Document/Exhibit Description Pages Size
1: 8-K Current Report 4 31K
2: EX-2.1 Hanson Agreement Dated March 12, 1996 45± 176K
3: EX-2.2 Crown Pacific Agreement Dated April 11, 1996 37± 146K
4: EX-2.3 Exhibit 2.3 Temple 39± 150K
5: EX-2.4 Hancock Agreement 38± 147K
6: EX-2.5 Management Agreement Dated May 15, 1996 12± 48K
7: EX-2.6 Exhibit 2.6 Right of First Offer 3 15K
8: EX-2.7 Timber Supply Agreement Dated May 15, 1996 9± 36K
9: EX-4 Credit Agreement Dated May 10, 1996 109± 467K
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 15, 1996
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WILLAMETTE INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Oregon
(STATE OR OTHER JURISDICTION OF INCORPORATION)
0-3730
(COMMISSION FILE NO.)
93-0312940
(IRS EMPLOYER IDENTIFICATION NO.)
1300 S.W. Fifth Avenue, Suite 3800
Portland, Oregon 97201
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code:
(503) 227-5581
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 12, 1996, the registrant entered into an agreement (the
"Cavenham Agreement") with Cavenham Energy Resources Inc., Cavenham Forest
Industries Inc. and Hanson Natural Resources Company (collectively "Cavenham")
providing for the sale by Cavenham and the purchase by the registrant of
approximately 1,088,000 acres of timberland and related assets used in
Cavenham's timber, wood products, and energy business in the Pacific Northwest
and in North and Southwest Louisiana for $1,588,000,000. Pursuant to the
Cavenham Agreement, the registrant deposited $50,000,000 in escrow to be
applied to the payment of the purchase price when the transaction was
consummated.
In April 1996, the registrant entered into separate agreements (the
"Designee Agreements") with Crown Pacific Limited Partnership ("Crown"), John
Hancock Mutual Life Insurance Company ("Hancock") and Temple-Inland Forest
Products Corporation ("Temple") providing for the purchase by them (each a
"Designee") of an aggregate of approximately 542,000 acres of the timberland
and related assets covered by the Cavenham Agreement for an aggregate price of
$641,000,000.
The Designee Agreements with Crown and Temple provided that the
transactions contemplated by such agreements would be consummated concurrently
with the consummation of the Cavenham Agreement. The Designee Agreement with
Hancock provided for the division of the timberland covered by the agreement
into parcels with the purchase and sale of at least one parcel to be
consummated concurrently with the consummation of the Cavenham Agreement and
the purchase and sale of the remaining parcels (the "Contract Parcels") to be
consummated by November 14, 1997. Hancock's obligation to purchase the
Contract Parcels is subject to its ability to secure client funding for the
purchases, which it has agreed to make diligent and sustained efforts to
obtain, and to certain other conditions.
On May 15, 1996, the transactions contemplated by the Cavenham
Agreement and the Designee Agreements were simultaneously consummated,
resulting in the purchase by the registrant from Hanson Natural Resources
Company of approximately 602,000 acres of timberland in the Pacific Northwest
and North Louisiana, a sawmill in Warrenton, Oregon, inventories and other
assets for approximately $1,144,860,000. The timberland acquired by the
registrant includes Contract Parcels aggregating approximately 56,000 acres in
Oregon which are to be conveyed to Hancock for approximately $197,860,000 plus
certain expenses incurred by the registrant. Accordingly, after giving effect
to the sale of the Contract Parcels, the registrant will have acquired 546,000
acres of timberland and related assets for approximately $947,000,000.
Pursuant to the Cavenham Agreement, the registrant assumed
Cavenham's environmental and other liabilities relating to the assets covered
by the Cavenham Agreement other than accounts payable, obligations for
borrowed money and specified excluded liabilities. Pursuant to the Designee
Agreements, each Designee assumed and indemnified the registrant against such
liabilities relating to the assets purchased by such Designee.
The registrant intends to continue to use the assets it acquired
from Cavenham for the purposes for which such assets were used by Cavenham.
The registrant funded the $50,000,000 deposit from its cash
resources and from the proceeds of a loan of $25,000,000 on March 13, 1996,
from First Interstate Bank of Oregon, N.A. The registrant funded the balance
of the purchase price from the proceeds of a loan of $1,100,000,000 on May 15,
1996, under a credit agreement (the "Credit Agreement") dated as of May 10,
1996, among the registrant; and Bank of America National Trust and Savings
Association; Abn Amro Bank N.V.; Morgan Guaranty Trust Company of New York;
Nationsbank, N.A.; Wachovia Bank of Georgia, N.A.; Deutsche Bank AG; First
Interstate Bank of Oregon, N.A.; Mellon Bank, N.A.; PNC Bank, National
Association; Royal Bank of Canada; Toronto Dominion (Texas), Inc.; The Bank of
New York; The Bank of Nova Scotia; Banque Paribas; Credit Lyonnais; The
Industrial Bank of Japan, Limited; The Northern Trust Company; Cooperatieve
Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland"; The Sanwa Bank,
Limited; Societe Generale; and United States National Bank of Oregon
(collectively, "Banks").
The Credit Agreement sets forth the terms of a revolving loan and a
term loan provided to the registrant by Banks. The revolving loan provides
for borrowings of up to $1,000,000,000 in principal amount, matures on May 15,
2001, and at May 28, 1996, had an outstanding principal balance of
$500,000,000. The term loan is in the principal amount of $600,000,000 and
matures on May 15, 1998. Both loans bear interest at either a Base Rate or a
LIBO Rate, as defined in the Credit Agreement and selected by the registrant.
