement to the undersigned
not later than September 10, 1999.
BANK OF AMERICA, N.A.
By: /s/ Michael Balok
----------------------------------------
Name: Michael Balok
Title: Managing Director
ACCEPTED AND AGREED TO AS OF
THE DATE FIRST WRITTEN ABOVE:
LOUISIANA-PACIFIC ACQUISITION INC.
By: /s/ Curtis M. Stevens
--------------------------------
Name: Curtis M. Stevens
Title: Vice President
Date: September 8, 1999
EXHIBIT A
DEFINITIONS
Agreement: This letter agreement, as amended, restated, extended,
supplemented or otherwise modified in writing from time to
time.
Base Rate: A fluctuating rate per annum equal to the higher of (a)
the Federal Funds Rate plus1/2of 1% and (b) the rate of
interest publicly announced from time to time by Lender as
its "prime rate". Lender's prime rate is a rate set by
Lender based upon various factors including Lender's costs
and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such
announced rate. Any change in the prime rate announced by
Lender shall take effect at the opening of business on the
day specified in the public announcement of such change.
Base Rate Loan: A Loan bearing interest based on the Base Rate.
Breakage Costs: Any loss, cost or expense incurred by Lender (including
any loss or expense arising from the liquidation or
reemployment of funds obtained by Lender to maintain the
relevant Offshore Rate Loan or from fees payable to
terminate the deposits from which such funds were
obtained) as a result of (i) any continuation, conversion,
payment or prepayment of any Offshore Rate Loan on a day
other than the last day of the Interest Period therefor
(whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or (ii) any failure by
Borrower (for a reason other than the failure of Lender to
make a Loan when all conditions to making such Loan have
been met by Borrower in accordance with the terms hereof)
to prepay, borrow, continue or convert any Offshore Rate
Loan on a date or in the amount notified by Borrower. The
certificate of Lender as to its costs of funds, losses and
expenses incurred shall be conclusive absent manifest
error.
Business Day: Any day other than a Saturday, Sunday, or other day on
which commercial banks are authorized to close under the
laws of, or are in fact closed in, the State of California
where Lender's lending office is located and, if such day
relates to any Offshore Rate Loan, means any such day on
which dealings in dollar deposits are conducted by and
between banks in the offshore dollar interbank market.
Closing Date: The date on which each condition set forth in Paragraph 2
of this Agreement shall have been met, which date must
occur on or before the Termination Date.
Credit Agreement: The Credit Agreement, dated as of January 31, 1997, among
Borrower, Louisiana-Pacific Canada Pulp Co. (as successor
to Louisiana-Pacific Canada Ltd.), Lender, and the other
financial institutions party thereto, as in effect on the
date hereof, without giving effect to any amendment,
supplement or other modification thereto or thereof after
the date hereof and without giving effect to any
termination, cancellation, discharge or replacement
thereof after the date hereof.
Default: Any event that, with the giving of any notice, the passage
of time, or both, would be an Event of Default.
Event of Default: Has the meaning set forth in Paragraph 5.
Federal Funds Rate: For any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day; provided that (a)
if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the
next succeeding Business Day, and (b) if no such rate is
so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate
charged to Lender on such day on such transactions as
determined by Lender.
Governmental Any nation or government, any state or other political
Authority: subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled,
through stock or capital ownership or otherwise, by any of
the foregoing.
Guaranty Agreement: A guaranty agreement in the form of Exhibit C hereto made
by Louisiana-Pacific for the benefit of Lender.
Interest Period: For each Offshore Rate Loan, (a) initially, the period
commencing on the date the Offshore Rate Loan is disbursed
or converted from a Base Rate Loan and (b) thereafter, the
period commencing on the last day of the preceding
Interest Period, and, in each case, ending on the earlier
of (x) the Maturity Date and (y) one, two, three or six
months thereafter, as requested by Borrower; provided
that:
(i) any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period
shall end on the next preceding Business Day; and
(ii) any Interest Period which begins on the last Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such
Interest Period
Loan Documents: This Agreement, the Guaranty Agreement and any promissory
note, certificate, fee letter, and other instrument,
document or agreement delivered in connection with this
Agreement.
Louisiana-Pacific: Louisiana-Pacific Corporation, a Delaware corporation.
Material Adverse Any set of circumstances or events which (a) has or could
Effect: reasonably be expected to have any material adverse effect
whatsoever upon the validity or enforceability of any Loan
Document, (b) is or could reasonably be expected to be
material and adverse to the financial condition or
operations of Borrower or Louisiana-Pacific or (c)
materially impairs or could reasonably be expected to
materially impair the ability of Borrower or
Louisiana-Pacific to perform its obligations and
liabilities under this Agreement or any other Loan
Document.
Maturity Date: The date which is the earlier of (i)180 days after the
Closing Date and (ii) May 25, 2000.
Net Worth: At any date, the excess of Total Assets at such date over
Total Liabilities at such date.
Offshore Rate: For any Interest Period with respect to any Offshore Rate
Loan, a rate per annum at which dollar deposits in the
approximate amount of Lender's Offshore Rate Loan for such
Interest Period would be offered by Lender's Grand Cayman
Branch, Grand Cayman, B.W.I. (or such other office as may
be designated for such purpose by Lender) to major banks
in the offshore dollar interbank market upon request of
such banks at approximately 11:00 a.m. (New York City
time) one Business Day prior to the commencement of such
Interest Period.
Offshore Rate Loan: A Loan bearing interest based on the Offshore Rate.
Person: An individual, partnership, corporation, limited liability
company, limited liability partnership, business trust,
joint stock company, trust, unincorporated association,
joint venture, other business entity, or Governmental
Authority.
Subsidiary: A corporation, partnership, joint venture, limited
liability company or other business entity of which a
majority of the shares of securities or other interests
having ordinary voting power for the election of directors
or other governing body (other than securities or
interests having such power only by reason of the
happening of a contingency) are at the time beneficially
owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more
intermediaries, or both, by Borrower.
Termination Date: November 30, 1999, or such earlier date on which the
Commitment may terminate in accordance with the terms
hereof.
Total Assets: At any date, without duplication, the total consolidated
assets of Borrower and its Subsidiaries.
Total Liabilities: At any date, without duplication, the total consolidated
liabilities of Borrower and its Subsidiaries.
EXHIBIT B
FORM OF PROMISSORY NOTE
$300,000,000 ______________, ____
FOR VALUE RECEIVED, the undersigned, LOUISIANA-PACIFIC ACQUISITION INC., a
Quebec company ("Borrower"), hereby promises to pay to the order of BANK OF
AMERICA, N.A. ("Lender") the principal sum of Three Hundred Million Dollars
($300,000,000) or, if less, the aggregate unpaid principal amount of the Loan
made by Lender to Borrower pursuant to the letter agreement, dated as of even
date herewith (such letter agreement, as it may be amended, restated, extended,
supplemented or otherwise modified from time to time, being hereinafter called
the "Agreement"), between Borrower and Lender, on the Maturity Date. Borrower
further promises to pay interest on the unpaid principal amount of the Loan
evidenced hereby from time to time at the rates, on the dates, and otherwise as
provided in the Agreement.
The loan account records maintained by Lender shall at all times be
conclusive evidence, absent manifest error, as to the amount of the Loan and
payments thereon; provided, however, that any failure to record any Loan or
payment thereon or any error in doing so shall not limit or otherwise affect the
obligation of Borrower to pay any amount owing with respect to the Loan.
This promissory note is the promissory note referred to in, and is
entitled to the benefits of, the Agreement, which Agreement, among other things,
contains provisions for acceleration of the maturity of the Loan evidenced
hereby upon the happening of certain stated events and also for prepayments on
account of principal of the Loan prior to the maturity thereof upon the terms
and conditions therein specified.
Unless otherwise defined herein, terms defined in the Agreement are used
herein with their defined meanings therein. This promissory note shall be
governed by, and construed in accordance with, the laws of the State of
California.
LOUISIANA-PACIFIC ACQUISITION INC.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (the "Guaranty"), dated as of September 8, 1999, is made
by LOUISIANA-PACIFIC CORPORATION, a Delaware corporation ("Guarantor"), in favor
of BANK OF AMERICA, N.A., a national banking association (together with any
assign or successor by merger thereto, "Lender").
