Exhibit 99(b)(3)
[LETTERHEAD OF BANK OF AMERICA]
January 14, 0000
Xxxxxxxxx-Xxxxxxx Xxxxxxxxxxx
000 X.X. Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention; Xx. Xxxxxxx X. Xxxxxx, Director, Business
Development
Re: Limited Waiver to Credit Agreement ("Credit Agreement") dated as of
January 31, 1997 among Louisiana-Pacific Corporation, a Delaware
corporation (the "Company"), as the Revolving Borrower, Louisiana-Pacific
Canada Pulp Co., a Nova Scotia, Canada corporation, as the Term Borrower,
the financial Institutions party thereto (the "Banks") and Bank of America
National Trust and Savings Association, as agent for the Banks and the
Designated Bidders (the "Agent")
Dear Xx. Xxxxxx:
Pursuant to your letter to the Agent dated January 13, 1999 (the "Request
Letter") you have requested that the Banks agree to a waiver of the provisions
of Section 7.03 of the Credit Agreement (entitled "Mergers") and Section 7.05 of
the Credit Agreement (entitled "Use of Proceeds"). As detailed in the Request
Letter, the Company has requested this waiver to permit it to acquire a
publicly-held company (the "Acquisition") using Loan proceeds. (Capitalized
terms not defined herein shall have the meanings assigned to them in the Credit
Agreement.)
In reliance upon the representations in the Request Letter and our
understanding that the Acquisition will be effected by a merger (the "Merger')
of a newly organized wholly owned subsidiary of the Company with and into the
publicly held target company (whereupon such target company will become a wholly
owned subsidiary of the Company), and subject to the terms and limitations
hereof: (i) the Banks hereby consent to a limited waiver of the provisions of
Section 7.03 of the Credit Agreement to the extent that Section 7.03 would
prohibit the Company from effecting the Acquisition by means of the Merger and
hereby waive any Default or Event of Default arising solely due to a breach of
Section 7.03 of the Credit Agreement as a result of the Merger, and (ii) the
Banks hereby consent to a limited waiver of the provisions of Section 7.05 of
the Credit Agreement to the extent that Section 7.05 would prohibit the Company
from using Loan proceeds to effectuate the Acquisition and hereby waive any
Default or Event of Default arising solely due to a breach of Section 7.05 of
the Credit Agreement as a result of the use of Loan proceeds to effectuate the
Acquisition.
Re: Louisiana-Pacific Corporation
January 14, 1999
Page 2
This waiver is limited to the transaction described hereby and shall not
(i) except as expressly waived and consented to hereby, waive any Default or
Event of Default otherwise arising out of the Acquisition (whether similar or
dissimilar and including any cross-default arising as a result thereof) nor (ii)
be deemed to create a course of dealing or otherwise obligate the Banks to enter
into other waivers in the future, whether under the same, similar or different
circumstances.
The effectiveness of this waiver is subject to the following conditions:
(1) each of the representations in the Request Letter shall be true and correct
in all material respects as of the date hereof and as of the date of
consummation of the Acquisition; (2) immediately after giving effect to the
Acquisition, there shall be no Default or Event of Default (except as expressly
waived hereby) and the Company shall be in pro forma compliance with Section
7.01 of the Credit Agreement; (3) the Acquisition and the use of the Loan
proceeds therefore are undertaken in accordance with all applicable Requirements
of Law (including Regulation U of the FRB); (4) the prior, effective written
consent or approval to the Acquisition of the board of directors of the acquiree
is obtained; and (5) the Agent shall have received an executed counterpart of
this letter from each of the Company and the Majority Banks (including by
facsimile transmission, which shall be deemed to be an original for all
purposes, the Agent being authorized by the parties to make sufficient copies of
such facsimile signature pages to assemble counterparts for each of the
parties). This waiver may be executed in counterparts, and by each party on
separate counterparts, all of which when taken together shall constitute one and
the same instrument. The parties acknowledge that the Term Commitment has been
terminated and the Term Loans have been repaid; accordingly, the Term Borrower
is not a party hereto.
