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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
AUGUST 12, 1999
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
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LOUISIANA-PACIFIC CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 1-7107 93-0609074
(STATE OF INCORPORATION) (COMMISSION FILE NUMBER) (IRS EMPLOYER
IDENTIFICATION NUMBER)
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111 S.W. FIFTH AVENUE, PORTLAND, OREGON 97204
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(503) 221-0800
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Item 5. Other Events.
On August 12, 1999, Louisiana-Pacific Corporation
("Louisiana-Pacific"), and Le Groupe Forex Inc., a Quebec company ("Forex"),
entered into an amended and restated agreement (the "Amended and Restated
Support Agreement") providing, on the terms and subject to the conditions set
forth therein, for a tender offer (the "Offer") by Louisiana-Pacific or a wholly
owned subsidiary thereof for all outstanding shares ("Shares") of Forex at Cdn.
$33.00 per Share. Concurrently with entering into the Support Agreement,
Louisiana-Pacific entered into an amended and restated agreement (the "Amended
and Restated Lock-Up Agreement") with certain persons (collectively, the
"Shareholder Group") who own approximately 42.4% of the Shares outstanding (on a
fully diluted basis). Pursuant to the Amended and Restated Lock-Up Agreement,
the members of the Shareholder Group agreed, among other things, to tender their
Shares pursuant to the Offer. The Amended and Restated Support Agreement and the
Amended and Restated Lock-up Agreement are filed as exhibits 2.1 and 2.2,
respectively, to this report and incorporated herein by this reference.
On August 18, 1999, a wholly owned subsidiary of Louisiana-Pacific (the
"Offeror") commenced the Offer pursuant to a circular bid (the "Circular Bid").
The Circular Bid (excluding certain schedules thereto) is filed as exhibit 99.1
to this report and incorporated herein by this reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) The following exhibits are filed herewith:
2.1 Amended and Restated Support Agreement, dated August 12, 1999, between
Louisiana-Pacific and Forex.
2.2 Amended and Restated Lock-up Agreement, dated August 12, 1999, among
Louisiana-Pacific and each of the parties identified in Schedule B
thereof.
99.1 Circular Bid, dated August 16, 1999, of the Offeror.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LOUISIANA-PACIFIC CORPORATION
By: /s/ Gary C. Wilkerson
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Gary C. Wilkerson
Vice President and General Counsel
Date: August 18, 1999
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EXHIBIT 2.1
AMENDED AND RESTATED SUPPORT AGREEMENT
LOUISIANA-PACIFIC CORPORATION
August 12, 1999
CONFIDENTIAL
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LE GROUPE FOREX INC.
1 Place Ville-Marie, Suite 3415
Montreal, Quebec
H3B 3N6
Dear Sirs:
This letter agreement (the "Agreement") sets out the terms and conditions upon
which Louisiana-Pacific Corporation (the "Offeror") will, either directly or
through a wholly-owned subsidiary, make an offer on the terms summarized in
Schedule "A" to this Agreement (the "Offer") for all of the issued and
outstanding Class A Multiple Voting Shares (the "Class A Shares") and all of the
issued and outstanding Class B Subordinate Voting Shares (the "Class B Shares,
and collectively with the Class A shares, the "Common Shares") of Le Groupe
Forex Inc. (the "Corporation") at the price per Common Share specified in
Schedule "A". This Agreement amends and restates the Support Agreement dated
June 25, 1999, as amended on July 21, 1999 and on August 2, 1999 between the
Offeror and the Corporation.
This Agreement further sets out certain covenants of the Corporation.
1. THE OFFER
1.1 TIMING. The Offeror agrees to make the Offer for 100% of the Common
Shares as soon as possible but in any event not more than ten (10)
calendar days after the date of this Agreement provided that, if the
Corporation has given to the Offeror a notice contemplated by Section
3.2 (j) hereof prior to the making of the Offer, such ten (10) day
period may, at the option of the Offeror, be extended by ten (10) days.
1.2 CONDITIONS PRECEDENT. Notwithstanding section 1.1, the Offeror shall
not be required to make the Offer (and shall, if it determines not to
make the Offer, without prejudice to any other rights, terminate this
Agreement by written notice to the Sellers and the Corporation) if:
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(a) prior to the making of the Offer, (i) any act, action, suit or
proceeding shall have been taken before or by any domestic or
foreign court or tribunal or governmental agency or other
regulatory authority or administrative agency or commission by
any elected or appointed public official or private person
(including, without limitation, any individual, corporation,
firm, group or other entity) in Canada or elsewhere, or (ii)
any law, regulation or policy shall have been proposed,
enacted, promulgated or applied:
a. to cease trade, enjoin, prohibit or impose material
limitations or conditions on the purchase by or the sale to
the Offeror of the Common Shares or any of them pursuant to
the Offer or the right of the Offeror to own or exercise
full rights of ownership of the Common Shares or any of
them; or
b. which, if the Offer was consummated, would, in the
judgment of the Offeror, acting reasonably, materially and
adversely affect the Corporation and each of Forex OSB Inc.
and Forex Chambord Inc. (the "Subsidiaries") considered as a
whole;
(b) at the time the Offeror proposes to make the Offer, there
exists any prohibition at law (other than those referred to in
paragraphs 2(b), (c) or (d) of Schedule "A" hereto) against
the Offeror making the Offer or taking up and paying for 100%
of the Common Shares under the Offer;
(c) there shall have occurred (or there shall have been generally
disclosed, if previously undisclosed generally) any change
(other than a change in the market conditions or price of
O.S.B.)(or any condition, event or development involving a
prospective change) in the business, assets, capitalization,
financial condition, licenses, permits, rights or privileges,
whether contractual or otherwise, of the Corporation or any of
its Subsidiaries which, in the judgment of the Offeror, acting
reasonably, is or would be materially adverse to the
Corporation and its Subsidiaries considered as a whole;
(d) the Offeror shall not have obtained assurances acceptable to
it with respect to CAAFS held by the Corporation from such
appropriate governmental authorities as it shall consider
desirable to ensure that there will be no termination, default
(other than a default resulting from a change of control)
breach or other adverse effects on the Corporation or the
Subsidiaries as a result of the transactions contemplated
herein;
(e) the agreement entered into on the date hereof between the
holders of Common Shares listed on Schedule "C" hereof (the
"Sellers") and the Offeror whereby such Sellers agreed to
deposit irrevocably and
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unconditionally under the Offer that number of Common
Shares, respectively, set forth opposite their names on
Schedule "C" including such Common Shares to be issued
pursuant to the exercise of the options referred to therein
is not in full force and effect (the "Lock-Up Agreement");
(f) any representation or warranty of any of the Sellers in the
Lock-Up Agreement or any representation or warranty of the
Corporation in this Agreement shall not have been, as of the
date made, true and correct in all material respects, or the
Corporation or any of the Sellers shall not have respectively
performed in all material respects any covenant or complied
with any agreement to be performed by them or it under the
Lock-Up Agreement and this Agreement; or
(g) all non-unionized individuals working for the Corporation as a
result of services agreement entered into between the
Corporation and companies controlled by insiders of the
Corporation shall not have agreed to become employees of the
Corporation before the Offeror takes up and pays for the
Common Shares (the "Effective Date").
The foregoing conditions are for the sole benefit of the Offeror and may be
waived by the Offeror in whole or in part at any time and shall be deemed to
have been waived by it by the making of the Offer.
2. Representations and Warranties
2.1 REPRESENTATIONS AND WARRANTIES OF THE OFFEROR. The Offeror hereby represents
and warrants that:
(a) the Offeror is a corporation duly incorporated and validly existing
under the laws of its jurisdiction of incorporation;
(b) the Offeror has the financial resources and is financially capable of
completing the Offer; and
(c) the Offeror has the requisite corporate power and authority to enter
into this Agreement and to perform its obligations hereunder; the
execution and delivery of this Agreement by Offeror and the
consummation by the Offeror of the transactions contemplated by this
Agreement have been duly authorized by the board of directors of the
Offeror and no other corporate proceedings on the part of the Offeror
are necessary to authorize this Agreement or the transactions
contemplated hereby and this Agreement has been duly executed and
delivered by Offeror and constitutes a valid and binding agreement of
the Offeror, enforceable
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against the Offeror in accordance with its terms subject to the usual
exceptions as to bankruptcy and the availability of equitable
remedies.
2.2 REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. In addition to the
representations and warranties made by the Corporation in Schedule B
hereof, the Corporation hereby represents and warrants that its board
of directors, upon consultation with its financial and legal advisors,
has determined that the price per Common Share offered pursuant to the
Offer is fair to the holders of Common Shares and that the Offer is in
the best interests of the Corporation and the holders of Common Shares.
3. Covenants of the Corporation
3.1 GENERAL. The Corporation hereby covenants that until the Offeror has
taken up and paid for the Common Shares under the Offer or abandoned
the Offer or the terms of this Agreement have been terminated by the
Corporation or the Offeror pursuant to Section 6 hereof:
(a) except as previously disclosed to the Offeror, it shall, and
shall cause each of its Subsidiaries or to, conduct its and
their respective businesses only in, and not take or omit to
take any action except in, the usual, ordinary and regular
course of business and consistent with past practice;
(b) except as previously disclosed to the Offeror, it will use its
reasonable best efforts to cause the Corporation to comply
promptly with all material requirements which applicable law
may impose on the Corporation and its Subsidiaries;
(c) it will promptly advise the Offeror orally and in writing of
any material change known to the Corporation in the condition
(financial or otherwise), properties, assets, liabilities,
operations, business or prospects of the Corporation or any of
its Subsidiaries;
(d) except for transactions (i) contemplated among the parties by
this Agreement or (ii) disclosed in writing by the Corporation
to the Offeror, prior to the Corporation or any of its
Subsidiaries making or agreeing to make any commitment or
agreement with respect to the following matters, it shall not
and shall not suffer or permit any Subsidiary to;
(i) pay any dividend or issue or commit to issue
any share of or other ownership interest in
the Corporation or the Subsidiaries (other
than as referred to in paragraph (d) of
Schedule "B" hereof);
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(ii) grant or commit to grant any options,
warrants, convertible securities or rights
to subscribe for, purchase or otherwise
acquire or exchange into any shares or other
ownership interest in the Corporation or any
subsidiary;
(iii) directly or indirectly redeem, purchase or
otherwise acquire or commit or offer to
acquire any share of or other ownership
interest in the Corporation or any
subsidiary;
(iv) effect any subdivision, consolidation or
reclassification of any of its shares (or
pay any dividend or make any distribution on
or in respect of any of its shares); or
(v) amend its articles or by-laws;
(e) it shall not, and shall cause its Subsidiaries not to, settle
or compromise any claim brought by any present, former or
purported holder of any of its securities in connection with
the transactions contemplated by this Agreement prior to the
Effective Date without the prior written consent of the
Offeror, such consent not to be unreasonably withheld;
(f) except in the usual, ordinary and regular course of business
and consistent with past practice, or except as previously
disclosed in writing to the Offeror or as required by
applicable laws, it and its Subsidiaries shall not enter into
or modify in any material respect any contract, agreement,
commitment or arrangement which new contract or series of
related new contracts or modification to an existing contract
or series of related existing contracts would be material to
the Corporation or which would have a material adverse effect
on the Corporation;
(g) without restricting the fiduciary obligations of its
directors, it shall use all commercially reasonable efforts to
satisfy (or cause the satisfaction of) the conditions
precedent to its obligations hereunder to the extent the same
is within its control and to take, or cause to be taken, all
action and to do, or cause to be done, all other things
necessary, proper or advisable under all applicable laws to
complete the Offer and the transactions contemplated by this
Agreement;
(h) it shall make, or cooperate as necessary in the making of, all
necessary filings and applications under all applicable laws
required in connection with the transactions contemplated
herein and take all reasonable action necessary to be in
compliance with such laws;
(i) it shall use its reasonable commercial efforts to conduct its
affairs and shall cause its Subsidiaries to conduct their
affairs so that all of its
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representations and warranties contained herein shall be
true and correct in all material respects on and as of the
Effective Date as if made on and as of such date;
(j) it will forthwith request from every person to whom it has
provided, since January 1, 1999, confidential information
concerning the Corporation in the context of an Acquisition
Proposal (as defined in Section 3.2((f))) that such person
(including Boise Cascade Corporation or any of its affiliates
and associates) immediately return to the Corporation such
information and all copies thereof in any form whatsoever
under the power or control of any person and delete any such
information from all retrieval systems and data bases;
(k) if the Offeror takes up and pays for Common Shares pursuant to
the Offer, it will use all reasonable commercial efforts to
enable the Offeror to acquire the balance of the Common Shares
as soon as practicable by way of compulsory acquisition or any
subsequent acquisition transaction (as such expressions are
defined in the Offer); and
(l) use its reasonable best efforts to cause all members of the
board of directors of the Corporation and its Subsidiaries to
resign at the time and in the manner requested by the Offeror,
after the Offeror takes up and pays for the Common Shares.
3.2 SUPPORT FOR OFFER. The Corporation confirms to the Offeror and covenants
that:
(a) its board of directors supports the Offer and has decided to
recommend its acceptance to holders of Common Shares;
(b) the Corporation will use its reasonable best efforts to mail
the directors' circular (including such recommendation) with
the Offer, as well as to provide drafts thereof to the Offeror
and give the Offeror a reasonable opportunity to comment
thereon;
(c) the Corporation will cause a list of shareholders of the
Corporation prepared by the Corporation or the transfer agent(s) of
the Corporation in accordance with section 123.113 of the COMPANIES
ACT (Quebec) and a list of holders of stock options and any other
rights, warrants or convertible securities currently outstanding (with
full particulars as to the purchase, exercise or conversion price and
expiry date) prepared by the Corporation (as well as a security
position listing from each depositary, including The Canadian
Depository for Securities Limited) to be delivered to the Offeror
within two business days after execution of this Agreement and
supplemental lists setting out any changes thereto for each business
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day thereafter to be delivered forthwith to the Offeror, all such
deliveries to be both in printed form and computer-readable format;
(d) notwithstanding the pre-agreement investigation of the Corporation
and its Subsidiaries conducted by or on behalf of the Offeror, the
Corporation and its Subsidiaries shall give the Offeror and its
authorized agents reasonable ongoing access during the term of this
Agreement, upon reasonable notice to the Corporation, to all of the
Corporation's and its subsidiaries' personnel, assets, properties,
books, records, agreements and commitments and to reasonably
co-operate with the Offeror and any such authorized persons in their
review and furnish such persons with all material information with
respect to the Corporation and its Subsidiaries and their ongoing
operations and activities as the Offeror or any person authorized by
it may reasonably request, provided that the Offeror shall not
unreasonably disrupt the normal business operations of the Corporation
or its Subsidiaries;
(e) (i) its board of directors has determined unanimously to use its
and their respective reasonable efforts (x) to encourage all persons
holding options to exercise such options prior to the expiry of the
Offer which, by their terms, are otherwise exercisable and to tender
all Common Shares issued in connection therewith to the Offer and (y)
to encourage all persons holding convertible debentures to deposit
such convertible debentures for conversion prior to the expiry of the
Offer conditional upon the Offeror taking up and paying for the Common
Shares deposited under the Offer, (ii) its board of directors has also
resolved and has authorized and directed the Corporation, subject to
any required regulatory or stock exchange approval, to cause the
vesting of option entitlements, to accelerate prior to or concurrent
with the expiry of the Offer which, by their terms, are otherwise
accelerated upon the Offeror's purchase of the Common Shares, such
that outstanding options to acquire Common Shares are exercisable
prior to or concurrent with the expiry of the Offer, and to arrange
for all Common Shares that are fully paid thereunder to be distributed
to those persons entitled thereto so as to be able to be tendered into
the Offer and to thereafter satisfy all other obligations of the
Corporation under such plans;
(f) the Corporation shall not, directly or indirectly, through any
officer, director, employee, representative or agent of the
Corporation or any of its Subsidiaries, solicit, initiate or knowingly
encourage or facilitate (including by way of furnishing information or
entering into any form of agreement, arrangement or understanding) the
initiation of any inquiries or proposals regarding an Acquisition
Proposal (as defined below), participate in any, discussions or
negotiations regarding any Acquisition Proposal, withdraw or modify in
a manner adverse to the Offeror the approval of the Board of Directors
of the Corporation of the transactions contemplated hereby,
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accept or approve or recommend any Acquisition Proposal or cause the
Corporation to enter into any agreement related to any Acquisition
Proposal; provided, however, that subject to paragraph ((j)) below but
notwithstanding the preceding part of this paragraph and any other
provision of this Agreement, nothing shall prevent the Board of
Directors of the Corporation from considering, negotiating, approving,
recommending to its shareholders or entering into an agreement in
respect of an unsolicited bona fide written Acquisition Proposal made
and received under circumstances not involving any breach of this
Section that the Board of Directors of the Corporation determines in
good faith, after consultation with financial advisors and after
receiving a written opinion of outside counsel to the effect that the
Board of Directors of the Corporation is required to take such action
in order to discharge properly its fiduciary duties, would, if
consummated in accordance with its terms, result in a transaction more
favourable to the Corporation's shareholders than the transaction
contemplated by this Agreement (any such Acquisition Proposal being
referred to herein as a "Superior Proposal"), or from approving or
recommending such Superior Proposal. "Acquisition Proposal" means any
merger, amalgamation, take-over bid, sale of material assets (or any
lease, long-term supply agreement or other arrangement having the same
economic effect as a sale), any sale of a material number of shares or
rights or interests therein or thereto or similar transactions
involving the Corporation or any Subsidiaries, or a proposal to do so,
excluding this Offer;
(g) the Corporation shall promptly notify the Offeror of any future
Acquisition Proposal of which directors or senior officers become
aware, or any amendments to the foregoing, or any request for
non-public information relating to the Corporation or any Subsidiaries
in connection with an Acquisition Proposal or for access to the
properties, books or records of the Corporation or any Subsidiary by
any person or entity that informs the Corporation or such Subsidiary
that it is considering making, or has made, an Acquisition Proposal.
Such notice shall include a description of the material terms and
conditions of any proposal and provide such details of the proposal,
inquiry or contact as the Offeror may reasonably request including the
identity of the person making such proposal, inquiry or contact;
(h) if the Corporation receives a request for non-public information
from a person who shall have made a bona fide Acquisition Proposal
(the existence and content of which have been disclosed to the
Offeror), and the Board of Directors of the Corporation determines
that such proposal would be a Superior Proposal pursuant to paragraph
(f) above after having received the opinion referred to therein, then,
and only in such case, the Board of Directors of the Corporation may,
subject to the execution of a confidentiality agreement containing a
standstill provision substantially similar to that contained in the
confidentiality agreement
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signed by the Offeror, provide such person with access to information
regarding the Corporation, provided, however that the Corporation
sends a copy of any such confidentiality agreement to the Offeror
immediately upon its execution and the Offeror is provided with a
list of or copies of the information provided to such person and
immediately provided with access to similar information to which
such person was provided;
(i) the Corporation shall ensure that its and its Subsidiaries'
officers, directors, employees and any financial advisors or other
advisors, agents or representatives retained by it are aware of the
provisions of this Section, and it shall be responsible for any breach
of this Section by any such persons;
(j) the Corporation shall not withdraw or modify in a manner adverse
to the Offeror its approval or recommendation of the Offer or accept,
approve, recommend or enter into any agreement in respect of an
Acquisition Proposal (other than a confidentiality agreement) on the
basis that it would constitute a Superior Proposal unless (i) it has
notified the Offeror of its bona fide intention to do so and provided
the Offeror with a copy of the documentation setting forth or
providing for such Acquisition Proposal, and (ii) five business days
shall have elapsed from the later of the date the Offeror received
such notice and the date the Offeror received a copy of such
documentation;
(k) during such five business day period, the Corporation acknowledges
that the Offeror shall have the opportunity, but not the obligation,
to offer to amend the terms of this Agreement. The Board of Directors
of the Corporation will review any offer by the Offeror to amend the
terms of this Agreement in good faith in order to determine, in its
discretion in the exercise of its fiduciary duties, whether the
Offeror's offer upon acceptance by the Corporation would result in the
Acquisition Proposal not being a Superior Proposal. If the Board of
Directors of the Corporation so determines, it will enter into an
amended agreement with the Offeror reflecting the Offeror's amended
proposal; and
(l) the Corporation acknowledges and agrees that each successive
modification of any Acquisition Proposal shall constitute a new
Acquisition Proposal for all purposes of this Section, including the
five business days period referred in paragraphs (j) and (k).
4. Covenants of the Offeror
4.1 OFFEROR. Subject to the terms and conditions hereof, the Offeror
hereby covenants to:
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(a) use its reasonable commercial efforts to successfully complete the
Offer, including diligently pursuing all requisite regulatory
approvals;
(b) co-operate with the Sellers and the Corporation in making all
requisite regulatory filings, and giving evidence in relation thereto,
and to provide copies of all written documents and submissions and
responses with respect thereto in connection with regulatory
proceedings; and
(c) provide copies of drafts of the Offer to the Corporation, in order
to provide them with an opportunity to comment.
4.2 CONFIDENTIALITY AGREEMENT. The Offeror hereby covenants and agrees to
be bound by the terms of the confidentiality agreement dated June 18,
1999 between the Offeror and the Corporation (the "Confidentiality
Agreement") throughout the term of this Agreement and in the event that
this Agreement is terminated for any reason whatsoever. The Corporation
hereby confirms and agrees that the Confidentiality Agreement will be
null and void in the event that the Offeror takes up and pays for
Common Shares under the Offer. Furthermore, in such circumstances, each
of the Sellers agrees to hold all Information (as defined below)
confidential and not to use it in any way detrimental to the interests
of the Offeror, the Corporation or its Subsidiaries, except as required
by law. For the purposes hereof, "Information" has the meaning ascribed
to such expression in the Confidentiality Agreement.
5. Break Fee Event
5.1 A "Break Fee Event" shall occur if (x) the Board of Directors of the
Corporation shall withdraw or modify in a manner adverse to the Offeror
its approval or recommendation of the Offer, or approve or recommend
any Superior Proposal, or determine at the conclusion of the process
set out in Section 3.2 ((k)) and ((l)) that any Acquisition Proposal is
a Superior Proposal, or shall fail to reaffirm such approval or
recommendation upon the Offeror's request, or take or resolve to take
any of the foregoing actions, or (y) an Acquisition Proposal shall have
been made directly to the Corporation's shareholders for a
consideration exceeding $33.00 prior to the Offeror making the Offer
and the Offeror shall decide not to make the Offer and such Acquisition
Proposal succeeds.
6. Termination
6.1 TERMINATION BY CORPORATION. The Corporation, when not in default in
performance of its material obligations under this Agreement, may,
without prejudice to any other rights and subject to Section 6.3
hereof, terminate its obligations under this Agreement by notice to the
Offeror if:
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(a) the Offer has not been made within the time period provided in
Section 1.1;
(b) the Offer does not conform in all material respects with the
description of the Offer in Schedule "A";
(c) the Offeror has not taken up and paid for the Common Shares on or
prior to December 31, 1999;
(d) Common Shares deposited under the Offer have not, for any reason
whatsoever (other than that all the terms and conditions of the Offer
have not been complied with or waived by the Offeror) been taken up
and paid for on or before the expiry of ten days after the expiry of
the Offer (as it may have been extended); or
(e) A Break Fee Event described in clause (x) of Section 5.1 shall
have occurred, provided that no termination under this paragraph shall
be effective unless and until the Corporation shall have paid the
Offeror by bank draft or wire transfer the sum of $29.8 million in
immediately available funds (the "Break Fee").
6.2 TERMINATION BY OFFEROR. The Offeror, when not in default in
performance of its material obligations under this Agreement, may,
without prejudice to any other rights, terminate its obligations under
this Agreement by notice to the Corporation if:
(a) the Offeror has not taken up and paid for the Common Shares on or
prior to December 31, 1999;
(b) a Break Fee Event shall have occurred;
(c) as a result of the failure of any of the conditions set forth in
Schedule "A", the Offer shall have expired or have been terminated in
accordance with its terms without the Offeror having purchased any
Common Share pursuant to the Offer; or
(d) the Sellers or the Corporation shall have breached in any material
respect any of their respective representations, warranties, covenants
or other agreements contained in the Lock-Up Agreement or this
Agreement.
6.3 PAYMENT OF BREAK FEE. The Corporation shall pay the Break Fee to the
Offeror (i) in the event of any termination of this Agreement pursuant
to paragraph (e) of Section 6.1 or pursuant to paragraph (b) or (d) of
Section 6.2, or (ii) in the event that an Acquisition Proposal made by
a person other than the Offeror shall be
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publicly announced or communicated to the Corporation prior to the
termination hereof and consummated within twelve (12) months of the
date of this Agreement or six (6) months after termination of this
Agreement whichever shall occur later. Such Break Fee shall be payable
by bank draft or wire transfer no later than the first business day
following the termination of this Agreement in the circumstances
described in (i) above or the first business day following the
consummation of the Acquisition Proposal in the circumstances
described in (ii) above.
6.4 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Section 6.1 or 6.2, this Agreement (except for
Sections 6.1(e), 6.3, 6.4 and 7) shall forthwith become void and
cease to have any force or effect without any liability on the part of
any party hereto or any of its affiliates; provided however that
nothing in this Section 6.4 shall relieve any party to this Agreement
of liability for any breach of this Agreement.
7. General
7.1 DISCLOSURE. Except as required by applicable laws or regulations, or as
required by any competent governmental, judicial or other authority, or
in accordance with the requirements of any stock exchange, no party
shall make any public announcement or statement with respect to this
Agreement or the Lock-Up Agreement without the approval of the others,
which shall not be unreasonably withheld. Moreover, the parties agree
to consult with each other prior to issuing each public announcement or
statement with respect to this Agreement or the Lock-Up Agreement.
7.2 ASSIGNMENT. The Offeror may assign all or any part of its rights and/or
obligations under this Agreement to a wholly-owned subsidiary of the
Offeror, but, if such assignment takes place, the Offeror shall
continue to be liable to the Corporation for any default in performance
by the assignee. This Agreement shall not otherwise be assignable by
any party without the consent of the other.
7.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Quebec and of Canada
applicable therein (without regard to conflict of laws principles).
7.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Corporation shall survive until the Effective
Date and the representations and warranties made by the Offeror herein
shall survive for a period of one year from the date hereof except that
any representations which prove to be incorrect or untrue as a result
of tax matters shall survive only as to such tax matters until thirty
(30) days following the last applicable limitation period under
applicable tax laws and except in the case of fraud which shall survive
indefinitely. No investigations made by or on behalf of the Offeror or
any of its authorized agents at any time shall have the effect of
waiving, diminishing the
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scope of or otherwise affecting any representation, warranty or
covenant made by the Corporation herein or pursuant hereto.
7.5 AMENDMENTS. This Agreement may not be amended except by written
agreement signed by all of the parties to this Agreement.
7.6 SPECIFIC PERFORMANCE AND OTHER EQUITABLE RIGHTS. Each of the parties
recognizes and acknowledges that this Agreement is an integral part of
the Offer, that the Offeror would not contemplate causing the Offer to
be made unless this Agreement was executed, and that a breach by any
party of any covenants or other commitments contained in this Agreement
will cause the other parties to sustain injury for which they would not
have an adequate remedy at law for money damages. Therefore, each of
the parties agrees that in the event of any such breach, the aggrieved
party or parties shall be entitled to the remedy of specific
performance of such covenants or commitments and preliminary and
permanent injunctive and other equitable relief in addition to any
other remedy to which it or they may be entitled, at law or in equity,
and the parties further agree to waive any requirement for the securing
or posting of any bond in connection with the obtaining of any such
injunctive or other equitable relief.
7.7 EXPENSES. The Corporation shall pay its legal, financial advisory and
accounting costs and expenses incurred in connection with the
preparation, execution and delivery of this Agreement and all documents
and instruments executed or prepared pursuant to this Agreement and any
other costs and expenses whatsoever and howsoever incurred. The Offeror
shall pay its legal, financial advisory and accounting costs and
expenses incurred in connection with the preparation, execution and
delivery of this Agreement and all documents and instruments executed
or prepared pursuant to this Agreement and any other costs and expenses
whatsoever and howsoever incurred.
7.8 BUSINESS DAY. A business day for the purpose of this Agreement shall
mean any day on which chartered banks in the City of Montreal are open
for business.
7.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts which together shall be deemed to constitute one valid and
binding agreement, and delivery of the counterparts may be effected by
means of a telecopier transmission.
7.10 SCHEDULE. Schedules "A" , "B" and C hereto shall for all purposes
form an integral part of this Agreement.
7.11 ENTIRE AGREEMENT. This Agreement, together with the Confidentiality
Agreement (as defined herein) and any document referred to herein,
constitutes the entire agreement and understanding between the parties
pertaining to the subject matter of this Agreement.
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7.12 TIME. Time shall be of the essence in this Agreement.
7.13 CURRENCY. All sums of money referred to in this Agreement shall mean
Canadian funds.
7.14 NOTICES. Any notice, request, consent, agreement or approval which may
or is required to be given pursuant to this Agreement shall be in
writing and shall be sufficiently given or made if delivered, or sent
by telecopier, in the case of:
(a) the Offeror, addressed as follows:
Louisiana-Pacific Corporation
111 South West Fifth
Portland, Oregon
USA 97204
Attention: The Office of the General Counsel
Telecopier No. (503) 796-0105
with a copy to:
Stikeman, Elliott
Suite 4000
1155 West Rene-Levesque Blvd.
Montreal, Quebec
H3B 3V3
Attention: Pierre A. Raymond
Telecopier No.: (514) 397-3222
(b) the Corporation, addressed as follows:
Le Groupe Forex Inc.
1, Place Ville-Marie, suite 3415
Montreal, Quebec
H3B 3N6
Attention: Jacques Dalpe,
Vice-president Affaires juridiques
Telecopier No.:
with a copy to:
Martineau Walker
Tour de la Bourse
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800, Place Victoria, Suite 3400
Montreal, Quebec
H4Z 1E9
Attention: Maurice Forget
Telecopier No.: (514) 397-7600
or to such other address as the relevant party may from time to time advise by
notice in writing given pursuant to this Section. The date of receipt of any
such notice, request, consent, agreement or approval shall be deemed to be the
date of delivery or sending thereof.
8. Special Provisions
8.1 JOINT CONDUCT. Notwithstanding any other provision hereof, the Offeror
shall upon its written election have no obligations hereunder to the
Corporation if the Corporation fails to comply with the terms hereof or
with any of its covenants or agreements hereunder or if any of the
representations or warranties of the Corporation prove to be incorrect
or untrue in any material respect.
8.2 COMMON SHARES. References to "Common Shares" include any shares into
which the foregoing may be reclassified, sub-divided, consolidated or
converted and any rights and benefits arising therefrom including any
extraordinary distributions of securities which may be declared in
respect of the Common Shares.
------------
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If the terms and conditions of this letter are acceptable to you, please so
indicate by executing and returning the enclosed copy hereof to the undersigned
prior to 5:00 p.m. (Montreal time) on August 12, 1999, failing which this offer
shall be null and void.
Yours truly,
Louisiana-Pacific Corporation
By: /s/ Gary Wilkerson
-------------------------------
Gary Wilkerson
Agreed and accepted this 12th day of August 1999
Le Groupe Forex Inc.
By: /s/ J.J. Cossette
-------------------------------
Jean-Jacques Cossette
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SCHEDULE "A"
TERMS OF THE OFFER
1. GENERAL TERMS. The Offer shall be made by a circular bid prepared in
compliance with the Securities Act (Quebec) and other applicable
provincial securities laws. The Offer shall be open for twenty-one (21)
days or such longer period as may be required to satisfy all of the
conditions set forth in paragraph 3 below, provided that in no event
shall the Offer be required to be open after December 31, 1999.
2. PRICE OF THE OFFER. The Offer shall be made for a consideration of not
less than Cdn. $33.00 per Common Share payable, at the option of the
holder, in cash, by the delivery of Instalment Notes (which shall be
deemed for purposes of the Offer to have a value equal to the original
principal amount thereof) or a combination thereof.
3. CONDITIONS OF THE OFFER. The Offer shall not be subject to any
conditions other than those substantially described as follows:
(a) not less than 66-2/3% of the outstanding Class A Multiple
Voting Shares and not less than 66-2/3% of the outstanding
Class B Subordinate Voting Shares (on a fully-diluted basis,
assuming that all rights to acquire Common Shares were to be
exercised in full) are tendered under the Offer and not
withdrawn at the expiration of the Offer;
(b) (i) the Commissioner of Competition (the "Commissioner")
appointed under the Competition Act (Canada) (the "Act")
shall have issued an advance ruling certificate under
section 102 of the Act in respect of the transaction (the
"Transaction") which will result from the Offer; (ii) the
Commissioner shall have advised the Offeror that he does not
intend at the current time to apply to the Competition
Tribunal for an order under section 92 of the Act in respect
of the Transaction; or (iii) the applicable waiting period
under section 123 of the Act shall have expired without the
Commissioner having notified the Offeror that he intends to
apply to the Competition Tribunal for an order under section
92 of the Act in respect of the Transaction; and no
proceedings shall have been taken or threatened under the
merger provisions of Part VIII or under section 45 of the
Act in respect of the Transaction;
(c) any applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 shall have expired or been
earlier terminated;
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(d) any other requisite regulatory approvals or requirements
(including without limitation those of stock exchanges and
securities regulatory authorities and under the Investment
Canada Act,) shall have been obtained or satisfied on terms
satisfactory to the Offeror;
(e) (i) no act, action, suit or proceeding shall have been
threatened or taken before or by any domestic or foreign court
or tribunal or governmental agency or other regulatory
authority or administrative agency or commission by any
elected or appointed public official or private person
(including, without limitation, any individual, corporation,
firm, group or other entity) in Canada or elsewhere and (ii)
no law, regulation or policy shall have been proposed,
enacted, promulgated or applied:
a. to cease trade, enjoin, prohibit or impose material
limitations or conditions on the purchase by or the
sale to the Offeror of the Common Shares or any of
them pursuant to the Offer or the right of the
Offeror to own or exercise full rights of ownership
of the Common Shares or any of them, or
b. which if the Offer was consummated, would materially
and adversely affect the Corporation and its
Subsidiaries considered on a consolidated basis or
the Offeror;
(f) there shall not exist any prohibition at law against the
Offeror making the Offer or taking up and paying for 100% of
the Common Shares under the Offer;
(g) there shall not have occurred any change after December 31,
1998 (other than a change in the market conditions or price of
O.S.B.)(or any condition, event or development involving
prospective change) in the business, assets, capitalization,
financial condition, licences, permits, rights or privileges,
whether contractual or otherwise, of the Corporation or any of
its Subsidiaries considered as a whole which was not disclosed
prior to the Offer in writing to the Offeror, and which, in
the judgment of the Offeror, acting reasonably, is or would be
materially adverse to the Corporation and its Subsidiaries
considered as a whole;
(h) the Offeror shall have obtained assurances acceptable to it
with respect to CAAFS held by the Corporation from such
appropriate governmental authorities as it shall consider
desirable to ensure that there will be no termination, default
(other than a default resulting from a change of control),
breach or other adverse effects on the Corporation or the
Subsidiaries as a result of the transactions contemplated
herein; and
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(i) any representation or warranty of any of the Sellers and the
Corporation in the Lock-Up Agreement and this Agreement shall
not have been, as of the date made, true and correct in all
material respects, or the Corporation or any of the Sellers
shall not have performed in all material respects any covenant
or complied with any agreement to be performed by them under
the Lock-Up Agreement and this Agreement.
The foregoing conditions will be for the sole benefit of the Offeror and may be
waived by it in whole or in part at any time.
4. TERMS OF INSTALMENT NOTES. The Installment Notes shall be issued by a
Canadian corporation pursuant to a note indenture and the principal
terms thereof shall be:
(a) interest rate: annual interest rate equal to the rate secured
by the Offeror on the indebtedness incurred to finance the
Offer from its principal bankers payable quarterly calculated
in arrears;
(b) instalments: 20% of the principal payable on the Effective
Date and 20% on the first, second, third and fourth
anniversary of the issuance of the notes (it being understood
that, if the initial principal payment is duly paid or
provided for on the Effective Date, the notes need represent
only the principal payments due after the Effective Date);
(c) guarantee: unconditionally guaranteed by Offeror;
(d) security: unsecured, ranking PARI PASSU with indebtedness to ordinary
creditors of the issuer;
(e) events of default: customary, including non-payment of instalment
or interest and insolvency of issuer or guarantor;
(the "Instalment Notes").