Recitals:
A. Pursuant to the letter agreement, dated as of September 8, 1999 (together
with all amendments, supplements, and other modifications, if any, from
time to time thereafter made thereto, the "Agreement") between
Louisiana-Pacific Acquisition Inc. ("Borrower") and Lender, Lender has
agreed to make a loan (the "Loan") to Borrower, which Loan is to be
unconditionally guaranteed by Guarantor.
B. Guarantor has agreed to guarantee the obligations of Borrower under the
Agreement on the terms and conditions set forth herein.
C. It is in the best interests of Guarantor to execute this Guaranty inasmuch
as Borrower is a wholly-owned indirect Subsidiary of Guarantor.
In consideration of the foregoing, and other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, and in order to induce
Lender to enter into the Agreement and make the Loan thereunder, Guarantor and
Lender hereby agree as follows:
Article I
The Guaranty
1.1 Guaranty. Guarantor hereby absolutely, unconditionally, and irrevocably:
(a) guarantees the full and punctual payment when due, whether at
stated maturity, by required prepayment, declaration, acceleration,
demand, or otherwise, of all obligations of Borrower now or
hereafter existing under the Agreement (including all such amounts
which would become due but for the operation of the automatic stay
under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C.
362(a), and the operation of Sections 502(b) and 506(b) of the
United States Bankruptcy Code, 11 U.S.C. 502(b) and 506(b)) (the
"Guaranteed Obligations"); and
(b) indemnifies and holds harmless Lender for any and all
out-of-pocket costs and expenses (including the out-of-pocket
expenses and reasonable fees of counsel and the allocated cost of
in-house counsel retained by Lender) incurred by Lender in
preserving and enforcing any rights under this Guaranty;
This Guaranty constitutes a guaranty of payment when due and not of collection
or of performance, and Guarantor specifically agrees that it shall not be
necessary or required that Lender exercise any right, assert any claim or
demand, or enforce any remedy whatsoever against Borrower, or any other Person
(as defined in the Agreement) before or as a condition to the obligations of
Guarantor hereunder.
1.2 Acceleration of Guaranty. Guarantor agrees that, in the event of the
occurrence and continuance of any event described in Paragraph 5 of the
Agreement, Guarantor shall forthwith pay to Lender the full amount of all
amounts owing by Borrower under the Agreement, whether in respect of principal,
interest or otherwise.
1.3 Guaranty Absolute, etc. This Guaranty shall in all respects be a continuing,
absolute, unconditional, and irrevocable guaranty of payment, and shall remain
in full force and effect until all Guaranteed Obligations have been paid in cash
in full, and the commitment of Lender to extend any credit to Borrower under the
Agreement shall have terminated. Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Agreement,
regardless of any law, regulation, or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of Lender with respect
thereto. The liability of Guarantor under this Guaranty shall be absolute,
unconditional, and irrevocable irrespective of:
(a) any lack of validity, legality, or enforceability of the Agreement or
any note executed and delivered in connection therewith;
(b) the failure of Lender: (i) to assert any claim or demand or to enforce
any right or remedy against Borrower or any other Person (including any
guarantor) under the provisions of the Agreement, any such note or
otherwise; or (ii) to exercise any right or remedy against any other
guarantor of, or any collateral securing, any Guaranteed Obligations;
(c) any change in the time, manner, or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other
extension, compromise, or renewal of any such obligations of Borrower;
(d) any reduction, limitation, impairment, or termination of the
Guaranteed Obligations for any reason, including any claim of waiver,
release, surrender, alteration, or compromise, and shall not be subject to
(and Guarantor hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment, or termination whatsoever by reason of
the invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, the
Guaranteed Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other modification of, or any
consent to departure from, any of the terms of the Agreement;
(f) any addition, exchange, release, surrender, or non-perfection of any
collateral, or any amendment to or waiver or release or addition of, or
consent to departure from, any other guaranty, held by Lender securing any
of the Guaranteed Obligations; or
(g) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, Borrower, any surety,
or any guarantor.
1.4 Reinstatement, etc. Guarantor agrees that this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time any payment (in
whole or in part) of any of the Guaranteed Obligations is rescinded or must
otherwise be restored by Lender, upon the insolvency, bankruptcy, or
reorganization of Borrower or otherwise, all as though such payment had not been
made.
1.5 Waiver, etc. Guarantor hereby waives promptness, diligence, notice of
acceptance, and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that Lender protect, secure,
perfect, or insure any security interest or lien, or any property subject
thereto, or exhaust any right or take any action against Borrower or any other
Person (including any other guarantor) or any collateral securing the Guaranteed
Obligations.
1.6 Subordination. Until such time as the Guaranteed Obligations have been paid
and performed in full and the period of time has expired during which any
payment made by Borrower, Guarantor or any other guarantor of the Guaranteed
Obligations to Lender may be
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid by Lender or paid over to a trustee, receiver or any
other entity, whether under any bankruptcy act or otherwise (any such payment
being hereinafter referred to as a "Preferential Payment"), any claim or other
rights which Guarantor may now have or hereafter acquire against Borrower or
such other guarantor that arises from the existence or performance of
Guarantor's obligations under this Guaranty or any other agreement (all such
claims and rights being hereinafter referred to as "Guarantor's Conditional
Rights"), including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, or indemnification, any right to
participate in any claim or remedy of Lender or such other guarantor or any
collateral which Lender now has or hereafter acquires, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, by any payment made hereunder or otherwise, including, without limitation,
the right to take or receive from Borrower or such other guarantor, directly or
indirectly, in cash or other property or by setoff or in any other manner,
payment or security on account of such claim or other rights, shall be
subordinate to Lender's right to full payment and performance of the Guaranteed
Obligations, and Guarantor shall not enforce Guarantor's Conditional Rights
until such time as the Guaranteed Obligations have been paid and performed in
full and the period of time has expired during which any payment made by
Borrower or Guarantor to Lender may be determined to be a Preferential Payment.
1.7 Successors, Transferees and Assigns. This Guaranty shall:
(a) be binding upon Guarantor, and its successors, transferees, and
assigns; and
(b) inure to the benefit of and be enforceable by Lender.
Without limiting the generality of subsection (b), Lender may assign or
otherwise transfer (in whole or in part) its rights and obligations under the
Agreement or any note executed and delivered in connection therewith to any
other Person, and such other Person shall thereupon become vested with all
rights and benefits in respect thereof granted to Lender hereunder or otherwise,
subject, however, to any contrary provisions in such assignment or transfer.
1.8 Payments Free and Clear of Taxes, etc. Guarantor hereby agrees that any and
all payments made by Guarantor hereunder to or for the account of Lender shall
be made free and clear of, and without deduction or withholding for, any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto (all such taxes, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred to
as "Taxes"). If Guarantor shall be required by law to deduct or withhold any
Taxes from or in respect of any sum payable hereunder to Lender:
(a) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 1.8) Lender receives an amount
equal to the sum it would have received had no such deductions been made;
(b) Guarantor shall make such deductions; and
(c) Guarantor shall pay the full amount deducted to the relevant taxation
authority or other governmental authority in accordance with applicable
law.
Without prejudice to the survival of any other agreement of Guarantor hereunder,
the agreements and obligations of Guarantor contained in this Section 1.8 shall
survive the payment in full of all amounts due under the Agreement.
Article II
Representations And Warranties
2.1 Representations and Warranties. Guarantor hereby represents and warrants as
follows:
(a) Guarantor is duly organized, validly existing and in good standing in
the state of its incorporation;
(b) This Agreement has been duly authorized, executed and delivered by
Guarantor, and constitutes a valid and binding obligation of Guarantor,
enforceable against Guarantor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally or by general
equitable principles (whether enforcement is sought by proceedings in
equity or at law); and
(c) The execution, delivery, performance and enforcement of this Agreement
do not and will not contravene, or constitute a default under, any
provision of applicable law or regulation or of the certificate of
incorporation or bylaws of Guarantor or of any agreement, judgment,
injunction, order, decree or other instrument binding upon Guarantor.
Article III
Miscellaneous Provisions
3.1 Binding On Successors, Transferees And Assigns; Assignment. In addition to,
and not in limitation of, Section 1.7, this Guaranty shall be binding upon
Guarantor and its successors, transferees, and assigns and shall inure to the
benefit of and be enforceable by Lender, and its respective successors,
transferees, and assigns (to the full extent provided pursuant to Section 1.7);
provided, however, that Guarantor may not assign any of its obligations
hereunder.
