exv10wxgy



 



Exhibit 10(g)


EXECUTION COPY


$1,200,000,000



SECOND AMENDED AND RESTATED 364-DAY

REVOLVING CREDIT FACILITY AGREEMENT



Dated as of March 25, 2003



among



WEYERHAEUSER COMPANY, and



WEYERHAEUSER REAL ESTATE COMPANY, as Borrowers



THE LENDERS NAMED HEREIN,



JPMORGAN CHASE BANK, as Administrative Agent,



MORGAN STANLEY SENIOR FUNDING, INC., as Syndication Agent,



and



THE BANK OF TOKYO-MITSUBISHI, LTD., and



DEUTSCHE BANK SECURITIES INC.,



as Co-Documentation Agents



J.P. MORGAN SECURITIES INC. and MORGAN STANLEY SENIOR FUNDING, INC.,



as Lead Arrangers and Joint Book Runners



 






 





          SECOND AMENDED AND RESTATED 364-DAY REVOLVING CREDIT FACILITY AGREEMENT
dated as of March 25, 2003 among WEYERHAEUSER COMPANY, a Washington corporation
(“Weyerhaeuser”), WEYERHAEUSER REAL ESTATE COMPANY, a Washington corporation
(“WRECO,” together with Weyerhaeuser, the “Borrowers” and each, individually, a
“Borrower”), the lenders listed in Schedule 2.01 (together with each assignee
that becomes a party hereto pursuant to Section 9.04, a “Lender,” and
collectively, the “Lenders”), JPMORGAN CHASE BANK, a New York banking
corporation, as administrative agent for the Lenders (in such capacity, and its
successors in such capacity, the “Administrative Agent”), MORGAN STANLEY SENIOR
FUNDING, INC., as syndication agent (in such capacity, the “Syndication
Agent”), and THE BANK OF TOKYO-MITSUBISHI, LTD. and DEUTSCHE BANK SECURITIES
INC., as co-documentation agents (each, individually, a “Co-Documentation
Agent,” and collectively, the “Co-Documentation Agents”).



W I T N E S S E T H:



          WHEREAS, the Borrowers have entered into that certain Amended and Restated
364-Day Revolving Credit Facility Agreement, dated as of March 26, 2002 (the
“Existing 364-Day Revolving Credit Agreement”) with JPMorgan Chase Bank, as
administrative agent, Morgan Stanley Senior Funding, Inc., as syndication
agent, The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche Bank Securities Inc. as
co-documentation agents, and the lenders party thereto from time to time.



          WHEREAS, the Borrowers have requested that the Lenders amend and restate
the Existing 364-Day Revolving Credit Agreement (a) to refinance the Existing
364-Day Revolving Credit Agreement, (b) to pay costs and expenses related to
such re-financing and (c) to provide the Borrowers and their Subsidiaries with
financing for general corporate purposes.



          WHEREAS, the Lenders have indicated their willingness to amend and restate
the Existing 364-Day Revolving Credit Agreement on the terms and conditions of
this Agreement.



          WHEREAS, Weyerhaeuser Real Estate Company, a Washington corporation and a
wholly owned subsidiary of Weyerhaeuser, will derive a substantial benefit from
the credit extended to Weyerhaeuser.



          NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree to
amend and restate the Existing 364-Day Revolving Credit Agreement as follows:



ARTICLE I



DEFINITIONS



          Section 1.01 Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:



          “Adjusted Net Worth” shall mean, as of the date of any computation
thereof, the aggregate amount of capital stock (less treasury stock), surplus
and retained earnings of WRECO





 






 





and its Restricted Subsidiaries, after deducting (i) goodwill, patents,
trade names, trademarks, unamortized debt discount and expense, deferred assets
(other than prepaid taxes and insurance), experimental or organizational
expense, any reappraisal, revaluation or write-up assets, and such other assets
as are properly classified as “intangible assets” of WRECO and its Restricted
Subsidiaries in accordance with GAAP, (ii) all minority interests in the
capital stock and surplus of the Restricted Subsidiaries of WRECO, (iii) all
Investments in Unrestricted Subsidiaries of WRECO, and (iv) all Investments of
WRECO and its Restricted Subsidiaries in any joint venture, partnership or
similar entity (not including any Investments in any Restricted Subsidiary of
WRECO) entered into for the purpose of acquiring, developing, constructing,
owning, operating, selling or leasing any Real Estate Assets.


          “Administrative Agent Fees” shall have the meaning given such term in
Section 2.04(b).



          “Administrative Questionnaire” shall mean an Administrative Questionnaire
in the form of Exhibit B hereto.



          “Affiliate” shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified.



          “Aggregate Credit Exposure” shall mean the aggregate amounts of the
Lenders’ Credit Exposures.



          “Agreement” shall mean this Second Amended and Restated 364-Day Revolving
Credit Facility Agreement, together with all amendments, supplements and
modifications hereof.



          “Applicable Margin” shall have the meaning given such term in Section
2.06(d).



          “Applicable Percentage” of any Lender at any time shall mean the
percentage of the Total Commitment represented by such Lender’s Commitment. In
the event the Commitments shall have expired or been terminated, the Applicable
Percentage shall be determined on the basis of the Commitments most recently in
effect, but giving effect to assignments pursuant to Section 9.04.



          “Assignment and Acceptance” shall mean an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
which acceptance shall be governed by the terms of Section 9.04, substantially
in the form of Exhibit C.



          “Base Rate” shall mean, for any day, a rate per annum equal to the higher
of (i) the Prime Rate and (ii) 1/2 of 1% plus the Federal Funds Rate, each as
in effect from time to time. If for any reason the Administrative Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Federal Funds Rate, including the inability
or failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms thereof, the Base Rate shall be determined without
regard to clause (ii) of the first sentence of this definition, until the
circumstances giving rise to such inability no longer exist. Any change in the
Base Rate due to a change in the Prime Rate or the Federal




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Funds Rate shall be effective on the effective date of such change in the
Prime Rate or the Federal Funds Rate, respectively.


          “Base Rate Borrowing” shall mean a Borrowing comprised of Base Rate Loans.



          “Base Rate Loan” shall mean any Loan bearing interest at a rate determined
by reference to the Base Rate in accordance with the provisions of Article II.



          “Board” shall mean the Board of Governors of the Federal Reserve System of
the United States.



          “Borrower” and “Borrowers” shall have the respective meanings given such
terms in the introductory paragraph hereto.



          “Borrowing” shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in effect.



          “Business Day” shall mean any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of New York) on which banks are open for
business in New York City; provided, however, that, when used in connection
with a Eurodollar Loan, the term “Business Day” shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London
interbank market.



          “Capital Base” shall mean, as of the date of any computation thereof, the
sum of (i) Adjusted Net Worth plus (ii) the amount of WRECO/Weyerhaeuser
Subordinated Debt then outstanding not to exceed Adjusted Net Worth.



          “Capital Lease Obligations” of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
and, for purposes of this Agreement, the amount of such obligations at any time
shall be the capitalized amount thereof at such time determined in accordance
with GAAP.



          A “Change in Control” shall be deemed to have occurred with respect to (a)
Weyerhaeuser if, (i) any person or group (within the meaning of Rule 13d-5 of
the SEC as in effect on the date hereof) shall own directly or indirectly,
beneficially or of record, shares representing more than 20% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock
of Weyerhaeuser; (ii) a majority of the seats (other than vacant seats) on the
board of directors of Weyerhaeuser shall at any time have been occupied by
persons who were neither (A) nominated by the management of Weyerhaeuser in
accordance with its charter and by-laws, nor (B) appointed by directors so
nominated; or (iii) any person or group shall otherwise directly or indirectly
Control Weyerhaeuser, and (b) WRECO if Weyerhaeuser shall fail to own directly
or indirectly, beneficially or of record, shares representing at least 79% of
the aggregate ordinary voting power represented by the issued and outstanding
capital stock of WRECO.





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          “Closing Date” shall mean the first date on which the conditions precedent
set forth in Section 4.02 shall have been satisfied.



          “Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of
this Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.



          “Commitment” shall mean, with respect to each Lender, the commitment of
such Lender hereunder as set forth in Schedule 2.01 or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable, as such Lender’s Commitment may be permanently reduced, increased
or terminated from time to time pursuant to Section 2.09, Section 2.18, Article
VII or Section 9.04. Each Lender’s unused Commitment shall automatically and
permanently terminate on the Revolver Termination Date, and, if the Term Loan
Conversion is elected, each Lender’s remaining Commitment shall automatically
and permanently terminate on the Termination Date.



          “Control” shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person,
whether through the ownership of voting securities or by contract, and
“Controlling” and “Controlled” shall have meanings correlative thereto.



          “Credit Exposure” shall mean, with respect to each Lender, at any time,
the aggregate principal amount at such time of all outstanding Loans of such
Lender to the Borrowers.



          “Default” shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.



          “Dollars,” “dollars” or “$” shall mean lawful money of the United States
of America.



          “Domestic Subsidiary” shall mean any subsidiary organized under the laws
of any State of the United States of America, substantially all the assets of
which are located, and substantially all the business of which is conducted, in
the United States of America.



          “Environmental Claims” shall mean any and all administrative, regulatory,
or judicial actions, suits, demand letters, claims, liens, notices of
noncompliance or violation, investigations, or proceedings relating in any way
to any Environmental Law (hereinafter referred to as “claims”) or any permit
issued under any such Environmental Law, including without limitation (a) any
and all claims by Governmental Authorities for enforcement, cleanup, removal,
response, remedial, or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation, or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety, or the environment.



          “Environmental Laws” shall mean any and all Federal, state, local and
foreign statutes, laws, regulations, ordinances, codes, rules (including rules
of common law), judgments,








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orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions now or hereafter in effect
relating to the environment, health, safety, Hazardous Materials (including,
without limitation, the manufacture, processing, distribution, use, treatment,
storage, Release, and transportation thereof) or to industrial hygiene or the
environmental conditions on, under or about real property, including, without
limitation, soil, groundwater, and indoor and outdoor ambient air conditions.


          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.



          “ERISA Affiliate” shall mean any trade or business (whether or not
incorporated) that, together with Weyerhaeuser or WRECO, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code.



          “Eurodollar Borrowing” shall mean a Borrowing comprised of Eurodollar
Loans.



          “Eurodollar Loan” shall mean any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate in accordance with the
provisions of Article II.



          “Eurodollar Rate” shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for the purpose of providing quotations
of interest rates applicable to dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is
not available at such time for any reason, then the “Eurodollar Rate” with
respect to such Eurodollar Borrowing for such Interest Period shall be the rate
at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.



          “Event of Default” shall have the meaning given such term in Article VII.



          “Excluded Sales” shall mean (a) the sale by Weyerhaeuser or any of its
Subsidiaries in the ordinary course of its business of inventory and
timberlands, (b) sales of accounts, receivables or other payment intangibles as
part of a securitization transaction and (c) sales to Weyerhaeuser or any of
its subsidiaries.



          “Existing 364-Day Revolving Credit Agreement” shall have the meaning given
such term in the preliminary statements hereto.





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          “Facility Fees” shall have the meaning given such term in Section 2.04(a).



          “Federal Funds Rate” shall mean, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for the day of such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.



          “Fees” shall mean the Facility Fees and the Administrative Agent Fees.



          “Financial Officer” of any corporation shall mean the chief financial
officer, principal accounting officer, treasurer or controller of such
corporation.



          “Five-Year Revolving Credit Facility Agreement” shall mean the Amended and
Restated Competitive Advance and Revolving Credit Facility Agreement dated as
of March 26, 2002, entered into by and among Weyerhaeuser, the lenders party
thereto from time to time, the Syndication Agent, the Administrative Agent and
the Co-Documentation Agents, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time.



          “GAAP” shall mean generally accepted accounting principles, applied on a
consistent basis.



          “Governmental Authority” shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.



          “Guarantee” of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the “primary obligor”) in
any manner, whether directly or indirectly, and including any obligation of
such person, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment of
such Indebtedness, (c) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, however, that the term Guarantee shall
not include endorsements for collection or deposit, in either case in the
ordinary course of business.



          “Hazardous Materials” shall mean (a) any petroleum or petroleum products,
flammable substances, explosives, radioactive materials, hazardous wastes,
substances or contaminants, toxic wastes, substances or contaminants, or any
other wastes, substances,





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contaminants or pollutants prohibited, limited or regulated by any
Governmental Authority; (b) asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment
that contains dielectric fluid containing levels of polychlorinated biphenyls
or radon gas; (c) any chemicals, materials or substances defined as or included
in the definition of “hazardous substances,” “hazardous wastes,” “hazardous
materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic
substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of
similar import, under any applicable Environmental Law; and (d) any other
chemical, material, or substance, exposure to which is prohibited, limited, or
regulated by any Governmental Authority.


          “Indebtedness” of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such person, whether or
not the obligations secured thereby have been assumed, (g) all Guarantees by
such person of Indebtedness of others, (h) all Capital Lease Obligations of
such person, and (i) all obligations of such person as an account party in
respect of letters of credit, letters of guaranty and bankers’ acceptances.
The Indebtedness of any person shall include the Indebtedness of any
partnership in which such person is a general partner.



          “Interest Period” shall mean, as to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing or on the date of conversion of a
Borrowing of a different Type to a Eurodollar Borrowing or on the last day of
the immediately preceding Interest Period applicable to such Borrowing or
conversion thereof, as the case may be, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the
last day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
applicable Borrower may elect; provided, however, that if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of Eurodollar
Loans, such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business
Day; provided further that no Interest Period for any Loan shall extend beyond
the Termination Date. Interest shall accrue from and including the first day of
an Interest Period to but excluding the last day of such Interest Period.



          “Investments” shall mean all investments in any Person, computed in
accordance with GAAP, made by stock purchase, capital contribution, loan,
advance, extension of credit, or creation or assumption of any other contingent
liability or Guarantee in respect of any obligation of such Person, or
otherwise; provided, however, that in computing any investment in any Person
(i) all expenditures for such investment shall be taken into account at the
actual amounts thereof in the case of expenditures of cash and at the fair
value thereof (as determined in good faith by the Board of Directors of WRECO)
or depreciated cost thereof (in accordance with GAAP),





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whichever is greater, in the case of expenditures of property, (ii) there
shall not be included any Real Estate Assets, or any account or note receivable
from such other Person arising from transactions in the ordinary course of
business, and (iii) a Guarantee or other contingent liability of any kind in
respect of any Indebtedness or other obligation of such Person shall be deemed
an Investment equal to the amount of such Indebtedness or obligation.


          “Lead Arrangers” shall mean, collectively, J.P. Morgan Securities Inc.,
and Morgan Stanley Senior Funding, Inc.



          “Lender” and “Lenders” shall have the respective meanings given such terms
in the introductory paragraph hereto.



          “Lender Affiliate” shall mean, (a) with respect to any Lender, (i) an
Affiliate of such Lender or (ii) any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing, holding
or otherwise investing in bank loans and similar extensions of credit in the
ordinary course of its business and is administered or managed by a Lender or
an Affiliate of such Lender and (b) with respect to any Lender that is a fund
which invests in bank loans and similar extensions of credit, any other fund
that invests in bank loans and similar extensions of credit and is managed by
the same investment advisor as such Lender or by an Affiliate of such
investment advisor.



          “Lien” shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset
and (c) in the case of securities, any purchase option, call or similar right
of a third party with respect to such securities.



          “Loan” shall mean a Revolving Loan made by a Lender to a Borrower pursuant
to Section 2.01 and a Term Loan made by a Lender to a Borrower pursuant to
Section 2.19. Each Loan shall be a Eurodollar Loan or a Base Rate Loan.



          “Loan Documents” shall mean this Agreement, the OCBM Agreement and any
notes issued in accordance with Section 2.05.



          “Mandatory Convertible Debt Securities” with respect to Weyerhaeuser,
shall mean all obligations of Weyerhaeuser evidenced by bonds, notes,
debentures, or other similar instruments, which by their terms convert
mandatorily into equity interests of Weyerhaeuser no later than three years
from the date of issuance of such bonds, notes, debentures, or other similar
instruments; provided that at no time shall the aggregate outstanding principal
amount of such obligations included in the definition of “Mandatory Convertible
Debt Securities,” prior to their conversion, exceed $1,500,000,000.



          “Margin Stock” shall have the meaning given such term under Regulation U.



          “Material Adverse Effect” shall mean (a) a materially adverse effect on
the business, financial condition, operations or properties of Weyerhaeuser and
its Subsidiaries, taken as a whole, (b) a materially adverse effect on the
ability of Weyerhaeuser or any of its Subsidiaries to perform its obligations
under any Loan Documents to which it is or will be a





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party, or (c) a materially adverse effect on the rights and remedies
available to the Administrative Agent and the Lenders under the Loan Documents.


          “Moody’s” shall mean Moody’s Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
successors and assigns, and if such corporation shall for any reason no longer
perform the functions of a securities rating agency, “Moody’s” shall be deemed
to refer to any other nationally recognized rating agency designated by
Weyerhaeuser and the Required Lenders.



          “Net Cash Proceeds” shall mean, with respect to any sale, lease, transfer
or other disposition of any asset by any Person, the aggregate amount of cash
received from time to time (whether as initial consideration or through payment
or disposition of deferred consideration) by or on behalf of such Person in
connection with such transaction after deducting therefrom only (without
duplication) (a) the costs associated with such transaction (including
reasonable and customary brokerage fees and commissions, legal fees and other
similar fees and commissions), (b) the amount of taxes payable in connection
with or as a result of such transaction, (c) the amount of any Indebtedness
secured by a Lien on such asset that, by the terms of the agreement or
instrument governing such Indebtedness, is required to be repaid upon
disposition and (d) reserves for purchase price adjustments and retained fixed
liabilities that are payable by such Person in cash to the extent required
under GAAP in connection with such sale, lease, transfer or disposition (it
being understood that immediately upon expiration of the retention period for
such reserves, amounts held as reserves must be paid as a mandatory prepayment
pursuant to Section 2.10(b)), in each case to the extent, but only to the
extent, that the amounts so deducted are, (in the cases of (a) and (c) above,
at the time of receipt of such cash), actually paid to a Person that is not an
Affiliate of such Person or Weyerhaeuser or any of its Subsidiaries or any
Affiliate of Weyerhaeuser or any of its Subsidiaries and are properly
attributable to such transaction or to the asset that is the subject thereof;
provided, however, that Net Cash Proceeds shall not include, (i) with respect
to any sale, lease, transfer or other disposition of any asset by any Person,
any cash receipts received from the sale of worn, damaged, or obsolete
equipment, (ii) any cash receipts received from proceeds of insurance,
condemnation awards (or payments in lieu thereof) or indemnity payments to the
extent that such proceeds, awards or payments in respect of loss or damage to
the assets are applied (or in respect of which expenditures were previously
incurred) to replace or repair the assets in respect of which such proceeds
were received, so long as such application is made within 180 days after the
occurrence of such damage or loss and (iii) any rental payments received in
connection with the lease of an asset in the ordinary course of business. In
addition, no proceeds realized in a single transaction or series of related
transactions shall constitute Net Cash Proceeds except for the portion (if any)
of such proceeds in excess of $25,000,000.



          “OCBM Agreement” shall mean the Ownership and Capital Base Maintenance
Agreement, dated as of February 12, 2002, and entered into by Weyerhaeuser.



          “PBGC” shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.





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          “Person” shall mean any natural person, corporation, business trust, joint
venture, joint stock company, trust, unincorporated organization, association,
company, partnership or government, or any agency or political subdivision
thereof.



          “Plan” shall mean any multiemployer or single-employer plan as defined in
Section 4001 of ERISA covered by Title IV of ERISA, which is maintained or
contributed to by (or to which there is an obligation to contribute of), or at
any time during the five calendar years preceding the date of this Agreement
was maintained or contributed to by (or to which there was an obligation to
contribute of), Weyerhaeuser or an ERISA Affiliate.



          “Prime Rate” shall mean the rate of interest per annum publicly announced
from time to time by the Administrative Agent as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced as effective. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer.



          “Rating” shall mean, as of any date, the rating by Moody’s and S&P in
effect on such date, of the Senior Unsecured Long-Term Debt of Weyerhaeuser.



          “Real Estate Assets” shall mean all assets of WRECO and its Restricted
Subsidiaries (determined, unless the context otherwise requires, on a
consolidated basis for WRECO and its Restricted Subsidiaries) of the types
described below, acquired and held for the purpose of, and arising out of, the
development and/or sale or rental thereof in the ordinary course of business:
(i) improved and unimproved land, buildings and other structures and
improvements and fixtures located thereon, and (ii) contracts, mortgages, notes
receivables and other choses in action.



          “Reduction Amount” shall have the meaning given such term in Section
2.09(c).



          “Register” shall have the meaning given such term in Section 9.04(c).



          “Regulation D” shall mean Regulation D of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.



          “Regulation T” shall mean Regulation T of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.



          “Regulation U” shall mean Regulation U of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.



          “Regulation X” shall mean Regulation X of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.



          “Reinvestment Proceeds” shall have the meaning given such term in Section
2.10(b).





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          “Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person’s Affiliates.



          “Release” shall mean disposing, discharging, injecting, spilling, leaking,
dumping, emitting, escaping, emptying, seeping, placing, and the like, into or
upon any land or water or air, or otherwise entering into the environment.



          “Reportable Event” shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan as to which the 30-day notice requirement has not
been waived by statute, regulation or otherwise.



          “Required Lenders” shall mean, at any time, Lenders having Credit
Exposures and unused Commitments representing more than 50% of the sum of the
Aggregate Credit Exposure and unused Commitments at such time; provided that if
either Borrower elects the Term Loan Conversion, then on or after the Revolver
Termination Date, “Required Lenders” shall mean those Lenders having Term Loans
representing more than 50% of the aggregate principal amount of all Term Loans
outstanding at such time.



          “Restricted Subsidiary” shall mean, (i) with respect to Weyerhaeuser, each
Subsidiary that has not been designated as an Unrestricted Subsidiary on
Schedule 3.08 Part I and thereafter not designated by a Financial Officer of
Weyerhaeuser as an Unrestricted Subsidiary after the Closing Date pursuant to
Section 9.17 and (ii) with respect to WRECO, each Subsidiary that has not been
designated as an Unrestricted Subsidiary on Schedule 3.08 Part II or thereafter
designated by a Financial Officer of WRECO as an Unrestricted Subsidiary after
the Closing Date pursuant to Section 9.17. On the Closing Date, the Company
and its subsidiaries shall be deemed Restricted Subsidiaries unless a Financial
Officer of Weyerhaeuser shall have designated any of such entities as an
Unrestricted Subsidiary after the Closing Date.



          “Revolver Termination Date” shall mean March 23, 2004.



          “Revolving Borrowing” shall mean a Borrowing consisting of Revolving
Loans.



          “Revolving Borrowing Request” shall mean a request made pursuant to
Section 2.02(e) in the form of Exhibit A.



          “Revolving Loan” shall mean a Loan made by the Lenders to a Borrower
pursuant to Section 2.01.



          “S&P” shall mean Standard & Poor’s Ratings Services, a division of the
McGraw-Hill Companies, Inc., a corporation organized and existing under the
laws of the State of New York, and its successors and assigns, and if such
corporation shall for any reason no longer perform the functions of a
securities rating agency, “S&P” shall be deemed to refer to any other
nationally recognized rating agency designated by Weyerhaeuser and the Required
Lenders.



          “SEC” shall mean the Securities and Exchange Commission or any successor.





11






 





          “Senior Bank Financing” shall mean the credit facilities contemplated by
(a) this Agreement, and (b) the Five-Year Revolving Credit Facility Agreement.



          “Senior Debt” shall mean all Indebtedness of any Person (other than WRECO)
which is not expressed to be subordinate and junior in right of payment to any
other Indebtedness of such Person, and, with respect to WRECO, shall mean all
Indebtedness of WRECO other than Subordinated Debt.



          “Senior Unsecured Long-Term Debt” shall mean the unsecured bonds,
debentures, notes or other Indebtedness of Weyerhaeuser, designated on its
financial statements as senior long-term indebtedness. In the event more than
one issue of Senior Unsecured Long-Term Debt shall be outstanding at any
relevant time and different credit ratings shall have been issued by S&P or
Moody’s for such issues, Senior Unsecured Long-Term Debt shall be deemed to
refer to the lowest rated issue.



          “Statutory Reserves” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one, and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including
any marginal, special, emergency or supplemental reserves) expressed as a
decimal established by the Board and any other banking authority to which the
Administrative Agent is subject with respect to the Eurodollar Rate, for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserves shall be adjusted automatically
on and as of the effective date of any change in any reserve percentage.



          “Subordinated Debt” shall mean and include (i) Subordinated Promissory
Notes of WRECO, in substantially the form annexed as Exhibit E hereto, and (ii)
any other Indebtedness of WRECO now or hereafter created, issued or assumed
which at all times is evidenced by a written instrument or instruments
containing or having applicable thereto subordination provisions substantially
the same as those in said Exhibit E hereto, providing for the subordination of
such Indebtedness to such other Indebtedness of WRECO as shall be specified or
characterized in such subordination provisions.



          “subsidiary” shall mean, with respect to any Person (herein referred to as
the “parent”), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power to elect a
majority of the board of directors or more than 50% of the general partnership
interests are, at the time any determination is being made, owned, controlled
or held, or (b) which is, at the time any determination is made, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.



          “Subsidiary” shall mean any subsidiary of Weyerhaeuser or WRECO, provided
that there shall be excluded from this definition (i) Nelson Forests Joint
Venture, a joint venture





12






 





formed under the laws of New Zealand, (ii) Wapawekka Lumber Ltd., a
limited partnership formed under the laws of Saskatchewan, and (iii) Monterra
Lumber Mills Limited, a limited partnership formed under the laws of Ontario,
for so long as such business entities shall not be Controlled by Weyerhaeuser
or any of its subsidiaries.


          “Termination Date” shall mean the later to occur of (a) the Revolver
Termination Date or (b) if the Term Loan Conversion has been effected pursuant
to Section 2.19, the first anniversary of the Revolver Termination Date.



          “Term Borrowing” shall mean a Borrowing consisting of Term Loans.



          “Term Loan” shall have the meaning given such term in Section 2.19.



          “Term Loan Conversion” shall have the meaning given such term in Section
2.19.



          “Term-Out Premium” shall have the meaning giving such term in Section
2.06.



          “Total Adjusted Shareholders’ Interest” shall mean, at any time, the
amount of the preferred, preference and common shares accounts plus (or minus
in the case of a deficit) the amount of other capital and retained earnings, in
accordance with GAAP, of Weyerhaeuser and its consolidated Subsidiaries, less
treasury common shares and the aggregate net book value (after deducting any
reserves applicable thereto) of all items of the following character which are
included in the consolidated assets of Weyerhaeuser and its consolidated
Subsidiaries:




		
	 	     (a) investments in Unrestricted Subsidiaries; and
	 
	 	     (b) without duplication, investments by Weyerhaeuser and its
consolidated Subsidiaries in WRECO and its consolidated Subsidiaries.



          No effect shall be given for any increases or decreases attributable to
unrealized foreign exchange gains or losses resulting from the application of
FASB Statement 52.



          “Total Commitment” shall mean at any time the aggregate amount of the
Commitments as in effect at such time, and on the date hereof shall mean
$1,200,000,000.



