exv10wxhy



 



Exhibit 10(h)


Execution Copy










$1,300,000,000



AMENDED AND RESTATED COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT



Dated as of March 26, 2002



among



WEYERHAEUSER COMPANY, as Borrower,



THE LENDERS, SWING LINE BANK and FRONTING BANK NAMED HEREIN,



JPMORGAN CHASE BANK, as Administrative Agent,



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



and



THE BANK OF TOKYO-MITSUBISHI, LTD., and



DEUTSCHE BANC ALEX. BROWN INC.,



as Co-Documentation Agents













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



as Lead Arrangers and Joint Book Runners



 






 





          AMENDED AND RESTATED COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY
AGREEMENT dated as of March 26, 2002 among WEYERHAEUSER COMPANY, a Washington
corporation (the “Borrower”), the lenders listed in Schedule 2.01 (together
with each assignee that becomes a party hereto pursuant to Section 9.04, a
“Lender”, and collectively, the “Lenders”), JPMORGAN CHASE BANK, a New York
banking corporation, as swing line bank (in such capacity, the “Swing Line
Bank”), JPMORGAN CHASE BANK, as fronting bank (in such capacity, the “Fronting
Bank”), JPMORGAN CHASE BANK, as administrative agent for the Lenders (in such
capacity, and its successors in such capacity, the “Administrative Agent”),
MORGAN STANLEY SENIOR FUNDING, INC., as syndication agent (in such capacity,
the “Syndication Agent”), and THE BANK OF TOKYO-MITSUBISHI, LTD. and DEUTSCHE
BANC ALEX. BROWN INC., as co-documentation agents (each, individually, a
“Co-Documentation Agent,” and collectively, the “Co-Documentation Agents”).



W I T N E S S E T H:


          WHEREAS, pursuant to that certain Competitive Advance and Revolving Credit
Facility Agreement, dated as of February 8, 2002 (the “Existing Competitive
Advance and Revolving Credit Agreement”) entered into by and among the
Borrower, JPMorgan Chase Bank, as swing line bank, fronting bank and
administrative agent, Morgan Stanley Senior Funding, Inc., as syndication
agent, The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche Banc. Alex Brown Inc. as
co-documentation agents, and the lenders party thereto from time to time, the
lenders, the swing line bank and the fronting bank party thereto have extended
credit to the Borrower to enable it (a) to finance the acquisition (the
“Acquisition”) by the Borrower of the outstanding shares of common stock,
including the related preferred stock purchase rights, of Willamette
Industries, Inc., an Oregon corporation (the “Company”), (b) to pay costs and
expenses related to such Acquisition and the financing thereof, (c) to
refinance certain existing indebtedness of the Borrower, the Company and their
respective subsidiaries (as hereinafter defined), (d) to provide the Borrower
and its Subsidiaries (as hereinafter defined) with financing for general
corporate purposes and (e) to provide for the issuance of letters of credit for
the account of the Borrower.



          WHEREAS, the Borrower has requested that the Lenders amend and restate the
Existing Competitive Advance and Revolving Credit Agreement (a) to refinance
the Existing Competitive Advance and Revolving Credit Agreement, (b) to pay
costs and expenses related to such re-financing, (c) to provide the Borrower
and its Subsidiaries with financing for general corporate purposes and (d) to
provide for the issuance of Letters of Credit for the account of the Borrower.



          WHEREAS, the Lenders have indicated their willingness to amend and restate
the Existing Competitive Advance and 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 the Borrower will derive a substantial benefit from
the credit extended to the Borrower.




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          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 Competitive Advance and 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:



          “364-Day Revolving Credit Facility Agreement” shall mean the Amended and
Restated 364-Day Revolving Credit Facility Agreement dated as of even date
herewith, entered into by and among the Borrower, WRECO, the lenders party
thereto from time to time, the Syndication Agent, the Administrative Agent and
the Co-Documentation Agents, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time.



          “Acquisition” shall have the meaning given such term in the preliminary
statements hereto.



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



          “Administrative Agent Fees” shall have the meaning given such term in
Section 2.07(b).



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



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



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




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          “Agreement” shall mean this Amended and Restated Competitive Advance and
Revolving Credit Facility Agreement, together with all amendments, supplements
and modifications hereof.



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



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



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



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



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



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



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



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



          “Borrowing” shall mean a group of Loans of a single Type made by the
Lenders (or, in the case of a Competitive Borrowing, by the Lender or Lenders
whose Competitive Bids have been accepted pursuant to Section 2.05) on a single
date and as to which a single Interest Period is in effect.



          “Borrowing Request” shall mean a Revolving Borrowing Request and a Swing
Line Borrowing Request.




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



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



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



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



          “Class”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, is a Revolving Loan
or a Competitive Loan.



          “Closing Date” shall mean March 26, 2002.



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



          “Commitment” shall mean, with respect to each Lender, the commitment of
such Lender hereunder as set forth in Schedule 2.01 or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable, as such Lender’s Commitment may be permanently reduced, increased
or terminated from time to time pursuant to Section 2.12, Section 2.21, Article
VII or Section 9.04.



          “Company” shall have the meaning given such term in the preliminary
statements hereto.




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          “Competitive Bid” shall mean an offer by a Lender to make a Competitive
Loan in accordance with Section 2.05.



          “Competitive Bid Rate” shall mean, with respect to any Competitive Bid,
the Margin or the Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.



          “Competitive Bid Request” shall mean a request by the Borrower for
Competitive Bids in accordance with Section 2.05.



          “Competitive Borrowing” shall mean a Borrowing consisting of Competitive
Loans or concurrent Competitive Loans from the Lender or Lenders whose
Competitive Bids for such Borrowing have been accepted by the Borrower under
the bidding procedure described in Section 2.05.



          “Competitive Loan” shall mean a Loan made pursuant to Section 2.05.



          “Confidential Information Memorandum” shall mean, the confidential
information memorandum dated February 2002 and used by the Administrative Agent
and the Lead Arrangers in connection with the syndication of the Commitments.



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



          “Credit Exposure” shall mean, with respect to each Lender, at any time,
the aggregate principal amount at such time of all outstanding Revolving Loans
of such Lender to the Borrower, plus the aggregate amount at such time of such
Lender’s L/C Exposure, plus the aggregate amount at such time of such Lender’s
Swing Line Exposure.



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



          “Disclosure Letter” shall mean the Company Disclosure Letter of the
Company to the Borrower and Company Holdings, Inc. (“Holdings”), as
contemplated by the Agreement and Plan of Merger Dated as of January 28, 2002,
among the Borrower, Holdings and the Company.



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



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



          “Environmental Claims” shall mean any and all administrative, regulatory,
or judicial actions, suits, demand letters, claims, liens, notices of
noncompliance or violation, investigations, or proceedings relating in any way
to any Environmental Law (hereinafter referred to as “claims”) or any permit
issued under any such Environmental Law, including




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without limitation (a) any and all claims by Governmental Authorities for
enforcement, cleanup, removal, response, remedial, or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation, or injunctive relief resulting from Hazardous Materials or
arising from alleged injury or threat of injury to health, safety, or the
environment.


          “Environmental Laws” shall mean any and all Federal, state, local and
foreign statutes, laws, regulations, ordinances, codes, rules (including rules
of common law), judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental restrictions now or
hereafter in effect relating to the environment, health, safety, Hazardous
Materials (including, without limitation, the manufacture, processing,
distribution, use, treatment, storage, Release, and transportation thereof) or
to industrial hygiene or the environmental conditions on, under or about real
property, including, without limitation, soil, groundwater, and indoor and
outdoor ambient air conditions.



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



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



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



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



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




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



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



          “Existing Competitive Advance and Revolving Credit Agreement” shall have
the meaning given such term in the preliminary statements hereto.



          “Existing Senior Credit Facilities” shall mean material senior funded
Indebtedness of the Borrower and its Subsidiaries outstanding immediately
before the Closing Date. For purposes of this definition, no single loan shall
be considered material unless the aggregate principal amount outstanding
exceeds $15,000,000.



          “Facility Fees” shall have the meaning given such term in Section 2.07(a).



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



          “Fees” shall mean the Facility Fees, the Fronting Fee, the L/C
Participation Fee and the Administrative Agent Fees.



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



          “Fixed Rate” shall mean, with respect to any Competitive Loan (other than
a Eurodollar Competitive Loan), the fixed rate of interest per annum specified
by the Lender making such Competitive Loan in its related Competitive Bid.



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



          “Fixed Rate Loan” shall mean a Competitive Loan bearing interest at a
Fixed Rate.



          “Fronting Fee” shall have the meaning given such term in Section 2.07(c).



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



          “Governmental Authority” shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state
or local, and any




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agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.


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



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



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




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          “Interest Period” shall mean, (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing or on the date of conversion of
a Borrowing of a different Type to a Eurodollar Borrowing or on the last day of
the immediately preceding Interest Period applicable to such Borrowing or
conversion thereof, as the case may be, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the
last day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
Borrower may elect and (b) with respect to any Fixed Rate Borrowing, the period
(which shall not be less than seven days or more than 360 days) commencing on
the date specified in the applicable Competitive Bid Request; provided,
however, that if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless, in the case of Eurodollar Loans, such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day; provided, further, that no Interest
Period for any Loan shall extend beyond the Termination Date. Interest shall
accrue from and including the first day of an Interest Period to but excluding
the last day of such Interest Period.



          “Investments” shall mean all investments in any Person, computed in
accordance with GAAP, made by stock purchase, capital contribution, loan,
advance, extension of credit, or creation or assumption of any other contingent
liability or Guarantee in respect of any obligation of such Person, or
otherwise; provided, however, that in computing any investment in any Person
(i) all expenditures for such investment shall be taken into account at the
actual amounts thereof in the case of expenditures of cash and at the fair
value thereof (as determined in good faith by the Board of Directors of WRECO)
or depreciated cost thereof (in accordance with GAAP), whichever is greater, in
the case of expenditures of property, (ii) there shall not be included any Real
Estate Assets, or any account or note receivable from such other Person arising
from transactions in the ordinary course of business, and (iii) a Guarantee or
other contingent liability of any kind in respect of any Indebtedness or other
obligation of such Person shall be deemed an Investment equal to the amount of
such Indebtedness or obligation.



          “L/C Disbursement” shall mean a payment or disbursement made by the
Fronting Bank pursuant to a Letter of Credit.



          “L/C Exposure” shall mean, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time (assuming
compliance at such time with all conditions to drawing) plus (b) the aggregate
principal amount of all L/C Disbursements that have not yet been reimbursed by
the Borrower at such time. The L/C Exposure of any Lender at any time shall
mean its Applicable Percentage of the aggregate L/C Exposure at such time.



          “L/C Participation Fee” shall have the meaning given such term in Section
2.07(c).



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



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




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          “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.



          “Letter of Credit” shall mean any letter of credit issued pursuant to
Section 2.04.



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



          “Loan” shall mean a Revolving Loan, a Swing Line Loan or a Competitive
Loan.



          “Loan Documents” shall mean this Agreement, the OCBM Agreement, any notes
issued in accordance with Section 2.08 and any Guarantee entered into by the
Company in accordance with Section 5.13.



          “Mandatory Convertible Debt Securities” shall mean all obligations of the
Borrower evidenced by bonds, notes, debentures, or other similar instruments,
which by their terms convert mandatorily into equity interests of the Borrower
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” means, with respect to any Competitive Loan bearing interest at a
rate based on the Eurodollar Rate, the marginal rate of interest, if any, to be
added to or subtracted from the Eurodollar Rate to determine the rate of
interest applicable to such Loan, and specified by the Lender making such Loan
in its related Competitive Bid.



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



          “Material Adverse Effect” shall mean (a) a materially adverse effect on
the business, financial condition, operations or properties of the Borrower and
its Subsidiaries, taken as a whole, (b) a materially adverse effect on the
ability of the Borrower or any of its Subsidiaries to perform its obligations
under any Loan Documents to which it is or will be a party, (c) a materially
adverse effect on the rights and remedies available to the Administrative Agent
and the Lenders under the Loan Documents or (d) a materially adverse effect on
the Transactions.




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          “Merger” shall mean the merger of the Purchaser, the Borrower or one of
its wholly owned Restricted Subsidiaries with the Company, contemplated to
occur as soon as practicable after the closing of the Tender Offer.



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



          “Net Cash Proceeds” shall mean, with respect to any sale, lease, transfer
or other disposition of any asset by any Person, the aggregate amount of cash
received from time to time (whether as initial consideration or through payment
or disposition of deferred consideration) by or on behalf of such Person in
connection with such transaction after deducting therefrom only (without
duplication) (a) the costs associated with such transaction (including
reasonable and customary brokerage fees and commissions, legal fees and other
similar fees and commissions), (b) the amount of taxes payable in connection
with or as a result of such transaction, (c) the amount of any Indebtedness
secured by a Lien on such asset that, by the terms of the agreement or
instrument governing such Indebtedness, is required to be repaid upon
disposition and (d) reserves for purchase price adjustments and retained fixed
liabilities that are payable by such Person in cash to the extent required
under GAAP in connection with such sale, lease, transfer or disposition (it
being understood that immediately upon expiration of the retention period for
such reserves, amounts held as reserves must be paid as a mandatory prepayment
pursuant to Section 2.13(b)), in each case to the extent, but only to the
extent, that the amounts so deducted are (in the cases of (a) and (c) above, at
the time of receipt of such cash), actually paid to a Person that is not an
Affiliate of such Person or the Borrower or any of its Subsidiaries or any
Affiliate of the Borrower or any of its Subsidiaries and are properly
attributable to such transaction or to the asset that is the subject thereof;
provided, however, that Net Cash Proceeds shall not include, (i) with respect
to any sale, lease, transfer or other disposition of any asset by any Person,
any cash receipts received from the sale of worn, damaged, or obsolete
equipment, (ii) any cash receipts received from proceeds of insurance,
condemnation awards (or payments in lieu thereof) or indemnity payments to the
extent that such proceeds, awards or payments in respect of loss or damage to
the assets are applied (or in respect of which expenditures were previously
incurred) to replace or repair the assets in respect of which such proceeds
were received, so long as such application is made within 180 days after the
occurrence of such damage or loss and (iii) any rental payments received in
connection with the lease of an asset in the ordinary course of business. In
addition, no proceeds realized in a single transaction or series of related
transactions shall constitute Net Cash Proceeds except for the portion (if any)
of such proceeds in excess of $25,000,000.



          “Non-Material Loans” shall mean any senior obligations for borrowed money
of any Person outstanding in an amount not in excess of $15,000,000.



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




11






 





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



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



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



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



          “Purchaser” shall mean Company Holdings, Inc., a Washington corporation
and a wholly owned subsidiary of the Borrower.



          “Rating” shall mean, as of any date, the rating by Moody’s and S&P in
effect on such date, of the Senior Unsecured Long-Term Debt of the Borrower,
provided that such ratings shall take into effect (a) the Tender Offer, (b) the
Acquisition, (c) the Merger and (d) the incurrence by the Borrower and its
Subsidiaries of the Indebtedness under the Senior Bank Financing, including,
without limitation, any refinancing of existing Indebtedness of the Borrower,
the Company, and their respective subsidiaries.



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



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



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




12






 





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



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



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



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



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



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



          “Required Lenders” shall mean, at any time, Lenders having Credit
Exposures and unused Commitments representing more than 50% of the sum of the
Aggregate Credit Exposure and unused Commitments at such time, provided that,
for the purpose of declaring the Loans to be due and payable pursuant to
Article VII, and for all purposes after the Loans become due and payable
pursuant to Article VII or the Commitments expire or terminate, (i) the
outstanding Competitive Loans of the Lenders shall be added to their respective
Credit Exposures and to the Aggregate Credit Exposure and (ii) notwithstanding
Section 2.17, the entire amount of Competitive Loans of each Lender shall
reduce the unused Commitment of such Lender and shall not reduce the unused
Commitment of any other Lender in determining the Required Lenders.



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



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



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




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



          “S&P” shall mean Standard & Poor’s 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 the Borrower and the Required
Lenders.



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



          “Senior Bank Financing” shall mean the credit facilities contemplated by
(a) this Agreement, and (b) the 364-Day Revolving Credit Facility Agreement.



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



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



          “Specified Indebtedness” shall mean the Indebtedness set forth in Schedule
7.01.



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



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




14






 





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



          “Subsidiary” shall mean any subsidiary of the Borrower or WRECO, provided
that there shall be excluded from this definition (i) Nelson Forests Joint
Venture, a joint venture formed under the laws of New Zealand, (ii) Wapawekka
Lumber Ltd., a limited partnership formed under the laws of Saskatchewan, and
(iii) Monterra Lumber Mills Limited, a limited partnership formed under the
laws of Ontario, for so long as such business entities shall not be Controlled
by the Borrower or any of its subsidiaries.



          “Surviving Senior Credit Facilities” shall mean the Existing Senior Credit
Facilities outstanding immediately before and after the Closing Date.



          “Swing Line Borrowing” shall mean a Borrowing consisting of Swing Line
Loans.



          “Swing Line Borrowing Request” shall mean a request made pursuant to
Section 2.03(b) in the form of Exhibit B.



          “Swing Line Exposure” shall mean, at any time, the aggregate principal
amount of all Swing Line Loans outstanding at such time made by the Swing Line
Bank. The Swing Line Exposure of any Lender at any time shall mean its
Applicable Percentage of the aggregate Swing Line Exposure at such time.



          “Swing Line Loan” shall mean a Loan made by (i) the Swing Line Bank
pursuant to Section 2.03(a), or (ii) any Lender pursuant to Section 2.03(c).



          “Tender Offer” shall mean the offer by Purchaser to acquire through a
tender offer for cash all of the outstanding shares of common stock of the
Company, including the related preferred stock purchase rights of the Company,
as more specifically set forth in the Tender Offer Statement.



          “Tender Offer Statement” shall mean the offering memorandum dated November
29, 2000 setting forth the terms and conditions of the Tender Offer, as such
offering memorandum may be amended, supplemented or otherwise modified from
time to time.



          “Termination Date” shall mean March 26, 2007.



          “Total Adjusted Shareholders’ Interest” shall mean, at any time, the
amount of the preferred, preference and common shares accounts plus (or minus
in the case of a deficit) the amount of other capital and retained earnings, in
accordance with GAAP, of the Borrower and its consolidated Subsidiaries, less
treasury common shares and the aggregate net book value (after




15






 





          deducting any reserves applicable thereto) of all items of the following
character which are included in the consolidated assets of the Borrower and its
consolidated Subsidiaries:




		
	 	     (a) investments in Unrestricted Subsidiaries; and




		
	 	     (b) without duplication, investments by the Borrower and its
consolidated Subsidiaries in WRECO and its consolidated Subsidiaries.



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


          “Total Commitment” shall mean at any time the aggregate amount of the
Commitments as in effect at such time, and on the date hereof shall mean
$1,300,000,000.



          “Total Funded Indebtedness” with respect to the Borrower shall mean, at
any time, the aggregate principal amount of all Indebtedness (other than
Guarantees by such Person of Indebtedness of others) for borrowed money or for
the deferred purchase price of property and Capital Lease Obligations of the
Borrower and its consolidated Subsidiaries, excluding (a) the Indebtedness of
Unrestricted Subsidiaries, (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.



          “Transaction-Related Event of Default” shall mean any default or event of
default under any indentures, agreements or other documentation evidencing the
Specified Indebtedness, provided that such default or event of default shall
have occurred or be continuing solely by reason of the consummation by the
Borrower or any of its Subsidiaries of any of the Transactions.



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



          “Transferee” shall have the meaning given such term in Section 2.20.



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



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



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


16






 


WRECO, each Subsidiary that has been designated as an Unrestricted
Subsidiary on Schedule 3.08 Part II and any Subsidiary which has been
designated by a Financial Officer of WRECO as an Unrestricted Subsidiary after
the Closing Date pursuant to Section 9.17.


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



          “WRECO” shall mean Weyerhaeuser Real Estate Company, a Washington
corporation.



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



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



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



ARTICLE II



THE CREDITS



          Section 2.01 Commitments. Subject to the terms and conditions and relying upon
the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, to make Revolving Loans to the Borrower upon
request, at any time and from time to time on and after the date hereof and
until the earlier of the Termination Date and the termination of the Commitment
of
such Lender, in an aggregate principal amount at any time outstanding not
to exceed such Lender’s Commitment at such time, minus, in each case, the
amount by which the Competitive Loans outstanding at such time shall be deemed
pursuant to Section 2.17 to have utilized such Lender’s Commitment, subject,
however, to the conditions that:




17






 






		
	 	     (a) at no time shall the outstanding aggregate principal amount of
all Loans made by all Lenders and the Swing Line Bank plus the L/C
Exposure of such Lenders at such time exceed the Total Commitment; and




		
	 	     (b) at all times the outstanding aggregate principal amount of all
Revolving Loans made by each Lender shall equal the product of (i) the
Applicable Percentage times (ii) the outstanding aggregate principal
amount of all Revolving Loans made pursuant to Section 2.02.