5. HOLDCO PURCHASE. The Offer will provide that any holder of Common
Shares which holds such Common Shares indirectly through a holding
corporation (a "Holdco") may deposit all of the outstanding shares of
its Holdco under the Offer. Any such deposit of shares of a Holdco as
opposed to the deposit of the underlying Common Shares shall be
subject to customary conditions, including (i) any required approval
under applicable securities laws, (ii) the relevant seller providing
representations, warranties and indemnities reasonably satisfactory to
the Offeror, including as to the absence of any liabilities in the
relevant Holdco and of any asset other than Common Shares, and (iii)
each seller who deposits
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shares of a Holdco shall reimburse the Offeror for any additional
costs that will be incurred as a result of the acquisition of such
Holdco.
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<PAGE>
SCHEDULE "B"
REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of Corporation
and each of the Subsidiaries has been duly incorporated or formed
under applicable law, is validly existing and has full corporate or
legal power and authority to own its properties and conduct its
businesses as currently owned and conducted. All of the outstanding
shares and other ownership interests of the Subsidiaries are validly
issued, fully paid and non-assessable and all such shares and other
ownership interests owned directly or indirectly by Corporation are
owned free and clear of all material liens, claims or encumbrances,
and except as disclosed in paragraph (d) hereof, there are no
outstanding options, rights, entitlements, understandings or
commitments (contingent or otherwise) regarding the right to acquire
any shares or other ownership interests in any of the Subsidiaries.
(b) AUTHORITY; NO CONFLICT. The Corporation has the requisite
corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution and delivery of this
Agreement by Corporation and the consummation by Corporation of the
transactions contemplated by this Agreement have been duly authorized
by the board of directors of Corporation and no other corporate
proceedings on the part of Corporation are necessary to authorize this
Agreement or the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Corporation and constitutes a
valid and binding obligation of Corporation, enforceable against
Corporation in accordance with its terms subject to the usual
exceptions as to bankruptcy and the availability of equitable
remedies. Except as disclosed in writing to the Offeror prior to the
execution of this Agreement, the execution and delivery by Corporation
of this Agreement and performance by it of its obligations hereunder
and (subject to satisfying the conditions to the Offer specified in
clauses 3(b), (c) and (d) of Schedule "A" with respect to subparagraph
A(ii) below) the completion of the Offer and the transactions
contemplated thereby, will not:
a. result in a violation or breach of, require any
consent to be obtained under or give rise to any
termination rights or other adverse consequences
under any provision of:
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b. its or any Subsidiary's certificate of incorporation,
articles, by-laws or other charter documents,
including any unanimous shareholder agreement or any
other agreement or understanding with any party
holding an ownership interest in any Subsidiary;
(i) any law, regulation, order, judgment or decree;
or
(ii) any material contract, agreement, license,
franchise or permit to which the Corporation or
any Subsidiary is bound or is subject or is the
beneficiary;
c. except as disclosed to the Offeror prior to the
execution of this Agreement, give rise to any right
of termination or acceleration of indebtedness, or
cause any indebtedness to come due before its stated
maturity or cause any available credit to cease to be
available; or
d. result in the imposition of any hypothec, mortgage,
lien, charge, encumbrance, or adverse claim upon any
of its assets or the assets of any Subsidiary, or
restrict, hinder, impair or limit the ability of
Corporation or any Subsidiary to carry on the
business of Corporation or any Subsidiary as and
where it is now being carried on or as and where it
may be carried on in the future.
(c) CONSENTS AND APPROVALS. No consent, approval or authorization of,
or declaration or filing with, or notice to, any Governmental Entity
which has not been received or made is required by or with respect to
Corporation or any of its Subsidiaries in connection with the
execution and delivery of this Agreement by Corporation or the
consummation by Corporation of the transactions contemplated hereby,
except for (i) satisfying the conditions of the Offer specified in
clauses 3 (b), (c) and (d) of Schedule "A", (ii) any other consents,
approvals, authorizations, filings or notices the failure to make or
obtain which would not reasonably be expected to have, individually or
in the aggregate, a material adverse effect on Corporation.
(d) CAPITAL STRUCTURE. As of July 30, 1999, there are 11,169,483 Class
A Shares and 5,950,158 Class B Shares issued and outstanding. As at
the date hereof, up to a maximum of 1,625,000 Class B Shares may be
issued pursuant to outstanding stock option entitlements. 1,000,000
Class B Shares may be issued pursuant to an option granted to CIBC
World Markets Inc. and 3,293,077 Class B Shares may be issued pursuant
to the exercise of convertible debentures. Except as described in the
immediately preceding sentence, there are no options, warrants,
conversion privileges or other rights, agreements, arrangements or
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commitments obligating Corporation or any Subsidiary to issue or sell
any shares of the capital of Corporation or any of its Subsidiaries or
securities or obligations of any kind convertible into or exchangeable
for any shares of the capital of Corporation, any Subsidiary or any
other person, nor, except as disclosed to the Offeror prior to the
execution of this Agreement, is there outstanding any stock
appreciation rights, phantom equity or similar rights, agreements,
arrangements or commitments based upon the book value, income or any
other attribute of Corporation or any Subsidiary.
(e) QSC DOCUMENTS. The Corporation is a "reporting issuer" under the
SECURITIES ACT (Quebec), as amended (the "SECURITIES ACT" and is not
in default of any material requirements of any applicable securities
laws, and no delisting, suspension of trading in or cease trading
order with respect to the Common Shares or any other securities of the
Corporation is pending or threatened.
(f) FINANCIAL STATEMENTS. As of their respective dates, the
consolidated financial statements of Corporation included in any
documents filed with the Quebec Securities Commission on a
non-confidential basis (the "QSC Documents") complied as to form in
all material respects with the regulations of the QSC with respect
thereto, had been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods
involved (except as may otherwise be indicated in the notes thereto)
and fairly presented the consolidated financial position of
Corporation and its Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited quarterly
statements, to normal year-end audit adjustments).
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS; NO UNDISCLOSED MATERIAL
LIABILITIES. Except as disclosed to the Offeror prior to the execution
of this Agreement and except as has been publicly disclosed in any
document filed with the Quebec Securities Commission (the "QSC"),
since December 31, 1998 (i) the Corporation and the Subsidiaries have
conducted their respective businesses only in the ordinary course,
(ii) no liability or obligation of any nature (whether absolute,
accrued, contingent or otherwise) material to the Corporation or any
Subsidiary has been incurred, and (iii) there has not been any
material adverse change in the financial conditions, results of
operations or businesses of the Corporation or any Subsidiary.
(h) REAL PROPERTY; OTHER ASSETS. Except as disclosed to the Offeror
prior to the execution of this Agreement, the Corporation and its
Subsidiaries have good and valid title to the real property interests
and to each other
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asset reflected in the latest balance sheet of Corporation included in
the Filed QSC Documents (other than as disclosed in the Filed QSC
Documents, or any such other asset disposed of or consumed in the
ordinary course of business) free and clear of any and all hypothecs,
mortgages, liens, charges, encumbrances and adverse claims except (A)
those reflected or reserved against in the latest balance sheet of
Corporation included in the Filed QSC Documents, (B) taxes not in
default and payable without penalty and interest, and (C) other Liens
that individually or in the aggregate would not have a material
adverse effect on Corporation (collectively, "Permitted Liens").
(i) YEAR 2000 COMPLIANCE.
(i) Corporation presently expects that all reprogramming,
remediation and testing of Information Systems and Equipment (as
defined below) that is required to make it in all material
respects Year 2000 Compliant will be completed no later than
December 31, 1999. Except as otherwise disclosed in the Filed QSC
Documents, the cost of all such reprogramming, remediation and
testing, together with the reasonably foreseeable consequences of
any reasonably foreseeable failure of such Information Systems
and Equipment to be or timely become Year 2000 Compliant will not
have, individually or in the aggregate, a material adverse effect
on Corporation.
(ii) (A) As used in respect of Information Systems and Equipment,
"Year 2000 Compliant" means that such Information Systems and
Equipment will not cease to properly function, produce erroneous
results or otherwise experience diminished performance or
functionality when presented with or when calculating, comparing,
sequencing or otherwise processing date data before, during and
after the year 2000 and (B) "Information Systems and Equipment"
means all computer hardware, firmware, software and information
processing systems and all equipment containing embedded
microchips that is used by Corporation or any of its Subsidiaries
in the conduct of their respective business.
(j) INTELLECTUAL PROPERTY. Other than as disclosed in writing to the
Offeror all of the material patents, registered trademarks and service
marks, trade names and licenses owned or used by the Corporation at the
date of this Agreement are in good standing, valid and adequate to permit
the
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Corporation and its Subsidiaries to conduct its business as presently
conducted.
(k) MATERIAL CONTRACTS. There have been made available to Offeror and its
representatives true, correct and complete copies of all of the material
contracts to which Corporation or any of its Subsidiaries is a party or by
which any of them is bound (collectively, the "Material Contracts"). None
of Corporation or its Subsidiaries or, to the knowledge of Corporation, any
other party, is in material breach or default under any Material Contract.
(l) LITIGATION, ETC. As of the date hereof, except as disclosed in the
Filed QSC Documents or disclosed to the Offeror prior to the execution of
this Agreement, (i) there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of Corporation, threatened
against Corporation or any of its Subsidiaries before any court or other
Governmental Entity, and (ii) neither Corporation nor any of its
Subsidiaries is subject to any outstanding order, writ, judgment,
injunction, decree or arbitration order or award that, in any such case
described in clauses (i) and (ii), has had or would reasonably be expected
to have, individually or in the aggregate, a material adverse effect on
Corporation or which could prevent or materially delay the consummation of
the transaction contemplated herein. As of the date hereof, there are no
suits, claims, actions, proceedings or investigations pending or, to the
knowledge of Corporation, threatened, seeking to prevent, hinder, modify or
challenge the transactions contemplated by this Agreement.
(m) COMPLIANCE WITH APPLICABLE LAW. Except as disclosed in the Filed QSC
Documents or disclosed to the Offeror prior to the execution of this
Agreement, Corporation and its Subsidiaries are in material compliance with
all applicable statutes, law, ordinances, rules, certificates, orders,
grants, regulations and other authorization of any Governmental Entity,
except for non-compliance which would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on Corporation.
(n) ENVIRONMENTAL LAWS.
a. Definitions. For purposes of this Agreement, the following definitions
shall apply:
(i) The term "ENVIRONMENT" shall mean all components of the
earth, including, without limitation, air (and all layers of
the atmosphere), land (and all surface and subsurface soil,
underground spaces and cavities and all land submerged
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under water) and water (and all surface and underground
water), organic and inorganic matter and living organisms,
and the interacting natural systems that include components
referred to above in this definition of "ENVIRONMENT";
(ii) The terms "ENVIRONMENTAL LAWS" shall mean any and all
applicable federal, provincial, municipal or local statutes,
legislations, codes, ordinances, decrees, rules,
regulations, judicial or departmental or regulatory
judgments, orders, decisions, rulings or awards, policies
and guidelines having force of law, (hereafter "LAWS")
pertaining to the Environment, health and safety matters or
conditions, Hazardous Substances, pollution or protection of
the Environment, including, without limitation, Laws
relating to: (i) on site or off-site contamination; (ii)
occupational health and safety; (iii) chemical substances or
products; (iv) Release of pollutants, contaminants,
chemicals or other industrial, toxic or radioactive
substances or Hazardous Substances into the Environment; (v)
the manufacture, processing, distribution, use, treatment,
storage, transport, packaging, labelling, sale, recycling,
disposal, destruction, incineration, burial, advertising,
display or handling of Hazardous Substances; and (vi) any
preventive measures, Remedial Actions and notifications in
connection with the foregoing;
(iii) The terms "HAZARDOUS SUBSTANCE" shall mean any
substance, whether waste, liquid, gaseous or solid matter,
fuel, micro-organism, ray, odour, radiation, energy, vector,
plasma and organic or inorganic matter, which is or is
deemed to be, alone or in any combination, hazardous, waste,
hazardous waste, toxic, a pollutant, a deleterious
substance, a contaminant or a source of pollution or
contamination under any Environmental Laws, whether or not
such substance is defined as hazardous under Environmental
Laws;
(iv) The term "RELEASE" shall mean to release, spill, leak,
discharge, dispose, pump, pour, emit, empty, inject, leach,
dump or allow to escape;
(v) The terms "REMEDIAL ACTION" shall mean any compelled
action that is necessary to: (i) clean up, remove, treat or
in any other way deal with Hazardous Substances in the
Environment; (ii) prevent any Release of Hazardous
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Substances where such Release would violate any
Environmental Laws or would endanger or threaten to endanger
public health or welfare or the Environment; or (iii)
perform remedial studies, investigations, restoration, and
post-remedial studies, investigations and monitoring on,
about or in connection with the Immoveables or any
immoveable or real property owned, used or leased by the
Offeror.
b. Except as previously disclosed to the Offeror,
(i) Each of the Corporation and its Subsidiaries, has been,
and is being operated, and their assets are being used in
material compliance with all Environmental Laws, and each of
the Corporation and its Subsidiaries holds and their
business has been conducted in material compliance with all
environmental permits, certificates of authorization,
registrations and other authorizations (collectively,
"ENVIRONMENTAL PERMITS") required under Environmental Laws,
and all such Environmental Permits are in full force and
effect, except where failure to hold and maintain in full
force and effect any such Environmental Permits would not
have a material adverse effect on the Corporation, any of
its Subsidiaries or their business;
(ii) Each of the Corporation and its Subsidiaries has not
caused or permitted to cause, and has no knowledge of any
material Release of Hazardous Substances at, on or under any
of the real estates owned or leased by any of the
Corporation or its Subsidiaries which would require Remedial
Action, or from any real estate owned or operated by third
parties, but with respect to which any of the Corporation or
any of its Subsidiaries is alleged to have material
liability and which could have a material adverse effect on
the Corporation, any of its Subsidiaries or their business;
(iii) No Hazardous Substances have been transported or
arranged for the transportation of any such Hazardous
Substances to any location which is not listed and duly
authorized pursuant to Environmental Laws, and which would
lead to material claims against any of the Corporation or
its Subsidiaries for Remedial Action.
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(o) TAXES. Except as previously disclosed to the Offeror:
(i) Except where the failure to do so would not reasonably
be expected to have, individually or in the aggregate, a
material adverse effect on Corporation, each of Corporation
and each subsidiary of Corporation (and any affiliated or
unitary group of which any such person was a member) has (A)
timely filed all federal, provincial, local and foreign
returns, declarations, reports, estimates, information
returns and statements ("Returns") required to be filed by
or for it in respect of any Taxes (as hereinafter defined)
and has caused such Returns as so filed to be true, correct
and complete, (B) established reserves that are reflected in
Corporation's most recent financial statements included in
the Filed QSC Documents and that as so reflected are
adequate for the payment of all Taxes not yet due and
payable with respect to the results of operations of
Corporation and its Subsidiaries through the date hereof,
and (C) timely withheld and paid over to the proper taxing
authorities all Taxes and other amounts required to be so
withheld and paid over. Each of Corporation and each
subsidiary of Corporation has timely paid all Taxes that are
shown as being due on the Returns referred to in the
immediately preceding sentence. There have been made
available to Offeror and its representatives true, correct
and complete copies of all Returns filed by or for
Corporation and each subsidiary of Corporation since 1994 in
respect of any Taxes.
(ii) As of the date hereof, (A) there has been no taxable
period since 1992 for which a Return of Corporation or any
of its Subsidiaries has been or is being examined by the
Minister of Revenue of Quebec or any other federal,
provincial, local or foreign taxing authority, and (B)
except for alleged deficiencies which have been finally and
irrevocably resolved, Corporation has not received formal or
informal notification that any deficiency for any Taxes, the
amount of which could reasonably be expected to have,
individually or in the aggregate, a material adverse effect
on Corporation, has been or will be proposed, asserted or
assessed against Corporation or any of its Subsidiaries by
any federal, provincial, local or foreign taxing authority
or court with respect to any period; (C) No waiver or
extension of any statute of limitations in effect with
respect to Taxes or Returns of the Corporation or any
subsidiary.
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For purposes of this Agreement, "Taxes" shall mean all
federal, provincial, local, foreign income, property, sales,
excise, goods and services, employment, payroll, franchise,
withholding and other taxes, tariffs, charges, fees, levies,
imposts, duties, licenses, payroll or employee withholding
taxes or other assessments of every kind and description,
together with any interest and any penalties, additions to tax
or additional amounts imposed by any federal, state, local or
foreign taxing authority.
(p) EMPLOYEE PLANS. "Employee Plans" means all the employee
benefit, fringe benefit, supplemental unemployment benefit,
bonus, incentive, profit sharing, termination, change of
control, pension, retirement, stock option, stock purchase,
stock appreciation, health, welfare, medical, dental,
disability, life insurance and similar plans, programmes,
arrangements or practices relating to the current or former
employees, officers or directors of the Corporation
maintained, sponsored or funded by the Corporation, whether
written or oral, funded or unfunded, insured or self-insured,
registered or unregistered.
a. The Corporation has made available to the Offeror
true, correct and complete copies of all the Employee
Plans as amended as of the date hereof, together with
all summary plan descriptions and all material
correspondence with all relevant persons.
b. The Corporation may unilaterally amend or terminate,
in whole or in part, each Employee Plan, each subject
only to approvals required by laws and, with respect
to amendment or termination, the collective
agreements of the Corporation.
c. All contributions or premiums required to be paid by
the Corporation under the terms of each Employee Plan
or by laws have been made in a timely fashion in
accordance with laws and the terms of the Employee
Plans. The Corporation does not have any liability
(other than liabilities accruing after the date
hereof) with respect to any of the Employee Plans.
Contributions or premiums have been paid by the
Corporation when due.
d. No commitments to establish, improve or otherwise
amend any Employee Plan have been made except as
required by applicable laws or as disclosed prior to
the execution of this Agreement to the Offeror.
e. None of the Employee Plans is a pension plan.
-29-
<PAGE>
f. All employee data necessary to administer each
Employee Plan has been made available by the
Corporation to the Offeror and is true and correct as
of the date of this Agreement and the Corporation
will notify the Offeror of any changes thereto.
g. None of the Employee Plans provide benefits to
retired employees or to the beneficiaries or
dependents of retired employees.
(q) LABOUR MATTERS. Other than as disclosed to the Offeror prior
to the execution of this Agreement, or except as set forth in
the Information Circular and Proxy Statement of the
Corporation dated February 23, 1999, neither the Corporation
nor any Subsidiary is a party to any written or oral policy,
agreement, obligation or understanding providing for severance
or termination payments to, or any employment agreement with,
any person.
(r) BROKERS. No broker, investment banker, financial advisor or
other person, other than CIBC World Markets Inc., the fees and
expenses of which will be paid by Corporation, is entitled to
any broker's, finder's, financial advisor's or other similar
fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on
behalf of Corporation.
(s) WRITTEN OPINION OF FINANCIAL ADVISOR. Corporation has received
the opinion of CIBC World Markets Inc. on August 12, 1999 (a
true, correct and complete copy of which will be delivered to
Offeror by Corporation), to the effect that, based upon and
subject to the matters set forth therein and as of the date
thereof, the Price of the Offer to be received by the holders
of Common Shares in the Offer, is fair, from a financial point
of view, to such holders and such opinion has not been
withdrawn or modified.
(t) BOOKS AND RECORDs. The corporate records and minutes books of
Corporation and its Subsidiaries have been maintained
substantially in accordance with all applicable laws and are
complete and accurate in all material respects.
-30-
<PAGE>
SCHEDULE "C"
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES OPTIONS TOTAL
<S> <C> <C> <C> <C>
Placements Al-Vi Inc. 3,320,663 23,402 3,344,065
2330-3076 QBC. Inc. 2,653,486 2,653,486
Jean-Jacques Cossette 285,464 2,200 200,000 487,664
2954-7635 Quebec Inc. 173,650 233,100 406,750
Viviane Cossette 8,204 200,000 208,204
Fernand Cossette 658,825 3,002 200,000 861,827
9008-6760 Quebec Inc. 385,064 2 385,066
Marcel Cossette 235,245 235,245
Andre J. Lascelle 192,441 14,720 200,000 407,161
Pierre Moreau 200,000 500 150,000 350,500
2700638 Canada Inc. 56,350 56,350
Norman Farrell 200,020 150,000 350,020
Lock-up Group 8,369,412 276,926 1,100,000 9,746,338
</TABLE>
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<PAGE>
Exhibit 2.2
AMENDED AND RESTATED LOCK-UP AGREEMENT
LOUISIANA-PACIFIC CORPORATION
August 12, 1999
CONFIDENTIAL
- ------------
To the parties identified in Schedule "B" hereof
(the "Sellers")
c/o: Jean-Jacques Cossette
1200 1re Avenue
Val d'Or, Quebec
J9P 1Z5
Dear Sirs:
This letter agreement (the "Agreement") sets out the terms and conditions upon
which Louisiana-Pacific Corporation (the "Offeror") will, either directly or
through a wholly-owned subsidiary, make an offer on the terms summarized in
Schedule "A" to this Agreement (the "Offer") for all of the issued and
outstanding Class A Multiple Voting Shares (the "Class A Shares") and all of the
issued and outstanding Class B Subordinate Voting Shares (the "Class B Shares,
and collectively with the Class A shares, the "Common Shares") of Le Groupe
Forex Inc. (the "Corporation") at the price per Common Share specified in
Schedule "A". This Agreement amends and restates the Lock-Up Agreement dated
June 25, 1999 as amended on July 21, 1999 and on August 2, 1999 between the
Offeror and the Sellers.
This Agreement also sets out the terms and conditions of the agreement by each
of the Sellers to deposit irrevocably and unconditionally under the Offer that
number of Common Shares set forth opposite their respective names on Schedule
"B" hereof, including that number of Common Shares to be issued pursuant to the
exercise of the options referred to therein (in the aggregate, the "Securities",
and, individually, "its portion of the Securities"), and sets out the
obligations and commitments of the Sellers in connection therewith.
1. THE OFFER
1.1 TIMING. The Offeror agrees to make the Offer for 100% of the Common
Shares as soon as possible but in any event not more than ten (10)
calendar days after the date of this Agreement provided that, if the
Corporation has given to the Offeror a
<PAGE>
notice contemplated by Section 3.2(j) of the Support Agreement (as
defined hereunder) prior to the making of the Offer, such ten (10) day
period may, at the option of the Offeror, be extended by ten (10)
days.
1.2 CONDITIONS PRECEDENT. Notwithstanding Section 1.1, the Offeror shall
not be required to make the Offer (and shall, if it determines not to
make the Offer, without prejudice to any other rights, terminate this
Agreement by written notice to the Sellers and the Corporation) if:
(a) prior to the making of the Offer, (i) any act, action, suit or
proceeding shall have been taken before or by any domestic or
foreign court or tribunal or governmental agency or other
regulatory authority or administrative agency or commission by
any elected or appointed public official or private person
(including, without limitation, any individual, corporation,
firm, group or other entity) in Canada or elsewhere, or (ii)
any law, regulation or policy shall have been proposed,
enacted, promulgated or applied:
a. to cease trade, enjoin, prohibit or impose material
limitations or conditions on the purchase by or the
sale to the Offeror of the Common Shares or any of
them pursuant to the Offer or the right of the
Offeror to own or exercise full rights of ownership
of the Common Shares or any of them; or
b. which, if the Offer was consummated, would, in the
judgment of the Offeror, acting reasonably, materially
and adversely affect the Corporation and each of Forex
OSB Inc. and Forex Chambord Inc. (the "Subsidiaries")
considered as a whole;
(b) at the time the Offeror proposes to make the Offer, there
exists any prohibition at law (other than those referred to
in paragraphs 3(b), (c) or (d) of Schedule "A" hereto)
against the Offeror making the Offer or taking up and
paying for 100% of the Common Shares under the Offer;
(c) there shall have occurred (or there shall have been
generally disclosed, if previously undisclosed generally)
any change (other than a change in the market conditions or
price of O.S.B.)(or any condition, event or development
involving a prospective change) in the business, assets,
capitalization, financial condition, licenses, permits,
rights or privileges, whether contractual or otherwise, of
the Corporation or any of its Subsidiaries which, in the
judgment of the Offeror, acting reasonably, is or would be
materially adverse to the Corporation and its Subsidiaries
considered as a whole;
-2-
<PAGE>
(d) the Offeror shall not have obtained assurances acceptable
to it with respect to CAAFS held by the Corporation or such
appropriate governmental authorities as it shall consider
desirable to ensure that there will be no termination,
default (other than a default resulting from a change of
control), breach or other adverse effects on the
Corporation or the Subsidiaries as a result of the
transactions contemplated herein;
(e) the agreement entered into on the date hereof between the
Corporation and the Offeror whereby the Corporation agreed
to support the Offer, is not in full force and effect (the
"Support Agreement");
(f) any representation or warranty of any of the Sellers in
this Agreement or any representation or warranty of the
Corporation in the Support Agreement shall not have been,
as of the date made, true and correct in all material
respects, or the Corporation or any of the Sellers shall
not have respectively performed in all material respects
any covenant or complied with any agreement to be performed
by them or it under this Agreement and the Support
Agreement; or
(g) all non-unionized individuals working for the Corporation
as a result of services agreement entered into between the
Corporation and companies controlled by insiders of the
Corporation shall not have agreed to become employees of
the Corporation before the Offeror takes up and pays for
the Common Shares (the "Effective Date").
The foregoing conditions are for the sole benefit of the Offeror and may be
waived by the Offeror in whole or in part at any time and shall be deemed to
have been waived by it by the making of the Offer.
2. Acceptance
2.1 DEPOSIT. Subject to the terms and conditions hereof, each of the
Sellers hereby irrevocably agrees to deposit its portion of the
Securities, together with a completed and executed letter of
transmittal, under the Offer as soon as practicable after the Offer has
been made and, in any event, on or before the third business day after
the date that the Offer is made, except that all of the Common Shares
issuable upon the exercise of the options listed in Schedule B may be
deposited no later than twenty-four (24) hours prior to the expiry of
the Offer.
2.2 NON-WITHDRAWAL. Each of the Sellers hereby irrevocably agrees not to
withdraw or take any action to withdraw any of its portion of the
Securities following their deposit under the Offer, notwithstanding any
statutory rights or other rights under the terms of the Offer or
otherwise which it might have, unless this Agreement is terminated in
accordance with its terms prior to the taking up of the Securities
under the Offer;
-3-
<PAGE>
3. Representations and Warranties
3.1 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each of the Sellers hereby
represents and warrants that:
(a) it is a corporation duly incorporated or created and validly
existing under the laws of its jurisdiction of incorporation or
creation, if applicable; it has the corporate or other power, if
applicable, and capacity and has received all requisite
approvals, if applicable, to enter into this Agreement and to
complete the sale of its portion of the Securities pursuant to
the Offer; this Agreement has been duly executed and delivered
by the Sellers and is a valid and binding agreement enforceable
by the Offeror against it in accordance with its terms, subject
to the usual exceptions as to bankruptcy and the availability of
equitable remedies;
(b) it is and, upon the deposit of its portion of the Securities
under the Offer, will be the sole legal and beneficial owner of
such Securities and will have the exclusive right to vote and
dispose thereof as provided in this Agreement and it is not a
party to, bound or affected by or subject to, any provision of
its constating documents if applicable, or any statute,
regulation, judgment, order, decree or law which would be
violated, contravened, breached by, or under which default would
occur as a result of, the execution and delivery of this
Agreement;
(c) the portion of the Securities to be acquired by the Offeror from
it pursuant to the Offer will be acquired by the Offeror with
good and marketable title, free and clear of any and all
hypothecs, mortgages, liens, charges, proxies, voting
agreements, encumbrances and adverse claims, save for the
charges which will be released on or before the Effective Date;
(d) other than as disclosed to the Offeror prior to the execution of
this Agreement, there does not exist any agreement,
understanding or commitment giving rise to any material
obligations, financial or otherwise, on the part of the
Corporation or any of its Subsidiaries to such Seller or any of
its affiliates (or any associates or insiders of any of the
foregoing);
(e) other than as disclosed to the Offeror prior to the execution of
this Agreement, the execution and delivery of this Agreement and
the fulfillment of the terms hereof and thereof by it do not and
will not result in a breach of (a) its constating documents, if
applicable, or (b) any agreement or instrument to which it is a
party or by which it is contractually bound which would have a
material adverse effect upon it; and
-4-
<PAGE>
(f) to the best of their knowledge, the Corporation has not omitted
to disclose to the Offeror any information concerning the
Corporation, its business, assets, operations, capital, affairs,
financial conditions and prospects that a purchaser would
consider material in circumstances similar to the transaction
contemplated herein.
3.2 REPRESENTATIONS AND WARRANTIES OF THE OFFEROR. The Offeror hereby represents
and warrants that:
(a) the Offeror is a corporation duly incorporated and validly
existing under the laws of its jurisdiction of incorporation;
(b) the Offeror has the financial resources and is financially
capable of completing the Offer; and
(c) the Offeror has the requisite corporate power and authority to
enter into this Agreement and to perform its obligations
hereunder; the execution and delivery of this Agreement by
Offeror and the consummation by the Offeror of the transactions
contemplated by this Agreement have been duly authorized by the
board of directors of the Offeror and no other corporate
proceedings on the part of the Offeror are necessary to
authorize this Agreement or the transactions contemplated hereby
and this Agreement has been duly executed and delivered by
Offeror and constitutes a valid and binding agreement of the
Offeror, enforceable against the Offeror in accordance with its
terms subject to the usual exceptions as to bankruptcy and the
availability of equitable remedies.
4. Covenants of the Sellers
4.1 GENERAL. Each of the Sellers hereby covenants that until the Offeror
has taken up and paid for the Common Shares under the Offer or
abandoned the Offer or the terms of this Agreement have been terminated
by the Sellers pursuant to Section 6.1, it will:
(a) not take any action of any kind which may reduce the likelihood
of success of or delay the completion of the Offer, including
but not limited to any action that the Corporation would be
prohibited from taking under the first sentence of Section 3.2
(f) of the Support Agreement without regard to the proviso
thereof, and will not participate in any negotiations regarding,
or otherwise cooperate in any way with or assist or participate
in:
(i) the direct or indirect acquisition or disposition of all or
any Common Shares or any other securities of the Corporation
-5-
<PAGE>
or its Subsidiaries (except as expressly provided in this
Agreement); or
(ii) except as expressly permitted by this Agreement or as
previously approved in writing by the Offeror, any
amalgamation, merger, sale of any material part of the
Corporation's or its Subsidiaries' assets, take-over bid, plan
of arrangement, reorganization, recapitalization, liquidation
or winding-up of, or other business combination or similar
transaction involving the Corporation or any of its
Subsidiaries;
(b) notify the Offeror forthwith upon becoming aware of any
Acquisition Proposal (as defined in Section 3.2(f) of the
Support Agreement) and inform the Offeror of all information
(including the identity of any prospective offeror) known to the
Seller at that time regarding such proposal;
(c) cause the voting rights attaching to its portion of the
Securities to be exercised to oppose any proposed action by: (i)
the Corporation, its shareholders or others which might
reasonably be regarded as being directed towards or likely to
prevent or delay the successful completion of the Offer, or (ii)
the Corporation or its shareholders to materially change the
business, assets, operations, capital, affairs, financial
conditions, licenses, permits, rights or privileges, whether
contractual or otherwise, or prospects of the Corporation and
its Subsidiaries taken as a whole which in the judgment of the
Offeror, acting reasonably, could individually, or in the
aggregate, adversely affect the value of the Common Shares to
the Offeror, provided that nothing in this Agreement shall
require the Sellers to request any of their directors or
officers who may be a director of the Corporation or any Sellers
who are themselves a director to take any action or to refrain
from taking any action as a director of the Corporation or to
act otherwise than in accordance with his or her fiduciary
duties as a director of the Corporation;
(d) use its reasonable commercial efforts to assist the Offeror to
successfully complete the acquisition of Common Shares,
including diligently pursuing all requisite regulatory approvals
and co-operating with the Offeror in making all requisite
regulatory filings and giving evidence in relation thereto;
(e) promptly advise the Offeror orally and in writing of any
material change (other than a change in the market conditions or
price of O.S.B. known to the Seller in the condition (financial
or otherwise), properties, assets, liabilities, operations,
business or prospects of the Corporation or any of its
Subsidiaries;
-6-
<PAGE>
(f) promptly notify the Offeror upon any representation or warranty
of it or the Corporation contained in this Agreement becoming
untrue or incorrect in any material respect during the period
commencing on the date hereof and expiring at the time of expiry
of the Offer, and for the purposes of this provision, each
representation and warranty shall be deemed to be given at and
as of all times during such period (irrespective of any language
which suggests that it is only being given as at the date
hereof);
(g) cause its nominees on the board of directors of the Corporation
and its Subsidiaries, and use its reasonable best efforts to
cause all members of the board of directors of the Corporation
and its Subsidiaries, to resign at the time and in the manner
requested by the Offeror, after the Offeror takes up and pays
for the Securities; and
(h) use its reasonable best efforts to cause the Corporation to
comply with its covenants contained in the Support Agreement.
4.2 OPTIONS. Each of the Sellers hereby covenants to exercise all options
set out in Schedule B next to his name, if any, at least twenty-four
(24) hours before the expiry of the Offer or to have such options
cancelled.
4.3 AMENDMENT TO LOCK-UP AGREEMENT. In the event that the Corporation
enters into an amendment to the Support Agreement in accordance with
section 3.2(k) thereof, each of the Sellers hereby covenants to enter
into an amendment to this Agreement that shall reflect the terms of
such amended Support Agreement.
5. Covenants of the Offeror
5.1 OFFEROR. Subject to the terms and conditions hereof, the Offeror
hereby covenants to:
(a) use its reasonable commercial efforts to successfully complete
the Offer, including diligently pursuing all requisite
regulatory approvals;
(b) co-operate with the Sellers and the Corporation in making all
requisite regulatory filings, and giving evidence in relation
thereto, and to provide copies of all written documents and
submissions and responses with respect thereto in connection
with regulatory proceedings;
(c) provide copies of drafts of the Offer to Mr. Jean-Jacques
Cossette on behalf of the Sellers in order to provide them with
an opportunity to comment; and
-7-
<PAGE>
(d) use its reasonable commercial efforts to file with the Director
of Investigation and Research appointed under the COMPETITION
ACT (Canada) the notice required under Section 123 of said act
prior to the expiry of the delay referred to in Section 1.1
hereof, notwithstanding the fact that the Offer may have been
made prior thereto.
5.2 CONFIDENTIALITY AGREEMENT. The Offeror hereby covenants and agrees to
be bound by the terms of the confidentiality agreement dated June 18,
1999 between the Offeror and the Corporation (the "Confidentiality
Agreement") throughout the term of this Agreement and in the event that
this Agreement is terminated for any reason whatsoever. Pursuant to the
Support Agreement, the Corporation has confirmed and agreed that the
Confidentiality Agreement will be null and void in the event that the
Offeror takes up and pays for Common Shares (including the Securities)
under the Offer. Furthermore, in such circumstances, each of the
Sellers agrees to hold all Information (as defined below) confidential
and not to use it in any way detrimental to the interests of the
Offeror, the Corporation or its Subsidiaries, except as required by
law. For the purposes hereof, "Information" has the meaning ascribed to
such expression in the Confidentiality Agreement.
6. Termination
6.1 TERMINATION BY SELLERS. All of the Sellers, when not in default in
performance of their respective material obligations under this
Agreement, may, without prejudice to any other rights, terminate their
obligations under this Agreement by notice to the Offeror if:
(a) the Offer has not been made within the time period provided in
Section 1.1;
(b) the Offer does not conform in all material respects with the
description of the Offer in Schedule "A";
(c) the Offeror has not taken up and paid for the Securities on or
prior to December 31, 1999;
(d) Common Shares deposited under the Offer (including the
Securities) have not, for any reason whatsoever (other than that
all the terms and conditions of the Offer have not been complied
with or waived by the Offeror) been taken up and paid for on or
before the expiry of ten days after the expiry of the Offer (as
it may have been extended); or
(e) A Break Fee Event described in clause (x) of Section 5.1 of the
Support Agreement shall have occurred, provided that no
termination under this paragraph shall be effective unless and
until the Corporation shall have
-8-
<PAGE>
paid the Offeror by bank draft or wire transfer the sum of $29.8
million in immediately available funds (the "Break Fee").
