EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
AMONG
XXXXX FOREST PRODUCTS LIMITED
AND
LOUISIANA-PACIFIC CANADA ENGINEERED WOOD PRODUCTS LTD.
AND
LOUISIANA-PACIFIC CANADA XXXXXX CREEK LTD.
AND
LOUISIANA-PACIFIC CANADA LTD.
TABLE OF CONTENTS
PAGE
PART A - INTENT AND INTERPRETATION OF AGREEMENT.................................................6
1. INTENT OF AGREEMENT........................................................................6
1.1. Purchases and Sales...........................................................6
1.2. Aggregate Purchase Price......................................................7
2. INTERPRETATION OF AGREEMENT................................................................7
2.1. Definitions...................................................................7
2.2. Schedules....................................................................15
PART B - SALE OF XXXXX ASSETS BY XXXXX TO L-P ENGINEERED WOOD..................................18
3. SALE AND PURCHASE OF XXXXX ASSETS........................................................18
3.1. Sale of Xxxxx Assets.........................................................18
3.2. Xxxxx Assets.................................................................18
3.3. Liens........................................................................19
3.4. Excluded Xxxxx Assets........................................................19
3.5. Allocation of the Purchase Price.............................................19
3.6. Payment of Taxes, Fees and Costs.............................................19
3.7. Additional Prepaid Expenses..................................................20
4. PAYMENT AND ADJUSTMENT OF XXXXX EQUIPMENT PURCHASE PRICE..................................20
4.1. Basic Xxxxx Equipment Purchase Price.........................................20
4.2. Xxxxx Equipment Purchase Price Adjustments at Closing........................20
4.3. Adjusted Xxxxx Equipment Purchase Price......................................21
4.4. Payment of Adjusted Xxxxx Equipment Purchase Price...........................21
5. PAYMENT AND ADJUSTMENT OF RESIDUAL XXXXX ASSETS PURCHASE PRICE............................21
5.1. Residual Xxxxx Assets Purchase Price.........................................21
5.2. Residual Xxxxx Assets Purchase Price Adjustments at Closing..................21
5.3. Estimated Residual Xxxxx Assets Purchase Price at Closing....................23
5.4. Payment of Estimated Residual Xxxxx Assets Purchase Price....................24
5.5. Holdback for Adjustment to Residual Xxxxx Assets Purchase Price..............24
5.6. Indemnity Holdback...........................................................24
5.7. Post-Closing Residual Xxxxx Assets Purchase Price Adjustment Procedure.......24
5.8. Post-Closing Residual Xxxxx Assets Purchase Price Adjustment Payment.........24
5.9. Residual Xxxxx Assets Adjustment Payment Not Subject to Minimum..............25
6. DISPUTE OF STATEMENTS OF ADJUSTMENTS......................................................25
6.1. Notice of Adjustment Disagreement............................................25
6.2. Fees of Independent Accountant...............................................26
7. ASSUMPTION OF LIABILITIES.................................................................26
7.1. Liability Assumption.........................................................26
3
PART C - SALE OF SLEC ASSETS BY XXXXX TO X-X XXXXXX CREEK......................................27
8. SALE AND PURCHASE OF SLEC ASSETS..........................................................27
8.1. Sale of SLEC Assets..........................................................27
8.2. Liens........................................................................27
8.3. Allocation of the Purchase Price.............................................27
9. PAYMENT OF SLEC ASSETS PURCHASE PRICE.....................................................27
9.1. SLEC Assets Purchase Price...................................................27
9.2. Payment of SLEC Assets Purchase Price........................................27
9.3. Payment of Taxes, Fees and Costs.............................................27
10. ASSUMPTION OF OBLIGATIONS.................................................................27
10.1. Obligation Assumption........................................................27
PART D - REPRESENTATIONS, WARRANTIES AND COVENANTS.............................................28
11. REPRESENTATIONS AND WARRANTIES OF XXXXX...................................................28
11.1. Corporate Organization, Etc..................................................28
11.2. No Violation.................................................................28
11.3. Contracts....................................................................29
11.4. Assets and Title.............................................................29
11.5. The Capital Leases...........................................................30
11.6. Litigation...................................................................30
11.7. Compliance with Laws and Regulations.........................................30
11.8. Environmental Matters........................................................30
11.9. Disclosure...................................................................31
11.10. Condition of Xxxxx Assets and SLEC Assets....................................32
11.11. Tax Matters..................................................................32
11.12. Labour Relations.............................................................32
11.13. Salaried Employees...........................................................32
11.14. Employee Plans...............................................................32
11.15. Employment Obligations.......................................................33
11.16. Patents, Trademarks, etc.....................................................33
11.17. Year 2000 Compliance.........................................................34
11.18. Financial Statements.........................................................34
11.19. Road Costs...................................................................34
11.20. Accounts Receivable..........................................................34
11.21. Inventory....................................................................34
11.22. Insurance....................................................................34
11.23. Forest Tenures...............................................................34
11.24. Promissory Note..............................................................35
11.25. SLEC Capital Leases..........................................................35
11.26. SLEC ASSETS..................................................................35
11.27. Survival.....................................................................35
12. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS AND L-P CANADA...........................35
12.1. Organization, Standing and Power.............................................35
12.2. Authority....................................................................35
12.3. Preferred Shares.............................................................36
4
12.4. SLEC Assets..................................................................36
12.5. Accuracy of Xxxxx' Representations...........................................36
12.6. Survival.....................................................................36
13. COVENANTS.................................................................................36
13.1. Conduct of Business..........................................................36
13.2. Storage of Xxxxxx J-Bar Sorter...............................................37
13.3. Contract Consents............................................................37
13.4. Forest Tenures Consents......................................................37
13.5. Employees....................................................................37
13.6. Valuations...................................................................38
13.7. Notice of Actuarial Disagreement.............................................39
13.8. Funding......................................................................39
13.9. Pension Transfer.............................................................40
13.10. Continued Access to Employees................................................40
13.11. Consistent Use of GAAP.......................................................40
13.12. Validity of Representations..................................................40
13.13. Indemnifications.............................................................40
13.14. Loan and Promissory Note.....................................................42
13.15. SLEC Assets..................................................................42
13.16. Permitted Encumbrances.......................................................42
13.17. Defense of Claims............................................................42
13.18. Land Title Office Discharges.................................................43
13.19. Job Protection Liabilities...................................................43
13.20. Currency Conversion..........................................................43
13.21. Deliveries...................................................................43
PART E - GENERAL TERMS GOVERNING PURCHASES.....................................................44
14. INDEMNITY HOLDBACK........................................................................44
14.1. Delivery of Indemnity Holdback...............................................44
14.2. Limitation on Liability......................................................44
14.3. Claims on Indemnity Holdback.................................................44
14.4. Release of Indemnity Holdback................................................44
14.5. Interest on Indemnity Holdback...............................................44
15. COMPETITION MATTERS.......................................................................45
15.1. Xxxx-Xxxxx Xxxxxx Act........................................................45
15.2. Competition Act..............................................................45
16. INVESTMENT CANADA ACT.....................................................................45
16.1. Purchaser to make Filings....................................................45
17. CONDITIONS PRECEDENT TO THE CLOSING.......................................................45
17.1. Conditions Precedent to the Purchasers' and L-P Canada's Obligations.........45
17.2. Conditions Precedent to Obligations of Xxxxx.................................48
17.3. Mutual Conditions Precedent to the Parties' Obligations......................48
18. CLOSING PROCEDURE.........................................................................49
18.1. The Closing..................................................................49
5
18.2. Xxxxx' Deliveries at Closing.................................................49
18.3. L-P Engineered Wood's Deliveries at Closing..................................50
18.4. X-X Xxxxxx Creek's Deliveries at Closing.....................................51
18.5. L-P Canada's Deliveries at Closing...........................................51
18.6. Public Announcement..........................................................52
19. TERMINATION...............................................................................52
19.1. Events of Termination........................................................52
19.2. Effect of Termination........................................................52
19.3. Specific Performance.........................................................52
20. MISCELLANEOUS.............................................................................52
20.1. Notices......................................................................52
20.2. The Purchasers' Consents.....................................................55
20.3. Expenses.....................................................................55
20.4. Brokerage....................................................................55
20.5. Successors and Assigns.......................................................55
20.6. Waiver.......................................................................55
20.7. Entire Agreement.............................................................56
20.8. Amendments, Supplements......................................................56
20.9. Disclosure...................................................................56
20.10. Exclusive Applicable Law.....................................................56
20.11. Recovery of Litigation Costs.................................................56
20.12. Severability.................................................................56
20.13. Access to Information........................................................56
20.14. Post-Closing Co-operation....................................................56
20.15. Disposal of Books and Records................................................57
20.16. Further Assurances...........................................................57
20.17. No Third-Party Beneficiaries.................................................57
20.18. Counterparts.................................................................57
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement"), is made by
and among XXXXX FOREST PRODUCTS LIMITED, a British Columbia company ("Xxxxx"),
LOUISIANA-PACIFIC CANADA ENGINEERED WOOD PRODUCTS LTD., a British Columbia
company ("L-P Engineered Wood"), LOUISIANA-PACIFIC CANADA XXXXXX CREEK LTD., a
British Columbia company ("X-X Xxxxxx Creek") and LOUISIANA-PACIFIC CANADA LTD.,
a British Columbia company ("L-P Canada").
RECITALS
X. Xxxxx carries on the businesses of the manufacture of veneer, plywood,
laminated veneer lumber ("LVL"), cedar lumber and cedar mulch and of power
generation in Golden, Malakwa and Donald, British Columbia (collectively, the
"Operations").
B. St. Xxxxxxx Xxxxx Canada Corp., a Washington state corporation ("SLEC") owns
certain assets which are leased to Xxxxx for use in the Operations.
C. L-P Engineered Wood and X-X Xxxxxx Creek (together, the "Purchasers") desire
to buy from Xxxxx and Xxxxx desires to sell to the Purchasers substantially all
of the rights and assets used in the Operations, other than the Excluded Xxxxx
Assets (as herein defined).
D. L-P Canada owns all of the issued shares of each of L-P Engineered Wood and
X-X Xxxxxx Creek and has agreed to give certain representations, warranties and
covenants in respect of the purchases hereunder.
E. NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties hereby agree as follows:
PART A - INTENT AND INTERPRETATION OF AGREEMENT
1. INTENT OF AGREEMENT
1.1. PURCHASES AND SALES. Subject to and upon the terms and conditions set forth
in this Agreement:
(a) L-P Engineered Wood shall buy from Xxxxx and Xxxxx shall sell to L-P
Engineered Wood substantially all of Xxxxx' rights and assets used in
the Operations, other than the Excluded Xxxxx Assets and the SLEC
Assets;
(b) X-X Xxxxxx Creek shall buy from Xxxxx and Xxxxx shall sell to X-X
Xxxxxx Creek the SLEC Assets;
(c) L-P Canada shall lend to Xxxxx an amount equal to the Adjusted Xxxxx
Equipment Purchase Price; and
7 PART A
(d) L-P Canada shall give certain representations, warranties and
covenants in respect of each of the purchases hereunder.
1.2. AGGREGATE PURCHASE PRICE. Subject to the adjustments set out hereunder, the
aggregate purchase price payable by the Purchasers to Xxxxx for the purchases
set out in this Agreement shall be US $95,592,000.
2. INTERPRETATION OF AGREEMENT
2.1. DEFINITIONS. The following capitalized terms when used herein shall have
the meaning indicated below:
(a) "ADJUSTED XXXXX EQUIPMENT PURCHASE PRICE" shall have the meaning
ascribed to it in Section 4.3.
(b) "ADJUSTED RESIDUAL XXXXX ASSETS PURCHASE PRICE" shall have the meaning
ascribed to it in Section 5.7.
(c) "ADJUSTMENT HOLDBACK" shall have the meaning ascribed to it in Section
5.5.
(d) "AFFILIATE" has the meaning attributed to that term in the COMPANY ACT
(British Columbia), as in effect on the date hereof.
(e) "Aggregate Adjusted Xxxxx Purchase Price" means the sum of:
(i) the Adjusted Xxxxx Equipment Purchase Price; and
(ii) the Adjusted Residual Xxxxx Assets Purchase Price.
(f) "Aggregate Basic Xxxxx Purchase Price" means the sum of:
(i) the Basic Xxxxx Equipment Purchase Price; and
(ii) the Basic Residual Xxxxx Assets Purchase Price.
(g) "Aggregate Estimated Xxxxx Purchase Price" means the sum of:
(i) the Adjusted Xxxxx Equipment Purchase Price; and
(ii) the Estimated Residual Xxxxx Assets Purchase Price.
(h) "ASSETS" means:
(i) the Xxxxx Assets; and
(ii) the SLEC Assets.
(i) "ASSUMED CAPITAL LEASES" means:
(i) the Assumed Valuation Date Capital Leases;
(ii) Capital Leases entered into by Xxxxx after the Valuation Date and
prior to the date of this Agreement which L-P Engineered Wood
8 PART A
agrees in writing to assume and which are listed in Part 3 of
Schedule 11.5; and
(iii) Capital Leases entered into by Xxxxx after the date of this
Agreement and prior to the Closing Date in the ordinary course of
business of Xxxxx and with the prior written consent of L-P
Engineered Wood, not to be unreasonably withheld provided that
the fair market value of the assets leased is not Material.
(j) "ASSUMED CAPITAL LEASES ADJUSTMENT" shall have the meaning ascribed to
it in Section 5.2(e).
(k) "ASSUMED CONTRACTS" means Contracts of Xxxxx as of the Closing Date
that:
(i) are in force as of the date of this Agreement, are in the
ordinary course of Xxxxx' business, require an expenditure by
Xxxxx or L-P Engineered Wood of not more than Cdn. $100,000 and
either:
A. will be terminable by L-P Engineered Wood without
penalty not more than 12 months after the Closing Date;
or
B. will be fully performed within 12 months of the Closing
Date; or
(ii) are listed in Part 1 of Schedule 11.3(a) as Assumed Contracts; or
(iii) are entered into by Xxxxx after the date of this Agreement and
prior to the Closing Date:
A. in the ordinary course of business of Xxxxx, at fair
market value and will not require a Material
expenditure on the part of L-P Engineered Wood; or
B. are agreed to be assumed by L-P Engineered Wood in
writing at or prior to the Closing Date.
(l) "ASSUMED XXXXX LIABILITIES" shall have the meaning ascribed to it in
Section 7.1(b).
(m) "ASSUMED XXXXX LIABILITIES ADJUSTMENT" shall have the meaning ascribed
to it in Section 5.2(f).
(n) "ASSUMED XXXXX OBLIGATIONS" shall have the meaning ascribed to it in
Section 7.1(c).
(o) "ASSUMED VALUATION DATE CAPITAL LEASES" means the Capital Leases,
other than the SLEC Capital Leases, which were in existence on the
Valuation Date and which are listed in Part 1 of Schedule 11.5.
9 PART A
(p) "AUTHORITY" means any governmental, regulatory or administrative body,
agency or authority, any court or judicial authority or any public
regulatory authority, whether international, federal, provincial or
municipal.
(q) "BASIC XXXXX EQUIPMENT PURCHASE PRICE" shall have the meaning ascribed
to it in Section 4.1.
(r) "BASIC RESIDUAL XXXXX ASSETS PURCHASE PRICE" shall have the meaning
ascribed to it in Section 5.1.
(s) "BOOKS AND RECORDS" shall have the meaning ascribed to it in Section
3.2(g).
(t) "CAPITAL LEASES" means leases of assets or conditional sales contracts
for assets that are recorded on the financial statements of Xxxxx as
capital leases or that should be, in accordance with GAAP, recorded on
such statements as capital leases.
(u) "CLAIM" means any claim, lawsuit, demand, suit, litigation,
proceeding, arbitration, or other dispute, whether civil, criminal,
administrative or otherwise, or any hearing, investigation or notice
of a violation or order by an Authority.
(v) "CLOSING" AND "CLOSING DATE" mean the event and date of the sale of
the Assets specified in Section 18.1.
(w) "COLLECTIVE AGREEMENT" means, collectively, the agreements set forth
in Schedule 11.12.
(x) "COMPETITION ACT" shall have the meaning ascribed to it in Section
15.2.
(y) "CONTRACT" means any agreement, contract, option, commitment, lease or
other binding arrangement.
(z) "DISPUTED ACTUARIAL MATTERS" shall have the meaning ascribed to it in
Section 13.7.
(aa) "DISPUTED ADJUSTMENT MATTERS" shall have the meaning ascribed to it in
Section 6.1.
(bb) "XXXXXX FACILITY" means Xxxxx' lands, premises and operations located
at Donald, British Columbia as more particularly described in Schedule
3.4.
