EXHIBIT 1.2
EXECUTION COPY
Pricing Agreement
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., and
Banc of America Securities LLC,
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
as Independent Underwriter
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
August 8, 2001
Ladies and Gentlemen:
Louisiana-Pacific Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated August 8, 2001 (the "Underwriting Agreement"),
between the Company, on the one hand, and ▇▇▇▇▇▇▇, Sachs & Co. and Banc of
America Securities LLC, as Representatives of the several Underwriters, and the
Independent Underwriter, on the other hand, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 14 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 14
are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto. Subject to the terms and conditions set
forth herein and in the Underwriting Agreement incorporated herein by reference,
upon the execution of this Agreement, the Company hereby confirms its engagement
of the
services of the Independent Underwriter as, and the Independent Underwriter
hereby confirms its agreement with the Company to render services as, a
"qualified independent underwriter" within the meaning of Section (b)(15) of
Rule 2720 with respect to the offering and sale of the Designated Securities
specified herein, and all provisions with respect to the Independent Underwriter
contained in the Underwriting Agreement are incorporated herein in their
entirety.
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company, each of the Representatives and the
Independent Underwriter, plus one for each counsel, counterparts hereof, and
upon acceptance hereof by you, on behalf of each of the Underwriters, and by the
Independent Underwriter, this letter and such acceptance hereof, including the
provisions of the Underwriting Agreement incorporated herein by reference, shall
constitute a binding agreement between each of the Underwriters, the Independent
Underwriter and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Company for examination upon request, but without
warranty on the part of the Representatives as to the authority of other
Underwriters party thereto.
Very truly yours,
Louisiana-Pacific Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice-President and Chief Financial Officer
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
Banc of America Securities LLC,
on behalf of each of the Underwriters
BY ▇▇▇▇▇▇▇, Sachs & Co.
By: /s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
-----------------------------
(▇▇▇▇▇▇▇, Sachs & Co.)
Independent Underwriter:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
By: /s/ ▇▇▇▇▇▇▇, Sachs & Co.
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(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
SCHEDULE I
Principal
Amount of
Designated
Securities to be
Underwriter Purchased
----------- ---------
▇▇▇▇▇▇▇, Sachs & Co. $ 100,000,000
Banc of America Securities LLC 50,000,000
RBC Dominion Securities Corporation 20,000,000
Wachovia Securities, Inc. 20,000,000
Scotia Capital (USA) Inc. 10,000,000
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Total $ 200,000,000
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SCHEDULE II
Title of Designated Securities:
10.875% Senior Subordinated Notes due ▇▇▇▇
▇▇▇▇▇▇▇▇▇ principal amount:
$200,000,000
Price to Public:
100% of the principal amount of the Designated Securities, plus accrued
interest, if any, from August 13, 2001
Purchase Price by Underwriters:
98% of the principal amount of the Designated Securities, plus accrued
interest, if any, from August 13, 2001
Form of Designated Securities:
Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ("DTC") or its designated custodian, to be
made available for checking by the Representatives at least twenty-four hours
prior to the Time of Delivery at the office of DTC.
Specified funds for payment of purchase price:
Federal (same day) funds
Time of Delivery:
10:00 a.m. (New York City time), August 13, 2001
Indenture:
Indenture dated April 2, 1999, between the Company and Bank One Trust
Company, N.A., as successor in interest to The First National Bank of
Chicago, as Trustee, as supplemented by the Third Supplemental Trust
Indenture, dated August 13, 2001 (the "Supplemental Indenture"), between the
Company and Bank One Trust Company, N.A., as Trustee
Maturity:
November 15, 2008
Interest Rate:
10.875%
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Interest Payment Dates:
May 15 and November 15, commencing May 15, 2002
Redemption Provisions:
At any time prior to November 15, 2005, the Company has the option to redeem
the Designated Securities, in whole or in part, at a redemption price equal to
the greater of (1) 100% of the principal amount of the Designated Securities
being redeemed and (2) as determined by the Quotation Agent, the sum of the
present values of the remaining scheduled payments of the principal of and
interest on the Designated Securities being redeemed (not including any portion
of such payments of interest accrued as of the date of redemption) discounted to
the date of redemption on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 50 basis
points, together, in either case, with accrued interest on the principal amount
of the Designated Securities being redeemed to the date of redemption.
At any time prior to November 15, 2004, the Company may, on one or more
occasions, also redeem up to 35% of the aggregate principal amount of the
Designated Securities (including additional securities of the same series issued
under the Indenture as more fully described therein) issued under the Indenture
at a redemption price of 110.875% of the principal amount, plus accrued and
unpaid interest to the redemption date, with the net cash proceeds of one or
more Public Equity Offerings (as defined in the Supplemental Indenture);
provided that (1) at least 65% of the aggregate principal amount of the
Designated Securities (including additional securities of the same series issued
under the Indenture as more fully described therein) issued under the Indenture
remains outstanding immediately after the occurrence of such redemption
(excluding Designated Securities held by the Company and its Subsidiaries); and
(2) the redemption occurs within 45 days of the date of the closing of such
Public Equity Offering.
On or after November 15, 2005, the Company has the option to redeem all or a
part of the Designated Securities upon not less than 30 nor more than 60 days'
notice at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest on the Designated Securities
being redeemed, to the applicable redemption date, if redeemed during the
twelve-month period beginning on November 15 of the years indicated below:
Year Percentage
---- ----------
2005........................... 105.438%
2006........................... 102.719%
2007 and thereafter............ 100.00%
"Adjusted Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the U.S. Treasury security selected by a
Quotation Agent as having a maturity comparable to the remaining term of the
Designated Securities, that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of the Designated
Securities.