6.2 TERMINATION BY OFFEROR. The Offeror, when not in default in performance
of its material obligations under this Agreement, may, without
prejudice to any other rights, terminate its obligations under this
Agreement by notice to the Sellers and if:
(a) the Offeror has not taken up and paid for the Securities on
or prior to December 31, 1999;
(b) a Break Fee Event shall have occurred;
(c) as a result of the failure of any of the conditions set forth
in Schedule "A", the Offer shall have expired or have been
terminated in accordance with its terms without the Offeror
having purchased any Common Share pursuant to the Offer; or
(d) the Sellers or the Corporation shall have breached in any
material respect any of their respective representations,
warranties, covenants or other agreements contained in this
Agreement or the Support Agreement.
6.3 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Section 6.1 or 6.2, this Agreement (except for
Sections 6.1(e), 6.3 and 7) shall forthwith become void and cease to
have any force or effect without any liability on the part of any party
hereto or any of its affiliates; provided however that nothing in this
Section shall relieve any party to this Agreement of liability for any
breach of this Agreement.
7. General
7.1 DISCLOSURE. Except as required by applicable laws or regulations, or as
required by any competent governmental, judicial or other authority, or
in accordance with the requirements of any stock exchange, no party
shall make any public announcement or statement with respect to this
Agreement or the Support Agreement without the approval of the others,
which shall not be unreasonably withheld. Moreover, the parties agree
to consult with each other prior to issuing each public announcement or
statement with respect to this Agreement or the Support Agreement.
7.2 ASSIGNMENT. The Offeror may assign all or any part of its rights and/or
obligations under this Agreement to a wholly-owned subsidiary of the
Offeror, but, if such assignment takes place, the Offeror shall
continue to be liable to the Sellers for
-9-
<PAGE>
any default in performance by the assignee. This Agreement shall not
otherwise be assignable by any party without the consent of the others.
7.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Quebec and of Canada
applicable therein (without regard to conflict of laws principles).
7.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Sellers and by the Offeror herein shall survive
for a period of one year from the date hereof except that any
representations which prove to be incorrect or untrue as a result of
tax matters shall survive only as to such tax matters until thirty (30)
days following the last applicable limitation period under applicable
tax laws and except in the case of the representations and warranties
contained in paragraphs 3.1((a)) THROUGH ((e)), INCLUSIVE, which shall
survive indefinitely, and in the case of fraud. No investigations made
by or on behalf of the Offeror or any of its authorized agents at any
time shall have the effect of waiving, diminishing the scope of or
otherwise affecting any representation, warranty or covenant made by
any Seller herein or pursuant hereto.
7.5 AMENDMENTS. This Agreement may not be amended except by written
agreement signed by all of the parties to this Agreement.
7.6 SPECIFIC PERFORMANCE AND OTHER EQUITABLE RIGHTS. Each of the parties
recognizes and acknowledges that this Agreement is an integral part of
the Offer, that the Offeror would not contemplate causing the Offer to
be made and the Sellers would not agree to the deposit of the
Securities under the Offer unless this Agreement was executed, and that
a breach by any party of any covenants or other commitments contained
in this Agreement will cause the other parties to sustain injury for
which they would not have an adequate remedy at law for money damages.
Therefore, each of the parties agrees that in the event of any such
breach, the aggrieved party or parties shall be entitled to the remedy
of specific performance of such covenants or commitments and
preliminary and permanent injunctive and other equitable relief in
addition to any other remedy to which it or they may be entitled, at
law or in equity, and the parties further agree to waive any
requirement for the securing or posting of any bond in connection with
the obtaining of any such injunctive or other equitable relief.
7.7 EXPENSES. Each of the Sellers shall pay its legal, financial advisory
and accounting costs and expenses incurred in connection with the
preparation, execution and delivery of this Agreement and all documents
and instruments executed or prepared pursuant to this Agreement and any
other costs and expenses whatsoever and howsoever incurred, and none of
such costs and expenses shall be borne by the Corporation or its
Subsidiaries. The Offeror shall pay its legal, financial advisory and
accounting costs and expenses incurred in connection with the
preparation, execution and delivery of this Agreement and all documents
and instruments executed or prepared pursuant to this Agreement and any
other costs
-10-
<PAGE>
and expenses whatsoever and howsoever incurred. The Sellers shall bear
all costs and expenses of obtaining the necessary consents, and shall
indemnify and hold harmless the Offeror, the Corporation and its
Subsidiaries against all claims in respect thereof.
7.8 BUSINESS DAY. A business day for the purpose of this Agreement shall
mean any day on which chartered banks in the City of Montreal are open
for business.
7.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts which together shall be deemed to constitute one valid and
binding agreement, and delivery of the counterparts may be effected by
means of a telecopier transmission.
7.10 SCHEDULE. Schedules "A" and "B" hereto shall for all purposes form an
integral part of this Agreement.
7.11 ENTIRE AGREEMENT. This Agreement, together with the Confidentiality
Agreement (as defined herein) and any document referred to herein,
constitutes the entire agreement and understanding between the parties
pertaining to the subject matter of this Agreement.
7.12 TIME. Time shall be of the essence in this Agreement.
7.13 CURRENCY. All sums of money referred to in this Agreement shall mean
Canadian funds.
7.14 NOTICES. Any notice, request, consent, agreement or approval which may
or is required to be given pursuant to this Agreement shall be in
writing and shall be sufficiently given or made if delivered, or sent
by telecopier, in the case of:
(a) the Offeror, addressed as follows:
Louisiana-Pacific Corporation
111 South West Fifth
Portland, Oregon
USA 97204
Attention: The Office of the General Counsel
Telecopier No. (503) 796-0105
with a copy to:
Stikeman, Elliott
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<PAGE>
Suite 4000
1155 West Rene-Levesque Blvd.
Montreal, Quebec H3B 3V3
Attention: Pierre A. Raymond
Telecopier No.: (514) 397-3222
(b) in the case of the Sellers, addressed as follows:
Mr. Jean-Jacques Cossette
1200, 1ere Avenue
Val d'Or, Quebec
J9P 1Z5
with a copy to:
Martineau Walker
Tour de la Bourse
800, Place Victoria, Suite 3400
Montreal, Quebec
H4Z 1E9
Attention: Maurice Forget
Telecopier No.: (514) 397-7600
or to such other address as the relevant party may from time to time advise by
notice in writing given pursuant to this Section. The date of receipt of any
such notice, request, consent, agreement or approval shall be deemed to be the
date of delivery or sending thereof.
8. Special Provisions
8.1 JOINT CONDUCT. Notwithstanding any other provision hereof, the Offeror
shall upon its written election have no obligations hereunder to any of
the Sellers if any Seller fails to comply with the terms hereof or with
any of its covenants or agreements hereunder or if any of the
representations or warranties of any Seller prove to be incorrect or
untrue in any material respect. Furthermore, if any Seller shall
terminate its obligations under this Agreement as provided herein, any
obligations of the Offeror may be terminated with respect to all
Sellers at the Offeror's written election.
8.2 COMMON SHARES. References to "Common Shares" include any shares into
which the foregoing may be reclassified, sub-divided, consolidated or
converted and any rights and benefits arising therefrom including any
extraordinary distributions of securities which may be declared in
respect of the Common Shares.
-12-
<PAGE>
8.3 WAIVERS AND RELEASES. Following the taking up of Securities under the
Offer, the Sellers hereby agree that they shall be deemed to have
waived all pre-emptive rights or other rights to acquire securities of
the Corporation or any subsidiary, and to have agreed to release the
Corporation and its Subsidiaries from all claims, obligations or
liabilities whatsoever.
------------
-13-
<PAGE>
If the terms and conditions of this letter are acceptable to you, please so
indicate by executing and returning the enclosed copy hereof to the undersigned
prior to 5:00 p.m. (Montreal time) on August 12, 1999, failing which this offer
shall be null and void.
Yours truly,
Louisiana-Pacific Corporation
By: /s/ Gary Wilkerson
----------------------------------------------
Gary Wilkerson
Agreed and accepted this 12th day of August 1999
PLACEMENTS AL-VI INC.
By: /s/ J.J. Cossette
-----------------------------------------------
2330-3076 QBC. INC.
By: /s/ J.J. Cossette
-----------------------------------------------
2954-7635 QUEBEC INC.
By: /s/ J.J. Cossette
-----------------------------------------------
By: /s/ J.J. Cossette
-----------------------------------------------
Jean-Jacques Cossette
By: /s/ Viviane Cossette
-----------------------------------------------
Viviane Cossette
-14-
<PAGE>
By: /s/ Fernand Cossette
----------------------------------------------
Fernand Cossette
By: /s/ Andre' J. Lascelle
----------------------------------------------
Andre J. Lascelle
2700638 CANADA INC.
By: /s/ Pierre Moreau
-----------------------------------------------
By: /s/ Pierre Moreau
-----------------------------------------------
Pierre Moreau
By: /s/ Norman Farrell
-----------------------------------------------
Norman Farrell
9008-6760 QUEBEC INC.
By: /s/ Marcel Cossette
------------------------------------------------
By: /s/ Marcel Cossette
------------------------------------------------
Marcel Cossette
-15-
<PAGE>
SCHEDULE "A"
TERMS OF THE OFFER
1. GENERAL TERMS. The Offer shall be made by a circular bid prepared in
compliance with the Securities Act (Quebec) and other applicable
provincial securities laws. The Offer shall be open for twenty-one (21)
days or such longer period as may be required to satisfy all of the
conditions set forth in paragraph 3 below, provided that in no event
shall the Offer be required to be open after December 31, 1999.
2. PRICE OF THE OFFER. The Offer shall be made for a consideration of not
less than Cdn. $33.00 per Common Share payable, at the option of the
holder, in cash, by the delivery of Instalment Notes (which shall be
deemed for purposes of the Offer to have a value equal to the original
principal amount thereof) or a combination thereof.
3. CONDITIONS OF THE OFFER. The Offer shall not be subject to any
conditions other than those substantially described as follows:
(a) not less than 66 2/3% of the outstanding Class A Multiple
Voting Shares and not less than 66-2/3% of the outstanding
Class B Subordinate Voting Shares (on a fully-diluted basis,
assuming that all rights to acquire Common Shares were to be
exercised in full) are tendered under the Offer and not
withdrawn at the expiration of the Offer;
(b) (i) the Commissioner of Competition (the "Commissioner")
appointed under the Competition Act (Canada) (the "Act") shall
have issued an advance ruling certificate under section 102 of
the Act in respect of the transaction (the "Transaction")
which will result from the Offer; (ii) the Commissioner shall
have advised the Offeror that he does not intend at the
current time to apply to the Competition Tribunal for an order
under section 92 of the Act in respect of the Transaction; or
(iii) the applicable waiting period under section 123 of the
Act shall have expired without the Commissioner having
notified the Offeror that he intends to apply to the
Competition Tribunal for an order under section 92 of the Act
in respect of the Transaction; and no proceedings shall have
been taken or threatened under the merger provisions of Part
VIII or under section 45 of the Act in respect of the
Transaction;
(c) any applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 shall have expired or been
earlier terminated;
-16-
<PAGE>
(d) any other requisite regulatory approvals or requirements
(including without limitation those of stock exchanges and
securities regulatory authorities and under the Investment
Canada Act,) shall have been obtained or satisfied on terms
satisfactory to the Offeror;
(e) (i) no act, action, suit or proceeding shall have been
threatened or taken before or by any domestic or foreign court
or tribunal or governmental agency or other regulatory
authority or administrative agency or commission by any
elected or appointed public official or private person
(including, without limitation, any individual, corporation,
firm, group or other entity) in Canada or elsewhere and (ii)
no law, regulation or policy shall have been proposed,
enacted, promulgated or applied:
a. to cease trade, enjoin, prohibit or impose material
limitations or conditions on the purchase by or the
sale to the Offeror of the Common Shares or any of
them pursuant to the Offer or the right of the
Offeror to own or exercise full rights of ownership
of the Common Shares or any of them, or
b. which if the Offer was consummated, would materially
and adversely affect the Corporation and its
Subsidiaries considered on a consolidated basis or
the Offeror;
(f) there shall not exist any prohibition at law against the
Offeror making the Offer or taking up and paying for 100% of
the Common Shares under the Offer;
(g) there shall not have occurred any change after December 31,
1998 (other than a change in the market conditions or price of
O.S.B.)(or any condition, event or development involving a
prospective change) in the business, assets, capitalization,
financial condition, licences, permits, rights or privileges,
whether contractual or otherwise, of the Corporation or any of
its Subsidiaries considered as a whole which was not disclosed
prior to the Offer in writing to the Offeror, and which, in
the judgment of the Offeror, acting reasonably, is or would be
materially adverse to the Corporation and its Subsidiaries
considered as a whole;
(h) the Offeror shall have obtained assurances acceptable to it
with respect to CAAFS held by the Corporation or such
appropriate governmental authorities as it shall consider
desirable to ensure that there will be no termination, default
(other than a default resulting from a change of control),
breach or other adverse effects on the Corporation or the
Subsidiaries as a result of the transactions contemplated
herein; and
-17-
<PAGE>
(i) any representation or warranty of any of the Sellers and the
Corporation in this Agreement and in the Support Agreement shall not
have been, as of the date made, true and correct in all material
respects, or the Corporation or any of the Sellers shall not have
performed in all material respects any covenant or complied with any
agreement to be performed by them under the Support Agreement and this
Agreement.
The foregoing conditions will be for the sole benefit of the Offeror and may be
waived by it in whole or in part at any time.
4. TERMS OF INSTALMENT NOTES. The Instalment Notes shall be issued by a
Canadian corporation pursuant to a note indenture and the principal
terms thereof shall be:
(a) interest rate: annual interest rate equal to the rate secured
by the Offeror on the indebtedness incurred to finance the
Offer from its principal bankers payable quarterly calculated
in arrears;
(b) instalments: 20% of the principal payable on the Effective
Date and 20% on the first, second, third and fourth
anniversary of the issuance of the notes (it being understood
that, if the initial principal payment is duly paid or
provided for on the Effective Date, the notes need represent
only the principal payments due after the Effective Date);
(c) guarantee: unconditionally guaranteed by Offeror;
(d) security: unsecured, ranking PARI PASSU with indebtedness to
ordinary creditors of the issuer;
(e) events of default: customary, including non-payment of
instalment or interest and insolvency of issuer or guarantor;
(the "Instalment Notes")
5. HOLDCO PURCHASE. The Offer will provide that any holder of Common
Shares which holds such Common Shares indirectly through a holding
corporation (a "Holdco") may deposit all of the outstanding shares of
its Holdco under the Offer. Any such deposit of shares of a Holdco as
opposed to the deposit of the underlying Common Shares shall be subject
to customary conditions, including (i) any required approval under
applicable securities laws, (ii) the relevant Seller providing
representations, warranties and indemnities reasonably satisfactory to
the Offeror, including as to the absence of any liabilities in the
relevant Holdco and of any asset other than Common Shares, and (iii)
each Seller who deposits
-18-
<PAGE>
shares of a Holdco shall reimburse the Offeror for any additional costs
that will be incurred as a result of the acquisition of such Holdco.
-19-
<PAGE>
SCHEDULE "B"
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES OPTIONS TOTAL
<S> <C> <C> <C> <C>
Placements Al-Vi Inc. 3,320,663 23,402 3,344,065
2330-3076 QBC. Inc. 2,653,486 2,653,486
Jean-Jacques Cossette 285,464 2,200 200,000 487,664
2954-7635 Quebec Inc. 173,650 233,100 406,750
Viviane Cossette 8,204 200,000 208,204
Fernand Cossette 658,825 3,002 200,000 861,827
9008-6760 Quebec Inc. 385,064 2 385,066
Marcel Cossette 235,245 235,245
Andre J. Lascelle 192,441 14,720 200,000 407,161
Pierre Moreau 200,000 500 150,000 350,500
2700638 Canada Inc. 56,350 56,350
Norman Farrell 200,020 150,000 350,020
Lock-up Group 8,369,412 276,926 1,100,000 9,746,338
</TABLE>
-20-
<PAGE>
Exhibit 99.1
NO SECURITIES COMMISSION OR SIMILAR AUTHORITY IN CANADA HAS IN ANY WAY PASSED
UPON THE MERITS OF THE SECURITIES OFFERED HEREUNDER AND ANY REPRESENTATION TO
THE CONTRARY IS AN OFFENCE. THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION. IF YOU HAVE ANY QUESTIONS AS TO HOW TO DEAL WITH IT, YOU
SHOULD CONSULT YOUR INVESTMENT DEALER, BROKER, BANK MANAGER, LAWYER OR OTHER
PROFESSIONAL ADVISOR.
OFFER TO PURCHASE
BY
LOUISIANA-PACIFIC ACQUISITION INC.
A WHOLLY-OWNED INDIRECT SUBSIDIARY OF
LOUISIANA-PACIFIC CORPORATION
FOR ALL OF THE OUTSTANDING CLASS A MULTIPLE VOTING SHARES
AND CLASS B SUBORDINATE VOTING SHARES OF
LE GROUPE FOREX INC.
FOR A CONSIDERATION PER SHARE, AT THE OPTION OF THE SHAREHOLDER, OF:
(I) $33.00 IN CASH PAYABLE ON THE EFFECTIVE DATE (THE "CASH OPTION");
OR
(II) $33.00 IN CASH PAYABLE IN FIVE INSTALLMENTS, TOGETHER WITH
INTEREST AS DESCRIBED HEREIN (THE "NOTE OPTION"); OR
(III) ANY COMBINATION OF THE CASH OPTION AND THE NOTE OPTION.
The Offer by Louisiana-Pacific Acquisition Inc. (the "OFFEROR") to
purchase all of the issued and outstanding Class A Multiple Voting Shares and
Class B Subordinate Voting Shares of Le Groupe Forex Inc. ("Forex") (including
the Class B Subordinate Voting Shares issuable upon the exercise of outstanding
options and conversion of Forex Convertible Debentures) (collectively, the
"SHARES") will be open for acceptance until 5:00 p.m., Montreal time on
September 9, 1999 (the "EXPIRY TIME") unless withdrawn or extended.
THE OFFER IS MADE ONLY FOR THE SHARES AND IS NOT MADE FOR ANY OPTIONS
OR OTHER RIGHTS, IF ANY, TO PURCHASE OR TO RECEIVE IN EXCHANGE SHARES. ANY
HOLDER OF SUCH OPTIONS OR OTHER RIGHTS (INCLUDING BENEFICIAL OWNERS OF FOREX
CONVERTIBLE DEBENTURES) WHO WISHES TO ACCEPT THE OFFER MUST, TO THE EXTENT
PERMITTED THEREBY AND HEREBY, EXERCISE THE OPTIONS OR RIGHTS IN ORDER TO OBTAIN
CERTIFICATES REPRESENTING SHARES AND DEPOSIT SUCH SHARES IN ACCORDANCE WITH THE
OFFER; PROVIDED, HOWEVER, THAT FOREX CONVERTIBLE DEBENTURES MAY BE DEPOSITED FOR
CONVERSION CONDITIONAL UPON THE OFFEROR TAKING UP AND PAYING FOR THE SHARES
DEPOSITED UNDER THE OFFER. THE BENEFICIAL OWNER OF ANY FOREX CONVERTIBLE
DEBENTURE THAT IS SO CONVERTED WILL BE ENTITLED TO RECEIVE FROM FOREX ACCRUED
AND UNPAID INTEREST THEREON UP TO THE DATE OF SUCH CONVERSION.
The Offer is conditional upon certain events which are described in
Section 3 of the Offer, "Conditions of the Offer", including without limitation,
the valid deposit of at least 66 2/3% of the Class A Multiple Voting Shares and
at least 66 2/3% of the Class B Subordinate Voting Shares, calculated on a
fully-diluted basis, which Shares shall not have been withdrawn at the Expiry
Time.
THE BOARD OF DIRECTORS OF FOREX HAS RECOMMENDED THAT SHAREHOLDERS AND
THE BENEFICIAL OWNERS OF FOREX CONVERTIBLE DEBENTURES ACCEPT THE OFFER.
The Class A Multiple Voting Shares and the Class B Subordinate Voting
Shares of Forex are listed for trading on the Montreal Exchange (the "ME"). On
June 21, 1999, the trading day immediately prior to the announcement by Forex
that it had received expressions of interest to purchase Forex and on June 25,
1999, the last full trading day prior to the announcement of the Offeror's
intention to make an offer for the Shares at $26.00 per Share, the closing price
on the ME of the Class A Multiple Voting Shares and the Class B Subordinate
Voting Shares were $18.75 and $18.50, respectively, and $21.40 and $21.00,
respectively. The average closing prices on the ME for the Class A Multiple
Voting Shares and the Class B Subordinate Voting Shares for the 20 trading days
prior to the announcement of the Offeror's intention to make such prior offer
were $16.40 and $15.90, respectively; thus, the price offered in the Offer
represents a premium of 101.22% and 107.55%, respectively, on such average
closing prices.
MR. JEAN-JACQUES COSSETTE, THE COSSETTE FAMILY AND MEMBERS OF FOREX
SENIOR MANAGEMENT HAVE AGREED TO DEPOSIT OR CAUSE TO BE DEPOSITED UNDER THE
OFFER 8,369,412 CLASS A MULTIPLE VOTING SHARES AND 1,376,926 CLASS B SUBORDINATE
VOTING SHARES (INCLUDING 1,100,000 CLASS B SUBORDINATE VOTING SHARES TO BE
ISSUED PURSUANT TO THE EXERCISE OF OUTSTANDING OPTIONS), REPRESENTING
APPROXIMATELY 74.9% OF THE OUTSTANDING CLASS A MULTIPLE VOTING SHARES AND 23.1%
OF CLASS B SUBORDINATE VOTING SHARES (74.9% AND 11.6% ON A FULLY-DILUTED BASIS).
----------------------------------------------
THE DEALER MANAGERS FOR THE OFFER ARE:
NESBITT BURNS INC. GOLDMAN SACHS CANADA
August 16, 1999
<PAGE>
(CONTINUED FROM COVER PAGE)
Shareholders or beneficial owners of Shares or Forex Convertible
Debentures who wish to accept the Offer must properly complete and duly execute
the accompanying Letter of Transmittal (YELLOW for the Shares and GREEN for the
Forex Convertible Debentures) or a manually executed facsimile thereof and
deposit it, together with certificates representing their Shares, if applicable,
at the office of Laurentian Trust of Canada Inc. (the "DEPOSITARY") shown on the
Letter of Transmittal in accordance with the instructions in the Letter of
Transmittal. Alternatively, a holder of Shares who desires to deposit Shares and
whose certificates for such Shares are not immediately available may deposit
certificates representing such Shares by following the procedures for guaranteed
delivery set forth in Section 2 of the Offer, "Manner and Time of Acceptance".
Certain Shareholders who elect to sell their Shares pursuant to the Note Option
may, under certain circumstances, achieve, for Canadian tax purposes, a partial
tax deferral of the capital gain realized on the sale of such Shares. See
Section 21 of the Circular, "Certain Income Tax Considerations".
Questions and requests for assistance may be directed to the Dealer
Managers or the Depositary and additional copies of this document, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained, without
charge, on request from those persons at their respective offices shown on the
Letter of Transmittal. Persons whose Shares or Forex Convertible Debentures are
registered in the name of a broker, investment dealer, bank, trust company or
other nominee should contact their nominee holder for assistance.
MEMBERS OF THE SOLICITING DEALER GROUP WILL BE PAID THE FEES DESCRIBED
IN SECTION 20 OF THE CIRCULAR, "FINANCIAL ADVISOR AND SOLICITING DEALER MANAGER
ARRANGEMENTS".
THE INSTALLMENT NOTES ISSUABLE PURSUANT TO THE OFFER HAVE NOT BEEN AND WILL NOT
BE REGISTERED OR OTHERWISE QUALIFIED FOR DISTRIBUTION UNDER THE LAWS OF ANY
JURISDICTION OUTSIDE OF CANADA AND, IN PARTICULAR, HAVE NOT AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933. NO INSTALLMENT NOTES
WILL BE DELIVERED TO ANY PERSON (A "NON-CANADIAN SHAREHOLDER") WHO IS, OR WHO
APPEARS TO THE OFFEROR OR THE DEPOSITARY TO BE, A RESIDENT WITHIN THE UNITED
STATES OR ANY TERRITORY OR POSSESSION THEREOF, OR WHO IS, OR WHO APPEARS TO THE
OFFEROR OR THE DEPOSITARY TO BE, A RESIDENT OF ANY OTHER FOREIGN JURISDICTION,
UNLESS IT IS ESTABLISHED TO THE SATISFACTION OF THE OFFEROR, WHOSE DETERMINATION
SHALL BE FINAL AND BINDING, THAT THE INSTALLMENT NOTES MAY BE LAWFULLY DELIVERED
IN SUCH JURISDICTION WITHOUT FURTHER ACTION BY THE OFFEROR AND WITHOUT
SUBJECTING THE OFFEROR TO ANY REGISTRATION, REPORTING OR OTHER SIMILAR
REQUIREMENT.
If a depositing Non-Canadian Shareholder has nonetheless elected to receive
Installment Notes, any Installment Note which would otherwise have been issuable
to such Non-Canadian Shareholder shall be issued to the Depositary on behalf of
such Non-Canadian Shareholder. The Depositary will sell the Installment Notes
which such Non-Canadian Shareholder would otherwise have received and, in lieu
of receiving such Installment Notes, such Non-Canadian Shareholder will receive
an amount equal to the aggregate principal amount of such Installment Notes (net
of all applicable expenses in respect of such sales and any applicable
withholding taxes). See Section 13 of the Offer, "Shareholders Not Resident in
Canada".
On August 13, 1999, the Bank of Canada noon rate of exchange was
Canadian $1.00 = United States $0.6767.
ALL DOLLAR REFERENCES IN THE OFFER AND CIRCULAR ARE REFERENCES TO
CANADIAN DOLLARS.
FORWARD LOOKING STATEMENTS
Certain statements contained in the accompanying Circular under
"Purpose of the Offer and the Offeror's Plans for Forex" and "Selected
Historical and Pro Forma Consolidated Financial Information", in addition to
certain statements contained elsewhere or incorporated in this document, are
"forward-looking statements" and are prospective. Such forward-looking
statements are subject to risks, uncertainties and other factors which could
cause actual results to differ materially from future results expressed or
implied by such forward-looking statements.
THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION TO ANY
PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. THE
OFFER IS NOT BEING MADE TO, NOR WILL DEPOSITS BE ACCEPTED FROM OR ON BEHALF OF,
HOLDERS OF SHARES IN ANY JURISDICTION IN WHICH THE MAKING OR ACCEPTANCE THEREOF
WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. HOWEVER, THE
OFFEROR OR ITS AGENTS MAY, IN ITS SOLE DISCRETION, TAKE SUCH ACTION AS THEY MAY
DEEM NECESSARY TO EXTEND THE OFFER TO HOLDER OF SHARES IN SUCH JURISDICTION.
-2-
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
SUMMARY...........................................................................................................4
DEFINITIONS.......................................................................................................9
OFFER............................................................................................................14
1. The Offer.....................................................................................................14
2. Manner and Time of Acceptance.................................................................................15
3. Conditions of the Offer.......................................................................................19
4. Extension and Variation of the Offer..........................................................................20
5. Take-up and Payment for Deposited Shares......................................................................21
6. Withdrawal of Deposited Shares and Forex Convertible Debentures...............................................22
7. Return of Deposited Shares and Forex Convertible Debentures...................................................23
8. Changes in Capitalization, Distributions and Liens............................................................23
9. Mail Service Interruption.....................................................................................24
10. Notice.......................................................................................................24
11. Acquisition of Shares Not Deposited..........................................................................25
12. Market Purchases during the Offer............................................................................25
13. Shareholders Not Resident in Canada..........................................................................25
14. Other Terms of the Offer.....................................................................................26
CIRCULAR.........................................................................................................28
1. The Offeror...................................................................................................28
2. Forex.........................................................................................................28
3. Background to the Offer.......................................................................................29
4. Arrangements with Controlling Shareholders....................................................................31
5. Arrangements with Forex.......................................................................................32
6. Purpose of the Offer and the Offeror's Plans for Forex........................................................34
7. Source of Funds...............................................................................................34
8. Selected Historical and Pro Forma Consolidated Financial Information..........................................35
9. Effect of the Offer on Market and Listings....................................................................35
10. Price Range and Trading Volume of Class A Multiple Voting Shares and Class B Subordinate Voting Shares.......36
11. Acquisition of Shares Not Deposited..........................................................................36
12. Regulatory Matters...........................................................................................40
13. Holdings of Securities of Forex..............................................................................41
14. Trading in Securities of Forex...............................................................................41
15. Commitments to Acquire Securities of Forex...................................................................41
16. Arrangements, Pre-Acquisition Agreements or Understandings...................................................41
17. Description of the Installment Notes.........................................................................42
18. Acceptance of the Offer......................................................................................47
19. Depositary...................................................................................................47
20. Financial Advisor and Soliciting Dealer Manager Arrangements.................................................48
21. Certain Income Tax Considerations............................................................................48
22. Expenses of the Offer........................................................................................52
23. Statutory Rights.............................................................................................52
CONSENTS.........................................................................................................53
APPROVAL AND CERTIFICATE.........................................................................................55
SCHEDULE I - INFORMATION CONCERNING
LOUISIANA-PACIFIC CORPORATION.........................................................
SCHEDULE II - LOUISIANA-PACIFIC CORPORATION -
HISTORICAL CONSOLIDATED FINANCIAL STATEMENTS............................................
SCHEDULE III - LOUISIANA-PACIFIC CORPORATION -
PRO FORMA FINANCIAL DATA................................................................
SCHEDULE IV - LOUISIANA-PACIFIC ACQUISITION INC. - BALANCE SHEET......................................
</TABLE>
-3-
<PAGE>
SUMMARY
THE FOLLOWING IS A SUMMARY ONLY AND IS QUALIFIED IN ITS ENTIRETY BY THE
DETAILED PROVISIONS CONTAINED IN THE OFFER AND THE CIRCULAR. THE INFORMATION
CONCERNING FOREX CONTAINED IN THE OFFER AND THE CIRCULAR HAS BEEN TAKEN FROM OR
IS BASED UPON PUBLICLY AVAILABLE DOCUMENTS OR RECORDS ON FILE WITH CANADIAN
SECURITIES REGULATORY AUTHORITIES AND OTHER PUBLIC SOURCES AT THE TIME OF THE
OFFER. SHAREHOLDERS ARE URGED TO READ THE OFFER AND THE CIRCULAR IN THEIR
ENTIRETY. CERTAIN TERMS USED IN THIS SUMMARY ARE DEFINED UNDER "DEFINITIONS".
THE OFFER
The Offeror is offering, upon the terms and subject to the conditions
of the Offer, to purchase all of the issued and outstanding Class A Multiple
Voting Shares and Class B Subordinate Voting Shares (including the Class B
Subordinate Voting Shares issuable upon the exercise of outstanding options and
conversion of Forex Convertible Debentures) for a consideration per Share, at
the option of the Shareholder, of:
(a) $33.00 in cash payable on the Effective Date (the "CASH OPTION");
or
(b) $33.00 in cash payable in five installments, together with
interest as described herein (the "NOTE OPTION"); or
(c) any combination of the Cash Option and the Note Option.
SHAREHOLDERS WHO DO NOT PROPERLY ELECT AN OPTION WITH RESPECT TO ANY
SHARES DEPOSITED BY THEM PURSUANT TO THE OFFER WILL BE DEEMED TO HAVE ELECTED
THE CASH OPTION IN RESPECT OF SUCH SHARES.
INSTALLMENT NOTES
The Shareholders have the option to sell all or part of their Shares
for $6.60 in cash payable on the Effective Date and $6.60 in cash payable at
each of the first, second, third and fourth anniversary of the Effective Date,
together with interest as described herein, with the right to receive the
payments due after the Effective Date being evidenced by an Installment Note.
The Installment Notes will bear interest during each Interest Period at a rate
per annum determined by the Offeror to be equal to the Canadian LIBOR Rate plus
the Margin. Such interest will be payable quarterly in arrears. The Installment
Notes will be unsecured obligations of the Offeror but will be unconditionally
guaranteed by Louisiana-Pacific.
The principal amount of any Installment Note which would not otherwise
be an integral multiple of $1,000 will be rounded down to the nearest integral
multiple of $1,000, and the amount of cash payable to the recipient thereof on
the Effective Date will be increased by a corresponding amount. The Installment
Notes will not be listed or posted for trading on any stock exchange.
LOCK-UP AGREEMENT
Pursuant to the Amended and Restated Lock-up Agreement entered into on
August 12, 1999, Mr. Jean-Jacques Cossette, the Cossette Family and Members of
Forex Senior Management have agreed to deposit under the Offer and, except as
provided in the Amended and Restated Lock-up Agreement, not withdraw, 8,369,412
Class A Multiple Voting Shares and 1,376,926 Class B Subordinate Voting Shares
(including 1,100,000 Class B Subordinate voting Shares to be issued pursuant to
the exercise of outstanding options), representing approximately 74.9% of the
outstanding Class A Multiple Voting Shares (74.9% on a fully diluted basis) and
23.1% of the outstanding Class B Subordinate Voting Shares (11.6% on a
fully-diluted basis).
-4-
<PAGE>
ARRANGEMENTS WITH FOREX
On August 12, 1999, Louisiana-Pacific entered into the Amended and
Restated Support Agreement with Forex which provides, among other things, that
Louisiana-Pacific will, directly or indirectly, make the Offer and pursuant to
which Forex represented and confirmed to Louisiana-Pacific, among other things,
that Forex's board of directors, upon consultation with its financial and legal
advisors, had determined that the Offer is fair to the Shareholders, that the
Offer is in the best interest of Forex and the Shareholders and that its board
of directors had decided to recommend that the Shareholders and beneficial
owners of Forex Convertible Debentures accept the Offer. The Amended and
Restated Support Agreement also provides that Forex will not, INTER ALIA,
solicit, initiate or knowingly encourage or facilitate the initiation of any
inquiries or proposals regarding an Acquisition Proposal or participate in any
discussions or negotiations regarding any Acquisition Proposal, provided,
however, that, subject to the satisfaction of certain conditions, the board of
directors of Forex is permitted to consider, negotiate, approve, recommend to
the Shareholders or enter into an agreement in respect of an unsolicited BONA
FIDE written Acquisition Proposal that the board of directors of Forex
determines in good faith would result in a transaction more favourable to the
Shareholders than the Offer (a "SUPERIOR PROPOSAL").
Before Forex accepts, approves, recommends or enters into any agreement
in respect of an Acquisition Proposal on the basis that it would constitute a
Superior Proposal, Forex must notify the Offeror of its BONA fide intention to
do so and provide the Offeror with a copy of the documentation relating to such
Acquisition Proposal, whereupon the Offeror will have five business days to
offer, if it so chooses, to amend the terms of the Amended and Restated Support
Agreement. If the Offeror timely offers to amend the terms of the Amended and
Restated Support Agreement, Forex's board of directors will be obligated to
consider the Offeror's offer in good faith. If Forex's board of directors
determines that the Offeror's offer, upon acceptance, would result in the
Acquisition Proposal not being a Superior Proposal, Forex will be required to
enter into an amended agreement reflecting the Offeror's offer.
If the Amended and Restated Support Agreement is terminated as a result
of the board of directors of Forex approving or recommending a Superior
Proposal, and in certain other circumstances, Forex will be required to pay to
the Offeror the sum of $29.8 million.
TIME FOR ACCEPTANCE
The Offer is open for acceptance until 5:00 p.m., Montreal time, on
September 9, 1999 subject to certain rights of extension and withdrawal.
CONDITIONS OF THE OFFER
The Offeror reserves the right to withdraw the Offer and not take up
and pay for any Shares deposited under the Offer unless the conditions described
in Section 3 of the Offer, "Conditions of the Offer", are satisfied or waived by
the Offeror, including, without limitation, the valid deposit of not less than
66 2/3% of the Class A Multiple Voting Shares and not less than 66 2/3% of the
Class B Subordinate Voting Shares (calculated on a fully-diluted basis), which
Shares shall not have been withdrawn at the Expiry Time.
THE OFFEROR AND LOUISIANA-PACIFIC
The Offeror is a wholly-owned indirect subsidiary of Louisiana-Pacific.
The Offeror was incorporated on July 15, 1999 under the laws of Quebec for the
purpose of making the Offer and has not otherwise carried on any business
activity.
Louisiana-Pacific is a major building products firm, operating
approximately 83 facilities in the United States, Canada and Ireland.
Louisiana-Pacific's principal products are OSB, plywood (OSB and plywood
constitute structural panel products), lumber, engineered wood products,
exterior siding, industrial panel products, specialty products and pulp. With
the exception of pulp, Louisiana-Pacific's products are used primarily in the
construction, repair, remodeling and manufacturing of traditional and
manufactured housing. Louisiana-Pacific distributes its building products
primarily through third-party distributors and home centres.
