CONTRIBUTION AND DISTRIBUTION AGREEMENT AMONG WEYERHAEUSER COMPANY AND WEYERHAEUSER ELI, LLC AND WEYERHAEUSER TIA, INC. DATED AS OF AUGUST 22, 2006
AMONG
WEYERHAEUSER
COMPANY
AND
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇, LLC
AND
WEYERHAEUSER
TIA,
INC.
DATED
AS
OF AUGUST 22, 2006
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▇▇
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| ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Exchangeco Assets and Newco Canada Exchangeco Liabilities |
A
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| Form of Intellectual Property License Agreement |
B
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THIS
CONTRIBUTION AND DISTRIBUTION AGREEMENT, dated as of August 22, 2006 (this
“Agreement”),
among
Weyerhaeuser Company, a Washington corporation (“Weyerhaeuser”),
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, LLC, a Delaware limited liability company and a wholly-owned
subsidiary of Weyerhaeuser (“Newco”),
and
Weyerhaeuser TIA, Inc., a Delaware corporation and a wholly-owned subsidiary
of
Weyerhaeuser (“Spinco”).
R
E C I T
A L S
WHEREAS
Weyerhaeuser directly and indirectly through its subsidiaries is engaged in
the
Newco Business (as defined in Article I);
WHEREAS
the Board of Directors of Weyerhaeuser has determined that it would be in the
best interests of Weyerhaeuser and its shareholders to (i) transfer the
Newco Business to Newco, (ii) transfer the limited liability company
interests of Newco to Spinco, (iii) distribute the stock of Spinco to the
shareholders of Weyerhaeuser, and (iv) combine Domtar Inc., a Canadian
corporation (“Domtar”),
with
Spinco by means of a plan of arrangement pursuant to a transaction agreement,
dated as of the date hereof (the “Transaction
Agreement”),
among
Weyerhaeuser, Spinco, Domtar, Newco, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, Inc., a Delaware
corporation and wholly-owned subsidiary of Newco (“Newco
Holding”),
Weyerhaeuser ▇▇▇▇▇▇, Inc., a Canadian corporation and a wholly-owned subsidiary
of Newco Holding (“Newco
Canada”),
and
Weyerhaeuser Yukon, Inc., a Canadian corporation and a wholly-owned subsidiary
of Newco Canada (“Newco
Canada Exchangeco”);
WHEREAS
an executed commitment letter and related term sheet pursuant to which the
financial institutions named therein have agreed to provide debt financing
to
Spinco in the amount and on the terms and conditions set forth therein (the
“New
Debt Commitment Letter”)
has
been delivered to the parties;
WHEREAS
on the Contribution Date (as defined in Section 2.01(a)), Weyerhaeuser
shall transfer or cause to be transferred (A) the Newco Assets (as defined
in
Section 2.02(a)) and the Newco Liabilities (as defined in
Section 2.03) to Newco in exchange for limited liability company interests
of Newco (“Newco
Equity Interests”),
and
the assumption of the Newco Liabilities (the “Newco
Contribution”),
and
(B) all the issued and outstanding Newco Equity Interests to Spinco in
exchange for (x) that number of issued and outstanding shares of Spinco, par
value $0.01 per share (the “Spinco
Common Stock”),
determined in accordance with Section 2.12, and (y) cash in an amount equal
to the New Debt Amount (as defined in Article I) (the “Spinco
Contribution”
and,
together with the Newco Contribution, the “Contribution”);
WHEREAS
on or prior to the Contribution Date, Newco shall cause Newco Canada Exchangeco
(or a subsidiary of Newco Canada Exchangeco) to purchase the Newco Canada
Exchangeco Assets (as defined in Article I) and assume the Newco Canada
Exchangeco Liabilities (as defined in Article I) from Weyerhaeuser Canada
and Weyerhaeuser Saskatchewan (each as defined in Article I) as provided in
this
Agreement;
WHEREAS
following the Canadian Asset Sale (as defined in Section 2.07) and the
Contribution and prior to the Effective Time (as defined in Article I),
Weyerhaeuser shall distribute all of the issued and outstanding shares of Spinco
Common Stock, on a pro rata basis or, at Weyerhaeuser’s election, in an exchange
offer or a combination thereof to Eligible Holders (as defined in Article I),
in
each case as provided in this Agreement (the “Distribution”);
WHEREAS
the parties intend that the Contribution and the Distribution shall qualify
under Sections 355 and 368 of the Code (as defined in Article I);
and
WHEREAS
it is appropriate and desirable to set forth the principal corporate
transactions required to effect the Contribution and the Distribution and
certain other agreements that will govern certain matters relating to the
Contribution and the Distribution and the relationship of Weyerhaeuser, Spinco
and Newco following the Distribution;
NOW,
THEREFORE, in consideration of the mutual agreements, provisions and covenants
contained in this Agreement, the parties, intending to be legally bound, hereby
agree as follows:
Definitions
For
the
purpose of this Agreement the following terms shall have the following
meanings:
“Accounting
Firm”
has
the
meaning set forth in Section 2.04(b).