          “Total Funded Indebtedness” with respect to Weyerhaeuser shall mean, at
any time, the aggregate principal amount of all Indebtedness (other than
Guarantees by such Person of Indebtedness of others) for borrowed money or for
the deferred purchase price of property and Capital Lease Obligations of
Weyerhaeuser and its consolidated Subsidiaries, excluding (a) the Indebtedness
of Unrestricted Subsidiaries, (b) without duplication, the Indebtedness of
WRECO and its consolidated Subsidiaries, and (c) 80% of the aggregate principal
amount of the Mandatory Convertible Debt Securities outstanding at such time.



          “Transactions” shall have the meaning given such term in Section 3.02.



          “Transferee” shall have the meaning given such term in Section 2.17.




13






 





          “Type,” when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, “Rate” shall include the
Eurodollar Rate and the Base Rate.



          “Unfunded Current Liability” of any Plan shall mean the amount, if any, by
which the present value of the accrued benefits under the Plan as of the close
of its most recent plan year, determined in accordance with Statement of
Financial Accounting Standards No. 35, based upon the actuarial assumptions
used by the Plan’s actuary in the most recent annual valuation of the Plan,
exceeds the fair market value of the assets allocable thereto, determined in
accordance with Section 412 of the Code.



          “Unrestricted Subsidiary” shall mean, (i) with respect to Weyerhaeuser,
each Subsidiary that has been designated as an Unrestricted Subsidiary on
Schedule 3.08 Part I and any Subsidiary which has been designated by a
Financial Officer of Weyerhaeuser as an Unrestricted Subsidiary after the
Closing Date pursuant to Section 9.17, and (ii) with respect to WRECO, each
Subsidiary that has been designated as an Unrestricted Subsidiary on Schedule
3.08 Part II and any Subsidiary which has been designated by a Financial
Officer of WRECO as an Unrestricted Subsidiary after the Closing Date pursuant
to Section 9.17.



          “Utilization Fee” shall have the meaning given such term in Section
2.06(e).



          “Weyerhaeuser” shall have the meaning given such term in the introductory
paragraph hereto.



          “WRECO” shall have the meaning given such term in the introductory
paragraph hereto.



          “WRECO/Weyerhaeuser Subordinated Debt” shall mean the Subordinated
Promissory Notes issued by WRECO to Weyerhaeuser described in clause (i) of the
definition of “Subordinated Debt.”



          Section 1.02 Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.” All
references herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require.



          Section 1.03 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if either Borrower notifies the Administrative Agent that such Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies either
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in





14






 





effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.


ARTICLE II



THE CREDITS



          Section 2.01 Commitments. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, to make Loans to each Borrower requesting a
Borrowing, at any time and from time to time on and after the date hereof and
until the earlier of the Revolver Termination Date and the termination of the
Commitment of such Lender, in an aggregate principal amount at any time
outstanding not to exceed such Lender’s Commitment at such time, subject,
however, to the conditions that:




		
	 	     (a) at no time shall the outstanding aggregate principal amount of
all Loans (including, if the Term Loan Conversion has been elected, Term
Loans) made by all Lenders exceed the Total Commitment;
	 
	 	     (b) at no time shall the outstanding aggregate principal amount of
all Loans (including, if the Term Loan Conversion has been elected, Term
Loans) made by all Lenders to WRECO exceed $600,000,000; and
	 
	 	     (c) at all times the outstanding aggregate principal amount of all
Loans made by each Lender shall equal the product of (i) the Applicable
Percentage times (ii) the outstanding aggregate principal amount of all
Loans made pursuant to Section 2.02 or 2.19.



          Each Lender’s Commitment is set forth opposite its name in Schedule 2.01,
or in the case of each assignee that becomes a party hereto pursuant to Section
9.04, on the Register maintained by the Administrative Agent pursuant to
Section 9.04(c).



          Within the foregoing limits, each Borrower may borrow, pay or prepay and
reborrow hereunder, on and after the Closing Date and prior to the Revolver
Termination Date, subject to the terms, conditions and limitations set forth
herein, on a several and not joint basis.



          Section 2.02 Loans. (a) Each Revolving Loan and each Term Loan shall be
made as part of a Borrowing consisting of Revolving Loans and Term Loans,
respectively, made by the Lenders ratably in accordance with their respective
Commitments; provided, however, that the failure of any Lender to make any Loan
shall not in and of itself relieve any other Lender of its obligation to lend
hereunder (it being understood, however, that no Lender shall be responsible
for the failure of any other Lender to make any Loan required to be made by
such other Lender). The Loans comprising any Borrowing shall be in an
aggregate principal amount which is an integral multiple of $1,000,000 and not
less than $25,000,000 (or an aggregate principal amount equal to the remaining
balance of the available Commitments).




15






 





          (b) Each Revolving Borrowing and each Term Borrowing shall be comprised
entirely of Eurodollar Loans or Base Rate Loans, as the applicable Borrower may
request pursuant to paragraph (e) hereof. Each Lender may at its option make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option shall
not (i) affect the obligation of the applicable Borrower to repay such Loan in
accordance with the terms of this Agreement and (ii) entitle such Lender to any
amounts pursuant to Sections 2.11 or 2.12 to which amounts such Lender would
not be entitled if such Lender had made such Loan itself through its domestic
branch. Borrowings of more than one Type may be outstanding at the same time;
provided, however, that neither Borrower shall be entitled to request any
Borrowing which, if made, would result in an aggregate of more than twenty (20)
separate Loans from any Lender being outstanding hereunder at any one time.
For purposes of the foregoing, Loans (other than Base Rate Loans) having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Loans.



          (c) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to the
Administrative Agent in New York, New York, not later than 12:00 noon (or in
the case of Base Rate Loans, 2:00 p.m.), New York City time, and the
Administrative Agent shall by 3:00 p.m., New York City time, credit the amounts
so received to the general deposit account of the applicable Borrower
maintained with the Administrative Agent or, if a Borrowing shall not occur on
such date because any condition precedent herein specified shall not have been
met, return the amounts so received to the respective Lenders. Unless the
Administrative Agent shall have received notice from a Lender prior to the date
and time of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with this paragraph (c) and the Administrative Agent may, in
reliance upon such assumption, make available to the applicable Borrower on
such date a corresponding amount. If and to the extent that such Lender shall
not have made such portion available to the Administrative Agent, such Lender
and the applicable Borrower severally agree to repay to the Administrative
Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
applicable Borrower until the date such amount is repaid to the Administrative
Agent at (i) in the case of the applicable Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender’s Loan as part of such Borrowing for purposes of this Agreement.



          (d) Notwithstanding any other provision of this Agreement, no Borrower
shall be entitled to request any Borrowing with an Interest Period ending after
the Termination Date; provided that no Revolving Borrowing shall have an
Interest Period ending after the Revolver Termination Date.



          (e) In order to request a Revolving Borrowing, the Borrower requesting
such Borrowing shall hand deliver or telecopy to the Administrative Agent a
Revolving Borrowing Request in the form of Exhibit A (a) in the case of a
Eurodollar Borrowing, not later than





16






 





12:00 noon, New York City time, three Business Days before a proposed
borrowing and (b) in the case of a Base Rate Borrowing, not later than 12:00
noon, New York City time, on the day of a proposed borrowing. Such notice
shall be irrevocable and shall in each case specify (i) whether the Revolving
Borrowing then being requested is to be a Eurodollar Borrowing or a Base Rate
Borrowing; (ii) the date of such Revolving Borrowing (which shall be a Business
Day) and the amount thereof; and (iii) if such Revolving Borrowing is to be a
Eurodollar Borrowing, the Interest Period with respect thereto. If no election
as to the Type of Revolving Borrowing is specified in any such notice, then the
requested Revolving Borrowing shall be a Base Rate Borrowing. If no Interest
Period with respect to any Eurodollar Borrowing is specified in any such
notice, then the applicable Borrower shall be deemed to have selected an
Interest Period of one month’s duration. The Administrative Agent shall
promptly advise the Lenders of any notice given pursuant to this Section
2.02(e) and of each Lender’s portion of the requested Borrowing.


          Section 2.03 Conversion and Continuation of Loans. (a) Each Borrower
shall, with respect to its respective Borrowings, have the right at any time,
upon prior irrevocable written notice to the Administrative Agent given in the
manner and at the times specified in Section 2.02(d) and 2.19, respectively,
with respect to the Type of Borrowing into which conversion or continuation is
to be made, to convert any of its Borrowings into a Borrowing of a different
Type and to continue any of its Eurodollar Borrowings into a subsequent
Interest Period of any permissible duration, subject to the terms and
conditions of this Agreement and to the following:




		
	 	     (i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of Loans
comprising the converted or continued Borrowing;
	 
	 	     (ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, the aggregate principal amount
of such Borrowing converted and/or continued shall in each case not be
less than the minimum amount set forth in Section 2.02;
	 
	 	     (iii) if a Eurodollar Borrowing is converted at any time other than
on the last day of the Interest Period applicable thereto, the applicable
Borrower shall pay any amount due pursuant to Section 2.13;
	 
	 	     (iv) with respect to a Revolving Borrowing, if such Revolving
Borrowing is to be converted into a Eurodollar Borrowing or if a
Eurodollar Borrowing is to be continued, no Interest Period selected
shall extend beyond the Revolver Termination Date;
	 
	 	     (v) with respect to a Term Borrowing, if such Term Borrowing is to
be converted into a Eurodollar Borrowing or if a Eurodollar Borrowing is
to be continued, no Interest Period selected shall extend beyond the
Termination Date; and



17






 







		
	 	     (vi) interest accrued to the day immediately preceding each date of
conversion or continuation shall be payable on each Borrowing (or part
thereof) that is converted or continued concurrently with such conversion
or continuation.



          (b) Each notice given pursuant to Section 2.03(a) shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and the amount of
the Borrowing that the applicable Borrower requests to be converted or
continued; (ii) whether such Borrowing (or any part thereof) is to be converted
or continued as a Base Rate Borrowing or a Eurodollar Borrowing; (iii) if such
notice requests a conversion, the date of such conversion (which shall be a
Business Day); and (iv) if such Borrowing (or any part thereof) is to be
converted into or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar Borrowing, then
the applicable Borrower shall be deemed to have selected an Interest Period of
one month’s duration, in the case of a Eurodollar Borrowing. The
Administrative Agent shall advise the Lenders of any notice given pursuant to
Section 2.03(a) and of each Lender’s portion of any converted or continued
Borrowing.



          (c) If the applicable Borrower shall not have given notice in accordance
with this Section 2.03 to continue any Eurodollar Borrowing into a subsequent
Interest Period (and shall not otherwise have given notice in accordance with
this Section 2.03 to convert such Eurodollar Borrowing), such Eurodollar
Borrowing shall automatically be converted into a Base Rate Borrowing. In the
event of the occurrence and continuation of a Default or an Event of Default
(i) all Eurodollar Borrowings of each Borrower shall be converted into Base
Rate Borrowings on the last day of the Interest Period then in effect, and (ii)
no Base Rate Borrowing may be converted into a Borrowing of another Type so
long as a Default or Event of Default continues to exist.



          Section 2.04 Fees. (a) The Borrowers jointly and severally agree to pay
to each Lender, through the Administrative Agent, on each March 31, June 30,
September 30 and December 31 and on the date on which the Commitment of such
Lender shall be terminated as provided herein, a facility fee (each, a
“Facility Fee,” and collectively, the “Facility Fees”), calculated as specified
below, on the amount of the Commitment of such Lender, whether used or unused,
during the preceding quarter (or shorter period commencing with the Closing
Date or ending with the Termination Date applicable to such Lender or any date
on which the Commitment of such Lender shall be terminated). All Facility Fees
shall be computed on the basis of a year of 365 or 366 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day). The Facility Fee due to each Lender shall commence to
accrue on the Closing Date and shall cease to accrue on the earlier of the
Termination Date applicable to such Lender and the termination of the
Commitment of such Lender as provided herein.



          The Facility Fee for each Lender shall be calculated as a per annum rate
in an amount equal to the product of such Lender’s Commitment hereunder and the
applicable percentage specified in the table below, to be determined based upon
the Ratings received from S&P and Moody’s by Weyerhaeuser:





18






 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Level 1	 	Level 2	 	Level 3	 	Level 4	 	Level 5
	 	 	
	 	
	 	
	 	
	 	

	S&P:
	 	A- or better	 	BBB+	 	BBB	 	BBB-	 	Below BBB-
	Moody’s:
	 	A3 or better	 	Baa1	 	Baa2	 	Baa3	 	Below Baa3
	Facility Fee
	 	 	0.1000	%	 	 	0.1250	%	 	 	0.1500	%	 	 	0.2000	%	 	 	0.2500	%



          The Facility Fees shall change effective as of the date on which the
applicable rating agency announces any change in its Ratings. In the event
either S&P or Moody’s shall withdraw or suspend its Ratings, the remaining
Rating announced by either S&P or Moody’s, as the case may be, shall apply. In
the event neither agency shall provide a Rating, the Facility Fees shall be
based on the lowest rating provided above. If the Ratings by S&P and Moody’s
are split so that two consecutive Levels (as defined in the table above) apply,
the higher of those Ratings shall determine the applicable percentage to
calculate the Facility Fee. If the Ratings by S&P and Moody’s are split so
that the applicable Levels in the table above are separated by only one
intermediate Level, then such intermediate Level shall determine the applicable
percentage to calculate the Facility Fee. If the Ratings by S&P and Moody’s
are split so that the applicable Levels in the table above are separated by two
intermediate Levels, then the intermediate Level representing the lowest Rating
shall determine the applicable percentage to calculate the Facility Fee. The
Facility Fees shall be calculated by the Administrative Agent, which
calculation absent manifest error shall be final and binding on all parties.



          (b) Weyerhaeuser agrees to pay the Administrative Agent, for its own
account, the administration fees (the “Administrative Agent Fees”) at the times
and in the amounts agreed upon in the letter agreement dated as of December 13,
2001, among Weyerhaeuser, Morgan Stanley Senior Funding, Inc., J.P. Morgan
Securities Inc. and the Administrative Agent.



          (c) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for prompt distribution, if and as
appropriate, among the Lenders. Once paid, none of the Fees shall be
refundable under any circumstances.



          Section 2.05 Repayment of Loans; Evidence of Debt. (a) The outstanding
principal balance of (i) each Revolving Loan shall, unless the Borrowers elect
the Term Loan Conversion, be payable on the Revolver Termination Date and (ii)
each Term Loan shall be payable on the Termination Date. Each Loan shall bear
interest from the date thereof on the outstanding principal balance thereof as
set forth in Section 2.06.



          (b) Each Lender shall, and is hereby authorized by the Borrowers to,
maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of each Borrower to such Lender resulting from each
Loan made by such Lender, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.



          (c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from each Borrower to
each Lender hereunder and (iii) the amount of any sum received





19






 





by the Administrative Agent hereunder for the account of the Lenders and
each Lender’s share thereof.


          (d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of each Borrower to repay
its Loans in accordance with the terms of this Agreement.



          (e) Any Lender may request that Loans made by it be evidenced by a
promissory note, substantially in the form of Exhibit F attached hereto. In
such event, the applicable Borrower shall promptly, and in no event more than
ten (10) Business Days after a request therefor, prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns).
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note,
to such payee and its registered assigns).



          Section 2.06 Interest on Loans. (a) Subject to the provisions of Section
2.07, the Loans comprising each Eurodollar Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal to the Eurodollar Rate for the Interest Period
in effect for such Borrowing plus the Applicable Margin, determined pursuant to
paragraph (d) below.



          (b) Subject to the provisions of Section 2.07 the Loans comprising each
Base Rate Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be) at a
rate per annum equal to the Base Rate plus the Applicable Margin.



          (c) Interest on each Eurodollar Loan shall, except as otherwise provided
in this Agreement, be payable on the last day of the Interest Period applicable
thereto and, in case of a Eurodollar Loan with an Interest Period of more than
three months’ duration, each day that would have been an interest payment date
for such Loan had successive Interest Periods of three months’ duration been
applicable to such Loan, and on the Termination Date or any earlier date on
which this Agreement is, pursuant to its terms and conditions, terminated.
Interest on each Base Rate Loan shall be payable quarterly in arrears on the
last Business Day of each March, June, September and December, except as
otherwise provided in this Agreement and on the Termination Date or any earlier
date on which this Agreement is, pursuant to its terms and conditions,
terminated. The applicable Eurodollar Rate or Base Rate for each Interest
Period or day within an Interest Period, as the case may be, shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.



          (d) As used herein, “Applicable Margin” shall mean the sum of (i) the
applicable percentage per annum specified in the table below, to be determined
based upon the Ratings received from S&P and Moody’s by Weyerhaeuser, (ii) the
Utilization Fee, and (iii) if




20






 





applicable, the Term-Out Premium. The applicable percentage referred to
in Clause (i) of the immediately preceding sentence shall be determined based
upon the Ratings, as follows:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Level 1	 	Level 2	 	Level 3	 	Level 4	 	Level 5
	 	 	
	 	
	 	
	 	
	 	

	S&P:
	 	A- or better	 	BBB+	 	BBB	 	BBB-	 	Below BBB-
	Moody’s:
	 	A3 or better	 	Baa1	 	Baa2	 	Baa3	 	Below Baa3
	Eurodollar Loan:
	 	 	0.5250	%	 	 	0.6250	%	 	 	0.8500	%	 	 	1.0500	%	 	 	1.5000	%
	Base Rate Loan:
	 	 	0.0000	%	 	 	0.0000	%	 	 	0.0000	%	 	 	0.0500	%	 	 	0.5000	%



          The Applicable Margin shall change effective as of the date on which the
applicable rating agency announces any change in its Ratings. In the event
either S&P or Moody’s shall withdraw or suspend its Ratings, the remaining
Rating announced by either S&P or Moody’s, as the case may be, shall apply. In
the event neither agency shall provide a Rating, the Applicable Margin shall be
based on the lowest rating provided above. If the Ratings by S&P and Moody’s
are split so that two consecutive Levels (as defined in the table above) apply,
the higher of those Ratings shall determine the Applicable Margin. If the
Ratings by S&P and Moody’s are split so that the applicable Levels in the table
above are separated by only one intermediate Level, then such intermediate
Level shall determine the Applicable Margin. If the Ratings by S&P and Moody’s
are split so that the applicable Levels in the table above are separated by two
intermediate Levels, then the intermediate Level representing the lowest Rating
shall determine the Applicable Margin. The Applicable Margin shall be
calculated by the Administrative Agent, which calculation absent manifest error
shall be final and binding on all parties.



          (e) As used herein, “Utilization Fee” shall mean (i) a percentage per
annum equal to 0.250% for any date on which the sum of (A) the Aggregate Credit
Exposure plus (B) the “Aggregate Credit Exposure,” as defined under the
Five-Year Revolving Credit Facility Agreement, plus (C) the aggregate principal
amount of outstanding Competitive Loans under the Five-Year Revolving Credit
Facility Agreement, is equal to or exceeds 33% of the sum of (X) the Total
Commitment and (Y) the “Total Commitment” as defined under the Five-Year
Revolving Credit Facility Agreement, and (ii) a percentage per annum equal to
0.000% for any other date.



          (f) As used herein, “Term-Out Premium” shall mean, upon an election by a
Borrower of a Term Loan Conversion pursuant to Section 2.19, a percentage per
annum equal to 0.250%.



          Section 2.07 Default Interest. If a Borrower shall default in the payment
of the principal of or interest on any of its Loans or any other amount
becoming due hereunder, whether by scheduled maturity, notice of prepayment,
acceleration or otherwise, such Borrower shall on demand from time to time by
the Administrative Agent pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment (after as
well as before judgment) at a rate per annum equal to the rate of interest
applicable thereto at maturity or due date plus 2%.




21






 





          Section 2.08 Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined in good faith that dollar deposits in the principal amounts of the
Eurodollar Loans comprising such Borrowing are not generally available in the
London interbank market, or that the rates at which such dollar deposits are
being offered will not adequately and fairly reflect the cost to the Required
Lenders of making or maintaining their Eurodollar Loans during such Interest
Period, or that reasonable means do not exist for ascertaining the Eurodollar
Rate, the Administrative Agent shall, as soon as practicable thereafter, give
written notice of such determination to the Borrowers and the Lenders. In the
event of any such determination, until the Administrative Agent shall have
advised the Borrowers and the Lenders that the circumstances giving rise to
such notice no longer exist, (i) any request by the Borrowers for a Eurodollar
Borrowing pursuant to Section 2.02 shall be deemed to be a request for a Base
Rate Borrowing, and (ii) any request by the Borrowers for a conversion to, or a
continuation of, a Eurodollar Borrowing pursuant to Section 2.03 shall be
deemed to be a request for, respectively, a continuation as, or a conversion
to, a Base Rate Borrowing. Each determination by the Administrative Agent
hereunder shall be conclusive absent manifest error.



          Section 2.09 Termination and Reduction of Commitments. (a) The unused
Commitments of each Lender shall be automatically terminated on the Revolver
Termination Date, and, if the Term Loan Conversion is elected, the remaining
Commitments of each Lender shall be automatically terminated on the Termination
Date.



          (b) Subject to Section 2.10(b), upon at least three Business Days’ prior
irrevocable written notice to the Administrative Agent, the Borrowers may at
any time in whole permanently terminate, or from time to time in part
permanently reduce, the Total Commitment; provided, however, that (i) each
partial reduction shall be in an integral multiple of $1,000,000 and in a
minimum principal amount of $25,000,000 and (ii) no such termination or
reduction shall be made which would reduce the Total Commitment to an amount
less than the sum of the aggregate outstanding principal amount of Loans.



          (c) The Total Commitment shall be automatically and permanently reduced on
each date on which prepayment thereof is required to be made pursuant to
Section 2.10(b)(i) in the amount of such prepayment. In addition, the Total
Commitment shall be automatically and permanently reduced on each date on which
prepayment thereof is required to be made pursuant to Section 2.10(b)(i) in an
amount equal to the applicable Reduction Amount. “Reduction Amount” shall
mean, with respect to any sale, lease, transfer or other disposition of any
assets of Weyerhaeuser or any of its Subsidiaries (other than Excluded Sales),
on any date, the Net Cash Proceeds received with respect thereto on such date
less (i) any amounts applied with respect thereto to prepay any outstanding
amounts under the Senior Bank Financing pursuant to Section 2.10(b) (including
the amounts required to be cash collateralized pursuant to Section 2.04(i) of
the Five-Year Revolving Credit Facility Agreement), (ii) any amounts applied to
reduce Commitments under the Five-Year Revolving Credit Facility Agreement, and
(iii) the portion of such Net Cash Proceeds that constitutes Reinvestment
Proceeds.



          (d) Subject to Section 2.18, each reduction in the Total Commitment
hereunder shall be made ratably among the Lenders in accordance with their
respective





22






 





Commitments. The Borrowers jointly and severally agree to pay to the
Administrative Agent for the account of the Lenders, on the date of each
termination or reduction, the Facility Fees on the amount of the Commitments so
terminated or reduced accrued through the date of such termination or
reduction.


          Section 2.10 Prepayment. (a) Voluntary Prepayments. Each of the
Borrowers shall have the right at any time and from time to time to prepay any
of its respective Revolving Borrowings or Term Borrowings, in whole or in part,
upon giving written notice (or telephone notice promptly confirmed by written
notice) to the Administrative Agent: (i) before 12:00 noon, New York City
time, three Business Days prior to prepayment, in the case of Eurodollar Loans
and (ii) before 12:00 noon, New York City time, one Business Day prior to
prepayment, in the case of Base Rate Loans; provided, however, that each
partial prepayment shall be in an amount which is an integral multiple of
$1,000,000 and not less than $25,000,000.



          (b) Mandatory Prepayments. (i) The Borrowers shall, within three
Business Days of the date of receipt of the Net Cash Proceeds by Weyerhaeuser
or any of its Domestic Subsidiaries from the sale, lease, transfer or other
disposition of any assets of Weyerhaeuser or any of its Subsidiaries (other
than any Excluded Sales), prepay any amounts outstanding under the Senior Bank
Financing in an amount equal to the lesser of the amount of such Net Cash
Proceeds and the amount so outstanding (including the amounts required to be
cash collateralized pursuant to Section 2.04(i) of the Five-Year Revolving
Credit Facility Agreement). Each such prepayment shall be applied first to any
amounts outstanding or to be cash collateralized pursuant to the Five-Year
Revolving Credit Facility Agreement in accordance with the terms and conditions
set forth therein, and second to any principal amounts outstanding pursuant to
this Agreement in accordance with the terms and conditions for prepayment set
forth herein; provided that neither Borrower shall be required to make any
prepayments pursuant to this Section 2.10(b)(i) if Weyerhaeuser or any of its
Subsidiaries shall apply any of the Net Cash Proceeds it received from the
sale, lease, transfer or other disposition of its assets for reinvestment in
its business within 180 days after receipt thereof by Weyerhaeuser or any of
its Subsidiaries (any such Net Cash Proceeds so reinvested, the “Reinvestment
Proceeds”); provided further that Weyerhaeuser shall have notified the
Administrative Agent of its intent to so reinvest such Net Cash Proceeds.



          (ii) On the date of any termination or reduction of the Commitments
pursuant to Section 2.09, the Borrowers shall pay or prepay so much of their
respective Borrowings as shall be necessary in order that the aggregate
principal amount of Loans outstanding not exceed the Total Commitment, after
giving effect to such termination or reduction.



          (iii) The amount remaining (if any) after the prepayment in full of the
Loans may be retained by the Borrowers to the extent not required to be applied
in accordance with clause (i) above, and the Commitments shall be permanently
reduced in accordance with Section 2.09(c).



          (c) Each notice of prepayment under paragraph (a) above shall specify the
prepayment date and the principal amount of each Borrowing (or portion thereof)
to be prepaid, shall be irrevocable and shall commit the applicable Borrower to
prepay such Borrowing (or portion thereof) by the amount stated therein on the
date stated therein. All prepayments under





23






 





this Section 2.10 shall be subject to Section 2.13 but otherwise without
premium or penalty. All prepayments under this Section 2.10 shall be
accompanied by accrued interest on the principal amount being prepaid to the
date of payment.


          Section 2.11 Reserve Requirements; Change in Circumstances. (a) It is
understood that the cost to each Lender (including the Administrative Agent) of
making or maintaining any of the Eurodollar Loans may fluctuate as a result of
the applicability of reserve requirements imposed by the Board at the ratios
provided for in Regulation D. Each Borrower agrees to pay to each of such
Lenders from time to time, as provided in paragraph (d) below, such amounts as
shall be necessary to compensate such Lender for the portion of the cost of
making or maintaining Eurodollar Loans to such Borrower resulting from any such
reserve requirements provided for in Regulation D as in effect on the date
thereof, it being understood that the rates of interest applicable to
Eurodollar Loans have been determined on the assumption that no such reserve
requirements exist or will exist and that such rates do not reflect costs
imposed on the Lenders in connection with such reserve requirements. It is
agreed that for purposes of this paragraph (a) the Eurodollar Loans made
hereunder shall be deemed to constitute Eurocurrency Liabilities as defined in
Regulation D and to be subject to the reserve requirements of Regulation D
without the benefit of or credit for proration, exemptions or offsets which
might otherwise be available to the Lenders from time to time under Regulation
D.



          (b) Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation
or administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of any payments to any Lender
(including the Administrative Agent) of the principal of or interest on any
Eurodollar Loan made by such Lender, or any Fees or other amounts payable
hereunder (other than changes in respect of taxes imposed on the overall net
income of such Lender by the jurisdiction in which such Lender has its
principal office or by any political subdivision or taxing authority therein),
or shall impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of or
credit extended by such Lender, or shall impose on such Lender or the London
interbank market any other condition affecting this Agreement, any Eurodollar
Loan made by such Lender hereunder, and the result of any of the foregoing
shall be to increase the cost to such Lender of making or maintaining any
Eurodollar Loan or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or otherwise) in respect
thereof by an amount deemed by such Lender to be material, then the applicable
Borrower will pay to such Lender upon demand such additional amount or amounts
as will compensate such Lender for such additional costs actually incurred or
reduction actually suffered.