-5-
<PAGE>
Louisiana-Pacific was incorporated in 1972 under the laws of Delaware.
Louisiana-Pacific's executive offices are located at 111 S.W. Fifth Avenue,
Portland, Oregon 97204.
As of the date hereof, neither Louisiana-Pacific nor the Offeror
beneficially owns, directly or indirectly, any Shares.
FOREX
Forex is Canada's leading producer of OSB and the fourth largest in
North America.
Forex owns and operates three modern OSB plants for a total annual
production capacity of 1,450,000 cubic metres of OSB. Those mills are all
located in the Province of Quebec: one in Saint-Michel-des-Saints, one in
Chambord and one in Maniwaki.
Forex also operates in the Province of Quebec one softwood sawmill
located in Saint-Michel-des-Saints with an annual production capacity of
90,000,000 board feet and one hardwood sawmill located in Lac-Bouchette (near
Chambord) with an annual production capacity of 32,000,000 board feet.
Each OSB and sawmill plant benefits from a 25-year timber supply and
forest management agreement with the Government of Quebec, which is renewable
every five years for another 25-year term. These agreements allow Forex to enjoy
an annual aggregate wood supply of approximately 2.5 million cubic metres,
managed on a sustainable basis.
Forex has 750 employees and also uses the services of some 1,500
forestry and transportation contractors.
Through its Heli Forex and CRL Technologies Divisions, Forex is also
active in air transport and avionics.
PURPOSE OF THE OFFER
The purpose of the Offer is to enable the Offeror to acquire all the
Class A Multiple Voting Shares and Class B Subordinate Voting Shares. See
Section 6 of the Circular, "Purpose of the Offer and the Offeror's Plans for
Forex".
MANNER OF ACCEPTANCE
The Offer is made only for the Shares and is not made for any option or
other rights, if any, to purchase or to receive in exchange Shares. Any holder
of such options or other rights (including Forex Convertible Debentures), who
wishes to accept the Offer must, to the extent permitted thereby and hereby,
exercise the options or rights in order to obtain certificates representing
Shares and deposit such Shares in accordance with the Offer; provided, however,
that Forex Convertible Debentures may be deposited for conversion conditional
upon the Offeror taking up and paying for the Shares deposited under the Offer.
A Shareholder or beneficial owner of Forex Convertible Debentures
wishing to accept the Offer must deposit the certificate(s) representing its
Shares, if applicable, together with a properly completed Letter of Transmittal
(YELLOW for the Shares and GREEN for the Forex Convertible Debentures) or a
manually signed facsimile thereof and all other documents required by the Letter
of Transmittal, at the office of the Depositary specified in the Letter of
Transmittal not later than the Expiry Time. The Letter of Transmittal for the
Forex Convertible Debentures provides that the conversion of the Forex
Convertible Debentures is expressly subject to the Offeror taking up and paying
for the Shares deposited under the Offer. Instructions are contained in the
Letter of Transmittal which accompanies the Offer. Persons whose Shares or Forex
Convertible Debentures are registered in the name of a broker, investment
dealer, bank, trust company or other nominee must contact their nominee holder
to arrange for the deposit of their Shares or Forex Convertible Debentures.
-6-
<PAGE>
In lieu of depositing certificates as aforesaid, Shares may be
deposited in accordance with the procedures for guaranteed delivery, as set
forth in Section 2 of the Offer, "Manner and Time of Acceptance".
Alternatively, a Shareholder who owns Shares indirectly through a
Special Holdco may accept the Offer by selling to the Offeror all of the
outstanding shares of such Special Holdco in accordance with the procedure
described in Section 2 of the Offer, "Manner and Time of Acceptance".
PAYMENT
Subject to the terms and conditions of the Offer, the Offeror will take
up and pay for the Shares validly deposited under the Offer and not withdrawn
within the time periods prescribed by applicable securities laws. The cash
portion of the consideration offered is payable in Canadian dollars. See Section
5 of the Offer, "Take-up and Payment for Deposited Shares".
WITHDRAWAL OF DEPOSITED SHARES
All deposits of Shares or Forex Convertible Debentures are irrevocable,
except as provided in Section 6 of the Offer, "Withdrawal of Deposited Shares
and Forex Convertible Debentures".
ACQUISITION OF SHARES NOT DEPOSITED
The Offeror currently intends to acquire the Class A Multiple Voting
Shares and the Class B Subordinate Voting Shares not deposited under the Offer
pursuant to the compulsory acquisition provisions of Section 51 of the COMPANIES
ACT (Quebec) if at least 9/10 of the outstanding Class A Multiple Voting Shares
or 9/10 of the outstanding Class B Subordinate Voting Shares are deposited under
the Offer and not withdrawn. If the Offeror takes up and pays for Shares validly
deposited under the Offer and acquires less than 9/10 of the outstanding Class A
Multiple Voting Shares or Class B Subordinate Voting Shares or the compulsory
acquisition provisions of the COMPANIES ACT (Quebec) are otherwise unavailable,
the Offeror currently intends to consider other means of acquiring, directly or
indirectly, all of the Shares of Forex available in accordance with applicable
law, including a Subsequent Acquisition Transaction. Notwithstanding the fact
that the Compulsory Acquisition provisions of the COMPANIES ACT (Quebec) may be
available, the Offeror may nonetheless elect to propose a Subsequent Acquisition
Transaction. See Section 11 of the Circular, "Acquisition of Shares Not
Deposited".
SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following table sets out certain unaudited historical consolidated
financial information for Louisiana-Pacific as at and for the six months ended
June 30, 1999 and certain audited historical consolidated financial information
and unaudited pro forma consolidated financial information for Louisiana-Pacific
as at and for the year ended December 31, 1998. The historical consolidated
financial information is extracted from and should be read in conjunction with
the financial statements of Louisiana-Pacific and accompanying notes set forth
in Schedule II to the Circular. The pro forma consolidated financial information
is extracted from and should be read in conjunction with the pro forma financial
data of Louisiana-Pacific and accompanying notes set forth in Schedule III to
the Circular. The amounts in the following table have been converted to Canadian
Generally Accepted Accounting Principles.
<TABLE>
<CAPTION>
PRO FORMA
SIX MONTHS ENDED YEAR ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998 DECEMBER 31, 1998
---------------- ----------------- -----------------
(in million US$, except per share amounts)
<S> <C> <C> <C>
Total revenue............................. $ 1,368.6 $ 2,297.1 $ 2,452.3
Net income (loss)......................... 112.1 2.0 (26.3)
Net income (loss) per share - basic and diluted 1.05 0.02 (0.24)
Total Assets.............................. 2,844.4 2,560.2 3,226.7
Long-term debt............................ 578.1 459.8 1,085.5
Shareholders' equity...................... 1,355.8 1,269.9 1,269.9
Cash flow from operations................. 211.3 123.0 N/A
</TABLE>
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<PAGE>
CERTAIN INCOME TAX CONSIDERATIONS
The sale of Shares under the Offer will be a taxable disposition for
Canadian federal income tax purposes. In general, Shareholders will realize a
capital gain (or capital loss) to the extent that the proceeds of disposition
received for the Shares, net of disposition costs, exceed (or are less than) the
adjusted cost base thereof. Certain Shareholders who elect to sell their Shares
pursuant to the Note Option may, under certain circumstances, achieve, for
Canadian tax purposes, a partial tax deferral of the capital gain realized on
the sale of such Shares. See Section 21 of the Circular, "Certain Income Tax
Considerations".
DEPOSITARY
Laurentian Trust of Canada Inc. is acting as Depositary under the
Offer. The Depositary will receive deposits of certificates representing the
Shares and Letter of Transmittal for Shares and Forex Convertible Debentures at
the office specified in the Letter of Transmittal. The Depositary will also
receive Notices of Guaranteed Delivery at its Montreal office. The Depositary is
also responsible for giving notices, if required, and for making payment on
behalf of the Offeror for all Shares purchased by the Offeror under the Offer.
See Section 19 of the Circular, "Depositary".
FINANCIAL ADVISOR, DEALER MANAGERS AND SOLICITING DEALER GROUP
Goldman, Sachs & Co. has been retained to act as exclusive financial
advisor to Louisiana-Pacific in connection with the acquisition of Forex.
Nesbitt Burns Inc. and Goldman Sachs Canada are the Dealer Managers in Canada in
connection with the Offer. In addition, Nesbitt Burns Inc. will form a
Soliciting Dealer Group comprising members of the Investment Dealer Association
of Canada and members of the TSE and ME to solicit acceptances in Canada of the
Offer.
No brokerage fees or commissions will be payable by any holder who
deposits Shares or Forex Convertible Debentures directly with the Depositary or
who uses the services of the Dealer Managers or a member of the Soliciting
Dealer Group to accept the Offer. Shareholders or beneficial owners of Forex
Convertible Debentures should contact the Depositary, the Dealer Managers or a
broker or investment dealer for assistance in accepting the Offer and in
depositing Shares or Forex Convertible Debentures with the Depositary. See
Section 20 of the Circular, "Financial Advisor and Soliciting Dealer Manager
Arrangements".
-8-
<PAGE>
DEFINITIONS
IN THE OFFER AND THE CIRCULAR, UNLESS THE SUBJECT MATTER OR CONTEXT IS
INCONSISTENT THEREWITH, THE FOLLOWING TERMS SHALL HAVE THE MEANINGS SET FORTH
BELOW.
"ACCEPTANCE ALTERNATIVE" means the option of a holder of Shares held indirectly
through one or more Special Holdcos to participate in the Offer by depositing
(in lieu of such Shares) all of such person's Special Holdco Shares to the
Offer, for a consideration identical to the consideration that would have been
received if such Shares had been deposited directly under the Offer.
"ACQUISITION PROPOSAL" means any merger, amalgamation, take-over bid, sale of
material assets (or any lease, long-term supply agreement or other arrangement
having the same economic effect as a sale), any sale of a material number of
shares or rights or interests therein or thereto or similar transactions
involving Forex or any Subsidiaries, or a proposal to do so, excluding the
Offer.
"AFFILIATE" has the meaning ascribed thereto in the SECURITIES ACT (Quebec).
"AGENCY INDENTURE" means the Agency Indenture made as of March 12, 1997 between
Forex, Levesque Beaubien Geoffrion Inc. and Laurentian Trust of Canada Inc., as
agent, and providing for the issue of up to $33 million, 8% Convertible
Unsecured Subordinated Debentures of Forex;
"AMENDED AND RESTATED LOCK-UP AGREEMENT" means the agreement dated August 12,
1999 entered into by Louisiana-Pacific with Mr. Jean-Jacques Cossette, the
Cossette Family and Members of Forex Senior Management pursuant to which
Louisiana-Pacific agreed to cause the Offeror to make the Offer and Mr.
Jean-Jacques Cossette, the Cossette Family and Members of Forex Senior
Management agreed to tender the Lock-up Shares in acceptance of the Offer.
"AMENDED AND RESTATED SUPPORT AGREEMENT" means the agreement dated August 12,
1999 entered into between Forex and Louisiana-Pacific described under Section 5
of the Circular, "Arrangements with Forex".
"ASSOCIATE" has the meaning ascribed thereto in the SECURITIES ACT (Quebec).
"BREAK FEE EVENT" means an event which shall occur if the board of directors of
Forex shall withdraw or modify in a manner adverse to the Offeror its approval
or recommendation of the Offer, or approve or recommend any Superior Proposal,
or determine that any Acquisition Proposal is a Superior Proposal, or shall fail
to reaffirm such approval or recommendation upon the Offeror's request, or take
or resolve to take any of the foregoing actions.
"BUSINESS DAY" means any day other than a Saturday, Sunday or a day on which
banking institutions in Montreal, Quebec are authorized or obligated by law to
close.
"CAAFS" means the timber supply and forest management agreements between Forex
and the Ministry of Natural Resources (Quebec) pursuant to which Forex obtains
substantial wood.
"CANADIAN LIBOR RATE" means, in respect of each Interest Period, the London
Interbank market rate of interest for deposits in Canadian dollars in amounts
comparable to that of the aggregate principal amount of the Installment Notes
for a 90-day period which appears on Telerate Page 3740 of the Dow Jones
Telerate Service (or such other page as may be designated as a replacement page
for such deposits) as of 11:00 a.m. (London time) two business days in London
before the first day of such Interest Period; provided that if such rate is not
available as of such time, then the rate for such Interest Period shall mean a
rate determined by the Offeror, acting reasonably, that most closely
approximates such rate.
"CASH OPTION" means the option under the Offer to receive $33.00 in cash per
Share on the Effective Date.
"CIRCULAR" means the offering circular accompanying the Offer and forming part
hereof.
-9-
<PAGE>
"CLASS A MULTIPLE VOTING SHARES" means the Class A Multiple Voting Shares in the
share capital of Forex, as currently constituted.
"CLASS B SUBORDINATE VOTING SHARES" means the Class B Subordinate Voting Shares
in the share capital of Forex, including the Class B Subordinate Voting Shares
issuable upon the exercise of outstanding options and conversion of Forex
Convertible Debentures.
"COMMISSIONER" means the Commissioner of Competition appointed under the
COMPETITION ACT (Canada).
"COMPULSORY ACQUISITION" has the meaning ascribed thereto in Section 11 of the
Circular, "Acquisition of Shares Not Deposited - Compulsory Acquisition".
"COSSETTE FAMILY" means, collectively, the individual members of the Cossette
family and/or their holding companies who entered into the Amended and Restated
Lock-up Agreement, other than Mr. Jean-Jacques Cossette, being: Viviane
Cossette, Fernand Cossette, Marcel Cossette, 2954-7635 Quebec Inc. and 9008-6760
Quebec Inc.
"DEALER MANAGERS" means Nesbitt Burns Inc. and Goldman Sachs Canada.
"DEPOSITARY" means Laurentian Trust of Canada Inc. at the office specified in
the Letter of Transmittal.
"EFFECTIVE DATE" has the meaning ascribed thereto in Section 2 of the Offer,
"Manner and Time of Acceptance -
Power of Attorney".
"ELIGIBLE INSTITUTION" means a Canadian chartered bank, a trust company in
Canada or a member firm of the ME or the TSE.
"EXPIRY DATE" means September 9, 1999 or such later date or dates, no later than
December 31, 1999, as may be fixed by the Offeror from time to time pursuant to
Section 4 of the Offer, "Extension and Variation of the Offer".
"EXPIRY TIME" means 5:00 p.m., Montreal time, on the Expiry Date.
"FOREX" means Le Groupe Forex Inc., a company incorporated under Part 1A of the
COMPANIES ACT (Quebec).
"FOREX CONVERTIBLE DEBENTURES" means the 8% convertible unsecured subordinated
debentures issued by Forex under the Agency Indenture.
"FOREX CONVERTIBLE DEBENTURE CONVERSION RIGHTS" means the rights attaching to
the Forex Convertible Debentures entitling the beneficial owners thereof to
convert such Forex Convertible Debentures into Shares in accordance with the
terms thereof.
"FOREX DIRECTORS' CIRCULAR" means the circular dated August 16, 1999 of the
board of directors of Forex mailed contemporaneously with the Offer.
"FULLY-DILUTED BASIS" means, with respect to the number of outstanding Class A
Multiple Voting Shares or Class B Subordinate Voting Shares at any time, such
number of outstanding Class A Multiple Voting Shares or Class B Subordinate
Voting Shares calculated assuming that all outstanding options and other rights
(including the Forex Convertible Debentures) to purchase or receive in exchange
Class A Multiple Voting Shares or Class B Subordinate Voting Shares are
exercised.
"GOING PRIVATE TRANSACTION" unless otherwise defined has the meaning ascribed
thereto in Policy 9.1 and Policy Q-27.
-10-
<PAGE>
"INDEPENDENT COMMITTEE" means the independent committee of the board of
directors of Forex formed for the purposes of, among other things, reviewing the
Offer and making representations to the board of directors of Forex in light
thereof.
"INSTALLMENT NOTES" has the meaning ascribed thereto in Section 17 of the
Circular, "Description of the Installment Notes".
"INTEREST PERIOD" means initially, the period commencing on the Expiry Date and
ending on December 31, 1999, and thereafter each calendar quarter (or shorter
period in the event of repayment of the Installment Notes); provided that
interest shall accrue for the first day of each Interest Period and each day
thereafter up to but (provided that interest is timely paid) excluding the last
day of such Interest Period.
"JEAN-JACQUES COSSETTE" means collectively, Mr. Jean-Jacques Cossette and his
holding companies, Placements AI-VI Inc. and 2330-3076 Quebec Inc., who entered
into the Amended and Restated Lock-up Agreement.
"LETTER OF TRANSMITTAL" means a Letter of Transmittal in the form (YELLOW for
the Shares and GREEN for the Forex Convertible Debentures) accompanying the
Offer and the Circular, or a facsimile thereof.
"LOCK-UP AGREEMENT" means the agreement dated June 25, 1999, as amended on July
21, 1999 and on August 2, 1999, entered into by Louisiana-Pacific with Mr.
Jean-Jacques Cossette, the Cossette Family and Members of Forex Senior
Management with respect to an offer by the Offeror to purchase the Shares for
$26.00 per Share on June 25, 1999 and $31.00 per Share on August 2, 1999 but
otherwise providing for substantially the same terms and conditions as the
Amended and Restated Lock-up Agreement.
"LOCK-UP SHARES" means the 8,369,412 Class A Multiple Voting Shares (being
approximately 74.9% of the outstanding Class A Multiple Voting shares on a fully
diluted basis) and 1,376,926 Class B Subordinate Voting Shares, including
1,100,000 Class B Subordinate Voting Shares to be issued pursuant to the
exercise of outstanding options owned by Mr. Jean-Jacques Cossette, the Cossette
Family and Members of Forex Senior Management (being approximately 11.6% of the
outstanding Class B Subordinate Voting Shares on a fully diluted basis), which
are subject to the Amended and Restated Lock-up Agreement.
"LOUISIANA-PACIFIC" means Louisiana-Pacific Corporation, a company incorporated
under the laws of Delaware.
"MARGIN" means, in respect of each Interest Period, a rate per annum equal to
the rate set forth below opposite the applicable rating assigned to
Louisiana-Pacific's long-term debt by Moody's Investors Services Inc. or
Standard & Poor's Corporation as in effect two business days before the first
day of such Interest Period; provided that (i) if ratings assigned by both
Moody's Investors Services Inc. and Standard & Poor's Corporation are in effect
on the relevant date and would result in two different Margins, the lower of
such Margins shall be used, (ii) the Margin shall in no event be less than 0.25%
or greater than 1.25%, and (iii) if no rating assigned by Moody's Investors
Services Inc. or Standard & Poor's Corporation is in effect on the relevant
date, the Margin shall be 0.75%.
<TABLE>
<CAPTION>
MOODY'S S & P MARGIN
------- ----- ------
<S> <C> <C>
A2 A 0.25%
A3 A- 0.50%
Baa1 BBB+ 0.75%
Baa2 BBB 1.00%
Baa3 BBB- 1.25%
</TABLE>
"ME" means the Montreal Exchange.
"MEMBERS OF FOREX SENIOR MANAGEMENT" means Messrs. Andre J. Lascelle, Pierre
Moreau and Normand Farrell.
"MINIMUM CONDITION" has the meaning ascribed thereto in Section 3 of the Offer,
"Conditions of the Offer".
-11-
<PAGE>
"NON-CANADIAN SHAREHOLDERS" means any Shareholder who is, or who appears to the
Offeror or to the Depositary to be, a resident within the United States or any
territory or possession thereof or any Shareholder who is, or who appears to the
Offeror or the Depositary to be, a resident of any other foreign jurisdiction,
unless it is established to the satisfaction of the Offeror, whose determination
shall be final and binding , that any Installment Notes issuable to such
Shareholder pursuant to the Offer may be lawfully delivered in such jurisdiction
without further action by the Offeror and without subjecting the Offeror to any
registration, reporting or other similar requirement.
"NOTE OPTION" means the option under the Offer to receive $6.60 in cash payable
on the Effective Date and $6.60 in cash payable at each of the first, second,
third and fourth anniversary of the Effective Date, together with interest as
described herein, with the right to receive the payments due after the Effective
Date being evidenced by an Installment Note.
"NOTICE OF GUARANTEED DELIVERY" means a Notice of Guaranteed Delivery in the
form accompanying the Offer and the Circular, or a facsimile thereof.
"OFFER" means the Offer by Louisiana-Pacific to purchase all of the Class A
Multiple Voting Shares and all of the Class B Subordinate Voting Shares
(including the Class B Subordinate Voting Shares issuable upon the exercise of
outstanding options and conversion of Forex Convertible Debentures) made hereby,
the terms and conditions of which are set forth herein, in the Letter of
Transmittal and in the Notice of Guaranteed Delivery.
"OFFEROR" means Louisiana-Pacific Acquisition Inc., a company incorporated under
the Part 1A of the COMPANIES ACT (Quebec) and a wholly-owned indirect subsidiary
of Louisiana-Pacific.
"OFFER PERIOD" means the period commencing on August 16, 1999 and ending at the
Expiry Time.
"OPTIONS" means the Cash Option and the Note Option and "OPTION" means any one
of them.
"OSB" means oriented strand board.
"OSC" means the Ontario Securities Commission.
"OTHER SECURITIES" has the meaning ascribed in Section 2 of the Offer, "Manner
and Time of Acceptance - Power of Attorney".
"PERSON" includes an individual, body corporate, partnership, syndicate or other
form of unincorporated association.
"POLICY 9.1" means Policy Statement No. 9.1 of the OSC.
"POLICY Q-27" means Policy Q-27 of the QSC.
"PUBLIC CORPORATION" has the meaning ascribed thereto in the Tax Act.
"PURCHASED SECURITIES" has the meaning ascribed thereto in Section 2 of the
Offer, "Manner and Time of Acceptance - Power of Attorney".
"QSC" means the Commission des valeurs mobilieres du Quebec.
"SHAREHOLDERS" means the holders of Class A Multiple Voting Shares or Class B
Subordinate Voting Shares.
"SHARES" means, collectively, the Class A Multiple Voting Shares and the Class B
Subordinate Voting Shares of Forex and includes a reference to either class
where the context requires.
"SOLICITING DEALER GROUP" means the Soliciting Dealer Group to be formed by
Nesbitt Burns Inc. for the purpose of soliciting acceptances of the Offer from
Shareholders.
-12-
<PAGE>
"SPECIAL HOLDCO" means a single-purpose holding company, incorporated under the
laws of Quebec which is a resident of Canada for the purposes of the Tax Act,
that owns Shares and never had any assets other than Shares and never had any
liabilities whatsoever.
"SPECIAL HOLDCO SHARES" means the shares of a Special Holdco.
"SUBSEQUENT ACQUISITION TRANSACTION" has the meaning ascribed thereto in Section
11 of the Circular, "Acquisition of Shares Not Deposited - Subsequent
Acquisition Transaction".
"SUBSIDIARY" has the meaning ascribed thereto in the SECURITIES ACT (Quebec).
"SUPERIOR PROPOSAL" has the meaning ascribed thereto in Section 5 of the
Circular, "Arrangements with Forex".
"SUPPORT AGREEMENT" means the agreement dated June 25, 1999, as amended on July
21, 1999 and on August 2, 1999, entered into between Forex and Louisiana-Pacific
with respect to an offer by the Offeror to purchase the Shares for $26.00 per
Share on June 25, 1999 and $31.00 per Share on August 2, 1999 but otherwise
providing for substantially the same terms and conditions as the Amended and
Restated Support Agreement.
"TAX ACT" means the INCOME TAX ACT (Canada), as amended.
"TENDER AGREEMENT" has the meaning ascribed thereto in Section 2 of the Offer,
"Manner and Time of Acceptance".
"TSE" means The Toronto Stock Exchange.
-13-
<PAGE>
OFFER
TO: THE HOLDERS OF CLASS A MULTIPLE VOTING SHARES OF FOREX AND
THE HOLDERS OF CLASS B SUBORDINATE VOTING SHARES OF FOREX
1. THE OFFER
The Offeror hereby offers to purchase, during the Offer Period and on
the terms and subject to the conditions hereinafter specified, all of the issued
and outstanding Shares, including any Class B Subordinate Voting Shares which
may become outstanding on the exercise of outstanding options or conversion of
Forex Convertible Debentures prior to the Expiry Time, for a consideration per
Share, at the option of the Shareholder, of:
(a) $33.00 in cash payable on the Effective Date (the "CASH OPTION");
or
(b) $33.00 in cash payable in five installments, together with
interest as described herein (the "NOTE OPTION"); or
(c) any combination of the Cash Option and the Note Option.
The Shareholders have the option to sell all or part of their Shares
for $6.60 in cash payable on the Effective Date and $6.60 in cash payable at
each of the first, second, third and fourth anniversary of the Effective Date,
together with interest as described herein, with the right to receive the
payments due after the Effective Date being evidenced by an Installment Note.
The Installment Notes will bear interest during each Interest Period at a rate
per annum determined by the Offeror to be equal to the Canadian LIBOR rate plus
the Margin. Such interest will be payable quarterly in arrears. The Installment
Notes will be unsecured obligations of the Offeror but will be unconditionally
guaranteed by Louisiana-Pacific.
The principal amount of any Installment Note which would not otherwise
be an integral multiple of $1,000 will be rounded down to the nearest integral
multiple of $1,000, and the amount of cash payable to the recipient thereof on
the Effective Date will be increased by a corresponding amount. The Installment
Notes will not be listed or posted for trading on any stock exchange.
Shareholders or beneficial owners of Forex Convertible Debentures
wishing to accept the Offer may elect any Option with respect to the Shares or
Forex Convertible Debentures deposited by them pursuant to the Offer. The Letter
of Transmittal (YELLOW for the Shares and GREEN for the Forex Convertible
Debentures) and Notice of Guaranteed Delivery accompanying this Offer and
Circular set forth the manner in which such election may be made. Shareholders
or beneficial owners of Forex Convertible Debentures who otherwise validly
accept the Offer but fail to make such election or to properly make such
election in the Letter of Transmittal or in a Notice of Guaranteed Delivery
shall be deemed to have elected to receive the Cash Option for each of the
Shares or Forex Convertible Debentures which they have deposited.
The Offer is made only for the Shares and is not made for any options
or other rights, if any, to purchase or to receive in exchange Shares. Any
holder of such options or other rights (including Forex Convertible Debentures),
who wishes to accept the Offer must, to the extent permitted thereby and hereby,
exercise the options or rights in order to obtain certificates representing
Shares and deposit such Shares in accordance with the Offer; provided, however,
that Forex Convertible Debentures may be deposited for conversion conditional
upon the Offeror taking up and paying for the Shares deposited under the Offer.
Beneficial owners of Forex Convertible Debentures wishing to accept the
Offer must first convert their Forex Convertible Debentures into Class B
Subordinate Voting Shares by completing Part I of the GREEN Letter of
Transmittal. Pursuant to the terms of the said Letter of Transmittal, a
beneficial owner of Forex Convertible Debentures executing and delivering same
in accordance with the provisions of the Offer conditionally converts his Forex
Convertible Debentures into Class B Subordinate Voting Shares (Part I) and
deposits under the Offer the
-14-
<PAGE>
Class B Subordinate Voting Shares to be issued as a result of the conversion of
the Forex Convertible Debentures (Part II). Such Letter of Transmittal provides
that the conversion is expressly conditional upon the Offeror taking up and
paying for the Shares deposited under the Offer.
Depositing Shareholders and beneficial owners of Forex Convertible
Debentures will not be obliged to pay brokerage fees or commissions if they
accept the Offer by depositing their Shares or Forex Convertible Debentures
directly with the Depositary or if they use the services of the Dealer Managers
or a member of the Soliciting Dealer Group to accept the Offer. See Section 20
of the Circular, "Financial Advisor and Soliciting Dealer Manager Arrangements".
The accompanying Circular, Letter of Transmittal and Notice of
Guaranteed Delivery are incorporated into and form part of the Offer and contain
important information which should be read carefully before making a decision
with respect to the Offer.
2. MANNER AND TIME OF ACCEPTANCE
The Offer is open for acceptance until the Expiry Time or until such
time and date to which the Offer may be extended by the Offeror at its sole
discretion.
ACCEPTANCE OF OFFER
The Offer may be accepted by delivering to the Depositary at the office
mentioned in the Letter of Transmittal so as to arrive there not later than the
Expiry Time:
(a) the certificate or certificates representing the Shares, if
applicable, in respect of which the Offer is being accepted;
(b) the Letter of Transmittal, or a manually signed facsimile thereof,
properly completed and duly executed as required by the
instructions set out in the Letter of Transmittal; and
(c) all other documents required by the instructions set out in the
Letter of Transmittal.
In lieu of depositing certificates, Shares may be deposited in
compliance with the procedures for guaranteed delivery as set forth below.
Except as provided in the Letter of Transmittal, the signature on the
Letter of Transmittal must be guaranteed by an Eligible Institution. If a Letter
of Transmittal for the Shares is executed by a person other than the registered
holder of the certificate(s) deposited therewith, the certificate(s) must be
endorsed or be accompanied by an appropriate securities transfer power duly and
properly completed by the registered holder, with the signature on the
endorsement panel or securities transfer power guaranteed by an Eligible
Institution.
PROCEDURE FOR GUARANTEED DELIVERY
If a Shareholder wishes to accept the Offer and either (i) the
certificates representing the Shares are not immediately available, or (ii) such
Shareholder is not able to deliver the certificates and all other required
documents to the Depositary prior to the Expiry Time, such Shares may
nevertheless be deposited pursuant to the Offer provided that all of the
following conditions are met:
(a) a properly completed and duly executed Notice of Guaranteed
Delivery, or a manually signed facsimile thereof, is received by
the Depositary at its Montreal office set forth in the Notice of
Guaranteed Delivery, not later than the Expiry Time;
(b) such deposit is made by or through an Eligible Institution; and
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(c) the certificates representing deposited Shares, in proper form for
transfer (as described below) together with a properly completed
and duly executed Letter of Transmittal, or a manually signed
facsimile thereof, relating to the Shares and all other documents
required by the Letter of Transmittal, are received by the
Depositary at the same office at which the Notice of Guaranteed
Delivery was originally deposited on or before 4:30 p.m. (local
time) on the third trading day on the ME after the Expiry Date.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile transmission or mail to the Depositary and must include
a guarantee to deliver by an Eligible Institution in the form set forth in the
Notice of Guaranteed Delivery.
GENERAL
In all cases, payment for the Shares deposited and taken up by the
Offeror will be made only after timely receipt by the Depositary of certificates
representing the Shares, together with a properly completed and duly executed
Letter of Transmittal, or a manually signed facsimile thereof, relating to such
Shares, with the signatures guaranteed by an Eligible Institution, if required,
in accordance with the instructions in the Letter of Transmittal, and any other
required documents.
THE METHOD OF DELIVERY OF CERTIFICATES REPRESENTING THE SHARES, THE
LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK
OF THE PERSON DEPOSITING THE SAME. THE OFFEROR RECOMMENDS THAT SUCH DOCUMENTS BE
DELIVERED BY HAND TO THE DEPOSITARY AND A RECEIPT OBTAINED OR, IF MAILED, THAT
REGISTERED MAIL, WITH RETURN RECEIPT REQUESTED, BE USED AND THAT PROPER
INSURANCE BE OBTAINED.
Persons whose Shares or Forex Convertible Debentures are registered in
the name of a broker, investment dealer, bank, trust company or other nominee
must contact their nominee holder to arrange for the deposit of their Shares or
Forex Convertible Debentures.
All questions as to the validity, form, eligibility (including timely
receipt) and acceptance of any Shares deposited pursuant to the Offer will be
determined by the Offeror in its sole discretion. Depositing Shareholders agree
that such determination shall be final and binding. The Offeror reserves the
absolute right to reject any and all deposits which it determines not to be in
proper form or which may be unlawful to accept under the laws of any
jurisdiction. The Offeror reserves the absolute right to waive any defect or
irregularity in the deposit of any Shares. There shall be no duty or obligation
on the Offeror, the Dealer Managers, the Depositary or any other person to give
notice of any defect or irregularity in any deposit and no liability shall be
incurred by any of them for failure to give any such notice. The Offeror's
interpretation of the terms and conditions of the Offer (including the Circular,
the Letter of Transmittal and the Notice of Guaranteed Delivery) shall be final
and binding.
The Offeror reserves the right to permit the Offer to be accepted in a
manner other than that set out herein.
POWER OF ATTORNEY
The execution of a Letter of Transmittal by a Shareholder irrevocably
constitutes and appoints the Depositary and any officer of the Offeror, and each
of them, and any other person designated by the Offeror in writing, as the true
and lawful agent, attorney and attorney-in-fact and proxy of the holder of the
Shares covered by the Letter of Transmittal with respect to the Shares deposited
under the Letter of Transmittal which are taken up and paid for under the Offer
(the "PURCHASED SECURITIES") with respect to any and all dividends,
distributions, payments, securities, rights, assets or other interests declared,
paid, issued, distributed, made or transferred on or in respect of the Purchased
Securities on or after June 25, 1999 (the "OTHER SECURITIES").
The power of attorney granted irrevocably upon execution of the Letter
of Transmittal shall be effective on and after the date that the Offeror takes
up and pays for the Purchased Securities (the "EFFECTIVE DATE") with full power
of substitution, in the name and on behalf of such holder (such power of
attorney being deemed to be an irrevocable power coupled with an interest): (a)
to register or record, transfer and enter the transfer of Purchased
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Securities and any Other Securities on the appropriate register of holders
maintained by the registrar for Forex; and (b) to exercise any and all of the
rights of the holder of the Purchased Securities and Other Securities,
including, without limitation, to vote, execute and deliver any and all
instruments of proxy, authorizations or consents in respect of all or any of the
Purchased Securities and Other Securities, revoke any such instrument,
authorization or consent given prior to, on, or after the Effective Date,
designate in any such instruments of proxy any person or persons as the proxy
holder or the proxy nominee or nominees of such holder of Shares in respect of
such Purchased Securities and such Other Securities for all purposes including,
without limitation, in connection with any meeting (whether annual, special or
otherwise and any adjournment or adjournments thereof) of holders of securities
of Forex, and execute, endorse and negotiate, for and in the name of and on
behalf of the registered holder of Purchased Securities and Other Securities,
any and all cheques or other instruments respecting any distribution payable to
or to the order of such holder in respect of such Purchased Securities or Other
Securities. Furthermore, a holder of Purchased Securities or Other Securities
who executes a Letter of Transmittal agrees, effective on and after the
Effective Date, not to vote any of the Purchased Securities or Other Securities
at any meeting (whether annual, special or otherwise or any adjournment or
adjournments thereof) of Shareholders and not to exercise any or all of the
other rights or privileges attached to the Purchased Securities or Other
Securities and agrees to execute and deliver to the Offeror any and all
instruments of proxy, authorizations or consents in respect of the Purchased
Securities and Other Securities and to designate in any such instruments of
proxy the person or persons specified by the Offeror as the proxy holder or the
proxy nominee or nominees of the holder of the Purchased Securities and Other
Securities. Upon such appointment, all prior proxies given by the holder of such
Purchased Securities or Other Securities with respect thereto shall be revoked
and no subsequent proxies may be given by such person with respect thereto. A
holder of Purchased Securities or Other Securities who executes a Letter of
Transmittal covenants to execute, upon request, any additional documents
necessary or desirable to complete the sale, assignment and transfer of the
Purchased Securities and the Other Securities to the Offeror and acknowledges
that all authority therein conferred or agreed to be conferred shall, to the
extent permitted by law, survive the death or incapacity, bankruptcy or
insolvency of the holder and all obligations of the holder therein shall be
binding upon the heirs, personal representatives, successors and assigns of the
holder.
DEPOSITING SHAREHOLDERS' REPRESENTATIONS AND WARRANTIES
The deposit of Shares pursuant to the procedures described above will
constitute a binding agreement between the depositing Shareholder and the
Offeror upon the terms and subject to the conditions of the Offer, including the
depositing Shareholder's representation and warranty that: (i) such person has
full power and authority to deposit, sell, assign and transfer the Shares (and
any Other Securities) being deposited; (ii) such Shareholder depositing the
Shares (and any other Securities), or on whose behalf such Shares (and any other
Securities) are being deposited, has good title to and is the beneficial owner
of the Shares (and any Other Securities) being deposited; (iii) the deposit of
such Shares (and any Other Securities) complies with applicable securities laws;
and (iv) when such Shares (and any Other Securities) are taken up and paid for
by the Offeror, the Offeror will acquire good title thereto, free and clear of
all liens, restrictions, charges, encumbrances, claims and rights of others.