          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, the Borrower may borrow, pay or prepay and
reborrow hereunder, on and after the Closing Date and prior to the Termination
Date, subject to the terms, conditions and limitations set forth herein.



          Section 2.02
Loans. (a) Each Revolving Loan shall be made as part of a Revolving
Borrowing consisting of Revolving Loans made by the Lenders ratably in
accordance with their respective Commitments; provided, however, that the
failure of any Lender to make any Revolving Loan shall not in and of itself
relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Revolving Loan required to be made by such other
Lender). Each Competitive Loan shall be made in accordance with the procedures
set forth in Section 2.05. The Loans (other than Swing Line Loans) comprising
any Borrowing (other than a Swing Line Borrowing) shall be in an aggregate
principal amount which is an integral multiple of $1,000,000 and not less than
$25,000,000 (or an aggregate principal amount equal to the remaining balance of
the available Commitments).



          (b) Each Revolving Borrowing shall be comprised entirely of Eurodollar
Loans or Base Rate Loans, as the Borrower may request pursuant to paragraph (f)
hereof and each Competitive Borrowing shall be comprised entirely of Eurodollar
Loans or Fixed Rate Loans as the Borrower may request in accordance with
Section 2.05. Each Lender may at its option make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not (i) affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement and (ii) entitle such Lender to any amounts pursuant to Sections
2.14 or 2.15 to which amounts such Lender would not be entitled if such Lender
had made such Loan itself through its domestic branch. Borrowings of more than
one Type may be outstanding at the same time; provided, however, that the
Borrower shall not be entitled to request any Revolving Borrowing which, if
made, would result in an aggregate of more than twenty (20) separate
Revolving Loans from any Lender being outstanding hereunder at any one time.
For purposes of the foregoing, Revolving Loans (other than Base Rate Loans)
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Revolving Loans.



          (c) Each Lender shall make each Loan (other than a Swing Line Loan) to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available




18






 





funds to the Administrative Agent in New York, New York,
not later than 12:00 noon (or in the case of Base Rate Loans, 2:00 p.m.), New
York City time, and the Administrative Agent shall by 3:00 p.m., New York City
time, credit the amounts so received to the general deposit account of the
Borrower maintained with the Administrative Agent or, if a Borrowing (other
than a Swing Line Borrowing) shall not occur on such date because any condition
precedent herein specified shall not have been met, return the amounts so
received to the respective Lenders. Competitive Loans shall be made by the
Lender or Lenders whose Competitive Bids therefor are accepted pursuant to
Section 2.05 in the amount so accepted, and Revolving Loans shall be made by
the Lenders pro rata in accordance with Section 2.17. Unless the
Administrative Agent shall have received notice from a Lender prior to the date
and time of any Revolving Borrowing that such Lender will not make available to
the Administrative Agent such Lender’s portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Revolving Borrowing
in accordance with this paragraph (c) and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have
made such portion available to the Administrative Agent, such Lender and the
Borrower agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Revolving Loans comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount shall constitute such Lender’s Revolving Loan as part of such Revolving
Borrowing for purposes of this Agreement.


          (d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Revolving Borrowing with an Interest
Period ending after the Termination Date.



          (e) If the Fronting Bank shall not have received the payment required to
be made by the Borrower pursuant to Section 2.04(e) within the time specified
in such Section, the Fronting Bank will promptly notify the Administrative
Agent of the L/C Disbursement and the Administrative Agent will promptly notify
each Lender of such L/C Disbursement and its Applicable Percentage thereof.
Not later than 2:00 p.m., New York City time, on such date (or, if such Lender
shall have received such notice later than 12:00 noon, New York City time, on
any day, no later than 10:00 a.m., New York City time, on the immediately
following Business Day), each Lender will make available the amount of its
Applicable Percentage of such L/C Disbursement (it being understood that such
amount shall be deemed to constitute a Base Rate Loan of such Lender and such
payment shall be deemed to have reduced the L/C Exposure) in immediately
available funds, to the Administrative Agent in New York, New York, and the
Administrative Agent will promptly pay to the Fronting Bank amounts so
received by it from the Lenders. The Administrative Agent will promptly pay to
the Fronting Bank any amounts received by it from such Borrower pursuant to
Section 2.04(e) prior to the time that any Lender makes any payment pursuant to
this paragraph (e), and any such amounts received by the Administrative Agent
thereafter will be promptly remitted by the Administrative Agent to the Lenders
that shall have made such payments and to the Fronting Bank, as their interests
may appear. If any Lender shall not have made its Applicable Percentage of
such L/C Disbursement




19






 





available to the Administrative Agent as provided above,
such Lender agrees to pay interest on such amount, for each day from and
including the date such amount is required to be paid in accordance with this
paragraph to but excluding the date such amount is paid, to the Administrative
Agent for the account of the Fronting Bank at, the Federal Funds Rate.


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



          Section
2.03 Swing Line Loans. (a) The Borrower may request the Swing Line Bank to
make, and the Swing Line Bank shall make, on the terms and conditions
hereinafter set forth, Swing Line Loans to the Borrower from time to time on
any Business Day during the period from the date hereof until the Termination
Date in an aggregate amount not to exceed at any time outstanding $20,000,000;
subject, however, to the condition that at no time shall the outstanding
aggregate principal amount of all Loans made by all Lenders and the Swing Line
Bank plus the L/C Exposure of all Lenders at such time exceed the Total
Commitment. No Swing Line Loan shall be used for the purpose of funding the
payment of principal of any other Swing Line Loan. Each Swing Line Borrowing
shall be in an amount of $1,000,000 or an integral multiple of $100,000 in
excess thereof and shall be made as a Base Rate Loan.



          (b) In order to request a Swing Line Borrowing, the Borrower shall hand
deliver or telecopy to the Swing Line Bank and the Administrative Agent a Swing
Line Borrowing Request in the form of Exhibit B not later than 3:00 p.m., New
York City time, on the day of a proposed borrowing. Such notice shall be
irrevocable and shall in each case specify (i) the date of such Swing Line
Borrowing (which shall be a Business Day) and the amount thereof; and (ii) the
maturity of such Swing Line Borrowing (which maturity shall be no later
than the seventh day after the requested date of such Swing Line
Borrowing). The Swing Line Bank will make the amount thereof available to the
Administrative Agent on the proposed date thereof by wire transfer of
immediately available funds to the Administrative Agent in New York, New York,
not later than 4:00 p.m., New York City time, and the Administrative Agent
shall by 5:00 p.m., New York City time, credit the amount so received to the
general deposit account of the Borrower maintained with the Administrative
Agent or, if a Swing Line Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the amount
so received to the Swing Line Bank.




20






 





          (c) Upon written demand by the Swing Line Bank, with a copy of such demand
to the Administrative Agent, each other Lender shall purchase from the Swing
Line Bank, and the Swing Line Bank shall sell and assign to each such other
Lender, such other Lender’s Applicable Percentage of such Swing Line Loan as of
the date of such demand, by making available to the Administrative Agent in New
York, New York for the account of the Swing Line Bank by wire transfer of
immediately available funds, an amount equal to the portion of the outstanding
principal amount of such Swing Line Loan to be purchased by such Lender. The
Borrower hereby agrees to each such sale and assignment. Each Lender agrees to
purchase its Applicable Percentage of an outstanding Swing Line Loan on (i) the
Business Day on which demand therefor is made by the Swing Line Bank, provided
that notice of such demand is given to such Lender not later than 12:00 noon,
New York City time, on such Business Day or (ii) the first Business Day next
succeeding such demand if notice of such demand is given after such time. If
and to the extent that any Lender shall have received such notice of demand and
shall not have so made the amount of such Swing Line Loan available to the
Administrative Agent, such Lender agrees to pay to the Administrative Agent
forthwith on demand such amount together with interest thereon, for each day
from the date of demand by the Swing Line Bank until the date such amount is
paid to the Administrative Agent, at the Federal Funds Rate. If such Lender
shall pay to the Administrative Agent such amount for the account of the Swing
Line Bank on any Business Day, such amount so paid in respect of principal
shall constitute a Swing Line Loan made by such Lender on such Business Day for
purposes of this Agreement, and the outstanding principal amount of the Swing
Line Loan made by the Swing Line Bank shall be reduced by such amount on such
Business Day.



          Section 2.04
Letters of Credit. (a) General. The Borrower may from time to time
request the issuance of Letters of Credit for its own account (for obligations
of such Borrower or any of its Subsidiaries), denominated in dollars, in form
reasonably acceptable to the Administrative Agent and the Fronting Bank, at any
time and from time to time while the Commitments remain in effect. This
Section shall not be construed to impose an obligation upon the Fronting Bank
to issue any Letter of Credit that is inconsistent with the terms and
conditions of this Agreement.



          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
In order to request the issuance of a Letter of Credit (or to amend, renew or
extend an existing Letter of Credit), the Borrower shall hand deliver or
telecopy to the Fronting Bank and the Administrative Agent (reasonably in
advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal
or extension, the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) below), the amount of such Letter of Credit,
the name and address of the beneficiary thereof and such other information as
shall be necessary to prepare such Letter of Credit. A Letter of Credit shall
be issued, amended, renewed or extended only if, and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that, after giving effect to such issuance, amendment,
renewal or extension (A) the L/C Exposure shall not exceed $200,000,000 and (B)
the sum of (i) the Aggregate Credit Exposure and (ii) the aggregate principal
amount of outstanding Competitive Loans shall not exceed the Total Commitment.




21






 





          (c) Expiration Date. Each Letter of Credit shall expire at the close of
business on the date that is five Business Days prior to the Termination Date,
unless such Letter of Credit expires by its terms on an earlier date.



          (d) Participations. By the issuance of a Letter of Credit and without any
further action on the part of the Fronting Bank or the Lenders, the Fronting
Bank hereby grants to each Lender, and each such Lender hereby acquires from
the Fronting Bank, a participation in such Letter of Credit equal to such
Bank’s Applicable Percentage from time to time of the aggregate amount
available to be drawn under such Letter of Credit, effective upon the issuance
of such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of the Fronting Bank, such Lender’s
proportionate share of each L/C Disbursement made by the Fronting Bank and not
reimbursed by the Borrower forthwith on the date due as provided in Section
2.02(e). Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or an Event
of Default or the termination of the Commitments, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.



          (e) Reimbursement. If the Fronting Bank shall make any L/C Disbursement
in respect of a Letter of Credit, the Borrower shall pay to the Administrative
Agent an amount equal to such L/C Disbursement not later than the Business Day
after the Borrower shall have received notice from the Fronting Bank that
payment of such draft has been made. Upon receipt thereof, the Administrative
Agent shall promptly distribute such reimbursement payment to the Fronting Bank
and, to the extent each Lender has funded its participation therein in
accordance with paragraph (d), to such Lenders.



          (f) Obligations Absolute. The Borrower’s obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:




		
	 	     (i) any lack of validity or enforceability of any Letter of Credit
or any Loan Document, or any term or provision therein;
	 
	 	     (ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Loan Document;




		
	 	     (iii) the existence of any claim, setoff, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated
with, the Borrower or any subsidiary or other affiliate thereof or any
other person may at any time have against the beneficiary under any
Letter of Credit, the Fronting Bank, the Administrative Agent or any
Lender or any other person, whether in connection with this Agreement,
any other Loan Document or any other related or unrelated agreement or
transaction;



22






 







		
	 	     (iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;




		
	 	     (v) payment by the Fronting Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and




		
	 	     (vi) any other act or omission to act or delay of any kind of the
Fronting Bank, the Lenders, the Administrative Agent or any other person
or any other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of the Borrower’s obligations
hereunder.



provided, however, that the foregoing shall not be construed to excuse the
Fronting Bank from liability to the Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Fronting Bank’s gross
negligence or willful misconduct in determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof.


          It is understood that the Fronting Bank may accept documents that appear
on their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary and, in making any
payment under any Letter of Credit (i) the Fronting Bank’s exclusive reliance
on the documents presented to it under such Letter of Credit as to any and all
matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and
whether or not any other statement or any other document presented pursuant to
such Letter of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever and (ii) any
noncompliance in any immaterial respect of the documents presented under such
Letter of Credit with the terms thereof shall, in each case, be deemed not to
constitute willful misconduct or gross negligence of the Fronting Bank.



          (g) Disbursement Procedures. The Fronting Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a
Letter of Credit. The Fronting Bank shall as promptly as possible give
telephonic notification, confirmed by telecopy, to the Administrative Agent and
the Borrower of such demand for payment and whether the Fronting Bank has made
or will make an L/C Disbursement thereunder; provided that any failure to give
or delay in giving such notice shall not relieve the Borrower of its obligation
to reimburse the Fronting Bank and the Lenders with respect to any such L/C
Disbursement. The Administrative Agent shall promptly give each Lender notice
thereof.



          (h) Interim Interest. If the Fronting Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such L/C Disbursement




23






 





in full on the date thereof, the unpaid amount
thereof shall bear interest for the account of the Fronting Bank, for each day
from and including the date of such L/C Disbursement, to but excluding the
earlier of the date of payment by the Borrower or the date on which interest
shall commence to accrue on the Base Rate Loans resulting from such L/C
Disbursement as provided in Section 2.02(e), at the rate per annum that would
apply to such amount if such amount were a Base Rate Loan.


          (i) Cash Collateralization. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders thereof and from the
Administrative Agent of the amount to be deposited, deposit in an account with
the Administrative Agent, for the benefit of the Lenders, an amount in cash
equal to the portion of the L/C Exposure attributable to Letters of Credit
issued for the account of the Borrower and outstanding as of such date. Such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations under this Agreement. The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal without notice to or consent of the Borrower, over such account.
Such deposits shall not bear interest. Moneys in such account shall
automatically be applied by the Administrative Agent to reimburse the Fronting
Bank for L/C Disbursements attributable to Letters of Credit issued for the
account of the Borrower depositing such moneys for which the Fronting Bank has
not been reimbursed, and any remaining amounts will either (i) be held for the
satisfaction of the reimbursement obligations of the Borrower for the L/C
Exposure at such time or (ii) if the maturity of the Loans of the Borrower has
been accelerated, be applied to satisfy the obligations of such Borrower under
this Agreement. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.



          Section 2.05
Competitive Bid Procedure. (a) Subject to the terms and conditions set
forth herein, from time to time during the period from and including the
Closing Date to but excluding the Termination Date, the Borrower may request
Competitive Bids and may (but shall not have any obligation to) accept
Competitive Bids and borrow Competitive Loans; provided that the sum of the
Aggregate Credit Exposure and the aggregate principal amount of outstanding
Competitive Loans at any time shall not exceed the Total Commitment. To
request Competitive Bids, the Borrower shall notify the Administrative Agent of
such request by telephone, in the case of a Eurodollar Borrowing, not later
than 12:00 noon, New York City time, four Business Days
before the date of the proposed Borrowing and, in the case of a Fixed Rate
Borrowing, not later than 12:00 noon, New York City time, one Business Day
before the date of the proposed Borrowing. Each such telephonic Competitive
Bid Request shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Competitive Bid Request in a form approved by
the Administrative Agent and signed by the Borrower. Each such telephonic and
written Competitive Bid Request shall specify the following information in
compliance with Section 2.02:




		
	 	     (iii) the aggregate amount of the requested Borrowing;




		
	 	     (iv) the date of such Borrowing, which shall be a Business Day;



24






 







		
	 	     (v) whether such Borrowing is to be a Eurodollar Borrowing or a
Fixed Rate Borrowing;




		
	 	     (vi) the Interest Period to be applicable to such Borrowing, which
shall be a period contemplated by the definition of the term “Interest
Period”; and




		
	 	     (vii) the location and number of the Borrower’s account to which
funds are to be disbursed.



Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof in writing (which may be by telecopy) inviting the Lenders to submit
Competitive Bids.


          (b) Each Lender may (but shall not have any obligation to) make one or
more Competitive Bids to the applicable Borrower in response to a Competitive
Bid Request. Each Competitive Bid by a Lender must be substantially in a form
to be provided by the Administrative Agent and must be received by the
Administrative Agent by telecopy, in the case of a Eurodollar Competitive
Borrowing, not later than 11:00 a.m., New York City time, three Business Days
before the proposed date of such Competitive Borrowing, and in the case of a
Fixed Rate Borrowing, not later than 11:00 a.m., New York City time, on the
proposed date of such Competitive Borrowing. Competitive Bids that do not
conform substantially to the form provided by the Administrative Agent may be
rejected by the Administrative Agent, and the Administrative Agent shall notify
the applicable Lender as promptly as practicable. Each Competitive Bid shall
specify (i) the principal amount (which shall be a minimum of $5,000,000 and an
integral multiple of $1,000,000 and which may equal the entire principal amount
of the Competitive Borrowing requested by the Borrower) of the Competitive Loan
or Loans that the Lender is willing to make, (ii) the Competitive Bid Rate or
Rates at which the Lender is prepared to make such Loan or Loans (expressed as
a percentage rate per annum in the form of a decimal to no more than four
decimal places) and (iii) the Interest Period applicable to each such Loan and
the last day thereof.



          (c) The Administrative Agent shall promptly notify the Borrower in writing
(which may be by telecopy) of the Competitive Bid Rate and the principal amount
specified in each Competitive Bid and the identity of the Lender that shall
have made such Competitive Bid.



          (d) Subject only to the provisions of this paragraph, the Borrower may
accept or reject any Competitive Bid. The Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopy in a form approved by
the Administrative Agent, whether and to what extent it has decided to accept
or reject each Competitive Bid, in the case of a Eurodollar Competitive
Borrowing, not later than 12:00 noon, New York City time, three Business Days
before the date of the proposed Competitive Borrowing, and in the case of a
Fixed Rate Borrowing, not later than 12:00 noon, New York City time, on the
proposed date of the Competitive Borrowing; provided that (i) the failure of
the Borrower to give such notice shall be deemed to be a rejection of each
Competitive Bid, (ii) the Borrower shall not accept a Competitive Bid made at a
particular Competitive Bid Rate if the Borrower rejects a Competitive Bid made
at a lower Competitive Bid Rate, (iii) the aggregate amount of the Competitive
Bids accepted by the Borrower shall not exceed the aggregate amount of the
requested Competitive




25






 





Borrowing specified in the related Competitive Bid
Request, (iv) to the extent necessary to comply with clause (iii) above, the
Borrower may accept Competitive Bids at the same Competitive Bid Rate in part,
which acceptance, in the case of multiple Competitive Bids at such Competitive
Bid Rate, shall be made pro rata in accordance with the amount of each such
Competitive Bid, and (v) except pursuant to clause (iv) above, no Competitive
Bid shall be accepted for a Competitive Loan unless such Competitive Loan is in
a minimum principal amount of $5,000,000 and an integral multiple of
$1,000,000; provided further that if a Competitive Loan must be in an amount
less than $5,000,000 because of the provisions of clause (iv) above, such
Competitive Loan may be for a minimum of $1,000,000 or any integral multiple
thereof, and in calculating the pro rata allocation of acceptances of portions
of multiple Competitive Bids at a particular Competitive Bid Rate pursuant to
clause (iv) the amounts shall be rounded to integral multiples of $1,000,000 in
a manner determined by the Borrower. A notice given by the Borrower pursuant
to this paragraph shall be irrevocable.


          (e) The Administrative Agent shall promptly notify each bidding Lender in
writing (which may be by telecopy) whether or not its Competitive Bid has been
accepted (and, if so, the amount and Competitive Bid Rate so accepted), and
each successful bidder will upon receipt of such notice become bound, subject
to the terms and conditions hereof, to make the Competitive Loan in respect of
which its Competitive Bid has been accepted.



          (f) If the Administrative Agent shall elect to submit a Competitive Bid in
its capacity as a Lender, it shall submit such Competitive Bid directly to the
Borrower at least one quarter of an hour earlier than the time by which the
other Lenders are required to submit their Competitive Bids to the
Administrative Agent pursuant to paragraph (b) of this Section.



          (g) The Borrower shall pay, for each Competitive Bid Request submitted
pursuant to Section 2.05(a), an auction fee to the Administrative Agent in an
amount to be agreed by and between the Borrower and the Administrative Agent.
Such auction fee shall be due and owing irrespective of whether any Lender
submits a Competitive Bid pursuant to such Competitive Bid Request.