(cc) "XXXXXX J-BAR SORTER" means the J-Bar sorter formerly used in the
Operations and located at the Xxxxxx Facility.
(dd) "ENVIRONMENTAL LAW" means any Regulation, Order or judgment in effect
as of the Closing Date, which relates to or otherwise imposes
liability or standards of conduct concerning discharges, emissions,
releases or threatened releases of noise, odours or any pollutants,
contaminants, waste, or hazardous substances or materials, whether or
not as matter or energy, into air, water, or land, or otherwise
relating to the manufacture, processing,
10 PART A
generation, distribution, use, treatment, storage, disposal, cleanup,
transport or handling of pollutants, contaminants, or wastes,
hazardous substances or materials, including but not limited to the
WASTE MANAGEMENT ACT and the TRANSPORTATION OF DANGEROUS GOODS ACT and
any other similar federal or provincial statutes or municipal by-laws.
(ee) "ENVIRONMENTAL PERMIT" means any permit, license, approval, consent or
other authorization required by or pursuant to any applicable
Environmental Law.
(ff) "ESCROW AGENT" means Xxxxxxx & DuMoulin.
(gg) "ESCROW AGREEMENT" shall have the meaning ascribed to it in Section
5.5.
(hh) "ESTIMATED RESIDUAL XXXXX ASSETS PURCHASE PRICE" shall have the
meaning ascribed to it in Section 5.3.
(ii) "ESTIMATED RESIDUAL XXXXX ASSETS STATEMENT OF ADJUSTMENTS" shall have
the meaning ascribed to it in Section 5.3.
(jj) "XXXXX" means Xxxxx Forest Products Limited.
(kk) "XXXXX ACTUARY" means Xxxxxx Xxxxx & Co.
(ll) "XXXXX ASSETS" shall have the meaning ascribed to it in Section 3.2.
(mm) "XXXXX ASSETS PURCHASE PRICE ALLOCATION STATEMENT" shall have the
meaning ascribed to it in Section 3.5.
(nn) "XXXXX EQUIPMENT" has the meaning ascribed to it in Section
3.2(c)(iii).
(oo) "XXXXX EQUIPMENT ACQUISITION ADJUSTMENT" shall have the meaning
ascribed to it in Section 4.2(a).
(pp) "XXXXX EQUIPMENT DAMAGE ADJUSTMENT" shall have the meaning ascribed to
it in Section 4.2(c).
(qq) "XXXXX EQUIPMENT DISPOSAL ADJUSTMENT" shall have the meaning ascribed
to it in Section 4.2(b).
(rr) "XXXXX EQUIPMENT PURCHASE PRICE ADJUSTMENTS" shall have the meaning
ascribed to it in Section 4.2.
(ss) "XXXXX EQUIPMENT STATEMENT OF ADJUSTMENTS" shall have the meaning
ascribed to it in Section 4.3.
(tt) "XXXXX INDEMNIFIED PARTIES" shall have the meaning ascribed to it in
Section 13.13(b).
(uu) "XXXXX' SOLICITORS" means Xxxxxx Xxxxxxx Xxxxxx & XxXxxxxx.
(vv) "EXCLUDED XXXXX ASSETS" shall have the meaning ascribed to it in
Section 3.4.
11 PART A
(ww) "FINAL RESIDUAL XXXXX ASSETS STATEMENT OF ADJUSTMENTS" shall have the
meaning ascribed to it in Section 5.7.
(xx) "FINANCIAL STATEMENTS" means the audited financial statements of Xxxxx
for the year ended December 31, 1998, a copy of which is attached as
Schedule 11.18.
(yy) "FIXED ASSETS" shall have the meaning ascribed to it in Section
3.2(c).
(zz) "FOREST TENURES" means all agreements and other rights held by Xxxxx
entitling it to cut or otherwise harvest lumber, including Golden and
Okanagan forest licences A17645 and A18669, Revelstoke Tree Farm
Licence No. 55 and the following timber licences:
(i) Timber Licence No. T0541;
(ii) Timber Licence No. T0550;
(iii) Timber Licence No. T0588;
(iv) Timber Licence No. T0587;
(v) Timber Licence No. T0606;
(vi) Timber Licence No. T0630; and
(vii) Timber Licence No. T0759 (amendment of Timber Licence No.
T0621).
(aaa) "GAAP" shall mean generally accepted accounting principles as in
effect in Canada.
(bbb) "GOLDEN FACILITY" means Xxxxx' operations located at Golden, British
Columbia more particularly described in Schedule 3.2(c)(i).
(ccc) "GUARANTEE" means any guarantee or other contingent liability (other
than any endorsement for collection or deposit in the ordinary course
of business), direct or indirect, with respect to any obligations of
another Person, through an agreement or otherwise, including, without
limitation:
(i) any endorsement or discount recourse with or undertaking
substantially equivalent to or having economic effect similar to
a guarantee in respect of any such obligations; and
(ii) any Contract (i) to purchase, or to advance or supply funds for
the payment or purchase of, any such obligations, (ii) to
purchase, sell or lease property, products, materials or
supplies, or transportation or services, to enable such other
Person to pay any such obligation or to assure the owner thereof
against loss regardless of the delivery or nondelivery of the
property, products, materials or supplies or transportation or
services or (iii) to make any loan, advance or capital
12 PART A
contribution to or other investment in, or to otherwise provide
funds to or for, such other Person to enable such Person to
satisfy an obligation (including any liability for a dividend,
stock liquidation payment or expense) or to assure a minimum
equity, working capital or other balance sheet condition for any
such obligation.
(ddd) "HSR ACT" shall have the meaning ascribed to it in Section 15.1.
(eee) "INDEMNITY HOLDBACK" shall have the meaning ascribed to it in Section
5.6.
(fff) "INDEMNITY PERIOD" shall have the meaning ascribed to it in Section
13.13(d).
(ggg) "INDEPENDENT ACCOUNTANT" means the Managing Partner of the Vancouver
Office of KPMG LLP, Chartered Accountants or his or her delegate;
(hhh) "INTANGIBLE ASSETS" shall have the meaning ascribed to it in Section
3.2(b).
(iii) "LANDS" shall have the meaning ascribed to it in Section 3.2(c)(i).
(jjj) "LIEN" means any security interest, lien, mortgage, pledge,
hypothecation, encumbrance, easement, restriction or interest of
another Person of any kind or nature.
(kkk) "LOAN" shall have the meaning ascribed to it in Section 13.14.
(lll) "L-P CANADA" means Louisiana-Pacific Canada Ltd.
(mmm) "X-X XXXXXX CREEK" means Louisiana-Pacific Canada Xxxxxx Creek Ltd.
(nnn) "L-P ENGINEERED WOOD" means Louisiana-Pacific Canada Engineered Wood
Products Ltd.
(ooo) "LVL" means laminated veneer lumber.
(ppp) "MALAKWA FACILITY" means Xxxxx' operations located at Malakwa,
British Columbia more particularly described in Schedule 3.2(c)(i).
(qqq) "MATERIAL" means in excess of Cdn. $25,000.
(rrr) "MATERIAL ADVERSE EFFECT" means any material adverse effect on the
Xxxxx Assets, the SLEC Assets or the Operations as conducted on the
date of this Agreement which has resulted from any circumstances,
state of facts or matters.
(sss) "NOTICE OF ACTUARIAL DISAGREEMENT" shall have the meaning ascribed to
it in Section 13.7.
(ttt) "NOTICE OF ADJUSTMENT DISAGREEMENT" shall have the meaning ascribed
to it in Section 6.1.
(uuu) "OPERATIONS" shall have the meaning ascribed to it in Recital A.
13 PART A
(vvv) "ORDER" means any decree, order, judgment, injunction, rule,
requirement or consent of or by an Authority.
(www) "PENSION PLAN" shall have the meaning ascribed to it in Section
11.14.
(xxx) "PERMITS" shall have the meaning ascribed to it in Section
3.2(c)(ii).
(yyy) "PERMITTED ENCUMBRANCES" shall have the meaning ascribed thereto in
Schedule 2.1(by) and shall also include any other liens or
encumbrances affecting the Xxxxx Assets which have been disclosed to
and accepted in writing by L-P Engineered Wood or affecting the SLEC
Assets which have been disclosed to and accepted in writing by X-X
Xxxxxx Creek.
(zzz) "PERSON" means any corporation, partnership, joint venture,
organization, entity, Authority or natural person.
(aaaa) "PREFERRED SHARES" shall have the meaning ascribed to it in Section
4.4.
(bbbb) "PREPAID EXPENSES" means those prepaid expenses of Xxxxx for goods
or services to be received in the future or any deposits to be
returned to, or otherwise applied for the benefit of, the Operations
in the future, which are of the nature set out in Schedule 3.2(a).
(cccc) "PROMISSORY NOTE" shall have the meaning ascribed to it in Section
13.14.
(dddd) "PURCHASERS" means L-P Engineered Wood and X-X Xxxxxx Creek
together.
(eeee) "PURCHASERS INDEMNIFIED PARTIES" shall have the meaning ascribed to
it in Section 13.13.
(ffff) "PURCHASERS' SOLICITORS" means Xxxxxxx & DuMoulin.
(gggg) "REGULATION" means any rule, law, statute, regulation, ordinance,
requirement or other binding action of or by an Authority including
the common law and the law of equity.
(hhhh) "RESIDUAL XXXXX ASSETS" means all of the Xxxxx Assets other than the
Xxxxx Equipment.
(iiii) "RESIDUAL XXXXX ASSETS ACQUISITION ADJUSTMENT" shall have the
meaning ascribed to it in Section 5.2(a).
(jjjj) "RESIDUAL XXXXX ASSETS ADJUSTMENT PAYMENT" shall have the meaning
ascribed to it in Section 5.8.
(kkkk) "RESIDUAL XXXXX ASSETS DAMAGE ADJUSTMENT" shall have the meaning
ascribed to it in Section 5.2(c).
(llll) "RESIDUAL XXXXX ASSETS DISPOSAL ADJUSTMENT" shall have the meaning
ascribed to it in Section 5.2(b).
14 PART A
(mmmm) "RESIDUAL XXXXX ASSETS PURCHASE PRICE ADJUSTMENTS" shall have the
meaning ascribed to it in Section 5.2.
(nnnn) "ROAD COSTS" means the cost to Xxxxx of logging roads acquired or
constructed by Xxxxx less amortization, as recorded in the
accounting records of Xxxxx in accordance with GAAP.
(oooo) "ROAD COSTS ADJUSTMENT" shall have the meaning ascribed to it in
Section 5.2(g).
(pppp) "SILVICULTURE ADJUSTMENT" shall have the meaning ascribed to it in
Section 5.2(i).
(qqqq) "SILVICULTURE OBLIGATIONS" means the current and long-term
obligations of Xxxxx for silviculture under the Forest Tenures.
(rrrr) "SLEC" means St. Xxxxxxx Xxxxx Canada Corp.
(ssss) "SLEC ASSETS" means those assets which, at the date of this
Agreement, are owned by SLEC and leased to Xxxxx for use in the
Operations, including without limitation, those listed on Schedule
11.26.
(tttt) "SLEC ASSETS PURCHASE PRICE" shall have the meaning ascribed to it
in Section 9.1.
(uuuu) "SLEC CAPITAL LEASES" means the Capital Leases between Xxxxx, as
lessee, and SLEC, as lessor, of the SLEC Assets which were in
existence on the Valuation Date.
(vvvv) "SOLICITORS OPINION" means an opinion to be delivered at Closing
either by the Xxxxx' Solicitors to the Purchasers or by the
Purchasers' Solicitors to Xxxxx, as the case may be, with respect to
the following matters, in form and content acceptable to the
solicitors for the other parties, acting reasonably:
(i) corporate existence and status;
(ii) corporate power and capacity;
(iii) authorization and execution;
(iv) absence of conflicts with constating documents; and
(v) absence of outstanding litigation (other than as disclosed in
this Agreement or in the Schedules hereto).
(wwww) "SOLVENCY DEFICIENCY" shall have the meaning ascribed to it in
Section 13.6.
(xxxx) "SOLVENCY DEFICIENCY VALUATION" shall have the meaning ascribed to
it in Section 13.6.
15 PART A
(yyyy) "SUPPLEMENTAL PENSION" means the agreement of Xxxxx to pay
Supplemental Pension Benefits to certain employees as described in
Schedule 11.13.
(zzzz) "SUPPLEMENTAL PENSION BENEFITS" means all benefits, other than
increased or additional benefits granted by the Purchasers after the
Closing Date, payable to the beneficiaries of the Pension Plan,
including those individuals who are designated on Schedule 11.13 as
"Executive Participants", in excess of the benefits to which such
beneficiaries would have been entitled under the plan except for the
restriction contained in Section XIX of the plan, or any similar
limitation applicable to the plan at the time, which reduces the
monthly pension to which such persons would otherwise have become
entitled under the Pension Plan.
(aaaaa) "SUPPLEMENTAL PENSION OBLIGATIONS" shall have the meaning ascribed
to it in Section 13.6.
(bbbbb) "TRADE RIGHTS" shall have the meaning ascribed to it in Section
11.16.
(ccccc) "TRUS JOIST SALES AGREEMENT" means the sales agreement between
Xxxxx and Trust Joist MacMillan dated March 12, 1999.
(ddddd) "TRUS JOIST SCARFER" means the Raute scarfing line owned by Trus
Joist MacMillan which is currently in the possession of Xxxxx and
used in the Operations pursuant to the Trus Joist Sales Agreement.
(eeeee) "VACATION PAY ADJUSTMENT" shall have the meaning ascribed to it in
Section 5.2(h).
(fffff) "VALUATION DATE" means April 30, 1999.
(ggggg) "WORKING CAPITAL" means Working Capital Assets less Working Capital
Liabilities, and may be a negative number.
(hhhhh) "WORKING CAPITAL ADJUSTMENT" shall have the meaning ascribed to it
in Section 5.2(d).
(iiiii) "WORKING CAPITAL ASSETS" shall have the meaning ascribed to it in
Section 3.2(a).
(jjjjj) "WORKING CAPITAL LIABILITIES" means all current liabilities of
Xxxxx of the nature and type listed on Schedule 3.2(a) attached,
including, without limitation, accounts payable, accrued
liabilities, stumpage payable and waste assessment, but excluding
Silviculture Obligations and "Excluded Working Capital
Liabilities" as described in Schedule 3.2(a).
2.2. SCHEDULES. The Schedules to this Agreement are as follows:
Schedule 2.1(by) Permitted Encumbrances
Schedule 3.2(a) Working Capital Assets and Liabilities
Schedule 3.2(b) Intangible Assets
16 PART A
Schedule 3.2(c)(i) Lands
Schedule 3.2(c)(ii) Permits
Schedule 3.2(c)(iii) Xxxxx Equipment
Schedule 3.4 Excluded Xxxxx Assets
Schedule 4.2(a)(i) Xxxxx Equipment Acquired between Valuation Date and Date of Agreement
Schedule 4.2(b)(i) Xxxxx Equipment Disposed of between Valuation Date and Date of Agreement
Schedule 4.4 Rights and Restrictions of Preferred Shares
Schedule 5.2(a)(i) Fixed Assets other than Xxxxx Equipment Acquired between Valuation Date and Date of Agreement
Schedule 5.2(b)(i) Fixed Assets other than Xxxxx Equipment Disposed of between Valuation Date and Date of Agreement
Schedule 5.5 Escrow Agreement
Schedule 7.1 Assumption and Indemnity Agreements
Schedule 7.1(b) Assumed Xxxxx Liabilities
Schedule 8.3 Allocation of the SLEC Assets Purchase Price
Schedule 11.2 Xxxxx Consents
Schedule 11.3(a) Contracts:
Part 1 - Assumed Contracts
Part 2 - Contracts Not Assumed by L-P Engineered Wood
Schedule 11.4(d) Aboriginal Land Claims
Schedule 11.5 Capital Leases:
Part 1 - Assumed Valuation Date Capital Leases
Part 2 - Capital Leases as at Valuation Date Not
Assumed by L-P Engineered Wood
Part 3 - Capital Leases between Valuation
Date and Date of Agreement
Assumed by L-P Engineered Wood
Part 4 - Capital Leases between Valuation Date and
Date of Agreement Not Assumed by L-P
Engineered Wood
Part 5 - SLEC Capital Leases
Schedule 11.6 Xxxxx Litigation
Schedule 11.7 Xxxxx Non-Compliance with Laws and Regulations
Schedule 11.8 Environmental Disclosures
Part 1 - Disclosures for which L-P Engineered Wood Assumes Liability
Part 2 - Disclosures for which L-P Engineered Wood
Does Not Assume Liability
Schedule 11.8(c) Environmental Permits
Schedule 11.10 Condition of Assets
Schedule 11.12 Labour Relations
Schedule 11.13 Salaried Employees
Schedule 11.14 Employee Plans
Schedule 11.15 Employment Obligations
Schedule 11.17 Year 2000 Compliance
Schedule 11.18 Financial Statements
Schedule 11.26 SLEC Assets
Schedule 13.14 Promissory Note
17 PART A
[The Schedules listed above are not being filed with this Agreement. A copy of
any such Schedule will be furnished supplementally to the Commission upon
request.]