ACCEPTANCE ALTERNATIVE FOR HOLDING COMPANIES
Pursuant to the Amended and Restated Lock-up Agreement,
Louisiana-Pacific has agreed to permit any Shareholder who holds Shares
indirectly through a Special Holdco to participate in the Offer by depositing
all of such holder's shares of that Special Holdco pursuant to the Offer, in
lieu of depositing such Shares, for a consideration identical to that which the
Shareholder would have been entitled to receive had such Shares been deposited
under the Offer.
Provided the terms and conditions set forth below have been satisfied
and the applicable conditions of the Offer have been satisfied or waived prior
to the time by which the Offeror is obliged to take up and pay for the Shares
under the Offer, the Offeror will purchase all of a holder's Special Holdco
Shares from such holder where the holder has advised the Offeror that it wishes
to take advantage of the Acceptance Alternative. The Offeror currently intends
to wind up each Special Holdco, the shares of which have been acquired under the
Acceptance Alternative, into the Offeror under the voluntary winding-up or
dissolution procedures of the COMPANIES ACT (Quebec), or to amalgamate the
Special Holdco with the Offeror (thereby directly holding the Shares previously
held by the Special Holdco) or Forex.
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<PAGE>
The Acceptance Alternative will be available to an indirect holder of
Shares provided all of the following terms and conditions are satisfied:
(a) the holder holds such Shares indirectly through a Special Holdco;
(b) the holder advises the Offeror in writing, with a copy to the
Depositary, at or before 5:00 p.m. Montreal time on a date that is
at least 10 calendar days prior to the Expiry Date, that it wishes
to take advantage of the Acceptance Alternative should it accept
the Offer;
(c) if required by the Offeror, the holder properly completes and
signs a letter of acceptance and transmittal (in a form to be
provided by the Depositary for such purpose) in respect of its
Special Holdco Shares and deposits such letter of acceptance and
transmittal, together with the certificates representing such
holder's Special Holdco Shares and the Shares in respect of which
such Special Holdco Shares are being tendered, with the Depositary
prior to the Expiry Time;
(d) all of the issued and outstanding shares of the Special Holdco are
tendered pursuant to the Offer in accordance with the procedures
set out herein;
(e) the holder and the Special Holdco enter into an agreement (the
"TENDER AGREEMENT") with the Offeror on terms and conditions and
in a form satisfactory to the Offeror and containing (i)
representations and warranties concerning the Special Holdco and
the Special Holdco Shares (including, among other things, that the
holder owns the Special Holdco Shares, that the Special Holdco
owns the Shares and never had any assets other than its Shares and
never had any liabilities or obligations of any kind whatsoever,
contingent or otherwise, and that the sole business or activity of
the Special Holdco is and has always been the holding of Shares
for investment purposes and ancillary activities, together with
evidence to the satisfaction of the Offeror in respect thereof),
with such representations and warranties being effective both as
of the date of the Tender Agreement and the date the Special
Holdco Shares are acquired by the Offeror; and (ii) an indemnity
in favour of the Offeror;
(f) the Offeror determines, in its sole discretion, that the purchase
of the Special Holdco Shares will not have a material adverse
consequence (whether tax or otherwise) to the Offeror or Forex;
(g) the Special Holdco will not, other than by way of stock dividends
or increase in the issued and paid-up share capital account, have
effected any dividends or other distributions;
(h) the holder will ensure the preparation and filing of all income
tax returns of the Special Holdco in respect of the taxation year
of the Special Holdco ending immediately prior to the acquisition
of the Special Holdco Shares by the Offeror and any prior taxation
years for which income tax returns have not been filed, subject to
the Offeror's right to approve all such returns as to form and
substance;
(i) if the holder is a non-resident of Canada, the holder provides to
the Offeror on or before the Expiry Time a certificate under
Section 116 of the Tax Act and any similar certificate required by
any applicable provincial taxing legislation in form and substance
satisfactory to the Offeror or enters into an agreement with the
Offeror in form and substance satisfactory to the Offeror
entitling the Offeror to withhold in accordance with the Tax Act
and any applicable provincial taxing legislation from amounts
payable to the holder for the Special Holdco Shares and, if a
certificate under Section 116 of the Tax Act and any similar
certificate required by any applicable provincial taxing
legislation is not received by an agreed date, to remit the
amounts withheld by it to the Receiver General of Canada in
accordance with the Tax Act and to any other authority in
accordance with any applicable provincial taxing legislation;
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<PAGE>
(j) if the holder is a non-resident of Canada, the holder provides
evidence sufficient to the Offeror, acting reasonably, that the
Special Holdco has withheld and/or remitted, on a timely basis,
any amounts required to be withheld and/or remitted pursuant to
Part XIII of the Tax Act, prior to the acquisition of the Special
Holdco Shares by the Offeror;
(k) the holder agrees that the rights and obligations of the Offeror
under the Tender Agreement will terminate if the applicable
conditions of the Offer are not satisfied or waived prior to the
time by which the Offeror is obliged to take up and pay for the
Shares under the Offer;
(l) the holder will ensure that any approval under applicable
securities laws, if any, has been obtained; and
(m) the holder agrees to reimburse the Offeror for any additional
costs that will be incurred by the Offeror as a result of the
acquisition of the Special Holdco.
Any holder wishing to take advantage of the Acceptance Alternative may
determine the portion of the purchase price to be allocated to the different
classes of Special Holdco Shares. Such person is also encouraged to discuss such
arrangements with the Offeror at the earliest possible time and in any event
within the time limit set forth in (b) above. Copies of the form of Tender
Agreement may be obtained from the Offeror on request by Shareholders wishing to
use the Acceptance Alternative. The Offeror will treat a valid deposit of
Special Holdco Shares under the Offer as an acceptance of the Offer and, for
purposes of the Offer, a valid deposit of Special Holdco Shares by a holder
under the Offer will be considered to be a valid deposit of the Shares in
respect of which such Special Holdco Shares are being tendered and such holder
will be considered a Shareholder.
ACCEPTANCE OF THE OFFER THROUGH THE ACCEPTANCE ALTERNATIVE WILL HAVE
INCOME TAX CONSEQUENCES TO A PARTICULAR INDIRECT HOLDER OF SHARES THAT ARE NOT
DESCRIBED IN THIS DOCUMENT. SHAREHOLDERS WISHING TO USE THE ACCEPTANCE
ALTERNATIVE SHOULD CONSULT WITH THEIR OWN TAX ADVISORS.
3. CONDITIONS OF THE OFFER
The Offeror reserves the right to withdraw, amend or terminate the
Offer and not take up and pay for, or to extend the Expiry Date and postpone
taking up and paying for, any Shares deposited under the Offer unless all of the
following conditions have been satisfied or waived by the Offeror prior to the
Expiry Time:
(a) at the Expiry Time there shall have been validly deposited under
the Offer and not withdrawn a number of Shares which constitutes
at least 66 2/3% of the Class A Multiple Voting Shares and at
least 66 2/3% of the Class B Subordinate Voting Shares (calculated
on a fully-diluted basis) (the "MINIMUM CONDITION");
(b) any other requisite regulatory approvals or requirements
(including without limitation those of stock exchanges and
securities regulatory authorities and under the INVESTMENT CANADA
ACT) shall have been obtained or satisfied on terms satisfactory
to the Offeror;
(c) (i) no act, action, suit or proceeding shall have been threatened
or taken before or by any domestic or foreign court or tribunal or
governmental agency or other regulatory authority or
administrative agency or commission by any elected or appointed
public official or private person (including, without limitation,
any individual, corporation, firm, group or other entity) in
Canada or elsewhere, and (ii) no law, regulation or policy shall
have been proposed, enacted, promulgated or applied:
(i) to cease trade, enjoin, prohibit or impose material
limitations or conditions on the purchase by or the sale to
the Offeror of the Shares or any of them pursuant to the
Offer or the right of the Offeror to own or exercise full
rights of ownership of the Shares or any of them, or
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<PAGE>
(ii) which, if the Offer was consummated, would materially and
adversely affect Forex and its Subsidiaries considered on a
consolidated basis or the Offeror;
(d) there shall not exist any prohibition at law against the Offeror
making the Offer or taking up and paying for the Shares under the
Offer;
(e) there shall not have occurred after December 31, 1998 any change
(other than a change in the market conditions or price of OSB) (or
any condition, event or development involving a prospective
change) in the business, assets, capitalization, financial
condition, licenses, permits, rights or privileges, whether
contractual or otherwise, of Forex or any of its Subsidiaries
considered as a whole which was not disclosed prior to the Offer
in writing to the Offeror and which, in the judgement of the
Offeror, acting reasonably, is or would be materially adverse to
Forex and its Subsidiaries considered as a whole;
(f) the Offeror shall have obtained assurances acceptable to it with
respect to CAAFs held by Forex from such appropriate governmental
authorities as it shall consider desirable to ensure that there
will be no termination, default, breach or other adverse effects
on Forex or the Subsidiaries as the result of the Offer;
(g) all representations or warranties of each of Mr. Jean-Jacques
Cossette, the members of the Cossette Family and Members of Forex
Senior Management and of Forex in the Amended and Restated Lock-up
Agreement and in the Amended and Restated Support Agreement shall
have been, as of the date made, true and correct in all material
respects, and Forex and all of Mr. Jean-Jacques Cossette, the
members of the Cossette Family and Members of Forex Senior
Management shall have performed in all material respects all
covenants and complied with all agreements to be performed by them
under the Amended and Restated Support Agreement and the Amended
and Restated Lock-up Agreement.
The foregoing conditions will be for the sole benefit of the Offeror
and may be waived by it in whole or in part at any time.
Any waiver of a condition or the withdrawal of the Offer shall be
effective upon written notice or other communication confirmed in writing by the
Offeror to that effect to the Depositary at its principal office in Montreal,
Quebec. The Offeror, forthwith after giving any such notice, shall make a public
announcement of such waiver or withdrawal, shall cause the Depositary as soon as
practicable thereafter to notify Shareholders in the manner set forth in Section
10 of the Offer, "Notice" and shall provide a copy of such notice to the ME. Any
notice of waiver will be deemed to have been given and to be effective on the
day on which it is delivered or otherwise communicated to the Depositary at its
principal office in Montreal, Quebec. In the event of any waiver, all Shares
deposited previously and not taken up or withdrawn will remain subject to the
Offer and may be accepted for purchase by the Offeror in accordance with the
terms of the Offer. If the Offer is withdrawn, the Offeror shall not be
obligated to take up or pay for any Shares deposited under the Offer and the
Depositary will promptly return all certificates for deposited Shares, Letter of
Transmittal, Notices of Guaranteed Delivery and related documents to the parties
by whom they were deposited in acceptance of the Offer.
4. EXTENSION AND VARIATION OF THE OFFER
The Offer will be open for acceptance until but not after the Expiry
Time, unless withdrawn or extended.
The Offeror reserves the right, in its sole discretion, at any time and
from time to time while the Offer is open for acceptance (or otherwise as
permitted by applicable law), to extend the Expiry Time, or to vary the terms of
the Offer in each case by giving written notice or other communication,
confirmed in writing, of such extension or variation to the Depositary at its
principal office in Montreal, Quebec. The Offeror, forthwith after giving any
such notice or communication, shall make a public announcement of the extension
or variation, shall cause the Depositary as soon as practicable thereafter to
provide a copy of such notice or communication in the manner set forth in
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Section 10 of the Offer, "Notice", to all holders of Shares or beneficial owners
of Forex Convertible Debentures whose Shares have not been taken up prior to the
extension or variation and shall provide a copy of the aforementioned notice to
the ME. Any notice of extension or variation will be deemed to have been given
and to be effective on the day on which it is delivered or otherwise
communicated to the Depositary at its principal office in Montreal, Quebec.
Under applicable Canadian provincial securities legislation, if there
is a variation in the terms of an offer, the period during which shares may be
deposited pursuant to such offer shall not expire before 10 days after the
notice of variation has been delivered.
During any such extension or in the event of any variation, all Shares
or Forex Convertible Debentures previously deposited and not taken up or
withdrawn will remain subject to the Offer and may be accepted for purchase by
the Offeror in accordance with the terms hereof, subject to, among other
provisions, Section 5 of the Offer, "Take-up and Payment for Deposited Shares",
and to Section 6 of the Offer, "Withdrawal of Deposited Shares and Forex
Convertible Debentures". An extension of the Expiry Time or a variation of the
Offer does not constitute a waiver by the Offeror of its rights under Section 3
of the Offer, "Conditions of the Offer".
If the consideration being offered for the Shares under the Offer is
increased, the increased consideration will be paid to all depositing
Shareholders whose Shares are taken up under the Offer, without regard to when
such Shares are taken up by the Offeror.
Notwithstanding the foregoing, if all of the terms and conditions of
the Offer (except those waived by the Offeror) have been fulfilled or complied
with, the Offeror may not extend the Offer after the Expiry Time unless the
Offeror first takes up and pays for all Shares deposited under the Offer and not
withdrawn.
5. TAKE-UP AND PAYMENT FOR DEPOSITED SHARES
If all the conditions referred to under Section 3 of the Offer,
"Conditions of the Offer", have been satisfied or waived by the Offeror at the
Expiry Time, the Offeror will, pursuant to applicable law (unless the Offeror
shall have withdrawn or terminated the Offer), become obligated to take up and
pay for the Shares validly deposited under the Offer (including Shares issued
following the conversion of Forex Convertible Debentures and deposited under the
Offer) and not withdrawn as soon as practicable in the circumstances and in any
event not later than 10 days following the Expiry Date and to pay for the Shares
taken up as soon as possible, but not later than three days after taking up the
Shares. In accordance with applicable law, the Offeror will take up and pay for
any Shares deposited under the Offer subsequent to the date on which its first
takes up Shares deposited under the Offer no later than 10 days after the
deposit of such additional Shares.
Subject to applicable law, the Offeror may, in its discretion, at any
time before the Expiry Time if the applicable rights to withdraw any deposited
Shares have expired, take up and pay for all such Shares then deposited under
the Offer, provided that the Offeror agrees to take up and pay for additional
Shares validly deposited under the Offer thereafter.
The Offeror will be deemed to have taken up and accepted for payment
Shares validly deposited and not withdrawn pursuant to the Offer if, as and when
the Offeror gives written notice, or other communication confirmed in writing,
to the Depositary at its principal office in Montreal, Quebec of its acceptance
for payment of such Shares pursuant to the Offer.
The Offeror will pay for Shares validly deposited under the Offer and
not withdrawn by providing the Depositary with sufficient funds (by bank
transfer or other means satisfactory to the Depositary) and by providing the
Depositary with sufficient certificates for the Installment Notes for
transmittal to Shareholders. Under no circumstances will interest on the
purchase price of Shares purchased by the Offeror accrue or be paid by the
Offeror or the Depositary to persons depositing Shares, regardless of any delay
in making such payment.
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The Depositary will act as the agent of persons who have deposited
Shares pursuant to the Offer for the purposes of receiving payment (in cash
and/or Installment Notes) from the Offeror and transmitting payment to such
persons, and receipt of payment by the Depositary will be deemed to constitute
receipt of payment by persons depositing Shares.
Settlement will be made by the Depositary (a) for the Shares in respect
of which the Cash Option is applicable, by issuing or causing to be issued a
cheque payable in Canadian funds in the amount to which that person is entitled
and (b) for the Shares in respect of which the Note Option is applicable, except
as provided in Section 13 of the Offer, "Shareholders Not Resident in Canada",
with respect to Non-Canadian Shareholders, by issuing or causing to be issued a
cheque payable in Canadian funds for the cash portion of the consideration and a
note certificate for the balance of purchase price to which the Shareholder is
entitled. Subject to the foregoing and unless otherwise directed by the Letter
of Transmittal, the cheque or the cheque and the note certificate representing
the Installment Note, as the case may be, will be issued in the name of the
registered holder of the Shares so deposited. Unless the person depositing the
Shares instructs the Depositary to hold the cheque or the cheque and the note
certificate for pick-up by checking the appropriate box in the Letter of
Transmittal, the cheque or the cheque and the note certificate will be forwarded
by first class mail to such person at the address specified in the Letter of
Transmittal. If no address is specified, the cheque or the cheque and the note
certificate will be forwarded to the address of the holder as shown on the
registers maintained by Forex.
Depositing Shareholders will not be obligated to pay any brokerage fees
or commissions if they accept the Offer by depositing their Shares directly with
the Depositary or if they use the services of the Dealer Managers or a member of
the Soliciting Dealer Group to accept the Offer. See Section 20 of the Circular,
"Financial Advisor and Soliciting Dealer Manager Arrangements".
6. WITHDRAWAL OF DEPOSITED SHARES AND FOREX CONVERTIBLE DEBENTURES
All deposits of Shares and Forex Convertible Debentures are irrevocable
unless otherwise agreed to in writing by the Offeror, provided that any Shares
and Forex Convertible Debentures deposited may be withdrawn by or on behalf of
the depositing Shareholder or depositing beneficial owner of Forex Convertible
Debentures (unless otherwise required or permitted by applicable law):
(a) at any time before the Expiry Time;
(b) at any time before the expiration of the tenth day after the date
upon which either (i) a notice of change is delivered in
accordance with Section 10 of the Offer, "Notice", relating to a
change which has occurred in the information contained in the
Offer or the Circular or in any notice of change or notice of
variation delivered in connection herewith (except any change that
is not within the control of the Offeror or an affiliate of the
Offeror, unless it is a change in a material fact relating to the
Installment Notes) that would reasonably be expected to affect the
decision of a Shareholder to accept or reject the Offer, which
change occurred prior to the Expiry Time or after the Expiry Time
but before the expiry of all rights of withdrawal in respect of
the Offer; or (ii) a notice of variation concerning a variation in
the terms of the Offer is delivered in accordance with Section 10
of the Offer, "Notice", unless the variation in the terms of the
Offer consists solely of an increase in the consideration (cash
and/or non-cash) offered for Shares and the time for deposit is
not extended for a period greater than 10 days; and
(c) at any time after September 30, 1999 provided that the Shares have
not been taken up and paid for by the Offeror prior to the receipt
by the Depositary of the notice of withdrawal in respect of such
Shares.
In order for any withdrawal to be made, notice of the withdrawal must
be in writing (which includes a telegraphic communication or notice by
electronic means that produces a printed copy), and must be actually received by
the Depositary at the place of deposit of the applicable Shares (or Notice of
Guaranteed Delivery in respect thereof) or Forex Convertible Debentures within
the period permitted for withdrawal. Any such notice of
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withdrawal must be: (i) signed by or on behalf of the person who signed the
Letter of Transmittal that accompanied the Shares (or Notice of Guaranteed
Delivery in respect thereof) or Forex Convertible Debentures to be withdrawn and
(ii) specify such person's name, the number of Shares to be withdrawn, the name
of the registered holder and the certificate number shown on each certificate
representing the Shares to be withdrawn. Any signature on a notice of withdrawal
must be guaranteed by an Eligible Institution in the same manner as in the
Letter of Transmittal (as described in the instructions set out in such Letter
of Transmittal), except in the case of Shares deposited for the account of an
Eligible Institution. The withdrawal shall take effect upon receipt of the
written notice by the Depositary.
All questions as to the validity (including timely receipt) and form of
notices of withdrawal shall be determined by the Offeror, in its sole
discretion, and such determination shall be final and binding. There shall be no
duty or obligation on the Offeror, the Dealer Managers, the Depositary, or any
other person to give notice of any defect or irregularity in any notice of
withdrawal and no liability shall be incurred by any of them for failure to give
any such notice.
Withdrawals may not be rescinded and any Shares or Forex Convertible
Debentures withdrawn will be deemed not validly deposited for the purposes of
the Offer, but may be redeposited at any subsequent time prior to the Expiry
Time by following any of the applicable procedures described in Section 2 of the
Offer, "Manner and Time of Acceptance".
In addition to the foregoing rights of withdrawal, Shareholders in
certain provinces of Canada are entitled to statutory rights of rescission in
certain circumstances. See Section 23 of the Circular, "Statutory Rights".
7. RETURN OF DEPOSITED SHARES AND FOREX CONVERTIBLE DEBENTURES
Any deposited Shares or Forex Convertible Debentures not taken up and
paid for by the Offeror will be returned, at the expense of the Offeror, to the
depositing Shareholder or beneficial owner of Forex Convertible Debentures,
either by sending new certificates representing Shares not purchased or
returning the deposited certificates (and other relevant documents) or
returning, in the case of Forex Convertible Debentures, the relevant documents.
The certificates, if applicable (and other relevant documents) will be forwarded
by first class mail in the name of and to the address specified in the Letter of
Transmittal or, if such name or address is not so specified, in such name and to
such address as shown on the registers maintained by Forex as soon as
practicable following the Expiry Time or the withdrawal or termination of the
Offer. If certificates are submitted for more Shares than are deposited,
certificates representing the Shares not deposited will be sent or returned by
the same process outlined for Shares deposited and not taken up and paid for
under the Offer.
8. CHANGES IN CAPITALIZATION, DISTRIBUTIONS AND LIENS
If on or after the date hereof and prior to the Effective Date, Forex
should split, combine, reclassify, consolidate or convert any of the Shares or
make any extraordinary distribution of securities on such Shares, the Offer
price may, at the Offeror's sole discretion, be correspondingly adjusted and the
Offeror may make such adjustments as it considers appropriate to other terms of
the Offer (including, without limitation, the amounts payable for the securities
offered to be purchased) to reflect any such split, combination,
reclassification, consolidation or conversion or such extraordinary
distribution.
Shares acquired pursuant to the Offer shall be transferred by the
Shareholder and acquired by the Offeror free and clear of all liens,
restrictions, charges, encumbrances, claims and rights of others and together
with all rights and benefits arising therefrom, including the right to any and
all dividends, distributions, payments, securities, rights, assets or other
interests which may be declared, paid, issued, distributed, made or transferred
on or in respect of the Shares on or after June 25, 1999 other than as provided
herein.
If Forex should declare or pay any cash dividend or stock dividend or
make any other distribution on or issue any rights with respect to any of the
Shares which is or are payable or distributable to the Shareholders of
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record on a record date which is prior to both the Expiry Date and the date of
transfer into the name of the Offeror or its nominees and transferees on the
registers maintained by the registrar of Forex of such Shares following
acceptance thereof for purchase pursuant to the Offer then (i) in the case of
any cash dividend or cash distribution that does not exceed the cash purchase
price per Share or the principal amount of the Installment Note per Share, the
cash purchase price per Share or the principal amount of the Installment Note
per Share payable by the Offeror pursuant to the Offer will be reduced by the
amount of any such dividend or distribution paid or payable per Share in respect
of which the dividend or distribution is made; and (ii) in the case of any such
cash dividend or cash distribution in an amount that exceeds the cash purchase
price per Share or the principal amount of the Installment Note per Share in
respect of which the dividend or distribution is made, or in the case of any
other dividend, distribution or right, the whole of any such dividend,
distribution or right will be received and held by the depositing Shareholder
for the account of the Offeror and shall be promptly remitted and transferred by
the depositing Shareholder to the Depositary for the account of the Offeror,
accompanied by appropriate documentation of transfer. Pending such remittance,
the Offeror will be entitled to all rights and privileges as owner of any such
dividend, distribution or right, and may withhold the entire purchase price
payable by the Offeror pursuant to the Offer or deduct from the purchase price
payable by the Offeror pursuant to this Offer the amount or value thereof, as
determined by the Offeror in its sole discretion.
The foregoing is subject to the Offeror's rights under Section 3 of the
Offer, "Conditions of the Offer."
9. MAIL SERVICE INTERRUPTION
Notwithstanding the provisions of the Offer, the Circular, the Letter
of Transmittal or the Notice of Guaranteed Delivery, cheques and note
certificates in payment for Shares purchased pursuant to the Offer and
certificates representing Shares to be returned will not be mailed if the
Offeror determines that delivery thereof by mail may be delayed. Persons
entitled to cheques or note certificates which are not mailed for the foregoing
reason may take delivery thereof at the office of the Depositary at which the
deposited certificates representing Shares in respect of which the cheques and
note certificates are being issued were deposited, upon application to the
Depositary, until such time as the Offeror has determined that delivery by mail
will no longer be delayed. The Offeror shall provide notice of any such
determination not to mail made under this Section 9 as soon as reasonably
practicable after the making of such determination and in accordance with
Section 10 of the Offer, "Notice". Notwithstanding Section 5 of the Offer,
"Take-up and Payment for Deposited Shares", cheques or note certificates not
mailed for the foregoing reason will be conclusively deemed to have been
delivered on the first day upon which they are available for delivery to the
depositing Shareholder at the office of the Depositary.
10. NOTICE
Without limiting any other lawful means of giving notice, any notice
the Offeror or the Depositary may give or cause to be given under the Offer will
be deemed to have been properly given if it is mailed by first class mail,
postage prepaid, to the registered holders of Shares at their respective
addresses as shown on the registers maintained by the registrar for Forex and
will be deemed to have been received on the first day following the date of
mailing which is a Business Day. These provisions apply notwithstanding any
accidental omission to give notice to any one or more holders of Shares and
notwithstanding any interruption of postal service following mailing. Except as
otherwise required or permitted by law, if post offices in Canada or elsewhere
are not open for the deposit of mail or there is reason to believe that there is
or could be a disruption in all or part of the postal service, any notice which
the Offeror or the Depositary may give or cause to be given under the Offer,
except as otherwise provided herein, will be deemed to have been properly given
and to have been received by holders of Shares, as the case may be, if: (i) it
is given to the ME for dissemination through their facilities; or (ii) it is
published once in a newspaper or newspapers generally circulated in Montreal;
and (iii) it is given to the Canada News Wire Service.
Wherever the Offer calls for documents to be delivered to the
Depositary, such documents will not be considered delivered unless and until
they have been physically received at one of the addresses listed for the
Depositary in the Letter of Transmittal or Notice of Guaranteed Delivery, as
applicable. Wherever the Offer calls for documents to be delivered to a
particular office of the Depositary, such documents will not be considered
delivered
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unless and until they have been physically received at that particular office at
the address listed in the Letter of Transmittal or Notice of Guaranteed
Delivery, as applicable.
11. ACQUISITION OF SHARES NOT DEPOSITED
If the number of Class A Multiple Voting Shares or Class B Subordinate
Voting Shares deposited under the Offer and not withdrawn represents 9/10 or
more of the total outstanding Class A Multiple Voting Shares or Class B
Subordinate Voting Shares, as the case may be, pursuant to Section 51 of the
COMPANIES ACT (Quebec), the Offeror may, in the six months following the date of
the Offer, give notice that it wishes to purchase, on the same terms and
conditions as the Offer, the Class A Multiple Voting Shares or Class B
Subordinate Voting Shares, as the case may be, of the Shareholders who have not
accepted the Offer. If the Offeror takes up and pays for Shares validly
deposited under the Offer and acquires less than such percentage thereof or the
compulsory acquisition provisions of the COMPANIES ACT (Quebec) are otherwise
unavailable, the Offeror currently intends to consider other means of acquiring,
directly or indirectly, all of the Shares of Forex available in accordance with
applicable law, including a Subsequent Acquisition Transaction. Notwithstanding
the fact that the Compulsory Acquisition provisions of the COMPANIES ACT
(Quebec) may be available, the Offeror may nonetheless elect to propose a
Subsequent Acquisition Transaction. See Section 11 of the Circular, "Acquisition
of Shares Not Deposited - Subsequent Acquisition Transaction".
Reference is made to Section 11 of the Circular, "Acquisition of Shares
Not Deposited - Subsequent Acquisition Transaction and Judicial Developments",
for a discussion of applicable recent legal developments in Canada.
12. MARKET PURCHASES DURING THE OFFER
The Offeror has no current intention of acquiring beneficial ownership
of any Shares while the Offer is outstanding other than as described in the
Circular and the Offer. However, the Offeror reserves the right to, and may
acquire or cause an affiliate to acquire, beneficial ownership of Class A
Multiple Voting Shares and Class B Subordinate Voting Shares by making purchases
through the facilities of the ME, subject to applicable law, at any time and
from time to time prior to the Expiry Time. In no event will the Offeror make
any such purchases of Class A Multiple Voting Shares or Class B Subordinate
Voting Shares through the facilities of the ME until the third Business Day
following the date of the Offer. The aggregate number of Class A Multiple Voting
Shares or Class B Subordinate Voting Shares beneficially acquired by the Offeror
through the facilities of the ME while the Offer is outstanding shall not exceed
5% of the outstanding Class A Multiple Voting Shares or Class B Subordinate
Voting Shares as of the date of the Offer and the Offeror will issue and file a
press release containing the information prescribed by law forthwith after the
close of business of the ME on each day on which such Class A Multiple Voting
Shares or Class B Subordinate Voting Shares have been purchased. If the Offeror
purchases any Class A Multiple Voting Shares or Class B Subordinate Voting
Shares on the ME for a price in excess of that offered pursuant to the Offer,
the Offeror will pay such higher amount to each person whose Class A Multiple
Voting Shares and Class B Subordinate Voting Shares are taken up and paid for
under the Offer, whether or not such Shares have already been taken up, and will
immediately so notify the holders of the Shares. For the purposes of this
Section 12 of the Offer, "Offeror" includes the Offeror and any person or
company acting jointly or in concert with the Offeror.
Subject to applicable laws, the Offeror reserves the right to make or
enter into an arrangement, commitment or understanding while the Offer is
outstanding to sell any Shares after the Expiry Time, although the Offeror has
no current intention to do so.
13. SHAREHOLDERS NOT RESIDENT IN CANADA
The Installment Notes issuable pursuant to the Offer have not been and
will not be registered or otherwise qualified for distribution under the laws of
any jurisdiction other than the provinces and territories of Canada. Tendering
Shareholders who are Non-Canadian Shareholders or who appear to the Offeror or
the Depositary, relying on the addresses provided by the Shareholders, to be
Non-Canadian Shareholders and who select the Note Option
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will receive, in lieu of Installment Notes, the net cash proceeds of a
compulsory sale of such Installment Notes as described below.
All Installment Notes which would otherwise be issuable to Shareholders
who are Non-Canadian Shareholders, in accordance with the terms of the Offer, as
a result of such Shareholders electing the Note Option, will be issued and
delivered to the Depositary for sale by the Depositary on behalf of such
persons. All Installment Notes so issued and delivered to the Depositary will be
pooled and sold as soon as practicable and in any event no later than three
business days after the Offeror has taken up and paid for Shares. Any such sale
of Installment Notes shall be effected by the Depositary by private sale to Bank
of America National Trust and Savings Association ("BANK OF AMERICA") for a
purchase price equal to the aggregate principal amount of such Installments
Notes. As soon as reasonably possible thereafter, and in any event no later than
two business days following the completion of such sale of Installment Notes,
the Depositary will forward to each such Non-Canadian Shareholder whose
Installment Notes have been sold a cheque in Canadian dollars in an amount equal
to the aggregate principal amount of such Non-Canadian Shareholder's
Installments Notes (net of all applicable expenses in respect of such sales and
any applicable withholding taxes).
Because the amount to be received by such Non-Canadian Shareholder will
be in no event more than, and (due to expenses of sale and withholding taxes)
may be less than, the amount to be received by such Non-Canadian Shareholder
pursuant to the Cash Option, Non-Canadian Shareholders who desire certainty with
respect to the maximization of the price to be received for their Shares in the
Offer may wish to elect the Cash Option.
14. OTHER TERMS OF THE OFFER
(a) The Offer and all contracts resulting from acceptance hereof shall
be governed by and construed in accordance with the laws of the
Province of Quebec and the laws of Canada applicable therein. Each
party to any agreement resulting from the acceptance of the Offer
unconditionally and irrevocably attorns to the exclusive
jurisdiction of the courts of the Province of Quebec.
(b) No broker, investment dealer or other person has been authorized
to give any information or make any representation on behalf of
the Offeror not contained herein or in the Circular, and, if given
or made, such information or representation must not be relied
upon as having been authorized. No broker, investment dealer or
other person shall be deemed to be the agent of the Offeror, the
Depositary or the Dealer Managers for the purposes of the Offer.
In any jurisdiction in which the Offer is required to be made by a
licensed broker or investment dealer, the Offer shall be made on
behalf of the Offeror by brokers or investment dealers licensed
under the laws of such jurisdiction.
(c) The provisions of the Circular, the Letter of Transmittal and the
Notice of Guaranteed Delivery accompanying the Offer, including
the instructions contained therein, as applicable, form part of
the terms and conditions of the Offer.
(d) The Offeror shall, in its sole discretion, be entitled to make a
final and binding determination of all questions relating to the
interpretation of the Offer, the Circular and the Letter of
Transmittal, the Notice of Guaranteed Delivery, the validity of
any acceptance of this Offer and any withdrawals of Shares or
Forex Convertible Debentures, including, without limitation, the
satisfaction or non-satisfaction of any condition, the validity,
time and effect of any deposit of Shares or Forex Convertible
Debentures or notice of withdrawal thereof, and the due completion
and execution of the Letter of Transmittal. The Offeror reserves
the right to waive any defect in acceptance with respect to any
particular Shares or Forex Convertible Debentures. There shall be
no obligation on the Offeror, the Dealer Managers or the
Depositary to give notice of any defects or irregularities in
acceptance and no liability shall be incurred by any of them for
failure to give any such notification.
(e) The Offeror reserves the right to transfer to one or more Canadian
affiliates the right to purchase all or any portion of the Shares
deposited pursuant to the Offer, but any such transfer will not
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relieve the Offeror of its obligations under the Offer and will in
no way prejudice the rights of persons depositing Shares to
receive payment for Shares validly deposited and accepted for
payment pursuant to the Offer.
(f) This document does not constitute an offer or a solicitation to
any person in any jurisdiction in which such offer or solicitation
is unlawful. The Offer is not being made to, nor will deposits be
accepted from or on behalf of, holders of Shares in any
jurisdiction in which the making or acceptance of the Offer would
not be in compliance with the laws of any such jurisdiction.
However, the Offeror may, in its sole discretion take such action
as it may deem necessary to extend the Offer to holders of Shares
in any such jurisdiction.
The accompanying Circular together with the Offer constitute the
take-over bid circular required under the Canadian provincial securities
legislation with respect to the Offer.
DATED: August 16, 1999.
LOUISIANA-PACIFIC ACQUISITION INC.
By: (signed) Keith Matheney
President
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CIRCULAR
The following information is supplied with respect to the accompanying
Offer dated August 16, 1999, by the Offeror to purchase all of the issued and
outstanding Class A Multiple Voting Shares and Class B Subordinate Voting Shares
(including Class B Subordinate Voting Shares issuable upon the exercise of
outstanding options and conversion of Forex Convertible Debentures). The terms
and conditions of the Offer are incorporated into and form part of this Circular
and holders of Shares or Forex Convertible Debentures should refer to the Offer
for details of the terms and conditions of the Offer, including details as to
payment and withdrawal rights. Terms defined in the Offer but not defined in
this Circular have the same meaning herein as in the Offer unless the context
otherwise requires. All sums expressed in dollars herein are in Canadian dollars
unless otherwise expressly stated.
THE INFORMATION CONCERNING FOREX CONTAINED IN THE OFFER AND THIS CIRCULAR
HAS BEEN TAKEN FROM OR BASED UPON INFORMATION PROVIDED BY FOREX, PUBLICLY
AVAILABLE DOCUMENTS AND RECORDS ON FILE WITH CANADIAN SECURITIES REGULATORY
AUTHORITIES AND OTHER PUBLIC SOURCES. EXCEPT AS DESCRIBED IN THE OFFER OR IN THE
CIRCULAR, THE OFFEROR HAS NO INFORMATION THAT INDICATES THAT ANY MATERIAL CHANGE
HAS OCCURRED IN THE AFFAIRS OF FOREX SINCE THE DATE OF ITS LAST PUBLIC FINANCIAL
STATEMENTS, BEING ITS QUARTERLY FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE
30, 1999. ALTHOUGH THE OFFEROR HAS NO KNOWLEDGE THAT WOULD INDICATE THAT ANY
STATEMENTS CONTAINED HEREIN TAKEN FROM OR BASED ON SUCH DOCUMENTS AND RECORDS
ARE UNTRUE OR INCOMPLETE, THE OFFEROR DOES NOT ASSUME ANY RESPONSIBILITY FOR THE
ACCURACY OR COMPLETENESS OF THE INFORMATION TAKEN FROM OR BASED UPON SUCH
DOCUMENTS AND RECORDS, OR FOR ANY FAILURE BY FOREX TO DISCLOSE EVENTS WHICH MAY
HAVE OCCURRED OR MAY AFFECT THE SIGNIFICANCE OR ACCURACY OF ANY SUCH INFORMATION
BUT WHICH ARE UNKNOWN TO THE OFFEROR.