          (c) If after the date hereof any Lender (including the Administrative
Agent) shall have determined that the general applicability of any law, rule,
regulation or guideline adopted pursuant to or arising out of the July 1988
report of the Basle Committee on Banking Regulations and Supervisory Practices
entitled “International Convergence of Capital Measurement and Capital
Standards,” or the adoption after the date hereof of any other generally
applicable law, rule, regulation or guideline regarding capital adequacy, or
any change in any of the foregoing or in the interpretation or administration
of any of the foregoing by any governmental authority, central bank or
comparable agency charged with the interpretation or




24






 





administration thereof, or compliance by any Lender (or any lending office
of such Lender) or any Lender’s holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender’s capital or on the capital of such
Lender’s holding company, if any, as a consequence of this Agreement, the Loans
made by such Lender pursuant hereto to a level below that which such Lender or
such Lender’s holding company could have achieved but for such adoption, change
or compliance (taking into consideration such Lender’s policies and the
policies of such Lender’s holding company with respect to capital adequacy) by
an amount deemed by such Lender to be material, then from time to time, the
applicable Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender or such Lender’s holding company for any such
reduction suffered.


          (d) A certificate of a Lender (including the Administrative Agent) setting
forth a reasonably detailed explanation of such amount or amounts as shall be
necessary to compensate such Lender (or participating banks or other entities
pursuant to Section 9.04) as specified in paragraph (a), (b) or (c) above, as
the case may be, shall be delivered to the Borrowers and shall be conclusive
absent manifest error. The Borrowers shall pay each Lender the amount shown as
due on any such certificate delivered by it within 10 days after the receipt of
the same.



          (e) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Lender’s right to demand compensation with respect to such period or any
other period; provided that the Borrowers shall not be required to compensate a
Lender pursuant to this Section 2.11 for any increased costs or reductions
incurred more than 180 days prior to the date that such Lender notifies the
Borrowers of such increased costs or reductions in accordance with paragraph
(d) above and of such Lender’s intention to claim compensation thereof;
provided further that, if the circumstances giving rise to such increased costs
or reductions is retroactive, then the 180-day period referred to above shall
be extended to include the period of retroactive effect thereof.



          Notwithstanding any other provision of this Section 2.11, no Lender shall
demand compensation for any increased costs or reduction referred to above if
it shall not be the general policy or practice of such Lender to demand such
compensation in similar circumstances under comparable provisions of other
credit agreements, if any (it being understood that this sentence shall not in
any way limit the discretion of any Lender to waive the right to demand such
compensation in any given case).



          Section 2.12 Change in Legality. (a) Notwithstanding any other provision
herein contained, if any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
(including the Administrative Agent) to make or maintain any Eurodollar Loan or
to give effect to its obligations as contemplated hereby with respect to any
Eurodollar Loan, then, by written notice to the Borrowers and to the
Administrative Agent, such Lender may:





25






 






		
	 	     (i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder and any request by either Borrower for a Eurodollar
Borrowing or a conversion to or continuation of a Eurodollar Borrowing
shall, as to such Lender only, be deemed a request for a Base Rate Loan
unless such declaration shall be subsequently withdrawn; and
	 
	 	     (ii) require that all outstanding Eurodollar Loans made by it be
converted into Base Rate Loans, in which event all such Eurodollar Loans
shall be automatically converted into Base Rate Loans as of the effective
date of such notice as provided in paragraph (b) below.



In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied
to repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
Base Rate Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.



          (b) For purposes of this Section 2.12, a notice to a Borrower by any
Lender shall be effective as to each Eurodollar Loan, if lawful, on the last
day of the Interest Period currently applicable to such Eurodollar Loan; in all
other cases such notice shall be effective on the date of receipt by such
Borrower.



          Section 2.13 Indemnity. Each Borrower shall indemnify each Lender against
any loss or expense which such Lender sustains or incurs as a consequence of
(a) any failure by such Borrower to fulfill on the date of any borrowing
hereunder the applicable conditions set forth in Article IV, (b) any failure by
such Borrower to borrow or continue any Loan hereunder after irrevocable notice
of such borrowing or continuation has been given pursuant to Section 2.02 or
2.03, as applicable, (c) any payment, prepayment or conversion of a Eurodollar
Loan required by any other provision of this Agreement or otherwise made or
deemed made to or by such Borrower on a date other than the last day of the
Interest Period applicable thereto; provided that such Borrower shall not be
required to indemnify a Lender pursuant to this clause (c) for any loss or
expense to the extent any such loss or expense shall have been incurred
pursuant to (i) Section 2.11, 2.12 or 2.17 or (ii) Section 2.10(a) more than
six months prior to the date that the applicable Lender shall have notified
such Borrower of its intention to claim compensation therefor, (d) any default
in payment or prepayment of the principal amount of any Loan to such Borrower
or any part thereof or interest accrued thereon, as and when due and payable
(at the due date thereof, whether by scheduled maturity, acceleration,
irrevocable notice of prepayment or otherwise), or (e) the occurrence of any
Event of Default including, in each such case, any loss or reasonable expense
sustained or incurred or to be sustained or incurred in liquidating or
employing deposits from third parties acquired to effect or maintain such Loan
or any part thereof as a Eurodollar Loan. Such loss or reasonable expense
shall include an amount equal to the excess, if any, as reasonably determined
by such Lender, of (i) its cost of obtaining the funds for the Loan being paid,
prepaid, converted or not borrowed (based on the Eurodollar Rate) for the
period from the date of such payment, prepayment or conversion or failure to
borrow to the last day of the Interest Period for such Loan (or, in the case of
a failure to borrow, the Interest Period for such Loan which would have
commenced on the date of such failure) over (ii) the amount of interest (as
reasonably determined by such Lender) that would be realized by such





26






 





Lender in reemploying the funds so paid, prepaid or converted or not
borrowed for such period or Interest Period, as the case may be. A certificate
of any Lender setting forth a reasonably detailed explanation of any amount or
amounts which such Lender is entitled to receive pursuant to this Section shall
be delivered to such Borrower and shall be conclusive absent manifest error.


          Section 2.14 Pro Rata Treatment. Except as required under Sections 2.12
or 2.18, each Revolving Borrowing, each payment or prepayment of principal of
any Revolving Borrowing, each payment of interest on the Revolving Loans, each
payment of the Facility Fees, each reduction of the Commitments and each
conversion of any Revolving Borrowing to a Borrowing of any Type, shall be
allocated pro rata among the Lenders in accordance with their respective
Commitments (or, if such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their outstanding Revolving
Loans). Each payment of principal of any Term Borrowing shall be allocated pro
rata among the Lenders participating in such Borrowing in accordance with the
respective principal amounts of their outstanding Term Loans comprising such
Borrowing. Each payment of interest on any Term Borrowing shall be allocated
pro rata among the Lenders participating in such Borrowing in accordance with
the respective amounts of accrued and unpaid interest on their outstanding Term
Loans comprising such Borrowing. Each Lender agrees that in computing such
Lender’s portion of any Borrowing to be made hereunder, the Administrative
Agent may, in its discretion, round each Lender’s percentage of such Borrowing
to the next higher or lower whole dollar amount.



          Section 2.15 Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker’s lien, setoff or counterclaim
against a Borrower, or pursuant to a secured claim under Section 506 of Title
11 of the United States Code or other security or interest arising from, or in
lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other
means, obtain payment (voluntary or involuntary) in respect of any Loans (other
than pursuant to Sections 2.09, 2.11 and 2.12) as a result of which the unpaid
principal portion of its Loans shall be proportionately less than the unpaid
principal portion of the Loans of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and
shall promptly pay to such other Lender the purchase price for, a participation
in the Loans of such other Lender, so that the aggregate unpaid principal
amount of the Loans and participations in the Loans held by each Lender shall
be in the same proportion to the aggregate unpaid principal amount of all Loans
then outstanding as the principal amount of its Loans prior to such exercise of
banker’s lien, setoff or counterclaim or other event was to the principal
amount of all Loans outstanding prior to such exercise of banker’s lien, setoff
or counterclaim or other event; provided, however, that, if any such purchase
or purchases or adjustments shall be made pursuant to this Section 2.15 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustment restored without interest. Each
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in a Loan deemed to have been so purchased may
exercise any and all rights of banker’s lien, setoff or counterclaim with
respect to any and all moneys owing by such Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to such Borrower in
the amount of such participation.





27






 





          Section 2.16 Payments. (a) The Borrowers shall make each payment
(including principal of or interest on any Borrowing or any Fees or other
amounts payable) hereunder and under any other Loan Document without setoff,
counterclaim or deduction of any kind not later than 12:00 (noon), New York
City time, on the date when due in dollars to the Administrative Agent at its
offices at 270 Park Avenue, New York, New York, in immediately available funds.



          (b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts payable) hereunder or under any other
Loan Document shall become due, or otherwise would occur, on a day that is not
a Business Day, such payment may be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.



          Section 2.17 Taxes. (a) Any and all payments by a Borrower hereunder
shall be made, in accordance with Section 2.16, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding
any income, franchise, branch profits or similar tax imposed on or measured by
the net income or net profits of the Administrative Agent or any Lender (or any
transferee or assignee that acquires a Loan (any such entity a “Transferee”))
by the United States or any jurisdiction under the laws of which it is
organized or doing business or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as “Taxes”). If either Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to the Lenders (or any Transferee) or the Administrative
Agent, (i) the sum payable shall be increased by the amount necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.17) such Lender (or Transferee) or
the Administrative Agent (as the case may be) shall receive an amount equal to
the sum it would have received had no such deductions been made, (ii) such
Borrower shall make such deductions and (iii) such Borrower shall pay the full
amount deducted to the relevant taxing authority or other Governmental
Authority in accordance with applicable law.



          (b) In addition, each Borrower agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made by such Borrower hereunder or under
any other Loan Document or from the execution, delivery or registration of or
performance under this Agreement or any other Loan Document, or otherwise with
respect to such Borrower’s role in this Agreement or any other Loan Document
(hereinafter referred to as “Other Taxes”).



          (c) Each Borrower will indemnify each Lender (or Transferee) and the
Administrative Agent for the full amount of Taxes and Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable by such
Borrower under this Section 2.17) paid by such Lender (or Transferee) or the
Administrative Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other Governmental Authority. Each Borrower
shall also indemnify each Lender (or any Transferee) and the Administrative
Agent for the full amount of taxes imposed on or measured by the net income or
receipts of such Lender (or any Transferee) or the Administrative Agent as the
case may be, as such Lender (or Transferee) or the Administrative





28






 





Agent shall determine are payable in respect of amounts paid by such
Borrower to or on behalf of such Lender (or any Transferee) or the
Administrative Agent, as the case may be, pursuant to this Section 2.17. Such
indemnification shall be made within 30 days after the date any Lender (or
Transferee) or the Administrative Agent, as the case may be, makes written
demand therefor. If any Lender (or Transferee) or the Administrative Agent
becomes entitled to a refund of Taxes or Other Taxes for which such Lender (or
Transferee) or the Administrative Agent has received payment from a Borrower
hereunder, such Lender (a Transferee) or Administrative Agent, as the case may
be, shall, at the expense of such Borrower, use its reasonable efforts
(consistent with internal policy, and legal and regulatory restrictions) to
obtain such refund. If a Lender (or Transferee) or the Administrative Agent
receives a refund or is entitled to claim a tax credit in respect of any Taxes
or Other Taxes for which such Lender (or Transferee) or the Administrative
Agent has received payment from a Borrower hereunder it shall promptly notify
such Borrower of such refund or credit and shall, within 30 days after receipt
of a request by such Borrower (or promptly upon receipt, if such Borrower has
requested application for such refund or credit pursuant hereto), repay such
refund or amount of credit to such Borrower, net of all out-of-pocket expenses
of such Lender and without interest; provided that each Borrower, upon the
request of such Lender (or Transferee) or the Administrative Agent, agrees to
return such refund or amount of credit (plus penalties, interest or other
charges) to such Lender (or Transferee) or the Administrative Agent in the
event such Lender (or Transferee) or the Administrative Agent is required to
repay such refund or such credit is denied or subsequently determined to be
unavailable.


          (d) Within 30 days after the date of any payment of Taxes or Other Taxes
withheld by either Borrower in respect of any payment to any Lender (or
Transferee) or the Administrative Agent, such Borrower will furnish to the
Administrative Agent, at its address referred to in Section 9.01, the original
or a certified copy of a receipt evidencing payment thereof to the proper
Governmental Authority.



          (e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.17 shall
survive the payment in full of the principal of and interest on all Loans made
hereunder.



          (f) Each Lender (or Transferee), which is organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement or, in the case of a Transferee, on
the date on which it becomes a Lender, and in the case of any Lender, on or
prior to the date such Lender changes its funding office, and from time to time
thereafter as requested in writing by either Borrower (but only so long
thereafter as such Lender remains lawfully able to do so), shall deliver to the
Borrowers and the Administrative Agent such certificates, documents or other
evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including Internal Revenue Service Form W-8BEN or Form W-8ECI and any
other certificate or statement of exemption required by Treasury Regulation
Section 1.1441-4(a) or 1.1441-6(c) or any subsequent version thereof, properly
completed and duly executed by such Lender (or Transferee) establishing that
any payment under the Loan Documents is (i) not subject to withholding under
the Code because such payment is effectively connected with the conduct by such
Lender (or Transferee) of a trade or business in the United States, or (ii)
fully or partially exempt from United States tax under a provision of an
applicable tax treaty, or (iii) not subject to withholding under the portfolio




29






 





interest exception under Section 881(c) of the Code (and, if such Lender
(or Transferee) delivers a Form W-8BEN claiming the benefits of exemption from
United States withholding tax under Section 881(c), a certificate representing
that such Lender (or Transferee) is not a “bank” for purposes of Section 881(c)
of the Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of either Borrower and is not a controlled foreign
corporation related to either Borrower (within the meaning of Section 864(d)(4)
of the Code). Unless the Borrowers and the Administrative Agent have received
forms or other documents reasonably satisfactory to them indicating that
payments hereunder are not subject to United States withholding tax or are
subject to such tax at a rate reduced by an applicable tax treaty, each
applicable Borrower or the Administrative Agent shall withhold taxes from such
payments at the applicable statutory rate in the case of payments to or for any
Lender (or Transferee) organized under the laws of a jurisdiction outside the
United States. If a Lender (or Transferee) is unable to deliver one of these
forms or if the forms provided by a Lender (or Transferee), at the time such
Lender (or Transferee), first becomes a party to this Agreement or at the time
a Lender (or Transferee), changes its funding office (other than at the request
of a Borrower) indicate a United States interest withholding tax rate in excess
of zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Lender (or Transferee), provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
appropriate forms; provided, however, that if at the effective date of a
transfer pursuant to which a Lender (or Transferee) becomes a party to this
Agreement, the Lender (or Transferee) assignor was entitled to payments under
Section 2.17(a) in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender (or Transferee), assignee on such date.


          (g) The Borrowers shall not be required to pay any additional amounts to
any Lender (or Transferee) in respect of United States withholding tax pursuant
to paragraph (a) above for any period in respect of which the obligation to pay
such additional amounts would not have arisen but for a failure by such Lender
(or Transferee), to comply with the provisions of paragraph (f) above unless
such failure results from (i) a change in applicable law, regulation or
official interpretation thereof or (ii) an amendment, modification or
revocation of any applicable tax treaty or a change in official position
regarding the application or interpretation thereof, in each case after the
Closing Date (and, in the case of a Transferee, after the date of assignment or
transfer).



          (h) Any Lender (or Transferee) claiming any additional amounts payable
pursuant to this Section 2.17 shall use reasonable efforts (consistent with
internal policy, and legal and regulatory restrictions) to file any certificate
or document requested by the Borrowers or to change the jurisdiction of its
applicable lending office if the making of such a filing or change would avoid
the need for or reduce the amount of any such additional amounts which may
thereafter accrue and would not, in the reasonable determination of such Lender
(or Transferee) be materially disadvantageous to such Lender (or Transferee) or
require the disclosure of information that the Lender (or Transferee)
reasonably considers to be confidential.




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          Section 2.18 Mitigation Obligations; Replacement of Lenders. (a) If any
Lender (including the Administrative Agent) requests compensation under Section
2.11, or if it becomes unlawful for any Lender (including the Administrative
Agent) to make or maintain Eurodollar Loans under Section 2.12, or if a
Borrower is required to pay any additional amount to any Lender, the
Administrative Agent or any Governmental Authority for the account of any
Lender or the Administrative Agent pursuant to Section 2.17, then such Lender
or the Administrative Agent shall, at the request of such Borrower, use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Lender or the Administrative Agent, as the case may be, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.11 or 2.17 or no longer make it unlawful for such Lender or the
Administrative Agent, to make or maintain Eurodollar Loans under Section 2.12,
as the case may be, in the future and (ii) would not subject such Lender or the
Administrative Agent, as the case may be, to any unreimbursed cost or expense
and would not otherwise be disadvantageous to such Lender or the Administrative
Agent, as the case may be. The Borrowers hereby agree, jointly and severally,
to pay all reasonable costs and expenses incurred by any Lender or the
Administrative Agent in connection with any such designation or assignment.



          (b) If any Lender requests compensation under Section 2.11, or if it
becomes unlawful for any Lender to make or maintain Eurodollar Loans under
Section 2.12, or if a Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.17, or if any Lender defaults in its obligation to fund Loans
hereunder, then the Borrowers may, at their sole expense and effort, upon
notice to such Lender and the Administrative Agent, (i) require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (x) the Borrowers shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (y) such assigning Lender shall have received payment
of an amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrowers (in the case of all other amounts) and (z) in the case
of any such assignment resulting from a claim for compensation under Section
2.11 or payments required to be made pursuant to Section 2.17, such assignment
will result in a reduction in such compensation or payments or (ii) terminate
the Commitment of such Lender upon notice given to such Lender within
forty-five (45) days of receipt of the notice given by the Lender; provided
that such notice shall be accompanied by prepayment in full of all Loans from
such Lender, including accrued interest thereon and any breakage costs, accrued
fees and all other amounts payable to such Lender, without extension,
conversion or continuation. A Lender shall not be required to make any such
assignment and delegation under clause (i) above or terminate its Commitment
under clause (ii) above if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrowers to require such
assignment and delegation or termination of Commitment cease to apply.




31






 





          Section 2.19 Term Loan Conversion. (a) Not less than five days and not
more than thirty days prior to the Revolver Termination Date, and subject to
the conditions set forth in Section 4.03, each Borrower may elect to convert
all or a portion of its respective Revolving Borrowings outstanding as of the
Revolver Termination Date into Term Borrowings (the “Term Loan Conversion”) by
delivery of a written notice to that effect to the Administrative Agent, who
shall forward a copy of such notice to each of the Lenders. If such notice is
given, each Lender severally agrees, on the terms and conditions hereinafter
set forth, that each of its outstanding Revolving Loans that are part of the
Borrowings subject to the election to convert will be converted into a term
loan (each, a “Term Loan” and collectively, the “Term Loans”) having the same
terms as the converted loan on the Revolver Termination Date. Any amount of
any Lender’s Term Loans repaid may not be reborrowed, and the Term Loans so
elected shall commence on the Revolver Termination Date and shall be payable on
the Termination Date.



          (b) In order to elect the Term Loan Conversion, and in addition to the
notice set forth in Section 2.19(a) above, the Borrower electing the Term Loan
Conversion shall hand deliver or telecopy to the Administrative Agent a request
(i) in the case of a Term Borrowing consisting of a Eurodollar Borrowing, not
later than 11:00 a.m., New York City time, three Business Days before the
Revolver Termination Date, (ii) in the case of a Term Borrowing consisting of a
Base Rate Borrowing, not later than 12:00 noon, New York City time, on the day
of the Revolver Termination Date, which request shall be irrevocable and shall
in each case specify (x) whether the Term Borrowing then being requested is to
consist of a Eurodollar Borrowing or a Base Rate Borrowing; (y) the date of
such Borrowing (which shall be the Revolver Termination Date) and the amount
thereof (which shall be the amount of Revolving Borrowings of such Borrower
outstanding on the Revolver Termination Date); and (z) if such Borrowing is to
be a Eurodollar Borrowing, the Interest Period with respect thereto. If no
election as to the Type of Borrowing is specified in any such notice, then the
requested Borrowing shall be a Base Rate Borrowing. If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such notice, then such
Borrower shall be deemed to have selected an Interest Period of one month’s
duration. The Administrative Agent shall promptly advise the Lenders of any
notice given pursuant to this Section 2.19 and of each Lender’s portion of the
requested Borrowing.



ARTICLE III



REPRESENTATIONS AND WARRANTIES



          Each of the Borrowers represents and warrants to each of the Lenders that:



          Section 3.01 Organization; Powers. Such Borrower and each of its
Restricted Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(b) has all requisite power and authority to own its property and assets and to
carry on its business as now conducted and as proposed to be conducted, (c) is
qualified to do business in every jurisdiction where such qualification is
required, except where the failure so to qualify would not result in a Material
Adverse Effect, and (d) in the case of such Borrower, has the corporate power
and authority to execute, deliver





32






 





and perform its obligations under each of the Loan Documents and each
other agreement or instrument contemplated thereby to which it is or will be a
party and to borrow hereunder.


          Section 3.02 Authorization. The execution, delivery and performance by
such Borrower of each of the Loan Documents and the borrowings hereunder, and
the consummation of the other transactions contemplated hereby (collectively,
the “Transactions”) (a) have been duly authorized by all requisite corporate
and, if required, stockholder action and (b) (i) will not violate (A) any
provision of law, statute, rule or regulation, (B) of the certificate or
articles of incorporation or other constitutive documents or by-laws of such
Borrower or any of its Restricted Subsidiaries, (C) any order of any
Governmental Authority or (D) any provision of any indenture, agreement or
other instrument to which such Borrower or any of its Restricted Subsidiaries
is a party or by which any of them or any of their property is or may be bound,
(ii) will not be in conflict with, result in a breach of or constitute (alone
or with notice or lapse of time or both) a default under any such indenture,
agreement or other instrument or (iii) will not result in the creation or
imposition of any Lien upon or with respect to any property or assets now owned
or hereafter acquired by such Borrower or any of its Restricted Subsidiaries
except, in each case other than (a) and (b)(i)(B), as could not reasonably be
expected to have a Material Adverse Effect.



          Section 3.03 Enforceability. This Agreement has been duly executed and
delivered by such Borrower and constitutes, and each other Loan Document when
executed and delivered by such Borrower will constitute, a legal, valid and
binding obligation of such Borrower enforceable against such Borrower in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered
in a proceeding in equity or at law.



          Section 3.04 Consents and Approvals. No action, consent or approval of,
registration or filing with, or any other action by any Governmental Authority
or any other third party is or will be required in connection with the
Transactions, except as have been made or obtained (without the imposition of
any conditions that are not acceptable to the Lenders) and are in full force
and effect (other than any action, consent, approval, registration or filing
the absence of which could not reasonably be expected, either individually or
in the aggregate with any such other consents, approvals, registrations or
filings, to result in a Material Adverse Effect). No law or regulation shall
be applicable, restraining, preventing or imposing materially adverse
conditions upon the Transactions or the rights of the Borrowers and their
respective subsidiaries freely to transfer or otherwise dispose of, or to
create any Lien on, any properties now owned or hereafter acquired by any of
them except, in each case, as could not reasonably be expected to have a
Material Adverse Effect.



          Section 3.05 Financial Statements. (a) Weyerhaeuser has heretofore
furnished to the Lenders its consolidated balance sheets and statements of
earnings and statements of cash flows, together with the notes thereto, as of
and for the fiscal year ended December 29, 2002, audited by and accompanied by
the opinion of KPMG LLP, independent public accountants.



          (b) WRECO has heretofore furnished to the Lenders its consolidated balance
sheets and statements of earnings and statements of cash flows, together with
the notes thereto,





33






 





as of and for the fiscal year ended December 29, 2002, audited by and
accompanied by the opinion of KPMG LLP, independent public accountants.


          (c) Such financial statements referred to in Section 3.05(a) and (b)
present fairly in all material respects the financial position and results of
operations of Weyerhaeuser, WRECO and their respective consolidated
subsidiaries as of such dates and for such periods. Such balance sheets and
the notes thereto disclose all material liabilities, direct or contingent, of
Weyerhaeuser, WRECO and their respective consolidated subsidiaries as of the
dates thereof. Such financial statements were prepared in accordance with GAAP
applied on a consistent basis.



          Section 3.06 No Material Adverse Change. Other than changes in operating
results arising in the ordinary course of business and except as otherwise
disclosed publicly or to the Lenders prior to the date hereof, there has been
no material adverse change in the business, financial condition, operations or
properties of Weyerhaeuser and its subsidiaries, taken as a whole, since
December 29, 2002.



          Section 3.07 Title to Properties; Possession Under Leases. (a) Each of
such Borrowers and its Restricted Subsidiaries has good and marketable title
to, or valid leasehold interests in, all of its material properties and assets,
except for defects in title that do not interfere with its ability to conduct
its business as currently conducted or to utilize such properties and assets
for their intended purposes.



          (b) Each of such Borrowers and its Restricted Subsidiaries (i) has
complied with all obligations under all leases to which it is a party, and (ii)
enjoys peaceful and undisturbed possession under all such leases, except where
such non-compliance or lack of peaceful and undisturbed possession would not
result in a Material Adverse Effect. All leases to which the Borrowers and
their respective Restricted Subsidiaries are a party are in full force and
effect, except where such lack of force and effect would not result in a
Material Adverse Effect.



          Section 3.08 Subsidiaries. Schedule 3.08 Part I for Weyerhaeuser and
Schedule 3.08 Part II for WRECO (i) set forth as of the Closing Date a list of
all subsidiaries of Weyerhaeuser and WRECO and the percentage ownership
interest of Weyerhaeuser and WRECO therein, as applicable, and (ii) for
Weyerhaeuser and WRECO, designate those Subsidiaries which are Unrestricted
Subsidiaries.



          Section 3.09 Litigation; Compliance with Laws. (a) Except as disclosed
in Weyerhaeuser’s Report on Form 10-K for the fiscal year ended December 29,
2002, there are no actions, suits, investigations, litigations or proceedings
pending or, to the knowledge of the Borrowers, threatened against or affecting
the Borrowers or any of their Restricted Subsidiaries in any court or before
any arbitrator or Governmental Authority that could reasonably be expected to
have a Material Adverse Effect.



          (b) Except as disclosed in Weyerhaeuser’s Report on Form 10-K for the
fiscal year ended December 29, 2002, neither such Borrower nor any of its
Restricted Subsidiaries is in violation of any law, rule or regulation, or in
default with respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default could reasonably be
expected to result in a Material Adverse Effect.





34






 





          Section 3.10 Agreements. (a) Neither such Borrower nor any of its
Restricted Subsidiaries is a party to any agreement or instrument or subject to
any corporate restriction that has resulted in a Material Adverse Effect.



          (b) Neither such Borrower nor any of its Restricted Subsidiaries is in
default in any manner under any material agreement or instrument (except for
any indenture or other agreement or instrument evidencing Indebtedness) to
which it is a party or by which it or any of its properties or assets are or
may be bound, where such default could reasonably be expected to result in a
Material Adverse Effect.