          Section 2.06
Conversion and Continuation of Revolving Loans. (a) The Borrower
shall, with respect to its Revolving Borrowings, have the right at any time,
upon prior irrevocable written notice to the Administrative Agent given in the
manner and at the times specified in Section 2.02(f), with respect to the
Type of Revolving Borrowing into which conversion or continuation is to be
made, to convert any of its Revolving Borrowings into a Revolving Borrowing of
a different Type and to continue any of its Eurodollar Borrowings into a
subsequent Interest Period of any permissible duration, subject to the terms
and conditions of this Agreement and to the following:




		
	 	     (i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of Revolving
Loans comprising the converted or continued Revolving Borrowing;




		
	 	     (ii) if less than all the outstanding principal amount of any
Revolving Borrowing shall be converted or continued, the aggregate
principal amount of such



26






 







		
	 	     Revolving Borrowing converted and/or continued
shall in each case not be less than the minimum amount set forth in
Section 2.02;




		
	 	     (iii) if a Eurodollar Borrowing is converted at any time other than
on the last day of the Interest Period applicable thereto, the Borrower
shall pay any amount due pursuant to Section 2.16;




		
	 	     (iv) with respect to a Revolving Borrowing, if such Revolving
Borrowing is to be converted into a Eurodollar Borrowing or if a
Eurodollar Borrowing is to be continued, no Interest Period selected
shall extend beyond the Termination Date;




		
	 	     (v) interest accrued to the day immediately preceding each date of
conversion or continuation shall be payable on each Revolving Borrowing
that is converted or continued concurrently with such conversion or
continuation; and




		
	 	     (vi) Competitive Borrowings may not be converted or continued.



          (b) Each notice given pursuant to Section 2.06(a) shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and the amount of
the Revolving Borrowing that the Borrower requests to be converted or
continued; (ii) whether such Borrowing (or any part thereof) is to be converted
or continued as a Base Rate Borrowing or a Eurodollar Borrowing; (iii) if such
notice requests a conversion, the date of such conversion (which shall be a
Business Day); and (iv) if such Borrowing (or any part thereof) is to be
converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month’s
duration, in the case of a Eurodollar Borrowing. The Administrative Agent
shall advise the Lenders of any notice given pursuant to Section 2.06(a) and of
each Lender’s portion of any converted or continued Borrowing.



          (c) If the Borrower shall not have given notice in accordance with this
Section 2.06 to continue any Eurodollar Borrowing into a subsequent Interest
Period (and shall not otherwise have given notice in accordance with this
Section 2.06 to convert such Eurodollar Borrowing), such Eurodollar Borrowing
shall automatically be converted into a Base Rate Borrowing. In the event of
the occurrence and continuation of a Default or an Event of Default (i) all
Eurodollar Borrowings of the Borrower shall be converted into Base Rate
Borrowings on
the last day of the Interest Period then in effect, and (ii) no Base Rate
Borrowing may be converted into a Borrowing of another Type so long as a
Default or Event of Default continues to exist.



          Section 2.07 Fees. (a) The Borrower agrees to pay to each Lender, through the
Administrative Agent, on each March 31, June 30, September 30 and December 31
and on the date on which the Commitment of such Lender shall be terminated as
provided herein, a facility fee (each, a “Facility Fee,” and collectively, the
“Facility Fees”), calculated as specified below, on the amount of the
Commitment of such Lender, whether used or unused, during the preceding quarter
(or shorter period commencing with the Closing Date or ending with the
Termination Date applicable to such Lender or any date on which the Commitment
of such Lender shall be




27






 





terminated). All facility fees shall be computed on
the basis of a year of 365 or 366 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
The Facility Fee due to each Lender shall commence to accrue on the Closing
Date and shall cease to accrue on the earlier of the Termination Date
applicable to such Lender and the termination of the Commitment of such Lender
as provided herein.


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




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Level 1	 	Level 2	 	Level 3	 	Level 4	 	Level 5
	 	 	
	 	
	 	
	 	
	 	

	S&P:	 	A- or better	 	BBB+	 	BBB	 	BBB-	 	Below BBB-
	Moody’s:	 	A3 or better	 	Baa1	 	Baa2	 	Baa3	 	Below Baa3
	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) The Borrower agrees to pay the Administrative Agent, for its own
account, the administration fees (the “Administrative Agent Fees”) at the times
and in the
amounts agreed upon in the letter agreement dated as of December 13, 2001,
among the Borrower, Morgan Stanley Senior Funding, Inc., J.P. Morgan Securities
Inc. and the Administrative Agent.



          (c) The Borrower agrees to pay (i) to the Administrative Agent for pro
rata distribution to each Lender a fee (an “L/C Participation Fee”), for the
period from the Closing Date until the Termination Date (or such earlier date
as all Letters of Credit shall be canceled or expire and the Total Commitment
shall be terminated), on that portion of the average daily L/C Exposure
attributable to Letters of Credit issued for the account of the Borrower
(excluding the portion thereof attributable to unreimbursed L/C Disbursements),
at the rate per annum equal to the Applicable Margin for Eurodollar Loans from
time to time in effect for the Borrower and (ii) to the Fronting Bank a
fronting fee (a “Fronting Fee”), which shall accrue at the rate of .125% per
annum on the average daily amount of the L/C Exposure attributable to Letters
of Credit




28






 





issued for the account of such Borrower (excluding any portion
thereof attributable to unreimbursed L/C Disbursements) during the period from
and including the Closing Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to
be any L/C Exposure attributable to Letters of Credit issued for the account of
such Borrower, as well as the Fronting Bank’s standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. L/C Participation Fees and Fronting Fees accrued under
this paragraph are payable quarterly in arrears on the last day of each
calendar quarter and on the date on which the Total Commitment shall be
terminated as provided herein. All L/C Participation Fees and Fronting Fees
payable under this paragraph shall be computed on the basis of the number of
days actually elapsed over a year of 365 or 366 days.


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



          Section 2.08 Repayment of Loans; Evidence of Debt. (a) The outstanding principal
balance of (i) each Revolving Loan shall be payable on the Termination Date,
(ii) each Swing Line Loan shall be payable on the earlier of the maturity date
specified in the applicable Swing Line Borrowing Request (which maturity shall
be not later than the seventh day after the requested date of such Borrowing)
and the Termination Date and (iii) each Competitive Loan shall be payable on
the last day of the Interest Period applicable to such Competitive Loan and on
the Termination Date. Each Loan shall bear interest from the date thereof on
the outstanding principal balance thereof as set forth in Section 2.09.



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



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



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



          (e) Any Lender may request that Loans made by it be evidenced by a
promissory note, substantially in the form of Exhibit G attached hereto. In
such event, the Borrower shall promptly, and in no event more than ten (10)
Business Days after a request therefor, prepare, execute and deliver to such
Lender a promissory note payable to the order of




29






 





such Lender (or, if requested
by such Lender, to such Lender and its registered assigns). Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and
its registered assigns).


          Section 2.09 Interest on Loans. (a) Subject to the provisions of Section 2.10, the
Loans comprising each (i) Eurodollar Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 360 days) at a
rate per annum equal to the Eurodollar Rate for the Interest Period in effect
for such Borrowing plus the Applicable Margin, determined pursuant to paragraph
(d) below, and (ii) Eurodollar Competitive Loan, at the Eurodollar Rate for the
Interest Period in effect for such Borrowing plus (or minus, as applicable) the
Margin applicable to such Loan.



          (b) Subject to the provisions of Section 2.10, the Loans comprising each
Base Rate Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be) at a
rate per annum equal to the Base Rate plus the Applicable Margin.



          (c) Interest on each Eurodollar Loan shall, except as otherwise provided
in this Agreement, be payable on the last day of the Interest Period applicable
thereto and, in case of a Eurodollar Loan with an Interest Period of more than
three months’ duration, each day that would have been an interest payment date
for such Loan had successive Interest Periods of three months’ duration been
applicable to such Loan, 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. Interest on each Fixed
Rate Loan shall be payable on the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Fixed Rate Borrowing with an Interest Period of more than three months’
duration (unless otherwise specified in the applicable Competitive Bid
Request), each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest
Period, and any other dates that are specified in the applicable Competitive
Bid Request as interest payment dates with respect to such Borrowing, and on
the Termination Date or any earlier date on which this Agreement is, pursuant
to its terms and conditions, terminated.



          (d) As used herein, “Applicable Margin” shall mean the sum of (i) the
applicable percentage per annum specified in the table below, to be determined
based upon the Ratings received from S&P and Moody’s by the Borrower, and (ii)
the Utilization Fee. The applicable percentage referred to in clause (i) of
the immediately preceding sentence shall be determined based upon the Ratings,
as follows:




30






 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	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 principal amount of outstanding Competitive
Loans, plus (C) the “Aggregate Credit Exposure” as defined under the 364-Day
Revolving Credit Facility Agreement, is equal to or exceeds 33% of the sum of
(X) the Total Commitment and (Y) the “Total Commitment” as defined under the
364-Day Revolving Credit Facility Agreement, and (ii) a percentage per annum
equal to 0.000% for any other date.



          (f) Subject to the provisions of Section 2.10, the Loans comprising each
Fixed Rate Borrowing shall bear interest at the Fixed Rate applicable to such
Loans.



          Section 2.10 Default Interest. If the Borrower shall default in the payment of
the principal of or interest on any of its Loans or any other amount becoming
due hereunder (other than any L/C Disbursement that has been made by the
Fronting Bank and not yet due pursuant to the terms of Section 2.04(e)),
whether by scheduled maturity, notice of prepayment, acceleration or otherwise,
the Borrower shall on demand from time to time 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%.



          Section 2.11 Alternate Rate of Interest. In the event, and on each occasion, that
on the day two Business Days prior to the commencement of any Interest Period
for a Eurodollar Borrowing the Administrative Agent (or, in the case of a
Eurodollar Competitive Loan, the Lender that is required to make such Loan)
shall have determined in good faith that dollar




31






 





deposits in the principal
amounts of the Eurodollar Loans comprising such Borrowing are not generally
available in the London interbank market, or that the rates at which such
dollar deposits are being offered will not adequately and fairly reflect the
cost to the Required Lenders of making or maintaining their Eurodollar Loans
during such Interest Period, or that reasonable means do not exist for
ascertaining the Eurodollar Rate, the Administrative Agent (or, in the case of
a Eurodollar Competitive Loan, the Lender that is required to make such Loan)
shall, as soon as practicable thereafter, give written notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any request by the Borrower for a Eurodollar Revolving Borrowing
pursuant to Section 2.02 shall be deemed to be a request for a Base Rate
Borrowing, (ii) any request by the Borrower for a conversion to, or a
continuation of, a Eurodollar Revolving Borrowing pursuant to Section 2.06
shall be deemed to be a request for, respectively, a continuation as, or a
conversion to, a Base Rate Borrowing and (iii) any request for a Eurodollar
Competitive Borrowing shall be ineffective; provided that if the circumstances
giving rise to such notice do not affect all the Lenders, then requests for
Eurodollar Competitive Borrowings may be made to Lenders that are not affected
thereby. Each determination by the Administrative Agent hereunder shall be
conclusive absent manifest error.


          Section 2.12 Termination and Reduction of Commitments. (a) The unused Commitments
of each Lender shall be automatically terminated on the Termination Date.



          (b) Subject to Section 2.13(b), upon at least three Business Days’ prior
irrevocable written notice to the Administrative Agent, the Borrower may at any
time in whole permanently terminate, or from time to time in part permanently
reduce, the Total Commitment; provided, however, that (i) each partial
reduction shall be in an integral multiple of $1,000,000
and in a minimum principal amount of $25,000,000 and (ii) no such
termination or reduction shall be made which would reduce the Total Commitment
to an amount less than the sum of the aggregate outstanding principal amount of
Loans and the aggregate L/C Exposure.



          (c) The Total Commitment shall be automatically and permanently reduced on
each date on which prepayment thereof is required to be made pursuant to
Section 2.13(b)(i) in the amount of such prepayment. In addition, the Total
Commitment shall be automatically and permanently reduced on each date on which
prepayment thereof is required to be made pursuant to Section 2.13(b)(i) in an
amount equal to the applicable Reduction Amount. “Reduction Amount” shall
mean, with respect to any sale, lease, transfer or other disposition of any
assets of the Borrower or any of its Subsidiaries (other than Excluded Sales),
on any date, the Net Cash Proceeds received with respect thereto on such date
less (i) any amounts applied with respect thereto to prepay any outstanding
amounts under the Senior Bank Financing pursuant to Section 2.13(b) (including
the amounts required to be cash collateralized pursuant to Section 2.04(i)),
(ii) any amounts applied to reduce Commitments under the 364-Day Revolving
Credit Facility Agreement, and (iii) the portion of such Net Cash Proceeds that
constitutes Reinvestment Proceeds.



          (d) Subject to Section 2.21, each reduction in the Total Commitment
hereunder shall be made ratably among the Lenders in accordance with their
respective Commitments. The Borrower agrees to pay to the Administrative Agent
for the account of the




32






 





Lenders, on the date of each termination or reduction,
the Facility Fees on the amount of the Commitments so terminated or reduced
accrued through the date of such termination or reduction.


          Section 2.13 Prepayment. (a) Voluntary Prepayments. Except as provided in the next
sentence below, the Borrower shall have the right at any time and from time to
time to prepay any of its Borrowings, in whole or in part, upon giving written
notice (or telephone notice promptly confirmed by written notice) to the
Administrative Agent: (i) before 12:00 noon, New York City time, three
Business Days prior to prepayment, in the case of Eurodollar Loans and (ii)
before 12:00 noon, New York City time, one Business Day prior to prepayment, in
the case of Base Rate Loans; provided, however, that each partial prepayment
shall be in an amount which is an integral multiple of $1,000,000 and not less
than $25,000,000. The Borrower shall not have the right to prepay any
Competitive Loan without the prior consent of the Lender thereof.



          (b) Mandatory
Prepayments. (i) The Borrower shall, within three Business
Days of the date of receipt of the Net Cash Proceeds by the Borrower or any of
its Domestic Subsidiaries from the sale, lease, transfer or other disposition
of any assets of the Borrower or any of its Subsidiaries (other than any
Excluded Sales), prepay any amounts outstanding under the Senior Bank Financing
in an amount equal to the lesser of the amount of such Net Cash Proceeds and
the amount so outstanding (including the amounts required to be cash
collateralized pursuant to Section 2.04 hereof). Each such prepayment shall be
applied first to any Loans, L/C Disbursements or cash collateralizations under
this Agreement as set forth in clause (iii) below, and second to any principal
amounts outstanding pursuant to the 364-Day Revolving Credit Facility Agreement
in accordance with the terms and conditions for
prepayment set forth therein; provided that the Borrower shall not be
required to make any prepayments pursuant to this Section 2.13(b)(i) if the
Borrower or any of its Subsidiaries shall apply any of the Net Cash Proceeds it
received from the sale, lease, transfer or other disposition of its assets for
reinvestment in its business within 180 days after receipt thereof by the
Borrower or any of its Subsidiaries (any such Net Cash Proceeds so reinvested,
the “Reinvestment Proceeds”); provided, further, that the Borrower shall have
notified the Administrative Agent of its intent to so reinvest such Net Cash
Proceeds.



          (ii) On the date of any termination or reduction of the Commitments
pursuant to Section 2.12, the Borrower shall pay or prepay so much of its
Borrowings as shall be necessary in order that the sum of the aggregate
principal amount of Loans outstanding and the aggregate L/C Exposure not exceed
the Total Commitment, after giving effect to such termination or reduction.



          (iii) Prepayments required to be made pursuant to clause (i) above to
amounts due hereunder shall be first applied to prepay L/C Disbursements then
outstanding until such L/C Disbursements are paid in full, second applied to
prepay Swing Line Loans then outstanding until such Loans are paid in full,
third, applied to prepay Revolving Loans then outstanding until such Loans are
paid in full, fourth, applied to prepay ratably Competitive Loans then
outstanding until such Loans are paid in full, and fifth, to the extent
required, applied to cash collateralize any outstanding Letters of Credit in
accordance with Section 2.04(i). The amount remaining (if any) after the
prepayment in full of the L/C Disbursements and Loans, and the 100% cash




33






 





collateralization of the Letters of Credit then outstanding pursuant to Section
2.04(i), may be retained by the Borrower to the extent not required to be
applied in accordance with clause (i) above, and the Commitments shall be
permanently reduced in accordance with Section 2.12(c).


          (c) Each notice of prepayment under paragraph (a) above shall specify the
prepayment date and the principal amount of each Borrowing (or portion thereof)
to be prepaid, shall be irrevocable and shall commit the Borrower to prepay
such Borrowing (or portion thereof) by the amount stated therein on the date
stated therein. All prepayments under this Section 2.13 shall be subject to
Section 2.16 but otherwise without premium or penalty. All prepayments under
this Section 2.13 shall be accompanied by accrued interest on the principal
amount being prepaid to the date of payment.



          Section 2.14 Reserve Requirements; Change in Circumstances. (a) It is understood
that the cost to each Lender (including the Administrative Agent, the Swing
Line Bank and the Fronting Bank) of making or maintaining any of the Eurodollar
Loans or Letters of Credit may fluctuate as a result of the applicability of
reserve requirements imposed by the Board at the ratios provided for in
Regulation D. The Borrower agrees to pay to each of such Lenders from time to
time, as provided in paragraph (d) below, such amounts as shall be necessary to
compensate such Lender for the portion of the cost of making or maintaining
Eurodollar Loans to (or issuing Letters of Credit for the account of) the
Borrower resulting from any such reserve requirements provided for in
Regulation D as in effect on the date 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, the Swing Line Bank and the Fronting Bank)
of the principal of or interest on any Eurodollar Loan or Fixed Rate Loan made
by such Lender, of any payments related to the Letters of Credit or any Fees or
other amounts payable hereunder (other than changes in respect of taxes imposed
on the overall net income of such Lender by the jurisdiction in which such
Lender has its principal office or by any political subdivision or taxing
authority therein), or shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of or credit extended by such Lender, or shall impose on such
Lender or the London interbank market any other condition affecting this
Agreement, any Eurodollar Loan or Fixed Rate Loan made by such Lender or any
Letter of Credit hereunder, and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Loan
or Fixed Rate Loan (or issuing any Letter of Credit) or to reduce the amount of
any sum received or receivable by such Lender hereunder (whether of principal,
interest or otherwise) in respect thereof by an amount deemed by such Lender to
be material, then the Borrower will pay to such Lender upon demand such




34






 





additional amount or amounts as will compensate such Lender for such additional
costs actually incurred or reduction actually suffered.


          (c) If after the date hereof any Lender (including the Administrative
Agent, the Swing Line Bank and the Fronting Bank) shall have determined that
the general applicability of any law, rule, regulation or guideline adopted
pursuant to or arising out of the July 1988 report of the Basle Committee on
Banking Regulations and Supervisory Practices entitled “International
Convergence of Capital Measurement and Capital Standards”, or the adoption
after the date hereof of any other generally applicable law, rule, regulation
or guideline regarding capital adequacy, or any change in any of the foregoing
or in the interpretation or administration of any of the foregoing by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender’s holding company with any request
or directive regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender’s capital or on
the capital of such Lender’s holding company, if any, as a consequence of this
Agreement, the Loans made by such Lender pursuant hereto (or the Letters of
Credit issued hereunder) to a level below that which such Lender or such
Lender’s holding company could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s policies and the policies
of such Lender’s holding company with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender or such Lender’s holding company for any such reduction suffered.



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



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



          (f) Notwithstanding any other provision of this Section 2.14, no Lender
shall demand compensation for any increased costs or reduction referred to
above if it shall not be the general policy or practice of such Lender to
demand such compensation in similar circumstances under comparable provisions
of other credit agreements, if any (it being understood that this




35






 





sentence
shall not in any way limit the discretion of any Lender to waive the right to
demand such compensation in any given case).


          Section 2.15 Change in Legality. (a) Notwithstanding any other provision herein
contained, if any change in any law or regulation or in the interpretation
thereof by any governmental authority charged with the administration or
interpretation thereof shall make it unlawful for any Lender (including the
Administrative Agent, the Swing Line Bank and the Fronting Bank) to make or
maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written
notice to the Borrower and to the Administrative Agent, such Lender may:




		
	 	     (i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder and any request by the Borrower for 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 to Base Rate Loans as of the effective
date of such notice as provided in paragraph (b) below.



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


          (b) For purposes of this Section 2.15, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan, if lawful, on the last
day of the Interest Period currently applicable to such Eurodollar Loan; in all
other cases such notice shall be effective on the date of receipt by the
Borrower.