“Action” means
any
demand, action, suit, countersuit, arbitration, inquiry, proceeding or
investigation by or before any federal, state, local, foreign or international
Governmental Entity or any arbitration or mediation tribunal.
“affiliate” of
any
Person means another Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
such first Person. As used herein, “control”
means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, whether through
ownership of voting securities or other interests, by contract or
otherwise.
“Agreement”
has
the
meaning set forth in the heading of this Agreement.
“Ancillary
Agreements”
means
the Asset Conveyance Documents, the Liabilities Assumption Documents, the
Canadian Purchase Agreement, the Tax Sharing Agreement, the Transition Services
Agreement, the Site Services Agreements, the Fiber Supply Agreements and the
Intellectual Property License Agreement.
“Arrangement”
has
the
meaning set forth in the Transaction Agreement.
“Asset
Conveyance Documents”
has
the
meaning set forth in Section 2.05.
“Assumed
Canadian Plans”
has
the
meaning set forth in the Transaction Agreement.
“Benefit
Plan Assets”
has
the
meaning set forth in Section 2.02(a)(xvi).
“Benefit
Plan Liabilities”
has
the
meaning set forth in Section 2.03(a)(vii).
“Bowater
Agreement”
means
the Asset Purchase Agreement, dated August 4, 1998, among Bowater Pulp and
Paper Canada Inc., Bowater Incorporated, Weyerhaeuser Canada and
Weyerhaeuser.
“Bowater
Claim”
means
the claim of Weyerhaeuser and/or Weyerhaeuser Canada against Bowater Canadian
Forest Products Inc. and Bowater Incorporated under the Bowater Agreement for
the liabilities and obligations described in the notice to arbitrate dated
March 17, 2006, as amended through the date hereof, delivered by
Weyerhaeuser and Weyerhaeuser Canada to Bowater Canadian Forest Products Inc.
and Bowater Incorporated, regardless of whether such claim is settled by
arbitration or otherwise.
“Business
Day”
has
the
meaning set forth in the Transaction Agreement.
“Canadian
Asset Sale”
has
the
meaning set forth in Section 2.07(a).
“Canadian
Excluded Assets”
means
the business, properties, assets, goodwill and rights of Weyerhaeuser Canada
and
Weyerhaeuser Saskatchewan listed under such heading in
Exhibit A.
“Canadian
Purchase Agreement”
has
the
meaning set forth in Section 2.07(b).
“Canadian
Retained Liabilities”
means
the obligations, liabilities and commitments of Weyerhaeuser Canada and
Weyerhaeuser Saskatchewan listed under such heading in Exhibit A.
“CBA”
has
the
meaning set forth in the Transaction Agreement.
“Closing
Date”
has
the
meaning set forth in the Transaction Agreement.
“Closing
Working Capital”
has
the
meaning set forth in Section 2.04(a).
“Code”
means
the U.S. Internal Revenue Code of 1986, as amended, and the Treasury regulations
promulgated thereunder.
“Commission”
means
the Securities and Exchange Commission.
“Competitive
Activities”
has
the
meaning set forth in Section 7.06(a).
“Consents”
means
any consents, waivers or approvals from, or notification requirements to, any
third parties.
“Contracts”
has
the
meaning set forth in Section 2.02(a)(viii).
“Contribution”
has
the
meaning set forth in the recitals.
“Contribution
Date”
has
the
meaning set forth in Section 2.01(a).
“Current
Assets”
has
the
meaning set forth in Section 2.04(d).
“Current
Liabilities”
has
the
meaning set forth in Section 2.04(d).
“Delayed
Transfer Assets”
means
any Newco Assets that this Agreement or any other Transaction Document provides
or contemplates are to be transferred to Newco and that require the removal
of a
Legal Impediment or the receipt of a Consent or Governmental Approval to
transfer, which Legal Impediment is not removed or Consent or Governmental
Approval is not obtained on or prior to the Contribution Date.
“Delayed
Transfer Liabilities”
means
any Newco Liabilities that this Agreement or any other Transaction Document
provides or contemplates are to be assumed by Newco and that require the removal
of a Legal Impediment or the receipt of a Consent or Governmental Approval
for
the transfer and assumption of such Newco Liabilities, which Legal Impediment
is
not removed or Consent or Governmental Approval is not obtained on or prior
to
the Contribution Date.
“Disabled
Newco Employees”
has
the
meaning set forth in the Transaction Agreement.
“Distribution”
has
the
meaning set forth in the recitals.