3.2 Amendment, etc. No amendment to or waiver of any provision of this Guaranty,
nor consent to any departure by Guarantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by Guarantor and
Lender, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
3.3 Addresses for Notices to Guarantor. All notices and other communications
hereunder to Guarantor shall be in writing (including by facsimile) and mailed
by overnight delivery, transmitted by facsimile or delivered to it, addressed to
it at the address set forth below its signature hereto or at such other address
as shall be designated by Guarantor in a written notice to Lender at the address
specified by Lender to Guarantor complying with the terms of this Section 3.3.
All such notices and other communications shall be effective, if telexed, when
confirmed by telex answerback or, if mailed by overnight delivery or delivered,
upon delivery, addressed as aforesaid.
3.4 No Waiver; Remedies. In addition to, and not in limitation of, Sections 1.3
and 1.5, no failure on the part of Lender to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
3.5 Section Captions. Section captions used in this Guaranty are for convenience
of reference only, and shall not affect the construction of this Guaranty.
3.6 Setoff. In addition to, and not limitation of, any rights of Lender under
applicable law, Lender shall, upon the occurrence and during the continuance of
any default under the Agreement or hereunder, have the right to appropriate and
apply to the payment of the obligations of Guarantor owing to it hereunder,
whether or not then due, any and all balances, credits, deposits, accounts or
moneys of Guarantor then or thereafter maintained with Lender. Lender shall
promptly notify the Guarantor after any such setoff and application made by it;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of Lender under this Section
3.6 are in addition to any other right or remedy (including any other right of
set off) which Lender may have.
3.7 Severability. Wherever possible each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
3.8 Governing Law, etc. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA. THIS GUARANTY CONSTITUTES
THE ENTIRE AGREEMENT AND UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO
THE SUBJECT MATTER THEREOF AND SUPERSEDES ALL PRIOR AGREEMENTS, WRITTEN OR ORAL,
WITH RESPECT THERETO.
3.9 Waiver of Jury Trial. GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
GUARANTY. GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR
THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK
MAINTAINING THE LETTER OF CREDIT AND ENTERING INTO THE AGREEMENT.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and
delivered by its officer thereunto duly authorized as of the date first above
written.
LOUISIANA-PACIFIC CORPORATION
By: /s/ Curtis M. Stevens
----------------------------------------
Title: Vice President
Address: Louisiana-Pacific Corporation
111 SW 5th Ave., Suite 4200
Portland, OR 97204
Attn:
Facsimile:
Exhibit 99.3
LOAN AGREEMENT
September 10, 1999
Louisiana-Pacific Acquisition Inc. ("LPA")
111 S. W. Fifth Avenue
Portland, OR 97204
Ladies and Gentlemen:
We are pleased to make available to you a committed credit facility
(the "Agreement") for general corporate purposes on the terms set forth in this
letter. As used in this Agreement, the following terms shall have the following
meanings:
"Business Day" shall mean a day on which banks are not required or
authorized by law or executive order to close in New York, New York or
Charlotte, North Carolina.
"Draw Period" shall mean (i) as to any Advance, the period
commencing on the date of such Advance and ending on the numerically
corresponding day (or if there is no corresponding day, the last day) in the
calendar month that is one (1) or two (2) months thereafter or, with the consent
of Wachovia Bank, N.A. in its capacity as administrative agent, (including any
successor or assign thereof in such capacity, "Wachovia"), seven (7) days
thereafter, as we, after consultation with you, may elect by notice to Wachovia
at least three (3) LIBOR Business Days prior to the commencement of the Draw
Period.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with LPA within the meaning of Section 414(b)
or (c) of the Internal Revenue Code of 1986, as amended (the "Code") (and
Sections 414(m) and (o) of the Code for purposes of provisions relating to
Section 412 of the Code).
"ERISA Event" means (a) a reportable event set forth in Section
4043(c) of ERISA, other than those events as to which the notice requirement has
been waived by regulation, with respect to a Pension Plan; (b) a withdrawal by
LPA or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in section 4001(a)(2) of
ERISA or a cessation of operations which is treated as such under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by LPA or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate a Pension
Plan or Multiemployer Plan, the treatment of a Plan amendment as a termination
under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the
PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon LPA or any ERISA Affiliate.
"IRS" shall mean the Internal Revenue Service, and any governmental
authority succeeding to any of its principal functions under the Code.
"LIBOR" shall mean with respect to any Draw Period the rate
determined in accordance with the following provisions:
(a) LIBOR will be determined by Wachovia in its sole
discretion as either (i) the arithmetic mean of the offered rates
for deposits in U.S. Dollars having an interest period matching the
Draw Period specified, commencing on the second LIBOR Business Day
immediately preceding the first day of such Draw Period, which
appear on the Reuters Screen LIBO Page as of approximately 11:00
a.m., London time, if at least two such offered rates appear on the
Reuters Screen LIBO Page ("LIBOR Reuters"), or (ii) the rate for
deposits in U.S. dollars having the Draw Period designated
commencing on the second LIBOR Business Day immediately preceding
the first day of such Draw Period which appears on the Telerate Page
3750 as of 11:00 a.m., London time ("LIBOR Telerate"). "Reuters
Screen LIBO Page" means the display designated as page "LIBO" on the
Reuters Monitor Money Rate Service (or such other page as may
replace the LIBO page on that service for the purpose of displaying
London interbank offered rates of major banks), and "Telerate Page
3750" means the display designated as page "3750" on the Telerate
Service (or such other page as may replace the 3750 page on that
service or such other service or services as may be nominated by the
British Bankers' Association for the purpose of displaying London
interbank offered rates for U.S. dollar deposits). If neither LIBOR
Reuters nor LIBOR Telerate is specified, LIBOR will be determined as
if LIBOR Telerate had been specified. If fewer than two offered
rates appear on the Reuters Screen LIBO Page, or if no rate appears
on the Telerate Page 3750, as applicable, LIBOR in respect of that
LIBOR Interest Determination Date will be determined as if the
parties had specified the rate described in (b) below.
(b) With respect to a day on which fewer than two offered
rates appear on the Reuters Screen LIBO Page, as specified in (a)(i)
above, or if no rate appears on Telerate Page 3750 as specified in
(a)(ii) above, as applicable, LIBOR will be determined at
approximately 11:00 a.m., London time, on such day on the basis of
the rates at which deposits in United States dollars having the Draw
Period specified are offered to prime banks in the London interbank
market by four major banks in the London interbank market selected
by Wachovia (after consultation with us) commencing on the second
LIBOR Business Day immediately preceding the first day of such Draw
Period and in a principal amount equal to the approximate amount of
the Advance to be borrowed by LPA that is representative for a
single transaction in such market at such time.
2
Wachovia will request the principal London office of each of such
banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR for such day will be the arithmetic
mean of such quotations. If fewer than two quotations are provided,
LIBOR for such day will be the arithmetic mean of the rates quoted
at approximately 11:00 a.m., London time, on such day by three major
banks in New York, New York selected by Wachovia (after consultation
with us) for loans in U.S. Dollars to leading European banks, having
the specified Draw Period, commencing on the second LIBOR Business
Day immediately preceding the first day of such Draw Period and in a
principal amount equal to the approximate amount of the Advance to
be borrowed by LPA that is representative for a single transaction
in such market at such time provided, however, that if the banks
selected as aforesaid by Wachovia are not quoting as described
above, LIBOR in effect for the applicable period will be LIBOR in
effect on the previous Business Day.
"LIBOR Business Day" shall mean a business day on which dealings in
U.S. Dollars are carried on in the London interbank market and on which
commercial banks are open for business in London.
"LIBOR Interest Determination Date" shall mean the second LIBOR
Business Day immediately preceding the first day of the related Draw Period.
"Multiemployer Plan" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which LPA or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to make, contributions.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
governmental authority succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in section 3(2) of
ERISA) subject to Title IV of ERISA which LPA sponsors or maintains, or to which
it makes, is making, or is obligated to make contributions, or in the case of a
multiple employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding five plan years.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which LPA sponsors or maintains or to which LPA makes, is making, or is
obligated to make contributions and includes any Pension Plan.
"Termination Date" means September 13, 2004.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in
3
accordance with the assumptions used for funding that Plan pursuant to Section
412 of the Code for the applicable plan year.