The interest rates are subject to periodic adjustment. At May 28, 1996, the
weighted average interest rates per annum for indebtedness outstanding under
the revolving loan and the term loan were 5.75% and 5.72%, respectively. The
Credit Agreement contains certain restrictions on the registrant's activities
which include, among other things, restrictions relating to sales and lease
backs, mergers, sales of assets not in the ordinary course of business, and
encumbrances on the registrant's property. The Credit Agreement also provides
that the registrant will not permit (i) its Consolidated Interest Coverage
Ratio, as defined, for any period of four consecutive fiscal quarters to be
less than 1.5 to 1.0; (ii) its Consolidated Funded Debt, as defined, to exceed
60% of its Consolidated Funded Debt plus its consolidated net worth until the
earlier of (A) March 31, 1997, and (B) the repayment of the term loan; and
(iii) its Consolidated Funded Debt to thereafter exceed 55% of its
Consolidated Funded Debt plus its consolidated net worth. Reference should be
made to the copy of the Credit Agreement filed as an exhibit to this report
for a complete description of its terms.
The purchase prices under the Cavenham Agreement and the Designee
Agreements were determined by arm's length negotiations between the parties
based on the market value of the assets purchased and sold. Such prices are
subject to post-closing adjustments to reflect the effect of certain of
Cavenham's operations during a period preceding May 15, 1996.
Pursuant to the Designee Agreement with Hancock, on May 15, 1996,
the registrant and Hancock entered into:
1. An agreement (the "Management Agreement") providing for the
management of the Contract Parcels by a Hancock subsidiary until such parcels
are purchased by Hancock or Hancock's right to purchase such parcels expires.
During the period a Contract Parcel is subject to the Management Agreement,
the net cash income, as defined, from such parcel is credited against the
purchase price for the parcel. The Hancock subsidiary and a subsidiary of the
registrant are also parties to the Management Agreement.
2. An agreement (the "Right of First Offer Agreement") providing
that Hancock will not sell or transfer to a third party any tract of the
timberland it acquires pursuant to its Designee Agreement, other than certain
exempt sales and transfers, without first offering to sell such tract to the
registrant at the price and on terms at which Hancock proposes to sell or
transfer such tract to the third party. If the registrant does not accept an
offer and the tract is thereafter sold to the third party as permitted by the
Right of First Offer Agreement, the registrant's rights under the Right of
First Offer Agreement terminate with respect to such tract. The Right of
First Offer Agreement expires on May 15, 2121.
3. An agreement (the "Timber Supply Agreement") providing that
Hancock will offer to sell to the registrant 25 percent of various categories
of the logs harvested from the timberland subject to the Right of First Offer
Agreement at a price equal to the highest sales price at which Hancock is
selling logs pursuant to its open market bidding procedures to unaffiliated
customers. The Timber Supply Agreement expires on June 30, 2001.
The above descriptions of the Cavenham Agreement, the Designee
Agreements, the Management Agreement, the Right of First Offer Agreement, and
the Timber Supply Agreement are summaries and do not purport to be complete.
Reference should be made to the copies of such agreements filed as exhibits to
this report for a complete description of their respective terms.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements.
None (pursuant to a waiver by the staff dated March 28,
1996).
(b) Pro Forma Financial Information.
It is impractical at this time to provide the required
pro forma financial information with respect to the
acquisition described in Item 2. The registrant
expects to file such pro forma financial information as
an amendment to this report on June 10, 1996.
(c) Exhibits.
The exhibits to this report are listed in the
accompanying index to exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Willamette Industries, Inc.
(Registrant)
By /s/J. A. Parsons
J. A. Parsons
Executive Vice President and
Chief Financial Officer
Dated: May 29, 1996
INDEX TO EXHIBITS
Exhibit No. Description
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2.1 Asset sale, purchase and transfer
agreement dated March 12, 1996,
between Hanson Natural Resources
Company, Cavenham Energy Resources
Inc., Cavenham Forest Industries Inc.
and the registrant.*
2.2 Asset sale, purchase and transfer
agreement dated April 11, 1996,
between the registrant and Crown
Pacific Limited Partnership.*
2.3 Asset sale, purchase and transfer
agreement dated April 23, 1996,
between the registrant and Temple-
Inland Forest Products Corporation.*
2.4 Asset sale, purchase and transfer
agreement dated April 26, 1996,
between the registrant and John
Hancock Mutual Life Insurance
Company, together with Addendum No. 1
thereto dated May 13, 1996.*
2.5 Management agreement dated May 15,
1996, among the registrant, John
Hancock Mutual Life Insurance
Company, Willamette Columbia Timber
Co. and Hancock Natural Resource
Group, Inc.*
2.6 Right of first offer agreement dated
May 15, 1996, between the registrant
and John Hancock Mutual Life
Insurance Company.*
2.7 Timber supply agreement dated May 15,
1996, between the registrant and John
Hancock Mutual Life Insurance
Company.*
4 Credit agreement dated as of May 10,
1996, among the registrant, Bank of
America National Trust and Savings
Association, Abn Amro Bank N.V.,
Morgan Guaranty Trust Company of New
York, Nationsbank, N.A., Wachovia
Bank of Georgia, N.A., and other
financial institutions parties
thereto.
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*The schedules (or similar attachments) to this exhibit have been omitted.
Such schedules are listed at the end of the exhibit and copies thereof will be
furnished supplementally to the Commission upon request.
Dates Referenced Herein and Documents Incorporated by Reference
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