1. THE OFFEROR
The Offeror, a wholly-owned indirect subsidiary of Louisiana-Pacific, was
incorporated on July 15, 1999 under the laws of Quebec. The registered office of
the Offeror is located at 1155 Rene-Levesque Blvd. West, Suite 4000, Montreal,
Quebec, H3B 3V2. The Offeror has been incorporated and organized for the purpose
of making the Offer and has not otherwise carried on any business activity.
Louisiana-Pacific is a major building products firm, operating
approximately 83 facilities in the United States, Canada, and Ireland.
Louisiana-Pacific's principal products are OSB, plywood (OSB and plywood
constitute structural panel products), lumber, engineered wood products,
exterior siding, industrial panel products, specialty products and pulp. With
the exception of pulp, Louisiana-Pacific's products are used primarily in the
construction, repair, remodeling and manufacturing of traditional and
manufactured housing. Louisiana-Pacific distributes its building products
primarily through third-party distributors and home centers.
Louisiana-Pacific was incorporated in 1972 under the laws of Delaware.
Louisiana-Pacific's executive offices are located at 111 S.W. Fifth Avenue,
Portland, Oregon 97204.
Further information with respect to Louisiana-Pacific is set forth in
Schedule I to this Circular which is incorporated herein by reference.
2. FOREX
Forex was incorporated pursuant to Part 1A of the COMPANIES ACT (Quebec).
The head office of Forex is located at 689 3rd Avenue, P.O. Box 296, Val-d'Or,
Quebec J9P 4P3 and its executives offices are located at 1, Place Ville-Marie,
suite 3415, Montreal, Quebec, H3B 3N6 where the telephone number is (514)
861-4841. The Class A Multiple Voting Shares, the Class B Subordinate Voting
Shares and the Forex Convertible Debentures are currently and respectively
listed on the ME under symbols FOX.A, FOX.B and FOX.DB.
Forex is Canada's leading producer of OSB and the fourth largest in North
America.
Forex owns and operates three modern OSB plants for a total annual
production capacity of 1,450,000 cubic metres of OSB. Those mills are all
located in the Province of Quebec: one in Saint-Michel-des-Saints, one in
Chambord and one in Maniwaki.
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Forex also operates in the Province of Quebec one softwood sawmill located
in Saint-Michel-des-Saints with an annual production capacity of 90,000,000
board feet and one hardwood sawmill located in Lac-Bouchette (near Chambord)
with an annual production capacity of 32,000,000 board feet.
Each OSB and sawmill plant benefits from a 25-year timber supply and forest
management agreement with the Government of Quebec, which is renewable every
five years for another 25-year term. These agreements allow Forex to enjoy an
annual aggregate wood supply of approximately 2.5 million cubic metres, managed
on a sustainable basis.
Forex has 750 employees and also uses the services of some 1,500 forestry
and transportation contractors.
Through its Heli Forex and CRL Technologies Divisions, Forex is also active
in air transport and avionics.
The authorized share capital of Forex consists of an unlimited number of
Class A Multiple Voting Shares and an unlimited number of Class B Subordinate
Voting Shares, all without par value. As of July 30, 1999, 11,169,483 Class A
Multiple Voting Shares and 5,950,158 Class B Subordinate Voting Shares were
issued and outstanding. As of the same date, options to purchase 2,625,000 Class
B Subordinate Voting Shares were issued and outstanding and 3,293,077 Class B
Subordinate Voting Shares were issuable pursuant to the exercise of Forex
Convertible Debentures.
Each Class A Multiple Voting Share carries ten votes per share while each
Class B Subordinate Voting Share carries one vote per share.
3. BACKGROUND TO THE OFFER
Over the past several years, Louisiana-Pacific has considered a number of
possible acquisitions, business combinations and other transactions of or with
other companies in the building products industry. Following the divestiture of
Louisiana-Pacific's California redwood properties and other nonstrategic assets
in June 1998, Louisiana-Pacific's efforts in this area intensified. Among other
companies considered by Louisiana-Pacific in this regard was Forex.
Representatives of Louisiana-Pacific and Forex met on different occasions in
1998 to discuss the possibility of a business combination, however, no agreement
was reached as a result of these discussions.
In early May 1999, CIBC World Markets Inc. advised Louisiana-Pacific that
Mr. Jean-Jacques Cossette was seeking expressions of interest to purchase Forex
from various potential purchasers. On May 12, 1999, representatives of CIBC
World Markets Inc. made a formal presentation regarding Forex to senior
executives of Louisiana-Pacific. On May 19, 1999, Louisiana-Pacific communicated
to CIBC World Markets Inc. its interest in the acquisition of Forex subject to
various conditions, including satisfactory completion of due diligence. CIBC
World Markets Inc. advised Louisiana-Pacific that its indication of interest was
likely to be unacceptable to Mr. Jean-Jacques Cossette and the board of
directors of Forex.
During the ensuing weeks, representatives of Louisiana-Pacific and CIBC
World Markets Inc. held discussions regarding Louisiana-Pacific's interest in
acquiring Forex and assessed various alternatives relating to the consideration
that Louisiana-Pacific might be willing to offer to the Shareholders.
On June 9, 1999, Louisiana-Pacific communicated to CIBC World Markets Inc.
Louisiana-Pacific's willingness to propose a transaction for an increased
consideration. Shortly thereafter, CIBC World Markets Inc. advised
Louisiana-Pacific that its June 9th proposal was likely to be unacceptable to
Mr. Jean-Jacques Cossette and the board of directors of Forex. On June 17, 1999,
the board of directors of Forex decided to solicit expressions of interest to
purchase the Shares and invited a number of potential purchasers to conduct due
diligence on Forex's business and operations.
On June 17, 1999, Louisiana-Pacific expressed an interest, subject to
various conditions including due diligence, in purchasing the Shares at $26.00
per Share. On the basis of this expression of interest, Mr. Jean Jacques
Cossette and Forex agreed to enter into negotiations regarding such a
transaction. Louisiana-Pacific executed a
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confidentiality agreement with Forex on June 18, 1999 and conducted its due
diligence on June 22 and June 23, 1999.
During the week of June 21, 1999, Mr. Jean-Jacques Cossette and
Louisiana-Pacific negotiated the terms of the Lock-up Agreement and Forex and
Louisiana-Pacific negotiated the terms of the Support Agreement. On June 25,
1999, Louisiana-Pacific was informed that the Cossette Family and Members of
Forex Senior Management consented to execute the Lock-up Agreement. On June 25,
1999, the board of directors of Forex met to consider the Support Agreement and
approved its terms and conditions. Also on June 25, 1999, the board of directors
of Louisiana-Pacific met to consider the Support Agreement and the Lock-up
Agreement and approved their terms and conditions. In the evening of June 25,
1999, Louisiana-Pacific and Forex executed the Support Agreement and
Louisiana-Pacific, Mr. Jean-Jacques Cossette, the Cossette Family and Members of
Forex Senior Management executed the Lock-up Agreement. On June 28, 1999,
Louisiana-Pacific's intent to make an offer for the Shares at $26.00 per Share
and the execution of the Lock-up Agreement and of the Support Agreement were
announced by Louisiana-Pacific and Forex in a joint press release.
On July 8, 1999, Forex notified Louisiana-Pacific, in accordance with the
terms of the Support Agreement, that it had received from Boise Cascade
Corporation a letter indicating that Boise Cascade Corporation was prepared to
make an offer to purchase the Shares, subject to conducting due diligence
satisfactory to Boise Cascade Corporation, the negotiation and execution of
mutually acceptable agreements with Forex and its controlling shareholders and
approval by the board of directors of Boise Cascade Corporation. In such notice,
Forex advised Louisiana-Pacific that its board of directors determined that the
proposal of Boise Cascade Corporation would, if consummated in accordance with
its terms, constitute a Superior Proposal within the meaning of the Support
Agreement for purposes of the provisions of the Support Agreement that permit
Forex to furnish access to non-public information regarding Forex to a person
who has made a BONA FIDE Acquisition Proposal. Forex further advised
Louisiana-Pacific that its board of directors had authorized Boise Cascade
Corporation to have access to relevant documentation and to the members of
management of Forex in order to conduct its due diligence.
On July 28, 1999, Forex announced that it had received a conditional offer
from Boise Cascade Corporation for the acquisition of all of the Shares of
Forex. Boise Cascade Corporation's offer provided for a plan of arrangement to
be approved by the Shareholders, pursuant to which all holders of Shares would
have received, at their option, the following consideration per Share, in any
combination thereof: (i) $30.00 cash, (ii) $30.00 in installment notes payable
over five years with interests, or (iii) $31.00 payable by the issuance of a new
class of Forex's shares to be created, which would have been exchangeable into
Boise Cascade Corporation's common shares. Following a recommendation of the
Independent Committee, the board of directors of Forex had determined on July
27, 1999 that the Boise Cascade Corporation's offer was a Superior Proposal
within the meaning of the Support Agreement.
In accordance with the Support Agreement, Louisiana-Pacific was entitled to
a five business day period in which to offer to amend the Support Agreement such
that the Boise Cascade Corporation's offer would cease to be a Superior
Proposal. Following the submission by Louisiana-Pacific of such an offer to
amend the Support Agreement, the Support Agreement and the Lock-up Agreement
were amended on August 2, 1999 to provide for an offer for the Shares at $31.00
per Share.
On August 5, 1999, Forex announced that it had received another conditional
offer from Boise Cascade Corporation for the acquisition of all of the Shares of
Forex. Such offer provided for a plan of arrangement to be approved by the
Shareholders, pursuant to which all holders of Shares would have received, at
their option, the following consideration per Share, in any combination thereof:
(i) $32.00 cash, (ii) $32.00 in installment notes payable over five years with
interest, or (iii) $33.00 payable by the issuance of a new class of Forex's
shares to be created, which would have been exchangeable into Boise Cascaded
Corporation's common shares. Following a recommendation of the Independent
Committee, the board of directors of Forex had determined on August 5, 1999 that
the Boise Cascade Corporation's offer was a Superior Proposal within the meaning
of the Support Agreement.
Again, in accordance with the Support Agreement, Louisiana-Pacific was
entitled to a five business day period in which to offer to amend the Support
Agreement such that the Boise Cascade Corporation's offer would cease to be a
Superior Proposal. Following the submission by Louisiana-Pacific of such an
offer to amend the Support Agreement, the Support Agreement and the Lock-up
Agreement were amended on August 12, 1999 (by the
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execution and delivery of the Amended and Restated Support Agreement and the
Amended and Restated Lock-up Agreement) to provide for the Offer.
On August 13, 1999, Boise Cascade Corporation announced that it would not
submit any increased offer for the acquisition of all of the Shares of Forex.
4. ARRANGEMENTS WITH CONTROLLING SHAREHOLDERS
Other than as set forth below, none of Louisiana-Pacific, the Offeror or
their affiliates have any arrangements with any shareholders of Forex with
respect to the Offer.
Pursuant to the Amended and Restated Lock-up Agreement and subject to the
conditions set forth therein, the Offeror agreed to make the Offer and Mr.
Jean-Jacques Cossette, the Cossette Family and Members of Forex Senior
Management agreed to deposit the Lock-up Shares under the Offer and (subject to
their right in certain circumstances to terminate the Amended and Restated
Lock-up Agreement in accordance with its terms) not to withdraw or take any
action to withdraw any of the Lock-up Shares notwithstanding any statutory right
or other rights under the terms of the Offer or otherwise which it might have.
Mr. Jean-Jacques Cossette, the Cossette Family and Members of Forex Senior
Management have agreed to deposit the Lock-up Shares pursuant to the Offer
within three business days of the date of the Offer, other than the Shares
issuable upon the exercise of options which may be tendered no later than
twenty-four hours prior to the Expiry Date.
In the Amended and Restated Lock-up Agreement, Mr. Jean-Jacques Cossette,
the Cossette Family and Members of Forex Senior Management covenanted, among
other things, that until the Offeror had taken up and paid for the Shares under
the Offer or abandoned the Offer or the Amended and Restated Lock-up Agreement
had been terminated, they would:
(a) not take any action of any kind which may reduce the likelihood of
success of or delay the completion of the Offer, including but not
limited to any action that Forex would be prohibited from taking
under the first sentence of paragraph (c) under Section 5 of the
Circular, "Arrangements with Forex" without regard to the proviso
thereof, and will not participate in any negotiations regarding, or
otherwise cooperate in any way with or assist or participate in:
(i) the direct or indirect acquisition or disposition of all or
any Shares or any other securities of Forex or its
Subsidiaries (except as expressly provided in the Amended and
Restated Lock-up Agreement); or
(ii) except as expressly permitted by the Amended and Restated
Lock-up Agreement or as previously approved in writing by the
Offeror, any amalgamation, merger, sale of any material part
of Forex's or its Subsidiaries' assets, take-over bid, plan of
arrangement, reorganization, recapitalization, liquidation or
winding-up of, or other business combination or similar
transaction involving Forex or any of its Subsidiaries;
(b) notify the Offeror forthwith upon becoming aware of any Acquisition
Proposal and inform the Offeror of all information (including the
identity of any prospective offeror) known to them at that time
regarding such Acquisition Proposal;
(c) cause the voting rights attaching to Mr. Jean-Jacques Cossette, the
Cossette Family and Members of Forex Senior Management's portion of
the Lock-up Shares to be exercised to oppose any proposed action by:
(i) Forex, its shareholders or others which might reasonably be
regarded as being directed towards or likely to prevent or delay the
successful completion of the Offer, or (ii) Forex or its
shareholders to materially change the business, assets, operations,
capital, affairs, financial conditions, licenses, permits, rights or
privileges, whether contractual or otherwise, or prospects of Forex
and its Subsidiaries which in the judgement of the Offeror, acting
reasonably,
-31-
<PAGE>
could individually, or in the aggregate, adversely affect the value
of the Shares to the Offeror, provided that nothing in the Amended
and Restated Lock-up Agreement shall require Mr. Jean-Jacques
Cossette, the Cossette Family and Members of Forex Senior Management
to request any of their directors or officers who may be a director
of Forex or any one of Mr. Jean-Jacques Cossette, the Cossette
Family and Members of Forex Senior Management who are themselves a
director to take any action or to refrain from taking any action as
a director of Forex or to act otherwise than in accordance with his
or her fiduciary duties as a director of Forex;
(d) use their reasonable best efforts to cause Forex to comply with its
covenants contained in the Amended and Restated Support Agreement.
Mr. Jean-Jacques Cossette, the Cossette Family and Members of Forex Senior
Management, when not in default in the performance of their material obligations
under the Amended and Restated Lock-up Agreement, may, without prejudice to any
other rights, terminate their obligations under the Amended and Restated Lock-up
Agreement by notice to the Offeror if (a) the Offeror has not taken up and paid
for the Lock-up Shares prior to December 31, 1999, (b) the Shares deposited
under the Offer (including the Lock-up Shares) have not, for any reason
whatsoever (other than that all the terms and conditions of the Offer have not
been complied with or waived by the Offeror), been taken up and paid for on or
before the expiry of 10 days after the Expiry Date (as it may be extended) or
(c) the board of directors of Forex shall withdraw or modify in a manner adverse
to the Offeror its approval or recommendation of the Offer, or approve or
recommend any Superior Proposal or determine that any Acquisition proposal is a
Superior Proposal, or take or resolve to take any of the foregoing actions,
provided that the termination of the Amended and Restated Lock-up Agreement as
described in this clause ((c)) shall not be effective unless and until Forex
shall have paid the Offeror the sum of $29.8 million in immediately available
funds.
5. ARRANGEMENTS WITH FOREX
Other than as set forth below, none of the Offeror or its affiliates have
any arrangements with Forex with respect to the Offer.
Pursuant to the Amended and Restated Support Agreement and subject to the
conditions set forth therein, the Offeror agreed to make the Offer. Forex has
represented, among other things, to Louisiana-Pacific in the Amended and
Restated Support Agreement (i) that the board of directors of Forex, upon
consultation with its financial and legal advisors, has determined that the
price per Share offered pursuant to the Offer is fair to the Shareholders, (ii)
that the Offer is in the best interest of Forex and the Shareholders and (iii)
that its board of directors has decided to recommend that the Shareholders and
beneficial owners of Forex Convertible Debentures accept the Offer. See
accompanying Forex Directors' Circular.
Forex has also represented to Louisiana-Pacific that the board of directors
of Forex has received on August 12, 1999 an oral opinion from Forex's financial
advisor that the Cash Option under the Offer is fair from a financial point of
view to the Shareholders. The written form of such opinion, as amended and
updated on August 16, 1999, is to be appended to the Forex Directors' Circular.
In the Amended and Restated Support Agreement, Forex covenanted, among
other things, that until the Offeror had taken up and paid for the Shares under
the Offer or abandoned the Offer or the Amended and Restated Support Agreement
had been terminated:
(a) except as previously disclosed to the Offeror, it shall, and shall
cause each of its Subsidiaries to, conduct its and their respective
businesses only in, and not take or omit to take any action except
in, the usual, ordinary and regular course of business and
consistent with past practice;
(b) without restricting the fiduciary obligations of its directors, it
shall use all commercially reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done, all other
things necessary, proper or advisable under all applicable laws to
complete the Offer and the transactions contemplated by the Amended
and Restated Support Agreement;
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<PAGE>
(c) it shall not, directly or indirectly, through any officer, director,
employee, representative or agent of Forex or any of its
Subsidiaries, solicit, initiate or knowingly encourage or facilitate
(including by way of furnishing information or entering into any
form of agreement, arrangement or understanding) the initiation of
any inquiries or proposals regarding an Acquisition Proposal,
participate in any discussions or negotiations regarding any
Acquisition Proposal, withdraw or modify in a manner adverse to the
Offeror the approval of the board of directors of Forex of the
transactions contemplated by the Amended and Restated Support
Agreement, accept or approve or recommend any Acquisition Proposal
or cause Forex to enter into any agreement related to any
Acquisition Proposal; provided, however, that subject to paragraph
(e) below but notwithstanding the preceding part of this paragraph
and any other provision of the Amended and Restated Support
Agreement, nothing shall prevent the board of directors of Forex
from considering, negotiating, approving, recommending to the
Shareholders or entering into an agreement in respect of an
unsolicited BONA FIDE written Acquisition Proposal made and received
under circumstances not involving any breach of this paragraph that
the board of directors of Forex determines in good faith, after
consultation with financial advisors and after receiving a written
opinion of outside counsel to the effect that the board of directors
of Forex is required to take such action in order to discharge
properly its fiduciary duties, would, if consummated in accordance
with its terms, result in a transaction more favourable to the
Shareholders than the transaction contemplated by the Amended and
Restated Support Agreement (any such Acquisition Proposal being
referred to herein as a "SUPERIOR PROPOSAL"), or from approving or
recommending such Superior Proposal;
(d) if Forex receives a request for non-public information from a person
who shall have made a BONA FIDE Acquisition Proposal (the existence
and content of which have been disclosed to the Offeror), and the
board of directors of Forex determines that such proposal would be a
Superior Proposal pursuant to paragraph (c) above after having
received the opinion referred to therein, then, and only in such
case, the board of directors of Forex may, subject to the execution
of a confidentiality agreement containing a standstill provision
substantially similar to that contained in the confidentiality
agreement signed by Louisiana-Pacific, provide such person with
access to information regarding Forex, provided, however that Forex
sends a copy of any such confidentiality agreement to the Offeror
immediately upon its execution and the Offeror is provided with a
list of or copies of the information provided to such person and
immediately provided with access to similar information to which
such person was provided;
(e) it shall not withdraw or modify in a manner adverse to the Offeror
its approval or recommendation of the Offer or accept, approve,
recommend or enter into any agreement in respect of an Acquisition
Proposal (other than a confidentiality agreement) on the basis that
it would constitute a Superior Proposal unless (i) it has notified
the Offeror of its BONA FIDE intention to do so and provided the
Offeror with a copy of the documentation setting forth or providing
for such Acquisition Proposal, and (ii) five business days shall
have elapsed from the later of the date the Offeror received such
notice and the date the Offeror received a copy of such
documentation;
(f) during such five business day period, the Offeror shall have the
opportunity, but not the obligation, to offer to amend the terms of
the Amended and Restated Support Agreement. The board of directors
of Forex will review any offer by the Offeror to amend the terms of
the Amended and Restated Support Agreement in good faith in order to
determine, in its discretion in the exercise of its fiduciary
duties, whether the Offeror's offer upon acceptance by Forex would
result in the Acquisition Proposal not being a Superior Proposal. If
the board of directors of Forex so determines, it will enter into an
amended agreement with the Offeror reflecting the Offeror's amended
proposal.
Forex, when not in default in the performance of its material obligations
under the Amended and Restated Support Agreement, may, without prejudice to any
other rights, terminate its obligations under the Amended and Restated Support
Agreement by notice to the Offeror if (a) the Offeror has not taken up and paid
for the Shares prior to December 31, 1999, (b) the Shares deposited under the
Offer have not, for any reason whatsoever (other than that all the terms and
conditions of the Offer have not been complied with or waived by the Offeror),
been taken up and paid for on or before the expiry of 10 days after the Expiry
Date (as it may be extended) or (c) the board of directors
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<PAGE>
of Forex shall withdraw or modify in a manner adverse to the Offeror its
approval or recommendation of the Offer, or approve or recommend any superior
Proposal, or determine that any Acquisition Proposal is a Superior Proposal, or
take or resolve to take any of the foregoing actions, provided that the
termination of the Amended and Restated Support Agreement as described in this
clause (c) shall not be effective unless and until Forex shall have paid the
Offeror the sum of $29.8 million in immediately available funds.
The Offeror, when not in default in performance of its material obligations
under the Amended and Restated Support Agreement, may, without prejudice to any
other rights, terminate its obligations under the Amended and Restated Support
Agreement by notice to Forex if (a) the Offeror has not taken up and paid for
the Shares on or prior to December 31, 1999, (b) a Break Fee Event shall have
occurred, (c) as a result of the failure of any of the conditions of the Offer,
the Offer shall have expired or have been terminated in accordance with its
terms without the Offeror having purchased any Share pursuant to the Offer, or
(d) Mr. Jean-Jacques Cossette, the Cossette Family, the Members of Forex Senior
Management or Forex shall have breached in any material respect any of their
respective representations, warranties, covenants or other agreements contained
in the Amended and Restated Lock-up Agreement or the Amended and Restated
Support Agreement. Forex shall pay the sum of $29.8 million to the Offeror in
the event (i) of any termination of the Amended and Restated Support Agreement
as a result of the occurrence of an event referred to in clause (b) or (d) of
the immediately preceding sentence, or (ii) that an Acquisition Proposal made
by a person other than the Offeror shall be publicly announced or communicated
to Forex prior to the termination of the Amended and Restated Support Agreement
and consummated within twelve months of the date of the Amended and Restated
Support Agreement or within six months after termination of the Amended and
Restated Support Agreement, whichever shall occur later.
6. PURPOSE OF THE OFFER AND THE OFFEROR'S PLANS FOR FOREX
PURPOSE OF THE OFFER
The purpose of the Offer is to enable the Offeror to acquire all the Class
A Multiple Voting Shares and Class B Subordinate Voting Shares. The Offeror's
current intentions are to acquire, following the completion of the Offer, all
Shares not deposited under the Offer. See Section 11 of the Circular,
"Acquisition of Shares Not Deposited". The exact timing and details of a
Compulsory Acquisition or Subsequent Acquisition Transaction involving Forex
will necessarily depend upon a variety of factors, including the number of
Shares acquired pursuant to the Offer.
Louisiana-Pacific believes that the acquisition of Forex is consistent with
Louisiana-Pacific's established acquisition criteria and will further
Louisiana-Pacific's goal of being the premier supplier of building products in
North America. In particular, Louisiana-Pacific believes that the acquisition of
Forex will enhance Louisiana-Pacific's ability to be an efficient and effective
supplier and to satisfy its customers' needs across North America.
PLANS FOR FOREX
Except as described in the Offer or in the Circular, the Offeror does not
plan to make material changes in the business of Forex. It is possible that
Forex may become amalgamated or be wound up into the Offeror and/or an affiliate
of the Offeror. If permitted by applicable law, subsequent to the completion of
the Offer or the Subsequent Acquisition Transaction, if necessary, the Offeror
intends to delist the Class A Multiple Voting Shares and the Class B Subordinate
Voting Shares from the ME and cause Forex to cease to be a reporting issuer
under applicable securities legislation in any province in which it has an
insignificant number of security holders.
7. SOURCE OF FUNDS
The consideration payable for the Shares purchased pursuant to the Offer
will consist of cash, Installment Notes or a combination of cash and Installment
Notes. The respective proportions of cash and Installment Notes that will be
payable for Shares purchased pursuant to the Offer or pursuant to any following
Compulsory Acquisition or Subsequent Acquisition Transaction cannot presently be
determined.
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<PAGE>
The Offeror estimates that if all Shareholders select the Cash Option and
if it acquires all of the Shares (including the Class B Subordinate Voting
Shares which may be issued upon the exercise of outstanding options and
conversion of Forex Convertible Debentures) pursuant to the Offer or pursuant to
any following Compulsory Acquisition or Subsequent Acquisition Transaction, the
total amount required to purchase such Shares will be approximately $759 million
(excluding the related fees and expenses under the Offer estimated at $6
million). Louisiana-Pacific expects to fund the cash portion of the aggregate
purchase price of the Shares and other amounts payable in connection with the
acquisition of Forex from its existing cash balances and a combination of: (i)
borrowings under its existing credit facility (the "EXISTING CREDIT FACILITY")
with Bank of America and certain other financial institutions and (ii)
borrowings under a new bridge loan facility described below ("the "BRIDGE LOAN
FACILITY"). As of August 16, 1999, Louisiana-Pacific had approximately U.S. $300
million of borrowing capacity available under the Existing Credit Facility.
Louisiana-Pacific has obtained the written commitment of Bank of America to
provide the Bridge Loan Facility for a minimum amount of U.S. $300 million,
subject to the negotiation and execution of definitive documentation.
8. SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following table sets out certain unaudited historical consolidated
financial information for Louisiana-Pacific as at and for the six months ended
June 30, 1999 and certain audited historical consolidated financial information
and unaudited pro forma consolidated financial information for Louisiana-Pacific
as at and for the year ended December 31, 1998. The historical consolidated
financial information is extracted from and should be read in conjunction with
the financial statements of Louisiana-Pacific and accompanying notes set forth
in Schedule II to the Circular. The pro forma consolidated financial information
is extracted from and should be read in conjunction with the pro forma financial
data of Louisiana-Pacific and accompanying notes at Schedule III to the
Circular. The amounts in the following table have been converted to Canadian
Generally Accepted Accounting Principles.
<TABLE>
<CAPTION>
PRO FORMA
SIX MONTHS ENDED YEAR ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998 DECEMBER 31, 1998
---------------------------------------------------------------
(in million US $, except per share amounts)
<S> <C> <C> <C>
Total revenue.................................. $ 1,368.6 $ 2,297.1 $ 2,452.3
Net income (loss).............................. 112.1 2.0 (26.3)
Net income (loss) per share - basic and diluted 1.05 0.02 (0.24)
Total Assets................................... 2,844.4 2,560.2 3,226.7
Long-term debt................................. 578.1 459.8 1,085.5
Shareholders' equity........................... 1,355.8 1,269.9 1,269.9
Cash flow from operations...................... 211.3 123.0 N/A
</TABLE>
9. EFFECT OF THE OFFER ON MARKET AND LISTINGS
The purchase of Shares by the Offeror pursuant to the Offer will reduce the
number of Shares which might otherwise trade publicly, as well as the number of
Shareholders, and, depending on the number of Shareholders depositing and the
number of Shares purchased under the Offer, could adversely affect the liquidity
and market value of the remaining Shares held by the public. After the purchase
of Shares under the Offer, it may be possible for Forex to take steps towards
the elimination of any applicable public reporting requirements under applicable
securities legislation in any province in which it has an insignificant number
of security holders.
The rules and regulations of the ME establish certain criteria which, if
not met, could lead to the delisting of the Shares from the ME. Among such
criteria are the number of Shareholders, the number of Shares publicly held and
the aggregate market value of the Shares publicly held. Depending on the number
of Shares purchased pursuant to the Offer, it is possible that the Shares would
fail to meet the criteria for continued listing on the ME. If this were to
happen, the Shares could be delisted and this could, in turn, adversely affect
the market or result in a lack of an established market for such Shares. It is
the intention of the Offeror to apply to delist the Shares from the ME as soon
as practicable after completion of the Offer, if all the issued and outstanding
Shares are deposited, or after a Compulsory Acquisition or Subsequent
Acquisition Transaction, if any.
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<PAGE>
10. PRICE RANGE AND TRADING VOLUME OF CLASS A MULTIPLE VOTING SHARES AND
CLASS B SUBORDINATE VOTING SHARES
The Class A Multiple Voting Shares and Class B Subordinate Voting Shares
are listed and posted for trading on the ME. The volume of trading and the price
ranges of the Class A Multiple Voting Shares and Class B Subordinate Voting
Shares of Forex on the ME (as reported by the ME) are set forth on the following
table for the periods indicated:
<TABLE>
<CAPTION>
CLASS A MULTIPLE VOTING SHARE CLASS B SUBORDINATE VOTING SHARES
---------------------------------------- ------------------------------------
HIGH $ LOW $ VOLUME HIGH $ LOW $ VOLUME
----------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
1998
- ---------
JANUARY 4.50 4.00 22,525 4.40 3.85 20,260
FEBRUARY 4.90 4.05 37,150 4.85 3.85 66,745
MARCH 5.55 4.35 70,010 5.50 4.15 137,460
APRIL 6.00 5.00 207,563 5.75 5.00 160,996
MAY 6.90 5.75 119,172 6.80 5.40 225,088
JUNE 6.60 5.25 84,350 6.50 5.25 73,492
JULY 7.75 5.65 173,692 7.75 5.35 166,923
AUGUST 7.75 6.50 190,001 7.50 6.50 265,597
SEPTEMBER 7.45 5.80 58,508 7.50 6.25 63,283
OCTOBER 7.25 5.90 85,006 7.10 5.85 125,265
NOVEMBER 7.50 6.50 189,015 7.50 6.55 159,712
DECEMBER 7.75 7.00 83,701 7.70 6.70 83,126
1999
- ----
JANUARY 10.15 7.00 255,102 10.00 7.00 280,693
FEBRUARY 11.00 9.35 292,329 9.85 9.00 261,523
MARCH 13.50 9.65 233,723 13.50 9.10 664,272
APRIL 14.50 11.35 216,572 13.50 11.20 622,603
MAY 15.35 13.75 116,468 14.40 12.80 725,948
JUNE 25.50 14.10 384,936 25.50 13.70 2,691,820
JULY 31.40 25.00 498,027 31.50 25.10 3,308,689
AUGUST (UNTIL AUGUST 12) 33.00 30.75 394,512 33.00 30.75 1,402,838
</TABLE>
On June 21, 1999, the trading day immediately prior to the announcement by
Forex that it had received expressions of interest to purchase Forex and on June
25, 1999, the last full trading day prior to the announcement of the Offeror's
intention to make an offer for the Shares at $26.00 per Share, the closing price
on the ME of the Class A Multiple Voting Shares and the Class B Subordinate
Voting Shares were $18.75 and $18.50, respectively, and $21.40 and $21.00,
respectively. The average closing prices on the ME for the Class A Multiple
Voting Shares and the Class B Subordinate Voting Shares for the 20 trading days
prior to the announcement of the Offeror's intention to make such prior offer
were $16.40 and $15.90, respectively; thus, the price offered in the Offer
represents a premium of respectively 101.22% and 107.55%, respectively, on such
average closing prices.
11. ACQUISITION OF SHARES NOT DEPOSITED
COMPULSORY ACQUISITION
If the number of Class A Multiple Voting Shares or Class B Subordinate
Voting Shares deposited under the Offer and not withdrawn represents 9/10 or
more of the outstanding Class A Multiple Voting Shares or Class B Subordinate
Voting Shares, as the case may be, pursuant to Section 51 of the COMPANIES ACT
(Quebec), the Offeror may, in the six months following the date of the Offer,
give notice that it will purchase, on the same terms and conditions as the
Offer, the Class A Multiple Voting Shares or Class B Subordinate Voting Shares
or both, as the case may be, of the Shareholders who have not accepted the Offer
or propose a Subsequent Acquisition Transaction, as described under "Subsequent
Acquisition Transaction" below.
This notice will be given in the manner prescribed by a court of competent
jurisdiction, following a motion to such effect by the Offeror, and will seek
the purchase of such Class A Multiple Voting Shares or Class B Subordinate
Voting Shares, as the case may be, pursuant to the terms of the Offer.
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<PAGE>
The Offeror currently intends to exercise the rights resulting from these
provisions (reference is made to Section 51 of the Companies ACT (Quebec) (the
"ACT") for the full text of the relevant statutory provisions) or propose an
amalgamation, as described under "Subsequent Acquisition Transaction" below.
SUBSEQUENT ACQUISITION TRANSACTION
If the statutory right of acquisition described above is not available or
if it is available but the Offeror elects not to pursue such right, then the
Offeror currently intends to pursue other means of acquiring, directly or
indirectly, all the Shares in accordance with applicable law, including by way
of a Subsequent Acquisition Transaction. To effect a Subsequent Acquisition
Transaction, the Offeror may seek to cause a special meeting of Shareholders to
be called to consider such a transaction. Pursuant to the Act, if the Offeror
proposes an amalgamation between the Offeror or an affiliate of the Offeror and
Forex, such amalgamation must be approved by at least two-thirds of the votes
cast by holders of the Class A Multiple Voting Shares and Class B Subordinate
Voting Shares voting together. The timing and details of any such transaction
will necessarily depend on a variety of factors, including the number of Shares
acquired pursuant to the Offer. In the event of any such Subsequent Acquisition
Transaction, the Shareholders, other than the Offeror and its affiliates, could
receive cash, preferred shares (which may be immediately redeemable for cash),
debt or any combination thereof. The consideration offered to Shareholders in a
Subsequent Acquisition Transaction could have a higher or lower value than the
value of the consideration offered for the Shares pursuant to the Offer. The
Offeror's current intention is that the value of the consideration to be paid to
Shareholders pursuant to a Subsequent Acquisition Transaction will be equal and
identical to that payable under the Offer.
The methods of acquiring the remaining outstanding Shares described above,
other than the statutory right of compulsory acquisition under Section 51 of the
Act, may include a "going private transaction" within the meaning of certain
applicable Canadian securities legislation and regulations (all such regulations
being collectively referred to in this Section 11 of this Circular as the
"REGULATIONS"), Policy No. 9.1 and Policy Q-27 if such method would result in
the interest of a holder of Shares (the "AFFECTED SECURITIES") being terminated
without the consent of the Shareholder and without the substitution therefor of
an interest of equivalent value in a participating security of Forex, a
successor to the business of Forex or a person who controls Forex or, in the
cases of Policy 9.1 and Policy Q-27, a person who controls a successor to the
business of Forex. The Subsequent Acquisition Transaction may also include
"RELATED PARTY TRANSACTIONS" for purposes of Policy 9.1 and Policy Q-27.
Policy 9.1 and Policy Q-27 provide that, unless exempted, a corporation
proposing to carry out a going private transaction (or a related party
transaction) is required to prepare a valuation of the affected securities (and
any non-cash consideration being offered therefor) and provide to the holders of
the affected securities a summary of such valuation. The Regulations impose a
requirement to include a summary of a similar valuation in a take-over bid
circular where the take-over bid is an insider bid or where it is anticipated by
the Offeror that a going private transaction will follow the take-over bid. The
Offeror is relying on exemptions provided in the Regulations in connection with
the valuation requirements in connection with the Offer and intends to rely on
any exemption then available or to seek a waiver pursuant to Policy 9.1 and
Policy Q-27 exempting the Offeror or Forex, as appropriate, from the requirement
to prepare a valuation in connection with any Subsequent Acquisition Transaction
proposed by the Offeror.