1. We agree, at your request, to make advances to you, on either an
interest bearing or a discount basis (such interest rate not to exceed the
amount set forth on Schedule II hereto) ("Advances"), in an aggregate U.S.
Dollar amount not to exceed at any one time outstanding the amount set forth on
Schedule I hereto as the "Facility Amount", as adjusted from time to time, on
the terms and conditions set forth below. This letter sets forth the procedures
to be used in connection with your requests for our making of Advances to you
from time to time on or prior to the Termination Date hereof pursuant to
paragraph 10 and, in the event that we make Advances to you hereunder, your
obligations to us with respect thereto. The Advances shall be evidenced by the
"grid" promissory note executed by you in substantially the form of Exhibit A
hereto (the "Note").
2. The net amount of each Advance shall be in an amount at least
equal to the amount set forth on Schedule I hereto as the "Minimum Advance
Amount" and not more than $1,000 greater than the amount of the Advance
requested and shall be made upon (i) your request to us by telephone, telecopy
or letter, given by any of the Persons listed on Exhibit B hereto or otherwise
designated by you in writing ("Designated Persons"), that you wish to borrow
money on a specified date, in a specified amount and for a specified Draw Period
(which shall, in no event, exceed the Termination Date) and (ii) our mutual
agreement as to such date, amount and term and as to the interest rate per annum
or, in the case of an Advance made on a discount basis, discount applicable to
any such Advance. On the date of any such Advance, we will make such Advance
available to you in same day funds by directing Wachovia to transfer or wire the
net proceeds of such Advance to an account designated in writing by a Designated
Person.
3. Your agreement and acceptance of this letter, together with your
furnishing to us certified copies of resolutions of your board of directors
authorizing a Designated Person to execute this letter and any documents
delivered pursuant hereto and to request Advances, together with specimen
signatures of such Designated Persons, shall constitute the following
representations and warranties by LPA:
(a) Corporate Authorization. The execution, delivery and performance
of this letter has been duly authorized by all necessary corporate action
and does not contravene any law, or any contractual or legal restriction,
applicable to LPA;
(b) Governmental Authorization. No authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for such execution, delivery and
performance or for the making of any Advance;
(c) Corporate Existence. LPA is a corporation duly organized and
existing under the laws of the jurisdiction of its incorporation, and is
properly qualified as a foreign corporation and in good standing in every
jurisdiction in which LPA is doing business of a nature that requires such
qualification;
4
(d) Encumbrances. The properties and assets of LPA are free and
clear of all security interests, liens, encumbrances or rights of others,
except for security interests, liens and encumbrances referenced in
Exhibit C hereto or permitted under paragraph 8(ii)(b) hereof;
(e) Compliance with Laws. LPA is in compliance with all applicable
federal, state and local laws, ordinances and regulations relating to
hazardous materials or wastes or hazardous or toxic substances, except
where failure to so comply would not have a material adverse effect on
LPA's financial condition or operations or materially impair LPA's ability
to repay the Advances or perform its obligations hereunder or under any
instrument or agreement required hereunder;
(f) Litigation. There are no suits, proceedings, claims or disputes
pending or, to the of knowledge of LPA, threatened against or affecting
LPA or its properties, the adverse determination of which might reasonably
be expected to materially affect LPA's financial condition or operations
or materially impair LPA's ability to repay the Advances or perform its
obligations hereunder or under any instrument or agreement required
hereunder;
(g) Regulated Entities. None of LPA or any Person controlling LPA or
under control of LPA is an "Investment Company" within the meaning of
Investment Company Act of 1940. LPA is not subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other
Federal or state statute or regulation limiting its ability to incur
indebtedness;
(h) ERISA Compliance.
(i) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code
has received a favorable determination letter from the IRS and, to the
best knowledge of LPA, nothing has occurred which would cause the loss of
such qualification. LPA has made all required contributions to any Plan
subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412
of the Code has been made with respect to any Plan;
(ii) There are no pending or, to the best knowledge of LPA,
threatened claims, actions or lawsuits, or actions by any governmental
authority, with respect to any Plan which have resulted or could
reasonably be expected to result in a material adverse change in LPA's
consolidated financial condition or results of operations. There has been
no prohibited transaction or violation of the fiduciary responsibility
rules with respect to any Plan which has resulted or could reasonably be
expected to result in a material adverse change in LPA's financial
condition or results of operations;
(iii) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Plan has any Unfunded Pension Liability; (iii) neither LPA
nor any ERISA Affiliate
5
has incurred, or reasonably expects to incur, any liability under Title IV
of ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA); (iv) neither LPA nor any ERISA
Affiliate has incurred, or reasonably expects you to incur, any liability
(and no event has occurred which, with the giving of notice under Section
4219 of ERISA, would result in such liability) under Section 4201 and 4243
of ERISA with respect to a Multiemployer Plan; and (v) neither you, nor
any ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA; and
(iv) LPA (i) does not sponsor or maintain or make, is not making,
and is not obligated to make contributions, and in the case of a
multiemployer plan (as described in Section 4064(a) of ERISA) has not made
contributions at any time during the immediately preceding five plan years
to a pension plan (as defined in Section 3(2) of ERISA) subject to ERISA,
(iii) does not make, is not making and is not obligated to make
contributions nor, during the preceding three calendar years, has it made
or been obligated to make contributions to a "multiemployer plan", within
the meaning of Section 4001(a)(3) of ERISA, and (iii) does not sponsor or
maintain and does not make, is not making, and is not obligated to make
contributions to an employee benefit plan (as defined in Section 3(3) of
ERISA) subject to ERISA.
4. Each request by you for an Advance shall constitute a
representation and warranty by you, as of the making of such Advance and giving
effect to the application of the proceeds therefrom, that (i) no payment default
has occurred and is continuing under any agreement or instrument relating to any
of your indebtedness, (ii) such Advance when made will constitute your legal,
valid and binding obligation, (iii) such Advance is being incurred, and will be
repaid at maturity, in the ordinary course of your business out of the cash flow
generated in the normal day-to-day conduct and operations of your business, and
(iv) no event has occurred and no circumstance exists as a result of which the
information which you have provided to us in connection herewith would include
an untrue statement of a material fact or omit to state any material fact or any
fact necessary to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading.
5. You shall repay each Advance, and in the case of an Advance made
on an interest bearing basis shall pay interest on such Advance, in accordance
with the terms hereof and of the Note. You shall not have the right to prepay
any unpaid principal amount of any Advance.
6. You shall make each payment hereunder and under the Notes in the
ordinary course of your business on or before 12:00 noon (New York City time) on
the day when due in U.S. Dollars to our account, Centric Capital Corporation
Commercial Paper Account at The First National Bank of Chicago, One First
National Plaza, Chicago, Illinois, 60670 in same day funds. All computations of
interest shall be made on the basis of a year of 360 days, for the actual number
of days (including the first day but excluding the last day) elapsed.
7. Whenever any payment to be made hereunder shall be otherwise due
on a Saturday, a Sunday or other day of the year on which banks are required or
authorized to close in
6
New York City, New York, Winston-Salem, North Carolina or Chicago, Illinois (any
other day being a "Business Day"), such payment shall be made on the next
succeeding Business Day.
8. (i) LPA hereby covenants that it shall:
(a) Use of Proceeds. Use the proceeds of the Advances for general
corporate purposes not in contravention of any requirement of law
applicable to or binding upon LPA or any of its property.
(b) Preservation of Corporate Existence, Etc. Preserve all rights,
privileges and franchises useful or necessary for ordinary business
operations and keep all properties useful or necessary for ordinary
business operations in good working order and condition, and from time to
time make all needful repairs, renewals and replacements thereto and
thereof so that the efficiency of such property shall be fully maintained
and preserved;
(c) Notices. Promptly give notice in writing to us of:
the occurrence of any of the following events affecting either
Borrower or any ERISA Affiliate (but in no event more than 10 days after
such event), and deliver to us a copy of any notice with respect to such
event that is filed with a governmental authority and any notice delivered
by a governmental authority to LPA or any ERISA Affiliate with respect to
such event:
(i) an ERISA Event
(ii) a material increase in the Unfunded Pension Liability of
any Plan;
(iii) the adoption of, or the commencement of contributions to,
and Plan subject to Sections 412 of the Code by LPA or any ERISA
Affiliate; or
(iv) the adoption of any amendment to a Plan subject to
Section 412 of the Code, if such amendment results in a material increase
in contributions or Unfunded Pension Liability.