18 PART B
PART B - SALE OF XXXXX ASSETS BY XXXXX TO L-P ENGINEERED WOOD
3. SALE AND PURCHASE OF XXXXX ASSETS
3.1. SALE OF XXXXX ASSETS. Subject to and upon the terms and conditions set
forth in this Agreement, Xxxxx shall sell, transfer, convey and assign to L-P
Engineered Wood, and L-P Engineered Wood shall purchase or acquire from Xxxxx at
the Closing all of Xxxxx' right, title and interest in and to the Xxxxx Assets
as at the Closing Date free and clear of all Liens save as provided in Section
3.3, for an aggregate purchase price of US $68,592,000 (the "Aggregate Basic
Xxxxx Purchase Price"), subject to adjustment as provided herein.
3.2. XXXXX ASSETS. The Xxxxx Assets shall consist of the entire right,
title and interest of Xxxxx in and to all those items used by Xxxxx in carrying
on the Operations, other than the Excluded Xxxxx Assets and the SLEC Assets.
Without limiting the generality of the foregoing, the Xxxxx Assets include:
(a) WORKING CAPITAL ASSETS. Being all current assets of Xxxxx of the
nature and type listed on Schedule 3.2(a) attached, including, without
limitation:
(i) All inventories and supplies of Xxxxx;
(ii) All accounts receivable of Xxxxx;
(iii) All Prepaid Expenses;
(iv) All cash and other securities of Xxxxx; and
(v) Recoverable forestry.
(b) INTANGIBLE ASSETS. All intangible assets of Xxxxx of every nature and
type used by Xxxxx in connection with the Operations including without
limitation all Canadian and foreign trademarks, service marks, trade
names, know how, shop rights, brand names, copyrights, including
registrations and applications, patents and patent applications and
employee covenants and agreements with respect to intellectual
property including without limitation those listed on Schedule 3.2(b)
attached (the "Intangible Assets").
(c) FIXED ASSETS. All fixed assets of Xxxxx other than the Excluded Xxxxx
Assets and the SLEC Assets (the "Fixed Assets") and including, without
limitation:
(i) All Xxxxx' right, title and interest in and to all lands and
premises owned, leased or used in the Operations, including all
logging roads, easements and rights-of-way (other than the Xxxxxx
Facility), including those listed in Schedule 3.2(c)(i) hereto
(the "Lands");
(ii) All governmental licenses, permits, approvals, license
applications, license amendment applications and product
registrations necessary or desirable for the running of the
Operations, including the
19 PART B
Environmental Permits and the other items described in Schedule
3.2(c)(ii) hereto (collectively, the "Permits"); and
(iii) All machinery, equipment, vehicles, furniture, computers,
software, furnishings, tools, dies, molds, parts and similar
assets wherever located, and all manuals and other materials
necessary for the operation of the Assets or used in the running
of the Operations (collectively, the "Xxxxx Equipment")
including without limitation those assets described on Schedule
3.2(c)(iii) attached, which schedule includes the Trus Joist
Scarfer.
(d) CAPITAL LEASES. The entire right, title and interest of Xxxxx in the
Assumed Capital Leases and in the assets which are the subject matter
of such Capital Leases.
(e) ASSUMED CONTRACTS. All of the rights of Xxxxx in the Assumed
Contracts.
(f) FOREST TENURES. All of Xxxxx' rights, title and interest in and to the
Forest Tenures.
(g) BOOKS AND RECORDS. Copies of all books and records relating to the
Assets and the Operations, including customer lists, lists of
suppliers, employee records, financial records and product or service
warranties and manuals (the "Books and Records"), but excluding tax
returns and all books and records relating to the Excluded Xxxxx
Assets.
3.3. LIENS. The Xxxxx Assets to be transferred or otherwise conveyed to L-P
Engineered Wood at the Closing Date pursuant to Section 3.1 shall be free and
clear of all Liens, excepting only the Assumed Xxxxx Liabilities, the Assumed
Xxxxx Obligations, the Working Capital Liabilities and the Permitted
Encumbrances.
3.4. EXCLUDED XXXXX ASSETS. Xxxxx shall retain and not transfer and L-P
Engineered Wood shall not purchase or acquire from Xxxxx the assets described on
Schedule 3.4 hereto (the "Excluded Xxxxx Assets").
3.5. ALLOCATION OF THE PURCHASE PRICE. As soon as possible after the date of
this Agreement but in any event by October 11, 1999, L-P Engineered Wood, acting
reasonably, shall prepare and deliver to Xxxxx a statement (the "Xxxxx Assets
Purchase Price Allocation Statement") allocating the Aggregate Basic Xxxxx
Purchase Price amongst the Xxxxx Assets, or classes of the Xxxxx Assets and such
statement shall be binding upon the parties. Such allocation shall automatically
be varied as required to reflect the Xxxxx Equipment Purchase Price Adjustments,
if any, and the Residual Xxxxx Assets Purchase Price Adjustments, if any.
3.6. PAYMENT OF TAXES, FEES AND COSTS. L-P Engineered Wood shall be wholly
responsible for all sales and transfer taxes payable in respect of the
conveyance of the Xxxxx Assets under the Agreement, including without limitation
goods and services tax under the EXCISE TAX ACT (Canada), property transfer tax
under the PROPERTY TRANSFER TAX ACT (British Columbia) and social services tax
under the SOCIAL SERVICE TAX ACT (British Columbia). Xxxxx and L-P Engineered
Wood shall make and file a joint election under section 167 of the EXCISE TAX
ACT (Canada) in respect of goods and services tax and shall do all things and
execute and deliver all documents necessary to make such election effective. To
the extent that social
20 PART B
services tax applies to the transfer of the Xxxxx Assets, L-P Engineered Wood
shall promptly pay to Xxxxx all amounts required to be collected and remitted by
Xxxxx in respect thereof and Xxxxx shall remit such amounts to the British
Columbia Consumer Taxation Branch as required.
3.7. ADDITIONAL PREPAID EXPENSES. In the event that, at the Closing Date, Xxxxx
has prepaid expenses which are not Prepaid Expenses (similar in nature to those
set out in Schedule 3.2(a)), L-P Engineered Wood shall have the right, but not
the obligation, to purchase such prepaid expenses from Xxxxx on the Closing Date
at the fair market value thereof.
4. PAYMENT AND ADJUSTMENT OF XXXXX EQUIPMENT PURCHASE PRICE
4.1. BASIC XXXXX EQUIPMENT PURCHASE PRICE. The consideration for the purchase of
the Xxxxx Equipment shall be the sum allocated to the Xxxxx Equipment according
to the Xxxxx Assets Purchase Price Allocation Statement (the "Basic Xxxxx
Equipment Purchase Price"), as adjusted under Section 4.2 and Section 4.3.
4.2. XXXXX EQUIPMENT PURCHASE PRICE ADJUSTMENTS AT CLOSING. The following
adjustments, without duplication, shall be made to the Basic Xxxxx Equipment
Purchase Price:
(a) XXXXX EQUIPMENT ACQUISITION ADJUSTMENT. Add the cost (less
depreciation at customary rates from the date of acquisition to the
Closing Date) of any Xxxxx Equipment acquired by Xxxxx:
(i) from May 1, 1999 to the date of the execution of this Agreement,
as identified on Schedule 4.2(a)(i); and
(ii) after the execution of this Agreement and prior to the Closing
Date:
A. with the prior written approval of L-P Engineered Wood,
which shall not be unreasonably withheld; or
B. in the ordinary course of business of Xxxxx, at no more
than the fair market value thereof and the cost of
which is not Material;
(the "Xxxxx Equipment Acquisition Adjustment");
(b) XXXXX EQUIPMENT DISPOSAL ADJUSTMENT. Deduct an amount equal to the
actual proceeds received by Xxxxx from the disposition of any of the
Xxxxx Equipment:
(i) from May 1, 1999 to the date of this Agreement, as identified on
Schedule 4.2(b)(i); and
(ii) after the date of this Agreement and prior to the Closing Date:
A. with the prior written approval of L-P Engineered Wood,
which shall not be unreasonably withheld; or
B. in the ordinary course of business of Xxxxx, at no less
than the fair market value thereof and the proceeds for
which
21 PART B
are not Material;
(the "Xxxxx Equipment Disposal Adjustment");
(c) XXXXX EQUIPMENT DAMAGE ADJUSTMENT. Deduct an amount equal to the
actual cost to repair or replace any Xxxxx Equipment which has
suffered any damage or loss (other than ordinary wear and tear)
between the Valuation Date and the Closing Date to the extent that
such damage or loss is not:
(i) repaired by the Closing Date; or
(ii) covered by insurance proceeds which are assigned to L-P
Engineered Wood at Closing and which are not included in the
Working Capital Assets; or
(iii) included in the Working Capital Liabilities or the Assumed Xxxxx
Liabilities;
(the "Xxxxx Equipment Damage Adjustment");
(the Xxxxx Equipment Acquisition Adjustment, the Xxxxx Equipment Disposal
Adjustment and the Xxxxx Equipment Damage Adjustment collectively, are referred
to herein as the "Xxxxx Equipment Purchase Price Adjustments").
4.3. ADJUSTED XXXXX EQUIPMENT PURCHASE PRICE. No less than 10 days before the
Closing Date, Xxxxx, acting reasonably, shall prepare and provide to L-P
Engineered Wood for approval, acting reasonably, a statement of the Xxxxx
Equipment Purchase Price Adjustments (the "Xxxxx Equipment Statement of
Adjustments") in which the amount of the Xxxxx Equipment Purchase Price
Adjustments shall be estimated and applied to the Basic Xxxxx Equipment Purchase
Price so as to provide the parties with an adjusted purchase price for the Xxxxx
Equipment (the "Adjusted Xxxxx Equipment Purchase Price").
4.4. PAYMENT OF ADJUSTED XXXXX EQUIPMENT PURCHASE PRICE. The Adjusted Xxxxx
Equipment Purchase Price shall be payable by the allotment, issuance and
delivery by L-P Engineered Wood to Xxxxx of a number of Preferred Shares having
an aggregate par value and redemption price equal to the Adjusted Xxxxx
Equipment Purchase Price and having attached thereto the rights and restrictions
set forth in Schedule 4.4 (the "Preferred Shares"), at an issue price of US
$1,000.00 per share.
5. PAYMENT AND ADJUSTMENT OF RESIDUAL XXXXX ASSETS PURCHASE PRICE
5.1. RESIDUAL XXXXX ASSETS PURCHASE PRICE. The consideration for the purchase of
the Residual Xxxxx Assets shall be the sum allocated to the Residual Xxxxx
Assets according to the Xxxxx Assets Purchase Price Allocation Statement (the
"Basic Residual Xxxxx Assets Purchase Price"), as adjusted in accordance with
this Section 5.
5.2. RESIDUAL XXXXX ASSETS PURCHASE PRICE ADJUSTMENTS AT CLOSING. The following
adjustments, without duplication, shall be made to the Basic Residual Xxxxx
Assets Purchase Price:
22 PART B
(a) RESIDUAL XXXXX ASSETS ACQUISITION ADJUSTMENT. Add the cost (less
depreciation at customary rates from the date of acquisition to the
Closing Date) of any Fixed Assets, other than Xxxxx Equipment,
acquired by Xxxxx:
(i) from May 1, 1999 to the date of the execution of this Agreement,
as identified on Schedule 5.2(a)(i) and approved by L-P
Engineered Wood, which approval shall not be unreasonably
withheld; and
(ii) after the execution of this Agreement and prior to the Closing
Date:
A. with the prior written approval of L-P Engineered Wood,
which shall not be unreasonably withheld; or
B. in the ordinary course of business of Xxxxx, at no more
than the fair market value thereof and the cost of
which is not Material;
(the "Residual Xxxxx Assets Acquisition Adjustment");
(b) RESIDUAL XXXXX ASSETS DISPOSAL ADJUSTMENT. Deduct an amount equal to
the actual proceeds received by Xxxxx from the disposition of any of
the Fixed Assets other than Xxxxx Equipment;
(i) from May 1, 1999 to the date of this Agreement, as identified on
Schedule 5.2(b)(i) and approved by L-P Engineered Wood, which
approval shall not be unreasonably withheld; and
(ii) after the date of this Agreement and prior to the Closing Date:
A. with the prior written approval of L-P Engineered Wood,
which shall not be unreasonably withheld; or
B. in the ordinary course of business of Xxxxx, at no less
than the fair market value thereof and the proceeds for
which are not Material;
(the "Residual Xxxxx Assets Disposal Adjustment");
(c) RESIDUAL XXXXX ASSETS DAMAGE ADJUSTMENT. Deduct an amount equal to the
actual cost to repair or replace any of the Fixed Assets, other than
Xxxxx Equipment, which shall suffer any damage or loss (other than
normal wear and tear) between the Valuation Date and the Closing Date
to the extent that such damage or loss is not:
(i) repaired by the Closing Date; or
(ii) covered by insurance proceeds which are assigned to L-P
Engineered Wood at Closing and which are not included in the
Working Capital Assets; or
23 PART B
(iii) included in the Working Capital Liabilities or the Assumed Xxxxx
Liabilities;
(the "Residual Xxxxx Assets Damage Adjustment");
(d) WORKING CAPITAL ADJUSTMENT. Add an amount equal to the increase, if
any, or subtract an amount equal to the decrease, if any, in the
Working Capital from the Valuation Date to the Closing Date determined
in accordance with GAAP (the "Working Capital Adjustment");
(e) ASSUMED CAPITAL LEASES ADJUSTMENT. Deduct an amount equal to the
aggregate principal amount due after the Closing Date under the
Assumed Valuation Date Capital Leases (the "Assumed Capital Leases
Adjustment");
(f) ASSUMED XXXXX LIABILITIES ADJUSTMENT. Deduct an amount equal to the
aggregate of the Assumed Xxxxx Liabilities (the "Assumed Xxxxx
Liabilities Adjustment");
(g) ROAD COSTS ADJUSTMENT. Add an amount equal to the increase, if any, or
subtract an amount equal to the decrease, if any, in the Road Costs
from the Valuation Date to the Closing Date (the "Road Costs
Adjustment");
(h) VACATION PAY ADJUSTMENT. Add an amount equal to the decrease, if any,
or subtract an amount equal to the increase, if any, in the vacation
pay obligations of Xxxxx from the Valuation Date to the Closing Date
determined in accordance with GAAP (the "Vacation Pay Adjustment");
and
(i) SILVICULTURE ADJUSTMENT. Add an amount equal to the excess, if any, of
the amount expended by Xxxxx in payment of Silviculture Obligations
from the Valuation Date to the Closing Date over the amount accrued by
Xxxxx since the Valuation Date as Silviculture Obligations, or
subtract an amount equal to the deficiency, if any, by which the
amount accrued by Xxxxx from the Valuation Date to the Closing Date as
Silviculture Obligations exceeds the amount expended by Xxxxx in
payment of Silviculture Obligations since the Valuation Date (the
"Silviculture Adjustment");
(the Residual Fixed Asset Acquisition Adjustment, the Residual Fixed Asset
Disposal Adjustment, the Residual Fixed Asset Damage Adjustment, the Working
Capital Adjustment, the Assumed Capital Leases Adjustment, the Assumed Xxxxx
Liabilities Adjustment, the Road Costs Adjustment, the Vacation Pay Adjustment
and the Silviculture Adjustment are, collectively, referred to herein as the
"Residual Xxxxx Assets Purchase Price Adjustments").
5.3. ESTIMATED RESIDUAL XXXXX ASSETS PURCHASE PRICE AT CLOSING. No less than 10
days before the Closing Date, Xxxxx, acting reasonably, shall prepare and
provide to L-P Engineered Wood for approval, acting reasonably an estimated
statement of the Residual Xxxxx Assets Purchase Price Adjustments (the
"Estimated Residual Xxxxx Assets Statement of Adjustments") in which the amount
of the Residual Xxxxx Assets Purchase Price Adjustments shall be estimated and
applied to the Basic Residual Xxxxx Assets Purchase Price so as to provide the
parties with an estimated purchase price for the Residual Xxxxx Assets (the
"Estimated Residual Xxxxx Assets Purchase Price").