          Section 3.11 Federal Reserve Regulations. (a) Neither such Borrower nor
any of its Restricted Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.



          (b) No part of the proceeds of any Loan will be used, whether directly or
indirectly, whether immediately, incidentally or ultimately, for any purpose
which entails a violation of, or which is inconsistent with, the provisions of
the Regulations of the Board, including Regulation T, U or X.



          Section 3.12 Investment Company Act; Public Utility Holding Company Act.
Neither such Borrower nor any of its Restricted Subsidiaries is (a) an
“investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a “holding company” as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.



          Section 3.13 Tax Returns. Each of such Borrower and its Subsidiaries has
filed or caused to be filed all material Federal, state and local tax returns
required to have been filed by it and has paid or caused to be paid all
material taxes shown to be due and payable on such returns or on any
assessments received by it, except taxes that are being contested in good faith
by appropriate proceedings and for which such Borrower or Subsidiary, as the
case may be, shall have set aside on its books appropriate reserves.



          Section 3.14 No Material Misstatements. No information, report, financial
statement, exhibit or schedule furnished by or on behalf of such Borrower to
the Administrative Agent or any Lender in connection with the negotiation of
any Loan Document or included therein or delivered pursuant thereto, when taken
together with the reports and other filings with the SEC, contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.



          Section 3.15 Compliance with ERISA. Except as would not have a Material
Adverse Effect, subject to the following sentences of this Section 3.15, each
Plan subject to ERISA or the Code, as applicable, is in compliance with ERISA
and the Code; no Reportable Event has occurred with respect to a Plan, no Plan
is insolvent or in reorganization; no Plan has an Unfunded Current Liability in
excess of $40,000,000, and all Plans collectively do not have Unfunded Current
Liabilities in excess of $91,000,000 in the aggregate, and no Plan subject to
ERISA or the Code, as applicable, has an accumulated or waived funding
deficiency, has





35






 





permitted decreases in its funding standard account or has applied for an
extension of any amortization period within the meaning of Section 412 of the
Code; neither such Borrower nor any ERISA Affiliate has incurred any liability
to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4975 of the Code or expects
to incur any material liability under any of the foregoing Sections with
respect to any such Plan; no condition exists which presents a risk to such
Borrower or any ERISA Affiliate of incurring a liability to or on account of a
Plan pursuant to the foregoing provisions of ERISA and the Code; no proceedings
have been instituted to terminate any Plan; no lien imposed under the Code or
ERISA on the assets of such Borrower or any ERISA Affiliate exists or is likely
to arise on account of any Plan; such Borrower and its Subsidiaries do not
maintain or contribute to any “welfare plan” (within the meaning of Section
3(1) of ERISA) which provides life insurance or health benefits to retirees
(other than as required by Section 601 of ERISA) the obligations with respect
to which could reasonably be expected to have a Material Adverse Effect.


          Section 3.16 Environmental Matters. Except as disclosed in Weyerhaeuser’s
Report on Form 10-K for the fiscal year ended December 29, 2002, filed with the
SEC, (a) neither Borrower nor any of its Subsidiaries has failed to comply with
any Federal, state, local and other statutes, ordinances, orders, judgments,
rulings and regulations relating to environmental pollution or to environmental
regulation or control, where any such failure to comply, alone or together with
any other such noncompliance, could result in a Material Adverse Effect; (b)
neither Borrower nor any of its Subsidiaries has received notice of any failure
so to comply which alone or together with any other such failure could result
in a Material Adverse Effect; and (c) the Borrowers’ and their respective
Subsidiaries’ plants have not managed any hazardous wastes, hazardous
substances, hazardous materials, toxic substances or toxic pollutants, as those
terms are used in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other Environmental Law, in violation of any regulations
promulgated pursuant thereto or in any other applicable law where such
violation could reasonably result, individually or together with other
violations, in a Material Adverse Effect.



          Section 3.17 Maintenance of Insurance. Such Borrower and each of its
Restricted Subsidiaries maintains insurance (which may be self insurance) for
all of its insurable properties: (a) by financially sound and reputable
insurers to the extent of insurance obtained from third party insurers; (b) to
such extent and against such risks, including fire and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses, including public liability insurance against claims for
personal injury or death or property damage occurring upon, in, about or in

connection with the use of any properties owned, occupied or controlled by such
Borrower or such Restricted Subsidiaries; and (c) as may be required by law.



ARTICLE IV



CONDITIONS OF LENDING



36






 





          The obligations of the Lenders to make Loans hereunder are subject to the
satisfaction of the following conditions:



          Section 4.01 All Borrowings and Issuances. On the date of each Borrowing:




		
	 	     (a) Notice. The Administrative Agent shall have received from the
applicable Borrower a notice of such Borrowing as required by Section
2.02 or 2.03, as applicable.
	 
	 	     (b) Representations. The representations and warranties of the
Borrowers set forth in Sections 3.01, 3.02, 3.03, 3.04, 3.07, 3.10(b),
3.11 and 3.12 shall be true and correct in all material respects on and
as of such date with the same effect as though made on and as of such
date at the time of and immediately after such Borrowing.
	 
	 	     (c) Compliance, etc. The Borrowers shall be in compliance with all
the terms and provisions set forth herein and in each other Loan Document
on their part to be observed or performed, and, as applicable, at the
time of and immediately after such Borrowing, no Event of Default or
Default shall have occurred and be continuing.



          Each Borrowing shall be deemed to constitute a representation and warranty
by the Borrowers on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.



          Section 4.02 Closing Date. In addition to all the conditions set forth in
Section 4.01, on or before the Closing Date:




		
	 	     (a) Opinions. The Administrative Agent shall have received a
favorable written opinion of (i) Perkins Coie, special counsel for the
Borrowers, dated the Closing Date and addressed to the Lenders, in form
and substance reasonably satisfactory to the Administrative Agent and
(ii) Lorrie Scott, Esq., Senior Legal Counsel to Weyerhaeuser, as counsel
for Weyerhaeuser, dated the Closing Date and addressed to the Lenders, in
form and substance reasonably satisfactory to the Administrative Agent.
	 
	 	     (b) Legal Matters. All legal matters (including any documentation)
related to this Agreement and the Transactions shall be satisfactory to
the Lenders and to Shearman & Sterling, special counsel for the
Administrative Agent.
	 
	 	     (c) Articles, etc. The Administrative Agent shall have received (i)
a copy of the certificate or articles of incorporation, including all
amendments thereto, of each of the Borrowers, certified as of a recent
date by the Secretary of State of their respective States of
incorporation, and certificates as to the good standing of each of the
Borrowers, as of a recent date, from each such Secretary of State; (ii) a
certificate from each of the Borrowers of their respective Secretary or
Assistant Secretary dated the Closing Date and certifying (A) that
attached thereto is a true and complete copy of the by-laws of such
Borrower as in effect on the Closing Date and at all times since a date
prior to the date of the resolutions described in clause (B) below, (B)
that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such Borrower authorizing the
execution, delivery and performance of such Borrower of any and all
documents and agreements to be entered into with respect to the Loan
Documents and the



37






 







		
	 	borrowings to be made thereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect, (C)
that the certificate or articles of incorporation of such Borrower have
not been amended since the date of the last amendment thereto shown on
the certificates of good standing furnished pursuant to clause (i) above,
and (D) as to the incumbency and specimen signature of each officer
executing any Loan Document or any other document or agreement delivered
in connection with the Transactions on behalf of such Borrower; (iii) a
certification of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents as the
Lenders or Shearman & Sterling, special counsel for the Administrative
Agent, may reasonably request.
	 
	 	     (d) Officers’ Certificates. The Administrative Agent shall have
received a certificate from each Borrower, dated the Closing Date and
signed by a Financial Officer of such Borrower, confirming (i) compliance
with the condition precedent set forth in paragraph (c) of Section 4.01,
and (ii) that the representations and warranties of such Borrower set
forth herein are true and correct in all material respects on and as of
the Closing Date (except for representations and warranties expressly
stated to relate to a specific earlier date, in which case such
representations and warranties are true and correct in all material
respects as of such earlier date), immediately prior to, and after giving
effect to, the initial Borrowing.
	 
	 	     (e) Fees. The Administrative Agent and the Lenders shall have
received all Fees and other amounts due and payable on or prior to the
Closing Date.
	 
	 	     (f) Loan Documents. The Administrative Agent shall have received a
fully executed counterpart of this Agreement, and an executed copy of
each Loan Document (other than this Agreement).



          Section 4.03 Term Loan Conversion Conditions. On the date any Term Loan
Conversion is effective:



          (a) Representations. The representations and warranties of the Borrower
electing such Term Loan Conversion shall be true and correct in all material
respects on and as of such date with the same effect as though made on and as
of such date (except for representations and warranties expressly stated to
relate to a specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such
earlier date).



          (b) Compliance, etc. The Borrower electing such Term Loan Conversion
shall be in compliance with all the terms and provisions set forth herein and
in each other Loan Document on its part to be observed or performed, and at the
time of and immediately after the Term Loan Conversion, no Event of Default or
Default shall have occurred and be continuing.



ARTICLE V



AFFIRMATIVE COVENANTS



38






 





          Each Borrower covenants and agrees with each Lender and the Administrative
Agent that, so long as this Agreement shall remain in effect or the principal
of or interest on any Loan, any Fees or any other expenses or amounts payable
under any Loan Document shall be unpaid, unless the Required Lenders (or, where
indicated, the Lenders) shall otherwise consent in writing, each Borrower will,
and will cause each of its Restricted Subsidiaries (except in the case of
Sections 5.03 (which applies to Weyerhaeuser), 5.06 (which applies to
Weyerhaeuser, WRECO and their respective ERISA Affiliates) and 5.09 (which
applies to Weyerhaeuser, WRECO and all of their respective Subsidiaries)) to:



          Section 5.01 Existence; Businesses and Properties. (a) Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except as otherwise expressly permitted under Section
6.01(c) (with respect to Weyerhaeuser) and Section 6.02(d) (with respect to
WRECO) and, with respect to Restricted Subsidiaries, where the failure to do so
could not reasonably be expected to have a Material Adverse Effect, provided,
however, that such Borrower may liquidate or dissolve any of its Subsidiaries
to the extent the assets of such Subsidiary are transferred to Weyerhaeuser or
any of its Restricted Subsidiaries.



          (b) Except in each case where the failure to do so could not reasonably be
expected to result in a Material Adverse Effect, (i) do or cause to be done all
things necessary to obtain, preserve, renew, extend and keep in full force and
effect the rights, licenses, permits, franchises, authorizations, patents,
copyrights, trademarks and trade names necessary in the conduct of its
business; (ii) maintain and operate such business in substantially the manner
in which it is presently conducted and operated; (iii) comply with all
applicable laws, rules, regulations and orders of any Governmental Authority,
whether now in effect or hereafter enacted; and (iv) at all times maintain and
preserve all property necessary in the conduct of such business and keep such
property in good repair, working order and condition and from time to time
make, or cause to be made, all necessary and proper repairs, renewals,
additions, improvements and replacements thereto necessary in order that the
business carried on in connection therewith may be properly conducted at all
times.



          (c) Maintain compliance with each of its loans, contracts, leases and
other obligations (other than Indebtedness) except such as are being contested
in good faith by appropriate proceedings and for which appropriate reserves
have been established, and except for such noncompliance as could not
reasonably be expected to have, in any case or in the aggregate, a Material
Adverse Effect.



          Section 5.02 Insurance. (a) Keep such of its insurable properties as are
insured with third-party insurers insured at all times by financially sound and
reputable insurers; and (b) maintain (i) insurance (which may include self
insurance), to such extent and against such risks, including fire and other
risks insured against by extended coverage, as is customary with companies in
the same or similar businesses, including public liability insurance against
claims for personal injury or death or property damage occurring upon, in,
about or in connection with the use of any properties owned, occupied or
controlled by it; and (ii) such insurance as may be required by law.



          Section 5.03 Obligations and Taxes. Pay its obligations (other than
Indebtedness) promptly and in accordance with their terms and pay and discharge
promptly




39






 





when due all taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits or in respect of its property, before the
same shall become delinquent or in default, as well as all lawful claims for
labor, materials and supplies or otherwise which, if unpaid, might give rise to
a Lien upon such properties or any part thereof; provided, however, that such
payment and discharge shall not be required (i) with respect to any such tax,
assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and such Borrower
or such Subsidiary shall have set aside on its books appropriate reserves with
respect thereto or (ii) if the failure to make such payments or to discharge
such Liens is not, in any case or in the aggregate, reasonably likely to have a
Material Adverse Effect.


          Section 5.04 Financial Statements, Reports, etc. In the case of each
Borrower, furnish to the Administrative Agent (which shall promptly furnish to
each Lender):




		
	 	     (a) within 95 days after the end of each fiscal year, its
consolidated balance sheets and related statements of earnings and
statements of cash flows, together with the notes thereto, showing the
financial position of such Borrower and its consolidated Subsidiaries as
of the close of such fiscal year and the results of their operations and
the operations of such subsidiaries during such year, all audited by KPMG
LLP or other independent public accountants of recognized national
standing acceptable to the Required Lenders and accompanied by an opinion
of such accountants (which shall not be qualified in any material
respect) to the effect that such consolidated financial statements fairly
present the financial position and results of operations of each such
Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, except as therein noted;
	 
	 	     (b) within 50 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated balance sheets and related
statements of earnings and, with respect to Weyerhaeuser, statements of
cash flows, showing the financial position of Weyerhaeuser and its
consolidated Subsidiaries as of the close of such fiscal quarter and the
results of its operations and the operations of such consolidated
Subsidiaries during such fiscal quarter and the then elapsed portion of
the fiscal year, all certified (in the form of Exhibits D-1 and D-2, with
respect to Weyerhaeuser and WRECO, respectively) by one of its Financial
Officers as fairly presenting the financial position and results of
operations of each such Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, except
as therein noted, subject to appropriate year-end audit adjustments;
	 
	 	     (c) concurrently with any delivery of financial statements under (a)
or (b) above, a certificate (in the form of Exhibits D-3 and D-4, with
respect to Weyerhaeuser and WRECO, respectively) of the accounting firm
or Financial Officer of such Borrower opining on or certifying such
statements (which certificate, when furnished by an accounting firm, may
be limited to accounting matters and disclaim responsibility for legal
interpretations) (i) certifying that no Event of Default or Default has
occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action taken
or proposed to be taken with respect thereto, (ii) in the case of
Weyerhaeuser setting forth computations in reasonable detail satisfactory
to the



40






 







		
	 	Administrative Agent demonstrating compliance with the covenants
contained in Sections 6.01(d) and 6.01(e) and (iii) including a
reconciliation setting forth adjustments made to such financial
statements in order to make the calculations set forth in clause (ii)
above;
	 
	 	     (d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
it or any of its Subsidiaries with the SEC, or with any national
securities exchange, or distributed to its shareholders, as the case may
be;
	 
	 	     (e) as soon as practicable, copies of such further financial
statements and reports as such Borrower shall send to banks with which it
has lines of credit, and all such financial statements and reports as
such Borrower shall send to its shareholders (unless all of the
outstanding shares of capital stock of such Borrower are held by one
Person);
	 
	 	     (f) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of such Borrower
or any of its Subsidiaries, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably
request (it being understood that neither Borrower shall be required to
provide any information or documents which are subject to confidentiality
provisions the nature of which prohibit such disclosure);
	 
	 	     (g) promptly, and in any event within 2 days, upon becoming aware
thereof, notice of any proposed or actual down-grade, suspension or
withdrawal of the rating provided by S&P or Moody’s to Weyerhaeuser in
respect of its Senior Unsecured Long-Term Debt; and
	 
	 	     (h) information required to be delivered pursuant to paragraphs (a),
(b), (d) and (e) shall be deemed to have been delivered on the date on
which Weyerhaeuser provides notice to the Administrative Agent that such
information has been posted on Weyerhaeuser’s website on the internet at
the website address listed on the signature pages thereof, at www.sec.gov
or at another website identified in such notice and accessible by the
Lenders without charge; provided that Weyerhaeuser shall deliver paper
copies of the reports and financial statements referred to in paragraphs
(a), (b), (d) and (e) of this Section 5.04 to the Administrative Agent or
any Lender who requests Weyerhaeuser to deliver such paper copies until
written notice to cease delivering paper copies is given by such
Administrative Agent or Lender to Weyerhaeuser.



          Section 5.05 Litigation and Other Notices. Furnish to the Administrative
Agent (which shall promptly furnish to each Lender) prompt written notice of
the following:




		
	 	     (a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be taken
with respect thereto;
	 
	 	     (b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against Weyerhaeuser, WRECO or any of



41






 







		
	 	their respective Affiliates which, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;




		
	 	     (c) any development that has resulted in a Material Adverse Effect;
and
	 
	 	     (d) the issuance by any Governmental Authority of any injunction,
order, decision or other restraint prohibiting, or having the effect of
prohibiting, the making of the Loans or the initiation of any litigation
or similar proceeding seeking any such injunction, order or other
restraint;



provided that in each case (other than Subsection 5.05 (a)) no Borrower shall
be required to provide separate notice of any event disclosed in any report
promptly filed with the SEC.


          Section 5.06 ERISA. As soon as possible and, in any event, within 10
Business Days after Weyerhaeuser knows of the occurrence of any of the
following events which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect, Weyerhaeuser will deliver to the
Administrative Agent a certificate of the Financial Officer of Weyerhaeuser
setting forth details as to such occurrence and such action, if any, which
Weyerhaeuser or an ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed with or by
Weyerhaeuser or such ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: (a) that a Reportable Event has occurred,
(b) that an accumulated funding deficiency has been incurred or an application
has been made to the Secretary of the Treasury for a waiver or modification of
the minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code with
respect to a Plan, (c) that a Plan has been or is in the process of being
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA, (d) that a Plan has an Unfunded Current Liability, (e) that proceedings
have been instituted to terminate a Plan, (f) that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan, or (g) that Weyerhaeuser or any ERISA Affiliate will or
is reasonably likely to incur any liability (including any contingent or
secondary liability) to or on account of the termination of or withdrawal from
a Plan under Section 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or with
respect to a Plan under Section 4975 of the Code or Section 409, 502(i) or
502(l) of ERISA. Weyerhaeuser will, upon written request, deliver to the
Administrative Agent a complete copy of the annual report (Form 5500) of each
Plan required to be filed with the Internal Revenue Service. In addition to
any certificates or notices delivered to the Administrative Agent pursuant to
the first sentence hereof, copies of annual reports and any other notices
received by Weyerhaeuser or any ERISA Affiliate required to be delivered to the
Administrative Agent hereunder shall be delivered to the Administrative Agent
no later than 10 Business Days after the later of the date such report or
notice has been filed with the Internal Revenue Service or the PBGC, given to
Plan participants, received by Weyerhaeuser or such ERISA Affiliate or
requested in writing by the Administrative Agent.



          Section 5.07 Maintaining Records; Access to Properties and Inspections.
Maintain appropriate, accurate and complete financial records and permit any
representatives designated by the Administrative Agent or any Lender to visit
and inspect the financial records and the properties of each such Borrower or
any of its Restricted Subsidiaries at reasonable times





42






 





and, with reasonable prior notice given to Weyerhaeuser, as often as
requested and until a Default has occurred at the expense of the Administrative
Agent or such Lender, and to make extracts from and copies of such financial
records, and permit any representatives designated by any Lender or the
Administrative Agent to discuss the affairs, finances and condition of
Weyerhaeuser, WRECO or any such Restricted Subsidiary with the officers thereof
and independent accountants (so long as a representative of Weyerhaeuser is
present, or Weyerhaeuser has consented to the absence of such a representative)
therefor (in each case subject to such Borrower’s obligations under applicable
confidentiality provisions).


          Section 5.08 Use of Proceeds. Use the proceeds of the Loans only for the
purposes set forth in the recitals to this Agreement.



          Section 5.09 Environmental Matters. (a) (i) Comply in all material
respects with all Environmental Laws applicable to the ownership or use of any
real property owned or leased by such Borrower or any of its Subsidiaries,
except where such noncompliance is not, in any case or in the aggregate,
reasonably likely to have a Material Adverse Effect, (ii) include in all
material contracts with tenants and other persons occupying such real property
provisions to ensure such tenants’ compliance in all material respects with all
such Environmental Laws, and diligently enforce and prosecute its rights with
respect to such provisions, (iii) pay or cause to be paid in the case of sole
liability, or, in the case of joint liability, to seek contribution or
compensation in respect of, all costs and expenses incurred in connection with
such compliance, except in respect to costs and expenses that are being
contested in good faith and for which such Borrower or such Subsidiary, as the
case may be, shall have set aside on its books appropriate reserves, and except
where failures to make such payments are not, in any case or in the aggregate,
reasonably likely to have a Material Adverse Effect, and (iv) use its best
efforts to keep or cause to be kept all such real property free and clear of
any liens imposed pursuant to any Environmental Laws, except in respect to
liens that are being contested in good faith, and except in respect to liens
the existence of which is not, in any case or in the aggregate, reasonably
likely to have a Material Adverse Effect.



          (b) Neither such Borrower, nor any of its Subsidiaries will generate, use,
treat, store, Release, or permit the generation, use, treatment, storage or
Release of Hazardous Materials on any real property owned or leased by such
Borrower or any of its Subsidiaries, or transport or permit the transportation
of Hazardous Materials to or from any such real property, except for quantities
generated, used, treated, stored, or Released on, or transported to or from,
such real property in the ordinary course of business in material compliance
with all applicable Environmental Laws and, except for such generation, use,
treatment or storage on, or transportation to or from, any such real property
of Hazardous Materials as is not, in any case or in the aggregate, reasonably
likely to have a Material Adverse Effect.



          (c) If the Administrative Agent receives any notice from such Borrower
pursuant to subsection (d) of this Section 5.09 or if the Administrative Agent
otherwise acquires knowledge of any Environmental Claim which in the sole
determination of the Required Lenders would have a Material Adverse Effect with
respect to such Borrower then upon the written request of the Required Lenders,
such Borrower will provide, at its sole cost and expense, an environmental site
assessment report concerning any real property owned or leased by such Borrower
or an affected Subsidiary prepared by an environmental consulting firm approved
by





43






 





the Required Lenders, indicating the presence or absence of Hazardous
Materials and the potential costs of any removal or remedial action in
connection with any Hazardous Materials on any real property owned or leased by
such Borrower or any of its Subsidiaries.


          (d) Such Borrower will immediately advise the Administrative Agent in
writing of any of the following:




		
	 	     (i) Any pending or threatened Environmental Claim against such
Borrower or any of its Subsidiaries or any real property owned or leased
by such Borrower or any of its Subsidiaries which if determined adversely
to such Borrower or any of its Subsidiaries would be reasonably likely to
have a Material Adverse Effect;
	 
	 	     (ii) Any condition or occurrence on any real property owned or
leased by such Borrower or any of its Subsidiaries that (A) results in
noncompliance by such Borrower or any of its Subsidiaries with any
applicable Environmental Law which noncompliance is reasonably likely to

have a Material Adverse Effect, or (B) could reasonably be anticipated to
form the basis of an Environmental Claim against such Borrower or any of
its Subsidiaries or any real property owned or leased by such Borrower or
any of its Subsidiaries and which if determined adversely to such
Borrower or any of its Subsidiaries would be reasonably likely to have a
Material Adverse Effect;
	 
	 	     (iii) Any condition or occurrence on any real property owned or
leased by such Borrower or any of its Subsidiaries or, to the actual
knowledge of such Borrower or any of its Subsidiaries, any property
adjoining or in the vicinity thereof that could reasonably be anticipated
to cause such real property to be subject to any restrictions on the
ownership, occupancy, use, or transferability thereof under any
Environmental Law which restrictions, in any case or in the aggregate,
are reasonably likely to have a Material Adverse Effect; and
	 
	 	     (iv) The taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Materials on any real
property owned or leased by such Borrower or any of its Subsidiaries the
taking of which, in any case or in the aggregate, is reasonably likely to
have a Material Adverse Effect.



All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence, or removal or remedial action and the
action which such Borrower or any of its Subsidiaries proposes to take in
response thereto.


          Section 5.10 OCBM Agreement. With respect to Weyerhaeuser, perform,
observe and comply with each of its covenants and agreements in the OCBM
Agreement, and do or cause to be done all things necessary to keep the OCBM
Agreement in full force and effect.



          Section 5.11 Further Assurances. Promptly cause to be taken, executed,
acknowledged or delivered, at the sole expense of such Borrower, all such
further acts, documents and assurances as the Required Lenders may from time to
time reasonably request in order for such Borrower to carry out its obligations
hereunder and under the other Loan Documents.




44






 





ARTICLE VI



NEGATIVE COVENANTS



          Section 6.01 Covenants of Weyerhaeuser. Weyerhaeuser covenants and agrees
with each Lender and the Administrative Agent that, so long as this Agreement
shall remain in effect or the principal of or interest on any Loan, any Fees or
any other expenses or amounts payable under any Loan Document shall be unpaid,
unless the Required Lenders shall otherwise consent in writing, it will not,
either directly or indirectly:




		
	 	     (a) Secured Indebtedness. (i) Issue, assume or guarantee, or
permit any of its Restricted Subsidiaries to issue, assume or guarantee,
any indebtedness for money borrowed (hereinafter in this Section 6.01(a)
referred to as “debt”), if such debt is secured by a deed of trust,
mortgage, pledge, security interest or other lien or encumbrance (any
deed of trust, mortgage, pledge, security interest or other lien or
encumbrance being hereinafter in this Section 6.01(a) referred to as a
“mortgage” or collectively “mortgages”) upon or with respect to any
timber or timberlands of Weyerhaeuser or such Restricted Subsidiary
located in the States of Washington, Oregon, Arkansas, Oklahoma,
Mississippi or North Carolina, or upon or with respect to any principal
manufacturing plant of Weyerhaeuser or such Restricted Subsidiary located
anywhere in the United States of America, in either case now owned or
hereafter acquired, without in any such case effectively providing,
concurrently with the issuance, assumption or guarantee of any such debt,
that the Loans (together with, if Weyerhaeuser shall so determine, any
other indebtedness of or guarantee by Weyerhaeuser or such Restricted
Subsidiary ranking equally with the Loans and then existing or thereafter
created) shall be secured equally and ratably with (or prior to) such
debt; provided, however, that the foregoing restrictions shall not be
applicable to:




		
	 	     (1) mortgages upon or with respect to any property of any of
its Restricted Subsidiaries securing debt of such Restricted
Subsidiary to Weyerhaeuser or another Restricted Subsidiary of
Weyerhaeuser;
	 
	 	     (2) mortgages upon or with respect to any property acquired,
constructed or improved by Weyerhaeuser or any of its Restricted
Subsidiaries after the date of this Agreement which are created,
incurred or assumed contemporaneously with, or within 90 days
after, such acquisition, construction or improvement, to secure or
provide for the payment of any part of the purchase price of such
property or the cost of such construction or improvement, or
mortgages upon or with respect to any property existing at the time
of acquisition thereof; provided, however, that in the case of any
such construction or improvement the mortgage shall not apply to
any property theretofore owned by Weyerhaeuser or any of its
Restricted Subsidiaries other than any theretofore unimproved real
property on which the property so constructed, or the improvement,
is located;
	 
	 	     (3) any extension, renewal or replacement of any mortgage
referred to in clause (2) above or clause (4) below; provided,
however, that the principal



45






 







		
	 	amount of indebtedness secured thereby shall not exceed the
principal amount of indebtedness so secured at the time of such
extension, renewal or replacement, and that such extension, renewal
or replacement shall be limited to all or part of the same property
which secured the mortgage so extended, renewed or replaced; and
	 
	 	     (4) any mortgage existing on any timber or timberlands of any
Person or upon or with respect to any principal manufacturing plant
of any Person at the time of acquisition by the Borrower or any of
its Restricted Subsidiaries of such Person.