Each notice under this Section shall be accompanied by a written
statement by the chief financial officer of LPA setting forth details of
the occurrence referred to therein and stating what action LPA proposes to
take with respect thereto and at what time.
(d) Payment of Obligations. Promptly pay and discharge all material
obligations, including tax claims, at maturity, except such as may be
contested in good faith or as to which a bona fide dispute may exist;
(e) Insurance. Maintain such insurance as is usually maintained by
others in the business of the same nature as the business of LPA, or
maintain a program of self insurance, with reserves, in accordance with
sound business practice;
7
(f) Inspection of Property and Books and Records. Maintain adequate
books, accounts and records in accordance with good accounting standards
and permit our representatives to inspect such books and records and to
visit the properties of LPA; and
(g) ERISA Compliance. (a) Maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and
other federal or state law; (b) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such qualification; and (c) make
all required contributions to any Plan subject to Section 412 of the Code,
and cause each of its ERISA affiliates to do each of the foregoing.
(ii) LPA hereby covenants that it shall not:
(a) Mergers. Merge or consolidate with any other Person or liquidate
or dissolve other than as permitted under Section 7.03(a) of the Credit
Agreement, dated as of January 31, 1997 among the Guarantor,
Louisiana-Pacific Canada Ltd., Bank of America National Trust and Savings
Association and the other financial institutions party thereto.
(b) Encumbrances. Subject any property to any mortgage, deed of
trust, encumbrance, or voluntary lien; provided, however, that this
Section (b) shall not be deemed to prohibit the assumption of, or purchase
subject to, mortgages already existing upon property being acquired, or
the execution of purchase money mortgages, or the coming into being of
other encumbrances, including in support of industrial revenue or
pollution control bonds which are capitalized and treated as indebtedness
by LPA (provided that the maximum aggregate outstanding balance of
indebtedness secured by such mortgages, purchase money mortgages, or other
encumbrances, including such bonds, shall never be in excess of
$100,000,000), liens for taxes, or loggers' liens, or mechanics' liens, or
other liens arising by law out of the nature of the operations involved.
(c) ERISA. (A) Engage in one or more prohibited transactions or
violation of the fiduciary responsibility rules with respect to any Plan
which has resulted or could reasonably be expected to result in liability
of LPA in an aggregate amount in excess off $50,000,000; or (B) engage in
a transaction that could be subject to Section 4069 or 4212(c) of ERISA,
and LPA shall not suffer or permit any of its ERISA Affiliates to do any
of the foregoing.
9. We shall incur no liability to you in acting upon any telephone,
telecopy, telex or letter request or communication which we believe in good
faith to have been given by a Designated Person or in otherwise acting in good
faith under this letter. Further, all documents required to be executed in
conjunction with Advances under this letter may be signed by any Designated
Person.
10. This letter shall remain in effect until terminated by you by
giving prior written notice of termination hereof to the other party hereto, but
no such termination shall affect your obligations with respect to the Advances
hereunder outstanding at the time of such termination.
8
11. All communications hereunder shall be in writing (other than the
communication provided for in the second sentence of Paragraph 14 herein) and
mailed, telecopied or delivered to the address specified on Schedule I hereto
for you and for us, or as to each party, to such other address as may be
designated by such party in a written notice to the other party. Written
communication shall be effective upon receipt unless such communication is
mailed in which case it shall be effective three Business Days after deposit in
first class mail.
12. We may assign to one or more banks or other entities all or any
part of, or may grant participations to one or more banks or other entities in
or to all or any part of, any Advance or Advances hereunder and under the Note.
You may not assign your rights or obligations hereunder or any interest herein.
13. You agree to pay on demand all costs and expenses including, but
not limited to, legal fees and losses, if any, incurred by us in connection with
the enforcement of this letter or the Note.
14. You agree to furnish us with such financial statements or other
information as we may reasonably request. You shall immediately notify us of any
change in the short term or long term ratings assigned by any statistical rating
organization to any of your outstanding indebtedness or that of
Louisiana-Pacific Corporation.
15. If any of the following events shall occur and be continuing:
(a) you shall fail to pay any amount due hereunder or under the Note
when the same becomes due and payable; or
(b) any representation or warranty made by you (or any of your
officers) in connection with any Advance or otherwise in connection with
the Note shall prove to have been incorrect in any material respect when
made; or
(c) unless permitted under paragraph 8(ii)(a) above, you shall,
without our prior written consent, merge or consolidate with or into, or
convey, transfer, lease or dispose of (whether in one transaction or in a
series of transactions) all or substantially all of your assets to, any
Person or entity; or
(d) you shall fail to perform or observe any other material term,
covenant or agreement in connection with any Advance or otherwise in
connection with the Note on your part to be performed or observed; or
(e) you shall fail to pay any principal of or premium or interest on
any indebtedness, which we deem to be material, (excluding indebtedness
evidenced by the Note), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
indebtedness; or any other event shall occur or condition shall exist
under any agreement or instrument relating to such indebtedness and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such
9
indebtedness; or any such indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof; or
(f) you shall generally not pay your debts as such debts become due,
or shall admit in writing your inability to pay your debts generally, or
shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against you seeking to adjudicate you
as bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or
composition of you or your debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee, custodian
or other similar official for you or any substantial part of your
property; or you shall take any corporate action to authorize any of the
actions set forth above in this subsection (f); or
(g) A writ, execution or attachment, or any similar process, shall
be levied against all or any substantial portion of your property or any
judgment shall be entered against you in an amount in excess of
$15,000,000 and such writ, execution, attachment, process or judgment is
not released, bonded, satisfied, vacated or appealed from within 60 days
after its levy or entry, or the total of all judgments against you
outstanding at any time which have not been released, bonded, satisfied,
vacated or appealed from within 60 days from the respective dates of entry
thereof shall exceed $45,000,000 in the aggregate; or
(h) (i) Any one or more ERISA Events shall occur with respect to one
or more Pension Plans or Multiemployer Plans which has or have resulted or
could reasonably be expected to result in liability of you under Title IV
of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an
aggregate amount in excess of $50,000,000; (ii) the aggregate amount of
Unfunded Pension Liability among all Pension Plans at any time exceeds
$50,000,000; or (iii) you or any ERISA Affiliate shall fail to pay when
due, after the expiration of any applicable grace period, any installment
payment or payments with respect to its withdrawal liability under Section
4201 of ERISA under any one or more Multiemployer Plans, which payment or
payments are in an aggregate amount in excess of $50,000,000; or
(i) The entering of a final order by any court or administrative
agency requiring you to divest yourself of such a substantial part of your
assets that the ability of you to pay, when due and payable, either at the
fixed maturity thereof or otherwise, the Advances or any part thereof, or
any installment of interest thereon, or the principal of or interest on
any other obligation for borrowed money, will be or may reasonably be
expected to be materially adversely affected, which order is not subject
to appeal or review by any court or as to which order the right to appeal
or review has expired, and such order remains in effect for more than 60
days; or
(j) Any Person or related group of Persons (other than your
employees and any Plan for the benefit of such employees) shall
beneficially own or shall control by proxy or otherwise, or shall enter
into any agreement to obtain any right to acquire, more than thirty
percent (30%) of your voting securities; or
10
(k) At any time prior to termination or expiration of this Agreement
and payment in full of the Advances and any other obligations of LPA
hereunder and under any other document or instrument given in connection
herewith and of any amounts due under the Guaranty by Louisiana-Pacific
Corporation, dated as of the date hereof (the "Guaranty"), the Guaranty is
for any reason partially (including with respect to future advances) or
wholly revoked or invalidated, or otherwise ceases to be in full force and
effect, or LPA or any other Person contests in any manner the validity or
enforceability thereof or denies that it has any further liability or
obligation thereunder,
then, and in any such event, we may declare the Note, and all amounts payable
thereunder to be forthwith due and payable, whereupon the Note and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind all of which you hereby expressly
waive; provided, however, that in the event of an actual or deemed entry of an
order for relief with respect to you under the United States Bankruptcy Code,
the Note and all such other amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by you.
16. THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NORTH CAROLINA.
17. You agree that you will not institute against or join any other
Person in instituting against us any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or other proceeding under any federal or
state bankruptcy or similar law, for one year and a day after the latest
maturing commercial paper note issued by us is paid in full.