24 PART B
5.4. PAYMENT OF ESTIMATED RESIDUAL XXXXX ASSETS PURCHASE PRICE. The Estimated
Residual Xxxxx Assets Purchase Price, less the Adjustment Holdback as set out in
Section 5.5 and the Indemnity Holdback as set out in Section 5.6 (both of which
shall be delivered by L-P Engineered Wood directly to the Escrow Agent), shall
be payable by L-P Engineered Wood to Xxxxx on the Closing Date by bank draft or
certified cheque.
5.5. HOLDBACK FOR ADJUSTMENT TO RESIDUAL XXXXX ASSETS PURCHASE PRICE. L-P
Engineered Wood shall deduct from the Estimated Residual Asset Purchase Price
and deliver to the Escrow Agent five (5%) percent of the sum of the SLEC Assets
Purchase Price and the Aggregate Estimated Xxxxx Purchase Price (the "Adjustment
Holdback") to be held in trust by the Escrow Agent in accordance with the terms
of an Escrow Agreement in the form of Schedule 5.5 to be entered into among L-P
Engineered Wood, X-X Xxxxxx Creek, Xxxxx and the Escrow Agent at Closing (the
"Escrow Agreement"). Interest on the Adjustment Holdback shall be for the
account of the ultimate recipient of such monies, such interest to be paid in
whole or in part in proportion to the portion of the Adjustment Holdback paid to
each respective recipient.
5.6. INDEMNITY HOLDBACK. L-P Engineered Wood shall deduct from the Estimated
Residual Xxxxx Asset Purchase Price and deliver to the Escrow Agent the sum of
US $1,000,000 (the "Indemnity Holdback") to be held by the Escrow Agent pursuant
to the Escrow Agreement.
5.7. POST-CLOSING RESIDUAL XXXXX ASSETS PURCHASE PRICE ADJUSTMENT PROCEDURE.
Forthwith, and in any event within thirty (30) days following Closing, L-P
Engineered Wood shall prepare, in a manner consistent with that of the Estimated
Residual Xxxxx Assets Statement of Adjustments a statement of the adjustments to
the Basic Residual Xxxxx Assets Purchase Price as of the Closing Date (the
"Final Residual Xxxxx Assets Statement of Adjustments") showing the actual
amount of each of the Residual Xxxxx Assets Purchase Price Adjustments as well
as the Basic Residual Xxxxx Assets Purchase Price as adjusted by the actual
Residual Xxxxx Assets Purchase Price Adjustments (the "Adjusted Residual Xxxxx
Assets Purchase Price"), for the review and approval of Xxxxx. L-P Engineered
Wood shall furnish such access to the financial working papers of the Operations
after the Closing Date as Xxxxx shall reasonably require to review the Final
Residual Xxxxx Assets Statement of Adjustments. The Final Residual Xxxxx Assets
Statements of Adjustments shall be deemed to be approved by Xxxxx and to become
final and binding upon the parties unless Xxxxx delivers a Notice of Adjustment
Disagreement to L-P Engineered Wood pursuant to Section 6.1.
5.8. POST-CLOSING RESIDUAL XXXXX ASSETS PURCHASE PRICE ADJUSTMENT PAYMENT. The
amount of any adjusting payment required between the parties for the Residual
Xxxxx Assets shall be the difference between the Estimated Residual Xxxxx Assets
Purchase Price, as shown on the Estimated Residual Xxxxx Assets Statement of
Adjustments, and the Adjusted Residual Xxxxx Assets Purchase Price, as shown in
the Residual Xxxxx Assets Statement of Adjustments (the "Residual Xxxxx Assets
Adjustment Payment"), and shall be paid as follows:
(a) where the Adjusted Residual Xxxxx Assets Purchase Price exceeds the
Estimated Residual Xxxxx Assets Purchase Price, the Adjustment
Holdback shall be paid to Xxxxx and L-P Engineered Wood shall pay the
Residual Xxxxx Assets Adjustment Payment to Xxxxx; or
(b) where the Adjusted Residual Xxxxx Assets Purchase Price is less than
the Estimated Residual Xxxxx Assets Purchase Price and greater than
ninety-
25 PART B
five (95%) percent of the Estimated Residual Xxxxx Assets Purchase
Price, L-P Engineered Wood shall receive the amount of the Residual
Xxxxx Assets Adjustment Payment out of the Adjustment Holdback, and
the balance of the Adjustment Holdback shall be paid to Xxxxx; or
(c) where the Adjusted Residual Xxxxx Assets Purchase Price is less than
ninety-five (95%) percent of the Estimated Residual Xxxxx Assets
Purchase Price, the Adjustment Holdback shall be paid to L-P
Engineered Wood and the balance of the Residual Xxxxx Assets
Adjustment Payment shall be paid to L-P Engineered Wood by Xxxxx; and
the Residual Xxxxx Assets Adjustment Payment shall be paid forthwith after
approval of the Residual Xxxxx Assets Statement of Adjustments by the parties or
the date the Residual Xxxxx Assets Statement of Adjustments becomes final and
binding pursuant to Section 6.1, whichever is later.
5.9. RESIDUAL XXXXX ASSETS ADJUSTMENT PAYMENT NOT SUBJECT TO MINIMUM. The
payment of the Residual Xxxxx Assets Adjustment Payment shall not be subject to
the indemnity claim minimum set out in Section 13.13(c).
6. DISPUTE OF STATEMENTS OF ADJUSTMENTS
6.1. NOTICE OF ADJUSTMENT DISAGREEMENT. If Xxxxx disagrees with the Final
Residual Xxxxx Assets Statements of Adjustments, Xxxxx shall give written notice
of its disagreement ("Notice of Adjustment Disagreement") to L-P Engineered Wood
within fifteen (15) business days following receipt thereof. If a Notice of
Adjustment Disagreement is received by L-P Engineered Wood in a timely manner,
then the Final Residual Xxxxx Assets Statement of Adjustments shall become final
and binding upon the parties on the earlier of:
(a) the date the parties resolve in writing all matters specified in the
Notice of Adjustment Disagreement; or
(b) the date any Disputed Adjustment Matters are finally resolved in
writing by the Independent Accountant.
Any such Notice of Adjustment Disagreement shall state in reasonable
detail the nature of any disagreement so asserted. During a period of ten (10)
business days following receipt by L-P Engineered Wood of the Notice of
Adjustment Disagreement L-P Engineered Wood and Xxxxx shall attempt to resolve
in writing any differences that they may have with respect to any matter
specified in the Notice of Adjustment Disagreement. If at the end of such ten
(10) business day period, L-P Engineered Wood and Xxxxx have failed to reach
written agreement with respect to all of such matters, then all such matters as
are specified in any Notice of Adjustment Disagreement and as to which such
written agreement has not been reached (the "Disputed Adjustment Matters") shall
be submitted to and reviewed by the Managing Partner of the Independent
Accountant. The Independent Accountant shall resolve all Disputed Adjustment
Matters within sixty (60) days of his or her appointment and his or her decision
with respect to all Disputed Adjustment Matters shall be final and binding upon
L-P Engineered Wood and Xxxxx.
26 PART B
6.2. FEES OF INDEPENDENT ACCOUNTANT. The fees and expenses of the Independent
Accountant in respect of the Disputed Adjustment Matters shall be paid equally
by L-P Engineered Wood and Xxxxx.
7. ASSUMPTION OF LIABILITIES
7.1. LIABILITY ASSUMPTION. Subject to the other terms and conditions in this
Agreement, at the Closing L-P Engineered Wood shall assume and agree to pay,
honour and discharge:
(a) all of the Working Capital Liabilities;
(b) all of the liabilities of Xxxxx identified in Schedule 7.1(b) (the
"Assumed Xxxxx Liabilities"); and
(c) all of the obligations, covenants and agreements of Xxxxx under the
Assumed Contracts, the Forest Tenures, the Permits, the Silviculture
Obligations and the Assumed Capital Leases (collectively, the "Assumed
Xxxxx Obligations") and the Permitted Encumbrances;
which are assigned to and assumed by L-P Engineered Wood pursuant to this
Agreement, by executing and delivering to Xxxxx one or more assumption and
indemnity agreements substantially in the form attached as Schedule 7.1. L-P
Engineered Wood shall not assume any of the liabilities, obligations or
commitments of Xxxxx except those arising from the Permitted Encumbrances, the
Working Capital Liabilities, the Assumed Xxxxx Liabilities and the Assumed Xxxxx
Obligations. All other liabilities, obligations or commitments of Xxxxx shall
remain with Xxxxx and are excluded from this transaction. L-P Canada shall
execute the assumption and indemnity agreements to guarantee the obligations of
L-P Engineered Wood thereunder.
27 PART C
PART C - SALE OF SLEC ASSETS BY XXXXX TO X-X XXXXXX CREEK
8. SALE AND PURCHASE OF SLEC ASSETS
8.1. SALE OF SLEC ASSETS. Subject to and upon the terms and conditions set forth
in this Agreement, Xxxxx shall sell, transfer, convey and assign to X-X Xxxxxx
Creek, and X-X Xxxxxx Creek shall purchase or acquire from Xxxxx at the Closing
all of Xxxxx' right, title and interest in and to the SLEC Assets as at the
Closing Date free and clear of all Liens save as provided in Section 8.2.
8.2. LIENS. The SLEC Assets to be transferred or otherwise conveyed to X-X
Xxxxxx Creek at the Closing Date pursuant to Section 8.1 shall be free and clear
of all Liens, excepting only the Permitted Encumbrances.
8.3. ALLOCATION OF THE PURCHASE PRICE. The SLEC Assets Purchase Price shall be
allocated amongst the SLEC Assets, or classes of the SLEC Assets, as provided in
Schedule 8.3.
9. PAYMENT OF SLEC ASSETS PURCHASE PRICE
9.1. SLEC ASSETS PURCHASE PRICE. The consideration for the purchase of the SLEC
Assets shall be US $27,000,000 (the "SLEC Assets Purchase Price").
9.2. PAYMENT OF SLEC ASSETS PURCHASE PRICE. The SLEC Assets Purchase Price shall
be payable by X-X Xxxxxx Creek to Xxxxx on the Closing Date by bank draft or
certified cheque.
9.3. PAYMENT OF TAXES, FEES AND COSTS. X-X Xxxxxx Creek shall be wholly
responsible for all sales and transfer taxes payable in respect of the
conveyance of the SLEC Assets under the Agreement, including without limitation
goods and services tax under the EXCISE TAX ACT (Canada) and social services tax
under the SOCIAL SERVICE TAX ACT (British Columbia). Xxxxx and X-X Xxxxxx Creek
shall cooperate reasonably to ensure that any taxes payable by X-X Xxxxxx Creek
under the EXCISE TAX ACT (Canada) in respect of goods and services tax shall be
minimized. To the extent that social services tax applies to the transfer of the
SLEC Assets, X-X Xxxxxx Creek shall promptly pay to Xxxxx all amounts required
to be collected and remitted by Xxxxx in respect thereof and Xxxxx shall remit
such amounts to the British Columbia Consumer Taxation Branch as required.
10. ASSUMPTION OF OBLIGATIONS
10.1. OBLIGATION ASSUMPTION. Subject to the other terms and conditions in this
Agreement, at the Closing X-X Xxxxxx Creek shall assume and agree to pay, honour
and discharge all of Xxxxx' obligations under the Permitted Encumbrances
affecting the SLEC Assets by executing and delivering to Xxxxx one or more
assumption and indemnity agreements substantially in the form attached as
Schedule 7.1. X-X Xxxxxx Creek shall not assume any of the liabilities,
obligations or commitments of Xxxxx except the obligations of Xxxxx under the
Permitted Encumbrances affecting the SLEC Assets. All other liabilities,
obligations or commitments of Xxxxx shall remain with Xxxxx and are excluded
from this transaction. L-P Canada shall execute the assumption and indemnity
agreements to guarantee the obligations of X-X Xxxxxx Creek thereunder.
28 PART D
PART D - REPRESENTATIONS, WARRANTIES AND COVENANTS
11. REPRESENTATIONS AND WARRANTIES OF XXXXX
In order to induce the Purchasers and L-P Canada to enter into and to
consummate the transactions contemplated by this Agreement, Xxxxx represents and
warrants to the Purchasers and L-P Canada that, save as disclosed herein or
approved in writing by the Purchasers or L-P Canada, the following
representations and warranties are true and correct as at the date hereof,
notwithstanding any investigation that may be made by the Purchasers or L-P
Canada:
11.1. CORPORATE ORGANIZATION, ETC.
(a) Xxxxx is a corporation duly organized, validly existing and in good
standing with respect to filing of annual reports, all under the laws
of the Province of British Columbia, with full corporate power,
authority and capacity to carry on the Operations as now being
conducted, and to own, operate and lease the Assets.
(b) Xxxxx has complied in all material respects with all applicable
Regulations and Orders in connection with the execution, delivery and
performance of this Agreement and the transactions contemplated. The
transactions contemplated by this Agreement have been duly and validly
authorized by all necessary Xxxxx, shareholder and director action.
This Agreement, upon signature by the parties, shall be a valid and
binding obligation of Xxxxx enforceable in accordance with its terms,
except as the enforceability may be limited by public policy and
bankruptcy, insolvency, reorganization, moratorium or other laws and
principles of equity affecting the enforcement of creditors rights
generally.
11.2. NO VIOLATION. Except as otherwise provided in Schedule 11.2, the
execution, delivery and performance by Xxxxx of this Agreement, and the
fulfilment of and compliance with its terms shall not:
(a) conflict with or result in a breach of the terms, conditions or
provisions of;
(b) constitute a default or event of default under (with due notice, lapse
of time or both);
(c) result in the creation of any Lien upon the Assets pursuant to;
(d) give any third party the right to accelerate any obligation under;
(e) result in a violation of; or
(f) except for consents required under the FOREST ACT and as provided in
Sections 15 and 16, require any authorization, consent, approval,
exemption or other action by, notice to, or filing with any Authority
pursuant to,
the articles of incorporation of Xxxxx, or any applicable Regulation, Order or
Contract to which Xxxxx or the Assets are subject.
29 PART D
11.3. CONTRACTS.
(a) The list of Contracts set out in Schedule 11.3(a) is a true and
complete list of all present and outstanding Contracts entered into by
Xxxxx prior to the date of this Agreement, other than:
(i) those entered into in the ordinary course of Xxxxx' business
which require an expenditure by Xxxxx or L-P Engineered Wood of
not more than US $100,000 and which either:
A. will be terminated by Xxxxx before Closing; or
B. are terminable by L-P Engineered Wood without penalty
not more than 12 months after the Closing Date; or
C. shall be fully performed within 12 months after the
Closing Date; or
(ii) those which shall be fully performed prior to the Closing Date;
(b) To Xxxxx' knowledge, Xxxxx has performed in all material respects all
obligations required to be performed by it and is not in default in
any material respect under, or in breach of, nor in receipt of any
claim of default or breach under, any Contract and no event has
occurred which, with the passage of time or the giving of notice or
both, would result in a default or breach having a Material Adverse
Effect; and
(c) Copies of Contracts and documents delivered and to be delivered by
Xxxxx are and shall be true and complete copies of such Contracts and
documents.
11.4. ASSETS AND TITLE.
(a) With the exception of the Trus Joist Scarfer, Xxxxx has, or will have
on the Closing Date, good and valid title to the Assets to be
transferred by it pursuant to this Agreement free and clear of all
Liens, Claims and restrictions on transfer, other than Permitted
Encumbrances;
(b) save as disclosed in Schedules 4.2(b)(i) and 5.2(b)(i), Xxxxx has not,
between the Valuation Date and the date of this Agreement, sold,
transferred, conveyed, assigned or otherwise disposed of any of the
Assets other than in the normal course of business of Xxxxx and at the
fair market value thereof and none of the Assets are or shall be on
the Closing Date subject to any contracts of sale or lease except
contracts in the ordinary course of business of Xxxxx and at the fair
market value thereof;
(c) the Assets and the Excluded Xxxxx Assets comprise all of the assets
customarily used by Xxxxx in carrying on the Operations; and
(d) except as disclosed in Schedule 11.4(d), including the map attached
thereto, to the best of the knowledge of Xxxxx, there have been no
claims or rights, titles or jurisdictions asserted or established by
any aboriginal peoples by
30 PART D
virtue of their status as aboriginal peoples to, over or affecting any
of the Assets or Operations.
11.5. THE CAPITAL LEASES.
(a) The Capital Leases listed in Schedule 11.5 are all of the Capital
Leases in effect on the date of this Agreement;
(b) To Xxxxx' knowledge, Xxxxx has performed in all material respects all
obligations required to be performed by it and is not in default in
any material respect under, or in breach of, nor in receipt of any
claim of default or breach under, the Assumed Capital Leases and no
event has occurred which, with the passage of time or the giving of
notice or both, would result in a default or breach having a Material
Adverse Effect; and
(c) Copies of the Assumed Capital Leases delivered and to be delivered by
Xxxxx to L-P Engineered Wood are and shall be true and complete copies
of such Capital Leases.