		
	 	     (ii) Notwithstanding the provisions of paragraph (a)(i) of this
Section 6.01, Weyerhaeuser or any of its Restricted Subsidiaries may
issue, assume or guarantee secured debt which would otherwise be subject
to the foregoing restrictions in an aggregate amount which, together with
all other such debt of Weyerhaeuser and its Restricted Subsidiaries and
the Attributable Debt in respect of Sale and Lease-Back Transactions (as
defined in Section 6.01(b)) existing at such time (other than Sale and
Lease-Back Transactions permitted because Weyerhaeuser would be entitled
to incur debt secured by a mortgage on the property to be leased without
equally and ratably securing the Loans pursuant to paragraph (a)(i) of
this Section 6.01, and other than Sale and Lease-Back Transactions the
proceeds of which have been applied in accordance with clause (ii) of
Section 6.01(b)), does not at the time exceed five percent (5%) of
Shareholders’ Interest in Weyerhaeuser and its Restricted Subsidiaries
(as hereinafter defined). The term “Attributable Debt” as used in this
paragraph shall mean, as of any particular time, the present value of the
obligation of the lessee for rental payments during the remaining term of
any lease (including any period for which such lease has been extended or
may, at the option of the lessor, be extended).
	 
	 	     (iii) For purposes of this Section 6.01(a), (A) the term “principal
manufacturing plant” shall not include any manufacturing plant which, in
the reasonable opinion of the Board of Directors of Weyerhaeuser, is not
a principal manufacturing plant of Weyerhaeuser and its Restricted
Subsidiaries; (B) the following types of transactions shall not be deemed
to create debt secured by a mortgage: (1) the sale, mortgage or other
transfer of timber in connection with an arrangement under which
Weyerhaeuser or any of its Restricted Subsidiaries is obligated to cut
such timber or a portion thereof in order to provide the transferee with
a specified amount of money however determined; (2) the mortgage of any
property of Weyerhaeuser or any of its Restricted Subsidiaries in favor
of the United States, or any State, or any department, agency or
instrumentality of either, to secure partial, progress, advance or other
payments to Weyerhaeuser or any of its Restricted Subsidiaries pursuant
to the provisions of any contract or statute and (3) liens existing on
property at the time of acquisition of such property; and (C) the term
“Shareholders’ Interest in Weyerhaeuser and its Restricted Subsidiaries”
shall mean the aggregate of capital and surplus, including surplus
resulting from the March 1, 1913 revaluation of timber and timberlands,
of Weyerhaeuser and its Restricted Subsidiaries, after deducting the cost
of shares of Weyerhaeuser held in treasury.



46






 







		
	 	     (b) Sale and Lease-Back. Enter into any arrangement, or permit any
Restricted Subsidiary to enter into any arrangement, with any Person
providing for the leasing by Weyerhaeuser or any of its Restricted
Subsidiaries of any real property in the United States (except for
temporary leases for a term of not more than three years), which property
has been or is to be sold or transferred by Weyerhaeuser or such
Restricted Subsidiary to such Person (herein referred to as a “Sale and
Lease-Back Transaction”), unless (i) Weyerhaeuser or such Restricted
Subsidiary would be entitled to incur debt secured by a mortgage on the
property to be leased without equally or ratably securing the Loans
pursuant to Section 6.01(a), or (ii) Weyerhaeuser applies an amount equal
to the fair value (as determined by the Board of Directors of
Weyerhaeuser) of the property so leased to the retirement (other than any
mandatory retirement), within 90 days of the effective date of any such
Sale and Lease-Back Transaction, of indebtedness for borrowed money
incurred or assumed by Weyerhaeuser which by its terms matures at, or is
extendible or renewable at the option of the obligor to, a date more than
12 months after the date of the creation of such debt.
	 
	 	     (c) Merger, Consolidation, etc. Be a party to a merger or
consolidation or sell, transfer or otherwise dispose of all or
substantially all of its properties or assets in a single transaction or
in a series of related transactions unless (i) such merger,
consolidation, sale, transfer or disposition is made with respect to
another corporation incorporated and doing business primarily within the
United States of America which shall expressly assume, in form and
substance reasonably satisfactory to the Required Lenders, the
obligations of Weyerhaeuser under the Loan Documents and Weyerhaeuser’s
Loans, and (ii) immediately after giving effect to such merger,
consolidation, sale, transfer or disposition, no Default or Event of
Default hereunder shall have occurred and be continuing.
	 
	 	     (d) Debt Ratio. Permit Total Funded Indebtedness to exceed (i) on
or after the Closing Date, 72% of the sum of Weyerhaeuser’s Total
Adjusted Shareholders’ Interest and Total Funded Indebtedness, (ii) on or
after December 31, 2003, 69% of such sum, and (iii) on or after June 30,
2005, 65% of such sum.
	 
	 	     (e) Net Worth. At any time permit Weyerhaeuser’s Total Adjusted
Shareholders’ Interest to be less than $4,955,000,000.
	 
	 	     (f) Change in Business. Engage in, or permit any Restricted
Subsidiary to engage in, any material business activities or operations
substantially different from, or unrelated to, the business activities
and operations conducted by it as of the date hereof, except for
reasonable extensions, developments and modifications thereof.



          Section 6.02 Covenants with respect to WRECO. WRECO covenants and agrees
with each Lender and the Administrative Agent that, so long as this Agreement
shall remain in effect or the principal of or interest on any Loan, any Fees or
any other expenses or amounts payable under any Loan Document shall be unpaid,
unless the Required Lenders shall otherwise consent in writing, it will not,
either directly or indirectly:




		
	 	     (a) Capital Base. Have a Capital Base less than $100,000,000.



47






 







		
	 	     (b) Limitation on Indebtedness. Create, issue, guarantee, assume or
otherwise become liable, directly or indirectly, or permit any of its
Restricted Subsidiaries to create, issue, guarantee, assume or otherwise
become liable, directly or indirectly, in respect of any (i) Senior Debt
of WRECO or Indebtedness of any of its Restricted Subsidiaries if,
immediately after giving effect to the incurrence thereof and to the
application of the proceeds thereof, the aggregate principal amount of
all consolidated Senior Debt of WRECO and its Restricted Subsidiaries
then outstanding would exceed 80% of the sum of (x) the Capital Base plus
(y) the aggregate principal amount of Senior Debt of WRECO and its
Restricted Subsidiaries then outstanding; or (ii) Subordinated Debt of
WRECO if, immediately after giving effect to the incurrence thereof and
to the application of the proceeds thereof, the aggregate principal
amount of Subordinated Debt of WRECO then outstanding would exceed 100%
of Adjusted Net Worth. For purposes of this Section and Section 6.02(c),
Indebtedness of a Person which becomes a Restricted Subsidiary on any
date shall be deemed to have been issued or incurred as of such date.
	 
	 	     (c) Limitation on Mortgages and Liens. Create, incur or permit to
exist any mortgage, pledge, encumbrance, lien, security interest or
charge of any kind (including liens or charges upon properties acquired
or to be acquired under conditional sales agreements or other title
retention devices) on its property or assets, whether now owned or
hereafter acquired, or upon any income or profits thereof, or permit any
of its Restricted Subsidiaries to do any of the foregoing, except:




		
	 	     (i) liens, charges, encumbrances and priority claims
incidental to the conduct of the business or the ownership of
properties and assets (including warehousemen’s, attorneys’ and
statutory landlords’ liens) and liens, pledges or deposits in
connection with workmen’s compensation, unemployment insurance, old
age benefit or social security obligations, taxes, assessments,
statutory obligations or other similar charges, liens of
contractors, mechanics and materialmen, good faith deposits in
connection with tenders, contracts or leases to which WRECO or any
of its Restricted Subsidiaries is a party or other deposits
required to be made in the ordinary course of business and not in
connection with the borrowing of money, easements, rights of way,
restrictions and other similar encumbrances that, in the aggregate,
are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto
or substantially interfere with the ordinary conduct of WRECO’s
business; provided in each case the obligation secured is not
overdue or, if overdue, is being contested in good faith by
appropriate proceedings;
	 
	 	     (ii) provided that no Default or Event of Default has occurred
and is continuing, the pledge of assets for the purpose of securing
any appeal or stay or discharge in the course of any legal
proceeding and liens on or resulting from judgments or awards in
respect of which WRECO or any of its Restricted Subsidiaries shall
in good faith be prosecuting an appeal or proceeding for review;
	 
	 	     (iii) mortgages, liens or security interests existing as of
the date of this Agreement securing obligations of WRECO or any of
its Restricted Subsidiaries outstanding on such date and all
renewals, extensions or refundings thereof



48






 







		
	 	(without increase in the principal amount remaining unpaid at
the time of any such renewal, extension or refunding);
	 
	 	     (iv) mortgages, liens or security interests securing
Indebtedness of a Restricted Subsidiary of WRECO to another
Restricted Subsidiary of WRECO or to WRECO;
	 
	 	     (v) mortgages, conditional sale contracts, security interests
or other arrangements for the retention of title (including
financing leases), in addition to those permitted under
subparagraphs (iii), (iv), (vi) and (vii) hereof, given to secure
the payment of the purchase price incurred in connection with the
acquisition of property useful and intended to be used in carrying
on the business of WRECO or any of its Restricted Subsidiaries, and
liens existing on such property at the time of acquisition thereof
or at the time of acquisition by WRECO or a Restricted Subsidiary
of any Person then owning such property whether or not such
existing liens were given to secure the payment of the purchase
price of the property to which they attach; provided that the lien
or charge shall attach solely to the property acquired or purchased
and any improvements then or thereafter placed thereon;
	 
	 	     (vi) mortgages, security interests and other encumbrances or
liens on Real Estate Assets, incurred or created in the ordinary
course of the business of WRECO and its Restricted Subsidiaries;
provided that the aggregate principal amount of all Indebtedness so
secured and at any one time outstanding shall not exceed 10% of the
Capital Base at such time; and
	 
	 	     (vii) mortgages, conditional sale contracts, security
interests or other arrangements for the retention of title
(including financing leases), in addition to those specifically
permitted by foregoing subparagraphs (i) through (vi) hereof, given
to secure the payment of Senior Debt of WRECO or any of its
Restricted Subsidiaries, and any renewal, extension or refunding of
any such Senior Debt; provided that the aggregate principal amount
of all Senior Debt of WRECO and its Restricted Subsidiaries so
secured and at any one time outstanding shall not exceed 10% of the
Capital Base at such time.




		
	 	     In the event that any property is subjected to a lien or other
encumbrance in violation of this Section 6.02(c), WRECO will make or
cause to be made effective provision whereby the Loans shall be secured
equally and ratably with all other obligations secured thereby (provided,
however, that such violation shall constitute a default under this
Agreement whether or not such provision is made) and, if such provision
is not made, an equitable lien, so equally and ratably securing the
Loans, shall (to the extent permitted by law) exist on such property.
	 
	 	     (d) Limitation on Mergers and Consolidations. Be a party to any
merger or consolidation unless (i) WRECO or a Weyerhaeuser Subsidiary (as
defined below) having substantially all of its assets and doing business
primarily in the United States of America shall be the surviving or
resulting corporation of any such merger or



49






 







		
	 	consolidation and immediately after giving effect to any such merger
or consolidation such successor corporation, whether or not WRECO, shall
be entitled to incur at least $1 of additional Senior Debt under Section
6.02(b); (ii) if the surviving or resulting corporation is not WRECO, the
surviving or resulting corporation shall be a Weyerhaeuser Subsidiary
incorporated within the United States of America and shall expressly
assume the obligations of WRECO under this Agreement and the other Loan
Documents to which it is a party by supplemental agreement reasonably
satisfactory to the Administrative Agent; (iii) immediately after giving
effect to any such merger or consolidation, no Default or Event of
Default shall have occurred and be continuing; and (d) WRECO shall have
delivered to the Administrative Agent a certificate signed by two of
WRECO’s officers stating that such merger or consolidation and, if a
supplemental agreement is required in connection therewith as aforesaid,
such supplemental agreement comply with the provisions described in this
paragraph. Upon the consummation of any merger or consolidation in which
the surviving or resulting corporation is not WRECO in accordance with
the foregoing provisions, the surviving or resulting corporation shall
succeed to and be substituted for, and may exercise every right and power
of and shall be subject to all of the obligations of, WRECO under this
Agreement and the other Loan Documents to which it is a party, with the
same effect as if it had been named as WRECO therein. As used in this
paragraph, the term “Weyerhaeuser Subsidiary” means a corporation at
least 79% of whose issued and outstanding shares of capital stock at the
time outstanding and having ordinary voting power for the election of a
majority of the directors of such corporation shall be owned and
controlled by Weyerhaeuser or a wholly owned Subsidiary of Weyerhaeuser.
	 
	 	     (e) Limitation on Sale of Assets. Sell, transfer or otherwise
dispose of all or substantially all of its properties and assets in a
single transaction or in a series of related transactions unless (i) the
consideration received therefor shall consist of cash, securities or
other properties having an aggregate fair value (as determined in good
faith by the Board of Directors of WRECO) equal to not less than the
aggregate fair value (as determined in good faith by the Board of
Directors of WRECO) of the properties and assets so sold, transferred or
otherwise disposed of; (ii) immediately after giving effect thereto WRECO
shall be entitled to incur at least $1 of additional Senior Debt under
Section 6.02(b); (iii) immediately after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing; and
(iv) WRECO shall have delivered to the Administrative Agent a certificate
signed by two of WRECO’s officers stating that such transaction complies
with the provisions described in this paragraph.




50









 



ARTICLE VII



EVENTS OF DEFAULT



            Section 7.01 Events of Default. In case of the happening of any of the
events under Sections 7.01(a) through 7.01(l) below (an “Event of Default”):




		
	 	     (a) default shall be made in the payment by a Borrower of any
principal of any Loan, when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment thereof
or by acceleration thereof or otherwise;




		
	 	     (b) default shall be made in the payment by a Borrower of any
interest on any Loan or any Fee or any other amount (other than an amount
referred to in Section 7.01(a) above) due under any Loan Document, when
and as the same shall become due and payable, and such default shall
continue unremedied for a period of five days;




		
	 	     (c) any representation or warranty made or deemed made by a Borrower
in or in connection with any Loan Document or the Borrowings hereunder,
or any representation, warranty, statement or information contained in
any report, certificate, financial statement or other instrument
furnished in connection with or pursuant to any Loan Document, shall
prove to have been false or misleading in any material respect when so
made, deemed made or furnished;




		
	 	     (d) default shall be made in the due observance or performance by a
Borrower or any of its Subsidiaries (or its respective Restricted
Subsidiaries, if such covenant,
condition or agreement applies only to Restricted Subsidiaries) of
any covenant, condition or agreement contained in Section 5.01(a),
5.05(a), 5.08 or in Article VI;




		
	 	     (e) default shall be made in the due observance or performance by a
Borrower or any of its Subsidiaries (or its Restricted Subsidiaries, if
such covenant, condition or agreement applies only to Restricted
Subsidiaries) of any covenant, condition or agreement contained in any
Loan Document (other than those specified in Section 7.01(a), 7.01(b),
7.01(c) or 7.01(d)) and such default shall continue unremedied for a
period of thirty days after notice thereof from the Administrative Agent
or any Lender to such Borrower;




		
	 	     (f) a Borrower or any of its Restricted Subsidiaries shall (i) fail
to pay, when and as the same shall become due and payable (and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument related to such Indebtedness)
any principal or interest, regardless of amount, due in respect of
Indebtedness in an aggregate principal amount in excess of $100,000,000,
or (ii) fail to observe or perform any other terms, covenants, conditions
or agreements contained in any agreements or instruments evidencing or
governing Indebtedness in an aggregate principal amount in excess of
$100,000,000 (and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument related to such
Indebtedness), if the effect of any failure or failures referred to in
this Section 7.01(f)(ii) is to cause or permit the holder or holders of
such Indebtedness or a trustee on its or their



51






 







		
	 	behalf (with or without
the giving of notice) to cause, such Indebtedness to become due prior to
its stated maturity;




		
	 	     (g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of a Borrower or any of its Restricted Subsidiaries, or
of a substantial part of the property or assets of such Borrower or any
of its Restricted Subsidiaries, under Title 11 of the United States Code,
as now constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for such Borrower or any of its Restricted Subsidiaries or for a
substantial part of the property or assets of such Borrower or any of its
Restricted Subsidiaries or (iii) the winding-up or liquidation of such
Borrower or any of its Restricted Subsidiaries; and such proceeding or
petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;




		
	 	     (h) a Borrower or any of its Restricted Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or fail
to contest in a timely and appropriate manner, any proceeding or the
filing of any petition described in Section 7.01(g) above, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for such Borrower or any of
its Restricted Subsidiaries or for a substantial part of the property or
assets of such Borrower or any of its Restricted Subsidiaries, (iv) file
an answer admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors,
(vi) become unable, admit in writing its inability or fail generally to
pay its debts as they become due or (vii) take any action for the purpose
of effecting any of the foregoing;




		
	 	     (i) one or more judgments for the payment of money in an aggregate
amount in excess of $100,000,000 shall be rendered against a Borrower or
any of its Restricted Subsidiaries or any combination thereof and the
same shall remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to levy upon assets or properties of
such Borrower or any of its Restricted Subsidiaries to enforce any such
judgment;




		
	 	     (j) any Plan shall fail to satisfy the minimum funding standard
required for any plan year or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the
Code, any Plan is, shall have been or is likely to be terminated or the
subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, or Weyerhaeuser has incurred or is likely to
incur a liability to or on account of a Plan under Sections 409, 502(i),
502(l), or 515 of ERISA or Section 4975 of the Code, or Weyerhaeuser or
any ERISA Affiliate has incurred or is likely to incur a liability to or
on account of a Plan under Sections 4062, 4063, 4064, 4069, 4201 or 4204
of ERISA; and there shall result from any such event or events referred
to in this Section 7.01(j) the imposition of a lien upon the assets of
Weyerhaeuser



52






 







		
	 	or any ERISA Affiliate, the granting of a security interest,
a liability or a material risk of incurring a liability to the PBGC or
the Internal Revenue Service or a Plan or a trustee appointed under ERISA
or a liability or a material risk of incurring a liability under Sections
409, 502(i) or 502(l) of ERISA or under Sections 4971 or 4975 of the
Code; which, in the good faith determination of the Required Lenders,
will have a Material Adverse Effect;




		
	 	     (k) there shall have occurred a Change in Control of a Borrower; or




		
	 	     (l) the OCBM Agreement shall cease, for any reason, to be in full
force and effect, or Weyerhaeuser shall contest the validity or
enforceability thereof or otherwise fail to comply with its obligations
thereunder;



then, and in every such event (other than an event with respect to a Borrower
described in Section 7.01(g) or 7.01(h) above), and at any time thereafter
during the continuance of such event, the Administrative Agent, at the request
of the Required Lenders, shall, by notice to the Borrowers, take any or all of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments of the Lenders, (ii) declare the Loans then outstanding to the
Borrowers to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrowers accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Borrowers,
anything contained herein or in any other Loan Document to the contrary
notwithstanding; and in any event with respect to a Borrower described in
Sections 7.01(g) or 7.01(h) above, the Commitments of the Lenders shall automatically terminate and the principal of
the Loans then outstanding, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrowers accrued
hereunder and under any other Loan Document, shall automatically become due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrowers, anything contained
herein or in any other Loan Document to the contrary notwithstanding.


ARTICLE VIII



THE ADMINISTRATIVE AGENT



          Section 8.01 The Administrative Agent. In order to expedite the
transactions contemplated by this Agreement, JPMorgan Chase Bank is hereby
appointed to act as Administrative Agent on behalf of the Lenders. Each of the
Lenders, and each assignee thereof, hereby irrevocably authorizes the
Administrative Agent to take such actions on behalf of such Lender and to
exercise such powers as are specifically delegated to the Administrative Agent
by the terms and provisions hereof, together with such actions and powers as
are reasonably incidental thereto.



          The Administrative Agent is hereby expressly authorized by the Lenders,
without hereby limiting any implied authority, (a) to receive on behalf of the
Lenders, all payments of





53






 





principal of and interest on the Loans and all other
amounts due to the Lenders hereunder, and promptly to distribute to each Lender
its proper share of each payment so received; (b) to give prompt notice on
behalf of the Lenders to the Borrowers of any Event of Default specified in
this Agreement of which the Administrative Agent has actual knowledge acquired
in connection with its agency hereunder; and (c) to distribute promptly to each
Lender copies of all notices, financial statements and other materials
delivered by the Borrowers pursuant to this Agreement as received by the
Administrative Agent.


          Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall be liable as such to any Lender for any action taken
or omitted by any of them except for its or his own gross negligence or willful
misconduct, or be responsible for any statement, warranty or representation
herein or the contents of any document delivered in connection herewith, or be
required to ascertain or to make any inquiry concerning the performance or
observance by the Borrowers of any of the terms, conditions, covenants or
agreements contained in any Loan Document. The Administrative Agent shall not
be responsible to the Lenders for (i) the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement or any other Loan Documents
or other instruments or agreements or (ii) the satisfaction of any condition
set forth in any Loan Document, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent. The duties of
the Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Loan Document a fiduciary relationship in respect of any Lender. The
Administrative Agent shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written instructions signed by the
Required Lenders or the Lenders, as the case may be, and, except as otherwise
specifically provided herein, such instructions and any action or inaction pursuant
thereto shall be binding on all of the Lenders. The Administrative Agent
shall, in the absence of knowledge to the contrary, be entitled to rely on any
instrument or document believed by it to be genuine and correct and to have
been signed or sent by the proper person or persons. The Administrative Agent
may also rely upon any statement made to it orally or by telephone and believed
to be made by the proper Person, and shall not incur any liability for relying
thereon.



          Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall have any responsibility to the Borrowers on account
of the failure of or delay in performance or breach by any Lender of any of its
obligations hereunder or to any Lender on account of the failure of or delay in
performance or breach by any other Lender or the Borrowers of any of their
respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. The foregoing shall not limit the
obligations of JPMorgan Chase Bank (or its successors and assigns) in its
capacity as Lender hereunder. The Administrative Agent may execute any and all
duties hereunder by or through agents or employees and shall be entitled to
rely upon the advice of legal counsel (who may be counsel for a Borrower),
independent accountants and other experts selected by it with respect to all
matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The exculpatory provisions of this Article VIII shall apply to any such agent
or employee, and shall apply to their respective activities in connection with
the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.





54






 





          The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing, the Lenders hereby acknowledge that (a) the Administrative Agent
shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default or Event of Default has occurred and is continuing, (b) the
Administrative Agent shall be under no duty to take any discretionary action
permitted to be taken by it pursuant to the provisions of this Agreement unless
it shall be requested in writing to do so by the Required Lenders or the
Lenders, as the case may be, and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrowers
or any of their respective Subsidiaries that is communicated to or obtained by
the Administrative Agent or any of its Affiliates in any capacity.



          Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at any time by
notifying the Lenders and the Borrowers. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor. If no successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent which shall be
a bank with an office in New York, New York, having a combined capital and
surplus of at least $500,000,000 or an Affiliate of any such bank. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
bank, such successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.05
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative Agent.



          With respect to the Loans made by it hereunder, the Administrative Agent
in its individual capacity and not as Administrative Agent shall have the same
rights and powers as any other Lender and may exercise the same as though it
were not the Administrative Agent, and the Administrative Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrowers or any of their respective Subsidiaries or
other Affiliate thereof as if it were not the Administrative Agent.



          Each of the Lenders agrees (i) to reimburse the Administrative Agent, on
demand, in the amount of its pro rata share (based on its Commitment hereunder)
of any expenses incurred for the benefit of the Lenders by the Administrative
Agent, including counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, which shall not have been
reimbursed by the Borrowers and (ii) to indemnify and hold harmless the
Administrative Agent and any of its directors, officers, employees or agents,
on demand, in the amount of such pro rata share, from and against any and all
losses, claims, damages, liabilities and related expenses of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against it in its
capacity as the Administrative Agent or any of them in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken or
omitted by it or any of them under this Agreement or any other Loan Document,
to the extent the same shall not have been reimbursed by the Borrowers;
provided that no Lender shall








55






 





be liable to the Administrative Agent for any
portion of such losses, claims, damages, liabilities and related expenses
resulting from the gross negligence or willful misconduct of the Administrative
Agent or any of its directors, officers, employees, or agents.


          Each of the Lenders acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each of the Lenders also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement or any other Loan Document, any related agreement or any document
furnished hereunder or thereunder.



          Section 8.02 Other Agents. Each of the Lenders and each of the Borrowers
acknowledges (A) that each of the Lead Arrangers, the Joint Book Runners, the
Syndication Agent and the Co-Documentation Agents, in their capacity as,
respectively, Lead Arranger, Joint Book Runner, Syndication Agent and the
Co-Documentation Agent, do not have any responsibility or liability hereunder,
and (B) that the titles “Lead Arranger,” “Joint Book Runner,” “Syndication
Agent” and “Co-Documentation Agent” are purely honorary in nature.



ARTICLE IX



MISCELLANEOUS



          Section 9.01 Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telecopy to the address specified below, or such
other address as such party shall hereafter have specified by written notice to
the Administrative Agent and the Borrowers:




		
	 	   (a) if to a Borrower by hand or courier service, to such Borrower at
33663 Weyerhaeuser Way South, Federal Way, Washington, or by facsimile to
(253) 924-3543, in each case to the Attention of Vice President and
Treasurer with a copy to Secretary;




		
	 	   (b) if to the Administrative Agent or a Lender, to it at its address
(or telecopy number) set forth in Schedule 9.01 or in the Assignment and
Acceptance pursuant to which such Lender became a party hereto.



          All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telecopy or other telegraphic communications equipment of the
sender, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 9.01.



          Section 9.02 Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrowers herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan






56






 





Document shall be considered to
have been relied upon by the Lenders and shall survive the making of the Loans
regardless of any investigation made by the Lenders or on their behalf, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any Fee or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid and so long as
the Commitments hereunder have not been terminated.


          Section 9.03 Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrowers and the Administrative Agent and
when the Administrative Agent shall have received copies hereof which, when
taken together, bear the signatures of each Lender and thereafter shall be
binding upon and inure to the benefit of the Borrowers, the Administrative
Agent, each Lender, and their respective successors and assigns, except that,
other than as provided in Section 6.01(c) and Section 6.02(d), neither Borrower
shall have the right to assign or delegate its rights or obligations hereunder
or any interest herein without the prior consent of all the Lenders.



          Section 9.04 Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that, other than as provided in Section
6.01(c) and Section 6.02(d), neither Borrower may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by a Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.



          (b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided that (i) except in
the case of an assignment to a Lender or a Lender Affiliate, each of the
Borrowers and the Administrative Agent must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld or delayed),
(ii) except in the case of an assignment to a Lender or a Lender Affiliate or
an assignment of the entire remaining amount of the assigning Lender’s
Commitment, the amount of the Commitment of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 unless each of the Borrowers and the Administrative
Agent otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement, (iv) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, and (v) the assignee,
if it shall not be a Lender prior to such assignment, shall deliver to the
Administrative Agent an Administrative Questionnaire; and provided further that
any consent of a Borrower otherwise required under this paragraph shall not be
required if a Default or Event of Default has occurred and is continuing.
Subject to acceptance and recording thereof pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and
Acceptance the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under







57






 





this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
2.11, 2.13, 2.17 and 9.05). Any assignment or transfer by a Lender of rights
or obligations under this Agreement that does not comply with this paragraph
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e)
of this Section.