Policy 9.1 and Policy Q-27 also require that, unless exempted, in addition
to any other required shareholder approval, in order to complete a going private
transaction or a related party transaction, the approval of a simple or
two-thirds majority (depending on the nature of the transaction) of the votes
cast by "minority" holders of the affected securities be obtained. In relation
to the Offer and any subsequent going private or related party transaction, the
"minority" holders will be, unless an exemption is available or discretionary
relief is granted by the OSC and the QSC, as required, all holders of Shares,
other than: (i) the Offeror (other than in respect of Shares acquired pursuant
to the Offer, as described below), (ii) any director or officer of the Offeror,
(iii) any person or company acting jointly or in concert with the foregoing, or
(iv) any affiliate of the foregoing. Policy 9.1 and Policy Q-27 also provide
that, other than Shares tendered to an offer pursuant to a lock-up agreement by
a person who participated in the negotiation of the prior transaction, the
Offeror may treat Shares acquired pursuant to the Offer as "minority" shares and
vote them, or consider them voted, in favour of such going private or related
party transaction if the consideration per security in the going private or
related party transaction is at least equal in value to the consideration paid
under the Offer. The Offeror believes that votes in respect of Class A Multiple
Voting Shares and
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<PAGE>
Class B Subordinate Voting Shares acquired by the Offeror under the Offer, other
than those acquired from Mr. Jean-Jacques Cossette, pursuant to the Amended and
Restated Lock-up Agreement (subject to receiving confirmation from regulatory
authorities, where applicable), would be counted in the determination of whether
the required minority approval has been obtained. The Offeror currently intends
that the consideration offered under any Subsequent Acquisition Transaction
proposed by it would be identical to the price paid under the Offer. If,
following the Offer, the Offeror and its affiliates are the registered holders
of 90% or more of the Shares at the time the going private or related party
transaction is initiated, the requirement for minority approval under Policy 9.1
and Policy Q-27 will not apply to the transaction if a statutory dissent and
appraisal remedy is available, or if a substantially equivalent enforceable
right is made available, to the minority shareholders.
Although the Offeror currently intends to propose a Compulsory Acquisition
or a Subsequent Acquisition Transaction generally on the terms described herein,
it is possible that, as a result of delays in the Offeror's ability to effect
such a transaction, information hereafter obtained by the Offeror, changes in
general economic or market conditions or in the business of Forex, or other
currently unforeseen circumstances, such a transaction may not be so proposed,
may be delayed or abandoned or may be proposed on different terms. The Offeror
expressly reserves the right not to propose a Compulsory Acquisition, or
Subsequent Acquisition Transaction involving Forex, or to propose a Subsequent
Acquisition Transaction on terms other than those described herein.
If the Offeror decides not to propose a Compulsory Acquisition or a
Subsequent Acquisition Transaction, or proposes a Subsequent Acquisition
Transaction but cannot promptly obtain any required approvals, the Offeror will
evaluate its other alternatives. Such alternatives could include, to the extent
permitted by applicable law, purchasing additional Shares in the open market, in
privately negotiated transactions, in another take-over bid or exchange offer or
otherwise, or taking no further action to acquire additional Shares. Any
additional purchases of Shares could be at a price greater than, equal to or
less than the price to be paid for Shares under the Offer and could be for cash
and/or other consideration. Alternatively, the Offeror may sell or otherwise
dispose of any or all Shares acquired pursuant to the Offer or otherwise. Such
transactions may be effected on terms and at prices then determined by the
Offeror, which may vary from the price paid for Shares under the Offer.
See "Certain Income Tax Considerations" in Section 21 of the Circular, for
a discussion of the income tax consequences to Shareholders of a Subsequent
Acquisition Transaction.
JUDICIAL DEVELOPMENTS
Prior to the pronouncement of Policy 9.1 and Policy Q-27, Canadian courts
had, in a few instances, granted preliminary injunctions to prohibit
transactions which constituted "going private transactions" within the meaning
of Policy 9.1 and Policy Q-27. The Offeror has been advised that more recent
legislative enactments and notices and judicial decisions indicate a willingness
to permit "going private transactions" to proceed subject to compliance with
requirements intended to ensure procedural and substantive fairness to the
minority shareholders.
Shareholders should consult their legal advisors for a determination of
their legal rights with respect to any transaction which may constitute a
Subsequent Acquisition Transaction.
Certain judicial decisions may be considered relevant to any Subsequent
Acquisition Transaction which may be proposed or effected subsequent to the
expiry of the Offer. Prior to the adoption of Policy 9.1 and Policy Q-27,
Canadian courts, in a few instances, granted preliminary injunctions to prohibit
transactions involving going private amalgamations. The current trend both in
legislation and in the American jurisprudence upon which the previous Canadian
decisions were based is toward permitting going private transactions to proceed
subject to compliance with procedures designed to ensure substantive fairness to
the minority shareholders. Holders should consult their legal advisor for a
determination of their legal rights.
In two decisions in 1978, the Supreme Court of Ontario restrained proposed
amalgamations which would have had the effect of eliminating the interest which
minority shareholders held in one of the amalgamating corporations, without the
minority shareholders having been offered the opportunity to receive in exchange
participating securities issued by the amalgamated corporation, an affiliate or
a successor body corporate, with the result that the existing controlling
shareholder would become the sole holder of common shares of the amalgamated
corporation. See CARLTON REALTY LTD. V. MAPLE LEAF MILLS LTD. (1978), 22 O.R.
(2d) 198 and ALEXANDER V.
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WESTEEL-ROSCO LTD. (1978), 22 O.R. (2d) 211. In light of the specific regulatory
framework governing "going private transactions" in Policy 9.1 and Policy Q-27
and the decision of the Supreme Court of Ontario in LORNEX described below, the
decisions in MAPLE LEAF MILLS and WESTEEL-ROSCO may be of limited relevance to
any Subsequent Acquisition Transaction that may be effected by the Offeror in
respect of Forex subsequent to the Offer.
In THE GENERAL ACCIDENT ASSURANCE COMPANY OF CANADA V. LORNEX MINING
CORPORATION LTD. ET AL (1988), 66 O.R. (2d) 783, the Supreme Court of Ontario
declined to grant injunctive relief to a minority shareholder of Lornex seeking
to prevent a proposed amalgamation squeeze-out transaction which was to follow a
take-over bid made through the facilities of the Vancouver Stock Exchange. The
minority shareholder also sought an order declaring that the minority
shareholders of Lornex were entitled to vote separately as a class in approving
the proposed amalgamation. Lornex was not an "offering corporation" as defined
in the BUSINESS CORPORATIONS ACT (Ontario) ("OBCA"), so the "going private
transaction" provision of Section 190 of the OBCA were held to be not applicable
to it. The Court held that the proposed amalgamation did not contravene the
relevant provisions of the OBCA and that, in light of the oppression remedy
contained in the OBCA, the OBCA did not require that a separate class vote of
the minority shareholders of Lornex be held to approve the amalgamation. The
Court further held that the minority shareholders failed to establish that the
proposed amalgamation was oppressive or unfairly prejudicial to or unfairly
disregarded the rights of the minority shareholders of Lornex.
Shareholders should consult their legal advisors for a determination of
their legal rights with respect to any transaction which may constitute a going
private transaction or a related party transaction.
TREATMENT OF FOREX CONVERTIBLE DEBENTURES
The Offer is not being made for the outstanding Forex Convertible
Debentures. Beneficial owners of Forex Convertible Debentures wishing to accept
the Offer in respect of the Shares into which Forex Convertible Debentures are
convertible should exercise the Forex Convertible Debenture Conversion Rights
attached thereto in a timely manner or comply with the procedure for acceptance
of the Offer described in Section 1 of the Offer, "The Offer". The beneficial
owner of any Forex Convertible Debenture that is so converted will be entitled
to receive from Forex accrued and unpaid interest thereon up to the date of such
conversion. Each $1,000 of principal of Forex Convertible Debenture is presently
convertible into 139.86 Class B Subordinate Voting Shares (subject to rounding
to eliminate fractional shares). The purchase price payable by the Offeror
pursuant to the Offer for 139.86 Class B Subordinate Voting Shares is $4,615.38.
Beneficial owners of Forex Convertible Debentures who do not wish to
participate in the Offer may continue to hold, through their nominee holder,
such Forex Convertible Debentures notwithstanding the acquisition of Shares by
the Offeror, and the rights and limitations relating thereto (and to successor
obligations following a Subsequent Acquisition Transaction) will continue to be
governed by the terms and conditions thereof and as set forth in the Agency
Indenture pursuant to which the Forex Convertible Debentures were issued. The
Agency Indenture governing the Forex Convertible Debentures provides that,
should the Offeror propose a Corporate Reorganization (such as a Subsequent
Acquisition Transaction), the beneficial owners of Forex Convertible Debentures
who exercise their conversion privilege after the Corporate Reorganization will
be entitled to receive, in lieu of the Class B Subordinate Voting Shares to
which such beneficial owners would have been entitled to receive upon conversion
prior to the Corporate Reorganization, only the shares or other property,
including any cash, which such beneficial owners would have been entitled to
receive following the Corporate Reorganization if, on the effective date of such
Corporate Reorganization, such beneficial owners had been registered holders of
the number of Class B Subordinate Voting Shares to which they would have been
entitled to receive upon conversion prior to the Corporate Reorganization, the
whole without any approval of the Corporate Reorganization on the part of the
beneficial owners of Forex Convertible Debentures. IF THE OFFER IS SUCCESSFUL,
THE OFFEROR CURRENTLY INTENDS TO CARRY OUT AFTER THE EFFECTIVE DATE A CORPORATE
REORGANIZATION AS A RESULT OF WHICH BENEFICIAL OWNERS OF FOREX CONVERTIBLE
DEBENTURES WHO HAVE NOT ACCEPTED THE OFFER AND WHO THEREAFTER EXERCISE THEIR
CONVERSION PRIVILEGE WILL BE ENTITLED TO RECEIVE, IN LIEU OF EACH CLASS B
SUBORDINATE VOTING SHARE WHICH SUCH BENEFICIAL OWNERS WOULD OTHERWISE HAVE BEEN
ENTITLED TO RECEIVE UPON CONVERSION, ONLY A CONSIDERATION EQUAL TO THE CASH
OPTION OR THE NOTE OPTION, PROVIDED THAT NO INTEREST WILL BE PAID ON ANY CASH
CONSTITUTING PART OF SUCH CONSIDERATION AND ANY INSTALLMENT NOTES CONSTITUTING
PART OF SUCH CONSIDERATION SHALL NOT ACCRUE INTEREST PRIOR TO SUCH CONVERSION.
For purposes of the foregoing, "Corporate Reorganization" means an amalgamation,
a statutory arrangement or any similar transaction or any amendment to the
articles of Forex, as a result of which the Shares are
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exchanged, converted, redeemed, in whole or in part, for, into or with
participating or non-participating securities, property or cash.
Pursuant to the Agency Indenture, if a holder of Forex Convertible
Debentures does not exercise his Forex Convertible Debenture Conversion Rights,
the Forex Convertible Debentures will be redeemable at the option of Forex at
par plus accrued and unpaid interest (i) on and after March 12, 2000 provided
that the weighted average trading price of the Class B Subordinate Voting Shares
on the ME during the 20 consecutive trading days ending three trading days
preceding the date on which the notice of redemption is given exceeds 125% of
$7.15 and (ii) on March 13, 2002. In the event that the Offer is successful, the
Offeror currently intends to redeem (or to use its best efforts to cause Forex
or its successor corporation to redeem) all Forex Convertible Debentures which
remain outstanding on the first day on which they are redeemable or as soon as
practicable. Louisiana-Pacific believes that the criteria permitting redemption
on and after March 12, 2000 should be deemed to have been satisfied if, as a
result of a Corporate Reorganization, each $1,000 of principal of each Forex
Convertible Debenture shall have become convertible into cash, securities or
other property having a value greater than $1,250.00 ($7.15 multiplied by 125 %
multiplied by 139.86).
BENEFITS FROM OFFER OR SUBSEQUENT ACQUISITION TRANSACTION
None of the directors and senior officers of the Offeror, and, where known
after reasonable inquiry, none of (a) the associates of a director or senior
officer of the Offeror; (b) any person or company holding more than 10 per cent
of any class of equity securities of the Offeror; and (c) any person or company
acting jointly or in concert with the Offeror has or will receive any direct or
indirect benefits of accepting or refusing to accept the Offer, other than the
receipt of the consideration payable in respect of the Shares, and none of such
persons will receive any direct or indirect benefit as a result of subsequent
material changes or transactions which are contemplated in the Offer.
12. REGULATORY MATTERS
COMPETITION ACT (Canada)
The COMPETITION ACT (Canada) requires the Offeror and Forex to provide the
Commissioner with prior notice and information relating to the Offer and the
parties thereto, and to await the expiration of a prescribed "waiting period",
prior to completion of the purchase by the Offeror of the Shares. The Offeror
filed a short-form pre-merger notification with the Commissioner on July 29,
1999 pursuant to part IX of the COMPETITION ACT (Canada). The applicable waiting
period expired on August 6, 1999.
HART-SCOTT RODINO
Under the provisions of the HSR ACT applicable to the Offer, the purchase
of Shares under the Offer may be consummated following the expiration or
termination of a 15-calendar-day waiting period following the filing by Offeror
of a Notification and Report Form with respect to the Offer. The Offeror made
such filing on July 26, 1999 and such waiting period was terminated by the
United States Federal Trade Commission (the "FTC") on August 9, 1999.
The FTC and the Antitrust Division of the United States Department of
Justice ("ANTITRUST DIVISION") frequently scrutinize the legality under the
antitrust laws of transactions such as the Offeror's proposed acquisition of
Forex. At any time before or after the Offeror's purchase of Shares pursuant to
the Offer, the FTC or the Antitrust Division could take such action under the
antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the purchase of Shares pursuant to the Offer or
seeking the divestiture of Shares acquired by the Offeror or the divestiture of
substantial assets of the Offeror or its Subsidiaries, or Forex or its
Subsidiaries. Private parties may also bring legal action under the antitrust
laws under certain circumstances. There can be no assurance that a challenge to
the Offer on antitrust grounds will not be made or, if such a challenge is made,
of the result of that challenge.
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INVESTMENT CANADA ACT
The acquisition contemplated by the Offer is reviewable under the
INVESTMENT CANADA ACT, a Canadian statute governing the acquisition of control
of Canadian businesses by non-Canadians. A reviewable investment is one for
which the acquiror must submit an application for review with prescribed
information to Industry Canada.
Before a reviewable investment may be completed, the Minister of the
federal Cabinet responsible for Industry Canada must determine that the
investment is likely to be of "net benefit to Canada". The Minister has an
initial 45-day period to make his determination. The Minister may extend that
period for a further 30 days by giving notice to the prospective acquiror. If
the Minister is not satisfied that the investment is likely to be of net benefit
to Canada, he must send a notice to that effect to the prospective acquiror, and
the acquiror has 30 days to make representations and submit undertakings to the
Minister in an attempt to change his decision.
An application for review under the INVESTMENT CANADA ACT was filed by the
Offeror on July 16, 1999 and such application was certified as complete on July
20, 1999.
13. HOLDINGS OF SECURITIES OF FOREX
Neither the Offeror nor Louisiana-Pacific beneficially own, directly or
indirectly, nor do they control or exercise direction over, or have the right to
acquire, any securities of Forex. To the knowledge of the directors and senior
officers of the Offeror, no securities of Forex are owned by any associate or
affiliate of the Offeror or by any associate of any of them or by any person or
company who beneficially owns, directly or indirectly, more than 10% of any
class of equity securities of the Offeror, or by any person or company who
beneficially owns or exercises control over shares of the Offeror carrying more
than 10% of the votes attached to shares of the Offeror.
14. TRADING IN SECURITIES OF FOREX
No securities of Forex have been traded during the six-month period
preceding the date of the Offer by the Offeror or Louisiana-Pacific or by
directors or senior officers of the Offeror or, to the knowledge of directors
and senior officers of the Offeror, by associates or affiliates of the Offeror
or by associates of the directors or senior officers of the Offeror or by any
person or company who beneficially owns, directly or indirectly, more than 10%
of any class of equity securities of the Offeror, or by any person or company
who beneficially owns or exercises control or direction over shares of the
Offeror carrying more than 10% of the votes attached to shares of the Offeror.
15. COMMITMENTS TO ACQUIRE SECURITIES OF FOREX
To the knowledge of the directors and senior officers of the Offeror, no
securities of Forex are covered by any commitments made by the Offeror or
Louisiana-Pacific, or their affiliates and associates or the directors or senior
officers of the Offeror or their respective affiliates and associates, or by any
person or company holding more than 10% of any class of equity securities of the
Offeror, to acquire any securities of Forex, except for the Shares pursuant to
the Amended and Restated Lock-up Agreement and this Offer.
16. ARRANGEMENTS, PRE-ACQUISITION AGREEMENTS OR UNDERSTANDINGS
There are no arrangements or agreements made or proposed to be made between
the Offeror and any of the directors or senior officers of Forex and no payments
or other benefits are proposed to be made or given by the Offeror to such
directors or senior officers as compensation for loss of office or as
compensation for remaining in or retiring from office. Except for the Amended
and Restated Lock-up Agreement and the Amended and Restated Support Agreement,
there are no contracts, arrangements or understandings, formal or informal,
between the Offeror and any security holder of Forex with respect to the Offer
or between the Offeror and any person or company with respect to any securities
of Forex in relation to the Offer. However, it is currently contemplated that
except for the senior officers of Forex who may voluntarily decide to retire,
the current senior officers of Forex will continue to serve in such capacity
after the completion of the Offer.
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17. DESCRIPTION OF THE INSTALLMENT NOTES
GENERAL
The Installment Notes will be issued under an Indenture to be dated as of
the Effective Date (the "INDENTURE"), among the Offeror, Louisiana-Pacific, as
guarantor and Laurentian Trust of Canada Inc., as Installment Note Trustee (the
"TRUSTEE"). The following discussion includes a summary description of certain
material terms of the Indenture.
The Installment Notes will be unsecured obligations of the Offeror but will
be unconditionally guaranteed by Louisiana-Pacific. The initial aggregate
principal amount of the Installment Notes will be limited to the aggregate
principal amount thereof required to be issued pursuant to the Offer and any
Compulsory Acquisition or Subsequent Acquisition Transaction, based upon the
elections made by the holders of Shares. The principal of the Installment Notes
will be paid in equal installments (each such payment, a "PRINCIPAL
INSTALLMENT") on the last day of the calendar quarter in which the first,
second, third and fourth anniversary of the Effective Date occur (each such
date, a "MATURITY DATE"). Other than the payment of the Principal Installment
and the interests accrued thereon at each Maturity Date, the Offeror shall not
otherwise prepay the Installment Notes.
To receive payment of a Principal Installment, the Installment Notes must
be surrendered at the Corporate Trust Office of the Trustee, Laurentian Trust of
Canada Inc., 425 de Maisonneuve West, 1st Floor, Department 772, Montreal,
Quebec H3A 3G5 or at such other place as the Offeror may designate for such
purpose, whereupon the Offeror will execute, and the Trustee will authenticate
and deliver to the holder of such Installment Note, without charge, a new
Installment Note or Installment Notes of like tenor, of any authorized
denomination as requested by such holder, in an aggregate principal amount equal
to and in exchange for the unpaid principal of the Installment Note or
Installment Notes so surrendered. From and after the applicable Maturity Date,
no interest will accrue on the Principal Installment due on such Maturity Date.
Payment of each Principal Installment of an Installment Note will be made on the
applicable Maturity Date or, if later, promptly after the Installment Note is
surrendered for such purpose as described above.
The Installment Notes will bear interest during each Interest Period at a
rate per annum determined by the Offeror to be equal to the Canadian LIBOR Rate
plus the Margin. Such interest will be payable quarterly in arrears on December
31, March 31, June 30 and September 30 of each year commencing on December 31,
1999, to the person in whose name an Installment Note is registered at the close
of business on the fifteenth calendar day (whether or not a business day)
preceding the applicable interest payment date. Such payments will be made at
the Corporate Trust Office of the Trustee or at such other place as the Offeror
may designate for such purpose (or, at the option of the Offeror, by cheque
mailed to the address of the person entitled to receive the same, as such
address appears in the security register).
The Installment Notes will be issued only in fully registered form (without
coupons) in denominations of $1,000 or integral multiples thereof. The Offeror
does not intend to list the Installment Notes on any securities exchange.
The Indenture will not contain any provisions that would limit the ability
of the Offeror or Louisiana-Pacific to issue additional securities, incur
indebtedness, pay dividends or encumber its assets or require the maintenance of
financial ratios or specified levels of net worth or liquidity. In addition, the
Indenture will not contain any provisions that would require the Offeror to
repurchase or redeem or otherwise modify the terms of the Installment Notes upon
a change in control or other events involving the Offeror or Louisiana-Pacific
that may adversely affect the creditworthiness of the Installment Notes. See
"Covenants of the Offeror" below.
LOUISIANA-PACIFIC GUARANTEE
Louisiana-Pacific will unconditionally guarantee the due and punctual
payment of the principal and interest on the Installment Notes when and as the
same shall become due and payable, whether at maturity or otherwise. The
guarantee will be an unsecured obligation of Louisiana-Pacific and will rank
equally with all other unsecured and unsubordinated indebtedness of
Louisiana-Pacific.
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COVENANTS OF THE OFFEROR
MAINTENANCE OF OFFICE OR AGENCY. The Offeror will be required to maintain
an office or agency in each place of payment for the Installment Notes for
notice and demand purposes and for the purposes of presenting or surrendering
the Installment Notes for payment, registration of transfer or exchange.
PAYING AGENTS, ETC. If the Offeror acts as its own paying agent with
respect to the Installment Notes, on or before each due date of the principal of
or interest on the Installment Notes, it will be required to segregate and hold
in trust for the benefit of the persons entitled to payment a sum sufficient to
pay the amount due and to notify the Trustee promptly of its action or failure
to act. If the Offeror has one or more paying agents for the Installment Notes,
prior to each due date of the principal of or interest on the Installment Notes,
it will be required to deposit with a paying agent a sum sufficient to pay the
amount due and, unless the paying agent is the Trustee, to promptly notify the
Trustee of its action or failure to act. All moneys paid by the Offeror to a
paying agent for the payment of principal of or interest on the Installment
Notes that remain unclaimed for two years after the payment of that principal or
interest was due may be repaid to the Offeror, and thereafter the holder of the
Installment Notes may look only to the Offeror for payment.
PAYMENT OF TAXES AND OTHER CLAIMS. The Offeror will be required to pay and
discharge, before the same become delinquent:
(i) all taxes, assessments, and governmental charges levied or imposed
upon the Offeror or any subsidiary of the Offeror or their
properties; and
(ii) all claims for labor, materials and supplies that, if unpaid, would
result in a lien on their property and have a material adverse
effect on the business, assets, financial condition, or results of
operations of the Offeror and its subsidiaries, taken as a whole (a
"MATERIAL ADVERSE EFFECT");
unless, in either case, the same are being contested by proper proceedings.
MAINTENANCE OF PROPERTIES. The Offeror will be required to cause all
properties used in the business of the Offeror or any subsidiary of the Offeror
to be maintained and kept in good condition, repair and working order and to
make any necessary renewals, replacements and improvements to those properties,
except to the extent that the failure to do so would not have a Material Adverse
Effect.
EXISTENCE. The Offeror will be required to, and will be required to cause
its subsidiaries to, preserve and keep in full force and effect their existence,
charter rights, statutory rights and franchises, except to the extent that the
failure to do so would not have a Material Adverse Effect.
COMPLIANCE WITH LAWS. The Offeror will be required to, and will be required
to cause its subsidiaries to, comply with all applicable laws to the extent that
the failure to do so would have a Material Adverse Effect.
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture with respect to
the Installment Notes:
(i) failure to pay the principal of the Installment Notes when it
becomes due and payable;
(ii) failure to pay any interest on the Installment Notes when due, which
failure continues for 30 calendar days;
(iii) failure to perform, or breach of, any other covenant or warranty of
the Offeror in the Indenture, which failure or breach continues for
a period of 60 calendar days after written notice thereof has been
given to the Offeror as provided in the Indenture; and
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(iv) the events of bankruptcy, insolvency or reorganization involving the
Offeror specified in the Indenture.
If an Event of Default described in clause (iv) above occurs, the principal
of, premium, if any, and accrued interest on the Installment Notes will become
immediately due and payable without any declaration or other act on the part of
the Trustee of any holder of the Installment Notes. If any other Event of
Default with respect to the Installment Notes occurs and is continuing, either
the Trustee or the holders of at least 25% in principal amount of the
Installment Notes may declare the principal amount of all the Installment Notes
to be due and payable immediately. However, at any time after a declaration of
acceleration with respect to the Installment Notes has been made, but before a
judgment or decree based on that acceleration has been obtained, the holders of
a majority in principal amount of the Installment Notes may rescind and annul
the acceleration and its consequences if:
(i) the Offeror has paid or deposited with the Trustee a sum sufficient
to pay all amounts of principal of and interest on the Installment
Notes that have become due otherwise than by the declaration of
acceleration; and
(ii) all other Events of Default have been cured or waived as described
in "Modification and Waiver" below.
The Trustee will have no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of the holders of the
Installment Notes unless the holders of the Installment Notes shall have offered
to the Trustee reasonable security or indemnity. Subject to the provisions of
the Indenture, including those requiring security or indemnification of the
Trustee, the holders of a majority in principal amount of the Installment Notes
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Installment Notes. If the
Offeror defaults on the payment of any interest on the Installment Notes for a
period of 30 days or defaults on the payment of any principal on the Installment
Notes when due and payable and fails, upon demand for payment made by the
Trustee, to make the required payment, the Trustee may institute a legal
proceeding against the Offeror and/or Louisiana-Pacific to collect any amounts
determined to be payable.
No holder of an Installment Note will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder unless:
(i) the holder has previously given to the Trustee written notice of a
continuing Event of Default;
(ii) the holders of at least 25% in aggregate principal amount of the
outstanding Installment Notes have requested the Trustee to
institute proceedings in respect of the Event of Default;
(iii) such holder or holders have offered reasonable indemnity to the
Trustee with respect to the proceeding;
(iv) the Trustee has not received from the holders of a majority in
principal amounts of the outstanding Installment Notes a direction
inconsistent with the request to institute the proceedings; and
(v) the Trustee has failed to institute the proceeding within 60
calendar days.
However, the limitations described above will not apply to a suit
instituted by a holder of an Installment Note for enforcement of payment of the
principal of and interest on the Installment Note on or after the applicable due
dates for that principal and interest.
The Offeror will be required to furnish to the Trustee annually a statement
as to the performance by the Offeror of its obligations under the Indenture and
as to any default in the performance of those obligations.
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MODIFICATION AND WAIVER
In general, the Offeror, Louisiana-Pacific and the Trustee may modify and
amend the Indenture with the consent of the holders of a majority in principal
amount of Installment Notes and a majority of the holders of each other series
of debt securities affected thereby. However, no modification or amendment of
the Indenture may, without the consent of the holder of each Installment Note:
(i) change the stated maturity of, or any installment of principal of,
or interest on the Installment Notes;
(ii) reduce the principal amount of, or the rate of interest on the
Installment Notes;
(iii) change the place or currency of payment of principal of interest on
the Installment Notes;
(iv) impair the right to institute suit for the enforcement of any
payment on or with respect to the Installment Notes on or after the
stated maturity or prepayment date thereof; or
(v) reduce the percentage in principal amount of the Installment Notes
required for modification or amendment of the Indenture or for
waiver of compliance or defaults.
The holders of a majority in principal amount of the Installment Notes may,
on behalf of the holders of all the Installment Notes, waive compliance by the
Offeror with the covenants described above in "Covenants of the Offeror " under
the captions "Payment of Taxes and Other Claims", "Maintenance of Properties",
"Existence" and "Compliance with Laws". The holders of a majority in principal
amount of the Installment Notes may, on behalf of the holders of all the
Installment Notes, waive any past default under the Indenture with respect to
the Installment Notes, except:
(i) a default in the payment of the principal of interest on the
Installment Notes, or
(ii) a default in respect of a provision of the Indenture that cannot be
modified or amended without the consent of the holder of each
Installment Note.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
The Offeror may, at any time, elect to:
(i) discharge the entire indebtedness represented by the Installment
Notes and be deemed to have satisfied all of its other obligations
with respect to the Installment Notes, except to the limited extent
described below ("LEGAL DEFEASANCE"); or
(ii) be released from its obligations to comply, with respect to the
Installment Notes, with: the covenants described above in "Covenants
of the Offeror" under the captions "Payment of Taxes and Other
Claims", "Maintenance of Properties", "Existence" and "Compliance
with Laws"; and the restrictions described below in "Limitations on
Merger and Other Transactions" ("COVENANT DEFEASANCE").
Following any legal defeasance, holders of the Installment Notes will have
the right to receive, solely from the trust fund described below, payments of
principal of interest on the Installment Notes when those payments are due. In
addition, the Offeror will continue to have some limited obligations under the
Indenture, including obligations to:
(i) register the transfer or exchange of the Installment Notes;
(ii) replace destroyed, stolen, lost or mutilated Installment Notes;
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(iii) maintain an office or agency in respect of the Installment Notes;
and
(iv) holds funds for payment to holders of the Installment Notes in
trust.
Following any covenant defeasance, the occurrence of an event described in
clause (iii) under "Events of Default" above will no longer be an Event of
default with respect to the Installment Notes, except that any failure by the
Offeror to comply with the UNDEFEASED covenants may constitute an Event of
Default as described in clause (iii) under "Events of Default" above. If the
Installment Notes become due and payable because of the occurrence of any
undefeased Event of Default, the amount of money in the trust fund described
below may be insufficient to pay the amounts then due. However, the Offeror will
continue to be obligated to cause those amounts to be paid.
In order to effect either legal defeasance or covenant defeasance, the
Offeror must irrevocably deposit with the Trustee, in trust, money in an amount
sufficient to pay all of the principal of and interest on the Installment Notes
on the dates the payments are due in accordance with the terms of the
Installment Notes. In addition:
(i) no Event of Default or event which with the giving of notice or
lapse or time, or both, would become an Event of Default under the
Indenture shall have occurred and be continuing on the date of the
deposit described above; and
(ii) no Event of Default described in clause (iv) under "Events of
Default" above or event that with the giving of notice or lapse of
time, or both, would become an Event of Default described in that
clause (iv) shall have occurred and be continuing at any time on or
prior to the 90th calendar day following the date of the deposit
described above.
SATISFACTION AND DISCHARGE
The Offeror, at its option, may satisfy and discharge the Indenture when:
(i) either:
(1) all Installment Notes previously authenticated and delivered
under the Indenture (subject to exceptions relating to
Installment Notes that have otherwise been satisfied or
provided for) have been delivered to the Trustee for
cancellation; or
(2) all Installment Notes not previously delivered to the Trustee
for cancellation have become due and payable or will become
due and payable at their stated maturity within one year and
the Offeror has deposited or caused to be deposited with the
Trustee as trust funds for that purpose an amount sufficient
to pay and discharge the entire indebtedness on those
Installment Notes, for principal and interest to the date of
the deposit (in the case of debt securities which have become
due and payable) or to the stated maturity;
ii) the Offeror has paid or caused to be paid all other sums payable
under the Indenture by the Offeror; and
(iii) the Offeror has delivered to the Trustee an officer's certificate
and an opinion of counsel, each to the effect that all conditions
precedent relating to the satisfaction and discharge of the
Indenture have been satisfied.
Following any satisfaction and discharge of the Indenture, the Offeror and
the Trustee will continue to have obligations relating to the registration of
transfers and exchanges of debt securities and to the application of funds held
in trust, in each case to the extent provided in the Indenture.
LIMITATIONS ON MERGER AND OTHER TRANSACTIONS
Prior to the satisfaction and discharge of the Indenture, Louisiana-Pacific
and the Offeror may not consolidate with or merge with or into any other person,
or transfer all or substantially all of their respective properties and assets
to another person unless:
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(i) either
(1) Louisiana-Pacific or the Offeror, as the case may be, is the
continuing or surviving person in the consolidation or merger;
or
(2) the person (if other than Louisiana-Pacific or the Offeror)
formed by the consolidation or into which Louisiana-Pacific or
the Offeror, as the case may be, is merged or to which all or
substantially all of the properties and assets of
Louisiana-Pacific or the Offeror, as the case may be, are
transferred is a corporation organized and validly existing
under the laws of the United States, any state thereof, or the
District of Columbia in the case of Louisiana-Pacific, or
under the laws of Canada or any province thereof in the case
of the Offeror, and expressly assumes, by a supplemental
indenture, all the obligations of Louisiana-Pacific or the
Offeror, as the case may be, under the Installment Notes and
the Indenture;
(ii) immediately after the transaction, no Event or Default exists; and
(iii) an officer's certificate is delivered to the Trustee to the effect
that both of the conditions set forth above have been satisfied and
an opinion of outside counsel has been delivered to the Trustee to
the effect that the first condition set forth above has been
satisfied.
The continuing, surviving or successor person will succeed to and be
substituted for Louisiana-Pacific or the Offeror, as the case may be, with the
same effect as if it had been named in the Indenture as a party thereto, and
thereafter the predecessor person will be relieved of all obligations and
covenants under the Indenture and the Installment Notes.
GOVERNING LAW
The Indenture and the Installment Notes will be governed by, and construed
in accordance with, the laws of the State of New York.
REGARDING THE TRUSTEE
The Indenture will not prohibit the Trustee from serving as trustee under
any other indenture to which the Offeror or Louisiana-Pacific may be a party
from time to time or from engaging in other transactions with the Offeror or
Louisiana-Pacific.
18. ACCEPTANCE OF THE OFFER
Except pursuant to the Amended and Restated Lock-up Agreement, the Offeror
has no knowledge regarding whether any holders of Shares or beneficial owners of
Forex Convertible Debentures will accept the Offer.
19. DEPOSITARY
The Offeror has engaged the Depositary for the receipt of certificates in
respect of Shares, Letter of Transmittal for Shares and Forex Convertible
Debentures and Notices of Guaranteed Delivery deposited under the Offer and for
the payment for Shares purchased by the Offeror pursuant to the Offer. The
duties of the Depositary will include receiving deposits of Shares and Letter of
Transmittal for Shares and Forex Convertible Debentures, giving notices where
necessary and assisting in making settlement under the Offer. The Depositary
will receive reasonable and customary compensation from the Offeror for its
services in connection with the Offer, will be reimbursed for certain
out-of-pocket expenses and will be indemnified against certain liabilities,
including liabilities under securities laws and expenses in connection
therewith.
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20. FINANCIAL ADVISOR AND SOLICITING DEALER MANAGER ARRANGEMENTS
Goldman, Sachs & Co. has been retained to act as exclusive financial
advisor to Louisiana-Pacific in connection with the acquisition of Forex.
Nesbitt Burns Inc. and Goldman Sachs Canada are the Dealer Managers in
Canada in connection with the Offer. The Offeror has agreed to pay Nesbitt Burns
Inc. a fee of $100,000. Nesbitt Burns Inc. has undertaken to form a Soliciting
Dealer Group comprised of members of the Investment Dealers Association of
Canada (including Goldman Sachs Canada) and of the TSE and the ME to solicit
acceptances of the Offer. Each member of the Soliciting Dealer Group, including
the Dealer Managers, is referred to herein as a "Soliciting Dealer Manager". The
Offeror has agreed to pay to each Soliciting Dealer Manager whose name appears
in the appropriate space in the Letter of Transmittal accompanying a deposit of
Shares a fee of $0.18 for each such Share deposited and taken up by the Offeror
under the Offer, subject to an aggregate minimum amount payable of $80 with
respect to any single depositing beneficial holder of Shares and an aggregate
maximum amount of $1,500. Notwithstanding the above, no solicitation fee will be
payable by the Offeror with regard to the Shares deposited pursuant to the
Amended and Restated Lock-up Agreement. Furthermore, the Offeror will not pay a
solicitation fee to any member of the Soliciting Dealer Group, including the
Dealer Managers, in respect of (i) any single beneficial owner of Shares
depositing under the Offer two hundred Shares or less or (ii) Shares owned by
Forex's employees, registered in their name and identified by Forex on a
Shareholders' list. The Offeror may require the Soliciting Dealer Manager to
furnish evidence of such beneficial ownership satisfactory to the Offeror at the
time of deposit.
No brokerage fees or commissions will be payable by any Shareholder who
transmits Shares or beneficial owner of Forex Convertible Debentures who
transmit such Forex Convertible Debentures directly to the Depositary or who
uses the services of the Dealer Managers or a member of the Soliciting Dealer
Group to accept the Offer. Shareholders and beneficial owners of Forex
Convertible Debentures should contact the Depositary, the Dealer Managers or a
broker or investment dealer for assistance in accepting the Offer and in
depositing Shares and Forex Convertible Debentures with the Depositary.