Yours truly,
Bank of America National Trust and
Savings Association, as Agent
/s/ Xxxx X. Xxx
Xxxx X. Xxx
Vice President
Re: Louisiana-Pacific Corporation
January 14, 1999
Page 3
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent and Bank
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
---------------------------------
Title: Managing Director
--------------------------------
Agreed to:
LOUISIANA-PACIFIC CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
--------------------------------------
NAME OF INSTITUTION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Re: Louisiana-Pacific Corporation
January 14, 1999
Page 3
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent and Bank
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Agreed to:
LOUISIANA-PACIFIC CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
The Bank of New York
--------------------------------------
NAME OF INSTITUTION
By: /s/ Xxxxxx Xxxx
-----------------------------------
Name: Xxxxxx Xxxx
---------------------------------
Title: Vice President
--------------------------------
Re: Louisiana-Pacific Corporation
January 14, 1999
Page 3
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent and Bank
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Agreed to:
LOUISIANA-PACIFIC CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
ABN AMRO Bank
--------------------------------------
NAME OF INSTITUTION
By: /s/ Xxxxx XxXxxxxx
-----------------------------------
Name: Xxxxx XxXxxxxx
---------------------------------
Title: Vice President
--------------------------------
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
---------------------------------
Title: Senior Vice President
--------------------------------
Re: Louisiana-Pacific Corporation
January 14, 1999
Page 3
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent and Bank
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Agreed to:
LOUISIANA-PACIFIC CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
---------------------------------
Title: Vice President, Treasurer & CFO
--------------------------------
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
---------------------------------
Title: Assistant Treasurer
--------------------------------
--------------------------------------
NAME OF INSTITUTION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Re: Louisiana-Pacific Corporation
January 14, 1999
Page 3
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent and Bank
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Agreed to:
LOUISIANA-PACIFIC CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Chase Manhattan Bank
--------------------------------------
NAME OF INSTITUTION
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
---------------------------------
Title: Managing Director
--------------------------------
Re: Louisiana-Pacific Corporation
January 14, 1999
Page 3
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent and Bank
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Agreed to:
LOUISIANA-PACIFIC CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
The First National Bank of Chicago
--------------------------------------
NAME OF INSTITUTION
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
---------------------------------
Title: First Vice President
--------------------------------
Re: Louisiana-Pacific Corporation
January 14, 1999
Page 3
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent and Bank
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Agreed to:
LOUISIANA-PACIFIC CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Wachovia Bank, N.A.
--------------------------------------
NAME OF INSTITUTION
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
---------------------------------
Title: Vice President
--------------------------------
Re: Louisiana-Pacific Corporation
January 14, 1999
Page 3
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent and Bank
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Agreed to:
LOUISIANA-PACIFIC CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
U.S. Bank National Association
--------------------------------------
NAME OF INSTITUTION
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx
---------------------------------
Title: Asst. Relationship Manager
--------------------------------
Exhibit 99(b)(3)
[LETTERHEAD OF LOUISIANA-PACIFIC CORPORATION]
January 13, 1999
Xx. Xxxxx Xxxxxxxx Personal & Confidential
Vice President
Bank of America
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Dear Xxxxx,
Louisiana-Pacific Corporation is in the process of negotiating the purchase, for
cash, of all of the outstanding shares of a public company. Our current schedule
targets the signing of the share purchase and merger agreements and a public
announcement of the transaction early next week. Our goal is to be able to say
that our offer to purchase is not subject to any financing contingency.
We are planning on using funds available under our current credit agreement to
fund the share purchase. We have reviewed the credit agreement and are concerned
that the purchase of the above mentioned shares would violate paragraph 7.03 and
7.05 of the credit agreement. On a proforma basis, we are in compliance with
all other aspects of the agreement, including the financial covenant. We request
that you secure the necessary approvals from your bank and the other banks in
the credit agreement syndicate to provide the necessary waivers.
It is our intention to began discussions with BofA/NationsBanc Xxxxxxxxxx
Securities and our financial advisor about putting into place more appropriate,
longer-term financing to replace the funds used under the current credit
agreement.
The target is a publicly-traded building materials company. The target has one
shareholder that holds nearly 50% of the shares. This transaction is being
negotiated amongst L-P, target's management and the large shareholder on a
friendly basis and we would only proceed on that basis. Based on discussions to
date, the estimated total transaction value, including debt of $50 million,
would be $220-230 million.
The nature of the target's business is an excellent strategic fit with L-P in
terms of the nature of products sold and the customer and channels served. We
see quite a lot of good synergies in combining L-P and the target. They also
have an excellent management team. The company's sales in recent years have
ranged from $300-325 million and they have been profitable ($15-20 million).
The target has exposure to a product liability claims and litigation. L-P's
business people and legal people have done extensive due diligence on this
matter. Based on this review, we do not believe this is a material exposure.
Either I or Xxxx Xxxxxxx would be happy to answer any questions you may have
regarding this proposed transaction. Obviously everything discussed in this
letter is highly confidential and should only be used and discussed for purposes
of making the necessary credit decisions.
Sincerely,
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Director, Business Development
CC: Xxxx Xxxxxxx