11.6. LITIGATION. Except as set forth in Schedule 11.6, there is no Claim,
investigation or governmental inquiry in progress, or to Xxxxx' knowledge
pending or threatened, against Xxxxx, which, if adversely determined, could have
a Material Adverse Effect, nor is there presently outstanding any Order, adverse
judgment, settlement or other similar directive or agreement evidencing a
dispute which could have a Material Adverse Effect.
11.7. COMPLIANCE WITH LAWS AND REGULATIONS. Except as disclosed in Schedule
11.7, to Xxxxx' knowledge, Xxxxx is presently in compliance in all material
respects with regard to the Lands and its Operations, practices, plants,
structures, machinery, equipment and other property, and all other aspects of
its business relating to the Assets, with all applicable federal, provincial and
municipal Regulations and Orders. Except as set forth in Schedule 11.7, to
Xxxxx' knowledge there are no Claims pending, or threatened, nor has Xxxxx
received any written notice, alleging any violations of any Regulations and
Orders relating to the Assets from any Authority claiming jurisdiction over
Xxxxx.
11.8. ENVIRONMENTAL MATTERS. Except as disclosed on Schedule 11.8, to the best
of Xxxxx' knowledge:
(a) the Operations do not violate any applicable Environmental Law now in
effect in any material respect;
(b) Xxxxx possesses and shall possess on the Closing Date all material
Environmental Permits now required or which shall be required on the
Closing Date for the conduct of the Operations (or any part), and
Xxxxx is in material compliance with all of the requirements and
limitations included in such Environmental Permits;
(c) all Environmental Permits possessed by Xxxxx are listed on Schedule
11.8(c);
(d) Xxxxx does not store or use any pollutants, contaminants or hazardous
or toxic wastes, substances or materials on or at any of the Lands or
facilities
31 PART D
except for inventories of chemicals which are used or to be used in
the ordinary course of Xxxxx' business (which inventories have been
stored or used in material accordance with all applicable
Environmental Permits and all Environmental Laws);
(e) Xxxxx has not received any notice from any Authority or any private
Person or entity that Xxxxx' business or the operation of any of its
facilities is in violation of any Environmental Law or any
Environmental Permit or that it is responsible (or potentially
responsible) for the clean up of any pollutants, contaminants, or
hazardous or toxic wastes, substances or materials at, on or beneath
any of the Lands, or at, on or beneath any land adjacent thereto or in
connection with any waste or contamination site;
(f) Xxxxx is not the subject of federal, provincial, municipal or private
litigation or proceedings involving a demand for damages or other
potential liability with respect to violations of Environmental Laws;
(g) Xxxxx has not buried, dumped, disposed of, or spilled or released
material quantities of any pollutants, contaminants or hazardous
wastes, substances or materials on, beneath or adjacent to any of the
Lands or any property adjacent thereto;
(h) no by-products of any manufacturing process employed in the operation
of Xxxxx' business which may be pollutants, contaminants or hazardous
or toxic wastes, substances or materials as defined under any
Environmental Law are currently stored or otherwise located in a
material quantity on any of the Lands or leaseholds in a manner
prohibited by any Environmental Laws;
(i) Xxxxx has timely filed all reports required to be filed with respect
to all of the Lands, leaseholds and facilities and has generated and
maintained all required data, documentation and records under all
applicable Environmental Laws in all material respects;
(j) there are no underground storage tanks on or beneath the Golden
Facility or the Malakwa Facility;
(k) no pollutants, contaminants or hazardous or toxic wastes, substances
or materials as defined under any Environmental Law are migrating to
or from any of the Lands or any property adjacent thereto;
(l) none of the Assets to be sold to the Purchasers contain any asbestos,
PCBs or any other toxic, dangerous or hazardous substance in any
material quantity; and
(m) Xxxxx has provided to L-P Engineered Wood true copies of all
environmental studies or assessments prepared or obtained by Xxxxx
with respect to any of the Lands.
11.9. DISCLOSURE. To Xxxxx' knowledge, neither this Agreement nor any of the
Schedules, attachments, written statements, documents, certificates or other
items prepared for or supplied to the Purchasers or any of their Affiliates by
or on behalf of Xxxxx with respect to
32 PART D
the transactions contemplated herein contains any untrue statement of a material
fact or omits a material fact necessary to make each statement not misleading.
There is no fact which Xxxxx has not disclosed to the Purchasers or any of their
Affiliates and of which Xxxxx or any of its officers, directors or executive
employees is aware which would have a Material Adverse Effect.
11.10. CONDITION OF XXXXX ASSETS AND SLEC ASSETS. Except as disclosed on
Schedule 11.10 and excepting the Xxxxxx J-Bar Sorter which is being purchased by
L-P Engineered Wood on an as is where is basis, the Xxxxx Assets and the SLEC
Assets are in good working condition and suitable for their current use.
11.11. TAX MATTERS.
(a) There are no income or other taxes payable by Xxxxx at or prior to
Closing which might, now or hereafter, constitute or be capable of
forming an encumbrance, other than a Permitted Encumbrance, upon any
of the Assets or the Operations;
(b) Xxxxx is registered under Part IX of the EXCISE TAX ACT (Canada) with
registration number 101700722RT;
(c) Xxxxx is not a non-resident person within the meaning of section 116
of the INCOME TAX ACT (Canada);
11.12. LABOUR RELATIONS. Except as set forth in Schedule 11.12 Xxxxx has no
collective bargaining agreements and there have been no strikes, work stoppages
nor any demand for collective bargaining by any union or labour organization at
the Operations since January 1, 1997. There is no dispute or controversy with
any union or other organization of Xxxxx' employees and no arbitration
proceedings pending or, to Xxxxx' knowledge, threatened involving a dispute or
controversy affecting Xxxxx which would have a Material Adverse Effect.
11.13. SALARIED EMPLOYEES. Schedule 11.13 accurately and completely sets out the
names and titles of personnel employed or engaged in the Operations by Xxxxx and
paid on a salaried basis together with particulars of the material terms and
conditions of employment or engagement of such persons, including rates of
remuneration, term of employment, title, benefits, positions held and
particulars of any agreement or understanding concerning notice or severance in
the event of termination of employment. Each such employee has been paid all
wages, income, benefits and any other sums owing to him or her by Xxxxx to the
end of the most recent pay period. All amounts required to be deducted from the
employees' salaries and paid to any governmental body pursuant to any Regulation
have been withheld and paid. Xxxxx has provided to L-P Engineered Wood prior to
the execution of this Agreement the terms of any oral contract of employment and
a copy of the written contracts of employment with such persons where such oral
or written contracts exist.
11.14. EMPLOYEE PLANS. Except in connection with the Xxxxx Forest Products
Limited Salaried Employees Pension Plan described in Schedule 11.14 (the
"Pension Plan"), and the Supplemental Pension and the other plans disclosed in
Schedule 11.14, Xxxxx does not maintain, contribute to or have any liability
under or with respect to any:
(a) employee pension benefit plan including, without limitation, any
pension, profit sharing, defined contribution, retirement,
multi-employer or multiple employer plan;
33 PART D
(b) employee welfare benefit plan including, without limitation, any
medical, hospitalization, vision, dental, life insurance, disability
or retiree welfare benefit plan, program or arrangement;
(c) bonus, incentive, deferred compensation, severance, vacation, sick
leave, fringe benefit or other employment agreement, plan or
arrangement;
with respect to any of its employees and former employees. Xxxxx has delivered
to L-P Engineered Wood true, correct and complete copies of all employee plans
described in this Section which Xxxxx maintains or to which Xxxxx contributes.
Xxxxx has made all contributions required of it with respect to the IWA Forest
Industry Pension Plan described in Schedule 11.14.
11.15. EMPLOYMENT OBLIGATIONS. Schedule 11.15 lists all individuals who are, as
at the date of this Agreement:
(a) in receipt of benefits from a short term or long term disability
program sponsored by Xxxxx or in which Xxxxx participates;
(b) in receipt of Worker's Compensation benefits on account of their
employment by Xxxxx;
(c) on an authorized unpaid leave of absence (including maternity or
parental leave or unpaid sick leave) from Xxxxx;
(d) on layoff from Xxxxx with an existing right of recall pursuant to the
Collective Agreement; or
(e) entitled to post-retirement or other benefits provided through a
benefit program sponsored by Xxxxx or in which Xxxxx participates;
and particulars of the rights and benefits of such individuals in respect
thereof.
11.16. PATENTS, TRADEMARKS, ETC. Schedule 3.2(b) lists all Canadian and foreign
trademarks (including trademarks for which application is pending), service
marks, trade names, brand names, copyrights, including registrations and
applications, patent and patent applications, and employee covenants and
agreements respecting intellectual property ("Trade Rights") in which Xxxxx now
has any interest, if any, specifying whether such Trade Rights are owned,
controlled, used or held (under license or otherwise) by Xxxxx and also
indicating which of such Trade Rights are registered. All of Xxxxx' Trade Rights
registrations and all pending registrations and applications have been properly
made and filed and all annuity, maintenance, renewal and other fees relating to
registrations or applications are current. Xxxxx does not require any Trade
Rights that it does not already have to conduct its businesses, including the
operation of the SLEC Assets. To the best of the knowledge of Xxxxx, Xxxxx is
not infringing and has not infringed on any Trade Rights of another in the
operation of its businesses, nor is any other person infringing on the Trade
Rights of Xxxxx. Xxxxx has not granted any license or made any assignment of any
Trade Right and no other person has any right to use any Trade Right owned or
held by Xxxxx. Except for fees paid pursuant to the agreement with the Interior
Lumber Manufacturers' Association referred to in Schedule 3.2(b), Xxxxx does not
pay any royalties or other consideration for the right to use any Trade Rights
of others. To the best of Xxxxx' knowledge there are no inquiries,
investigations or claims or litigation challenging or
34 PART D
threatening to challenge the right, title and interest of Xxxxx with respect to
its continued use and right to preclude others from using any Trade Rights. To
the best of Xxxxx' knowledge all of Xxxxx' Trade Rights are valid, enforceable
and in good standing, and there are no equitable defenses to enforcement based
on any act or omission of Xxxxx.
11.17. YEAR 2000 COMPLIANCE. Except with respect to the deficiencies listed in
Schedule 11.17, all of which will be corrected prior to the Closing Date, to the
best of the knowledge of Xxxxx, it has taken all reasonable steps to ensure that
the Xxxxx Assets and the SLEC Assets are designed to be used prior to, during,
and after the calendar year 2000 A.D. and, during each such period, will
properly and effectively function and will properly and effectively process,
manage and manipulate data containing two and four digit year dates, without any
error or abnormal ending and without generating any incorrect value or invalid,
inaccurate or erroneous result.
11.18. FINANCIAL STATEMENTS. The Financial Statements of Xxxxx attached as
Schedule 11.18 have been prepared in accordance with GAAP consistently applied
and maintained and fairly present in all material respects, the financial
condition of Xxxxx as of the date indicated and the results of its operations
for the period covered.
11.19. ROAD COSTS. As of April 30, 1999, the Road Costs were Cdn. $12,493,000.00
as calculated in accordance with GAAP consistently applied and maintained.
11.20. ACCOUNTS RECEIVABLE. All Xxxxx' accounts receivable represent arm's
length sales actually made in the ordinary course of business. Xxxxx' accounts
receivable which shall be included as a Working Capital Asset in the calculation
of the Adjusted Residual Xxxxx Assets Purchase Price shall be collectible at the
amount therein recorded, which shall be net of the reserves determined by Xxxxx,
in the ordinary course of business. Xxxxx has given L-P Engineered Wood a
complete and correct aging schedule of the accounts receivable included in
Xxxxx' most recent balance sheet.
11.21. INVENTORY. Xxxxx' inventories held for sale are of a quality saleable in
the ordinary course of business of Xxxxx, inventories of raw materials are of a
quality usable in the ordinary course of business of Xxxxx, and the inventories
to be included as a Working Capital Asset in the calculation of the Adjusted
Residual Xxxxx Assets Purchase Price shall have, in the aggregate, a net
realizable value at least equal to the aggregate value so recorded, and shall be
valued in accordance with GAAP at the lower of cost (on a FIFO basis) or market.
11.22. INSURANCE. Xxxxx maintains such policies of insurance as are appropriate
to its business, properties and assets, in such amounts and against such risks
as are customarily carried and insured against by owners of comparable
businesses, properties and assets.
11.23. FOREST TENURES. With respect to the Forest Tenures:
(a) the Forest Tenures are recorded on the records of the Ministry of
Forests of the Province of British Columbia in the name of Xxxxx and
are validly subsisting;
(b) all rentals, stumpage, royalty and scale accounts and other taxes,
assessments and other costs payable up to the Closing Date in respect
of the Forest Tenures have been or will have been paid on the Closing
Date other
35 PART D
than those which constitute costs, accrued or accruing, in respect of
silviculture or other reforestation obligations thereunder;
(c) Xxxxx has, in all material respects, observed and performed all
covenants and agreements on its part to be observed or performed under
the provisions of the Forest Tenures, the FOREST ACT (British
Columbia) and the regulations thereunder in accordance with normal
forest industry practice in the Province of British Columbia; and
(d) Xxxxx is not aware of, and has not received any notice of, any breach
of the Forest Tenures which would have a Material Adverse Effect and
has received no notice of any fact or event likely to reduce, suspend
or terminate the Forest Tenures, or any of them, or any privileges
attached thereto.
11.24. PROMISSORY NOTE. The Promissory Note, when issued and delivered by Xxxxx
to L-P Canada pursuant to Section 13.14, shall be duly and validly authorized
and issued.
11.25. SLEC CAPITAL LEASES. The SLEC Capital Leases disclosed in Part 5 of
Schedule 11.5 are all of the SLEC Capital Leases.
11.26. SLEC ASSETS. The assets listed in Schedule 11.26 are all of the assets
which are the subject matter of the SLEC Capital Leases.
11.27. SURVIVAL. All representations and warranties contained in this Section 11
shall survive Closing and continue in effect until December 31, 2000. Upon
Xxxxx' receipt of a Claim from L-P Engineered Wood during the survival period,
the appropriate representations and warranties shall remain in effect until the
claim is finally resolved.
12. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS AND L-P CANADA
In order to induce Xxxxx to enter into and to consummate the
transactions contemplated by this Agreement, each of the Purchasers and L-P
Canada, jointly and severally, represent and warrant to Xxxxx that the following
representations and warranties are true and correct as at the date hereof:
12.1. ORGANIZATION, STANDING AND POWER. Each of L-P Canada and the Purchasers is
a corporation duly organized, validly existing and in good standing with respect
to annual filings under the laws of British Columbia and has all requisite
corporate power, authority and capacity to own, lease and operate its properties
and to carry on its business as now being conducted.
12.2. AUTHORITY. The execution, delivery and performance by each of the
Purchasers or L-P Canada of this Agreement, and the fulfilment of and compliance
with its terms shall not: (a) conflict with or result in a breach of the terms,
conditions or provisions of; (b) constitute a default or event of default under
(with due notice, lapse of time or both); (c) result in the creation of any Lien
upon the Purchasers' or L-P Canada's assets pursuant to; (d) give any third
party the right to accelerate any obligation under; (e) result in a violation
of; or (f) require any authorization, consent, approval, exemption or other
action by, notice to, or filing with any Authority pursuant to, the articles of
incorporation of the Purchasers or L-P Canada, or any applicable Regulation,
Order or Contract to which the Purchasers or L-P Canada or their assets are
subject. The Purchasers and L-P Canada have complied in all material respects
with all applicable
36 PART D
Regulations and Orders in connection with the execution, delivery and
performance of this Agreement and the transactions contemplated. The
transactions contemplated by this Agreement have been, or shall by the Closing
Date have been, duly and validly authorized by all necessary shareholder and
director action of the Purchasers and L-P Canada. This Agreement upon signature
by the parties shall be a valid and binding obligation of the Purchasers and L-P
Canada enforceable in accordance with its terms, except as the enforceability
may be limited by public policy and bankruptcy, insolvency, reorganization,
moratorium or other laws and principles of equity affecting the enforcement of
creditors rights generally.
12.3. PREFERRED SHARES. The Preferred Shares, when issued and delivered by L-P
Engineered Wood to Xxxxx pursuant to Section 4.4, shall be duly and validly
issued, fully paid and non-assessable.
12.4. SLEC ASSETS. X-X Xxxxxx Creek is purchasing the SLEC Assets for the
purpose only of leasing such assets to other persons and as such is exempt by
subsection 78(1) of the SOCIAL SERVICE TAX ACT (British Columbia) from tax
imposed by the SOCIAL SERVICE TAX ACT on such purchase.
