EXHIBIT 3
LONGVIEW FIBRE COMPANY
[LOGO] --------------------------------------------------------------
VALUE-ADDED PRODUCTS SUSTAINABLE FORESTRY
September 20, 2006
Brookfield Asset Management Inc.
BCE Place, Suite 000
000 Xxx Xxxxxx, P.O. Box 762
Toronto, Ontario, Canada M5J 2T3
Attention: Xxxx Xxxxxx, Managing Partner
CONFIDENTIALITY AGREEMENT
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Ladies and Gentlemen:
You have expressed an interest in a possible negotiated
business combination or other strategic transaction (the "Transaction")
involving Longview Fibre Company, a Washington corporation (the "Company"), or
one or more of its subsidiaries. In connection with your evaluation of the
Transaction, you have requested information concerning the Company and its
subsidiaries and the Transaction. All such information furnished to you or any
of your directors, officers, employees, affiliates, representatives (including,
without limitation, financial advisors, attorneys, accountants and consultants)
or agents or your potential sources of financing for the Transaction
(collectively, "your Representatives"), by the Company or any of the Company's
or any of its subsidiaries' directors, officers, employees, affiliates,
representatives (including, without limitation, financial advisors, attorneys
and accountants) or agents (collectively, "the Company's Representatives"),
irrespective of the form of communication (whether provided orally or in written
form or provided or stored on electronic or magnetic media, film or any other
form or media), and whether such information is so furnished before, on or after
the date hereof, and all analyses, compilations, data, forecasts, studies,
notes, interpretations, memoranda or other documents prepared by you or your
Representatives containing or based in whole or in part on any such information
are collectively referred to herein as the "Information." The term "Information"
will not, however, include information which (i) is or becomes publicly
available other than as a result of a disclosure by you or your Representatives
or (ii) is or becomes available to you on a nonconfidential basis from a source
(other than the Company or the Company's Representatives) which is not, to your
knowledge after reasonable inquiry, prohibited from disclosing such information
to you by a legal, contractual or fiduciary obligation to the Company or another
person.
In consideration of the Information being furnished to you,
you acknowledge and agree as follows:
CORPORATE OFFICES
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300 Fibre Way P.O. Box 639, Longview, WA 98632
Phone (000) 000-0000 Fax (000) 000-0000 xxx.xxxxxxxxxxxxx.xxx
Brookfield Asset Management Inc.
September 20, 2006
Page 2
1. You and your Representatives (a) will keep the Information strictly
confidential and will not (except as required by applicable law,
regulation or legal process, and in such event only after compliance
with paragraph 3 below), without the Company's prior written consent,
disclose any Information in any manner whatsoever, (b) will not use any
Information other than in connection with the Transaction and (c) will
not use any Information in any manner that is directly or indirectly
detrimental to the Company; provided, however, that you may reveal the
Information to your Representatives (x) who need to know the
Information for the purpose of evaluating the Transaction, (y) who are
informed by you of the confidential nature of the Information and (z)
who agree to act in accordance with the terms of this letter agreement.
You will cause your Representatives to observe the terms of this letter
agreement, and you will be responsible for any breach of this letter
agreement attributable to any of your Representatives.
2. Without the prior written consent of the Company, neither you nor your
Representatives will disclose (except as required by applicable law,
regulation or legal process, and in such event only after compliance
with paragraph 3 below), (a) the terms of this letter agreement, other
than to your Representatives pursuant to the proviso in paragraph 1
above, or (b) any of the terms, conditions or other facts with respect
to the Transaction, including the status thereof, other than to your
Representatives pursuant to the proviso in paragraph 1 above. Without
limiting the foregoing, neither you nor your Representatives will
approach, discuss or offer to any person an equity participation in a
possible Transaction or any other form of joint bid or acquisition
without the prior written consent of the Company. The term "person" as
used in this letter agreement will be interpreted broadly to include
the news media and any corporation, group, partnership or other entity
or individual.
3. In the event that you or any of your Representatives are requested
pursuant to, or required by, applicable law, regulation or
administrative or legal process to disclose any of the Information or
any of the information described in paragraph 2 above, you will notify
the Company promptly, to the extent not prohibited by applicable law,
regulation or administrative or legal process requiring such
disclosure, so that the Company may seek a protective order or other
appropriate remedy or, in the Company's sole discretion, waive
compliance with the terms of this letter agreement. In the event that
no such protective order or other remedy is obtained, or that the
Company waives compliance with the terms of this letter agreement, you
Brookfield Asset Management Inc.