18. At our option, we may, upon notice that either Standard & Poors,
a division of The McGraw Hill Companies, Inc. or Moody's Investors Service, Inc.
has (i) lowered or downgraded its short term commercial paper or corporate bond
or other short term rating of you or Louisiana-Pacific Corporation, or (ii)
placed your or Louisiana-Pacific Corporation's securities on a watch list of
securities singled out for surveillance, with either negative or developing
implications in a Ratings Category, amend Schedule I hereof to provide for an
amended "Facility Amount" and amended "Termination Date".
19. To the extent permitted by law, LPA hereby waives all set-offs
and counterclaims and all presentments and demands for performance.
20. The obligations under this Agreement are solely our corporate
obligations. No recourse shall be had for the payment of any amount owing by us
hereunder or any other obligation or claim of or against us arising out of or
based upon this Agreement against any of our stockholders, employees, officers,
directors or incorporators. You irrevocably agree that we shall only be required
to pay any amount owing by us under this Agreement only to the extent that we
have funds not required, after giving effect to all amounts on deposit in our
commercial paper account, to pay or provide for the payment of all commercial
paper notes maturing on the date of such determination or that have previously
matured but remain unpaid; provided, however, if we have insufficient funds to
make all payments required by this Agreement, you shall not be excused from the
performance of your obligations under this Agreement. In
11
addition, no amount owing by us shall constitute a claim (as defined in Section
101 to Title 11 of the United States Code) against us.
21. You irrevocably agree that any legal action, suit or proceeding
against us arising out of this Agreement may be brought in the United States
District Court for the Western District of North Carolina, located in the City
of Charlotte, North Carolina or in the courts of the State of North Carolina and
hereby irrevocably accept and submit to the non-exclusive jurisdiction of each
of the aforesaid courts in Person, generally and unconditionally with respect to
any action, suit or proceeding for you and in respect of your properties, assets
and revenues. You further irrevocably agree to the service of any legal process,
summons, notices and documents out of any of the aforesaid courts by mailing
copies thereof by registered or certified air mail, postage prepaid, to you at
your address designated pursuant to this Agreement. Nothing herein shall in any
way be deemed to limit our ability to serve any such legal process, summons,
notices and documents in any other manner, as may be permitted by applicable law
or to obtain jurisdiction over you, or bring actions, suits or proceedings
against you in such other jurisdictions, and in such manner, as may be permitted
by applicable law.
If the terms of this letter are satisfactory to you, please indicate
your agreement and acceptance thereof by signing a counterpart of this letter
and returning it to us.
22. All payments of any amounts to be made by you under this
Agreement shall be paid without deduction for, and free from, any taxes,
imposts, levies, duties, deductions or withholdings of any nature now or at any
time hereafter imposed by any governmental authority or by any taxing authority
thereof or therein (all such taxes, imposts, levies, duties, deductions or
withholdings of any nature being called "Taxes"). In the event that you are
required by applicable law to make any such withholding or deduction of Taxes
with respect to any amount payable under this Agreement, you shall pay such
deduction or withholding to the applicable taxing authority, shall promptly
furnish to us all receipts and other documents evidencing such payment and shall
pay to us additional amounts as may be necessary in order that the amount
received by us after the required withholding or other payment shall equal the
amount we would have received had no such withholding or other payment been
made. If no withholding or deduction of Taxes is payable in respect of any
amount payable under this Agreement, you shall furnish to us, at our request, a
certificate from each applicable taxing authority or an opinion of counsel
acceptable to us, in either case stating that such payments are exempt from or
not subject to withholding or deduction of Taxes. If you fail promptly to
provide such original or certified copy of a receipt evidencing payment of Taxes
or certificate(s) or opinion of counsel of exemption, you hereby agree to
compensate us for, and indemnify us with respect to, the tax consequences of
your failure to provide evidence of tax payments or tax exemption.
In the event that you attempt to pay or are able to pay any amount
under this Agreement, but such amount is not actually received by us in
immediately available funds for any reason (including without limitation for the
reason that (i) any law, regulation or other restriction promulgated by any
governmental authority prevents the payment by you or such amount to us or (ii)
the currency in which such payment is to be made to us is unavailable), such
amount shall be deemed to be unpaid for all purposes of this Agreement and you
shall continue to be obligated to make payment of such amount to us under this
Agreement.
12
Very truly yours,
CENTRIC CAPITAL CORPORATION
By: /s/ Elizabeth S. Eldridge
-------------------------
Name: Elizabeth S. Eldridge
Title: Vice President
Agreed and Accepted:
LOUISIANA-PACIFIC ACQUISITION INC.
By: /s/ Curtis M. Stevens
----------------------
Name: Curtis M. Stevens
Title: Vice President
13
SCHEDULE I
to
Loan Agreement
dated as of September 10, 1999
between Centric Capital Corporation and Louisiana-Pacific
Acquisition Inc.
(i) For the purpose of Sections 1 and 2 of this Loan Agreement:
The "Facility Amount" is $250,000,000, reduced by the net
proceeds of any issuance for cash of equity securities (other
than any equity securities issued pursuant to any employee
compensation or benefit plan) or debt securities (other than
bank borrowings) undertaken by the Borrower or the Guarantor
during the term of this agreement.
The "Minimum Advance Amount" is $5,000,000.
(ii) For the purpose of Section 12 of this Loan Agreement:
The address for written communications to you is:
Louisiana-Pacific Acquisition Inc.
c/o Louisiana-Pacific Corporation
111 S.W. Fifth Avenue
Portland, Oregon 97204
Attention: Curtis M. Stevens
Telephone: (503) 821-5432
Fax: (503) 821-5322
The address for written communications to us is:
Centric Capital Corporation
c/o AMACAR Group, L.L.C.
6525 Morrison Boulevard, Suite 318,
Charlotte, N.C. 28211
Attention: Douglas Johnson
Telephone: (704) 365-0569
Fax: (704) 365-1362
(iii) For purposes of this Loan Agreement, instructions for wire
transfer of funds to the Borrower are:
Name of Bank:
Bank ABA Number:
Borrower Number:
Reference:
14
SCHEDULE II
to
Loan Agreement
dated as of September 10, 1999
between Centric Capital Corporation and Louisiana-Pacific
Acquisition Inc.
For the purpose of Section 1 of this Loan Agreement, the interest rate on
Advances shall be as follows:
Date of Advance Interest Rate
- --------------- -------------
September 10, 1999 - June 9, 2000 LIBOR + 75 basis points
June 10, 2000 - July 9, 2000 LIBOR + 100 basis points
July 10, 2000 - August 9, 2000 LIBOR + 175 basis points
August 10, 2000 - September 9, 2000 LIBOR + 250 basis points
September 10, 2000 - Termination Date LIBOR + 300 basis points
15
EXHIBIT A
to
The Loan Agreement
FORM OF SHORT-TERM PROMISSORY GRID NOTE
$__________ Dated September __, 1999
FOR VALUE RECEIVED, the undersigned (hereinafter called the
"Borrower"), HEREBY PROMISES TO PAY to the order of Centric Capital Corporation
(hereinafter called the "Lender") with respect to each Advance (as defined
below):
(a) in the case of an Advance made on an interest bearing basis, the
principal amount of such Advance made by the Lender to the Borrower, on
the date mutually agreed to by the Lender and the Borrower at the time of
such Advance as the maturity date thereof, together with interest
(computed on the basis of a year of 360 days for the actual number of
days, including the first day but excluding the last day, elapsed) on the
principal amount of each Advance outstanding from time to time from and
including the date on which such Advance is made until the maturity date
of such Advance, at an interest rate per annum set forth in the Loan
Agreement (as defined below), payable on the maturity date of such
Advance; and
(b) in the case of each Advance made on a discount basis by the
Lender to the Borrower, the stated or face amount of such Advance, on the
date mutually agreed to by the Lender and the Borrower at the time of such
Advance as the maturity date thereof.
Any overdue principal amount and overdue amount of interest, fees or other
amounts payable hereunder or under the Loan Agreement referred to below shall
bear interest, payable on demand, at a fluctuating interest rate per annum equal
at all times to the Prime Rate plus 2%. As used herein, "Prime Rate" shall mean
the prime rate of U.S. money center commercial banks as published in the Wall
Street Journal. Changes in the Prime Rate shall be effective as of the day of
each such change.
The Borrower may not prepay any unpaid principal amount of any
Advance.