12.5. ACCURACY OF XXXXX' REPRESENTATIONS. The Purchasers and L-P Canada have
conducted an investigation of the Assets and Operations, which included the
preparation of an environmental audit. None of the Purchasers or L-P Canada has
any knowledge that any representation and warranty of Xxxxx set forth in this
Agreement is not true and correct in all material respects, or is untrue in a
manner that has a Materially Adverse Effect.
12.6. SURVIVAL. All representations and warranties contained in this Section 12
shall survive Closing and continue in full force and effect until December 31,
2000. Upon the Purchasers' or L-P Canada's receipt of a Claim from Xxxxx during
the survival period, the appropriate representations and warranties shall remain
in effect until the claim is finally resolved.
13. COVENANTS
13.1. CONDUCT OF BUSINESS. Following execution of this Agreement and prior to
the Closing, Xxxxx shall maintain, keep and preserve the Assets in good
condition and repair, maintain insurance in accordance with present practices
and shall not:
(a) remove or dispose of any of the Assets to be transferred and conveyed
under this Agreement, except for inventory sold in the ordinary course
of business, without the prior written agreement of L-P Engineered
Wood;
(b) amend any of the Assumed Contracts except in the ordinary course of
business and where such amendment does not require a Material
expenditure on the part of L-P Engineered Wood, without the prior
written consent of L-P Engineered Wood, which consent shall not be
unreasonably withheld; or
(c) enter into any new Contract except in the ordinary course of business
and on terms which allow the assignment of such Contract to L-P
Engineered Wood at Closing (in which case Xxxxx shall provide a copy
of any such new Contract to L-P Engineered Wood forthwith after
execution), without the prior written consent of L-P Engineered Wood.
Xxxxx acknowledges that L-P
37 PART D
Engineered Wood may, but need not, assume the rights and obligations
of Xxxxx under any such new Contract at the time of Closing, provided
however, that L-P Engineered Wood shall assume at Closing all new
Contracts to which it consents.
13.2. STORAGE OF XXXXXX J-BAR SORTER. Xxxxx agrees to provide L-P Engineered
Wood with storage for the Xxxxxx J-Bar Sorter at the Xxxxxx Facility for a
period of at least 180 days following the Closing Date, without cost, but at the
sole risk of L-P Engineered Wood. Xxxxx agrees that L-P Engineered Wood and L-P
Engineered Wood's authorized representatives may have access at all reasonable
times to the Xxxxxx Facility for the purpose of inspecting, repairing or
removing the Xxxxxx J-Bar Sorter.
13.3. CONTRACT CONSENTS. Xxxxx shall use commercially reasonable efforts to
obtain the consent of any party to any Contract with Xxxxx where the consent of
such party is required to assign such Contract to L-P Engineered Wood.
13.4. FOREST TENURES CONSENTS. Xxxxx and L-P Engineered Wood shall use all
commercially reasonable efforts to obtain:
(a) any consents necessary for the assignment to L-P Engineered Wood of
Xxxxx' interest in the Forest Tenures; or
(b) if applicable, the re-issuance of any one or more of the Forest
Tenures in the name of L-P Engineered Wood;
and in the course of attempting to obtain such consents:
(c) Xxxxx will not, without the prior written consent of L-P Engineered
Wood, agree to any amendment to any of the Forest Tenures; and
(d) L-P Engineered Wood will not, without the prior written consent of
Xxxxx, agree to any amendment to any of the Forest Tenures which would
have effect prior to L-P Engineered Wood's assumption of the Forest
Tenures on the Closing Date.
13.5. EMPLOYEES. L-P Engineered Wood intends to operate the Golden Facility and
Malakwa Facility after the Closing and further intends to staff the Golden
Facility and Malakwa Facility primarily from Xxxxx' current employees. L-P
Engineered Wood shall have the right, by written notice to Xxxxx given at any
time after all conditions precedent to the completion of this Agreement have
been removed or satisfied, to direct Xxxxx to terminate certain of the salaried
employees of Xxxxx prior to the Closing Date at the cost of L-P Engineered Wood.
Subject to such terminations, Xxxxx agrees to transfer and L-P Engineered Wood
agrees to accept the transfer of the employment of all of Xxxxx' salaried
employees, effective from the Closing Date, on terms equal to or better than
those specified in Schedule 11.13, provided that it is agreed that the terms of
employment of such salaried employees need not include any Supplemental Pension
Benefits so long as the terms of employment of each such employee, taken as a
whole, are equal to or better than those specified in Schedule 11.13. If any
such employee declines to accept the transfer of employment to L-P Engineered
Wood any severance or other payment required to such employee shall be the
responsibility of Xxxxx and not L-P Engineered Wood. If any employee accepts
such transfer of employment to L-P Engineered Wood, any subsequent severance or
other claim of such employee shall be the responsibility of L-P Engineered Wood
38 PART D
and not Xxxxx unless such claim relates to any action or inaction of Xxxxx prior
to the Closing Date or the information contained in Schedule 11.13 was
inaccurate in any material manner. Effective from the Closing Date, L-P
Engineered Wood shall become bound by the Collective Agreement as a successor
employer and shall assume all of Xxxxx' obligations and liabilities thereunder.
L-P Engineered Wood shall also assume all obligations and liabilities of Xxxxx
in respect of disability, salary, and other benefits (including the right to
resume employment) for individuals who are, at the Closing Date:
(a) in receipt of benefits from a short term or long term disability
program sponsored by Xxxxx or in which Xxxxx participates;
(b) in receipt of Worker's Compensation benefits on account of their
employment by Xxxxx;
(c) on an authorized unpaid leave of absence (including maternity or
parental leave or unpaid sick leave) from Xxxxx;
(d) on layoff from Xxxxx with an existing right of recall pursuant to the
Collective Agreement; or
(e) entitled to post-retirement or other benefits (other than Supplemental
Pension Benefits) provided through a benefit program sponsored by
Xxxxx or in which Xxxxx participates,
provided each such individual is disclosed on Schedule 11.15 and the liability
or obligation to such individual arises under a plan disclosed on Schedule
11.14, or arises in the ordinary course of business after the date of this
Agreement and prior to the Closing Date.
13.6. VALUATIONS. No less than 30 days prior to the Closing Date, Xxxxx shall
cause the Xxxxx Actuary to prepare and provide to L-P Engineered Wood for its
approval, acting reasonably:
(a) an actuarial valuation of the Pension Plan (the "Solvency Deficiency
Valuation") which specifies the sum which would be sufficient, in the
opinion of the Xxxxx Actuary, to fully fund the obligations of the
Pension Plan on a plan termination or "solvency" basis as of the
Closing Date (the "Solvency Deficiency"); and
(b) an actuarial valuation of the amounts which, in the opinion of the
Xxxxx Actuary, are required on the Closing Date to fully fund the
Supplemental Pension Benefits to which each of the Current Active
Executive Members specified in Schedule 11.13 would be entitled if his
employment terminated on the Closing Date (the "Supplemental Pension
Obligation").
Xxxxx shall provide to L-P Engineered Wood such access to financial working
papers as L-P Engineered Wood shall reasonably require to review the Solvency
Deficiency Valuation and the Supplemental Pension Obligation calculation. The
Solvency Deficiency Valuation and the Supplemental Pension Obligation
calculation shall be deemed to be approved by L-P Engineered Wood unless L-P
Engineered Wood delivers a Notice of Actuarial Disagreement to Xxxxx pursuant to
Section 13.7.
39 PART D
13.7. NOTICE OF ACTUARIAL DISAGREEMENT. If L-P Engineered Wood disagrees with
the Solvency Deficiency Valuation or the Supplemental Pension Obligation
calculations, L-P Engineered Wood shall give written notice of its disagreement
("Notice of Actuarial Disagreement") to Xxxxx within 10 days following its
receipt thereof. If a Notice of Actuarial Disagreement is received by Xxxxx in a
timely manner, then the Solvency Deficiency Valuation or the Supplemental
Pension Obligation calculations, as the case may be, together with any
amendments thereto, if any, shall become final and binding upon the parties on
the earlier of:
(a) the date the parties resolve in writing all matters specified in the
Notice of Actuarial Disagreement; or
(b) the date any Disputed Actuarial Matters are finally resolved in
writing by the Independent Accountant.
Any such Notice of Actuarial Disagreement shall state in reasonable
detail the nature of any disagreement so asserted. During a period of 5 days
following receipt by Xxxxx of the Notice of Actuarial Disagreement, Xxxxx and
L-P Engineered Wood shall attempt to resolve in writing any differences that
they may have with respect to any matter specified in the Notice of Actuarial
Disagreement. If at the end of such 5 day period, Xxxxx and L-P Engineered Wood
have failed to reach written agreement with respect to all of such matters, then
all such matters as are specified in any Notice of Actuarial Disagreement and as
to which such written agreement has not been reached (the "Disputed Actuarial
Matters") shall be submitted to and reviewed by the Independent Accountant. The
Independent Accountant shall resolve all Disputed Actuarial Matters within 10
days of his or her appointment and his or her decision with respect to all
Disputed Actuarial Matters shall be final and binding upon Xxxxx and L-P
Engineered Wood. The fees and expenses of the Independent Accountant in respect
of the Disputed Actuarial Matters shall be paid equally by L-P Engineered Wood
and Xxxxx.
13.8. FUNDING. On or before the Closing Date Xxxxx shall:
(a) contribute to the Pension Plan an amount equal to the Solvency
Deficiency as set out in the agreed Solvency Deficiency Valuation; and
(b) either:
(i) deliver to L-P Engineered Wood releases in form and substance
satisfactory to L-P Engineered Wood executed by each of the
Current Active Executive Members specified in Schedule 11.13
acknowledging that they have received payment of all Supplemental
Pension Benefits which is or may in the future become owing to
them in respect of any employment prior to the Closing Date; or
(ii) pay to L-P Engineered Wood an amount equal to the aggregate
Supplemental Pension Obligations in respect of each of the
Current Active Executive Members specified in Schedule 11.13, in
which case, for greater certainty, L-P Engineered Wood will
assume all obligations under the Supplemental Pension to such
Current Active Executive Members;
40 PART D
13.9. PENSION TRANSFER. Effective as of the Closing Date, Xxxxx shall assign to
L-P Engineered Wood and L-P Engineered Wood shall assume all of Xxxxx' rights,
duties and obligations under and in respect of the Pension Plan, other than any
obligations in respect of Supplemental Pension or the Supplemental Pension
Benefits, and the assets thereof. Without limitation, L-P Engineered Wood shall
assume all responsibility for all pension benefits accrued under the Pension
Plan prior thereto for all participants in the Pension Plan, other than any
obligations in respect of Supplemental Pension Benefits. Prior to the Closing
Date L-P Engineered Wood and Xxxxx shall co-operate to make all amendments to
the Pension Plan (and related documentation) and all applications for
registration or regulatory approval as are required to implement the terms of
this Section.
13.10. CONTINUED ACCESS TO EMPLOYEES. L-P Engineered Wood shall xxxxx Xxxxx
reasonable access to its employees after the Closing Date to resolve outstanding
matters, provided that Xxxxx shall reimburse L-P Engineered Wood for any
out-of-pocket expenses which L-P Engineered Wood incurs in connection with its
co-operation pursuant to this Section.
13.11. CONSISTENT USE OF GAAP. Between the date of this Agreement and the
Closing Date, Xxxxx will accurately record the Road Costs and the Silviculture
Obligations in its accounting records in accordance with GAAP consistently
applied and maintained.
13.12. VALIDITY OF REPRESENTATIONS. Xxxxx, the Purchasers and L-P Canada shall
not, between the date of this Agreement and the Closing Date, do anything which
would result in any of their respective representations or warranties set forth
in this Agreement not being true and correct in all material respects on the
Closing Date as if such representation and warranty were made on the Closing
Date, or in the case of Xxxxx, being untrue in a manner that has a Materially
Adverse Effect.
13.13. INDEMNIFICATIONS.
(a) Xxxxx agrees to indemnify and hold harmless the Purchasers, L-P Canada
and each of their directors, officers, employees and Affiliates (the
"Purchasers Indemnified Parties") from and against and to reimburse
the Purchasers Indemnified Parties with respect to any and all losses,
damages, liabilities, costs, expenses and deficiencies, including
interest, penalties and reasonable attorneys' fees incurred by the
Purchasers Indemnified Parties by reason of or arising out of or in
connection with:
(i) any representation or warranty made by Xxxxx in this Agreement
or in any other agreement or document delivered pursuant hereto
which shall have been false or inaccurate in any material
respect as of the date in respect of which it is made;
(ii) the nonfulfillment of any covenant or agreement on the part of
Xxxxx in or under this Agreement or any other agreement or
document delivered pursuant hereto;
(iii) any material misstatement and/or misrepresentation or omission
of facts or circumstances from this Agreement or a Schedule
hereto or in any certificate, document or other agreement
furnished or to be furnished by Xxxxx or any of its
representatives hereunder;
41 PART D
(iv) contract damages, personal injury damages, property damage caused
by or arising out of Xxxxx' acts or omissions;
(v) any and all acts, liabilities and obligations of Xxxxx not
expressly assumed by the Purchasers or L-P Canada in this
Agreement or any other agreement or document delivered pursuant
hereto;
(vi) all product liability, manufacturing or design defect claims
arising from products manufactured by Xxxxx prior to the Closing;
and
(vii) all Claims under any Environmental Law where the alleged conduct
or inaction constituting the basis of such Claim occurred prior
to Closing, whether or not Xxxxx had knowledge of such potential
Claim at the time of Closing. Provided that none of the
Purchasers or L-P Canada shall have any right to indemnification
hereunder in respect of the environmental matters specified in
Part 1 of Schedule 11.8.
(b) each of the Purchasers and L-P Canada, jointly and severally, agrees
to indemnify and hold harmless Xxxxx and its directors, officers,
employees and Affiliates (collectively, "Xxxxx Indemnified Parties")
from and against and to reimburse Xxxxx Indemnified Parties with
respect to any and all losses, damages, liabilities, costs, expenses
and deficiencies, including interest, penalties and reasonable
attorneys' fees incurred by Xxxxx Indemnified Parties by reason of or
arising out of or in connection with:
(i) any representation or warranty made by the Purchasers or L-P
Canada in this Agreement or in any other agreement or document
delivered pursuant hereto which shall have been false in any
material respect as of the date in respect of which it is made;
(ii) the nonfulfillment of any covenant or agreement on the part of
the Purchasers or L-P Canada in or under this Agreement or any
other agreement or document delivered pursuant hereto;
(iii) any material misstatement and/or misrepresentation or omission
from this Agreement or a Schedule hereto or any certificate,
document or other agreement furnished or to be furnished by the
Purchasers or L-P Canada or any of their representatives;
(iv) contract damages, personal injury damages and property damage,
arising from the Purchasers' or L-P Canada's acts or omissions
after the Closing;
(v) all product liability, manufacturing or design defect claims
arising from products manufactured by the Purchasers or L-P
Canada after the Closing;
(vi) all Claims for environmental matters for which the alleged
conduct constituting the basis of any such Claim or action
occurred after the Closing;
42 PART D
(vii) all Claims for amounts required to be collected and remitted by
Xxxxx to the British Columbia Consumer Taxation Branch pursuant
to the SOCIAL SERVICE TAX ACT in respect of the transfer of the
Assets hereunder in excess of the amount, if any, remitted to
Xxxxx for this purpose at Closing;
(viii) all Claims in respect of benefits payable under the Pension
Plan.
(c) No claim for indemnity pursuant to Section 13.13(a)(i)-(vii) or
(b)(i)-(iii) may be made after December 31, 2000, unless written
notice of a bona fide Claim has been given prior to such date,
specifying with reasonable particularity (to the extent that the
information is available) the factual basis for the Claim and the
amount of the Claim to the extent then known. No payment in respect of
an indemnity need be made to the Purchasers Indemnified Parties unless
and until the aggregate loss or damage suffered by the Purchasers
Indemnified Parties from all matters which entitle such parties to
indemnity pursuant to Section 13.13(a) exceeds US $50,000 and
thereafter indemnity need only be paid for the amount in excess of US
$50,000. No payment on account of Claims for indemnity under this
Section need be made by Xxxxx.
(d) The obligations to indemnify contained in Section 13.13(b)(iv), (v),
(vi), (vii) and (viii) shall survive Closing and remain in effect
indefinitely. All other obligations to indemnify contained in this
Section shall survive Closing and remain in effect up to and including
December 31, 2000 (the "Indemnity Period"). Upon receipt of a notice
of a Claim within the Indemnity Period the indemnity obligation of the
indemnifying party shall continue in effect until the Claim is finally
resolved.