          Section 2.16 Indemnity. The Borrower shall indemnify each Lender against any loss
or expense which such Lender sustains or incurs as a consequence of (a) any
failure by the Borrower to fulfill on the date of any borrowing or any issuance
of Letters of Credit hereunder the applicable conditions set forth in Article
IV, (b) any failure by the Borrower to borrow or continue any Loan hereunder or
to proceed with the issuance of a Letter of Credit hereunder after irrevocable
notice of such borrowing, continuation or issuance has been given pursuant to
Section 2.02, 2.03, 2.04, 2.05 or 2.06, as applicable, (c) any payment,
prepayment or conversion of a Eurodollar Loan or Fixed Rate Loan required by
any other provision of this Agreement or otherwise made or deemed made to or by
the Borrower on a date other than the last day of the Interest Period
applicable thereto; provided that the Borrower shall not be required to
indemnify a Lender pursuant to this clause (c) for any loss or expense to the
extent any such loss or expense shall have been incurred pursuant to (i)
Section 2.14, 2.15 or 2.20 or (ii) Section 2.13(a) more than six months prior
to the date that the applicable Lender shall have notified the Borrower of its
intention to claim compensation therefor, (d) any default in payment or
prepayment of the




36






 





principal amount of any Loan to the Borrower or any part
thereof or interest accrued thereon, as and when due and payable (at the due
date thereof, whether by scheduled maturity, acceleration, irrevocable notice
of prepayment or otherwise), (e) the failure by the Borrower to borrow any
Competitive Loan after accepting the Competitive Bid to make such Loan, or (f)
the occurrence of any Event of Default, including, in each such case, any loss
or reasonable expense sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties acquired to effect or
maintain such Loan or any part thereof as a Eurodollar Loan. Such loss or
reasonable expense shall include an amount equal to the excess, if any, as
reasonably determined by such Lender, of (i) its cost of obtaining the funds
for the Loan being paid, prepaid, converted or not borrowed (based, in the case
of a Eurodollar Loan, on the Eurodollar Rate) for the period from the date of
such payment, prepayment or conversion or failure to borrow to the last day of
the Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan which would have commenced on the date of such
failure) over (ii) the amount of interest (as reasonably determined by such
Lender) that would be realized by such Lender in reemploying the funds so paid,
prepaid or converted or not borrowed for such period or Interest Period, as the
case may be. A certificate of any Lender setting forth a reasonably detailed
explanation of any amount or amounts which such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error.


          Section 2.17 Pro Rata Treatment.
Except in the case of any Competitive Borrowing or as required under
Sections 2.15 or 2.21, each Borrowing, each payment or prepayment of principal
of any Borrowing, each payment of interest on the Loans, each payment of the
Facility Fees, each reduction of the Commitments and each conversion of any
Borrowing to a Borrowing of any Type, shall be allocated pro rata among the
Lenders in accordance with their respective Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans). Each payment of
interest on any Competitive Borrowing shall be allocated pro rata among the
Lenders participating in such Borrowing in accordance with the respective
amounts of accrued and unpaid interest on their outstanding Competitive Loans
comprising such Borrowing. For the purpose of determining the available
Commitments of the Lenders at any time, each outstanding Competitive Borrowing
shall be deemed to have utilized the Commitments of the Lenders (including
those Lenders that have not made Loans as part of such Competitive Borrowing)
pro rata in accordance with such respective Commitments. Each Lender agrees
that in computing such Lender’s portion of any Borrowing to be made hereunder,
the Administrative Agent may, in its discretion, round each Lender’s percentage
of such Borrowing to the next higher or lower whole dollar amount.



          Section 2.18 Sharing of Setoffs. Each Lender agrees that if it shall, through the
exercise of a right of banker’s lien, setoff or counterclaim against the
Borrower, or pursuant to a secured claim under Section 506 of Title 11 of the
United States Code or other security or interest arising from, or in lieu of,
such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Loans (other than pursuant
to Sections 2.12, 2.14 and 2.15) as a result of which the unpaid principal
portion of its Loans shall be proportionately less than the unpaid principal
portion of the Loans of any other Lender, it shall be deemed simultaneously to
have purchased from such other Lender at face value, and shall promptly pay to
such other Lender the purchase price for, a participation in the Loans of




37






 





such
other Lender, so that the aggregate unpaid principal amount of the Loans and
participations in the Loans held by each Lender shall be in the same proportion
to the aggregate unpaid principal amount of all Loans then outstanding as the
principal amount of its Loans prior to such exercise of banker’s lien, setoff
or counterclaim or other event was to the principal amount of all Loans
outstanding prior to such exercise of banker’s lien, setoff or counterclaim or
other event; provided, however, that, if any such purchase or purchases or
adjustments shall be made pursuant to this Section 2.18 and the payment giving
rise thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest. The Borrower
expressly consents to the foregoing arrangements and agrees that any Lender
holding a participation in a Loan deemed to have been so purchased may exercise
any and all rights of banker’s lien, setoff or counterclaim with respect to any
and all moneys owing by the Borrower to such Lender by reason thereof as fully
as if such Lender had made a Loan directly to the Borrower in the amount of
such participation.


          Section 2.19 Payments. (a) The Borrower shall make each payment (including
principal of or interest on any Borrowing or any Fees or other amounts payable
with respect to the Letters of Credit or
otherwise) hereunder and under any other Loan Document without setoff,
counterclaim or deduction of any kind not later than 12:00 noon, New York City
time, on the date when due in dollars to the Administrative Agent at its
offices at 270 Park Avenue, New York, New York, in immediately available funds.



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



          Section 2.20 Taxes. (a) Any and all payments by the Borrower hereunder shall be
made, in accordance with Section 2.19, free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto, excluding any
income, franchise, branch profits or similar tax imposed on or measured by the
net income or net profits of the Administrative Agent, the Swing Line Bank, the
Fronting Bank or any Lender (or any transferee or assignee that acquires a Loan
(any such entity a “Transferee”)) by the United States or any jurisdiction
under the laws of which it is organized or doing business or any political
subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
“Taxes”). If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to the Lenders (or any Transferee), the
Swing Line Bank, the Fronting Bank or the Administrative Agent, (i) the sum
payable shall be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.20) such Lender (or Transferee), the Swing Line Bank, the
Fronting Bank or the Administrative Agent (as the case may be) shall receive an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall
pay the full amount deducted




38






 





to the relevant taxing authority or other
Governmental Authority in accordance with applicable law.


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



          (c) The Borrower will indemnify each Lender (or Transferee), the Swing
Line Bank, the Fronting Bank and the Administrative Agent for the full amount
of Taxes and Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable by the Borrower under this Section 2.20) paid
by such Lender (or Transferee), the Swing Line Bank, the Fronting Bank or the
Administrative Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other
Governmental Authority. The Borrower shall also indemnify each Lender (or
any Transferee), the Swing Line Bank, the Fronting Bank and the Administrative
Agent for the full amount of taxes imposed on or measured by the net income or
receipts of such Lender (or any Transferee), the Swing Line Bank, the Fronting
Bank or the Administrative Agent as the case may be, as such Lender (or
Transferee), the Swing Line Bank, the Fronting Bank or the Administrative Agent
shall determine are payable in respect of amounts paid by the Borrower to or on
behalf of such Lender (or any Transferee), the Swing Line Bank, the Fronting
Bank or the Administrative Agent, as the case may be, pursuant to this Section
2.20. Such indemnification shall be made within 30 days after the date any
Lender (or Transferee), the Swing Line Bank, the Fronting Bank or the
Administrative Agent, as the case may be, makes written demand therefor. If
any Lender (or Transferee), the Swing Line Bank, the Fronting Bank or the
Administrative Agent becomes entitled to a refund of Taxes or Other Taxes for
which such Lender (or Transferee), the Swingline Bank, the Fronting Bank or the
Administrative Agent has received payment from the Borrower hereunder, such
Lender (or Transferee), Swingline Bank, Fronting Bank or Administrative Agent,
as the case may be, shall, at the expense of the Borrower, use its reasonable
efforts (consistent with internal policy, and legal and regulatory
restrictions) to obtain such refund. If a Lender (or Transferee), the
Swingline Bank, the Fronting Bank or the Administrative Agent receives a refund
or is entitled to claim a tax credit in respect of any Taxes or Other Taxes for
which such Lender (or Transferee), the Swing Line Bank, the Fronting Bank or
the Administrative Agent has received payment from the Borrower hereunder it
shall promptly notify the Borrower of such refund or credit and shall, within
30 days after receipt of a request by the Borrower (or promptly upon receipt,
if the Borrower has requested application for such refund or credit pursuant
hereto), repay such refund or amount of credit to the Borrower, net of all
out-of-pocket expenses of such Lender and without interest; provided that the
Borrower, upon the request of such Lender (or Transferee), the Swing Line Bank,
the Fronting Bank or the Administrative Agent, agrees to return such refund or
amount of credit (plus penalties, interest or other charges) to such Lender (or
Transferee), the Swing Line Bank, the Fronting Bank or the Administrative Agent
in the event such Lender (or Transferee), the Swing Line Bank, the Fronting
Bank or the Administrative Agent is required to repay such refund or such
credit is denied or subsequently determined to be unavailable.




39






 





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



          (e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.20 shall
survive the payment in full of the principal of and interest on all Loans made
hereunder.



          (f) Each Lender (or Transferee), the Swing Line Bank or the Fronting Bank
which is organized under the laws of a jurisdiction outside the United States
shall, on or prior to the date of its execution and delivery of this Agreement
or, in the case of a Transferee, on the date on which it becomes a Lender, and
in the case of any Lender, the Swing Line Bank or the Fronting Bank, on or
prior to the date such Lender, the Swing Line Bank or the Fronting Bank changes
its funding office, and from time to time thereafter as requested in writing by
the
Borrower (but only so long thereafter as such Lender, the Swing Line Bank
or the Fronting Bank remains lawfully able to do so), shall deliver to the
Borrower and the Administrative Agent such certificates, documents or other
evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including Internal Revenue Service Form W-8BEN or Form W-8ECI and any
other certificate or statement of exemption required by Treasury Regulation
Section 1.1441-4(a) or Section 1.1441-6(c) or any subsequent version thereof,
properly completed and duly executed by such Lender (or Transferee), the Swing
Line Bank or the Fronting Bank establishing that any payment under the Loan
Documents is (i) not subject to withholding under the Code because such payment
is effectively connected with the conduct by such Lender (or Transferee), the
Swing Line Bank or the Fronting Bank of a trade or business in the United
States, or (ii) fully or partially exempt from United States tax under a
provision of an applicable tax treaty, or (iii) not subject to withholding
under the portfolio interest exception under Section 881(c) of the Code (and,
if such Lender (or Transferee), the Swing Line Bank or the Fronting Bank
delivers a Form W-8BEN claiming the benefits of exemption from United States
withholding tax under Section 881(c), a certificate representing that such
Lender (or Transferee), the Swing Line Bank or the Fronting Bank is not a
“bank” for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code). Unless the Borrower and
the Administrative Agent have received forms or other documents reasonably
satisfactory to them indicating that payments hereunder are not subject to
United States withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty, the Borrower or the Administrative Agent shall
withhold taxes from such payments at the applicable statutory rate in the case
of payments to or for any Lender (or Transferee), the Swing Line Bank or the
Fronting Bank organized under the laws of a jurisdiction outside the United
States. If a Lender (or Transferee), the Swing Line Bank or the Fronting Bank
is unable to deliver one of these forms or if the forms provided by a Lender
(or Transferee), the Swing Line Bank or the Fronting Bank at the time such
Lender (or Transferee), the Swing Line Bank or the Fronting Bank first becomes
a party to this Agreement or at the time a Lender (or Transferee), the Swing
Line Bank or the Fronting Bank changes its funding office (other than at the
request of the Borrower) indicate a United States interest withholding tax rate
in excess of zero, withholding




40






 





tax at such rate shall be considered excluded
from Taxes unless and until such Lender (or Transferee), the Swing Line Bank or
the Fronting Bank provides the appropriate forms certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes for periods governed by such appropriate forms; provided,
however, that if, at the effective date of a transfer pursuant to which a
Lender (or Transferee), the Swing Line Bank or the Fronting Bank becomes a
party to this Agreement, the Lender (or Transferee), the Swing Line Bank or the
Fronting Bank assignor was entitled to payments under Section 2.20(a) in
respect of United States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to the Lender (or Transferee), the Swing Line Bank or the Fronting Bank
assignee on such date.


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



          (h) Any Lender (or Transferee), the Swing Line Bank or the Fronting Bank
claiming any additional amounts payable pursuant to this Section 2.20 shall use
reasonable efforts (consistent with internal policy, and legal and regulatory
restrictions) to file any certificate or document requested by the Borrower or
to change the jurisdiction of its applicable lending office if the making of
such a filing or change would avoid the need for or reduce the amount of any
such additional amounts which may thereafter accrue and would not, in the
reasonable determination of such Lender (or Transferee), the Swing Line Bank or
the Fronting Bank, as the case may be, be materially disadvantageous to such
Lender (or Transferee), the Swing Line Bank or the Fronting Bank or require the
disclosure of information that the Lender (or Transferee), the Swing Line Bank
or the Fronting Bank, as the case may be, reasonably considers to be
confidential.



          Section 2.21 Mitigation Obligations; Replacement of Lenders. (a) If any Lender
(including the Administrative Agent, the Swing Line Bank and the Fronting Bank)
requests compensation under Section 2.14, or if it becomes unlawful for any
Lender (including the Administrative Agent, the Swing Line Bank and the
Fronting Bank) to make or maintain Eurodollar Loans under Section 2.15, or if
the Borrower is required to pay any additional amount to any Lender, the
Administrative Agent, the Swing Line Bank or the Fronting Bank or any
Governmental Authority for the account of any Lender, the Administrative Agent,
the Swing Line Bank or the Fronting Bank pursuant to Section 2.20, then such
Lender, the Administrative Agent, the Swing Line Bank or the Fronting Bank
shall, at the request of the Borrower, use reasonable efforts to designate a
different lending office for funding or booking its Loans or for the issuance
of Letters of Credit hereunder or to assign its rights and obligations
hereunder to




41






 





another of its offices, branches or affiliates, if, in the
judgment of such Lender, the Administrative Agent, the Swing Line Bank or the
Fronting Bank, as the case may be, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.14 or 2.20 or no
longer make it unlawful for such Lender, the Administrative Agent, the Swing
Line Bank or the Fronting Bank to make or maintain Eurodollar Loans under
Section 2.15, as the case may be, in the future and (ii) would not subject such
Lender, the Administrative Agent, the Swing Line Bank or the Fronting Bank, as
the case may be, to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender, the Administrative Agent, the Swing Line Bank
or the Fronting Bank, as the case may be. The Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender, the Administrative
Agent, the Swing Line Bank or the Fronting Bank in connection with any such
designation or assignment.


          (b) If any Lender, the Swing Line Bank or the Fronting Bank requests
compensation under Section 2.14, or if it becomes unlawful for any Lender, the
Swing Line
Bank or the Fronting Bank to make or maintain Eurodollar Loans under
Section 2.15, or if the Borrower is required to pay any additional amount to
any Lender, the Swing Line Bank or the Fronting Bank or any Governmental
Authority for the account of any Lender, the Swing Line Bank or the Fronting
Bank pursuant to Section 2.20, or if any Lender, the Swing Line Bank or the
Fronting Bank defaults in its obligation to fund Loans or issue Letters of
Credit hereunder, then the Borrower may, at its sole expense and effort, upon
notice to such Lender, the Swing Line Bank or the Fronting Bank and the
Administrative Agent, (i) require such Lender, the Swing Line Bank or the
Fronting Bank to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 9.04), all its interests,
rights and obligations under this Agreement (other than any outstanding
Competitive Loans held by it) to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment);
provided that (x) the Borrower shall have received the prior written consent of
the Administrative Agent, which consent shall not unreasonably be withheld, (y)
such assigning Lender, the Swing Line Bank or the Fronting Bank shall have
received payment of an amount equal to the outstanding principal of its Loans
(other than Competitive Loans), accrued interest thereon, accrued fees and all
other amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other amounts) and (z) in the case of any such assignment resulting
from a claim for compensation under Section 2.14 or payments required to be
made pursuant to Section 2.20, such assignment will result in a reduction in
such compensation or payments or (ii) terminate the Commitment of such Lender
upon notice given to such Lender within forty-five (45) days of receipt of the
notice given by the Lender; provided that such notice shall be accompanied by
prepayment in full of all Loans from such Lender, including accrued interest
thereon and any breakage costs, accrued fees and all other amounts payable to
such Lender, without extension, conversion or continuation. A Lender, the
Swing Line Bank or the Fronting Bank shall not be required to make any such
assignment and delegation under clause (i) above or terminate its Commitment
under clause (ii) above if, prior thereto, as a result of a waiver by such
Lender, the Swing Line Bank or the Fronting Bank or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
or termination of Commitment cease to apply.




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ARTICLE III



REPRESENTATIONS AND WARRANTIES



          The Borrower represents and warrants to each of the Lenders, the Swing
Line Bank and the Fronting Bank that:



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



          Section 3.02 Authorization. The execution, delivery and performance by the
Borrower of each of the Loan Documents and the borrowings and issuances of
Letters of Credit hereunder, and the consummation of the Tender Offer, the
Acquisition and the Merger and the other transactions contemplated hereby and
thereby (collectively, the “Transactions”) (a) have been duly authorized by all
requisite corporate and, if required, stockholder action and (b) (i) will not
violate (A) any provision of law, statute, rule or regulation, (B) the
certificate or articles of incorporation or other constitutive documents or
by-laws of the Borrower or any of its Restricted Subsidiaries, (C) any order of
any Governmental Authority or (D) any provision of any indenture, agreement or
other instrument to which the Borrower or any of its Restricted Subsidiaries is
a party or by which any of them or any of their property is or may be bound,
(ii) will not be in conflict with, result in a breach of or constitute (alone
or with notice or lapse of time or both) a default under any such indenture,
agreement or other instrument or (iii) will not result in the creation or
imposition of any Lien upon or with respect to any property or assets now owned
or hereafter acquired by the Borrower or any of its Restricted Subsidiaries
except, in each case other than (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 the Borrower and constitutes, and each other Loan Document when executed and
delivered by the Borrower will constitute, a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.



          Section 3.04 Consents and Approvals. No action, consent or approval of,
registration or filing with, or any other action by any Governmental Authority
or any other third party is or will be required in connection with the
Transactions, except as have been made or obtained (without the imposition of
any conditions that are not acceptable to the Lenders) and are in full force
and effect (other than any action, consent, approval, registration or filing
the absence




43






 





of which could not reasonably be expected, either individually or
in the aggregate with any such other consents, approvals, registrations or
filings, to result in a Material Adverse Effect). All applicable waiting
periods in connection with the Transactions have expired without any action
having been taken by any competent authority, and no law or regulation shall be
applicable, restraining, preventing or imposing materially adverse conditions
upon the Transactions or the rights of the Borrower, the Company and their
respective subsidiaries freely to transfer or otherwise dispose of, or to
create any Lien on, any properties now owned or hereafter acquired by any of
them except, in each case, as could not reasonably be expected to have a
Material Adverse Effect.


          Section 3.05 Financial Statements. (a) The Borrower has heretofore furnished to the
Lenders 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 30, 2001, audited by and accompanied by the opinion
of Arthur Andersen LLP, independent public accountants.



          (b) The Borrower has heretofore furnished to the Lenders the consolidated
pro forma balance sheet of the Borrower as of the Closing Date, certified by
the chief financial officer of the Borrower, giving effect to the Transactions
and such pro forma balance sheet fairly presents the consolidated pro forma
financial condition of the Borrower and its Subsidiaries as at such date,
giving effect to the Transactions.



          (c) WRECO has heretofore furnished to the Lenders 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 30, 2001,
audited by and accompanied by the opinion of Arthur Andersen LLP, independent
public accountants.



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



          Section 3.06 No Material Adverse Change. Other than changes in operating results
arising in the ordinary course of business and except as otherwise disclosed
publicly or to the Lenders prior to the date hereof, there has been no material
adverse change in the business, financial condition, operations or properties
of the Borrower and its subsidiaries (other than the Company and its
subsidiaries), taken as a whole, since December 30, 2001.



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




44






 





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



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



          Section 3.09 Litigation. Compliance with Laws. (a) Except as otherwise disclosed
publicly prior to December 13, 2001, there has been no action, suit,
investigation, litigation or proceeding pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any of its Restricted
Subsidiaries (other than the Company and its subsidiaries) in any court or
before any arbitrator or Governmental Authority that could reasonably be
expected to have a Material Adverse Effect.



          (b) Except as disclosed in the Borrower’s Report on Form 10-K for the
fiscal year ended December 30, 2001, neither the Borrower nor any of its
Restricted Subsidiaries (other than the Company and its subsidiaries) is in
violation of any law, rule or regulation, or in default with respect to any
judgment, writ, injunction or decree of any Governmental Authority, where such
violation or default could reasonably be expected to result in a Material
Adverse Effect.



          (c) Except as disclosed in the Company’s Report on Form 10-K for the
fiscal year ended December 31, 2001, or in the Disclosure Letter, there are no
actions, suits, investigations, litigations or proceedings pending or
threatened against or affecting the Company or any of its subsidiaries in any
court or before any arbitrator or Governmental Authority that could reasonably
be expected to have a Material Adverse Effect.