The Borrower shall make each payment of principal and interest
hereunder prior to 12:00 noon (New York City time) on the day when due in lawful
money of the United States of America to the Lender's account, The Centric
Capital Corporation Commercial Paper Account, at The First National Bank of
Chicago, One First National Plaza, Chicago, Illinois, 60670 in same day funds.
Whenever any payment to be made hereunder shall be otherwise due on a day other
than a Business Day (as defined in the Loan Agreement), such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest.
The Borrower hereby authorizes the Lender to endorse on the grid
attached hereto the date and amount of each Advance made by the Lender to the
Borrower hereunder, the
16
maturity date thereof, all payments made on account of principal thereof and the
interest rate applicable thereto, provided that the failure to do so shall not
affect the obligations of the Borrower to the Lender.
The Borrower also agrees to pay on demand all costs and expenses
(including fees and expenses of counsel) incurred by the Lender in enforcing
this Promissory Note.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA.
This Promissory Note is the "grid" promissory note referred to in,
and is entitled to the benefits of, the Loan Agreement dated September 10, 1999
(the "Loan Agreement"), between the Borrower and the Lender, which Loan
Agreement, among other things, sets forth procedures to be used in connection
with the Borrower's periodic requests that the Lender make advances (the
"Advances") to the Borrower from time to time in an aggregate amount not to
exceed at any time outstanding the amount first above mentioned.
LOUISIANA-PACIFIC ACQUISITION INC.
By:
--------------------------------------
Name and Title:
17
GRID
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Interest Rate
Amount Maturity on Discounted Date
Date of of of or Amount of Payment
Advance Advance Advance Rate of Advance Received
Discount (if applicable)
of Advance
(as applicable)
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18
EXHIBIT B
to
the Loan Agreement
For the purpose of Section 2 of this Loan Agreement, the "Designated
Persons" are:
Name Title
- ---- -----
19
EXHIBIT C
to
the Loan Agreement
PERMITTED SECURITY INTERESTS, LIENS AND ENCUMBRANCES
20
GUARANTY
This Guaranty ("Guaranty") is executed as of this 10th day of
September, 1999 by Louisiana-Pacific Corporation (the "Guarantor"), in favor of
Centric Capital Corporation (the "Company").
PRELIMINARY STATEMENTS
The Company and Louisiana-Pacific Acquisition Inc. (the "Borrower")
intend to enter into a Loan Agreement (the "Loan Agreement") of even date
herewith, pursuant to which the Company has agreed to consider the making of
Advances to the Borrower which shall be evidenced by a promissory note (the
"Note"); and
In consideration of the execution of the Loan Agreement by the
Company and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the Guarantor, the Guarantor
agrees as follows:
SECTION 1. Definitions. Unless otherwise defined in this Agreement,
all defined terms used in this Agreement, including the Preliminary Statements
hereof, shall have the meanings ascribed to such terms in the Loan Agreement.
SECTION 2. Guaranty of Advances. The Guarantor irrevocably,
absolutely, and unconditionally guaranties the full and prompt payment, when
due, of all Advances under the Loan Agreement and the Note (which shall be all
payments under the Note), including, but not limited to, any payments that have
been characterized as preferential under Canadian bankruptcy or insolvency law,
to the holders from time to time of the Note (each, at the time an interest in
such Note is held, a "Noteholder"). This Guaranty constitutes a guaranty of
payment when due and not of collection or of performance.
SECTION 3. Validity of Obligations; Irrevocability. The Guarantor
agrees that its obligations under this Agreement shall be absolute and
unconditional, irrespective of (i) the validity, enforceability, discharge or
disaffirmance (by any Person, including a trustee in bankruptcy) of the
obligations under the Loan Agreement or the Note, (ii) the absence of any
attempt to collect the Advances from the Borrower, (iii) the waiver or consent
by any Noteholder with respect to any provision of the Note, (iv) any change of
the time, manner or place of payment, or any other term of any of the Advances,
(v) any law, regulation or order of any jurisdiction affecting any term of any
of the Advances or rights of any Noteholder with respect thereto, (vi) the
validity, regularity or enforceability of this Agreement or (vii) any other
circumstances which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. The Guarantor agrees that a Noteholder shall be under no
obligation to marshall any assets in favor of or against or in payment of any or
all of the Advances. The Guarantor further agrees that, to the extent that the
Borrower makes a payment or payments to a Noteholder, which payment or payments
or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to the Borrower, its
estate, trustee, receiver or any other party, including, without limitation, the
Guarantor, under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such payment or repayment, (i) the
Advances or part thereof which has been paid, reduced or satisfied by such
amount and
(ii) this Guaranty shall be reinstated and continued in full force and effect as
of the date such initial payment, reduction or satisfaction occurred. The
Guarantor waives all set-offs and counterclaims and all presentments, demands
for performance, notices of dishonor and notices of acceptance of this
Agreement. The Guarantor agrees that its obligations under this Agreement shall
be irrevocable.
SECTION 4. Rights of Set-Off. The Guarantor hereby authorizes any
Noteholder at any time and from time to time and with notice to the Guarantor,
to the fullest extent permitted by law, to (or to instruct any affiliate of any
Noteholder to) set off and apply all deposits (whether general or special, time
or demand, provisional or final) at any time held and other indebtedness at any
time owing by any Noteholder or any such affiliate to or for the credit or the
account of the Guarantor against any and all of the obligations of the Guarantor
now or hereafter existing under this Agreement to any Noteholder. The Guarantor
acknowledges that a Noteholder's rights described in this Section 4 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) any Noteholder may have.
SECTION 5. Waiver of Subrogation. Guarantor shall have no rights
(direct or indirect) of subrogation, contribution, reimbursement,
indemnification, or other rights of payment or recovery from any person or
entity (including, without limitation, the Borrower) for any payments made by
the Guarantor hereunder until one year and a day after the latest maturing
commercial paper note issued by the Company is paid in full and Guarantor hereby
waives and releases, absolutely and unconditionally, any such rights of
subrogation, contribution, reimbursement, indemnification and other rights of
payment or recovery which the Guarantor may now have or hereafter acquire until
one year and a day after the latest maturing commercial paper note issued by the
Company is paid in full.
SECTION 6. Representations and Warranties. The Guarantor hereby
represents and warrants to any Noteholder, as of the date hereof, as follows:
(a) Organization, etc. The Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has the corporate power and authority to own or
lease all of its properties and assets, to carry on its business as it is
now being conducted and to execute, deliver and perform this Guaranty. The
Guarantor is duly qualified as a foreign corporation in good standing
under the laws of each other jurisdiction where the nature of its business
requires such qualification except where the failure to be so qualified
would not reasonably be expected to have a materially adverse effect on
the ability of the Guarantor to perform its obligations hereunder.
(b) Authorization; Valid Agreement. The execution, delivery and
performance of this Guaranty has been duly authorized by all required
corporate or other action on the part of the Guarantor, and this Guaranty
constitutes the legal, valid and binding obligation of the Guarantor,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the
rights of creditors generally as such would apply in the event of the
bankruptcy, insolvency, moratorium or other similar event with respect to
the Guarantor.
-2-
(c) No Conflicts. The execution, delivery and performance by the
Guarantor of this Agreement does not and will not (a) contravene its
charter or by-laws, (b) violate any provision of, or require any filing,
registration, consent or approval under, any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award presently in
effect having applicability to the Guarantor, (c) result in a breach of or
constitute a default or require any consent under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which the
Guarantor is a party or by which it or its properties may be bound or
affected, or (d) result in, or require, the creation or imposition of any
lien upon or with respect to any of the properties now owned or hereafter
acquired by the Guarantor.
(d) Ordinary Course. The Guarantor has entered into this Guaranty in
the ordinary course of its business or financial affairs of the Guarantor
and any payments made hereunder by the Guarantor will be in the ordinary
course of business or financial affairs of the Guarantor out of the cash
flow generated in the normal day-to-day conduct and operations of the
Guarantor.