(e) For greater certainty, the Purchasers and L-P Canada acknowledge that
no Claim for indemnity may be made by the Purchasers or L-P Canada
against Xxxxx pursuant to this Section in respect of the environmental
matters specified in Part 1 of Schedule 11.8.
13.14. LOAN AND PROMISSORY NOTE. L-P Canada covenants to advance to Xxxxx an
amount equal to the Adjusted Xxxxx Equipment Purchase Price (the "Loan") by bank
draft or certified cheque and Xxxxx covenants to issue and deliver to L-P Canada
a promissory note in the form attached hereto as Schedule 13.14 (the "Promissory
Note") at Closing.
13.15. SLEC ASSETS. On or before the Closing Date, Xxxxx shall cause the SLEC
Capital Leases to be terminated and shall acquire good and valid title to the
SLEC Assets.
13.16. PERMITTED ENCUMBRANCES. Xxxxx covenants that it has no liability in
respect of any of the security interests identified as Permitted Encumbrances on
Appendix A of Schedule 2.1(by) by (2) and that it shall use its best reasonable
efforts to obtain and register a discharge of each such security interest prior
to the Closing Date. On or before the Closing Date Xxxxx shall obtain and
deliver to L-P Engineered Wood registrable discharges of the security interests
identified as Permitted Encumbrances on Appendix A of Schedule 2.1(by) by (1).
13.17. DEFENSE OF CLAIMS. Xxxxx shall use reasonable best efforts to defend any
Claims which have been or will be made which might result in a Lien against the
Assets or Operations.
43 PART D
13.18. LAND TITLE OFFICE DISCHARGES. At or prior to Closing, Xxxxx shall obtain
and deliver to L-P Engineered Wood registrable discharges of all of the
encumbrances listed in Schedule 3.2(c)(i), other than Undersurface Rights #F408
and Restrictive Covenant #M6239.
13.19. JOB PROTECTION LIABILITIES. Xxxxx shall, on or before the Closing Date,
pay to its employees, former employees, logging contractors and former logging
contractors all payments under logging contracts and all salary and wages and/or
benefits deferred pursuant to Economic Plans entered into by the Job Protection
Commissioner for the Province of British Columbia in relation to Xxxxx.
13.20. CURRENCY CONVERSION. All conversions of Canadian currency to United
States currency or of United States currency to Canadian currency required to be
made pursuant to the terms of this Agreement on or after the Closing Date on
account of any adjustments to the aggregate purchase price hereunder, or any
part thereof, shall be made according to the preferred volume currency
conversion rates as declared by The Royal Bank of Canada at its Main Branch in
Vancouver, British Columbia on the last day prior to the Closing Date on which
such branch is open for business.
13.21. DELIVERIES. Each of Xxxxx, X-X Engineered Wood and L-P Canada covenant
and agree with each of the others to make at Closing the deliveries required of
such party pursuant to Section 18 hereof.
44 PART E
PART E - GENERAL TERMS GOVERNING PURCHASES
14. INDEMNITY HOLDBACK
14.1. DELIVERY OF INDEMNITY HOLDBACK. Pursuant to Section 5.6, upon Closing, L-P
Engineered Wood shall deliver the Indemnity Holdback to the Escrow Agent to be
held in accordance with the terms of the Escrow Agreement to satisfy any Claims
during the Indemnity Period by L-P Engineered Wood, X-X Xxxxxx Creek or L-P
Canada against Xxxxx under this Agreement.
14.2. LIMITATION ON LIABILITY. Notwithstanding any other provision of this
Agreement or of any other document or agreement delivered pursuant to this
Agreement, L-P Engineered Wood, X-X Xxxxxx Creek and L-P Canada agree that their
sole recourse in the event that an indemnity is payable by Xxxxx (whether for
breach of representation and warranty or otherwise) shall be to the balance of
the monies from time to time held by the Escrow Agent as part of the Indemnity
Holdback and in accordance with the terms of the Escrow Agreement and for
greater certainty, the liability of Xxxxx to L-P Engineered Wood, X-X Xxxxxx
Creek and L-P Canada under or in relation to this Agreement is limited to such
monies.
14.3. CLAIMS ON INDEMNITY HOLDBACK. If a Claim is to be made by a party entitled
to indemnification the party entitled to such indemnification shall give written
notice to the indemnifying party immediately after the party entitled to
indemnification becomes aware of any fact, condition or event which may give
rise to a matter for which indemnification may be sought; provided that the
failure of any indemnified party to give timely notice shall not affect the
rights to indemnification except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. If any Claim arises against
any party entitled to the benefit of indemnity and if the indemnifying party
acknowledges in writing to the indemnified party that the indemnifying party is
obligated under the terms of its indemnity in connection with such Claim then
the indemnifying party shall be entitled, if it so elects, to take control of
the defense and investigation of such lawsuit, action or Claim with counsel of
its choice to handle and defend the same at the indemnifying party's expense
provided that the indemnifying party and its counsel shall proceed with
diligence and in good faith in the investigation, trial and defense of such
Claim and any appeal; provided, however, that the indemnified party may, at its
own cost, participate in the investigation, trial and defense of such lawsuit or
action and any appeal arising therefrom. If an indemnifying party acknowledges
the obligation to indemnify, an indemnified party shall not thereafter admit any
liability with respect to or settle, compromise, or discharge any Claim without
the consent of the indemnifying party.
14.4. RELEASE OF INDEMNITY HOLDBACK. Following the expiration of the Indemnity
Period, the remaining balance of the Indemnity Holdback, if any, after (i) the
payment of Claims by the Purchasers and (ii) the reservation of amounts required
to satisfy unresolved Claims as and to the extent provided in the Escrow
Agreement, shall be distributed by the Escrow Agent in accordance with the terms
of the Escrow Agreement.
14.5. INTEREST ON INDEMNITY HOLDBACK. Interest on the Indemnity Holdback shall
be for the account of Xxxxx and shall be paid in accordance with the terms of
the Escrow Agreement.
45 PART E
15. COMPETITION MATTERS
15.1. XXXX-XXXXX XXXXXX ACT. Xxxxx and the Purchasers shall make and complete
all necessary filings under the XXXX-XXXXX XXXXXX ANTITRUST IMPROVEMENTS ACT OF
1976, as amended (the "HSR Act"). If the waiting period (which term includes the
extension period) under the HSR Act has not expired by the Closing Date, the
Closing Date shall be delayed until five business days after the expiration of
the waiting period, provided that either Xxxxx or the Purchasers in their sole
discretion may terminate this Agreement if the waiting period has not expired or
been terminated within 90 calendar days following the date of this Agreement.
15.2. COMPETITION ACT. Xxxxx and the Purchasers shall make and complete all
necessary filings under the COMPETITION ACT, R.S.C. 1985, as amended (the
"Competition Act"). If, by the Closing Date, either the Commissioner (as defined
in the Competition Act) has not notified the parties that the Commissioner does
not at that time intend to make an application under section 92 of the
Competition Act in respect of the proposed purchase or the applicable period of
time specified in section 123 (1) of the Competition Act during which the
purchase may not proceed has not expired, the Closing Date shall be delayed
until five business days after the receipt of such notice or the expiry of such
period, whichever shall first occur, provided that either Xxxxx or the
Purchasers in their sole discretion may terminate this Agreement if such notice
has not been received or such period has not expired within 90 calendar days
following the date of this Agreement.
16. INVESTMENT CANADA ACT
16.1. PURCHASER TO MAKE FILINGS. The Purchasers shall make and complete all
necessary filings under the INVESTMENT CANADA ACT, R.S.C. 1985, in accordance
with the provisions of such Act.
17. CONDITIONS PRECEDENT TO THE CLOSING
17.1. CONDITIONS PRECEDENT TO THE PURCHASERS' AND L-P CANADA'S OBLIGATIONS. The
obligations of the Purchasers and L-P Canada under this Agreement to consummate
the transactions contemplated by this Agreement shall be subject to the
satisfaction, on or prior to the Closing Date, of the following conditions, any
of which may be waived at the option of the Purchasers or L-P Canada:
(a) There shall have been no material breach by Xxxxx in the performance
of any of its covenants.
(b) The representations and warranties of Xxxxx contained or referred to
in this Agreement shall be true and correct in all material respects
on the Closing Date as if made on the Closing Date (except for changes
contemplated or permitted by this Agreement and representations and
warranties made as of a specified date, which shall be true and
correct in all material respects as of such date).
(c) All corporate action necessary to authorize the execution, delivery
and performance of this Agreement by Xxxxx and the consummation of the
transactions contemplated hereby shall have been duly and validly
taken, and a good standing certificate and certified copies of all
directors and shareholder resolutions authorizing the execution and
delivery of this
46 PART E
Agreement and the consummation of the transactions contemplated hereby
shall be delivered to the Purchasers.
(d) All corporate and other proceedings in connection with the
transactions contemplated and all documents and instruments incident
to such transactions shall be reasonably satisfactory in substance and
form to the Purchasers' Solicitors, and Xxxxx shall have made
available to the Purchasers for examination the originals or true,
complete and correct copies of all records and documents relating to
the Operations and the Assets which the Purchasers may reasonably
request.
(e) L-P Engineered Wood shall have received a private ruling from the
British Columbia Consumer Taxation Branch confirming the availability
of an exemption from the payment of social services taxes pursuant to
the SOCIAL SERVICE TAX ACT (British Columbia) in respect of the
conveyance of the Xxxxx Equipment hereunder. L-P Engineered Wood
agrees that the ruling request will be made forthwith after the date
of this Agreement and that the Xxxxx' Solicitors will be afforded an
opportunity to review and comment upon the form of the ruling request
before it is submitted.
(f) All consents or approvals required to be obtained by Xxxxx or the
Purchasers or both for the purpose of selling, assigning or
transferring the Assets shall have been obtained with such consents
and/or approvals being on terms and conditions satisfactory to the
Purchasers.
(g) The Ministry of Forests shall have consented to the assignment of the
Forest Tenures and any requirements imposed by the Minister of Forests
for British Columbia as a condition of his consenting to the transfer
of the Forest Tenures to L-P Engineered Wood shall not, in L-P
Engineered Wood's opinion, acting reasonably, materially reduce the
value of the Forest Tenures or have a material adverse effect on the
Operations or on any other forest industry operations of L-P
Engineered Wood's or its Affiliates' in British Columbia, provided
that the following requirements shall be deemed not to materially
reduce the value of such tenures or have a Material Adverse Effect:
(i) the reduction by 5% of the allowable annual cut under the
replaceable licences included in the Forest Tenures as provided
in Section 56 of the FOREST ACT and the requirement to obtain and
submit an independent current appraisal of the value of the
timber within the timber licences included in the Forest Tenures
and payment to the Crown of 5% of the value of that timber as
provided in Section 56 of the FOREST ACT;
(ii) confirmation by L-P Engineered Wood of:
A. maintenance of cut control requirements under the
Forest Tenures;
B. continued operation of the timber processing facilities
included in the Assets;
47 PART E
C. acceptance of all obligations of the licensee under the
Forest Tenures; and
D. participation in programs as required by, and
compliance with operational requirements of, the
Ministry of Forests for British Columbia applicable
generally to the forest industry.
(h) Consent shall have been received from the Minister of Foreign Affairs
to the transfer to L-P Engineered Wood of the softwood lumber quota
allocation associated with the Operations on terms satisfactory to L-P
Engineered Wood.
(i) L-P Engineered Wood shall have reached an agreement with both Messrs.
Xxx Xxxxxxx and Xxxxxx Xxxxxxxx for employment with L-P Engineered
Wood, on terms and conditions satisfactory to L-P Engineered Wood.
(j) L-P Engineered Wood shall have received evidence satisfactory to it
that no liabilities or obligations arising out of any plans or
arrangements developed by the Job Protection Commission of the
Province of British Columbia, whether actual or contingent, exist or
may attach to the Assets or the Operations after the Closing Date.
(k) Xxxxx shall have furnished the Purchasers with all documents and other
items required under Sections 18.2 together with such other and
further documents and certificates, including certificates of Xxxxx'
officers and others, as the Purchasers shall reasonably request in
light of customary practice in transactions of this kind to evidence
compliance with the conditions in this Agreement.
(l) No material damage shall have occurred to any of the Assets to the
extent that such damage or loss is not:
(i) repaired by the Closing Date; or
(ii) covered by insurance proceeds which are assigned to the
Purchasers at Closing and which are not included in the Working
Capital Assets; or
(iii) included in the Working Capital Liabilities or the Assumed Xxxxx
Liabilities.
(m) L-P Engineered is satisfied that all liabilities and obligations of
Xxxxx in respect of the security interests identified as Permitted
Encumbrances on Appendix A of Schedule 2.1(by) by (2) and which remain
registered against any of the Assets at the time of Closing, if any,
have been fully paid and satisfied.
(n) L-P Engineered Wood is satisfied that it will have no liability after
Closing and that the Assets will be subject to no Lien after Closing
in respect of any Claim by Emerald Coast Timber Ltd., the Workers'
Compensation Board or the Employment Standards Branch.
48 PART E
17.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXXX. Xxxxx' obligations under
this Agreement shall be subject to the satisfaction on or prior to the Closing
Date of the following conditions, any of which may be waived at the option of
Xxxxx:
(a) There shall have been no material breach by the Purchasers or L-P
Canada in the performance of any of their covenants.
(b) The representations and warranties of the Purchasers and L-P Canada
contained or referred to in this Agreement shall be true and correct
in all material respects on the Closing Date as if made on the Closing
Date.
(c) All corporate action necessary to authorize the execution, delivery
and performance of this Agreement by the Purchasers and L-P Canada and
the consummation of the transactions contemplated shall have been duly
and validly taken.
(d) All corporate and other proceedings in connection with the
transactions contemplated hereby and all documents and instruments
incident to such transactions shall be reasonably satisfactory in
substance and form to Xxxxx' Solicitors.
(e) The Purchasers and L-P Canada shall have furnished Xxxxx with all
documents and other items required under Sections 18.3, 18.4 and 18.5
together with such other and further documents and certificates,
including certificates of the Purchasers' or L-P Canada's officers and
others, as Xxxxx shall reasonably request in light of customary
practice in transactions of this kind to evidence compliance with the
conditions in this Agreement.
(f) L-P Engineered Wood shall have offered employment to salaried
employees of Xxxxx and shall assume the obligations and liabilities of
Xxxxx in respect of disability, salary and other benefits to the
specified individuals in accordance with Section 13.5.
(g) Other than requirements imposed on Xxxxx to fulfil obligations of
Xxxxx existing as at the date of this Agreement, no requirements
imposed by the Minister of Forests for British Columbia as a condition
of his or her consenting to the transfer of the Forest Tenures to L-P
Engineered Wood to the extent that they directly affect Xxxxx, shall,
in Xxxxx' opinion, acting reasonably, have a Material Adverse Effect.
17.3. MUTUAL CONDITIONS PRECEDENT TO THE PARTIES' OBLIGATIONS. The obligation of
each of the parties under this Agreement to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction, on or prior
to the Closing Date, of the following conditions precedent, none of which may be
waived by any party hereto unless also waived by all other parties:
(a) No order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the sale or any of the other
transactions contemplated by this Agreement shall be in effect. No
statute, rule, regulation, order, injunction or decree shall
49 PART E
have been enacted, entered, promulgated or enforced by any Authority
which prohibits, restricts or makes illegal the proposed transaction.
(b) The applicable waiting period, including any extensions, under the HSR
Act and the Competition Act shall have expired or been terminated and
none of the Department of Justice (U.S.), the Federal Trade Commission
nor the Competition Tribunal shall have taken any action to enjoin or
delay the consummation of the transactions contemplated.
(c) Consent having been received from Trus Joist MacMillan to the
assignment by Xxxxx to L-P Engineered Wood on the Closing Date of the
Trus Joist Sales Agreement, including without limitation, a covenant
from Trus Joist MacMillan to assign title to the Trus Joist Scarfer
directly to L-P Engineered Wood pursuant to the terms of the Trus
Joist Sales Agreement on April 30, 2000.
18. CLOSING PROCEDURE
18.1. THE CLOSING. The completion of the sale of the Xxxxx Assets and the SLEC
Assets shall be consummated at the offices of the Purchasers' Solicitors at 10
o'clock in the forenoon, local time, on October 31, 1999, or at such other
place, date and/or time as the parties may agree, but in any case, after all
conditions to Closing have been met, including the conditions specified in
Sections 15 and 16 hereof (the "Closing Date").