21. CERTAIN INCOME TAX CONSIDERATIONS
THE FOLLOWING SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO
BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR
SHAREHOLDER OR BENEFICIAL OWNER OF FOREX CONVERTIBLE DEBENTURES. SHAREHOLDERS OR
BENEFICIAL OWNERS OF FOREX CONVERTIBLE DEBENTURES ARE ADVISED AND EXPECTED TO
CONSULT WITH THEIR OWN TAX ADVISORS FOR ADVICE REGARDING THE INCOME TAX
CONSEQUENCES TO THEM OF DISPOSING OF THEIR SHARES PURSUANT TO THE OFFER, A
COMPULSORY ACQUISITION OR A SUBSEQUENT ACQUISITION TRANSACTION, HAVING REGARD TO
THEIR OWN PARTICULAR CIRCUMSTANCES AND ANY OTHER CONSEQUENCES TO THEM OF SUCH
TRANSACTIONS UNDER CANADIAN FEDERAL, PROVINCIAL, LOCAL AND FOREIGN TAX LAWS.
In the opinion of Stikeman, Elliott, Canadian counsel to the Offeror, the
following is a summary of the principal Canadian federal income tax
considerations generally applicable to Shareholders in respect of the sale of
Shares pursuant to the Offer or pursuant to certain transactions described under
the heading "Acquisition of Common Shares Not Deposited". This summary is not
applicable to Shareholders who are "financial institutions" for the purposes of
the mark-to-market rules contained in the Tax Act or to Shareholders who are
"specified financial institutions" for the purposes of the Tax Act.
This summary is based upon the current provisions of the Tax Act, the
regulations thereunder (the "REGULATIONS"), and counsel's understanding of the
current published administrative practices of Revenue Canada. This summary also
takes into account specific proposals to amend the Tax Act and Regulations
publicly announced by or on behalf of the Minister of Finance (Canada) prior to
the date hereof (the "PROPOSED AMENDMENTS") and assumes that all Proposed
Amendments will be enacted substantially as proposed. However, no assurances can
be given that the Proposed Amendments will be enacted as proposed, or at all.
This summary does not otherwise take into account or anticipate any changes in
the law, whether by way of legislative, judicial or governmental action or
decision, nor does it take into account provincial, territorial or foreign tax
legislation or considerations.
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RESIDENT SHAREHOLDERS
The following applies only to Shareholders who, for the purposes of the Tax
Act, are resident or deemed to be resident in Canada, hold their Shares as
capital property, deal at arm's length with the Offeror and Forex and are not
affiliated with the Offeror or Forex (a "RESIDENT SHAREHOLDER"). Shares will
generally be considered to be capital property to a Shareholder unless the
Shareholder either holds such Shares in the course of carrying on a business or
acquired such Shares in a transaction or transactions considered to be an
adventure or concern in the nature of trade. Certain Canadian resident
Shareholders whose Shares might not otherwise be considered capital property may
be entitled to have them treated as capital property by making the election
permitted by subsection 39(4) of the Tax Act.
THE OFFER
A Resident Shareholder who disposes of Shares pursuant to the Offer will
realize a capital gain (or a capital loss) to the extent that the price paid
under the Offer for such Shares, net of any reasonable costs of disposition,
exceeds (or is less than) the adjusted cost base (for the purposes of the Tax
Act) to the Resident Shareholder of such Shares. The price paid under the Offer
will include the aggregate of any sums paid on the Effective Date or payable
subsequently pursuant to the Cash Option, the Note Option or a combination
thereof.
A Resident Shareholder will be required to include in income for the year
of disposition three-quarters of any such capital gain (a "TAXABLE CAPITAL
GAIN") and will generally be entitled to deduct three-quarters of any capital
loss (an "ALLOWABLE CAPITAL LOSS") from taxable capital gains realized by the
Resident Shareholder for the year, any of the three preceding years, or any
subsequent year to the extent and in the circumstances described in the Tax Act.
Any such capital loss may, in certain circumstances, be reduced by the amount of
any dividends, including deemed dividends, which have been received by a
Resident Shareholder on such Shares. A Resident Shareholder that is a
Canadian-controlled private corporation (as defined for the purposes of the Tax
Act) may be subject to a refundable tax of 6 2/3% on any such taxable capital
gains. Capital gains realized by an individual or a trust, other than certain
specified trusts, may give rise to alternative minimum tax under the Tax Act.
Resident Shareholders should consult their own tax advisors with respect to the
alternative minimum tax provisions.
RESERVE
Resident Shareholders who elect to sell their Shares pursuant to the Note
Option may be able to claim a reserve to defer the recognition of a portion of
the capital gain realized on the disposition of those Shares. A reserve may only
be claimed for the portion of the price that is not payable until after the end
of a taxation year. The aggregate reserve claimed in a given taxation year
becomes a capital gain in the immediately following year, but a new reserve may
be claimed for any proceeds of disposition that are not payable at the end of
that following year. The amount of the reserve that may be claimed by a Resident
Shareholder is the lesser of:
(i) a reasonable amount which according to Revenue Canada's
administrative practice is assumed to be that proportion of the
amount not payable to the Resident Shareholder until the end of a
given taxation year that the original capital gain realized on the
sale of the Shares bears to the proceeds of disposition of the
Shares, and
(ii) an amount determined as:
year of disposition of Shares: 4/5 of original capital gain;
2nd taxation year: 3/5 of original capital gain;
3rd taxation year: 2/5 of original capital gain;
4th taxation year: 1/5 of original capital gain
Accordingly, a reserve may be claimed up to a maximum of four years
including the year in which the Shares are disposed of. Therefore, Resident
Shareholders who make the proper elections may be able to recognize the capital
gain realized on the sale of the Shares over a maximum of five consecutive
years.
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A Shareholder wishing to deduct a reserve in a taxation year on the
disposition of capital property in the year or a previous year must complete and
file form T2017 with his or her Federal income tax return. Certain Shareholders
are not eligible to claim a reserve, such as non-residents or any person that is
exempt from tax by virtue of any provision of the Tax Act. Moreover a
Shareholders may, under certain circumstances, such as the sale of an
Installment Note lose the right to claim a reserve.
INTEREST ON THE INSTALLMENT NOTES
A Resident Shareholder that is a corporation, partnership, unit trust or
trust of which a corporation or a partnership is a beneficiary will be required
to include in its income for a taxation year any interest on the Installment
Notes that accrues to such Resident Shareholder to the end of that taxation year
or becomes receivable or is received by it before the end of that year, except
to the extent that such amount was included in the income of the Resident
Shareholder of a preceding year. Any other Resident Shareholder, including an
individual, will be required to include in its income for a taxation year any
interest on an Installment Note received or receivable by such Resident
Shareholder in the year (depending upon the method regularly followed by the
Resident Shareholder in computing income) and any interest on the Installment
Note accrued or deemed to accrue to the end of any "anniversary day" (as defined
in the Tax Act) in a year in which such Resident Shareholder holds the
Installment Note, in each case, except to the extent that such amount was
otherwise included in its income for the year or a preceding taxation year.
Upon an actual or deemed disposition of the Installment Note by a Resident
Shareholder at any time, including the cancellation upon maturity of such
Installment Note, the Resident Shareholder will be required to include in income
for the taxation year in which the disposition occurs an amount equal to the
amount of interest that has accrued on the Installment Notes to the date of the
disposition and which is not payable until after that time, to the extent that
such interest was not otherwise included in computing the income of this
Resident Shareholder for that year or the preceding taxation year.
COMPULSORY ACQUISITION
As described in Section 11 of the Circular, "Acquisition of Shares Not
Deposited - Compulsory Acquisition", the Offeror may, in certain circumstances,
acquire Shares not deposited under the Offer pursuant to a Compulsory
Acquisition. A Resident Shareholder whose Shares are acquired by the Offeror
pursuant to a Compulsory Acquisition will generally realize a capital gain (or a
capital loss) calculated in the manner, and subject to the treatment, described
above under "Resident Shareholders - The Offer".
SUBSEQUENT ACQUISITION TRANSACTION
As described in Section 11 of the Circular, "Acquisition of Shares Not
Deposited - Subsequent Acquisition Transaction", the Offeror may, in certain
circumstances, pursue a Subsequent Acquisition Transaction. The income tax
consequences to a Resident Shareholder of any Subsequent Acquisition Transaction
will depend upon the nature of such transaction. SHAREHOLDERS SHOULD CONSULT
THEIR OWN TAX ADVISORS FOR ADVICE WITH RESPECT TO THE INCOME TAX CONSEQUENCES TO
THEM HAVING THEIR SHARES ACQUIRED PURSUANT TO A SUBSEQUENT ACQUISITION
TRANSACTION.
A Subsequent Acquisition Transaction could be implemented by means of an
amalgamation of Forex with the Offeror or one of its affiliates pursuant to
which Resident Shareholders who have not tendered their Shares under the Offer
would have their Shares exchanged on the amalgamation for redeemable preference
shares of the amalgamated corporation ("Redeemable Shares") which would then be
immediately redeemed for cash. Such a Resident Shareholder would not realize a
capital gain or capital loss as a result of such exchange, and the cost of the
Redeemable Shares received would be equal to the aggregate adjusted cost base of
the Shares to the Resident Shareholder immediately before the amalgamation. Upon
the redemption of the Redeemable Shares, the holder thereof would be deemed to
have received a dividend (subject to the potential application of subsection
55(2) of the Tax Act to holders of such shares that are corporation as discussed
below) equal to the amount by which the redemption price of the Redeemable
Shares exceeds their paid-up capital for the purposes of the Tax Act. The
difference between the redemption price and the amount of the deemed dividend
would be treated as proceeds of disposition of the Redeemable Shares for the
purposes of computing any capital gain or capital loss arising on the
disposition of such shares. A capital loss arising upon the redemption of a
Redeemable Share may be reduced by
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dividends previously received or deemed to have been received thereon or on
Shares for which they were exchanged, as described above under "The Offer".
Subsection 55(2) of the Tax Act provides that where a corporate shareholder
is deemed to receive a dividend under the circumstances described above, all or
part of the deemed dividend may be treated as proceeds of disposition of the
Redeemable Shares (for the purpose of computing the shareholder's capital gain
on the disposition of such shares). Corporate Shareholders should consult their
tax advisors for specific advice with respect to the potential application of
this provision. Subject to the potential application of this provision,
dividends deemed to be received by a corporation as a result of the redemption
of the Redeemable Shares will be included in computing its income, but normally
will also be deductible in computing its taxable income.
A shareholder that is a "private corporation" or a "Subject corporation"
(as such terms are defined in the Tax Act) may be liable to pay 33 1/3%
refundable tax under Part IV of the Tax Act on dividends deemed to be received
on the Redeemable Shares to the extent that such dividends are deductible in
computing the corporation's taxable income.
In the case of a Resident Shareholder who is an individual (including a
trust), dividends deemed to be received on the Redeemable Shares will be
included in computing the recipient's income, and will be subject to the
gross-up and dividend tax credit rules normally applicable to taxable dividends
received from a taxable Canadian corporation.
NON-RESIDENT SHAREHOLDERS
The following applies to Shareholders who, at all relevant times, are
neither resident, nor deemed to be resident, of Canada for purposes of the Tax
Act and any applicable tax treaty or convention, who hold their Shares as
capital property, who deal at arm's length with the Offeror and Forex, who do
not use or hold, and are not deemed to use or hold, the Shares in carrying on a
business in Canada and who are not non-resident insurers (a "NON-RESIDENT
HOLDER").
THE OFFER
A Non-Resident Holder of Shares that do not constitute taxable Canadian
property within the meaning of the TAX ACT will not be subject to Canadian tax
on the disposition of such shares under the Offer. Generally, Shares held by a
Non-Resident Holder will not constitute taxable Canadian property to such
Non-Resident Holder at a particular time provided that such Shares are listed on
a prescribed stock exchange (which currently includes the TSE and the ME) at
that time and provided that at no time during the five-year period immediately
preceding the disposition did the Non-Resident Holder, persons with whom the
Non-Resident Holder does not deal at arm's length, or such Non-Resident Holder
together with such persons, own or have an interest in or an option in respect
of 25% or more of the issued shares of any class of Forex.
If Shares constitute or are deemed to constitute taxable Canadian property
to a particular Non-Resident Holder, on the disposition thereof pursuant to the
Offer, such holder will realize a capital gain (or capital loss) generally
computed in the manner described above under "Resident Shareholders". Any such
capital gain may be exempt from tax under the terms of an income tax treaty or
convention between Canada and the country in which the Non-Resident Holder
resides.
If the Shares constitute or are deemed to constitute taxable Canadian
property and the disposition of such Shares by a Non-Resident Holder gives rise
to a capital gain which is not exempt from Canadian tax under the terms of an
applicable income tax treaty or convention, the tax consequences as described
above under "Resident Shareholders - The Offer" will generally apply.
Non-Resident Holders who choose the Note Option will not be able to claim a
reserve and defer the recognition of part of the capital gain realized on the
disposition of those Shares. NON-RESIDENT HOLDERS WHOSE SHARES ARE TAXABLE
CANADIAN PROPERTY SHOULD CONSULT THEIR OWN TAX ADVISORS FOR ADVICE HAVING REGARD
TO THEIR PARTICULAR CIRCUMSTANCES.
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COMPULSORY ACQUISITION
As described in Section 11 of this Circular, "Acquisition of Shares Not
Deposited", the Offeror may, in certain circumstances, acquire Shares not
deposited under the Offer pursuant to a Compulsory Acquisition. If the Shares
are not listed on a prescribed stock exchange at the time of disposition, they
will be taxable Canadian property to a Non-Resident Holder. Where a Non-Resident
Holder disposes of Shares that are taxable Canadian property to the holder, the
disposition may give rise to a capital gain. If such capital gain is not exempt
from Canadian tax under the terms of an applicable income tax treaty or
convention, the tax consequences as described above under "Resident Shareholders
- - The Offer" will generally apply. In addition, if the Shares are not listed on
a prescribed stock exchange at the time of disposition, the notification and
withholding provisions of section 116 of the Tax Act will apply to the
Non-Resident Holder. SHAREHOLDERS WHOSE SHARES ARE BEING COMPULSORILY ACQUIRED
SHOULD CONSULT THEIR OWN TAX ADVISORS FOR ADVICE HAVING REGARD TO THEIR
PARTICULAR CIRCUMSTANCES.
SUBSEQUENT ACQUISITION TRANSACTION
As described in Section 11 of the Circular, "Acquisition of Shares Not
Deposited - Subsequent Acquisition Transaction", if the Offeror does not acquire
all the Shares pursuant to the Offer or by means of Compulsory Acquisition, it
may propose other means to acquire the remaining Shares. The tax treatment of
such a transaction to a Non-Resident Holder will depend on the exact manner in
which the transaction is carried out and may be substantially the same as or
materially different than as described above. A Non-Resident Holder may realize
a capital gain or a capital loss and/or a deemed dividend. Dividends paid or
deemed to be paid to a non-resident will be subject to Canadian withholding tax
at a rate of 25%, subject to reduction under the provisions of an applicable
income tax treaty or convention. NON-RESIDENT HOLDERS SHOULD CONSULT THEIR OWN
TAX ADVISORS FOR ADVICE WITH RESPECT TO THE POTENTIAL INCOME TAX CONSEQUENCES TO
THEM OF HAVING THEIR SHARES ACQUIRED PURSUANT TO SUCH A TRANSACTION.
INTEREST ON THE INSTALLMENT NOTES
The payment, whether actual or deemed, by the Offeror of interest on the
Installment Notes to a Non-Resident Holder will be subject to Canadian
withholding tax at a rate of 25%. This rate may be reduced by virtue of an
applicable tax treaty between Canada and the country of residence of the
Non-Resident Holder.
22. EXPENSES OF THE OFFER
The expenses related to the Offer, including financial advisory, printing,
depositary, solicitation, accounting and legal expenses are estimated at $6
million and will be paid by the Offeror.
23. STATUTORY RIGHTS
Securities legislation in certain of the provinces and territories of
Canada provides holders of Shares with, in addition to any other rights they may
have at law, rights of rescission or to damages, or both, if there is a
misrepresentation in a circular or a notice that is required to be delivered to
the holders of Shares. However, such rights must be exercised within prescribed
time limits. Holders of Shares should refer to the applicable provisions of the
securities legislation of their province or territory for particulars of those
rights or consult with a lawyer.
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CONSENTS
TO: The Directors of the Offeror
We hereby consent to the reference to our opinion contained under
"Canadian Federal Income Tax Considerations" in the Circular accompanying the
Offer dated August 16, 1999 made by Louisiana-Pacific Acquisition Inc. to the
holders of all the outstanding Class A Multiple Voting Shares and Class B
Subordinate Voting Shares of Le Groupe Forex Inc.
Montreal, Canada (Signed) STIKEMAN, ELLIOTT
August 16, 1999
---------------------------------
TO: British Columbia Securities Commission
Alberta Securities Commission
Saskatchewan Securities Commission
Manitoba Securities Commission
Ontario Securities Commission
Commission des valeurs mobilieres du Quebec
Administrator, Department of Provincial Secretary, New Brunswick
Nova Scotia Securities Commission
Registrar of Securities, Prince Edward Island
Registrar of Securities, Newfoundland and Labrador
Registrar of Securities, Northwest Territories
Registrar of Securities, Yukon
Dear Sirs:
We refer to the Offer and Circular of Louisiana-Pacific Acquisition Inc., a
wholly-owned indirect subsidiary of Louisiana-Pacific Corporation dated August
16, 1999 relating to the purchase of Le Groupe Forex Inc.
We consent to the use in the above-mentioned Offer and Circular of our report
dated January 31, 1997 to the Board of Directors and Stockholders of
Louisiana-Pacific Corporation on the following financial statements:
Consolidated statements of income, stockholders' equity and of cash
flows for the year ended December 31, 1996.
We report that we have read the Offer and Circular and have no reason to believe
that there are any misrepresentations in the information contained therein that
is derived from the financial statements upon which we have reported or that is
within our knowledge as a result of our audit of such financial statements.
This letter is provided to the securities regulatory authorities to which it is
addressed pursuant to the requirements of their securities legislation and not
for any other purpose.
Portland, Oregon
August 16, 1999 (Signed) ARTHUR ANDERSEN LLP
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CONSENTS
(CONTINUED)
TO: British Columbia Securities Commission
Alberta Securities Commission
Saskatchewan Securities Commission
Manitoba Securities Commission
Ontario Securities Commission
Commission des valeurs mobilieres du Quebec
Administrator, Department of Provincial Secretary, New Brunswick
Nova Scotia Securities Commission
Registrar of Securities, Prince Edward Island
Registrar of Securities, Newfoundland and Labrador
Registrar of Securities, Northwest Territories
Registrar of Securities, Yukon
Dear Sirs:
We refer to the Offer and Circular of Louisiana-Pacific Acquisition
Inc., a wholly-owned indirect subsidiary of Louisiana-Pacific Corporation dated
August 16, 1999 relating to the purchase of Le Groupe Forex Inc.
We consent to the use in the above mentioned Offer and Circular of our
report dated January 29, 1999 (except as to the first paragraph of Note 11 which
is as of February 25, 1999), to the board of directors and stockholders of
Louisiana-Pacific Corporation on the following financial statements:
Consolidated balance sheets as at December 31, 1998 and 1997;
Consolidated statements of income, stockholders' equity and cash flows
for each of the years in the two-year period ended December 31, 1998.
We report that we have read the Offer and Circular and have no reason
to believe that there are any misrepresentations in the information contained
therein that is derived from the financial statements upon which we have
reported or that is within our knowledge as a result of our audit of such
financial statements.
We also consent to the following:
(a) the use of our review report dated August 16, 1999 to the board of
directors and stockholders of Louisiana-Pacific Corporation on the pro
forma condensed consolidated balance sheet as at December 31, 1998 and
the related pro forma condensed consolidated statement of income for
the year then ended.
(b) the use of our report dated July 19, 1999 to the shareholder of
Louisiana-Pacific Acquisition Inc. on the balance sheet as at July 15,
1999.
This letter is provided to the securities regulatory authorities to
which it is addressed pursuant to the requirement of their securities
legislation and not for any other purpose.
Yours truly,
Portland, Oregon (Signed) DELOITTE & TOUCHE LLP
August 16, 1999
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APPROVAL AND CERTIFICATE
The contents of the Offer and the Circular have been approved, and the
sending, communication or delivery thereof to the securityholders of Le Groupe
Forex Inc. has been authorized by the boards of directors of Louisiana-Pacific
Acquisition Inc. and Louisiana-Pacific Corporation. The foregoing contains no
untrue statement of a material fact and does not omit to state a material fact
that is required to be stated or that is necessary to make a statement not
misleading in the light of the circumstances in which it was made. In addition,
the foregoing does not contain any misrepresentation likely to affect the value
or the market price of the securities which are the subject of the Offer.
DATED: August 16, 1999
LOUISIANA-PACIFIC ACQUISITION INC.
(Signed) Keith Matheney (Signed) Curt Stevens
President Vice President Finance
On behalf of the Board of Directors
(Signed) Keith Matheney (Signed) Gary Wilkerson
LOUISIANA-PACIFIC CORPORATION
(Signed) Mark A. Suwyn (Signed) Curt Stevens
Chief Executive Officer Vice President and Chief
and Chairman of the Board Financial Officer
On behalf of the Board of Directors
(Signed) Archie Dunham (Signed) John Barter
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Office of the Depositary, Laurentian Trust of Canada Inc.
Inquiries, toll free: 1-800-363-9560
Local 5985
BY HAND, BY MAIL AND BY FACSIMILE TRANSMITTAL
Stock Transfer Department
Laurentian Trust of Canada
425 de Maisonneuve West, 1st Floor, Department 772
Montreal, Quebec
H3A 3G5
Tel: (514) 284-5985
Fax: (514) 284-4685
THE DEALER MANAGERS FOR THE OFFER ARE:
NESBITT BURNS INC. GOLDMAN SACHS CANADA
1501 McGill College 1 First Canadian Place 150 King Street West
Suite 3200 4th Floor, P.O. Box 150 Suite 1201
Montreal, Quebec Toronto, Ontario Toronto, Ontario
H3A 3M8 M5X 1H3 M5H 1J9
(514) 286-7200 (416) 359-4000 (416) 343-8900
Toll free: 1-800-361-7115 Toll free: 1-800-567-3008
ANY QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED BY SHAREHOLDERS TO THE
DEALER MANAGERS OR DEPOSITARY AT THEIR TELEPHONE NUMBERS AND LOCATIONS SET OUT
ABOVE.
<PAGE>
SCHEDULE III
LOUISIANA-PACIFIC CORPORATION
PRO FORMA FINANCIAL DATA
<PAGE>
PRO FORMA FINANCIAL DATA
The unaudited pro forma financial statements presented below give effect
to the acquisition of Forex and related financing transactions as if they had
been consummated on December 31, 1998, in the case of the Unaudited Pro
Forma Condensed Consolidated Balance Sheet, and January 1, 1998, in the
case of the Pro Forma Condensed Consolidated Statement of Income. The
Louisiana-Pacific historical financial data included in the unaudited pro
forma financial statements has been adjusted to conform to generally accepted
accounting principles in Canada. The unaudited pro forma financial statements
presented below do not give effect to the ABT Acquisition, which was
consummated on February 25, 1999, and related financing transactions.
These unaudited pro forma financial statements should be read in conjunction
with the Consolidated Financial Statements (including the notes thereto)
included in Schedule II to the Circular and the other information
contained in the Offer and the Circular (including Schedule I thereto).
These unaudited pro forma financial statements are presented for illustrative
purposes only and are not necessarily indicative of what Louisiana-Pacific's
actual financial position or results of operations would have been had such
transactions been consummated on such date or of the financial position or
results of operations that may be reported by Louisiana-Pacific in the future.
TERMS DEFINED IN THE OFFER OR THE CIRCULAR (INCLUDING THE OTHER
SCHEDULES THERETO) BUT NOT DEFINED IN THIS SCHEDULE HAVE THE SAME MEANING
HEREIN AS IN THE OFFER OR THE CIRCULAR (INCLUDING THE OTHER SCHEDULES
THERETO), AS THE CASE MAY BE, UNLESS THE CONTEXT OTHERWISE REQUIRES.
III-1
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors and Stockholders of
Louisiana-Pacific Corporation
Portland, Oregon
We have reviewed the pro forma adjustments reflecting the proposed
purchase business combination described in Note 1 to the pro forma
condensed consolidated financial statements and the application of those
adjustments to the historical amounts in the accompanying pro forma condensed
consolidated balance sheet of Louisiana-Pacific Corporation as of
December 31, 1998, and the related pro forma condensed consolidated
statement of income for the year then ended. The historical condensed
consolidated financial statements are derived from the audited historical
consolidated financial statements of Louisiana-Pacific Corporation, which
were audited by us (on which we have issued our report dated January 29,
1999, except as to the first paragraph of Note 11 which is as of
February 25, 1999), and of Le Groupe Forex Inc., which were audited
by other accountants, that appear in the pro forma condensed consolidated
financial statements. Such pro forma adjustments are based on management's
assumptions as described in Note 2 to the pro forma condensed
consolidated financial statements. Our review was conducted in accordance
with standards established by the American Institute of Certified Public
Accountants.
A review is substantially less in scope than an examination, the
objective of which is the expression of an opinion on management's
assumptions, the pro forma adjustments, and the application of those
adjustments to historical financial information. Accordingly, we do not
express such an opinion.
The objective of this pro forma financial information is to show what
the significant effects on the historical information might have been had the
proposed purchase business combination occurred at an earlier date. However,
the pro forma condensed consolidated financial statements are not necessarily
indicative of the results of operations or related effects on financial
position that would have been attained had the above-mentioned proposed
purchase business combination actually occurred earlier.
Based on our review, nothing came to our attention that caused us to
believe that management's assumptions do not provide a reasonable basis for
presenting the significant effects directly attributable to the above-mentioned
proposed purchase business combination described in Note 1 to the pro forma
condensed consolidated financial statements, that the related pro forma
adjustments do not give appropriate effect to those assumptions, or that the
pro forma column does not reflect the proper application of those adjustments
to the historical financial statement amounts in the pro forma condensed
consolidated balance sheet of Louisiana-Pacific Corporation as of
December 31, 1998, and the related pro forma condensed consolidated
statement of income for the year then ended.
/s/ Deloitte & Touche LLP
August 16, 1999
III-2
<PAGE>
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEET
(IN MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1998
----------------------------------------------------------------------------
LOUISIANA- PRO FORMA
PACIFIC FOREX ADJUSTMENTS PRO FORMA
(U.S. (CANADIAN FOREX (U.S. (U.S. (U.S.
DOLLARS) DOLLARS) DOLLARS)* DOLLARS) DOLLARS)
------------- ----------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents.............. $ 126.5 $ 34.0 $ 23.1 $ $ 149.6
Accounts receivable, net............... 134.7 20.5 13.9 148.6
Inventories............................ 205.7 40.6 27.6 233.3
Prepaid expenses....................... 8.1 1.0 0.7 8.8
Income tax refunds receivable.......... 43.9 -- -- 43.9
Deferred income taxes.................. 93.2 -- -- 93.2
------------- ----------- ------ ------ -------------
Total current assets................. 612.1 96.1 65.3 -- 677.4
Timber and Timberlands................. 499.0 1.4 1.0 500.0
Net property, plant and equipment...... 913.3 250.5 170.1 1,083.4
Goodwill, net of amortization.......... 60.0 -- -- 420.3(b) 480.3
Notes receivable from asset sales...... 403.8 -- -- 403.8
Other assets........................... 72.0 14.5 9.8 81.8
------------- ----------- ------ ------ -------------
TOTAL ASSETS......................... $ 2,560.2 $ 362.5 $ 246.2 $ 420.3 $ 3,226.7
------------- ----------- ------ ------ -------------
------------- ----------- ------ ------ -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt...... $ 34.1 $ 4.1 $ 2.8 $ $ 36.9
Short-term notes payable............... -- 0.3 0.2 0.2
Accounts payable and accrued
liabilities.......................... 192.5 23.1 15.9 208.4
Current portion of contingency
reserves............................. 140.0 -- -- 140.0
Income taxes payable................... -- 1.5 1.0 1.0
------------- ----------- ------ ------ -------------
Total current liabilities............ 366.6 29.0 19.9 -- 386.5
Limited recourse notes payable......... 396.5 -- -- 396.5
Other debt............................. 63.3 167.7 113.8 511.9(a)(b) 689.0
------------- ----------- ------ ------ -------------
Total long-term debt, excluding
current portion.................... 459.8 167.7 113.8 511.9 1,085.5
Contingency reserves, excluding current
portion.............................. 228.0 -- -- 228.0
Deferred income taxes and other........ 235.9 30.8 20.9 256.8
Stockholders' equity:.................. 1,269.9 135.0 91.6 (91.6)(a)(b) 1,269.9
------------- ----------- ------ ------ -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY............................. $ 2,560.2 $ 362.5 $ 246.2 $ 420.3 $ 3,226.7
------------- ----------- ------ ------ -------------
------------- ----------- ------ ------ -------------
</TABLE>
- --------------------------
* Forex historical amounts at December 31, 1998 have been translated into U.S.
dollars solely for the convenience of the reader at the rate of U.S. $0.6787
per Canadian dollar. See note 2 to unaudited pro forma condensed consolidated
financial statements.
See notes to unaudited pro forma condensed consolidated financial statements.
III-3
<PAGE>
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1998
(IN MILLIONS OF DOLLARS, EXCEPT PER SHARE DATA WHICH ARE IN DOLLARS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1998
-----------------------------------------------------------------------
LOUISIANA- PRO FORMA
PACIFIC FOREX ADJUSTMENTS PRO FORMA
(U.S. (CANADIAN FOREX (U.S. (U.S.
DOLLARS) DOLLARS) (U.S. DOLLARS)* DOLLARS) DOLLARS)
------------ ----------- --------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Net Sales............................... $ 2,297.1 $ 228.7 $ 155.2 $ $2,452.3
------------ ----------- ------ ------------
------------ ----------- ------ ------------
COSTS AND EXPENSES:
Cost of Sales........................... 1,853.8 139.4 94.6 1,948.4
Depreciation, amortization and
depletion............................. 185.4 16.8 11.4 28.0(c) 224.8
Selling and administrative.............. 183.3 10.7 7.3 190.6
Settlements and other unusual items,
net................................... 47.8 -- -- 47.8
Interest expense........................ 37.5 12.6 8.6 37.3(a)(b) 83.4
Interest income......................... (24.7) (1.4) (1.0) (25.7)
------------ ----------- ------ ------ ------------
Total costs and expenses.............. 2,283.1 178.1 120.9 65.3 2,469.3
------------ ----------- ------ ------ ------------
Income (loss) before taxes and minority
interest.............................. 14.0 50.6 34.3 (65.3) (17.0)
Provision (benefit) for income taxes.... 15.8 16.8 11.4 (14.4)(d) 12.8
Minority interest in income (loss) of
consolidated subsidiaries............. (3.8) 0.5 0.3 (3.5)
------------ ----------- ------ ------ ------------
NET INCOME (LOSS)....................... $ 2.0 $ 33.3 $ 22.6 $ (50.9) $ (26.3)
------------ ----------- ------ ------ ------------
------------ ----------- ------ ------ ------------
NET INCOME (LOSS) PER SHARE BASIC AND
DILUTED............................... $ 0.02 $ (0.24)
------------ ------------
------------ ------------
AVERAGE SHARES OF COMMON STOCK
(MILLIONS)--BASIC..................... 108.4 108.4
------------ ------------
------------ ------------
AVERAGE SHARES OF COMMON STOCK
(MILLIONS)--DILUTED................... 108.6
------------
------------
</TABLE>
- ------------------------
* Forex historical amounts for the year ended December 31, 1998 have been
translated into U.S. dollars solely for the convenience of the reader at the
rate of U.S. $0.6787 per Canadian dollar. See note 2 to unaudited pro forma
condensed consolidated financial statements.
See notes to unaudited pro forma condensed consolidated financial statements.
III-4
<PAGE>
LOUISIANA-PACIFIC CORPORATION
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The pro forma condensed consolidated balance sheet and the pro forma
condensed consolidated income statement are based upon the audited consolidated
financial statements of Louisiana-Pacific Corporation and subsidiaries
("Louisiana-Pacific"), adjusted to conform to generally accepted accounting
principles in Canada, and of Le Groupe Forex Inc. and subsidiaries ("Forex").
The pro forma condensed consolidated financial statements have been prepared
by Louisiana-Pacific management by applying the purchase accounting method to
the proposed acquisition in accordance with generally accepted accounting
principles. The pro forma condensed consolidated financial statements may not be
indicative of results that actually would have occurred if the proposed
acquisition had taken place on the dates indicated, or the actual results to be
expected in the future.
The accounting policies used in the preparation of the pro forma condensed
consolidated financial statements are those of Louisiana-Pacific and Forex as
detailed in the notes to their respective audited financial statements for the
year ended December 31, 1998. These pro forma condensed consolidated financial
statements should be read in conjunction with the audited consolidated financial
statements of Louisiana-Pacific and Forex for the year ended December 31, 1998.
2. PRO FORMA ASSUMPTIONS
The pro forma condensed consolidated balance sheet gives effect to the
proposed acquisition by Louisiana-Pacific of all the outstanding shares of Forex
as if the acquisition occurred on December 31, 1998. The pro forma condensed
consolidated income statement gives effect to the proposed acquisition by
Louisiana-Pacific of all the outstanding shares of Forex as if the acquisition
had occurred on January 1, 1998. It is assumed that Louisiana-Pacific will
acquire 23.0 million shares of Forex comprised of 15.8 million shares
outstanding at December 31, 1998, 4.6 million shares related to conversion of
convertible debentures, 1.0 million shares related to warrants and 1.6 million
shares related to employee stock options.
No adjustments have been made to these pro forma condensed consolidated
financial statements to reflect the operating synergies that are expected to
result from this acquisition or any integration costs which may be incurred. No
adjustments have been made to reflect possible favorable tax treatment of
certain items associated with this transaction.
The pro forma condensed consolidated financial statements do not give effect
to the purchase of ABT Building Products, Inc. by Louisiana-Pacific in February
1999 or to the buyout in April 1999 by Forex of a joint venture partner's
interest in a Forex subsidiary previously accounted for using the proportionate
consolidation method.
Except where expressed in Canadian dollars, all Canadian dollar amounts have
been converted to U.S. dollar amounts at the convenience rate of $0.6787 U.S.
dollars per Canadian dollar (the Convenience Rate). All dollar amounts are
stated in U.S. dollars unless otherwise noted.
III-5
<PAGE>
LOUISIANA-PACIFIC CORPORATION
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
3. PRO FORMA ADJUSTMENTS--BALANCE SHEET
The following pro forma adjustments have been made to the unaudited pro
forma condensed consolidated balance sheet:
(a) Adjustment to reflect the assumed conversion of the debt component of
the convertible debentures of $9.2 million into equity.
(b) Adjustment to reflect the purchase of Forex shares by Louisiana-Pacific.
Under the Offer, for each common share of Forex tendered, the holder
will receive at the option of the holder:
Option 1--Cdn. $33.00 cash (U.S. $22.40 at the Convenience Rate)
payable on the effective date of the Offer.
Option 2--Cdn. $33.00 payable in five installments, together with
interest thereon as described in the Circular.
Option 3--A combination of Option 1 and Option 2.
The total purchase price is estimated to be approximately $521.1 million
including the amount paid for the approximately 23 million shares assumed to be
tendered under the proposed acquisition and $6.0 million of estimated costs of
the transaction, including financial advisory fees, printing costs, legal fees
and accounting fees. The entire purchase price is assumed to be debt financed by
Louisiana-Pacific, either through notes payable issued to shareholders or
through various financing options available to Louisiana-Pacific. This total
purchase price will be allocated to the assets and liabilities of Forex based
upon their estimated fair values.
As neither the final purchase price nor the fair market value of the assets
and liabilities of Forex have yet been determined, the $420.3 million of excess
purchase price over the book value of the assets and liabilities of Forex has
been allocated to Goodwill in the pro forma condensed consolidated balance
sheet. The allocation of the purchase price may change as more information is
obtained regarding the fair value of the assets and liabilities of Forex.
4. PRO FORMA ADJUSTMENTS--INCOME STATEMENT
The following pro forma adjustments have been made to the unaudited pro
forma condensed consolidated income statement:
(a) Adjustment to reflect additional interest expense on the $521.1 million
of debt assumed to be issued in the proposed acquisition. The average
interest rate is assumed to be 7.5% per annum.
(b) Adjustment to reflect a reduction in interest expense due to the assumed
conversion of the convertible debentures on January 1, 1998.
(c) Adjustment to reflect the amortization of estimated goodwill resulting
from the proposed acquisition over a period of 15 years. This
amortization is assumed to be non-deductible for income tax purposes.
(d) Adjustment to reflect the income tax effect of the additional interest
expense (as discussed in note 4(a) above) net of the reduction in
interest expense (as discussed in note 4(b) above) at an assumed
effective income tax rate of 38.5%.
III-6