          (d) Except as disclosed in the Company’s Report on Form 10-K for the
fiscal year ended December 31, 2001, or in the Disclosure Letter, neither the
Company nor any of its subsidiaries is in violation of any law, rule or
regulation, or in default with respect to any judgment, writ, injunction or
decree of any Governmental Authority, where such violation or default could
reasonably be expected to result in a Material Adverse Effect.



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



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




45






 





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



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



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



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



          Section 3.14 No Material Misstatements. Neither the Confidential Information
Memorandum, nor any information, report, financial statement, exhibit or
schedule furnished by or on behalf of the Borrower to the Administrative Agent
or any Lender in connection with the negotiation of any Loan Document or
included therein or delivered pursuant thereto, when taken together with the
reports and other filings with the SEC, contains any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.



          Section 3.15 Compliance with ERISA. Except as would not have a Material Adverse
Effect, subject to the following sentences of this Section 3.15, each Plan
subject to ERISA or the Code, as applicable, is in compliance with ERISA and
the Code; no Reportable Event has occurred with respect to a Plan, no Plan is
insolvent or in reorganization; no Plan has an Unfunded Current Liability in
excess of $40,000,000, and all Plans collectively do not have Unfunded Current
Liabilities in excess of $91,000,000 in the aggregate, and no Plan subject to
ERISA or the Code, as applicable, has an accumulated or waived funding
deficiency, has permitted decreases in its funding standard account or has
applied for an extension of any amortization period within the meaning of
Section 412 of the Code; neither the Borrower nor any ERISA Affiliate has
incurred any liability to or on account of a Plan pursuant to Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section
4975 of the Code or expects to incur any material liability
under any of the foregoing Sections with respect to any such Plan; no
condition exists which presents a risk to the Borrower or any ERISA Affiliate
of incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no proceedings have been instituted to
terminate any Plan; no lien imposed under the Code or ERISA on the assets of
the Borrower or any ERISA Affiliate exists or is likely to arise on account of
any Plan; the Borrower and its Subsidiaries do not maintain or contribute to
any




46






 





“welfare plan” (within the meaning of Section 3(1) of ERISA) which provides
life insurance or health benefits to retirees (other than as required by
Section 601 of ERISA) the obligations with respect to which could reasonably be
expected to have a Material Adverse Effect.


          Section 3.16 Environmental Matters. (a) Except as disclosed in the Borrower’s
Report on Form 10-K for the fiscal year ended December 30, 2001, filed with the
SEC, (a) neither the Borrower nor any of its Subsidiaries (other than the
Company and its subsidiaries) has failed to comply with any Federal, state,
local and other statutes, ordinances, orders, judgments, rulings and
regulations relating to environmental pollution or to environmental regulation
or control, where any such failure to comply, alone or together with any other
such noncompliance, could result in a Material Adverse Effect; (b) neither the
Borrower nor any of its Subsidiaries (other than the Company and its
subsidiaries) has received notice of any failure so to comply which alone or
together with any other such failure could result in a Material Adverse Effect;
and (c) the Borrower’s and its Subsidiaries’ plants (other than the plants of
the Company and its subsidiaries) have not managed any hazardous wastes,
hazardous substances, hazardous materials, toxic substances or toxic
pollutants, as those terms are used in the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response Compensation and Liability Act,
the Hazardous Materials Transportation Act, the Toxic Substance Control Act,
the Clean Air Act, the Clean Water Act or any other Environmental Law, in
violation of any regulations promulgated pursuant thereto or in any other
applicable law where such violation could reasonably result, individually or
together with other violations, in a Material Adverse Effect.



          (b) Except as disclosed in the Company’s Report on Form 10-K for the
fiscal year ended December 31, 2001, filed with the Securities and Exchange
Commission, (a) neither the Company nor any of its subsidiaries has failed to
comply with any Federal, state, local and other statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental pollution or to
environmental regulation or control, where any such failure to comply, alone or
together with any other such noncompliance, could result in a Material Adverse
Effect; (b) neither the Company nor any of its subsidiaries has received notice
of any failure so to comply which alone or together with any other such failure
could result in a Material Adverse Effect; and (c) the Company’s and its
subsidiaries’ plants have not managed any hazardous wastes, hazardous
substances, hazardous materials, toxic substances or toxic pollutants, as those
terms are used in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other Environmental Law, in violation of any regulations
promulgated pursuant thereto or in any other applicable law where such
violation could reasonably be expected to result, individually or together with
other violations, in a Material Adverse Effect.



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




47






 





occupied or controlled by the Borrower or such
Restricted Subsidiaries; and (c) as may be required by law.


          Section 3.18 Existing Senior Credit Facilities. Schedule 3.18 sets forth, as of
the Closing Date, a complete and accurate list of the Existing Senior Credit
Facilities of the Borrower, the Company and their respective subsidiaries
(other than the Surviving Senior Credit Facilities), showing as of the Closing
Date the obligor and the principal amount outstanding thereunder.



          Section 3.19 Surviving Senior Credit Facilities. Schedule 3.19 sets forth, as of
the Closing Date, a complete and accurate list of the Surviving Senior Credit
Facilities of the Borrower, the Company and their respective subsidiaries,
showing as of the Closing Date the obligor and the principal amount outstanding
thereunder.



          Section 3.20 Non-Material Loans. Except as disclosed on Schedule 3.19,
there shall not be more than $50,000,000 of Non-Material Loans of the Borrower
and its Restricted Subsidiaries in the aggregate outstanding as of the Closing
Date.



ARTICLE IV



CONDITIONS OF LENDING AND ISSUANCE

OF LETTERS OF CREDIT



          The obligations of the Lenders to make Loans hereunder and the obligation
of the Fronting Bank to issue Letters of Credit hereunder (or to amend, renew
or extend an existing Letter of Credit) are subject to the satisfaction of the
following conditions:



          Section 4.01 All Borrowings and Issuances. On the date of each Borrowing and on
the date of each issuance of a Letter of Credit (and each amendment, renewal or
extension thereof):




		
	 	     (a) Notice. The Administrative Agent and, as applicable, the Swing
Line Bank or the Fronting Bank shall have received from the Borrower a
notice of such
Borrowing or a notice of such issuance, amendment, renewal or
extension as required by Section 2.02, 2.03, 2.04, 2.05 or 2.06, as
applicable.




		
	 	     (b) Representations. The representations and warranties of the
Borrower set forth in Sections 3.01, 3.02, 3.03, 3.04, 3.07, 3.10(b),
3.11 and 3.12 shall be true and correct in all material respects on and
as of such date with the same effect as though made on and as of such
date at the time of and immediately after such Borrowing or, at the time
of and immediately after the issuance, amendment, renewal or extension of
a Letter of Credit hereunder.




		
	 	     (c) Compliance, etc. The Borrower shall be in compliance with all
the terms and provisions set forth herein and in each other Loan Document
on their part to be observed or performed, and, as applicable, at the
time of and immediately after such Borrowing or, at the time of and
immediately after such issuance, amendment, renewal or



48






 







		
	 	     extension of a
Letter of Credit hereunder, no Event of Default or Default shall have
occurred and be continuing.



          Each Borrowing and each issuance of a Letter of Credit hereunder (or an
amendment, renewal or extension thereof) shall be deemed to constitute a
representation and warranty by the Borrower on the date of such Borrowing,
issuance, amendment, renewal or extension, as the case may be, as to the
matters specified in paragraphs (b) and (c) of this Section 4.01.



          Section 4.02 Closing Date. 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) Cravath, Swaine & Moore, special counsel
for the Borrower, dated the Closing Date and addressed to the Lenders, in
form and substance reasonably satisfactory to the Administrative Agent
and (ii) Lorrie Scott, Esq., Senior Legal Counsel to the Borrower, as
counsel for the Borrower, dated the Closing Date and addressed to the
Lenders, in form and substance reasonably satisfactory to the
Administrative Agent.




		
	 	     (b) Legal Matters. All legal matters (including any documentation)
related to this Agreement and the Transactions, shall be satisfactory to
the Lenders and to Shearman & Sterling, special counsel for the
Administrative Agent.




		
	 	     (c) Articles, etc. The Administrative Agent shall have received (i)
a copy of the certificate or articles of incorporation, including all
amendments thereto, of the Borrower, certified as of a recent date by the
Secretary of State of its State of incorporation, and a certificate as to
the good standing of the Borrower, as of a recent date, from such
Secretary of State; (ii) a certificate from the Borrower of its Secretary
or Assistant Secretary dated the Closing Date and certifying (A) that
attached thereto is a true and complete copy of the by-laws of the
Borrower as in effect on the Closing Date and at all times since a date
prior to the date of the resolutions described in clause (B) below, (B)
that attached thereto is a true and complete copy of resolutions duly
adopted
by the Board of Directors of the Borrower authorizing the execution,
delivery and performance of the Borrower of any and all documents and
agreements to be entered into with respect to the Loan Documents and the
borrowings to be made thereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C) that
the certificate or articles of incorporation of the Borrower have not
been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above, and
(D) as to the incumbency and specimen signature of each officer executing
any Loan Document or any other document or agreement delivered in
connection with the Transactions on behalf of the Borrower; (iii)
certification of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents as the
Lenders or Shearman & Sterling, special counsel for the Administrative
Agent, may reasonably request.




49










 




		
	 	     (d) Officers’ Certificates. The Administrative Agent shall have
received a certificate from the Borrower, dated the Closing Date and
signed by a Financial Officer of the Borrower, confirming (i) compliance
with the condition precedent set forth in paragraph (c) of Section 4.01
and (ii) that the representations and warranties of the Borrower set
forth herein are true and correct in all material respects on and as of
the Closing Date (except for representations and warranties expressly
stated to relate to a specific earlier date, in which case such
representations and warranties are true and correct in all material
respects as of such earlier date), immediately prior to, and after giving
effect to, the initial Borrowing and/or the initial issuance of a Letter
of Credit hereunder.
	 
	 	     (e) Fees. The Administrative Agent and the Lenders shall have
received all Fees and other amounts due and payable on or prior to the
Closing Date.
	 
	 	     (f) Loan Documents. The Administrative Agent shall have received a
fully executed counterpart of this Agreement, and an executed copy of
each Loan Document (other than this Agreement).
	 
	 	     (g) Termination of Existing Senior Credit Facilities. On the
Closing Date the Administrative Agent shall have received written
evidence reasonably satisfactory to it that either (i) all Existing
Senior Credit Facilities, other than the Surviving Senior Credit
Facilities, have been prepaid, redeemed or defeased in full or otherwise
satisfied and extinguished or (ii) arrangements reasonably satisfactory
to the Administrative Agent and the Lenders for such prepayment,
redemption, defeasance, satisfaction or extinguishment have been made;
and all Surviving Senior Credit Facilities shall be on terms and
conditions reasonably satisfactory to the Administrative Agent and the
Lenders.
	 
	 	     (h) Rating. The Rating of the Borrower’s Senior Unsecured Long-Term
Debt, shall be at least Baa3 by Moody’s and at least BBB- by S&P and, if
the Borrower is rated in the above referenced lowest categories by both
Moody’s and S&P, shall not have been placed on credit watch by either
Moody’s or S&P with negative implications, as of the Closing Date.
	 
	 	     (i) No Material Adverse Change. Other than changes in operating
results arising in the ordinary course of business and except as
otherwise disclosed publicly or to the Lenders prior to the date hereof,
there has been no material adverse change in the business, financial
condition, operations or properties of the Company and its subsidiaries,
taken as a whole, since December 31, 2001.



ARTICLE V



AFFIRMATIVE COVENANTS



          The Borrower covenants and agrees with each Lender, the Swing Line Bank,
the Fronting Bank and the Administrative Agent that, so long as this Agreement
shall remain in effect or the principal of or interest on any Loan, any Fees or
any other expenses or amounts payable under any Loan Document shall be unpaid,
or any Letters of Credit shall remain




50






 





outstanding, or any amounts drawn
thereunder shall remain unpaid, unless the Required Lenders (or, where
indicated, the Lenders) shall otherwise consent in writing, the Borrower will,
and will cause each of its Restricted Subsidiaries and WRECO and each of the
Restricted Subsidiaries of WRECO (except in the case of Sections 5.03 (which
applies to the Borrower), 5.06 (which applies to the Borrower, WRECO and their
respective ERISA Affiliates) and 5.09 (which applies to the Borrower, WRECO and
all of their respective Subsidiaries)) to:


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



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



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



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



          Section 5.03 Obligations and Taxes. Pay its obligations (other than
Indebtedness) promptly and in accordance with their terms and pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in




51






 





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


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



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



52






 







		
	 	Sections 6.01(d) and 6.01(e) and (iii) including a
reconciliation setting forth adjustments made to such financial
statements in order to make the calculations set forth in clause (ii)
above;




		
	 	     (d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
it or any of its Subsidiaries with the SEC, or with any national
securities exchange, or distributed to its shareholders, as the case may
be;
	 
	 	     (e) as soon as practicable, copies of such further financial
statements and reports as the Borrower or WRECO shall send to banks with
which it has lines of credit, and all such financial statements and
reports as the Borrower or WRECO shall send to its shareholders (unless
all of the outstanding shares of capital stock of the Borrower or WRECO
are held by one Person);
	 
	 	     (f) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of the Borrower
or WRECO or any of their respective Subsidiaries, or compliance with the
terms of any Loan Document, as the Administrative Agent, the Swing Line
Bank, the Fronting Bank or any Lender may reasonably request (it being
understood that the Borrower shall not be required to provide any
information or documents which are subject to confidentiality provisions
the nature of which prohibit such disclosure);
	 
	 	     (g) promptly, and in any event within 2 days, upon becoming aware
thereof, notice of any proposed or actual down-grade, suspension or
withdrawal of the rating provided by S&P or Moody’s to the Borrower in
respect of its Senior Unsecured Long-Term Debt; and
	 
	 	     (h) information required to be delivered pursuant to paragraphs (a),
(b), (d) and (e) shall be deemed to have been delivered on the date on
which the Borrower provides notice to the Administrative Agent that such
information has been posted on the Borrower’s website on the internet at
the website address listed on the signature pages thereof, at www.sec.gov
or at another website identified in such notice and accessible by the
Lenders without charge; provided that the Borrower shall deliver paper
copies of the reports and financial statements referred to in paragraphs
(a), (b), (d) and (e) of this Section 5.04 to the Administrative Agent,
the Swingline Bank, the Fronting Bank or any Lender who requests the
Borrower to deliver such paper copies until written notice to cease
delivering paper copies is given by such Administrative Agent, Swingline
Bank, Fronting Bank or Lender to the Borrower.



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




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



53






 







		
	 	by or before any Governmental
Authority, against the Borrower, WRECO or any of their respective
Affiliates which, if adversely determined, could reasonably be expected
to result in a Material Adverse Effect;
	 
	 	     (c) any development that has resulted in a Material Adverse Effect;
and
	 
	 	     (d) the issuance by any Governmental Authority of any injunction,
order, decision or other restraint prohibiting, or having the effect of
prohibiting, the making of the Loans or the initiation of any litigation
or similar proceeding seeking any such injunction, order or other
restraint;



provided, that in each case (other than Subsection 5.05(a)) the Borrower shall
not be required to provide separate notice of any event disclosed in any report
promptly filed with the SEC.


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



          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 the Borrower, WRECO or
any of their Restricted Subsidiaries at reasonable




54






 





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


          Section 5.08 Use of Proceeds. Use the credit extended pursuant to this
Agreement only for the purposes set forth in the recitals to this Agreement.



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



          (b) None of the Borrower, WRECO or any of their respective Subsidiaries
will generate, use, treat, store, Release, or permit the generation, use,
treatment, storage or Release of Hazardous Materials on any real property owned
or leased by the Borrower, WRECO or any of their respective Subsidiaries, or
transport or permit the transportation of Hazardous Materials to or from any
such real property, except for quantities generated, used, treated, stored, or
Released on, or transported to or from, such real property in the ordinary
course of business in material compliance with all applicable Environmental
Laws and, except for such generation, use, treatment or storage on, or
transportation to or from, any such real property of Hazardous Materials as is
not, in any case or in the aggregate, reasonably likely to have a Material
Adverse Effect.



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





55






 





property owned or leased by the Borrower, WRECO or an affected Subsidiary
prepared by an environmental consulting firm approved by the Required Lenders,
indicating the presence or absence of Hazardous Materials and the potential
costs of any removal or remedial action in connection with any Hazardous
Materials on any real property owned or leased by the Borrower, WRECO or any of
their respective Subsidiaries.


          (d) The Borrower or WRECO, as applicable, will immediately advise the

Administrative Agent in writing of any of the following:




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



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


          Section 5.10 Performance of Transaction Agreements. Perform and observe
all of the material terms and provisions of the agreements to be performed or
observed by it with respect to the Transactions.


56






 


          Section 5.11 OCBM Agreement. With respect to the Borrower, perform,
observe and comply with each of its covenants and agreements in the OCBM
Agreement, and do or cause to be done all things necessary to keep the OCBM
Agreement in full force and effect.



          Section 5.12 Further Assurances. Promptly cause to be taken, executed,
acknowledged or delivered, at the sole expense of the Borrower or WRECO, as
applicable, all such further acts, documents and assurances as the Required
Lenders may from time to time reasonably request in order for the Borrower or
WRECO to carry out its obligations hereunder and under the other Loan
Documents.



          Section 5.13 Guarantee. On or prior to March 31, 2003, cause the Company
either (i) to merge with and into the Borrower (with the Borrower being the
surviving corporation) or (ii) to execute for the
benefit of the Administrative Agent, the Swing Line Bank, the Fronting
Bank and the Lenders a Guarantee, in form and substance reasonably satisfactory
to the Administrative Agent, pursuant to which the Company shall guarantee the
obligations of the Borrower arising under this Agreement and the other Loan
Documents; provided that the obligations of the Company under such Guarantee
shall rank in right of payment at least pari passu with all other unsecured
senior Indebtedness of the Company; and provided further that such Guarantee
shall be limited to an amount that would not render the Company insolvent. In
addition, to the extent the Company guarantees any obligations of the Borrower
with respect to an issuance by the Borrower of Indebtedness pursuant to a
public offering registered with the SEC, a Rule 144A or Regulation S private
placement or any other similar offering on an underwritten or placement-agent
basis, the Borrower shall cause the Company to execute, promptly but in any
case no later than forty-five days after the date of such issuance, for the
benefit of the Administrative Agent, the Swing Line Bank, the Fronting Bank and
the Lenders, a Guarantee, in form and substance reasonably satisfactory to the
Administrative Agent, pursuant to which the Company shall equally and ratably
guarantee the obligations of the Borrower arising under this Agreement and the
other Loan Documents; provided that such Guarantee shall not render the Company
insolvent.



ARTICLE VI



NEGATIVE COVENANTS



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




		
	 	     (a) Secured Indebtedness. (i) Issue, assume or guarantee, or
permit any of its Restricted Subsidiaries to issue, assume or guarantee,
any indebtedness for money borrowed (hereinafter in this Section 6.01(a)
referred to as “debt”), if such debt is secured by a deed of trust,
mortgage, pledge, security interest or other lien or encumbrance (any



57






 







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




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




		
	 	     (ii) Notwithstanding the provisions of paragraph (a)(i) of this
Section 6.01, the Borrower or any of its Restricted Subsidiaries may
issue, assume or guarantee secured debt which would otherwise be subject
to the foregoing restrictions in an aggregate



58






 







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




		
	 	     (b) Sale and Lease-Back. Enter into any arrangement, or permit any
Restricted Subsidiary to enter into any arrangement, with any Person
providing for the leasing by the Borrower or any of its Restricted
Subsidiaries of any real property in the United States (except for
temporary leases for a term of not more than three years), which property
has been or is to be sold or transferred by the Borrower or such
Restricted Subsidiary to such Person (herein referred to as a “Sale and
Lease-Back Transaction”), unless (i) the Borrower or such Restricted
Subsidiary would be entitled to incur debt secured by a mortgage on the
property to be leased without equally or ratably securing the Loans
pursuant to Section 6.01(a), or (ii) the Borrower applies an amount equal
to the fair value (as determined by the Board of Directors of the
Borrower) of the property so leased to the retirement (other than any
mandatory retirement), within 90 days of the effective date of any such
Sale and Lease-Back Transaction, of indebtedness for borrowed money
incurred or assumed by the Borrower which by its terms matures at, or is
extendible or renewable at the option of the obligor to, a date more than
12 months after the date of the creation of such debt.



59






 







		
	 	     (c) Merger, Consolidation, etc. Be a party to a merger or
consolidation or sell, transfer or otherwise dispose of all or
substantially all of its properties or assets in a single transaction or
in a series of related transactions unless (i) such merger,
consolidation, sale, transfer or disposition is made with respect to
another corporation incorporated and doing business primarily within the
United States of America which shall expressly assume, in form and
substance reasonably satisfactory to the Required Lenders, the
obligations of the Borrower under the Loan Documents and the Borrower’s
Loans and Letters of Credit, and (ii) immediately after giving effect to
such merger, consolidation, sale, transfer or disposition, no Default or
Event of Default hereunder shall have occurred and be continuing.
	 