September 20, 2006
Page 3
will furnish only that portion of the Information or any such other
information which you are advised by counsel is legally required and
will exercise commercially reasonable efforts to obtain reliable
assurance that confidential treatment will be accorded the Information
or any such other information; provided, however, that you shall give
the Company advance written notice of any Information or any such other
information to be disclosed as far in advance of its disclosure as is
reasonably practicable.
4. If you determine not to proceed with the Transaction, you will promptly
inform the Company of that decision and, in that case, and at any time
upon the Company's request or that of any of the Company's
Representatives, you will promptly deliver to the Company at your own
expense all copies of the written Information; provided that you may
choose at your own expense to destroy or cause the destruction of all
copies of analyses, compilations, data, forecasts, studies, notes,
interpretations, memoranda or other documents prepared by you or your
Representatives containing or reflecting Information (such destruction
to be confirmed to the Company by your authorized officer(s)
supervising such destruction). Notwithstanding the return or
destruction of Information, you and your Representatives shall continue
to be bound by the confidentiality and other obligations hereunder.
5. Neither the Company nor the Company's Representatives, nor any of the
Company's or their respective officers, directors, employees, agents or
controlling persons within the meaning of Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), makes any
express or implied representation or warranty as to the accuracy or
completeness of the Information, and no such person will have any
liability relating to the Information or for any errors therein or
omissions therefrom. You are not entitled to rely on the accuracy or
completeness of the Information and will be entitled to rely solely on
such representations and warranties as may be included in any
definitive agreement with respect to the Transaction, subject to such
limitations and restrictions as may be contained therein. For purposes
of this letter agreement, "definitive agreement" does not include an
executed letter of intent or any other preliminary written agreement,
nor does it include any written or oral acceptance of any offer or bid
on your part.
6. You and your Representatives are familiar with the various
responsibilities under applicable securities laws relating to
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September 20, 2006
Page 4
restrictions on trading in securities of an issuer while in possession
of material, non-public information and restrictions on sharing such
information with other persons who may engage in such trading; and,
with respect to the Information and the information described in
paragraph 2 above, you will not violate those restrictions and will
prevent any of your Representatives who receive any Information or any
such other information from violating those restrictions.
7. For a period of eighteen (18) months immediately after the date of this
letter agreement, you will not, and will cause each of your
Representatives and affiliates not to, directly or indirectly (i) have
or acquire, or propose to have or acquire, "beneficial ownership"
(within the meaning of Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) of any equity securities or
assets, or rights or options to own or acquire any such securities or
assets (through purchase, exchange, conversion or otherwise), of the
Company or any of its subsidiaries; provided that the foregoing shall
not apply to the ownership or acquisition of such securities so long as
you and your Representatives and affiliates do not, and would not after
giving effect to any such acquisition, beneficially own, individually
or in the aggregate, more than 4.9% of the outstanding number or amount
of any such class of security; (ii) make, effect or commence any tender
or exchange offer, merger or other business combination involving the
Company or any of its subsidiaries; (iii) consummate, commence or
propose any recapitalization, restructuring, liquidation, dissolution
or other extraordinary transaction with respect to the Company or any
of its subsidiaries; (iv) make, or in any way participate in any
"solicitation" of proxies to vote, or seek to advise or influence any
person with respect to the voting of, any voting securities of the
Company or any of its subsidiaries or be or become a "participant" in
any "election contest" with respect to the Company (all within the
meaning of Section 14 of the Exchange Act); (v) form, join or in any
way participate in a "group" (within the meaning of Section 13(d)(3) of
the Exchange Act) with respect to any voting equity securities of the
Company or any of its subsidiaries; (vi) otherwise act, alone or in
concert with others, to seek to control or influence the management,
Board of Directors or policies of the Company; (vii) negotiate with or
provide any information to the Company or any of its affiliates with
respect to, or make any statement or proposal to the Company's (or any
of its affiliates') board of directors, to any of the Company's agents
or to any of the Company's shareholders with respect to, or make any
public announcement or proposal or offer whatsoever with respect to, or
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September 20, 2006
Page 5
otherwise solicit, seek or offer to effect any transactions or actions