18.2. XXXXX' DELIVERIES AT CLOSING. Subject to the terms and conditions of this
Agreement, Xxxxx shall deliver the following at or before the Closing:
(a) to the Purchasers and L-P Canada, in form satisfactory to the
Purchasers' Solicitors, acting reasonably:
(i) all transfers, bills of sale, assignments and other deeds which
are required to transfer the Assets and the Operations to L-P
Engineered Wood or as the Purchasers may direct and in
registrable form, where applicable;
(ii) executed consents to the transfer of the Assumed Contracts,
including the Assumed Capital Leases, and other agreements or
Permits to L-P Engineered Wood, where required;
(iii) all other instruments in such form as may be reasonably
requested by L-P Engineered Wood to vest in L-P Engineered Wood
fully all of Xxxxx' right, title and interest in the Xxxxx
Assets and the Operations;
(iv) a Solicitors Opinion from Xxxxx' Solicitors;
(v) certified copies of resolutions of the directors of Xxxxx and of
a special resolution of the members of Xxxxx authorizing the
entering into of this Agreement and the sale of the Assets as
contemplated by this Agreement;
50 PART E
(vi) a certificate of an officer of Xxxxx as to the accuracy of
Xxxxx' representations and warranties as of the Closing Date
and the performance of the covenants and agreements of Xxxxx to
be performed at or before the Closing Date, with particulars of
any inaccuracy or non-performance;
(vii) physical possession of the Xxxxx Assets and the SLEC Assets;
(viii) an executed copy of the Escrow Agreement;
(ix) the Books and Records;
(x) the executed Promissory Note;
(xi) all other instruments in such form as may be reasonably
requested by X-X Xxxxxx Creek to vest in X-X Xxxxxx Creek fully
all of Xxxxx' right, title and interest in the SLEC Assets; and
(xii) all such other instruments as may be reasonably requested by
the Purchasers to consummate the transactions contemplated;
(b) to the Escrow Agent, an executed copy of the Escrow Agreement.
18.3. L-P ENGINEERED WOOD'S DELIVERIES AT CLOSING. Subject to the terms and
conditions of this Agreement, L-P Engineered Wood shall deliver the following at
the Closing:
(a) to Xxxxx:
(i) a Solicitors Opinion from the Purchasers' Solicitors;
(ii) the Estimated Residual Xxxxx Assets Purchase Price less the
Adjustment Holdback and the Indemnity Holdback;
(iii) the assumption and indemnity agreement(s) provided for in
Section 7.1 to confirm the assumption by L-P Engineered Wood
and L-P Canada of the Working Capital Liabilities, the Assumed
Xxxxx Liabilities and the Assumed Xxxxx Obligations;
(iv) the Preferred Shares required in accordance with Section 4.4;
(v) a certified copy of a resolution of the directors of L-P
Engineered Wood authorizing the purchase of the Xxxxx Assets
and the assumption of the Assumed Xxxxx Liabilities and the
Assumed Xxxxx Obligations as contemplated by this Agreement;
(vi) an executed copy of the Escrow Agreement; and
(vii) all such other instruments as may be reasonably requested by
Xxxxx to consummate the transactions contemplated;
(b) to the Escrow Agent:
51 PART E
(i) the Adjustment Holdback;
(ii) the Indemnity Holdback; and
(iii) an executed copy of the Escrow Agreement.
18.4. X-X XXXXXX CREEK'S DELIVERIES AT CLOSING. Subject to the terms and
conditions of this Agreement, X-X Xxxxxx Creek shall deliver the following at
the Closing:
(a) to Xxxxx:
(i) a Solicitors Opinion from the Purchasers' Solicitors;
(ii) the SLEC Purchase Price;
(iii) a certified copy of a resolution of the directors of X-X Xxxxxx
Creek authorizing the purchase of the SLEC Assets as
contemplated by this Agreement;
(iv) an executed copy of the Escrow Agreement; and
(v) all such other instruments as may be reasonably requested by
Xxxxx to consummate the transactions contemplated;
(b) to the Escrow Agent, an executed copy of the Escrow Agreement.
18.5. L-P CANADA'S DELIVERIES AT CLOSING. Subject to the terms and conditions of
this Agreement, L-P Canada shall deliver the following at the Closing:
(a) to Xxxxx:
(i) a Solicitors Opinion from the Purchasers' Solicitors;
(ii) the assumption and indemnity agreement(s) provided for in
Section 7.1 to guarantee the assumption by L-P Engineered Wood
of the Working Capital Obligations, the Assumed Xxxxx
Liabilities, the Assumed Liabilities and the Assumed Xxxxx
Obligations;
(iii) a certified copy of a resolution of the directors of L-P Canada
authorizing the execution and delivery by L-P Canada of the
assumption and indemnity agreements and the making of the Loan
as contemplated by this Agreement;
(iv) the Loan; and
(v) all such other instruments as may be reasonably requested by
Xxxxx to consummate the transactions contemplated.
52 PART E
18.6. PUBLIC ANNOUNCEMENT. The Purchasers and Xxxxx each shall have the right to
approve any press release or other public announcement by any of the parties
concerning the execution of this Agreement or the consummation of the
transactions contemplated by this Agreement, which approval shall not be
unreasonably withheld. For this reason, each party shall provide the other
parties with copies of any such proposed announcement at a reasonable time in
advance of the intended publication thereof. Xxxxx and the Purchasers agree to
make a good faith effort to cause any such announcements to be made jointly.
19. TERMINATION
19.1. EVENTS OF TERMINATION. This Agreement may be terminated and abandoned at
any time prior to the Closing:
(a) By mutual written consent of the Purchasers and Xxxxx;
(b) By any party if the Closing has not occurred prior to November 30,
1999 or such later date as the parties shall mutually approve and such
non-occurrence shall not be due to any failure of such party to
perform its obligations hereunder;
(c) By Xxxxx or by the Purchasers if the other party shall have failed to
comply in any material respect with any of the provisions of this
Agreement for a period of twenty (20) days after the other party shall
have notified the noncomplying party of such failure to comply in
writing, or if there shall have occurred any event, development or
circumstance prior to the Closing which is beyond the control of the
parties and which has a Material Adverse Effect.
19.2. EFFECT OF TERMINATION. If this Agreement is terminated pursuant to Section
19.1, this Agreement shall become wholly void and of no force or effect, without
any liability or further obligation on the part of the Purchasers, Xxxxx or L-P
Canada (or any of their respective directors, officers, employees, agents or
representatives); provided that such termination shall not relieve the
Purchasers, Xxxxx or L-P Canada from any liability for any intentional breach of
any covenant or agreement contained in this Agreement.
19.3. SPECIFIC PERFORMANCE. The parties acknowledge that damages may be an
inadequate remedy for a breach of this Agreement and that the obligations of the
parties shall be specifically enforceable, but the availability of specific
performance shall in no way limit the availability of damages.
20. MISCELLANEOUS
20.1. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and, unless otherwise provided in this Agreement
shall be given or made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by courier service, by telecopy or by registered
or certified mail (postage prepaid, return receipt requested) to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) If to L-P Engineered Wood to:
00 XXXX X
Xxxxxxxxx-Xxxxxxx Xxxxxx
Engineered Wood Products Ltd.
000 X.X. Xxxxx Xxxxxx
X.X Bancorp Tower
Xxxxxxxx, Xxxxxx 00000
Attn: Director, Engineered Wood Products
Telecopy: (000) 000-0000
With a copy to:
Louisiana-Pacific Corporation
000 X.X. Xxxxx Xxxxxx
X.X. Bancorp Tower
Portland, Oregon 97204
Attn: General Counsel
Telecopy: (000) 000-0000
and:
Xxxxxxx & XxXxxxxx
Barristers & Solicitors
0000 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attn: Xxxx X. XxXxxxxxx
Telecopy: (000) 000-0000
(b) If to X-X Xxxxxx Creek to:
Louisiana-Pacific Canada
Xxxxxx Creek Ltd.
000 X.X. Xxxxx Xxxxxx
X.X Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxx 00000
Attn: Director, Engineered Wood Products
Telecopy: (000) 000-0000
With a copy to:
Louisiana-Pacific Corporation
000 X.X. Xxxxx Xxxxxx
X.X. Bancorp Tower
Portland, Oregon 97204
Attn: General Counsel
Telecopy: (000) 000-0000
54 PART E
and:
Xxxxxxx & XxXxxxxx
Barristers & Solicitors
0000 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attn: Xxxx X. XxXxxxxxx
Telecopy: (000) 000-0000
(c) If to L-P Canada to:
Louisiana-Pacific Canada Ltd.
000 X.X. Xxxxx Xxxxxx
X.X Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxx 00000
Attn: Director, Engineered Wood Products
Telecopy: (000) 000-0000
With a copy to:
Louisiana-Pacific Corporation
000 X.X. Xxxxx Xxxxxx
X.X. Bancorp Tower
Portland, Oregon 97204
Attn: General Counsel
Telecopy: (000) 000-0000
and:
Xxxxxxx & XxXxxxxx
Barristers & Solicitors
0000 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attn: Xxxx X. XxXxxxxxx
Telecopy: (000) 000-0000
(d) If to Xxxxx prior to Closing to:
Xxxxx Forest Products Limited
X.X. Xxx 000
0000 - 00xx Xxxxxx Xxxxx
Xxxxxx, X.X.
Xxxxxx XXX 0XX
Attn: President
Telecopy: (000) 000-0000
55 PART E
If to Xxxxx after Closing to:
Xxxxx Forest Products Limited
x/x Xx. Xxxxxxx Xxxxx Xxxxxx Corp.
000 XX 000xx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
X.X.X.
Attn: President
Telecopy: (000) 000-0000
In each case with a copy to:
Xxxxxx Xxxxxxx Xxxxxx & XxXxxxxx
0000-000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
Xxxxxx X0X 0X0
Attn: Xxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
or to such other address or addresses as any such party may from time to time
designate for itself by like notice.
20.2. THE PURCHASERS' CONSENTS. Any consent which Xxxxx is required to obtain
from the Purchasers, or either of them, pursuant to this Agreement may be given
by Xxxxx Xxxxxxxx or any other nominee of the Purchasers designated in writing
to Xxxxx by the Purchasers, or either of them.
20.3. EXPENSES. Except as otherwise expressly provided herein, each party shall
pay any expenses incurred by it incident to this Agreement and in preparing to
consummate the transactions provided for herein.
20.4. BROKERAGE. Each of the parties agrees to pay any brokerage fees,
commissions or finders' fees owing to any broker or finder which it has employed
in connection with the transactions contemplated by this Agreement.
20.5. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and enure to
the benefit of each of the parties hereto and their respective successors and
permitted assigns, but shall not be assignable or delegable in whole or in part
without the prior written consent of all parties, which shall not be
unreasonably withheld.
20.6. WAIVER. The parties, by written notice to the other parties, may (a)
extend the time for performance of any of the obligations or other actions of
the others under this Agreement, (b) waive any inaccuracies in the
representations or warranties of the others contained in this Agreement or in
any document delivered pursuant to this Agreement, (c) waive compliance with any
of the conditions or covenants of the others contained in this Agreement, or (d)
waive or modify performance of any of the obligations of the others under this
Agreement; provided, however, that no party may without the consent of the
others make or grant such extension of time, waiver of inaccuracies or
compliance, or waiver or modification of performance with respect to its own
obligations, representations, warranties, conditions, or
56 PART E
covenants hereunder. Except as provided in the preceding sentence, no action
taken pursuant to this Agreement shall be deemed to constitute a waiver of
compliance with any other representations, warranties, covenants or agreements
contained in this Agreement and shall not operate or be construed as a waiver of
any subsequent breach, whether of a similar or dissimilar nature.
20.7. ENTIRE AGREEMENT. This Agreement, together with the Schedules, which are
expressly incorporated herein, supersedes any other agreement, whether written
or oral, that may have been made or entered into by the parties (or by any
director, officer or representative of such parties) relating to the matters
contemplated. This Agreement, together with the Schedules, which are expressly
incorporated herein, constitutes the entire agreement by and among the parties
relating to the matters contemplated, and there are no agreements,
representations or commitments, except as expressly set forth herein.
20.8. AMENDMENTS, SUPPLEMENTS. This Agreement may only be amended by the
parties' written agreement.
20.9. DISCLOSURE. The parties acknowledge and agree that disclosure of
information in any Schedule or other part of this Agreement constitutes
disclosure for all purposes of this Agreement.
20.10. EXCLUSIVE APPLICABLE LAW. This Agreement is entered into in the Province
of British Columbia and the legal relations among the parties shall be governed
by and construed in accordance with the laws of the Province of British Columbia
exclusively.
20.11. RECOVERY OF LITIGATION COSTS. If any legal action or other proceeding is
brought by any party against any other party(ies) for the enforcement of this
Agreement or because of an alleged dispute, default or misrepresentation in
connection with the provisions of this Agreement, the prevailing party shall be
entitled to recover from the such other party(ies) reasonable legal fees and
other costs it has incurred in that action or proceeding, or on any appeal in
addition to any other relief to which it may be entitled.
20.12. SEVERABILITY. If any provision of this Agreement shall be held or deemed
to be, or shall in fact be, illegal, inoperative or unenforceable, the same
shall not affect any other provision or render the same invalid, inoperative or
unenforceable to any extent whatsoever.
20.13. ACCESS TO INFORMATION. Between the date of this Agreement and the Closing
Date, Xxxxx agrees that it shall give the Purchasers and the Purchasers'
authorized representatives access at all reasonable times to the Assets and the
Books and Records. In addition, Xxxxx covenants and agrees that the Purchasers
and their authorized representatives may make such inspections as they may
reasonably require and the Xxxxx shall furnish to the Purchasers and their
authorized representatives, as the case may be, such financial and operating
data and other information with respect to the Assets as the Purchasers and
their authorized representatives may reasonably request.
20.14. POST-CLOSING CO-OPERATION. After the Closing, upon reasonable notice, the
Purchasers shall give Xxxxx' officers, attorneys, accountants and other
authorized representatives reasonable access, during normal business hours, to
the Books and Records and the Purchasers shall permit such persons to examine
and copy such Books and Records to the extent reasonably requested by Xxxxx in
connection with the preparation of the Xxxxx' tax and financial reporting
matters and other business purposes. After the Closing, the Purchasers
57 PART E
shall cause their employees and agents to cooperate fully with Xxxxx in
connection with such reasonable examination and copying of such Books and
Records.
20.15. DISPOSAL OF BOOKS AND RECORDS. The Purchasers agree that they shall
preserve and keep the Books and Records in the Purchasers' possession for a
period of at least six (6) years from the end of the fiscal year to which such
Books or Records pertain. At the end of each fiscal year in which the Purchasers
wish to dispose of any Books and Records, the Purchasers shall, at least 90 days
before disposing of any of such Books and Records, provide written notice to
such effect to Xxxxx, and Xxxxx shall be given an opportunity, at their cost and
expense, to remove and retain all or any part of such Books and Records as Xxxxx
may select.
20.16. FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, the parties shall use commercially reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Regulations to consummate and
make effective as promptly as possible the transactions contemplated by this
Agreement, and to cooperate with each other in connection with the foregoing,
including, without limitation, using all reasonable efforts to: (a) obtain all
necessary waivers, consents and approvals from other parties to leases and other
Contracts being assigned to the Purchasers hereunder; (b) obtain all necessary
consents, approvals and authorizations as are required to be obtained under any
federal, provincial or foreign law or Regulation including the consent of the
Minister of Forests under the FOREST ACT; (c) lift or rescind any injunction or
restraining order or other Order adversely affecting the ability of the parties
to consummate the transactions contemplated; (d) effect all necessary
registrations and filings; and (e) fulfil all conditions to the obligations of
the parties under this Agreement.
20.17. NO THIRD-PARTY BENEFICIARIES. This Agreement is for the sole benefit of
the parties hereto and their successors and permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other Person
or entity any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
20.18. COUNTERPARTS. This Agreement may be signed in as many counterparts as may
be necessary, each of which so signed shall be deemed to be an original, and
such counterparts together shall constitute one and the same instrument and
notwithstanding the date of execution shall be deemed to bear the date set forth
below. Executed copies of this Agreement may be delivered by facsimile
transmission and it shall not be necessary to confirm execution by delivery of
originally executed documents.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by its duly authorized officers on the 23 day of August, 1999.
LOUISIANA-PACIFIC CANADA XXXXX FOREST PRODUCTS LIMITED.
ENGINEERED WOOD PRODUCTS LTD.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx St. Laurent
-------------------------- -----------------------------
Title: Vice President Title: Chairman
-------------------------- ---------------------------
00 XXXX X
XXXXXXXXX-XXXXXXX XXXXXX XXXXXXXXX-XXXXXXX XXXXXX LTD.
XXXXXX CREEK LTD.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
-------------------------- -----------------------------
Title: Vice President Title: Vice President
-------------------------- ---------------------------