	 	     (d) Debt Ratio. Permit Total Funded Indebtedness to exceed (i) on
or after the Closing Date, 72% of the sum of the Borrower’s Total
Adjusted Shareholders’ Interest and Total Funded Indebtedness, (ii) on or
after December 31, 2003, 69% of such sum and (iii) on or after June 30,
2005, 65% of such sum.




		
	 	     (e) Net Worth. At any time permit the Borrower’s Total Adjusted
Shareholders’ Interest to be less than $4,955,000,000.




		
	 	     (f) Change in Business. Engage in, or permit any Restricted
Subsidiary to engage in, any material business activities or operations
substantially different from, or unrelated to, the business activities
and operations conducted by it as of the date hereof, except for
reasonable extensions, developments and modifications thereof.



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



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



          (b) Limitation on Indebtedness. Create, issue, guarantee, assume or
otherwise become liable, directly or indirectly, or permit any Restricted
Subsidiary of WRECO to create, issue, guarantee, assume or otherwise
become liable, directly or indirectly, in respect of any (i) Senior Debt
of WRECO or Indebtedness of any Restricted Subsidiary of WRECO if,
immediately after giving effect to the incurrence thereof and to the
application of the proceeds thereof, the aggregate principal amount of
all consolidated Senior Debt of WRECO and its Restricted Subsidiaries
then outstanding would exceed 80% of the sum of (x) the Capital Base plus
(y) the aggregate principal amount of Senior Debt of WRECO and its
Restricted Subsidiaries then outstanding; or (ii) Subordinated Debt of
WRECO if, immediately after giving effect to the incurrence thereof and
to the application of the proceeds thereof, the aggregate principal
amount of Subordinated Debt of WRECO then outstanding would exceed 100%
of Adjusted Net Worth. For purposes




60






 





of this Section and Section 6.02(c),
Indebtedness of a Person which becomes a Restricted Subsidiary on any
date shall be deemed to have been issued or incurred as of such date.




		
	 	     (c) Limitation on Mortgages and Liens. Create, incur or permit to
exist any mortgage, pledge, encumbrance, lien, security interest or
charge of any kind (including liens or charges upon properties acquired
or to be acquired under conditional sales agreements or other title
retention devices) on its property or assets, whether now owned or
hereafter acquired, or upon any income or profits thereof, or permit any
of its Restricted Subsidiaries to do any of the foregoing, except:




		
	 	     (i) liens, charges, encumbrances and priority claims
incidental to the conduct of the business or the ownership of
properties and assets (including warehousemen’s, attorneys’ and
statutory landlords’ liens) and liens, pledges or deposits in
connection with workmen’s compensation, unemployment insurance, old
age benefit or social security obligations, taxes, assessments,
statutory obligations or other similar charges, liens of
contractors, mechanics and materialmen, good faith deposits in
connection with tenders, contracts or leases to which WRECO or any
of its Restricted Subsidiaries is a party or other deposits
required to be made in the ordinary course of business and not in
connection with the borrowing of money, easements, rights of way,
restrictions and other similar encumbrances that, in the aggregate,
are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto
or substantially interfere with the ordinary conduct of WRECO’s
business; provided in each case the obligation secured is not
overdue or, if overdue, is being contested in good faith by
appropriate proceedings;
	 
	 	     (ii) provided that no Default or Event of Default has occurred
and is continuing, the pledge of assets for the purpose of securing
any appeal or stay or discharge in the course of any legal
proceeding and liens on or resulting from judgments or awards in
respect of which WRECO or any of its Restricted Subsidiaries shall
in good faith be prosecuting an appeal or proceeding for review;
	 
	 	     (iii) mortgages, liens or security interests existing as of
the date of this Agreement securing obligations of WRECO or any of
its Restricted Subsidiaries outstanding on such date and all
renewals, extensions or refundings thereof (without increase in the
principal amount remaining unpaid at the time of any such renewal,
extension or refunding);
	 
	 	     (iv) mortgages, liens or security interests securing
Indebtedness of a Restricted Subsidiary of WRECO to another
Restricted Subsidiary of WRECO or to WRECO;
	 
	 	     (v) mortgages, conditional sale contracts, security interests
or other arrangements for the retention of title (including
financing leases), in addition to those permitted under
subparagraphs (iii), (iv), (vi) and (vii) hereof, given to secure
the payment of the purchase price incurred in connection with the
acquisition of property useful and intended to be used in carrying
on the business



61






 







		
	 	of WRECO or a Restricted Subsidiary of WRECO, and
liens existing on such property at the time of acquisition thereof
or at the time of acquisition by WRECO or a Restricted Subsidiary
of any Person then owning such property whether or not such
existing liens were given to secure the payment of the purchase
price of the property to which they attach; provided that the lien
or charge shall attach solely to the property acquired or purchased
and any improvements then or thereafter placed thereon;
	 
	 	     (vi) mortgages, security interests and other encumbrances or
liens on Real Estate Assets, incurred or created in the ordinary
course of the business of
WRECO and its Restricted Subsidiaries; provided that the
aggregate principal amount of all Indebtedness so secured and at
any one time outstanding shall not exceed 10% of the Capital Base
at such time; and
	 
	 	     (vii) mortgages, conditional sale contracts, security
interests or other arrangements for the retention of title
(including financing leases), in addition to those specifically
permitted by foregoing subparagraphs (i) through (vi) hereof, given
to secure the payment of Senior Debt of WRECO or any of its
Restricted Subsidiaries, and any renewal, extension or refunding of
any such Senior Debt; provided that the aggregate principal amount
of all Senior Debt of WRECO and its Restricted Subsidiaries so
secured and at any one time outstanding shall not exceed 10% of the
Capital Base at such time.




		
	 	     In the event that any property is subjected to a lien or other
encumbrance in violation of this Section 6.02(c), WRECO will make or
cause to be made effective provision whereby the Loans shall be secured
equally and ratably with all other obligations secured thereby (provided,
however, that such violation shall constitute a default under this
Agreement whether or not such provision is made) and, if such provision
is not made, an equitable lien, so equally and ratably securing the
Loans, shall (to the extent permitted by law) exist on such property.
	 
	 	     (d) Limitation on Mergers and Consolidations. Be a party to any
merger or consolidation unless (i) WRECO or a Weyerhaeuser Subsidiary (as
defined below) having substantially all of its assets and doing business
primarily in the United States of America shall be the surviving or
resulting corporation of any such merger or consolidation and immediately
after giving effect to any such merger or consolidation such successor
corporation, whether or not WRECO, shall be entitled to incur at least $1
of additional Senior Debt under Section 6.02(b); (ii) if the surviving or
resulting corporation is not WRECO, the surviving or resulting
corporation shall be a Weyerhaeuser Subsidiary incorporated within the
United States of America and shall expressly assume the obligations of
WRECO under this Agreement and the other Loan Documents to which it is a
party by supplemental agreement reasonably satisfactory to the
Administrative Agent; (iii) immediately after giving effect to any such
merger or consolidation, no Default or Event of Default shall have
occurred and be continuing; and (iv) WRECO shall have delivered to the
Administrative Agent a certificate signed by two of WRECO’s officers
stating that such merger or consolidation and, if a supplemental
agreement is required in connection therewith as aforesaid, such
supplemental agreement



62






 







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



ARTICLE VII



EVENTS OF DEFAULT



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




		
	 	     (a) default shall be made in the payment by the Borrower of any
principal of any Loan or any reimbursement of any L/C Disbursement, when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;
	 
	 	     (b) default shall be made in the payment by the Borrower of any
interest on any Loan or any Fee or any other amount (other than an amount
referred to in Section 7.01(a) above) due under any Loan Document, when
and as the same shall become due and payable, and such default shall
continue unremedied for a period of five days;
	 
	 	     (c) any representation or warranty made or deemed made by the
Borrower in or in connection with any Loan Document or the borrowings or
Letters of Credit hereunder, or any representation, warranty, statement
or information contained in any report, certificate, financial statement
or other instrument furnished in connection with or



63






 







		
	 	pursuant to any Loan
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
	 
	 	     (d) default shall be made in the due observance or performance by

the Borrower, WRECO or any of their respective Subsidiaries (or their
respective Restricted Subsidiaries, if such covenant, condition or
agreement applies only to Restricted Subsidiaries) of any covenant,
condition or agreement contained in Section 5.01(a), 5.05(a), 5.08 or
5.13 or in Article VI;
	 
	 	     (e) default shall be made in the due observance or performance by
the Borrower, WRECO or any of their respective Subsidiaries (or their
respective Restricted Subsidiaries, if such covenant, condition or
agreement applies only to Restricted Subsidiaries) of any covenant,
condition or agreement contained in any Loan Document (other than those
specified in 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, the Swing Line Bank, the
Fronting Bank or any Lender to the Borrower or WRECO;
	 
	 	     (f) the Borrower, WRECO or any of their respective Restricted
Subsidiaries shall (i) fail to pay, when and as the same shall become due
and payable (and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument related to such
Indebtedness) any principal or interest, regardless of amount, due in
respect of Indebtedness in an aggregate principal amount in excess of
$100,000,000, or (ii) fail to observe or perform any other terms,
covenants, conditions or agreements contained in any agreements or
instruments evidencing or governing Indebtedness in an aggregate
principal amount in excess of $100,000,000 (and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument related to such Indebtedness), if the effect of
any failure or failures referred to in this Section 7.01(f)(ii) is to
cause or permit the holder or holders of such Indebtedness or a trustee
on its or their behalf (with or without the giving of notice) to cause
such Indebtedness to become due prior to its stated maturity; provided
that any Transaction-Related Event of Default that, but for this proviso,
would be a Default or an Event of Default pursuant to this Section
7.01(f) prior to November 11, 2002, shall be deemed to be neither a
Default nor an Event of Default;
	 
	 	     (g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of the Borrower, WRECO or any of their respective
Restricted Subsidiaries, or of a substantial part of the property or
assets of the Borrower, WRECO or any of their respective Restricted
Subsidiaries, under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower, WRECO or any of their respective Restricted
Subsidiaries or for a substantial part of the property or assets of the
Borrower, WRECO or any of their respective Restricted Subsidiaries or
(iii) the winding-up or liquidation of the Borrower, WRECO or any of
their respective Restricted Subsidiaries;



64






 







		
	 	and such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;
	 
	 	     (h) the Borrower, WRECO or any of their respective Restricted
Subsidiaries shall (i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in Section 7.01(g)
above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official
for the Borrower, WRECO or any of their respective Restricted
Subsidiaries or for a substantial part of the property or assets of the
Borrower, WRECO or any of their respective Restricted Subsidiaries, (iv)
file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable, admit in writing its inability
or fail generally to pay its debts as they become due or (vii) take any
action for the purpose of effecting any of the foregoing;
	 
	 	     (i) one or more judgments for the payment of money in an aggregate
amount in excess of $100,000,000 shall be rendered against the Borrower,
WRECO, any of their respective Restricted Subsidiaries or any combination
thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to levy upon
assets or properties of the Borrower, WRECO or any of their respective
Restricted Subsidiaries to enforce any such judgment;
	 
	 	     (j) any Plan shall fail to satisfy the minimum funding standard
required for any plan year or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the
Code, any Plan is, shall have been or is likely to be terminated or the
subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, or the Borrower has incurred or is likely to
incur a liability to or on account of a Plan under Sections 409, 502(i),
502(l), or 515 of ERISA or Section 4975 of the Code, or the Borrower or
any ERISA Affiliate has incurred or is likely to incur a liability to or
on account of a Plan under Sections 4062, 4063, 4064, 4069, 4201 or 4204
of ERISA; and there shall result from any such event or events referred
to in this Section 7.01(j) the imposition of a lien upon the assets of
the Borrower or any ERISA Affiliate, the granting of a security interest,
a liability or a material risk of incurring a liability to the PBGC or
the Internal Revenue Service or a Plan or a trustee appointed under ERISA
or a liability or a material risk of incurring a liability under Sections
409, 502(i) or 502(l) of ERISA or under Sections 4971 or 4975 of the
Code; which, in the good faith determination of the Required Lenders,
will have a Material Adverse Effect;
	 
	 	     (k) there shall have occurred a Change in Control of the Borrower or
WRECO; or



65






 







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



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


ARTICLE VIII



THE ADMINISTRATIVE AGENT



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



          The Administrative Agent is hereby expressly authorized by the Lenders,
the Swing Line Bank and the Fronting Bank, without hereby limiting any implied
authority, (a) to receive on behalf of the Lenders, the Swing Line Bank and the
Fronting Bank, all payments of principal of and interest on the Loans, all
reimbursements made with respect to L/C Disbursements and all other amounts due
to the Lenders, the Swing Line Bank and the Fronting Bank hereunder, and
promptly to distribute to each Lender, the Swing Line Bank and the Fronting
Bank its proper share of each payment so received; (b) to give prompt notice on
behalf of the Lenders, the Swing Line Bank and the Fronting Bank to the
Borrower of any Event of




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Default specified in this Agreement of which the
Administrative Agent has actual knowledge acquired in connection with its
agency hereunder; and (c) to distribute promptly to each Lender, the Swing Line
Bank and the Fronting Bank copies of all notices, financial statements and
other materials delivered by the Borrower and WRECO pursuant to this Agreement
as received by the Administrative Agent.



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



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




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

Affiliates in any capacity.



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



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



          Each of the Lenders, the Swing Line Bank and the Fronting Bank agrees (i)
to reimburse the Administrative Agent, on demand, in the amount of its pro rata
share (based on its Commitment hereunder) of any expenses incurred for the
benefit of the Lenders, the Swing Line Bank and the Fronting Bank by the
Administrative Agent, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, the Swing Line
Bank and the Fronting Bank, which shall not have been reimbursed by the
Borrower and (ii) to indemnify and hold harmless the Administrative Agent and
any of its directors, officers, employees or agents, on demand, in the amount
of such pro rata share, from and against any and all 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




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Administrative Agent or any of them in any way relating to or arising out of
this Agreement or any other Loan Document or any action taken or omitted by it
or any of them under this Agreement or any other Loan Document, to the extent
the same shall not have been reimbursed by the Borrower; provided that no
Lender, nor the Swing Line Bank nor the Fronting Bank, shall be liable to the
Administrative Agent for any portion of such 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, the Swing Line Bank and the Fronting Bank
acknowledges that it has, independently and without reliance upon the
Administrative Agent, any other Lender, the Swing Line Bank or the Fronting
Bank and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
of the Lenders, the Swing Line Bank and the Fronting Bank also acknowledges
that it will, independently and without reliance upon the Administrative Agent,
any other Lender, the Swing Line Bank or the Fronting Bank and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement or any other Loan Document, any related agreement or
any document furnished hereunder or thereunder.



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



ARTICLE IX



MISCELLANEOUS



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



		
	 	     (a) if to the Borrower by hand or courier service, to it at 33663
Weyerhaeuser Way South, Federal Way, Washington, or by facsimile to (253)
924-3543, in each case to the Attention of Vice President and Treasurer
with a copy to Secretary;
	 
	 	     (b) if to the Administrative Agent or a Lender, to it at its address
(or telecopy number) set forth in Schedule 9.01 or in the Assignment and
Acceptance pursuant to which such Lender became a party hereto.



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



          Section 9.02 Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders, the Swing Line Bank and the Fronting Bank
and shall survive the making of the Loans and the issuance of the Letters of
Credit, regardless of any investigation made by the Lenders, the Swing Line
Bank or the Fronting Bank or on their behalf, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any Fee or any L/C Disbursement or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid and so long as
the Commitments and all Letters of Credit hereunder have not been terminated.



          Section 9.03 Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have received copies hereof which, when
taken together, bear the signatures of each Lender, the Swing Line Bank and the
Fronting Bank and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Administrative Agent, each Lender, the Swing Line Bank and
the Fronting Bank and their respective successors and assigns, except that
other than as provided in Section 6.01(c), the Borrower shall not have the
right to assign or delegate its rights or obligations hereunder or any interest
herein without the prior consent of all the Lenders, the Swing Line Bank and
the Fronting Bank.



          Section 9.04 Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that,
other than as provided in Section 6.01(c), the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.



          (b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it and the Letters of Credit
issued at such time); provided that (i) except in the case of an assignment to
a Lender or a Lender Affiliate, the Borrower and the Administrative Agent must
give their prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed), (ii) except in the case of an assignment to
a Lender or a Lender Affiliate or an assignment of the entire remaining amount
of the assigning Lender’s Commitment, the amount of the Commitment of the
assigning Lender subject to each




70






 





 such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement, except that this clause (iii) shall not apply to rights
in respect of outstanding Competitive Loans, (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with a processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender prior to such assignment, shall
deliver to the Administrative Agent an Administrative Questionnaire; and
provided further that any consent of the Borrower otherwise required under this
paragraph shall not be required if a Default or Event of Default has occurred
and is continuing. Subject to acceptance and recording thereof pursuant to
paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.16, 2.20 and 9.05). Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply
with this paragraph shall be treated for purposes of this Agreement as a sale
by such Lender of a participation in such rights and obligations in accordance
with paragraph (e) of this Section.


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



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



          (e) Any Lender may, without the consent of the Borrower, sell
participations to one or more banks or other entities (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment, the Loans




71






 





owing to it and the
Letters of Credit issued hereunder); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.08(b) that affects such Participant. Subject to paragraph (f) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.14, 2.16 and 2.20 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.06 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.18 as though it were a
Lender.


          (f) A Participant shall not be entitled to receive any greater payment
under Section 2.14 or 2.20 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower’s
prior written consent.



          (g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement and the other Loan Documents
(including, without limitation, any notes held by it pursuant to Section
2.08(e)) to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank without notice to,
or consent of, the Borrower or the Administrative Agent, and this Section 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) The Borrower authorizes each Lender to disclose to any Participant or
assignee and any prospective Participant or assignee any and all financial
information in such Lender’s possession concerning the Borrower or any
Subsidiary of the Borrower which has been delivered to such Lender by the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by the Borrower in connection with such Lender’s credit evaluation of the
Borrower prior to entering into this Agreement; provided that such Participant
or assignee or prospective Participant or assignee agrees to treat any such
information which is not public as confidential in accordance with the terms of
this Agreement.



          Section 9.05 Expenses; Indemnity. (a) The Borrower agrees to pay all
reasonable out-of-pocket expenses incurred by the Administrative Agent in
connection with the preparation of this Agreement and the other Loan Documents
or in connection with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the Administrative Agent, any
Lender, the Swing Line Bank or the Fronting Bank in connection with the
enforcement or protection of their rights in connection with
this Agreement and the other Loan




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Documents or in connection with the
Loans made and the Letters of Credit issued, including the fees and
disbursements of Shearman & Sterling, special counsel for the Administrative
Agent, and, in connection with any such amendment, modification or waiver made
in connection with any such enforcement or protection, the fees and
disbursements of any other counsel for the Administrative Agent, any Lender,
the Swing Line Bank or the Fronting Bank. The Borrower further agrees that it
shall indemnify the Lenders, the Swing Line Bank and the Fronting Bank from and
hold them harmless against any documentary taxes, assessments or charges made
by any Governmental Authority by reason of the execution and delivery of this
Agreement, any of the other Loan Documents or any Letters of Credit.


          (b) The Borrower will indemnify the Administrative Agent, each Lender, the
Swing Line Bank and the Fronting Bank and its directors, officers, employees
and agents (each such person being called an “Indemnitee”) against, and to hold
each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable counsel fees and expenses, incurred
by or asserted against any Indemnitee arising out of, in any way connected
with, or as a result of (i) the execution or delivery by the Borrower of this
Agreement or any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties thereto of their
respective obligations thereunder or the consummation of the Transactions and
the other transactions contemplated hereby and thereby, (ii) the use of the
proceeds of the Loans or of the Letters of Credit by the Borrower or (iii) any
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses have resulted from the
gross negligence or willful misconduct of such Indemnitee.



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



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



          Section 9.06 Right of Setoff. If any Event of Default shall have occurred
and be continuing, each Lender, the Swing Line Bank and the Fronting Bank is
hereby authorized at any time and from time to time, without notice to the
Borrower (any such notice being expressly waived by the Borrower), to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time
or demand, provisional or final) at any time held and other indebtedness
at any time owing by such Lender, the Swing Line Bank or the Fronting Bank or




73






 





any of their respective Affiliates to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement and any other Loan Documents held by
such Lender, the Swing Line Bank or the Fronting Bank, irrespective of whether
or not such Lender, the Swing Line Bank or the Fronting Bank shall have made
any demand under this Agreement or such other Loan Document and although such
obligations may be unmatured. The rights of each Lender, the Swing Line Bank
or the Fronting Bank, under this Section 9.06 are in addition to other rights
and remedies (including other rights of setoff) which such Lender, the Swing
Line Bank or any Fronting Bank, may have.