SECTION 7. Notice. The Guarantor shall give the Company and each
Noteholder other than the Company immediate notice if:
(a) (i) with respect to any indebtedness for borrowed money with a
current principal amount of at least $10,000,000, the Guarantor or any of
its subsidiaries shall (A) fail to pay any such indebtedness or any
interest or premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), or (B) fail to
perform or observe any financial covenant imposing financial ratio
requirements or other quantitative financial tests or limitations under
any agreement or instrument relating to any such indebtedness, if the
effect of such failure to perform or observe is to accelerate, or to
permit the acceleration, of the maturity of such indebtedness or (ii) any
such indebtedness shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment),
prior to the stated maturity thereof; or
(b) the Guarantor (i) shall generally not, or be unable to, or shall
admit in writing its inability to, pay its debts as such debts become due,
(ii) shall make an assignment for the benefit of creditors, petition or
apply to any tribunal for the appointment of a custodian, receiver or
trustee for the Guarantor or a substantial part of its assets, (iii) shall
commence any proceeding under any bankruptcy, reorganization, arrangement,
dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect, (iv) shall have had any such petition or
application filed, or any such proceeding shall have been commenced,
against the Guarantor, in which an adjudication or appointment is made or
order for relief is entered and which remains unstayed or undismissed for
a period of 60 days or more, (v) by any act or omission shall indicate its
consent to, approval of or acquiescence in any such petition, application
or proceeding or order for relief or the appointment of a custodian,
receiver or trustee for all or any substantial part of its properties or
(vi) shall suffer any such custodianship, receivership or trusteeship to
continue undischarged for a period of 60 days or more.
-3-
Notice to the Company shall be delivered to it at Centric Capital
Corporation, c/o Wachovia Bank of North Carolina, N.A., 100 North Main Street,
MC 32092, Winston-Salem, NC 27102 Attn: Corporate Services GLA, or at such other
address as the Company may specify from time to time.
Notice to the Noteholders shall be delivered to each Noteholder as
instructed by them.
SECTION 8. Successors. The agreements herein set forth shall be
mutually binding upon and inure to the mutual benefit of Guarantor, the Company
and Borrower and their respective successors, provided, however, that the
Guarantor shall not assign its rights or appoint a successor under this
Agreement without the prior written consent of the Company.
SECTION 9. Third Party Beneficiaries. Any holder of the Note shall
be an intended third-party beneficiary of this Agreement.
SECTION 10. Governing Law and Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of North
Carolina as applied to contracts made and performed in that state. Guarantor
hereby submits to the nonexclusive jurisdiction of the competent courts in the
State of North Carolina in relation to any legal action or proceedings arising
out of this Agreement.
SECTION 11. Taxes. All payments of any amounts to be made by the
Guarantor under this Guaranty shall be paid without deduction for, and free
from, any taxes, imposts, levies, duties, deductions or withholdings of any
nature now or at any time hereafter imposed by any governmental authority or by
any taxing authority thereof or therein, excluding in the case of the Company
taxes imposed on or measured by its net income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which the Company is organized or any
political subdivision thereof (all such non-excluded taxes, imposts, levies,
duties, deductions or withholdings of any nature being called "Taxes"). In the
event that the Guarantor is required by applicable law to make any such
withholding or deduction of Taxes with respect to any amount payable under this
Guaranty, the Guarantor shall pay such deduction or withholding to the
applicable taxing authority, shall promptly furnish to the Company all receipts
and other documents evidencing such payment and shall pay to the Company
additional amounts as may be necessary in order that the amount received by the
Company after the required withholding or other payment shall equal the amount
the Company would have received had no such withholding or other payment been
made. If no withholding or deduction of Taxes is payable in respect of any
amount payable under this Guaranty, the Guarantor shall furnish to the Company,
at the Company's request, a certificate from each applicable taxing authority or
an opinion of counsel acceptable to the Company, in either case stating that
such payments are exempt from or not subject to withholding or deduction of
Taxes. If the Guarantor fails promptly to provide such original or certified
copy of a receipt evidencing payment of Taxes or certificate(s) or opinion of
counsel of exemption, the Guarantor hereby agrees to compensate the Company for,
and indemnify the Company with respect to, the tax consequences of the
Guarantor's failure to provide evidence of tax payments or tax exemption.
-4-
In the event that the Guarantor attempts to pay or is able to pay
any amount under this Guaranty, but such amount is not actually received by the
Company in immediately available funds for any reason (including without
limitation for the reason that (i) any law, regulation or other restriction
promulgated by any governmental authority prevents the payment by the Guarantor
or such amount to the Company or (ii) the currency in which such payment is to
be made to the Company is unavailable), such amount shall be deemed to be unpaid
for all purposes of this Guaranty and the Guarantor shall continue to be
obligated to make payment of such amount to the Company under this Guaranty.
SECTION 12. Event of Default. A breach or violation by the Guarantor
of any representation or warranty, affirmative covenant or negative covenant
under Articles V, VI or VII, subject to the applicable grace periods, or the
triggering of an Event of Default under Article VIII of the Credit Agreement,
dated as of January 31, 1997 among the Guarantor, Louisiana-Pacific Canada Ltd.,
Bank of America National Trust and Savings Association and the other financial
institutions party thereto, or any successor agreement to which Wachovia Bank,
N.A. is a party, shall be deemed a revocation and invalidation of this Guaranty
for purposes of Section 15(k) of the Loan Agreement.
[SIGNATURE PAGE FOLLOWS]
-5-
IN WITNESS WHEREOF, this Guaranty has been duly executed by the
Guarantor as of this 10th day of September, 1999.
LOUISIANA-PACIFIC CORPORATION
By: /s/ Curtis M. Stevens
----------------------
Name: Curtis M. Stevens
Title: Vice President
Acknowledged and accepted
as of this 10th day of
September, 1999
CENTRIC CAPITAL CORPORATION
By: /s/ Elizabeth S. Eldridge
---------------------------
Name: Elizabeth S. Eldridge
Title: Vice President
-6-
Exhibit 99.4
Release No.: 138-8-9
Contact: Kelly Stoner (Media Relations)
(503) 821-5281
Bill Hebert (Investor Relations)
(503) 821-5311
FOR RELEASE TUESDAY, AUGUST 24, 1999 AT 9:00 AM EST
Louisiana-Pacific To Acquire Evans Forest Products, Ltd.
US$90 Million Transaction To Strengthen L-P's Position In Growing Engineered
Wood Market
(Portland, Oregon; August 24, 1999) Louisiana-Pacific Corporation announced
today that it has signed a definitive agreement to purchase Evans Forest
Products, Ltd., a leading Canadian producer of engineered wood and lumber
products.
Evans is a private company based in southeastern British Columbia whose assets
include a new laminated veneer lumber (LVL) mill, plywood facility, and a
sawmill that specializes in producing a wide range of Western Red Cedar
products. Included in the transaction are two forest licenses and a tree farm
license that will provide access to approximately 610,000 cubic meters of wood
per year.
"Evans Forest Products offers a highly trained work force and modern,
state-of-the-art LVL facilities. It further complements and strengthens our
rapidly growing engineered wood products business, particularly laminated veneer
lumber," said Mark A. Suwyn, Louisiana-Pacific Chairman and CEO. "This
acquisition strategically positions L-P to better serve rapidly growing West
Coast markets in the U.S. and will help further develop the company's presence
in British Columbia."
The sale is subject to approval by regulatory agencies in the United States and
Canada, the successful transfer of Evan's forest licenses and other customary
closing conditions. The total transaction value is approximately $90 million
U.S. plus a working capital adjustment at the time of closing. Finalization of
the sale is expected to be completed during the fourth quarter of 1999.
Louisiana-Pacific, now in its 26th year of operation, is a major building
products company headquartered in Portland, Oregon, with manufacturing
facilities throughout the United States and in Canada and Ireland. Visit L-P's
website at www.LPCorp.com.
FORWARD LOOKING STATEMENTS
Some statements in this release may constitute forward-looking statements within
the meaning of federal securities laws. Forward-looking statements include,
without limitation, statements regarding the outlook for future operations,
forecasts of future costs and expenditures, the outcome of legal proceedings,
plans for product development, new facilities and acquisitions, evaluation of
market conditions, and the adequacy of reserves. Investors are cautioned that
forward-looking statements are subject to an inherent risk that actual results
may vary materially from those described herein. Factors that may result in such
variance, in addition to those set forth above, include changes in interest
rates, commodity prices, and other economic conditions; actions by competitors;
changing weather conditions and other natural phenomena; actions by government
authorities; uncertainties associated with legal proceedings; technological
developments; risks associated with acquiring new businesses; future decisions
by management in response to changing conditions; and invalidity of the beliefs
and assumptions underlying such forward-looking statements.
Copyright (C) 1999 Louisiana-Pacific Corporation. All rights reserved.