described in the foregoing clauses (i) through (vi), or make any other
proposal or statement inconsistent with the terms of this letter
agreement; (viii) advise, assist, or encourage any other persons in
connection with any of the foregoing; or (ix) make any request or
otherwise attempt to amend or waive any provision of this letter
agreement, unless and until, in the case of each of the foregoing
clauses (i) through (ix), you have received the prior written
invitation or approval of a majority of the Company's board of
directors to do so. This paragraph 7 shall not apply to your
Representatives' effecting or recommending transactions in securities
in the ordinary course of their business as, without limitation, an
investment banker, broker, dealer in securities, market maker,
specialist or block positioner. You and your Representatives shall be
released from the restrictions of this paragraph 7 if and when,
pursuant to the terms of any Third-Party Confidentiality Agreement (as
defined below), the parties subject to the Third-Party Standstill (as
defined below) thereunder are released therefrom by reason of the
Company's entering into a definitive agreement with a third party
providing for such third party to acquire (A) beneficial ownership (as
defined under Section 13(d) of the Exchange Act) of a majority equity
interest in the Company pursuant to a merger, consolidation or other
business combination, sale of shares of capital stock, tender offer or
exchange offer or similar transaction involving the Company or (B) all
or substantially all of the business or assets of the Company (a
"Definitive Transaction Agreement"); provided that, if such third party
that has entered into a Definitive Transaction Agreement is also party
to a Third-Party Confidentiality Agreement and, but for the fact that
such third party is a party to such Definitive Transaction Agreement,
would have been released from the applicable Third-Party Standstill by
reason of the Company's entering into such Definitive Transaction
Agreement, then such third party will be deemed to have been released
from such Third-Party Standstill by reason of the Company's entering
into such Definitive Transaction Agreement. A "Third-Party
Confidentiality Agreement" is a confidentiality agreement between the
Company and a third party containing standstill restrictions (a
"Third-Parry Standstill") and providing for the release of such third
party therefrom upon the Company's entering into a Definitive
Transaction Agreement. If in connection with the evaluation process
related to the Transaction, the Company furnishes the Information to a
third party pursuant to a confidentiality agreement between the Company
and such third party without standstill restrictions, then, upon the
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September 20, 2006
Page 6
Company's entering into a Definitive Transaction Agreement, such third
party will be deemed to have been released from a Third-Party
Standstill pursuant to the terms of a Third-Party Confidentiality
Agreement. For the avoidance of doubt, it is understood and agreed that
the phrase "evaluation process related to the Transaction" in the
immediately-preceding sentence does not refer to any process related to
(1) a sale of the assets of the sawmill business of the Company and its
subsidiaries and/or (2) a transaction involving the Eastern Division
and/or Central Division converted products facilities of the Company
and its subsidiaries and/or (3) a transaction (other than a sale of all
or substantially all of the Company's timberlands) involving any other
discrete operating assets of the Company and its subsidiaries.
8. You agree not to, and agree to cause your Representatives not to,
directly or indirectly solicit for employment or hire any employees or
independent contractors of the Company or any of its subsidiaries to
whom you or your Representatives may be directly or indirectly
introduced or with whom you or your Representatives otherwise have
contact as a result of your evaluation of the Transaction or the
Information for a period of two (2) years immediately after the date of
this letter agreement, without the Company's prior written consent;
provided that (i) a general solicitation for employees or public
advertising of employment opportunities (including through the use of
employment agencies) not specifically directed at employees or
independent contractors of the Company or any of its subsidiaries and
(ii) hiring any individual who contacts you on his or her own
initiative without any direct or indirect solicitation or encouragement
from you or your Representatives, other than any general solicitation
or advertisement described in the immediately-preceding clause (i),
will not constitute a breach of the terms of this paragraph 8.
9. You agree that (i) all communications by you or your Representatives to
the Company or its Representatives regarding the Transaction or your
evaluation thereof, (ii) requests by you or your Representatives for
additional information, facility tours or management or employee
meetings with respect to the Company and its subsidiaries and (iii)
discussions or questions regarding procedures with respect to the
Transaction or your evaluation thereof will, in each case, be submitted
or directed only to the Company's financial advisors, Xxxxxxx Xxxxx &
Co. and Banc of America Securities LLC, or such other person or
Brookfield Asset Management Inc.
September 20, 2006
Page 7
persons, if any, as the Company may designate in writing from time to
time.