          Section 9.07 Applicable Law. THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS HEREUNDER AND THEREUNDER OF THE PARTIES HERETO AND
THERETO (OTHER THAN AS RELATED TO LETTERS OF CREDIT) SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER
OF CREDIT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS
OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY
CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500
(THE “UNIFORM CUSTOMS”) AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS,
THE LAWS OF THE STATE OF NEW YORK.



          Section 9.08 Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, any Lender, the Swing Line Bank or the Fronting Bank in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Lenders, the Swing Line Bank and the Fronting Bank hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies which they would otherwise have. No waiver of any provision of this
Agreement or any other Loan Document or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
No notice or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances.



          (b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders; provided, however, that no such

agreement shall (i) change the principal amount of, or extend or advance the
maturity of or any date for the scheduled payment of any principal of or
interest on, any Loan, or extend the stated maturity of any Letter
of Credit beyond the Termination Date (unless such Letter of Credit has
been cash collateralized or the Lenders have been relieved of their
participation obligations pursuant to Section 2.04(d) in respect of such Letter
of Credit) or waive or excuse any such scheduled payment or any part thereof,
or decrease the rate of interest on any Loan, without the prior written consent
of each Lender affected thereby, (ii) change the Commitment or decrease or
extend any date for the




74






 





payment of the Facility Fees, Utilization Fees or L/C
Participation Fees of any Lender without the prior written consent of such
Lender, or (iii) amend or modify the provisions of Section 2.17, the provisions
of this Section 9.08 or the definition of “Termination Date” or “Required
Lenders”, without the prior written consent of each Lender; provided further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent hereunder without the prior written consent
of the Administrative Agent. Each Lender shall be bound by any waiver,
amendment or modification authorized by this Section 9.08, and any consent by
any Lender pursuant to this Section 9.08 shall bind any person subsequently
acquiring a Loan from it.


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



          Section 9.10 Entire Agreement. This Agreement and the other Loan
Documents and the letter agreements referred to in Section 2.07(b) (with
respect to the payment of fees only) constitute the entire contract between the
parties relative to the subject matter hereof. Any previous agreement among
the parties with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents. Nothing in this Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any
party other than the parties hereto and thereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement or the other
Loan Documents.



          Section 9.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.11.



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




75






 





provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.


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



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



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



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



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




76






 





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



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



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



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



          (d) After the Closing Date, a Financial Officer of the Borrower may,
provided that no Default or Event of Default has occurred and is continuing,
designate an Unrestricted Subsidiary as a Restricted Subsidiary by notice sent
to all of the Lenders, provided that (w) no such designation shall be effective
unless immediately after giving effect thereto there would exist no Default or
Event of Default; (x) no such designation shall be effective unless immediately
after giving effect thereto the Borrower is in compliance with Sections 6.01(d)
and 6.01(e); (y) any such designation shall be effective not less than five
Business Days after written
notice thereof shall have been provided to each Lender; and (z) upon such
designation, Schedule 3.08 Part I shall be deemed to be amended to reflect such
designation.



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



          (f) After the Closing Date, the Borrower may, provided that no Default or
Event of Default has occurred and is continuing, cause a Financial Officer of
WRECO to designate an Unrestricted Subsidiary as a Restricted Subsidiary by
notice sent to all of the Lenders, provided that: (v) such Subsidiary
satisfies the requirements of Subsection 9.17(e)




77






 





above; (w) no such designation
shall be effective unless immediately after giving effect thereto there would
exist no Default or Event of Default; (x) WRECO could incur at least $1 of
additional Senior Debt under Subsection 6.02(b); (y) any such designation shall
be effective not less than five Business Days after written notice thereof
shall have been provided to each Lender; and (z) upon such designation,
Schedule 3.08 Part II shall be deemed to be amended to reflect such
designation.


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



[Remainder of page intentionally left blank.]



78






 





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




	 	 	 	 	 
	 	 	WEYERHAEUSER COMPANY, as Borrower
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK,

individually and as Swing Line Bank,

Fronting Bank and Administrative Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	MORGAN STANLEY SENIOR FUNDING, INC.,

individually and as Syndication Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	THE BANK OF TOKYO-MITSUBISHI, LTD.,

PORTLAND BRANCH

individually and as Co-Documentation Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	DEUTSCHE BANC ALEX. BROWN INC.,

as Co-Documentation Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 



Lenders




	 	 	 	 	 
	 	 	DEUTSCHE BANK AG NEW YORK BRANCH,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	THE BANK OF NOVA SCOTIA,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	CITICORP USA, INC.,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	ROYAL BANK OF CANADA,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	TORONTO DOMINION (TEXAS), INC.,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	CIBC INC.,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	PNC BANK, NATIONAL ASSOCIATION,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	WACHOVIA BANK N.A.,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	THE INDUSTRIAL BANK OF JAPAN, LIMITED,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	THE NORINCHUKIN BANK, NEW YORK BRANCH,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	SUMITOMO MITSUI BANKING

CORPORATION (formerly known as The

Sumitomo Bank, Limited),

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	CAJA MADRID,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	THE NORTHERN TRUST COMPANY,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	BANK HAPOALIM B.M.,

as Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:




 









 




	 	 	 	 	 
	 	 	PB CAPITAL CORPORATION,

as Lender
	 	 	 	 	 
	 	 	
By:
	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	COOPERATIEVE CENTRALE

RAIFFEISIN-BOERENLEENBANK B.A., “RABOBANK

NEDERLAND” NEW YORK BRANCH

as Lender
	 	 	 	 	 
	 	 	
By:
	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	
By:
	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	WESTPAC BANKING CORPORATION,

as Lender
	 	 	 	 	 
	 	 	
By:
	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	WELLS FARGO BANK, N.A.,

as Lender
	 	 	 	 	 
	 	 	
By:
	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	MELLON BANK, N.A.,

as Lender
	 	 	 	 	 
	 	 	
By:
	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 




	 	 	 	 	 
	 	 	AUSTRALIA AND NEW ZEALAND BANKING GROUP

LIMITED,

as Lender
	 	 	 	 	 
	 	 	
By
	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



 






 



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 (the “Borrower”), refers to the
Amended and Restated Competitive Advance and Revolving Credit Facility
Agreement dated as of March 26, 2002 (as it may hereafter be amended, modified,
extended or restated from time to time, the “Credit Agreement”), among the
Borrower, the lenders party thereto from time to time, JPMorgan Chase Bank, as
swing line bank, JPMorgan Chase Bank, as fronting bank, JPMorgan Chase Bank, as
Administrative Agent, Morgan Stanley Senior Funding, Inc., as syndication
agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche Banc Alex. Brown
Inc., as co-documentation agents. 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(f) 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.


 






 


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,
	 	 	 	 	 
	 	 	
By
	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title: [Responsible Officer]



A-2






 





EXHIBIT B


FORM OF SWING LINE 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 (the “Borrower”), refers to the
Amended and Restated Competitive Advance and Revolving Credit Facility
Agreement dated as of March 26, 2002 (as it may hereafter be amended, modified,
extended or restated from time to time, the “Credit Agreement”), among the
Borrower, the lenders party thereto from time to time, JPMorgan Chase Bank, as
swing line bank, JPMorgan Chase Bank, as fronting bank, 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 Banc
Alex. Brown 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
2.03(b) of the Credit Agreement that it requests a Swing Line 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)	 	
Maturity date of Borrowing2
	 	









1     Not less than $1,000,000 and in integral multiples of $100,000 in excess
thereof (or an aggregate principal amount equal to the remaining balance of the
available Commitments, but, in any case not to exceed, in the aggregate with
any other Swing Line Loans outstanding, $20,000,000).


2     No later than the seventh day after the requested date of such Borrowing.


B-1






 


EXHIBIT B


Upon acceptance of any or all of the Swing Line Loans offered by the Swing Line
Bank 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,
	 	 	 	 	 
	 	 	
By
	 	

	 	 	 	 	Name:
	 	 	 	 	Title: [Responsible Officer]




B-2










 





EXHIBIT C


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:



C-1




 






 



EXHIBIT C


Street Address:


City, State, Zip Code:

Phone Number:

FAX Number:

E-mail Address:





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:




C-2






 



EXHIBIT C


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.





C-3






 


EXHIBIT D



[FORM OF]



ASSIGNMENT AND ACCEPTANCE



          Reference is made to the Amended and Restated Competitive Advance and
Revolving Credit Facility Agreement dated as of March 26, 2002 (the “Credit
Agreement”), among Weyerhaeuser Company, a Washington corporation (the
“Borrower”), the lenders party thereto from time to time (the “Lenders”),
JPMorgan Chase Bank, as swing line bank, JPMorgan Chase Bank, as fronting bank,
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 Banc
Alex. Brown 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 reverse
hereof, 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 Schedule attached
hereto 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 2.20(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 C 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.




D-1






 





EXHIBIT D




	 	 	 	 	 
	The terms set forth above and on the
Schedule 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:








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


D-2






 






EXHIBIT D

Schedule to Assignment and Acceptance


Date of Assignment:


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
	                   Facility	 	Principal Amount Assigned	 	all Lenders thereunder
	
	 	
	 	

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



D-3






 



EXHIBIT E-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 Amended and Restated Competitive Advance and
Revolving Credit Facility Agreement dated as of March 26, 2002 by and among
Weyerhaeuser Company, the Lenders party thereto from time to time, JPMorgan
Chase Bank, as swing line bank, JPMorgan Chase Bank, as fronting bank, 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 Banc Alex. Brown 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:



E-1-1






 



EXHIBIT E-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 Amended and Restated Competitive Advance and
Revolving Credit Facility Agreement dated as of March 26, 2002 by and among
Weyerhaeuser Company, the Lenders party thereto from time to time, JPMorgan
Chase Bank, as swing line bank, JPMorgan Chase Bank, as fronting bank, 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 Banc Alex. Brown 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:




E-2-1









 



EXHIBIT E-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 (the “Borrower”);




		
	 	     (ii) We have reviewed the terms of the Amended and Restated
Competitive Advance and Revolving Credit Facility Agreement dated as of
March 26, 2002, by and among the Borrower, the Lenders party thereto from
time to time, JPMorgan Chase Bank, as swing line bank, JPMorgan Chase
Bank, as fronting bank, 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 Banc Alex. Brown
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 the Borrower 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:




E-3-1






 





          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 COMPANY,	 
	 	 	 
	 	
By	 
	 	 	


Name:
	 	 	
Title:
	 	 	 
	 	
By	 
	 	 	


Name:
	 	 	
Title:



E-3-2






 



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 the Borrower 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][65, if on or after 6/30/05]%



E-3-3






 



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



Total Adjusted Shareholders’ Interest (See item 2 above)


Required Total Adjusted Shareholders’ Interest           $[          ]




E-3-4






 



EXHIBIT E-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”);




		
	 	     (ii) We have reviewed the terms of the Amended and Restated
Competitive Advance and Revolving Credit Facility Agreement dated as of
March 26, 2002, by and among Weyerhaeuser Company, a Washington
corporation, the Lenders party thereto from time to time, JPMorgan Chase
Bank, as fronting bank, Morgan Stanley Senior Funding, Inc., as
syndication agent, JPMorgan Chase Bank, as administrative agent for the
Lenders, and The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche Banc Alex.
Brown 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




		
	 	     (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:




E-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:



E-4-2






 



ATTACHMENT NO. 1 TO

COMPLIANCE CERTIFICATE FOR WRECO



WEYERHAEUSER REAL ESTATE COMPANY AND RESTRICTED SUBSIDIARIES



COMPLIANCE WITH COVENANTS

AS OF

($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
	 	 	 	 	




E-4-3






 



EXHIBIT F


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 Amended and Restated
364-Day Revolving Credit Facility Agreement dated as of March 26, 2002, (as it
may be amended, modified, extended or restated from time to time, the “364-Day
Credit Agreement”), among the Company, Weyerhaeuser Company,




F-1






 





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. Without limiting the foregoing the holder or holders of said Prior
Debt may receive and



F-2






 







		
	 	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



F-3






 



EXHIBIT G


FORM OF PROMISSORY NOTE



New York, New York


[                    ,           ]


          FOR VALUE RECEIVED, WEYERHAEUSER COMPANY, a Washington corporation (the
“Borrower”), hereby promises to pay to the order of [                     ] (the “Lender”), at the
office of JP Morgan Chase Bank (the “Agent”), at 270 Park Avenue, New York, New
York 10017 on the Termination Date as defined in the Amended and Restated
Competitive Advance and Revolving Credit Facility Agreement dated as of March
26, 2002 (as it may hereafter be amended, modified, extended or restated from
time to time, the “Credit Agreement”), among the Borrower, 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 Banc Alex. Brown 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 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.




G-1






 





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




	 	 	 
	 	
WEYERHAEUSER COMPANY,	 
	 	 	 
	 	
By	 
	 	 	


Name:
	 	 	
Title:



G-2






 



Loans and Payments




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




G-3






 



Schedule 2.01



COMMITMENTS OF THE LENDERS




	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Percentage of Total
	Name of Bank	 	Commitment	 	Commitment
	JPMorgan Chase Bank
	 	$	128,562,500	 	 	 	9.8894	%
	Morgan Stanley Senior Funding, Inc.
	 	$	128,562,500	 	 	 	9.8894	%
	The Bank of Tokyo-Mitsubishi, Ltd.
	 	$	105,187,500	 	 	 	8.0913	%
	Deutsche Bank AG New York Branch
	 	$	105,187,500	 	 	 	8.0913	%
	The Bank of Nova Scotia
	 	$	95,000,000	 	 	 	7.3077	%
	Bank of America, N.A.
	 	$	95,000,000	 	 	 	7.3077	%
	Citicorp USA, Inc.
	 	$	95,000,000	 	 	 	7.3077	%
	Royal Bank of Canada
	 	$	95,000,000	 	 	 	7.3077	%
	Toronto Dominion (Texas), Inc.
	 	$	87,500,000	 	 	 	6.7308	%
	CIBC Inc.
	 	$	50,000,000	 	 	 	3.8462	%
	PNC Bank, National Association
	 	$	50,000,000	 	 	 	3.8462	%
	Wachovia Bank N.A.
	 	$	50,000,000	 	 	 	3.8462	%
	The Industrial Bank of Japan, Limited
	 	$	25,000,000	 	 	 	1.9231	%
	The Norinchukin Bank, New York Branch
	 	$	25,000,000	 	 	 	1.9231	%
	Sumitomo Mitsui Banking Corporation
	 	$	25,000,000	 	 	 	1.9231	%
	U.S. Bank National Association
	 	$	25,000,000	 	 	 	1.9231	%
	Caja Madrid
	 	$	17,500,000	 	 	 	1.3462	%
	The Northern Trust Company
	 	$	17,500,000	 	 	 	1.3462	%
	Bank Hapoalim B.M.
	 	$	12,500,000	 	 	 	0.9615	%
	PB Capital Corporation
	 	$	12,500,000	 	 	 	0.9615	%
	Cooperatieve Centrale
Raiffeisin-Boerenleenbank B.A.,
“Rabobank Nederland” New York Branch
	 	$	12,500,000	 	 	 	0.9615	%
	Westpac Banking Corporation
	 	$	12,500,000	 	 	 	0.9615	%



 






 


Schedule 2.01



	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Percentage of Total
	Name of Bank	 	Commitment	 	Commitment
	Wells Fargo Bank, N.A.
	 	$	12,500,000	 	 	 	0.9615	%
	Mellon Bank, N.A.
	 	$	10,000,000	 	 	 	0.7692	%
	Australia and New Zealand Banking
Group Limited
	 	$	7,500,000	 	 	 	0.5769	%
	 
	 	 	
	 	 	 	
	 
	 	Total Commitment:
	 	$	1,300,000,000	 	 	 	100.0000	%
	 
	 	 	
	 	 	 	
	 



 






 



Schedule 9.01


ADDRESSES FOR NOTICES TO THE BANK




	 	 	 
	Name of Bank	 	Domestic and Eurodollar
Lending Offices
	JPMorgan Chase Bank	 	
JPMorgan Chase Bank
	 	 	
One Chase Manhattan Plaza, 8th Floor
	 	 	
Loan and Agency Services
	 	 	
New York, NY 10081
	 	 	
Attn: Ms. Maria Swales Loan and
	 	 	
Agency Services
	 	 	
T: (212) 552-7472
	 	 	
F: (212) 552-5662
	 	 	 
	Morgan Stanley Senior Funding, Inc.	 	
Morgan Stanley Senior Funding, Inc.
	 	 	
1221 Avenue of the Americas – 35th Floor
	 	 	
New York, NY 10020
	 	 	
Attn: Stephen Hannan
	 	 	
T: (212) 762-5814
	 	 	
F: (212) 762-9181
	 	 	 
	The Bank of Tokyo-Mitsubishi, Ltd.	 	
The Bank of Tokyo-Mitsubishi, Ltd.
	 	 	
Portland Branch
	 	 	
2300 Pacwest Center
	 	 	
1211 S.W. 5th Ave.
	 	 	
Portland, OR 97204
	 	 	
Attn: Ms. Penny Crisman
	 	 	
T: (503) 222-3750
	 	 	
F: (503) 227-5372
	 	 	 
	Deutsche Banc Alex. Brown Inc.	 	
Deutsche Banc Alex. Brown 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 Banc Alex. Brown Inc.
	 	 	
31 West 52nd Street
	 	 	
New York, NY 10019
	 	 	
Attn: Mr. Oliver Schwarz
	 	 	
T: (212) 469-8610
	 	 	
F: (212) 469-2930



 






 



Schedule 9.01


	 	 	 
	Name of Bank	 	Domestic and Eurodollar
Lending Offices
	The Bank of Nova Scotia	 	
The Bank of Nova Scotia
	 	 	
600 Peachtree St., N.E.
	 	 	
Suite 2700
	 	 	
Atlanta, GA 30308
	 	 	
Attn: Arnetta Poindexter
	 	 	
T: (404) 877-1574
	 	 	
F: (404) 888-8998
	 	 	 
	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
	 	 	 
	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
	 	 	 
	Royal Bank of Canada	 	
Royal Bank of Canada

New York Branch
	 	 	
One Liberty Plaza, 3rd Floor
	 	 	
New York, NY 10006-1404
	 	 	
Attn: Karim Amr
	 	 	
T: (212) 428-6369
	 	 	
F: (212) 428-2372
	 	 	 
	Toronto Dominion (Texas), Inc.	 	
Toronto Dominion (Texas), Inc.
	 	 	
909 Fannin St., 17th Floor
	 	 	
Houston, TX 77010
	 	 	
Attn: Jean Pettit
	 	 	
T: (713) 653-8234
	 	 	
F: (713) 951-9921



 






 



Schedule 9.01



	 	 	 
	Name of Bank	 	Domestic and Eurodollar
Lending Offices
	CIBC Inc.	 	
CIBC Inc.
	 	 	
Two Paces West, 2727
	 	 	
Paces Ferry Rd. Suite 1200
	 	 	
Atlanta, GA 30339
	 	 	
Attn: Ava Cool
	 	 	
T: (770) 319-4818
	 	 	
F: (770) 319-4950
	 	 	 
	PNC Bank, National Association	 	
PNC Bank, National Association
	 	 	
One PNC Plaza, 5th Floor
	 	 	
249 Fifth Ave.
	 	 	
Pittsburgh, PA 15222
	 	 	
Attn: Sharon Geffel
	 	 	
T: (412) 762-9340
	 	 	
F: (412) 705-0984
	 	 	 
	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
	 	 	 
	The Industrial Bank of Japan, Limited	 	
The Industrial Bank of Japan Limited
	 	 	
1251 Avenue of the Americas
	 	 	
New York, NY 10020
	 	 	
Attn: Nelson Rojas
	 	 	
T: (212) 282-4064
	 	 	
F: (212) 282-4461
	 	 	 
	The Norinchukin Bank, New York Branch	 	
The Norinchukin Bank, New York

Branch
	 	 	
245 Park Ave. 29th
Floor
	 	 	
New York, NY 10167
	 	 	
Attn: Nicholas Fiore
	 	 	
T: (212) 697-1717
	 	 	
F: (212) 697-5754
	 	 	 
	Sumitomo Mitsui Banking Corporation	 	
Sumitomo Mitsui Banking Corporation
	 	 	
277 Park Ave.
	 	 	
New York, NY 10172
	 	 	
Attn: Noel Swift
	 	 	
T: (212) 224-4328
	 	 	
F: (212) 224-5197



 






 



Schedule 9.01



	 	 	 
	Name of Bank	 	Domestic and Eurodollar
Lending Offices
	U.S. Bank National Association	 	
U.S. Bank National Association
	 	 	
1420 Fifth Avenue 10th Floor
	 	 	
PD-WA-T11B
	 	 	
Seattle, WA 98101
	 	 	
Attn: Gail Fortun
	 	 	
T: (206) 587-5212
	 	 	
F: (206) 344-3741
	 	 	 
	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
	 	 	 
	The Northern Trust Company	 	
The Northern Trust Company
	 	 	
50 S. LaSalle, 11th
Floor
	 	 	
Chicago, IL 60675
	 	 	
Attn: Charles Gerlach
	 	 	
T: (312) 444-4715
	 	 	
F: (312) 630-6015
	 	 	 
	Bank Hapoalim B.M.	 	
Bank Hapoalim B.M.
	 	 	