"Comparable Treasury Price" means, with respect to any redemption date, (1)
the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest of
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such Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer
than three such Reference Treasury Dealer Quotations, the average of all such
Quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Trustee after consultation with the Company.
"Reference Treasury Dealer" means (1) ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and its
successors; provided, however, that if the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company is required to substitute therefor another Primary
Treasury Dealer, and (2) any other Primary Treasury Dealer selected by the
Trustee after consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.
There are no mandatory redemption provisions.
Change of Control:
Following the occurrence of a Change of Control, the Company shall be
required to make an offer to each holder of Designated Securities to repurchase
all or any part (equal to $1,000 or an integral multiple thereof) of such
holder's Designated Securities at a price in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest thereon to the date
of purchase.
"Change of Control" means the occurrence of any of the following events: (a)
any "person" or "group" (as such terms are used in Section 13(d) of the Exchange
Act) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
Exchange Act), directly or indirectly, of more than 50% of the total voting
stock of the Company; (b) the Company consolidates with, or merges with or into,
another person, or another person consolidates with, or merges with or into, the
Company, in either case pursuant to a transaction in which the outstanding
voting stock of the Company is converted into or exchanged for cash, securities,
or other property, other than any such transaction where (i) immediately after
such transaction no "person" or "group" (as such terms are used in Section 13(d)
of the Exchange Act) is the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), of more than 50% of the total voting stock (or
comparable equity securities) of the person created by or surviving such
transaction and (ii) the holders of a majority of the total voting stock of the
Company immediately prior to such transaction hold, immediately following such
transaction, a majority of the total voting stock (or comparable equity
securities) of the person created by or surviving such transaction; (c) the
sale, assignment, conveyance, transfer, lease or other disposition, in one or
more related transactions, of all or substantially all of the assets of the
Company and its restricted subsidiaries as a whole to any "person" or "group"
(as such terms are used in Section 13(d) of the Exchange Act); (d) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the board of directors of the Company (together with any new
directors whose election by such board of directors or whose nomination for
election by the stockholders of the Company was approved by a vote of a majority
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the board of
directors of the Company then in office; or (e) the adoption by the Company's
board of directors or the holders of a majority of the Company's outstanding
common stock of a plan providing for the dissolution or liquidation of the
Company. Notwithstanding the foregoing, a transaction effected to create a
holding company of the Company will not be deemed to involve a Change of Control
if (1) pursuant to such transaction the Company becomes a wholly owned
Subsidiary of such holding company and (2) the
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holders of the voting stock of such holding company immediately following such
transaction are substantially the same as the holders of voting stock of the
Company immediately prior to such transaction.
Asset Sales:
In the event of an Asset Sale (as defined in the Supplemental Indenture) that
requires the repurchase of Designated Securities pursuant to the Supplemental
Indenture, the Company will be required to apply Excess Proceeds (as defined in
the Supplemental Indenture) to the repayment of the Designated Securities and
other pari passu indebtedness having similar asset sale provisions in accordance
with the procedures set forth in the Supplemental Indenture.
Sinking Fund Provisions:
No sinking fund provisions
Defeasance provisions:
The Company may, at its option, at any time and subject to the provisions of
the Indenture and Supplemental Indenture, elect to have its obligations
discharged with respect to the outstanding Designated Securities ("Legal
Defeasance") except for: (1) the rights of holders of outstanding Designated
Securities to receive payments in respect of the principal of, or interest or
premium, if any, on such Designated Securities when such payments are due from
the trust referred to in the Indenture and Supplemental Indenture; (2) the
Company's obligations with respect to issuing temporary Designated Securities,
registering the transfer or exchange of Designated Securities, replacing
mutilated, destroyed, lost or stolen Designated Securities, maintaining an
office or agency and holding funds for holders of the Designated Securities in
trust; (3) the rights, powers, trusts, duties and immunities of the Trustee and
the Company's obligations in connection therewith; and (4) the Legal Defeasance
provisions of the Indenture and Supplemental Indenture.
In addition, the Company may, at its option, at any time and subject to the
provisions of the Indenture and Supplemental Indenture, elect to the have its
obligations released with respect to certain covenants that are described in the
Indenture and Supplemental Indenture ("Covenant Defeasance"), and thereafter any
omission to comply with those covenants will not constitute a Default or Event
of Default (as defined in the Indenture and Supplemental Indenture) with respect
to the Designated Securities. In the event Covenant Defeasance occurs, certain
events (not including non-payment, bankruptcy, insolvency and reorganization
events) will no longer constitute an Event of Default with respect to the
Designated Securities.
Closing location for delivery of Designated Securities:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Names and addresses of Representatives:
Designated Representatives:
▇▇▇▇▇▇▇, Sachs & Co.
Banc of America Securities LLC
Address for Notices, etc.:
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c/o Goldman, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Name and address of Independent Underwriter:
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
SCHEDULE III
Based upon clauses (A) through (D) of Section 4(b)(iv) of the Underwriting
Agreement and assuming that the offering and sale of the Designated Securities
is made as contemplated by the Underwriting Agreement, the Pricing Agreement and
the Prospectus as amended or supplemented, the minimum yield on the Designated
Securities recommended by the Independent Underwriter is 108.75% (corresponding
to an initial public offering price of 100%), which minimum yield should in no
way be considered or relied upon as an indication of the value of the Designated
Securities.