10. This letter agreement is not intended to, and does not, constitute an
agreement or impose any obligation to consummate the Transaction, to
conduct or continue negotiations with respect to the Transaction or to
enter into a definitive agreement. No contract or agreement providing
for the Transaction shall be deemed to exist unless and until a
definitive agreement therefor has been executed and delivered by both
the Company and you, and you hereby waive in advance any claims
(including breach of contract) in connection with the Transaction
unless and until you shall have entered into a definitive agreement
therefor. Unless and until a definitive agreement between the Company
and you with respect to the Transaction has been executed and
delivered, neither the Company nor any of its shareholders, affiliates
or Representatives has any legal obligation of any kind whatsoever with
respect to the Transaction by virtue of this letter agreement or any
other written or oral expression with respect to the Transaction,
except, in the case of this letter agreement, for the matters
specifically agreed to herein. The Company and its shareholders,
affiliates and Representatives are free as they in their sole
discretion shall determine (A) to conduct any process for the
Transaction or any other transaction (including negotiating with any of
the prospective parties thereto and entering into a definitive
agreement without prior notice to you or any other person); (B) to
provide or not provide Information to you or your Representatives under
this letter agreement; (C) to reject any and all proposals made by you
or any of your Representatives with regard to the Transaction and (D)
to terminate discussions and negotiations at any time for any reason or
no reason. Any procedures relating to any process for the Transaction
or any other transaction may be changed at any time without notice to
you or any other person. You hereby confirm that you are not acting as
a broker for or representative of any person and are considering the
Transaction only for your own account.
11. The Company would be irreparably and immediately harmed by, and money
damages would not be an adequate remedy for, any breach of this letter
agreement by you or your Representatives. Accordingly, the Company
shall be entitled to equitable relief, including injunctive relief and
specific performance, in the event of any breach or threatened breach
of this letter agreement, in addition to all other remedies available
at law or in equity. You hereby waive, and shall use your best efforts
to cause your shareholders, affiliates and Representatives to waive,
Brookfield Asset Management Inc.
September 20, 2006
Page 8
any requirement for the securing or posting of any bond in connection
with such remedy. You shall reimburse the Company for costs and
expenses (including, without limitation, reasonable attorney's fees)
arising out of your or any of your Representatives' breach of this
letter agreement and any action by the Company to enforce the terms
hereof in which the Company obtains a legal or equitable remedy for a
breach of this letter agreement.
12. No failure or delay by the Company in exercising any right, power or
privilege hereunder will operate as a waiver thereof, nor will any
single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege
hereunder.
13. The provisions of this letter agreement shall be severable if any such
provision is held by a court of competent jurisdiction to be invalid,
void or otherwise unenforceable, and such invalid, void or
unenforceable provision shall be deemed deleted herefrom to the minimum
extent necessary and replaced by a provision that is valid and
enforceable and that as closely as practicable expresses the intention
of such invalid, void or unenforceable provision. The remaining
provisions of this letter agreement shall remain enforceable to the
fullest extent permitted by law.
14. This letter agreement shall be governed by and construed in accordance
with the laws of the State of Washington without regard to the
conflicts of law principles thereof. Any proceeding relating to this
letter agreement shall be brought exclusively in a state court of the
State of Washington or a court of the United States of America located
in the State of Washington. A consent to personal jurisdiction in any
such action brought in any such court and consent to service of process
by U.S. registered or certified mail is hereby unconditionally and
irrevocably granted, and a waiver of any objection to venue in any such
court or to any claim that such court is an inconvenient forum is
hereby unconditionally and irrevocably granted.
15. This letter agreement contains the entire understanding relative to the
protection of Information, the information described in paragraph 2
above and the other matters addressed herein and supersedes all prior
collateral communications, if any, between the parties regarding the
Information, such other information and such other matters. No
amendment or other modification or waiver of any provision hereof shall
Brookfield Asset Management Inc.
September 20, 2006
Page 9
be binding unless in writing and signed by you and the Company or
unless signed by the party to be bound.
16. This letter agreement may not be assigned except with the prior written
approval of the Company. This letter agreement shall inure to the
benefit of, and be enforceable by, the Company and Longview Fibre Paper
and Packaging, Inc. ("LFPP") and their respective successors and
assigns, including any successor to substantially all of the Company's
or LFPP's assets or business, whether by merger, combination,
consolidation, purchase of assets, purchase of stock or otherwise.
Notwithstanding this paragraph 16, the power to modify or terminate
this letter agreement in accordance with paragraph 15 above as to your
obligations to and with respect to the Company without the consent of
LFPP or its successors and assigns is reserved to you and the Company.
17. This letter agreement shall terminate five (5) years from the date
hereof; provided that such termination shall not relieve you from your
responsibilities for any breach of this letter agreement that occurs
prior to such termination.
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Brookfield Asset Management Inc.
September 20, 2006
Page 10
Please confirm your agreement with the foregoing by signing
and returning to the undersigned a copy of this letter.
Very truly yours,
LONGVIEW FIBRE COMPANY
By: /s/ X.X. Xxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxx
President, Chief Executive Officer
and Chairman of the Board
CONFIRMED AND AGREED
as of the date first above written:
BROOKFIELD ASSET MANAGEMENT INC.
By: /s/ Xxx Xxxxxxx
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Name: Xxx Xxxxxxx
Title: Managing Partner