New York Branch
	 	 	
1177 Avenue of the Americas
	 	 	
New York, NY 10036
	 	 	
Attn: Marc Bosc
	 	 	
T: (212) 782-2179
	 	 	
F: (212) 782-2187
	 	 	 
	PB Capital Corporation	 	
PB Capital Corporation
	 	 	
590 Madison Ave.
	 	 	
New York, NY 10022
	 	 	
Attn: Andrew Shipman
	 	 	
T: (212) 756-5988
	 	 	
F: (212) 756-5536
	 	 	 
	Cooperatieve Centrale	 	
Rabobank International
	Raiffeisin-Boerenleenbank B.A.,	 	
245 Park Ave.
	“Rabobank Nederland” New York Branch	 	
36th Floor
	 	 	
New York, NY 10167
	 	 	
Attn: Brett Delfino
	 	 	
T: (212) 916-3743
	 	 	
F: (212) 916-7880



 






 



Schedule 9.01



	 	 	 
	Name of Bank	 	Domestic and Eurodollar
Lending Offices
	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
	 	 	 
	Wells Fargo Bank, N.A.	 	
Wells Fargo Bank,
N.A.
	 	 	
999 Third Ave. 11th Floor
	 	 	
Seattle, WA 98104
	 	 	
Attn: Deborah Speer Watson
	 	 	
T: (206) 292-3668
	 	 	
F: (206) 292-3595
	 	 	 
	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
	 	 	 
	Australia and New Zealand Banking	 	
Australia and New Zealand Banking
	Group Limited	 	
Group Limited
	 	 	
1177 Avenue of the Americas
	 	 	
New York, NY 10036
	 	 	
Attn: Damodar Menon
	 	 	
T: (212) 801-9752
	 	 	
F: (212) 556-4826




 









 



TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	ARTICLE I
	 	 	 	 
	 	 	 	 	DEFINITIONS
	 	 	 	 
	Section 1.01 Defined Terms
	 	 	2	 
	Section 1.02 Terms Generally
	 	 	17	 
	Section 1.03 Accounting Terms; GAAP
	 	 	17	 
	 	 	 	 	ARTICLE II
	 	 	 	 
	 	 	 	 	THE CREDITS
	 	 	 	 
	Section 2.01 Commitments
	 	 	17	 
	Section 2.02 Loans
	 	 	18	 
	Section 2.03 Swing Line Loans
	 	 	20	 
	Section 2.04 Letters of Credit
	 	 	21	 
	Section 2.05 Competitive Bid Procedure
	 	 	24	 
	Section 2.06 Conversion and Continuation of Revolving Loans
	 	 	26	 
	Section 2.07 Fees
	 	 	27	 
	Section 2.08 Repayment of Loans; Evidence of Debt
	 	 	29	 
	Section 2.09 Interest on Loans
	 	 	30	 
	Section 2.10 Default Interest
	 	 	31	 
	Section 2.11 Alternate Rate of Interest
	 	 	31	 
	Section 2.12 Termination and Reduction of Commitments
	 	 	32	 
	Section 2.13 Prepayment
	 	 	33	 
	Section 2.14 Reserve Requirements; Change in Circumstances
	 	 	34	 
	Section 2.15 Change in Legality
	 	 	36	 
	Section 2.16 Indemnity
	 	 	36	 
	Section 2.17 Pro Rata Treatment
	 	 	37	 
	Section 2.18 Sharing of Setoffs
	 	 	37	 
	Section 2.19 Payments
	 	 	38	 
	Section 2.20 Taxes
	 	 	38	 
	Section 2.21 Mitigation Obligations; Replacement of Lenders
	 	 	41	 
	 	 	 	 	ARTICLE III
	 	 	 	 
	 	 	REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	Section 3.01 Organization; Powers
	 	 	43	 
	Section 3.02 Authorization
	 	 	43	 
	Section 3.03 Enforceability
	 	 	43	 
	Section 3.04 Consents and Approvals
	 	 	43	 
	Section 3.05 Financial Statements
	 	 	44	 
	Section 3.06 No Material Adverse Change
	 	 	44	 



i






 




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	Section 3.07 Title to Properties; Possession Under Leases
	 	 	44	 
	Section 3.08 Subsidiaries
	 	 	45	 
	Section 3.09 Litigation; Compliance with Laws
	 	 	45	 
	Section 3.10 Agreements
	 	 	45	 
	Section 3.11 Federal Reserve Regulations
	 	 	46	 
	Section 3.12 Investment Company Act; Public Utility Holding Company Act
	 	 	46	 
	Section 3.13 Tax Returns
	 	 	46	 
	Section 3.14 No Material Misstatements
	 	 	46	 
	Section 3.15 Compliance with ERISA
	 	 	46	 
	Section 3.16 Environmental Matters
	 	 	47	 
	Section 3.17 Maintenance of Insurance
	 	 	47	 
	Section 3.18 Existing Senior Credit Facilities
	 	 	48	 
	Section 3.19 Surviving Senior Credit Facilities
	 	 	48	 
	Section 3.20 Non-Material Loans
	 	 	48	 
	 	 	 	 	ARTICLE IV
	 	 	 	 
	 	CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT
	 	 	 	 
	Section 4.01 All Borrowings and Issuances
	 	 	48	 
	Section 4.02 Closing Date
	 	 	49	 
	 	 	 	 	ARTICLE V
	 	 	 	 
	 	 	 	 	AFFIRMATIVE COVENANTS
	 	 	 	 
	Section 5.01 Existence; Businesses and Properties
	 	 	51	 
	Section 5.02 Insurance
	 	 	51	 
	Section 5.03 Obligations and Taxes
	 	 	51	 
	Section 5.04 Financial Statements, Reports, etc
	 	 	52	 
	Section 5.05 Litigation and Other Notices
	 	 	53	 
	Section 5.06 ERISA
	 	 	54	 
	Section 5.07 Maintaining Records; Access to Properties and Inspections
	 	 	54	 
	Section 5.08 Use of Proceeds
	 	 	55	 
	Section 5.09 Environmental Matters
	 	 	55	 
	Section 5.10 Performance of Transaction Agreements
	 	 	56	 
	Section 5.11 OCBM Agreement
	 	 	57	 
	Section 5.12 Further Assurances
	 	 	57	 
	Section 5.13 Guarantee
	 	 	57	 
	 	 	 	 	ARTICLE VI
	 	 	 	 
	 	 	 	 	NEGATIVE COVENANTS
	 	 	 	 
	Section 6.01 Covenants of the Borrower
	 	 	57	 
	Section 6.02 Covenants with respect to WRECO
	 	 	60	 



ii






 




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	ARTICLE VII
	 	 	 	 
	 	 	 	 	EVENTS OF DEFAULT
	 	 	 	 
	Section 7.01 Events of Default
	 	 	63	 
	 	 	 	 	ARTICLE VIII
	 	 	 	 
	 	 	 	THE ADMINISTRATIVE AGENT
	 	 	 	 
	Section 8.01 The Administrative Agent
	 	 	66	 
	Section 8.02 Other Agents
	 	 	69	 
	 	 	 	 	ARTICLE IX
	 	 	 	 
	 	 	 	 	MISCELLANEOUS
	 	 	 	 
	Section 9.01 Notices
	 	 	69	 
	Section 9.02 Survival of Agreement
	 	 	70	 
	Section 9.03 Binding Effect
	 	 	70	 
	Section 9.04 Successors and Assigns
	 	 	70	 
	Section 9.05 Expenses; Indemnity
	 	 	72	 
	Section 9.06 Right of Setoff
	 	 	73	 
	Section 9.07 Applicable Law
	 	 	74	 
	Section 9.08 Waivers; Amendment
	 	 	74	 
	Section 9.09 Interest Rate Limitation
	 	 	75	 
	Section 9.10 Entire Agreement
	 	 	75	 
	Section 9.11 WAIVER OF JURY TRIAL
	 	 	75	 
	Section 9.12 Severability
	 	 	75	 
	Section 9.13 Counterparts
	 	 	76	 
	Section 9.14 Headings
	 	 	76	 
	Section 9.15 Jurisdiction; Consent to Service of Process
	 	 	76	 
	Section 9.16 Domicile of Loans
	 	 	77	 
	Section 9.17 Restricted and Unrestricted Subsidiaries
	 	 	77	 



EXHIBITS




	 	 	 
	Exhibit A	 	
Form of Revolving Borrowing Request
	Exhibit B	 	
Form of Swing Line Borrowing Request
	Exhibit C	 	
Form of Administrative Questionnaire
	Exhibit D	 	
Form of Assignment and Acceptance
	Exhibit E-1	 	
Form of Certification of Financial Statements for Weyerhaeuser
	Exhibit E-2	 	
Form of Certification of Financial Statements for WRECO
	Exhibit E-3	 	
Form of Compliance Certificate for Weyerhaeuser
	Exhibit E-4	 	
Form of Compliance Certificate for WRECO
	Exhibit F	 	
Form of Subordinated Debt



iii






 




	 	 	 
	Exhibit G	 	
Form of Promissory Note




SCHEDULES




	 	 	 
	Schedule 2.01	 	
Commitments
	Schedule 3.08	 	
Subsidiaries of Weyerhaeuser, WRECO and the Company
	Schedule 3.18	 	
Existing Senior Credit Facilities
	Schedule 3.19	 	
Surviving Senior Credit Facilities
	Schedule 7.01	 	
Specified Indebtedness
	Schedule 9.01	 	
Notices




iv









 



Exhibit 10(h)




EXECUTION COPY




AMENDMENT NO. 1 TO

AMENDED AND RESTATED COMPETITIVE ADVANCE AND

REVOLVING CREDIT FACILITY AGREEMENT




Dated as of October 23, 2003




          AMENDMENT NO. 1 TO AMENDED AND RESTATED COMPETITIVE ADVANCE AND REVOLVING
CREDIT FACILITY AGREEMENT dated as of October 23, 2003, and entered into by and
among WEYERHAEUSER COMPANY, a Washington corporation (the “Borrower”), the
banks, financial institutions and other institutional lenders party to the
Credit Agreement referred to below (collectively, the “Lenders”), JPMORGAN
CHASE BANK, a New York banking corporation, as swing line bank (in such
capacity, the “Swing Line Bank”), JPMORGAN CHASE BANK, as Fronting Bank under
the Credit Agreement referred to below, JPMORGAN CHASE BANK, as administrative
agent (in such capacity, the “Administrative Agent”) for the Lenders, MORGAN
STANLEY SENIOR FUNDING, INC., as syndication agent (the “Syndication Agent”)
and THE BANK OF TOKYO-MITSUBISHI, LTD. and DEUTSCHE BANK ALEX. BROWN INC., as
co-documentation agents (the “Co-Documentation Agents”).



          PRELIMINARY STATEMENTS:



          (1) The Borrower, the Lenders, the Swing Line Bank, JPMorgan Chase Bank,
as fronting bank, the Administrative Agent, the Syndication Agent and the
Co-Documentation Agents have entered into an Amended and Restated Competitive
Advance and Revolving Credit Facility Agreement dated as of March 26, 2002 (as
amended, supplemented or otherwise modified through the date hereof, the
“Credit Agreement”). Capitalized terms not otherwise defined in this Amendment
have the same meanings as specified in the Credit Agreement.



          (2) The Borrower and the Required Lenders have agreed to amend the Credit
Agreement in order to (i) make the full Commitments of the Lenders available
for the issuance of Letters of Credit and (ii) allow the Borrower to designate
from time to time additional issuing banks of Letters of Credit, in each case
as hereinafter set forth.



          SECTION 1. Amendments to Credit Agreement. The Credit Agreement is,
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2, hereby amended as follows:




                    (a) The recital of parties to the Credit Agreement is hereby amended
by deleting therein the parenthetical ‘(in such capacity, the “Fronting
Bank”)’.




                    (b) Section 1.01 is hereby amended by adding therein the following
new definitions in appropriate alphabetical order:




                    ’“Fronting Bank” shall mean, (i) with respect to any Letter of
Credit, the Issuing Bank that has issued or is contemplated to issue such
Letter or Credit, (ii) with respect to



Amendment No. 1 to the

Weyerhaeuser Company Credit Agreement





 








 








  2





any L/C Disbursement, the Issuing Bank that has made a payment or
disbursement pursuant to a Letter of Credit, or (iii) otherwise, as the
context may require, any or all of the Issuing Banks.’




                    ’“Issuing Bank” shall mean JPMorgan Chase Bank and any other Lender
designated by the Borrower and approved by the Administrative Agent as an
Issuing Bank to the extent such Lender has expressly agreed to perform
all of the obligations that by the terms of this Agreement are required
to be performed by it as an Issuing Bank, as such consent by such Lender
may be evidenced from time to time by documentation reasonably acceptable
to the Administrative Agent and the Lender.’




                    (c) Section 2.04(b) is hereby amended by deleting therein the phrase
“(A) the L/C Exposure shall not exceed $200,000,000 and (B)” appearing in
the second to last line thereof.




                    (d) The first sentence of Section 2.07(c) is hereby amended in full
to read as follows:




                    “The Borrower agrees to pay (i) to the Administrative Agent for pro
rata distribution to each Lender a fee (an “L/C Participation Fee”), for
the period from the Closing Date until the Termination Date (or such
earlier date as all Letters of Credit shall be canceled or expire and the
Total Commitment shall be terminated), on that portion of the average
daily L/C Exposure attributable to Letters of Credit issued for the
account of the Borrower (excluding the portion thereof attributable to
unreimbursed L/C Disbursements), at the rate per annum equal to the
Applicable Margin for Eurodollar Loans from time to time in effect for
the Borrower and (ii) to each Issuing Bank a fronting fee (a “Fronting
Fee”), which shall accrue at the rate of .125% per annum (or at such
other rate as agreed between the applicable Issuing Bank and the
Borrower) on the average daily amount of the L/C Exposure attributable to
Letters of Credit issued by such Issuing Bank for the account of the
Borrower (excluding any portion thereof attributable to unreimbursed L/C
Disbursements) during the period from and including the Closing Date to
but excluding the later of the date of termination of the Commitments and
the date on which there ceases to be any L/C Exposure attributable to
Letters of Credit issued by such Issuing Bank for the account of the
Borrower, as well as such Issuing Bank’s standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder.”



          SECTION 2. Conditions of Effectiveness. This Amendment shall become
effective as of the date first above written when, and only when, the
Administrative Agent shall have received (i) counterparts of this Amendment
executed by the Borrower and the Required Lenders or, as to any of the Lenders,
advice satisfactory to the Administrative Agent that such Lender has executed
this Amendment and (ii) all of the following documents, each such document
(unless otherwise specified) dated the date of receipt thereof by the
Administrative Agent, and in form and substance satisfactory to the
Administrative Agent:



          (a) Certified copies of (i) the resolutions of the Board of Directors of
the Borrower approving this Amendment and the matters contemplated hereby and
thereby and (ii)



Amendment No. 1 to the

Weyerhaeuser Company Credit Agreement





 









 








  3



all documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Amendment and the matters contemplated
hereby and thereby.




          (b) A certificate of the Secretary or an Assistant Secretary of the
Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign this Amendment and the other documents to be
delivered hereunder.



          SECTION 3. Representations and Warranties of the Borrower The Borrower
represents and warrants as follows:




                    (a) The Borrower and each of its Restricted Subsidiaries (i) is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (ii) 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, (iii) 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 (iv) in the case of the Borrower, has the
corporate power and authority to execute, deliver and perform its
obligations under this Amendment and each of the Loan Documents, as
amended hereby, and each other agreement or instrument contemplated
thereby to which it is or will be a party and to borrow thereunder.




                    (b) The execution, delivery and performance by the Borrower of this
Amendment and each of the Loan Documents, as amended hereby, and the
borrowings and issuances of Letters of Credit thereunder, (i) have been
duly authorized by all requisite corporate and, if required, stockholder
action and (ii) (A) will not violate (1) any provision of law, statute,
rule or regulation, (2) the certificate or articles of incorporation or
other constitutive documents or by-laws of the Borrower or any of its
Restricted Subsidiaries, (3) any order of any Governmental Authority or
(4) any provision of any indenture, agreement or other instrument to
which the Borrower or any of its Restricted Subsidiaries is a party or by
which any of them or any of their property is or may be bound, (B) 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 (C) will not result in the creation or
imposition of any Lien upon or with respect to any property or assets now
owned or hereafter acquired by the Borrower or any of its Restricted
Subsidiaries except, in each case other than (i) and (ii)(A)(2) above, as
could not reasonably be expected to have a Material Adverse Effect.




                    (c) This Amendment has been duly executed and delivered by the
Borrower and constitutes, and each Loan Document, as amended hereby, to
which the Borrower is a party, constitutes, a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.




                    (d) 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



Amendment No. 1 to the

Weyerhaeuser Company Credit Agreement





 









 








  4





for the due execution, delivery or performance by the Borrower of
this Amendment or any of the Loan Documents, as amended hereby, to which
it is a party.




                    (e) Except as otherwise disclosed publicly prior to October 16,
2003, there has been no action, suit, investigation, litigation or
proceeding pending or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Restricted Subsidiaries
in any court or before any arbitrator or Governmental Authority that
could reasonably be expected to have a Material Adverse Effect.




                    (f) Except as disclosed in the Borrower’s Report on Form 10-K for
the fiscal year ended December 30, 2002, neither the Borrower nor any of
its Restricted Subsidiaries is in violation of any law, rule or
regulation, or in default with respect to any judgment, writ, injunction
or decree of any Governmental Authority, where such violation or default
could reasonably be expected to result in a Material Adverse Effect.



          SECTION 4. Reference to and Effect on the Credit Agreement. (a) On and
after the effectiveness of this Amendment, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import
referring to the Credit Agreement, and each reference in the promissory notes
issued pursuant to Section 2.08 of the Credit Agreement (the “Notes”) and each
of the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof”
or words of like import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement, as amended by this Amendment.



          (b) The Credit Agreement and, the Notes and each of the other Loan
Documents, as specifically amended by this Amendment, are and shall continue to
be in full force and effect and are hereby in all respects ratified and
confirmed.



          (c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of any Lender or the Administrative Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.



          SECTION 5. Costs, Expenses The Borrower agrees to pay on demand all costs
and expenses of the Administrative Agent in connection with the preparation,
execution, delivery and administration, modification and amendment of this
Amendment and the other instruments and documents to be delivered hereunder
(including, without limitation, the reasonable fees and expenses of counsel for
the Administrative Agent) in accordance with the terms of Section 9.05 of the
Credit Agreement.



          SECTION 6. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.



Amendment No. 1 to the

Weyerhaeuser Company Credit Agreement





 









 








  5




          SECTION 7. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.



[Remainder of page intentionally left blank.]




Amendment No. 1 to the

Weyerhaeuser Company Credit Agreement





 









 








          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.



	 	 	 	 	 
	 	 	WEYERHAEUSER COMPANY, as Borrower
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	
 
	

	 	 	 	Title:

Name:







Amendment No. 1 to the

Weyerhaeuser Company Credit Agreement





 









 








	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK,

individually and as Swing Line Bank,

Issuing Bank and Administrative Agent
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	
 
	

	 	 	 	Title:

Name:







Amendment No. 1 to the

Weyerhaeuser Company Credit Agreement




 









 





	 	 	 	 	 
	 	 	MORGAN STANLEY SENIOR FUNDING, INC.,

individually and as Syndication Agent
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	
 
	

	 	 	 	Title:

Name:







Amendment No. 1 to the

Weyerhaeuser Company Credit Agreement





 









 








	 	 	 	 	 
	 	 	THE BANK OF TOKYO-MITSUBISHI, LTD.,

individually and as Co-Documentation Agent
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	
 
	

	 	 	 	Title:

Name:







Amendment No. 1 to the

Weyerhaeuser Company Credit Agreement





 









 








	 	 	 	 	 
	 	 	DEUTSCHE BANC ALEX.BROWN INC.,

individually and as Co-Documentation Agent
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	
 
	

	 	 	 	Title:

Name:







Amendment No. 1 to the

Weyerhaeuser Company Credit Agreement





 









 








	 	 	 
	

	 	LENDERS
	 
	 	 
	

	 	
 
	

	 	[Print Name of Financial Institution]







	 	 	 	 	 
	 

	 	By	 	 
	

	 	 	 	
 
	

	 	 	 	Title:

Name:







Amendment No. 1 to the

Weyerhaeuser Company Credit Agreement