          (c) The Administrative Agent, acting for this purpose as an agent of the
Borrowers, shall maintain at one of its offices in The City of New York a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall
be conclusive (absent manifest error), and the Borrowers, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.



          (d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, if any, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.



          (e) Any Lender may, without the consent of the Borrowers, sell
participations to one or more banks or other entities (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrowers,
the Administrative Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.08(b) that affects such
Participant. Subject to paragraph (f) of this Section, the Borrowers agree
that each Participant shall be entitled to the benefits of Sections 2.11, 2.13
and 2.17 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the
extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.06 as though






58






 





it were a Lender, provided such Participant
agrees to be subject to Section 2.15 as though it were a Lender.


          (f) A Participant shall not be entitled to receive any greater payment
under Section 2.11 or 2.17 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrowers’
prior written consent.



          (g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement and the other Loan Documents
(including, without limitation, any notes held by it pursuant to Section
2.05(e)) to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, without notice to,
or consent of the Borrower or the Administrative Agent, and this Section 9.04
shall not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for such Lender as a party hereto.



          (h) Weyerhaeuser authorizes each Lender to disclose to any Participant or
assignee and any prospective Participant or assignee any and all financial
information in such Lender’s possession concerning Weyerhaeuser or any
Subsidiary of Weyerhaeuser which has been delivered to such Lender by a
Borrower in connection with such Lender’s credit evaluation of a Borrower prior
to entering into this Agreement; provided that such Participant or assignee or
prospective Participant or assignee agrees to treat any such information which
is not public as confidential in accordance with the terms of the Agreement.



          Section 9.05 Expenses; Indemnity. (a) The Borrowers jointly and
severally agree to pay all reasonable out-of-pocket expenses incurred by the
Administrative Agent in connection with the preparation of this Agreement and
the other Loan Documents or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
hereby contemplated shall be consummated) or incurred by the Administrative
Agent or any Lender in connection with the enforcement or protection of their
rights in connection with this Agreement and the other Loan Documents or in
connection with the Loans made, including the fees and disbursements of
Shearman & Sterling, special counsel for the Administrative Agent, and, in
connection with any such amendment, modification or waiver made in connection
with any such enforcement or protection, the fees and disbursements of any
other counsel for the Administrative Agent or any Lender. The Borrowers
further agree jointly and severally that they shall indemnify the Lenders from
and hold them harmless against any documentary taxes, assessments or charges
made by any Governmental Authority by reason of the execution and delivery of
this Agreement or any of the other Loan Documents.



          (b) Each Borrower will indemnify the Administrative Agent, each Lender,
and its directors, officers, employees and agents (each such person being
called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees and expenses, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result of (i) the
execution or delivery by such Borrower of this Agreement or any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties thereto







59






 





of their respective obligations thereunder
or the consummation of the Transactions and the other transactions contemplated
hereby and thereby, (ii) the use of the proceeds of the Loans by such Borrower
or (iii) any claim, litigation, investigation or proceeding relating to any of
the foregoing, whether or not any Indemnitee is a party thereto; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses have resulted
from the gross negligence or willful misconduct of such Indemnitee.


          (c) It is understood and agreed that, to the extent not precluded by a
conflict of interest, each Indemnitee shall endeavor to work cooperatively with
Weyerhaeuser with a view toward minimizing the legal and other expenses
associated with any defense and any potential settlement or judgment. To the
extent reasonably practicable and not disadvantageous to any Indemnitee, it is
anticipated that a single counsel selected by Weyerhaeuser may be used.
Settlement of any claim or litigation involving any material indemnified amount
will require the approval of Weyerhaeuser (not to be unreasonably withheld).



          (d) The provisions of this Section 9.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement,
the consummation of the transactions contemplated hereby, the repayment of any
of the Loans, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Administrative Agent or any Lender. All amounts due under this
Section 9.05 shall be payable on written demand therefor.



          Section 9.06 Right of Setoff. If any Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time
to time, without notice to such Borrower (any such notice being expressly
waived by such Borrower), to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender or any of its respective Affiliates to or for the credit or the account
of such Borrower against any of and all the obligations of such Borrower now or
hereafter existing under this Agreement and any other Loan Documents held by
such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or such other Loan Document and although such
obligations may be unmatured. The rights of each Lender under this Section
9.06 are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.



          Section 9.07 Applicable Law. THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS HEREUNDER AND THEREUNDER OF THE PARTIES HERETO AND
THERETO SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.



          Section 9.08 Waivers; Amendment. (a) No failure or delay of the
Administrative Agent or any Lender in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof
or the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder and under the other Loan
Documents are







60






 





cumulative and are not exclusive of any rights or remedies which
they would otherwise have. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Borrowers therefrom
shall in any event be effective unless the same shall be permitted by paragraph
(b) below, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice or demand on
the Borrowers in any case shall entitle the Borrowers to any other or further
notice or demand in similar or other circumstances.


          (b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrowers and the Required Lenders; provided, however, that no such
agreement shall (i) change the principal amount of, or extend or advance the
maturity of or any date for the scheduled payment of any principal of or interest on, any Loan, or waive or excuse
any such scheduled payment or any part thereof, or decrease the rate of
interest on any Loan, without the prior written consent of each Lender affected
thereby, (ii) change the Commitment or decrease or extend any date for the
payment of the Facility Fees, Utilization Fees or Term-Out Premium of any
Lender without the prior written consent of such Lender, or (iii) amend or
modify the provisions of Section 2.14, the provisions of Section 2.19, the
provisions of this Section 9.08 or the definition of “Termination Date” or
“Required Lenders,” without prior written consent of each Lender; provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent hereunder without the prior
written consent of the Administrative Agent. Each Lender shall be bound by any
waiver, amendment or modification authorized by this Section 9.08, and any
consent by any Lender pursuant to this Section 9.08 shall bind any person
subsequently acquiring a Loan from it.



          Section 9.09 Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the applicable interest rate, together with all
fees and charges which are treated as interest under applicable law
(collectively the “Charges”), as provided for herein or in any other Loan
Document, or otherwise contracted for, charged, received, taken or reserved by
any Lender, shall exceed the maximum lawful rate (the “Maximum Rate”) which may
be contracted for, charged, taken, received or reserved by such Lender in
accordance with applicable law, the rate of interest payable with respect to
each Loan owing to each Lender, together with all Charges payable to such
Lender, shall be limited to the Maximum Rate.



          Section 9.10 Entire Agreement. This Agreement and the other Loan
Documents and the letter agreements referred to in Section 2.04(b) (with
respect to the payment of fees only) constitute the entire contract between the
parties relative to the subject matter hereof. Any previous agreement among
the parties with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents. Nothing in this Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any
party other than the parties hereto and thereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement or the other
Loan Documents.



          Section 9.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS






61






 





AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.


          Section 9.12 Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.



          Section 9.13 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 9.03.



          Section 9.14 Headings. The cover page, the Article and Section headings
and the Table of Contents used herein are for convenience of reference only,
are not part of this Agreement and are not to affect the construction of, or to
be taken into consideration in interpreting, this Agreement.



          Section 9.15 Jurisdiction; Consent to Service of Process. (a) Each of
the Borrowers hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that
any Lender or the Administrative Agent may otherwise have to bring any action
or proceeding relating to this Agreement or the other Loan Documents against
either Borrower or its properties in the courts of any jurisdiction.



          (b) Each of the Borrowers hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or Federal court located in New York City.
Each of the parties hereto hereby irrevocably waives, to the fullest extent






62






 





permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.


          (c) Each of the Borrowers hereby irrevocably designates, appoints and
empowers CT Corporation System, Inc. presently located at 111 Eighth Avenue,
New York, New York 10011, as its designee, appointee and attorney-in-fact to
receive, accept and acknowledge for and on its behalf, and in respect of its
property, service of any and all legal process, summons, notices and documents
which may be served in any such action or proceeding. If for any reason such
designee, appointee and attorney-in-fact shall cease to be available to act as
such, each Borrower agrees to designate a new designee, appointee and
attorney-in-fact in New York City on the terms and for purposes of this
provision satisfactory to the Administrative Agent. Each party to this
Agreement irrevocably consents to service of process in the manner provided for
notices in Section 9.01. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner permitted by
law.



          Section 9.16 Domicile of Loans. Each Lender may transfer and carry its
Loans at, to or for the account of any office, subsidiary or Affiliate of such
Lender.



          Section 9.17 Restricted and Unrestricted Subsidiaries. (a) Set forth on
Schedule 3.08 Part I is a list of all of the Restricted Subsidiaries and
Unrestricted Subsidiaries of Weyerhaeuser as of the Closing Date.



          (b) Set forth on Schedule 3.08 Part II is a list of all of the Restricted
Subsidiaries and Unrestricted Subsidiaries of WRECO as of the Closing Date.



          (c) After the Closing Date, a Financial Officer of Weyerhaeuser may,
provided that no Default or Event of Default has occurred and is continuing,
designate a Restricted Subsidiary as an Unrestricted Subsidiary by notice sent
to all of the Lenders, provided that (i) no such designation shall be effective
unless immediately after giving effect thereto there would exist no Default or
Event of Default; (ii) any such designation shall be effective not less than
five Business Days after written notice thereof shall have been provided to
each Lender; and (iii) upon such designation, Schedule 3.08 Part I shall be
deemed to be amended to reflect such designation. Any Person that becomes a
Subsidiary (by formation, acquisition, merger or otherwise) after the Closing
Date shall automatically be deemed to be a Restricted Subsidiary of
Weyerhaeuser as of the date it becomes a Subsidiary unless designated as an
Unrestricted Subsidiary pursuant to the terms hereof.



          (d) After the Closing Date, a Financial Officer of Weyerhaeuser may,
provided that no Default or Event of Default has occurred and is continuing,
designate an Unrestricted Subsidiary as a Restricted Subsidiary by notice sent
to all of the Lenders, provided that (w) no such designation shall be effective
unless immediately after giving effect thereto there would exist no Default or
Event of Default; (x) no such designation shall be effective unless immediately
after giving effect thereto Weyerhaeuser is in compliance with Sections 6.01(d)
and 6.01(e); (y) any such designation shall be effective not less than five
Business Days after written notice thereof shall have been provided to each
Lender; and (z) upon






63






 





such designation, Schedule 3.08 Part I shall be deemed to be amended to
reflect such designation.


          (e) After the Closing Date, any Subsidiary of WRECO (i) which is organized
and existing under the laws of the United States or any state of the United
States, Puerto Rico or the Dominion of Canada or any province thereof and (ii)
of which substantially all of the physical properties are located, and
substantially all of the business is carried on, in the United States of
America, Puerto Rico or Canada may, provided that no Default or Event of
Default has occurred and is continuing, be designated as a Restricted
Subsidiary by WRECO, subject to the limitations described in Subsection 9.17(f)
below. Any Person that becomes a Subsidiary of WRECO (by formation,
acquisition, merger or otherwise) after the Closing Date shall automatically be
deemed to be an Unrestricted Subsidiary of WRECO as of the date it becomes a
Subsidiary unless designated as a Restricted Subsidiary pursuant to the terms
hereof.



          (f) After the Closing Date, Weyerhaeuser may, provided that no Default or
Event of Default has occurred and is continuing, cause a Financial Officer of
WRECO to designate an Unrestricted Subsidiary as a Restricted Subsidiary by
notice sent to all of the Lenders, provided that (v) such Subsidiary satisfies
the requirements of Subsection 9.17(e) above; (w) no such designation shall be
effective unless immediately after giving effect thereto there would exist no
Default or Event of Default; (x) WRECO could incur at least $1 of additional
Senior Debt under Subsection 6.02(b); (y) any such designation shall be
effective not less than five Business Days after written notice thereof shall
have been provided to each Lender; and (z) upon such designation, Schedule 3.08
Part II shall be deemed to be amended to reflect such designation.



          (g) After the Closing Date, Weyerhaeuser may, provided that no Default or
Event of Default has occurred and is continuing, cause a Financial Officer of
WRECO to designate a Restricted Subsidiary as an Unrestricted Subsidiary by
notice sent to all of the Lenders, provided that (v) no such designation shall
be effective unless immediately after giving effect thereto there would exist
no Default or Event of Default; (w) WRECO could incur at least $1 of additional
Senior Debt under Subsection 6.02(b); (x) the aggregate amount of Real Estate
Assets owned by all Subsidiaries of WRECO, determined on a consolidated basis,
which have been or are to be, as the case may be, designated as Unrestricted
Subsidiaries during the 365 consecutive days ending on and including the
effective date of such proposed designation, shall not exceed 15% of the
aggregate amount of Real Estate Assets owned by WRECO and its Restricted
Subsidiaries as of the beginning of such 365 day period; (y) any such
designation shall be effective not less than five Business Days after written
notice thereof shall have been provided to each Lender; and (z) upon such
designation, Schedule 3.08 Part II shall be deemed to be amended to reflect
such designation.



[Signatures follow.]





64






 





     IN WITNESS WHEREOF, the Borrowers, the Administrative Agent, the
Syndication Agent, the Co-Documentation Agents and the Lenders have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.



	 	 	 	 	 	 	 
	 	 	WEYERHAEUSER COMPANY, as Borrower,
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Jeffrey W. Nitta
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Jeffrey W. Nitta
	

	 	 	 	Title:
	 	Vice President/Treasurer
	 
	 	 	 	 	 	 
	 	 	WEYERHAEUSER REAL ESTATE COMPANY,
	 	 	as Borrower,
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Jeffrey W. Nitta
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Jeffrey W. Nitta
	

	 	 	 	Title:
	 	Vice President/Treasurer







 









 






	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK,
	 	 	as Administrative Agent and as
Lender,
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ William P. Rindfuss
	 	 	 	 	
 
	

	 	 	 	Name:
	 	William P. Rindfuss
	

	 	 	 	Title:
	 	Vice President







 









 






	 	 	 	 	 	 	 
	 	 	MORGAN STANLEY SENIOR FUNDING, INC.,
	 	 	as Syndication Agent and as Lender,
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Todd Vannucci
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Todd Vannucci
	

	 	 	 	Title:
	 	Executive Director







 









 






	 	 	 	 	 	 	 
	 	 	THE BANK OF TOKYO-MITSUBISHI, LTD.,
SEATTLE BRANCH,
	 	 	as Co-Documentation Agent and as Lender,
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Junji Ban
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Junji Ban
	

	 	 	 	Title:
	 	General Manager, Northwest Group







 









 





	 	 	 	 	 	 	 
	 	 	DEUTSCHE BANK SECURITIES INC.,
	 	 	as Co-Documentation Agent,
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Christian Dallwitz
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Christian Dallwitz
	

	 	 	 	Title:
	 	Director
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Oliver Schwarz
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Oliver Schwarz
	

	 	 	 	Title:
	 	Vice President







 









 





	 	 	 	 	 	 	 
	 	 	DEUTSCHE BANK AG NEW YORK BRANCH,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Christian Dallwitz
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Christian Dallwitz
	

	 	 	 	Title:
	 	Director
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Oliver Schwarz
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Oliver Schwarz
	

	 	 	 	Title:
	 	Vice President







 









 






	 	 	 	 	 	 	 
	 	 	CITICORP USA, INC.,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ David L. Harris
	 	 	 	 	
 
	

	 	 	 	Name:
	 	David L. Harris
	

	 	 	 	Title:
	 	Vice President
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	 	 	 	 	
 
	

	 	 	 	Name:	 	 
	

	 	 	 	Title:	 	 







 









 






	 	 	 	 	 	 	 
	 	 	CITICORP USA, INC.,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ William Timmons
	 	 	 	 	
 
	

	 	 	 	Name:
	 	William Timmons
	

	 	 	 	Title:
	 	Vice President
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	 	 	 	 	
 
	

	 	 	 	Name:	 	 
	

	 	 	 	Title:	 	 







 









 






	 	 	 	 	 	 	 
	 	 	ROYAL BANK OF CANADA,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Chris Abe
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Chris Abe
	

	 	 	 	Title:
	 	Manager







 









 






	 	 	 	 	 	 	 
	 	 	THE BANK OF NOVA SCOTIA,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Patrick G. Horne
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Patrick G. Horne
	

	 	 	 	Title:
	 	Director







 









 






	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Thomas R. Sullivan
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Thomas R. Sullivan
	

	 	 	 	Title:
	 	Vice President







 









 






	 	 	 	 	 	 	 
	 	 	CIBC INC.,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Geraldine Kerr
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Geraldine Kerr
	

	 	 	 	Title:
	 	Executive Director
CIBC World Markets Corp.
As Agent







 









 





	 	 	 	 	 	 	 
	 	 	PNC BANK, NATIONAL ASSOCIATION,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Dorothy G.W. Brailer
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Dorothy G.W. Brailer
	

	 	 	 	Title:
	 	Vice President







 









 






	 	 	 	 	 	 	 
	 	 	WACHOVIA BANK N.A.,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Shawn Janko
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Shawn Janko
	

	 	 	 	Title:
	 	Vice President







 









 






	 	 	 	 	 	 	 
	 	 	NORTHWEST FARM CREDIT SERVICES, PCA,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Jim D. Allen
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Jim D. Allen
	

	 	 	 	Title:
	 	Sr. Vice President







 









 






	 	 	 	 	 	 	 
	 	 	SUMITOMO MITSUI BANKING

CORPORATION
	 	 	(formerly know as The

Sumitomo Bank, Limited),

as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Al Galluzzo
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Al Galluzzo
	

	 	 	 	Title:
	 	Senior Vice President







 









 






	 	 	 	 	 	 	 
	 	 	CAJA MADRID,

as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Jose Luis Garcia
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Jose Luis Garcia
	

	 	 	 	Title:
	 	Global Head of Origination
and Syndication
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Pedro Lalanda
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Pedro Lalanda
	

	 	 	 	Title:
	 	Corporate Director







 









 






	 	 	 	 	 	 	 
	 	 	FARM CREDIT SERVICES OF AMERICA, PCA,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Steven L. Moore
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Steven L. Moore
	

	 	 	 	Title:
	 	Vice President







 









 






	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ James R. Farmer
	 	 	 	 	
 
	

	 	 	 	Name:
	 	James R. Farmer
	

	 	 	 	Title:
	 	Vice President







 









 






	 	 	 	 	 	 	 
	 	 	THE NORTHERN TRUST COMPANY,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Melissa A. Whitson
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Melissa A. Whitson
	

	 	 	 	Title:
	 	Vice President







 









 






	 	 	 	 	 	 	 
	 	 	COBANK, ACB,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ S. Richard Dill
	 	 	 	 	
 
	

	 	 	 	Name:
	 	S. Richard Dill
	

	 	 	 	Title:
	 	Vice President







 









 






	 	 	 	 	 	 	 
	 	 	COOPERATIEVE CENTRALE RAIFFEISIN-BOERENLEENBANK B.A., “RABOBANK
NEDERLAND” NEW YORK BRANCH
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Edward J. Pevser
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Edward J. Pevser
	

	 	 	 	Title:
	 	Managing Director
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Jessalyn Peters
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Jessalyn Peters
	

	 	 	 	Title:
	 	Executive Director







 









 






	 	 	 	 	 	 	 
	 	 	KBC BANK, N.V.,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Robert Snauffer
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Robert Snauffer
	

	 	 	 	Title:
	 	First Vice President
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Eric Raskin
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Eric Raskin
	

	 	 	 	Title:
	 	Vice President







 









 






	 	 	 	 	 	 	 
	 	 	REGIONS BANK,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Mark Burr
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Mark Burr
	

	 	 	 	Title:
	 	VP Corp. Banking







 









 






	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, N.A.,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Steven J. Anderson
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Steven J. Anderson
	

	 	 	 	Title:
	 	Senior Vice President







 









 






	 	 	 	 	 	 	 
	 	 	WESTPAC BANKING CORPORATION,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Anthony Matthews
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Anthony Matthews
	

	 	 	 	Title:
	 	Vice President







 









 






	 	 	 	 	 	 	 
	 	 	AGFIRST FARM CREDIT BANK,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ John W. Burnside
	 	 	 	 	
 
	

	 	 	 	Name:
	 	John W. Burnside
	

	 	 	 	Title:
	 	Vice-President







 









 






	 	 	 	 	 	 	 
	 	 	MELLON BANK, N.A.,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Lawrence C. Ivey
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Lawrence C. Ivey
	

	 	 	 	Title:
	 	First Vice President







 









 






	 	 	 	 	 	 	 
	 	 	AUSTRALIA AND NEW ZEALAND BANKING

GROUP LIMITED,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Damodar Menon
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Damodar Menon
	

	 	 	 	Title:
	 	First Vice President







 









 






	 	 	 	 	 	 	 
	 	 	FARM CREDIT SERVICES OF MINNESOTA

VALLEY, PCA dba FCS COMMERCIAL

FINANCE GROUP,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Warren Shoen
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Warren Shoen
	

	 	 	 	Title:
	 	Vice President







 









 






	 	 	 	 	 	 	 
	 	 	CHIAO TUNG BANK CO. LTD. NEW YORK
AGENCY,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Chun-Kai Hu
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Chun-Kai Hu
	

	 	 	 	Title:
	 	Deputy General Manager








 










 





EXHIBIT A


FORM OF REVOLVING BORROWING REQUEST



JPMorgan Chase Bank, as Administrative Agent for

the Lenders referred to below,

270 Park Avenue

New York, New York 10017



[Date]


Attention: [_________]



Ladies and Gentlemen:


          The undersigned, [Weyerhaeuser Company][Weyerhaeuser Real Estate Company]
(the “Borrower”), refers to the Second Amended and Restated 364-Day Revolving
Credit Facility Agreement dated as of March      , 2003 (as it may hereafter be
amended, modified, extended or restated from time to time, the “Credit
Agreement”), among the Borrowers, the lenders party thereto from time to time,
JPMorgan Chase Bank, as Administrative Agent, Morgan Stanley Senior Funding,
Inc., as Syndication Agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche
Bank Securities Inc., as Co-Documentation Agents. Capitalized terms used
herein and not otherwise defined herein shall have the meanings given such
terms in the Credit Agreement. The Borrower hereby gives you notice pursuant
to Section 2.02(e) of the Credit Agreement that it requests a Revolving
Borrowing under the Credit Agreement, and in that connection sets forth below
the terms on which such Borrowing is requested to be made:




	(A)	 	Date of Borrowing
(which is a Business Day)	

	 
	(B)	 	Principal Amount of Borrowing1	

	 
	(C)	 	Interest rate basis2	

	 
	(D)	 	Interest Period and the last day thereof3	









	1               Not less than $25,000,000 and in integral multiples of $1,000,000 in excess
thereof (or an aggregate principal amount equal to the remaining balance of the
available Commitments) or greater than the Total Commitment then available.
	 
	2	 	 Eurodollar Loan or Base Rate Loan.
	 
	3	 	 Which shall be subject to the
definition of “Interest Period” and end not
later than the then existing Termination Date.


A-1





 






 





Upon acceptance of any or all of the Revolving Loans offered by the Lenders in
response to this request, the Borrower shall be deemed to have represented and
warranted that the conditions to lending specified in Sections 4.01(b) and (c)
of the Credit Agreement have been satisfied.



	 	 	 	 	 
	 	 	Very truly yours,
	 	 	 	 	 
	 	 	[WEYERHAEUSER COMPANY],

as Borrower,
	 	 	 	 	 
	 	 	[WEYERHAEUSER REAL ESTATE 

COMPANY],

as Borrower,
	 	 	 	 	 
	 	 	
By
	 	

	 	 	 	 	Name:
	 	 	 	 	Title: [Responsible Officer]



A-2





 






 





EXHIBIT B


FORM OF ADMINISTRATIVE QUESTIONNAIRE



JPMorgan Chase Bank

1 Chase Manhattan Plaza - 8th Floor

New York, NY 10081

Tel: 212-552-7400

Fax: 212-552-5662


WEYERHAEUSER COMPANY



Please accurately complete the following information and return via FAX or
e-mail to the attention of Maggie Swales at JPMorgan Chase Bank as soon as
possible.


TEL Number: 212-552-7472    FAX Number: 212-552-5662    E-mail:maria.m.swales@jpmorgan.com



LEGAL NAME OF YOUR INSTITUTION TO APPEAR IN DOCUMENTATION:




NUMBER OF LINES NEEDED FOR SIGNATURE PAGE:



GENERAL INFORMATION - DOMESTIC LENDING OFFICE:


Institution
Name:


Street Address:

City State, Zip Code



GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:


Institution Name:


Street Address:

City, State, Zip Code:


CONTACTS/NOTIFICATION
METHOD:


CREDIT CONTACTS:

Primary Contact:


Street Address:

City, State, Zip Code:

Phone Number:

FAX Number:

E-mail Address:


Backup Contact:


Street Address:

City, State, Zip Code:

Phone Number:

FAX Number:

E-mail Address:


B-1




 






 





TAX WITHHOLDING:


Non Resident Alien       Y        N

If yes:




	•	 	What is the country of
incorporation or organization? 

	 
	•	 	Tax Form W-8BEN or W-8ECI should be enclosed as per the Tax Section of the referenced Credit Agreement.
Failure to properly complete and return the applicable form will subject your institution to withholding
tax.



If no:




	•	 	Please submit Tax Form W-9



Lender’s Tax Identification
Number:




CONTACTS/NOTIFICATION METHOD:

ADMINISTRATIVE CONTACTS — BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.

Contact Name:


Street Address:


City, State, Zip
Code:

Phone Number:

FAX Number:

E-mail Address:



BID LOAN NOTIFICATION: (if
applicable)


Contact Name:


Street Address:


City, State, Zip
Code:

Phone Number:

FAX Number:

E-mail Address:



PAYMENT
INSTRUCTIONS:


Name of Bank where funds are to be
transferred:


Routing Transit/ABA number of Bank where funds are to be
transferred:

Name of Account: (if applicable)

Account Number:

Additional Information:


MAILINGS


Please specify who should receive financial
information:

Contact Name:

Street Address:

City, State, Zip Code:


It is very important that all of the above information is accurately filled in
and returned promptly. If you have any questions, please call Maggie Swales at
Loan & Agency Services at 212-552-7472.


B-2





 






 





EXHIBIT C


[FORM OF]

ASSIGNMENT AND ACCEPTANCE



          Reference is made to the Second Amended and Restated 364-Day Revolving
Credit Facility Agreement dated as of March      , 2003 (the “Credit Agreement”),
among Weyerhaeuser Company, a Washington corporation (“Weyerhaeuser”),
Weyerhaeuser Real Estate Company (“WRECO,” together with Weyerhaeuser, the
“Borrowers” and each, individually, a “Borrower”), the lenders party thereto
from time to time (the “Lenders”), JPMorgan Chase Bank, as administrative agent
for the Lenders (in such capacity, the “Administrative Agent”), Morgan Stanley
Senior Funding, Inc., as syndication agent, and The Bank of Tokyo-Mitsubishi,
Ltd. and Deutsche Bank Securities Inc., as co-documentation agents. Terms
defined in the Credit Agreement are used herein with the same meanings.



          1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth on the Schedule
attached hereto, the interests set forth on the Schedule attached hereto (the
“Assigned Interest”) in the Assignor’s rights and obligations under the Credit
Agreement, including, without limitation, the interests set forth on the
reverse hereof in the Commitment of the Assignor on the Effective Date and the
Loans owing to the Assignor which are outstanding on the Effective Date,
together with unpaid interest accrued on the assigned Loans to the Effective
Date and the amount, if any, set forth on the reverse hereof of the Fees
accrued to the Effective Date for the account of the Assignor. Each of the
Assignor and the Assignee hereby agrees to be bound by Section 9.04 of the
Credit Agreement, a copy of which has been received by each such party and the
Assignor represents and warrants that it is the legal and beneficial owner of
the interest being assigned and that such interest is free and clear of any
lien or adverse claim. From and after the Effective Date, (i) the Assignee
shall be a party to and be bound by the provisions of the Credit Agreement and,
to the extent of the interest assigned by this Assignment and Acceptance, have
the rights and obligations of a Lender thereunder and under the Loan Documents
and (ii) the Assignor shall, to the extent of the interests assigned by this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.



          2. This Assignment and Acceptance is being delivered to the Administrative
Agent together with (i) if the Assignee is organized under the laws of a
jurisdiction outside the United States, the forms specified in Section 2.17(f)
of the Credit Agreement, duly completed and executed by such Assignee, (ii) if
the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form of Exhibit B to the Credit Agreement
and (iii) a processing and recordation fee of $3,500.



          3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.



Date of Assignment:




C-1






 






 





EXHIBIT C



	 	 	 	 	 	 	 
	The terms set forth above and on the
reverse side hereof are hereby agreed to:	 	Accepted1
	, as
Assignor,
	 	JPMORGAN CHASE BANK, as

	 	 	Administrative Agent,
	 	 	 	 	 	 	 
	By:	 	By:
	 	 	


	 	 	 	

	 	 	
Name:
	 	 	 	Name:
	 	 	
Title:
	 	 	 	Title:
	 	 	 	 	 	 	 
	, as
Assignee,
	 	[WEYERHAEUSER COMPANY], as

	 	 	 	 	Borrower,
	 	 	 	 	 	 	 
	By:	 	By:
	 	 	


	 	 	 	

	 	 	
Name:
	 	 	 	Name:
	 	 	
Title:
	 	 	 	Title:
	 	 	 	 	 	 	 
	 	 	 	 	[WEYERHAEUSER REAL ESTATE 

	 	 	 	 	COMPANY], as Borrower,
	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	Title:








	1	 	 To be completed only if consents are required under Section 9.04.


C-2




 










 



EXHIBIT C

Schedule to Assignment and Acceptance



	 	 	 
	Legal Name of Assignor:	 	 
	 	 	


	 	 	 
	Legal Name of Assignee:	 	 
	 	 	


	 	 	 
	Assignee’s Address for Notices:	 	 
	 	 	


	 	 	 
	Effective Date of Assignment	 	 
	(may not be fewer than 5 Business	 	 
	Days after the Date of Assignment,	 	 
	unless waived by the Administrative Agent):	 	 
	 	 	






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage Assigned of
	 	 	 	 	 	 	Commitment thereunder (set
	 	 	 	 	 	 	forth, to at least 8
	 	 	 	 	 	 	decimals) as
	 	 	 	 	 	 	a percentage of the aggregate
	 	 	 	 	 	 	Commitments of all Lenders
	Facility	 	Principal Amount Assigned	 	thereunder
	
	 	
	 	

	Loans:
	 	$	 	 	 	 	%	 
	Commitments:
	 	$	 	 	 	 	%	 
	Fees Assigned
(if any):
	 	$	 	 	 	 	%	 



C-3






 



EXHIBIT D-1


FORM OF CERTIFICATION OF FINANCIAL STATEMENTS FOR WEYERHAEUSER



          This is to certify that the consolidated statements attached hereto
required by Section 5.04 of the Second Amended and Restated 364-Day Revolving
Credit Facility Agreement dated as of March      , 2003 by and among Weyerhaeuser
Company, Weyerhaeuser Real Estate Company, the Lenders party thereto from time
to time, JPMorgan Chase Bank, as administrative agent for the Lenders, Morgan
Stanley Senior Funding, Inc., as syndication agent, and The Bank of
Tokyo-Mitsubishi, Ltd. and Deutsche Bank Securities Inc., as co-documentation
agents (the “Credit Agreement”; capitalized terms used herein without
definition shall have the meanings given them in the Credit Agreement), fairly
present the financial position and results of operations of Weyerhaeuser
Company and its consolidated Subsidiaries as of                          , 200     and for
the period then ended on a consolidated basis in accordance with GAAP
consistently applied except as noted therein.



Dated: ______________, 200_




	 	 	 	 	 
	 	 	WEYERHAEUSER COMPANY,
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



D-1-1






 



EXHIBIT D-2


FORM OF CERTIFICATION OF FINANCIAL STATEMENTS FOR WRECO



          This is to certify that the consolidated statements attached hereto
required by Section 5.04 of the Second Amended and Restated 364-Day Revolving
Credit Facility Agreement dated as of March      , 2003 by and among Weyerhaeuser
Company, Weyerhaeuser Real Estate Company, the Lenders party thereto from time
to time, JPMorgan Chase Bank, as administrative agent for the Lenders, Morgan
Stanley Senior Funding, Inc., as syndication agent, and The Bank of
Tokyo-Mitsubishi, Ltd. and Deutsche Bank Securities Inc., as co-documentation
agents (the “Credit Agreement”; capitalized terms used herein without
definition shall have the meanings given them in the Credit Agreement), fairly
present the financial position and results of operations of Weyerhaeuser Real
Estate Company and its consolidated Subsidiaries as of
                         , 200   
and for the period then ended on a consolidated basis in accordance with GAAP
consistently applied except as noted therein.



Dated: ______________, 200_




	 	 	 	 	 
	 	 	WEYERHAEUSER REAL ESTATE COMPANY,
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



D-2-1






 



EXHIBIT D-3


FORM OF COMPLIANCE CERTIFICATE FOR WEYERHAEUSER



THE UNDERSIGNED HEREBY CERTIFY THAT:




		
	 	     (i) We are
the duly elected                and                of Weyerhaeuser Company, a Washington corporation (“Weyerhaeuser”);




		
	 	     (ii) We have reviewed the terms of the Second Amended and Restated
364-Day Revolving Credit Facility Agreement dated as of March      , 2003,
by and among Weyerhaeuser, WRECO, the Lenders party thereto from time to
time, JPMorgan Chase Bank, as administrative agent for the Lenders,
Morgan Stanley Senior Funding, Inc., as syndication agent, and The Bank
of Tokyo-Mitsubishi, Ltd. and Deutsche Bank Securities Inc., as
co-documentation agents (the “Credit Agreement”; capitalized terms used
herein without definition shall have the meanings given them in the
Credit Agreement), and we have made, or have caused to be made under our
supervision, a detailed review of the transactions and conditions of
Weyerhaeuser and its Subsidiaries during the accounting period covered by
the attached financial statements; and




		
	 	     (iii) [No Event of Default or Default has occurred.] [An Event of
Default or Default has occurred. [If so, specify the nature and extent
thereof and any corrective action taken or proposed to be taken with
respect thereto.]]



          Describe below (or in a separate attachment to this Officers’ Certificate)
the exceptions, if any, to paragraph (iii) by listing, in detail, the nature of
the condition or event and the period during which it has existed:



















          The foregoing certifications, together with the computations set forth in
Attachment No. 1 hereto and the financial statements delivered with this
Officers’ Certificate in support hereof, are made and delivered this      day
of                    , 200     pursuant to Subsection 5.04(c) of the Credit Agreement.




	 	 	 	 	 
	Dated:______________, 200_	 	WEYERHAEUSER COMPANY,
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



D-3-1






 



ATTACHMENT NO. 1 TO

COMPLIANCE CERTIFICATE FOR WEYERHAEUSER



WEYERHAEUSER COMPANY AND RESTRICTED SUBSIDIARIES



COMPLIANCE WITH COVENANTS

AS OF                          , 200      

($000’s Omitted Except Ratio Amounts)



     Section 6.01(d)
- Debt Ratio as of                     , 200



	1.	 	Total Funded Indebtedness:




	 	a.	 	Short Term Indebtedness (inclusive of Notes Payable and
Commercial Paper)
	 
	 	b.	 	Current Maturities of Long Term Indebtedness and Capital
Lease Obligations
	 
	 	c.	 	Long Term Indebtedness:





	 	(1)	 	Senior Long Term Indebtedness
	 
	 	(2)	 	Capital Lease Obligations
	 
	 	(3)	 	Subordinated Indebtedness





	 	 	 	Total Long Term Indebtedness (1+2+3)
	 
	 	d.	 	Indebtedness of Unrestricted Subsidiaries
	 
	 	e.	 	Indebtedness of WRECO and its consolidated Subsidiaries
	 
	 	 	 	Total Funded Indebtedness (a+b+c-d-e)




	2.	 	Total Adjusted Shareholders’ Interest:




	 	f.	 	Preferred, Preference and Common Shares
	 
	 	g.	 	Other Capital and Retained Earnings
(plus or minus)
	 
	 	h.	 	Treasury Stock
	 
	 	i.	 	Investments in Unrestricted Subsidiaries
	 
	 	j.	 	Investments by Weyerhaeuser and its consolidated Subsidiaries
in WRECO and its consolidated Subsidiaries




	 	 	Total Adjusted Shareholders’ Interest
(f+g-h-i-j)
	 
	3.	 	Total Capitalization (1+2)
	 
	4.	 	Actual Debt Ratio (1/3)




	 	 	 
	 	Required Debt Ratio	
[72, if on or after the Closing Date]
	 	 	
[69, if on or after 12/31/03]%



Section 6.01(e) – Net Worth
as of
                     ,
200   



D-3-2






 



Total Adjusted Shareholders’ Interest (See item 2 above)

Required Total Adjusted Shareholders’ Interest $[              ]


D-3-3






 



EXHIBIT D-4


FORM OF COMPLIANCE CERTIFICATE FOR WRECO



THE UNDERSIGNED HEREBY CERTIFY THAT:




		
	 	     (i) We are
the duly elected                    and                    of Weyerhaeuser Real Estate Company, a Washington corporation (“WRECO”);




		
	 	     (i) We have reviewed the terms of the Second Amended and Restated
364-Day Revolving Credit Facility Agreement dated as of March      , 2003,
by and among Weyerhaeuser, WRECO, the Lenders party thereto from time to
time, JPMorgan Chase Bank, as administrative agent for the Lenders,
Morgan Stanley Senior Funding, Inc., as syndication agent, and The Bank
of Tokyo-Mitsubishi, Ltd. and Deutsche Bank Securities Inc., as
co-documentation agents (the “Credit Agreement”; capitalized terms used
herein without definition shall have the meanings given them in the
Credit Agreement), and we have made, or have caused to be made under our
supervision, a detailed review of the transactions and conditions of
WRECO and its Subsidiaries during the accounting period covered by the
attached financial statements; and




		
	 	     (ii) [No Event of Default or Default has occurred.] [An Event of
Default or Default has occurred. [If so, specify the nature and extent
thereof and any corrective action taken or proposed to be taken with
respect thereto.]]



          Describe below (or in a separate attachment to this Officers’ Certificate)
the exceptions, if any, to paragraph (iii) by listing, in detail, the nature of
the condition or event and the period during which it has existed:




















D-4-1






 





          The foregoing certifications, together with the computations set forth in
Attachment No. 1 hereto and the financial statements delivered with this
Officers’ Certificate in support hereof, are made and delivered this       day of
                   ,
200    pursuant to Subsection 5.04(c) of the Credit Agreement.




	 	 	 	 	 
	Dated: _____________, 200_	 	WEYERHAEUSER REAL ESTATE COMPANY,
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



D-4-2






 



ATTACHMENT NO. 1 TO

COMPLIANCE CERTIFICATE FOR WEYERHAEUSER REAL ESTATE COMPANY



WEYERHAEUSER REAL ESTATE COMPANY AND RESTRICTED SUBSIDIARIES



COMPLIANCE WITH COVENANTS

AS OF                                   , 200

($000’s Omitted)



Section 6.02(a) - Capital Base as of




	 	 	 	 	 	 	 	 	 	 	 
	1. Adjusted Net Worth:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	a. Capital Stock (less treasury stock)
	 	 	 	 	 	 	 	 
	 
	 	 	
	 	 	 	 	 
	 	b. Surplus and Retained Earnings
	 	 	 	 	 	 	 	 
	 
	 	 	
	 	 	 	 	 
	 	c. Intangible Assets
	 	 	 	 	 	 	 	 
	 
	 	 	
	 	 	 	 	 
	 	d. Minority Interests
	 	 	 	 	 	 	 	 
	 
	 	 	
	 	 	 	 	 
	 	e. Investments in Unrestricted Subsidiaries
	 	 	 	 	 	 	 	 
	 
	 	 	
	 	 	 	 	 
	 	f. Investments in joint ventures,
partnerships, etc.
	 	 	 	 	 	 	 	 
	 
	 	 	
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Adjusted Net Worth (a+b-c-d-e-f)
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	2. WRECO/Weyerhaeuser Subordinated Debt:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	a. Subordinated Promissory Notes issued to
Weyerhaeuser Company
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	
	 
	 
	 	 	 	 	 	 	 	 
	3. Capital Base (1 + the lesser of 1 and 2)
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Required Capital Base
	 	 	 	 	 	$	100,000	 
	 
	 	 	 	 	 	 	
	 



D-4-3






 



EXHIBIT E


FORM OF SUBORDINATED DEBT



WEYERHAEUSER REAL ESTATE COMPANY



Subordinated Promissory Note



$                            ,        


          FOR VALUE RECEIVED, the undersigned, WEYERHAEUSER REAL ESTATE COMPANY, a
Washington corporation (the “Company”), promises to pay to WEYERHAEUSER
COMPANY, on                    ,             , at the office of the Company in Federal Way,
Washington, the principal sum of                           ($            )
and to pay interest on the unpaid balance of such principal sum at said office
at the rate of             percent (     %) per annum from the date hereof, payable
monthly on the last day of each month in each year, until said principal sum is
fully paid.



          This Note is one of a series of Subordinated Promissory Notes of the
Company, all of which are identical except as to date, amount and maturity
date, from time to time issued and sold by the Company to Weyerhaeuser Company;
this Note and said subordinated Promissory Notes are hereinafter sometimes
collectively referred to as “Subordinated Notes”.



          Subject to the following provisions hereof, this Note may be prepaid at
any time by the Company without premium.



          Anything in this Note to the contrary notwithstanding, the indebtedness
evidenced by this Note and all other Subordinated Notes shall be subordinate
and junior in right of payment, to the extent and in the manner hereinafter set
forth, to all other indebtedness of the Company for money borrowed (including,
without limiting the generality of the foregoing, (i) its Medium-Term Notes,
Series A (the “Series A Medium-Term Notes”), issued and to be issued from time
to time under the Agency Agreement dated as of May 29, 1992 between the
Company, Weyerhaeuser Company and Morgan Guaranty Trust Company of New York,
(ii) its Medium-Term Notes, Series B (the “Series B Medium-Term Notes”), issued
and to be issued from time to time under the Agency Agreement dated as of
October 29, 1992 between the Company, Weyerhaeuser Company and Morgan Guaranty
Trust Company of New York, (iii) its Medium-Term Notes, Series C (the “Series C
Medium-Term Notes”), issued and to be issued from time to time under the Agency
Agreement dated as of October 13, 1993 between the Company, Weyerhaeuser
Company and Morgan Guaranty Trust Company of New York); (iv) its Medium-Term
Notes, Series D (the Series D Medium-Term Notes) issued and to be issued from
time to time under the Agency Agreement dated as of April 24, 2001, between the
Company, Weyerhaeuser Company, and the Chase Manhattan Bank; (v) its Loan
Agreement dated November 1, 1996 among the Company, the Banks named therein and
the Sumitomo Bank, New York Branch as Agent (the “Loan Agreement”), and (vi)
all indebtedness and other amounts owing pursuant to the Second Amended and
Restated 364-Day Revolving Credit Facility Agreement dated as of March      ,
2003, (as it may be amended, modified, extended or restated





E-1






 





from time to time, the “364-Day Credit Agreement”), among the Company,
Weyerhaeuser Company, JPMorgan Chase Bank, and the lenders referred to therein,
all such indebtedness to which this Note is subordinate and junior being
hereinafter referred to as “Prior Debt” and the governing loan documents being
hereinafter referred to as the “Prior Debt Instruments”), as follows:



		
	 	     (i) In the event of any distribution, division or application,
partial or complete, voluntary or involuntary, by operation of law or
otherwise, of all or any part of the assets of the Company, or the
proceeds thereof, to creditors of the Company or upon any indebtedness of
the Company occurring by reason of liquidation, dissolution or other
winding up of the Company or by reason of any execution, sale,
receivership, insolvency or bankruptcy proceedings or other proceedings
for the reorganization or readjustment of the Company or its debts or
properties, then in any such event such Prior Debt shall be preferred in
payment over the Subordinated Notes and such Prior Debt shall be first
paid and satisfied in full, in accordance with the order of priority of
payment established by any applicable provisions thereof and by any
instruments whereunder any Prior Debt is issued, before any payment or
distribution of any kind or character, whether in cash, property or
securities (other than in securities the payment of which is subordinated
to said Prior Debt to the same extent as herein provided), shall be made
on or in respect of principal or interest of the Subordinated Notes; and
in any such event any such payment, dividend or distribution (other than
in securities the payment of which is also subordinated as aforesaid)
which shall be made upon or in respect thereof shall be paid over to the
holders of such Prior Debt, pro rata, for application on such Prior Debt
in accordance with the order of priority of payment established by any
applicable provisions thereof and by any instrument whereunder any Prior
Debt is issued, until said Prior Debt has been fully paid.




		
	 	     (ii) Without limiting the foregoing, during the continuance of any
default in payment of principal, sinking fund, interest or premium, if
any, on any Prior Debt, no payment of principal or interest shall be made
on or with respect to the indebtedness evidenced by any Subordinated
Note, or any renewals or extensions thereof, and the holder or holders of
any Subordinated Notes shall not be entitled to receive or retain any
such payment made during the continuance of any such default.




		
	 	     (iii) Also without limiting the foregoing, the Company shall not
make, and the holder or holders of any Subordinated Notes shall not be
entitled to receive or retain, any payment of principal or interest on
the Subordinated Notes (whether such payment is made directly or
indirectly through the redemption, purchase or other acquisition of
Subordinated Notes by or for the benefit of the Company), if at the time
of any such payment and after giving effect thereto, an Event of Default
(as that term is defined in any of the Prior Debt Instruments), is then
continuing, or if any event has occurred which, with the lapse of time or
the giving of notice, or both, will become such an Event of Default under
any of the Prior Debt Instruments.




		
	 	     (iv) No right of any present or future holder of any Prior Debt to
enforce subordination as herein provided for shall at any time be
breached or impaired by any failure to act on the part of the Company or
by any noncompliance by the Company with the terms, provisions and
covenants hereof or of said Prior Debt, regardless of any knowledge
thereof that any holder of Prior Debt may have or be otherwise charged
with.



E-2






 







		
	 	Without limiting the foregoing the holder or holders of said Prior
Debt may receive and hold collateral for the payment of such Prior Debt,
may make substitutions and releases of collateral or any part thereof,
whether or not such holder or holders receive any consideration therefor;
may grant renewals or extensions of time for the payment of installments
of said Prior Debt or any part thereof, and take renewal notes or other
instruments to evidence the same; and no action or non-action taken or
omitted to be taken in respect of the foregoing matters or any of them by
any holder or holders of Prior Debt at any time or from time to time
shall invalidate or impair the subordination herein provided for.




	 	 	 	 	 
	 	 	WEYERHAEUSER REAL ESTATE COMPANY,
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	 	

	 	 	 	 	Its Treasurer



E-3






 



EXHIBIT F


FORM OF PROMISSORY NOTE



New York, New York


[                     ,       ]


          FOR VALUE RECEIVED, [WEYERHAEUSER COMPANY, a Washington corporation]
[WEYERHAEUSER REAL ESTATE COMPANY, a Washington corporation] (the “Borrower”),
hereby promises to pay to the order of [                             ] (the “Lender”), at the office of
JPMorgan Chase Bank (the “Agent”), at 270 Park Avenue, New York, New York 10017
on the Termination Date as defined in the Second Amended and Restated 364-Day
Revolving Credit Facility Agreement dated as of March      , 2003 (as it may
hereafter be amended, modified, extended or restated from time to time, the
“Credit Agreement”), among the Borrower, [Weyerhaeuser Company, a Washington
corporation] [Weyerhaeuser Real Estate Company, a Washington corporation], the
Lenders, the Swing Line Bank and Fronting Bank named therein, JPMorgan Chase
Bank, as Administrative Agent, Morgan Stanley Senior Funding, Inc., as
syndication agent and The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche Bank
Securities Inc., as co-documentation agents, the aggregate unpaid principal
amount of all Loans made by the Lender to the Borrower pursuant to the Credit
Agreement, in lawful money of the United States of America in same day funds,
and to pay interest from the date hereof on the principal amount hereof from
time to time outstanding, in like funds, at said office, at a rate or rates per
annum and payable on such dates as determined pursuant to the Credit Agreement.



          The Borrower promises to pay interest, on demand, on any overdue principal
of its borrowings and, to the extent permitted by law, overdue interest from
their due dates at a rate or rates determined as set forth in the Credit
Agreement.



          The Borrower hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.



          All borrowings evidenced by this Note and all payments and prepayments of
the principal hereof and interest hereon and the respective dates thereof shall
be endorsed by the holder hereof on the schedule attached hereto and made a
part hereof, or on a continuation thereof which shall be attached hereto and
made a part hereof, or otherwise recorded by such holder in its internal

records; provided, however, that any failure of the holder hereof to make such
a notation or any error in such notation shall not in any manner affect the
obligation of the Borrower to make payments of principal and interest with
respect to the Borrower’s borrowings in accordance with the terms of this Note
and the Credit Agreement.



          This Note is one of the promissory notes referred to in the Credit
Agreement which, among other things, contains provisions for the acceleration
of the maturity hereof upon the happening of certain events, for mandatory and,
in certain





F-1






 





circumstances, optional prepayment of the principal hereof prior to the
maturity thereof and for the amendment or waiver of certain provisions of the
Credit Agreement, all upon the terms and conditions therein specified.


          THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK.




	 	 	 	 	 
	 	 	[WEYERHAEUSER COMPANY,]

[WEYERHAEUSER REAL ESTATE COMPANY,]
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



F-2






 



Loans and Payments






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	Name of	 	 	 
	Amount	 	 	 	 	 	 	 	 	 	 	Principal	 	Person	 
	and Type	 	Interest	 	 	 	 	 	Unpaid	 	 	Balance	 	Making	 
	of Loan	 	Period	 	 	Principal	 	 	Interest	 	 	of Note	 	Notation	 
	
	 	
	 	 	
	 	 	
	 	 	
	 	
	 






F-3






 






Schedule 2.01


COMMITMENTS OF THE LENDERS




	 	 	 	 	 
	Institution	 	Commitment
	
	 	

	JPMorgan Chase Bank
	 	$	110,000,000	 
	Morgan Stanley Senior Funding, Inc.
	 	 	110,000,000	 
	Bank of Tokyo-Mitsubishi, Ltd., Seattle Branch
	 	 	100,000,000	 
	Deutsche Bank AG New York Branch
	 	 	100,000,000	 
	Citicorp USA, Inc.
	 	 	91,000,000	 
	Royal Bank of Canada
	 	 	91,000,000	 
	The Bank of Nova Scotia
	 	 	91,000,000	 
	Bank of America
	 	 	91,000,000	 
	CIBC Inc.
	 	 	50,000,000	 
	PNC Bank, National Association
	 	 	50,000,000	 
	Wachovia Bank N.A
	 	 	50,000,000	 
	Northwest Farm Credit Services, PCA
	 	 	31,000,000	 
	Sumitomo Mitsui Banking Corporation
	 	 	25,000,000	 
	Caja Madrid
	 	 	25,000,000	 
	Farm Credit Services of America, PCA
	 	 	20,000,000	 
	U.S. Bank National Association
	 	 	17,500,000	 
	The Northern Trust Company
	 	 	17,500,000	 
	CoBank, ACB
	 	 	17,500,000	 
	Rabobank Nederland
	 	 	17,500,000	 
	KBC Bank, N.V
	 	 	15,000,000	 
	Regions Bank
	 	 	15,000,000	 
	Wells Fargo Bank, N.A
	 	 	12,500,000	 
	Westpac Banking Corporation
	 	 	12,500,000	 
	AgFirst Farm Credit Bank
	 	 	12,500,000	 
	Mellon Bank, N.A
	 	 	10,000,000	 
	Australia and New Zealand Banking Group Limited
	 	 	7,500,000	 
	Farm Credit Services of Minnesota Valley, PCA
	 	 	5,000,000	 
	Chiao Tung Bank Co., Ltd. New York Agency
	 	 	5,000,000	 
	 
	 	 	
	 
	Total Commitments
	 	$	1,200,000,000	 



 






 



Schedule 3.08 Part I


WEYERHAEUSER COMPANY AND SUBSIDIARIES




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Percentage
	 	 	 	 	 	 	State or	 	Ownership of
	 	 	 	 	 	 	Country of	 	Immediate
	Name	 	Incorporation	 	Parent
	
	 	
	 	

	Columbia & Cowlitz Railway Company
	 	Washington	 	 	100	 
	DeQueen & Eastern Railroad Company
	 	Arkansas	 	 	100	 
	Fisher Lumber Company
	 	California	 	 	100	 
	Golden Triangle Railroad
	 	Mississippi	 	 	100	 
	Gryphon Asset Management, Inc.
	 	Delaware	 	 	100	 
	Gryphon Investments of Nevada, Inc.
	 	Nevada	 	 	100	 
	Mississippi & Skuna Valley Railroad Company
	 	Mississippi	 	 	100	 
	Norpac ResourcesLLC
	 	Delaware	 	 	100	 
	Oregon Timber Company
	 	Oregon	 	 	100	 
	 	Investment Company of Oregon
	 	Oregon	 	 	100	 
	Pacific Veneer, Ltd.
	 	Washington	 	 	100	 
	Texas, Oklahoma & Eastern Railroad Company
	 	Oklahoma	 	 	100	 
	United Structures, Inc.
	 	California	 	 	100	 
	Westwood Shipping Lines, Inc.
	 	Washington	 	 	100	 
	Weycomp Claims Management Services, Inc.
	 	Texas	 	 	100	 
	Weyerhaeuser Company of Nevada
	 	Nevada	 	 	100	 
	Weyerhaeuser Construction Company
	 	Washington	 	 	100	 
	Weyerhaeuser de Mexico, S.A. de C.V.
	 	Mexico	 	 	100	 
	Weyerhaeuser del Bajio, S.A. de C.V.
	 	Mexico	 	 	100	 
	Weyerhaeuser Europe Holdings
	 	Ireland	 	 	100	 
	 	Weyerhaeuser Sarasate Limited
	 	Ireland	 	 	100	 
	 	 	 	Weyerhaueser Holdings France SAS
	 	France	 	 	100	 
	 	 	 	 	Weyerhaeuser Mediland SAS
	 	France	 	 	100	 
	 	 	 	 	   Weyerhaeuser Darbo SAS
	 	France	 	 	100	 



 






 




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Percentage
	 	 	 	 	 	 	State or	 	Ownership of
	 	 	 	 	 	 	Country of	 	Immediate
	Name	 	Incorporation	 	Parent
	
	 	
	 	

	Weyerhaeuser Financial Services, Inc.
	 	Delaware	 	 	100	 
	 	ver Bes’ Insurance Company
	 	Vermont	 	 	100	 
	 	 	 	de Bes’ Insurance Ltd.
	 	Bermuda	 	 	100	 
	 	Weyerhaeuser Financial Investments, Inc.
	 	Nevada	 	 	100	 
	 	 	 	 	Trimark Development Company
	 	California	 	 	100	 
	 	 	 	WFI Servicing Company
	 	Nevada	 	 	100	 
	 	Weyerhaeuser Venture Company
	 	Nevada	 	 	100	 
	 	 	 	Las Positas Land Co.
	 	California	 	 	100	 
	 	 	 	WAMCO, Inc.
	 	Nevada	 	 	100	 
	Weyerhaeuser Forestlands International, Inc.
	 	Washington	 	 	100	 
	Weyerhaeuser International, Inc.
	 	Washington	 	 	100	 
	 	 	 	Southern Cone Timber Investors
Holding Company, LLC
	 	Delaware	 	 	100	 
	 	Trus Joist SPRL
	 	Belgium	 	 	100	 
	 	Weyerhaeuser Holdings Limited
	 	British Columbia	 	 	100	 
	 	 	 	Weyerhaeuser Company Limited
	 	Canada	 	 	100	 
	 	 	 	 	317298 Saskatchewan Ltd.
	 	Saskatchewan	 	 	100	 
	 	 	 	 	488205 British Columbia Ltd.
	 	British Columbia	 	 	90	 
	 	 	 	 	Forest License A49782 Holdings Ltd.
	 	British Columbia	 	 	99	 
	 	 	 	 	MacMillan Bloedel K.K
	 	Japan	 	 	100	 
	 	 	 	 	MacMillan Bloedel Pembroke Limited Partnership
	 	Ontario	 	 	100	 
	 	 	 	 	MacMillan Guadiana, S.A. de C.V.
	 	Mexico	 	 	100	 
	 	 	 	 	Mid-Island Reman Inc.
	 	British Columbia	 	 	100	 
	 	 	 	 	Weyerhaeuser (Annacis) Limited
	 	British Columbia	 	 	100	 
	 	 	 	 	Weyerhaeuser Australia Pty Ltd.
	 	Australia	 	 	100	 
	 	 	 	 	   Pine Solutions Australia Pty Limited
	 	Australia	 	 	100	 
	 	 	 	 	      K1 Holdings Pty Limited
	 	Australia	 	 	100	 
	 	 	 	 	      CCA Timbers (Vic) Pty Ltd.
	 	Australia	 	 	100	 
	 	 	 	 	      Hanaki Pty Ltd.
	 	Australia	 	 	100	 
	 	 	 	 	      Kaiyou Pty Ltd.
	 	Australia	 	 	100	 
	 	 	 	 	Weyerhaeuser (Barbados) SRL
	 	Barbados	 	 	100	 



 






 




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Percentage
	 	 	 	 	 	 	State or	 	Ownership of
	 	 	 	 	 	 	Country of	 	Immediate
	Name	 	Incorporation	 	Parent
	
	 	
	 	

	 	 	 	 	   Marlborough Capital Corp. SRL
	 	Barbados	 	 	100	 
	 	 	 	 	Weyerhaeuser (BVI) Ltd.
	 	British Virgin Islands	 	 	100	 
	 	 	 	 	   Weyerhaeuser New Zealand Holdings Inc.
	 	New Zealand	 	 	100	 
	 	 	 	 	      Nelson Forest Products Company
	 	New Zealand	 	 	100	 
	 	 	 	 	      Weyerhaeuser New Zealand Inc.
	 	New Zealand	 	 	100	 
	 	 	 	 	Weyerhaeuser (Carlisle) Ltd.
	 	Barbados	 	 	100	 
	 	 	 	 	   Camarin Limited
	 	Barbados	 	 	100	 
	 	 	 	 	Weyerhaeuser (Delta) Limited
	 	British Columbia	 	 	100	 
	 	 	 	 	Weyerhaeuser (Imports) Pty Limited
	 	Australia	 	 	100	 
	 	 	 	 	Weyerhaeuser (Ottawa) Limited
	 	British Columbia	 	 	100	 
	 	 	 	 	Weyerhaeuser Saskatchewan Ltd.
	 	Saskatchewan	 	 	100	 
	 	 	 	 	Weyerhaeuser Services Limited
	 	British Columbia	 	 	100	 
	 	Weyerhaeuser China, Ltd.
	 	Washington	 	 	100	 
	 	Weyerhaeuser (Asia) Limited
	 	Hong Kong	 	 	100	 
	 	Weyerhaeuser Japan Ltd.
	 	Japan	 	 	100	 
	 	Weyerhaeuser Japan Ltd.
	 	Delaware	 	 	100	 
	 	Weyerhaeuser Korea Ltd.
	 	Korea	 	 	100	 
	 	Weyerhaeuser, S.A.
	 	Panama	 	 	100	 
	 	Weyerhaeuser Taiwan Ltd.
	 	Delaware	 	 	100	 
	Weyerhaeuser International Sales Corp.
	 	Guam	 	 	100	 
	Weyerhaeuser (Mexico) Inc.
	 	Washington	 	 	100	 
	Weyerhaeuser Overseas Finance Co.
	 	Delaware	 	 	100	 
	Weyerhaeuser Raw Materials, Inc.
	 	Delaware	 	 	100	 
	Weyerhaeuser Real Estate Company*
	 	Washington	 	 	100	 
	 	Midway Properties, Inc.*
	 	North Carolina	 	 	100	 
	 	Pardee Homes *
	 	California	 	 	100	 
	 	 	Marmont Realty Company*
	 	California	 	 	100	 
	 	 	Pardee Homes of Nevada*
	 	Nevada	 	 	100	 
	 	 	Pardee Investment Company *
	 	California	 	 	100	 
	 	The Quadrant Corporation *
	 	Washington	 	 	100	 
	 	South Jersey Assets, Inc.*
	 	New Jersey	 	 	100	 



 






 




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Percentage
	 	 	 	 	 	 	State or	 	Ownership of
	 	 	 	 	 	 	Country of	 	Immediate
	Name	 	Incorporation	 	Parent
	
	 	
	 	

	 	Scarborough Constructors, Inc. *
	 	Florida	 	 	100	 
	 	TMI, Inc. *
	 	Texas	 	 	100	 
	 	Weyerhaeuser Real Estate Company of Nevada *
	 	Nevada	 	 	100	 
	 	Weyerhaeuser Realty Investors, Inc. *
	 	Washington	 	 	100	 
	 	Winchester Homes, Inc.*
	 	Delaware	 	 	100	 
	Weyerhaeuser Real Estate Development Company
	 	Washington	 	 	100	 
	Weyerhaeuser Sales Company
	 	Nevada	 	 	100	 
	Weyerhaeuser Servicios, S.A. de C.V.
	 	Mexico	 	 	100	 
	Weyerhaeuser USA LLC
	 	Delaware	 	 	100	 
	 	American Cemwood Corporation
	 	Oregon	 	 	100	 
	 	MB Administrative Services Inc.
	 	Delaware	 	 	100	 
	Willamette Mexican Holding Company
	 	Oregon	 	 	100	 
	Wilton Connor LLC
	 	North Carolina	 	 	100	 
	 	Wilton Connor Packaging International Limited
	 	Hong Kong	 	 	100	 
	The Wray Company
	 	Arizona	 	 	100	 



* Unrestricted Subsidiary



 






 



Schedule 3.08 Part II


WEYERHAEUSER REAL ESTATE COMPANY AND SUBSIDIARIES




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Percentage
	 	 	 	 	State or	 	Ownership of
	 	 	 	 	Country of	 	Immediate
	Name	 	Incorporation	 	Parent
	
	 	
	 	

	Weyerhaeuser Real Estate Company
	 	Washington	 	 	100	 
	Midway Properties, Inc.
	 	North Carolina	 	 	100	 
	Pardee Homes
	 	California	 	 	100	 
	 	Marmont Realty Company
	 	California	 	 	100	 
	 	Pardee Homes of Nevada
	 	Nevada	 	 	100	 
	 	Pardee Investment Company**
	 	California	 	 	100	 
	The Quadrant Corporation
	 	Washington	 	 	100	 
	 	 	South Jersey Assets, Inc.
	 	New Jersey	 	 	100	 
	Scarborough Constructors, Inc.
	 	Florida	 	 	100	 
	TMI, Inc.
	 	Texas	 	 	100	 
	Weyerhaeuser Real Estate Company of Nevada
	 	Nevada	 	 	100	 
	Weyerhaeuser Realty Investors, Inc.
	 	Washington	 	 	100	 
	Winchester Homes, Inc.
	 	Delaware	 	 	100	 



** Unrestricted Subsidiaries of Weyerhaeuser Real Estate Company



 






 



Schedule 9.01


ADDRESSES FOR NOTICES TO THE BANK




	 	 	 
	Name of Bank	 	Domestic and Eurodollar Lending Offices
	
	 	

	JPMorgan Chase Bank	 	
JPMorgan Chase Bank
	 	 	
Loan and Agency Services
	 	 	
1111 Fannin, Floor 10,
	 	 	
Houston TX 77002
	 	 	
Attn: Mr. Vaughan Nguyen, Loan and
	 	 	
Agency Services
	 	 	
T: (713) 750-3550
	 	 	
F: (713) 750-2932
	 	 	 
	 	 	
With copy to:
	 	 	 
	 	 	
JPMorgan Chase Bank
	 	 	
560 Mission Street
	 	 	
San Francisco, CA 94105
	 	 	
Attn: Mr. William Rindfuss
	 	 	
T: (415) 315-8232
	 	 	
F: (415) 315-8586
	 	 	 
	Morgan Stanley Senior Funding, Inc.	 	
Morgan Stanley Senior Funding, Inc.
	 	 	
1633 Broadway
	 	 	
New York, NY 10019
	 	 	
Attn: James Morgan
	 	 	
T: (212) 537-1470
	 	 	
F: (212) 537-1867/1866
	 	 	 
	 	 	
With copy to:
	 	 	 
	 	 	
Morgan Stanley Senior Funding, Inc.
	 	 	
750 7th Avenue
	 	 	
New York, NY 10019
	 	 	
Attn: David Morin
	 	 	
T: (212) 762-2621
	 	 	
F: (212) 507-3138
	 	 	 
	The Bank of Tokyo-Mitsubishi, Ltd.,	 	
The Bank of Tokyo-Mitsubishi, Ltd.,
	Seattle Branch	 	
Seattle Branch
	 	 	
777 South Figueroa Street, Suite 600
	 	 	
Los Angeles, CA 90017
	 	 	
Attn: Nina Jeon/Ellen Yuson
	 	 	
T: (213) 488-3794/3796
	 	 	
F: (213) 613-1136



 






 




	 	 	 
	Name of Bank	 	Domestic and Eurodollar Lending Offices
	
	 	

	Deutsche Bank Securities Inc.	 	
Deutsche Bank Securities Inc.
	 	 	
31 West 52nd Street
	 	 	
New York, NY 10019
	 	 	
Attn: Mr. Oliver Schwarz
	 	 	
T: (212) 469-8610
	 	 	
F: (212) 469-2930
	 	 	 
	Deutsche Bank AG New York Branch	 	
Deutsche Bank AG New York Branch
	 	 	
31 West 52nd Street
	 	 	
New York, NY 10019
	 	 	
Attn: Mr. Oliver Schwarz
	 	 	
T: (212) 469-8610
	 	 	
F: (212) 469-2930
	 	 	 
	AgFirst Farm Credit Bank	 	
AgFirst Farm Credit Bank
	 	 	
1401 Hampton Street
	 	 	
Columbia, SC 29202
	 	 	
Attn: Michelle Robertson
	 	 	
T: (800) 845-1745, ext. 371
	 	 	
F: (800) 929-0224
	 	 	 
	Australia and New Zealand Banking Group	 	
Australia and New Zealand Banking Group
	Limited	 	
Limited
	 	 	
1177 Avenue of the Americas
	 	 	
New York, NY 10036
	 	 	
Attn: Damodar Menon
	 	 	
T: (212) 801-9752
	 	 	
F: (212) 556-4826
	 	 	 
	Bank of America, N.A	 	
Bank of America, N.A.
	 	 	
Mail Code CA5-705-12-12
	 	 	
555 California Street, 12th Floor
	 	 	
San Francisco, CA 94104-1503
	 	 	
Attn: Michael Letson
	 	 	
T: (415) 953-0604
	 	 	
F: (415) 622-4585
	 	 	 
	The Bank of Nova Scotia	 	
The Bank of Nova Scotia
	 	 	
600 Peachtree St., N.E.
	 	 	
Suite 2700
	 	 	
Atlanta, GA 30308
	 	 	
Attn: Lily Hsieh
	 	 	
T: (404) 877-1523
	 	 	
F: (404) 888-8998



 






 




	 	 	 
	Name of Bank	 	Domestic and Eurodollar Lending Offices
	
	 	

	Caja Madrid	 	
Caja Madrid
	 	 	
Paseo De La Castellana 189
	 	 	
28046 Madrid (Spain)
	 	 	
Attn: Pedro Lalanda Marcos
	 	 	
T: 34 91 423 0985
	 	 	
F: 34 91 423 9718
	 	 	 
	Chiao Tung Bank Co., Ltd. New York Agency	 	
Chiao Tung Bank Co., Ltd. New York Agency
	 	 	
One World Financial Center, 30thFloor
	 	 	
200 Liberty Street
	 	 	
New York, NY 10281
	 	 	
Attn: Ifen Lee
	 	 	
T: (212) 285-2666, ext. 238
	 	 	
F: (212) 285-2922
	 	 	 
	CIBC Inc.	 	
CIBC Inc.
	 	 	
425 Lexington Avenue
	 	 	
New York, NY 10017
	 	 	
Attn: Geraldine Kerr, Executive Director
	 	 	
T: (212) 856-3684
	 	 	
F: (212) 856-3761
	 	 	 
	Citicorp USA, Inc.	 	
Citicorp USA, Inc. Global Loan Support
	 	 	
Services
	 	 	
Two Penns Way, Suite 200
	 	 	
New Castle, DE 19720
	 	 	
Attn: Ms. Lee Ocasio
	 	 	
T: (302) 894-6065
	 	 	
F: (302) 984-6120
	 	 	 
	CoBank, ACB	 	
CoBank, ACB
	 	 	
Global Financial Services Group
	 	 	
5500 South Quebec St.
	 	 	
Greenwood Village, CO 80111
	 	 	
Attn: S. Richard Dill, Vice President
	 	 	
T: (303) 740-4197
	 	 	
F: (303) 740-4366



 






 




	 	 	 
	Name of Bank	 	Domestic and Eurodollar Lending Offices
	
	 	

	Cooperatieve Centrale	 	
Rabobank Nederland
	Raiffeisin-Boerenleenbank B.A.,	 	
245 Park Ave.
	“Rabobank Nederland” New York Branch	 	
36th Floor
	 	 	
New York, NY 10167
	 	 	
Attn: Ann McDonough
	 	 	
T: (201) 499-5318
	 	 	
F: (201) 499-5326
	 	 	 
	Farm Credit Services of America, PCA	 	
Farm Credit Services of America, PCA
	 	 	
5015 South 118th Street
	 	 	
Omaha, NE 68137
	 	 	
Attn: Becky Haas
	 	 	
T: (402) 348-3241
	 	 	
F: (402) 348-3324
	 	 	 
	Farm Credit Services of Minnesota	 	
Farm Credit Services of Minnesota
	Valley, PCA dba FCS Commercial Finance	 	
Valley, PCA dba FCS Commercial Finance
	Group	 	
Group
	 	 	
375 Jackson Street
	 	 	
P.O. Box 64949
	 	 	
St. Paul, MN 55164-0949
	 	 	
Attn: Larry Dalton
	 	 	
T: (651) 282-8743
	 	 	
F: (651) 282-8777
	 	 	 
	KBC Bank, N.V	 	
KBC Bank, N.V.
	 	 	
125 West 55th Street, 10th Floor
	 	 	
New York, NY 10019
	 	 	
Attn: Rose Paga/Robert Pacifici
	 	 	
T: (212) 541-0657/0671
	 	 	
F: (212) 956-5580/5581
	 	 	 
	Mellon Bank, N.A	 	
Mellon Bank, N.A.
	 	 	
Three Mellon Bank Center, Room 1204
	 	 	
Pittsburgh, PA 15259
	 	 	
Attn: Damon Carr
	 	 	
T: (412) 234-4749
	 	 	
F: (412) 209-6129
	 	 	 
	The Northern Trust Company	 	
The Northern Trust Company
	 	 	
50 S. LaSalle, 11th Floor
	 	 	
Chicago, IL 60675
	 	 	
Attn: Melissa Whitson
	 	 	
T: (312) 444-4473
	 	 	
F: (312) 630-6062



 






 




	 	 	 
	Name of Bank	 	Domestic and Eurodollar Lending Offices
	
	 	

	Northwest Farm Credits Services, PCA	 	
Northwest Farm Credits Services, PCA
	 	 	
1700 S. Assembly Street
	 	 	
Spokane, WA 99224
	 	 	
Attn: Jim Allen
	 	 	
T: (509) 340-5555
	 	 	
F: (509) 340-5503
	 	 	 
	PNC Bank, National Association	 	
PNC Bank, National Association
	 	 	
One PNC Plaza, 5th Floor
	 	 	
249 Fifth Ave.
	 	 	
Pittsburgh, PA 15222
	 	 	
Attn: April Atwater
	 	 	
T: (412) 768-6214
	 	 	
F: (412) 768-4586
	 	 	 
	Regions Bank	 	
Regions Bank – Corporate Banking
	 	 	
Division
	 	 	
417 North 20th Street
	 	 	
Birmingham, Alabama 35203
	 	 	
Attn: Kim Hassell
	 	 	
T: (205) 326-7038
	 	 	
F: (205) 326-7746
	 	 	 
	Royal Bank of Canada	 	
Royal Bank of Canada
	 	 	
New York Branch
	 	 	
One Liberty Plaza, 3rd Floor
	 	 	
New York, NY 10006-1404
	 	 	
Attn: Manger Loans Administration
	 	 	
T: (212) 428-6369
	 	 	
F: (212) 428-2372
	 	 	 
	 	 	
With copy to:
	 	 	 
	 	 	
Royal Bank of Canada
	 	 	
One Liberty Plaza, 3rd Floor
	 	 	
New York, NY 10006-1404
	 	 	
Attn: C. Abe
	 	 	
T: (212) 428-6260
	 	 	
F: (212) 428-2319
	 	 	 
	Sumitomo Mitsui Banking Corporation	 	
Sumitomo Mitsui Banking Corporation
	 	 	
277 Park Ave.
	 	 	
New York, NY 10172
	 	 	
Attn: Andrew Homola
	 	 	
T: (212) 224-4320
	 	 	
F: (212) 224-5197



 






 




	 	 	 
	Name of Bank	 	Domestic and Eurodollar Lending Offices
	
	 	

	U.S. Bank National Association	 	
U.S. Bank National Association
	 	 	
1420 Fifth Avenue, 6th Floor
	 	 	
Seattle, WA 98101
	 	 	
Attn: Gail Fortun
	 	 	
T: (206) 587-5212
	 	 	
F: (206) 344-3741
	 	 	 
	Wachovia Bank N.A	 	
Wachovia Bank N.A.
	 	 	
191 Peachtree St. Mail Code GA 8050
	 	 	
Atlanta, GA 30303
	 	 	
Attn: Shawn Janko
	 	 	
T: (404) 332-5884
	 	 	
F: (404) 332-4136
	 	 	 
	Wells Fargo Bank, N.A	 	
Wells Fargo Loan Operations
	 	 	
201 Third Street, 8th Floor
	 	 	
MAC A0187-081
	 	 	
San Francisco, CA 94103
	 	 	
Attn: Ginnie Padgett
	 	 	
T: (415) 477-5374
	 	 	
F: (415) 512-1943
	 	 	 
	Westpac Banking Corporation	 	
Westpac Banking Corporation
	 	 	
575 Fifth Ave. 39th Floor
	 	 	
New York, NY 10017
	 	 	
Attn: Tony Smith
	 	 	
T: (212) 551-1814
	 	 	
F: (212) 551-1995



 






 



TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page
	 	 	 	 	 	 	 	

	 	 	 	 	 	
ARTICLE I

DEFINITIONS
	 	 	 	 
	Section 1.01	 	Defined Terms
	 	 	1	 
	Section 1.02	 	Terms Generally
	 	 	14	 
	Section 1.03	 	Accounting Terms; GAAP
	 	 	14	 
	 	 	 	 	 	
ARTICLE II

THE CREDITS
	 	 	 	 
	Section 2.01	 	Commitments
	 	 	15	 
	Section 2.02	 	Loans
	 	 	15	 
	Section 2.03	 	Conversion and Continuation of Loans
	 	 	17	 
	Section 2.04	 	Fees
	 	 	18	 
	Section 2.05	 	Repayment of Loans; Evidence of Debt
	 	 	19	 
	Section 2.06	 	Interest on Loans
	 	 	20	 
	Section 2.07	 	Default Interest
	 	 	21	 
	Section 2.08	 	Alternate Rate of Interest
	 	 	22	 
	Section 2.09	 	Termination and Reduction of Commitments
	 	 	22	 
	Section 2.10	 	Prepayment
	 	 	23	 
	Section 2.11	 	Reserve Requirements; Change in Circumstances
	 	 	24	 
	Section 2.12	 	Change in Legality
	 	 	25	 
	Section 2.13	 	Indemnity
	 	 	26	 
	Section 2.14	 	Pro Rata Treatment
	 	 	27	 
	Section 2.15	 	Sharing of Setoffs
	 	 	27	 
	Section 2.16	 	Payments
	 	 	28	 
	Section 2.17	 	Taxes
	 	 	28	 
	Section 2.18	 	Mitigation Obligations; Replacement of Lenders
	 	 	31	 
	Section 2.19	 	Term Loan Conversion
	 	 	32	 
	 	 	 	 	 	
ARTICLE III

REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	Section 3.01	 	Organization; Powers
	 	 	32	 
	Section 3.02	 	Authorization
	 	 	33	 
	Section 3.03	 	Enforceability
	 	 	33	 
	Section 3.04	 	Consents and Approvals
	 	 	33	 
	Section 3.05	 	Financial Statements
	 	 	33	 
	Section 3.06	 	No Material Adverse Change
	 	 	34	 
	Section 3.07	 	Title to Properties; Possession Under Leases
	 	 	34	 
	Section 3.08	 	Subsidiaries
	 	 	34	 



i






 




	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page
	 	 	 	 	 	 	 	

	Section 3.09	 	Litigation; Compliance with Laws
	 	 	34	 
	Section 3.10	 	Agreements
	 	 	35	 
	Section 3.11	 	Federal Reserve Regulations
	 	 	35	 
	Section 3.12	 	Investment Company Act; Public Utility Holding Company Act
	 	 	35	 
	Section 3.13	 	Tax Returns
	 	 	35	 
	Section 3.14	 	No Material Misstatements
	 	 	35	 
	Section 3.15	 	Compliance with ERISA
	 	 	35	 
	Section 3.16	 	Environmental Matters
	 	 	36	 
	Section 3.17	 	Maintenance of Insurance
	 	 	36	 
	 	 	 	 	 	
ARTICLE IV

CONDITIONS OF LENDING
	 	 	 	 
	Section 4.01	 	All Borrowings and Issuances
	 	 	37	 
	Section 4.02	 	Closing Date
	 	 	37	 
	Section 4.03	 	Term Loan Conversion Conditions
	 	 	38	 
	 	 	 	 	 	
ARTICLE V

AFFIRMATIVE COVENANTS
	 	 	 	 
	Section 5.01	 	Existence; Businesses and Properties
	 	 	39	 
	Section 5.02	 	Insurance
	 	 	39	 
	Section 5.03	 	Obligations and Taxes
	 	 	39	 
	Section 5.04	 	Financial Statements, Reports, etc
	 	 	40	 
	Section 5.05	 	Litigation and Other Notices
	 	 	41	 
	Section 5.06	 	ERISA
	 	 	42	 
	Section 5.07	 	Maintaining Records; Access to Properties and Inspections
	 	 	42	 
	Section 5.08	 	Use of Proceeds
	 	 	43	 
	Section 5.09	 	Environmental Matters
	 	 	43	 
	Section 5.10	 	OCBM Agreement
	 	 	44	 
	Section 5.11	 	Further Assurances
	 	 	44	 
	 	 	 	 	 	
ARTICLE VI

NEGATIVE COVENANTS
	 	 	 	 
	Section 6.01	 	Covenants of Weyerhaeuser
	 	 	45	 
	Section 6.02	 	Covenants with respect to WRECO
	 	 	47	 
	 	 	 	 	 	
ARTICLE VII

EVENTS OF DEFAULT
	 	 	 	 
	Section 7.01	 	Events of Default
	 	 	51	 



ii






 




	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page
	 	 	 	 	 	 	 	

	 	 	 	 	 	
ARTICLE VIII

THE ADMINISTRATIVE AGENT
	 	 	 	 
	Section 8.01	 	The Administrative Agent
	 	 	53	 
	Section 8.02	 	Other Agents
	 	 	56	 
	 	 	 	 	 	
ARTICLE IX

MISCELLANEOUS
	 	 	 	 
	Section 9.01	 	Notices
	 	 	56	 
	Section 9.02	 	Survival of Agreement
	 	 	56	 
	Section 9.03	 	Binding Effect
	 	 	57	 
	Section 9.04	 	Successors and Assigns
	 	 	57	 
	Section 9.05	 	Expenses; Indemnity
	 	 	59	 
	Section 9.06	 	Right of Setoff
	 	 	60	 
	Section 9.07	 	Applicable Law
	 	 	60	 
	Section 9.08	 	Waivers; Amendment
	 	 	60	 
	Section 9.09	 	Interest Rate Limitation
	 	 	61	 
	Section 9.10	 	Entire Agreement
	 	 	61	 
	Section 9.11	 	WAIVER OF JURY TRIAL
	 	 	61	 
	Section 9.12	 	Severability
	 	 	62	 
	Section 9.13	 	Counterparts
	 	 	62	 
	Section 9.14	 	Headings
	 	 	62	 
	Section 9.15	 	Jurisdiction; Consent to Service of Process
	 	 	62	 
	Section 9.16	 	Domicile of Loans
	 	 	63	 
	Section 9.17	 	Restricted and Unrestricted Subsidiaries
	 	 	63	 
	 	 	 	 	 	
EXHIBITS
	 	 	 	 
	Exhibit A	 	Form of Revolving Borrowing Request
	 	 	 	 
	Exhibit B	 	Form of Administrative Questionnaire
	 	 	 	 
	Exhibit C	 	Form of Assignment and Acceptance
	 	 	 	 
	Exhibit D-1	 	Form of Certification of Financial Statements for Weyerhaeuser
	 	 	 	 
	Exhibit D-2	 	Form of Certification of Financial Statements for WRECO
	 	 	 	 
	Exhibit D-3	 	Form of Compliance Certificate for Weyerhaeuser
	 	 	 	 
	Exhibit D-4	 	Form of Compliance Certificate for WRECO
	 	 	 	 
	Exhibit E	 	Form of Subordinated Debt
	 	 	 	 
	Exhibit F	 	Form of Promissory Note
	 	 	 	 



iii






 




	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page
	 	 	 	 	 	 	 	

	 	 	 	 	 	
SCHEDULES
	 	 	 	 
	Schedule 2.01	 	Commitments
	 	 	 	 
	Schedule 3.08	 	Subsidiaries of Weyerhaeuser and WRECO
	 	 	 	 
	Schedule 9.01	 	Notices
	 	 	 	 




iv