“Distribution
Date”
means
(i) if the Distribution is effected in whole as a pro rata dividend, the
date on which the issued and outstanding shares of Spinco Common Stock are
distributed to the holders of Weyerhaeuser Common Stock pursuant to a pro rata
dividend, and (ii) if the Distribution is effected in whole or in part as
an exchange offer as provided in Section 3.01(c), the date on which the
validly tendered Eligible Shares are accepted for payment.
“Domtar”
has
the
meaning set forth in the recitals.
“Domtar
Common Shares”
has
the
meaning set forth in the Transaction Agreement.
“Effective
Time”
has
the
meaning set forth in the Transaction Agreement.
“Eligible
Holders”
means
(i) to the extent that the Distribution is effected as a pro rata dividend,
(A)
the holders of record of shares of Weyerhaeuser Common Stock on the Record
Date,
(B) the holders of record of any Weyerhaeuser Canada Exchangeable Shares on
the
Record Date, and (C) if and to the extent determined by Weyerhaeuser, the
holders of record on the Distribution Date of any Weyerhaeuser Benefit Plan
Shares issued by Weyerhaeuser after the Record Date and prior to the
Distribution Date, or (ii) to the extent that the Distribution is effected
pursuant to an exchange offer, the holders of Eligible Shares validly tendered
and not withdrawn pursuant to an exchange offer as provided in Section
3.01(c).
“Eligible
Shares”
means
(i) to the extent that the Distribution is effected as a pro rata dividend,
(A)
the shares of Weyerhaeuser Common Stock outstanding on the Record Date,
(B) the Weyerhaeuser Canada Exchangeable Shares outstanding on the Record
Date, and (C) if and to the extent determined by Weyerhaeuser, the
Weyerhaeuser Benefit Plan Shares issued by Weyerhaeuser after the Record Date
and prior to the Distribution Date, or (ii) to the extent that the Distribution
is effected pursuant to an exchange offer, the shares of Weyerhaeuser Common
Stock and the Weyerhaeuser Canada Exchangeable Shares outstanding and eligible
to accept the exchange offer.
“Environmental
Laws”
means
all applicable federal, state, provincial, local and foreign Laws, Judgments,
legally binding agreements and Environmental Permits issued, promulgated or
entered into by or with any Governmental Entity, relating to pollution, natural
resources, protection or restoration of the environment (including ambient
air,
surface water, groundwater, land surface or subsurface strata), endangered
or
threatened species or human health.
“Environmental
Liabilities”
means
all obligations, liabilities, costs or commitments relating to or in respect
of
environmental, health or safety matters, including (i) the compliance or
noncompliance with Environmental Laws, (ii) the alleged or actual presence
or Release of, or exposure to, Hazardous Materials, (iii) the offsite
transportation, storage, disposal or arrangement for disposal of Hazardous
Materials, and (iv) any other obligations, liabilities, costs or
commitments relating to Environmental Laws, including, in each case, all
investigatory, cleanup and other remediation costs, administrative oversight
costs, natural resources damages, property damages, personal injury damages,
indemnity, contribution and similar obligations and all costs and expenses,
interest, fines, penalties and other monetary sanctions in connection with
the
foregoing.
“Exchange
Act”
has
the
meaning set forth in the Transaction Agreement.
“Excluded
Assets”
has
the
meaning set forth in Section 2.02(b).
“Excluded
Benefit Plans”
has
the
meaning set forth in Section 2.03(b)(iii).
“Excluded
IRB Indebtedness”
means all indebtedness evidenced by industrial revenue bonds issued by any
Governmental Entity relating to the Newco Business
(including any evidences of such indebtedness) and all Liabilities of
Weyerhaeuser or any other member of the Weyerhaeuser Group under Contracts
entered into by Weyerhaeuser or such member of the Weyerhaeuser Group in
connection therewith,
except for the Hawesville IRB Indebtedness and the Marlboro IRB
Indebtedness.
“Excluded
IRB Rights”
means all rights,
claims, causes of action and credits
of Weyerhaeuser or any other member of the Weyerhaeuser Group in connection
with
the Excluded IRB Indebtedness, except for the Hawesville IRB Rights and the
Marlboro IRB Rights.
“Fiber
Supply Agreements”
has
the
meaning set forth in the Transaction Agreement.
“Forest
Licenses”
means
(i) the Amended Sustainable Forest License No. 542461 for the Trout Lake Forest
issued by the Ministry of Natural Resources of the Province of Ontario on May
5,
2006, (ii) the Amended Sustainable Forest License No. 541593 for the Wabigoon
Forest issued by the Ministry of Natural Resources of the Province of Ontario
on
May 5, 2006, and (iii) the Prince ▇▇▇▇▇▇ Forest Management Agreement dated
April
1, 2000 between Weyerhaeuser Saskatchewan, Ltd. and Her Majesty the Queen in
the
Right of the Ministry of Natural Resources.
“Forest
Management Employees”
has
the
meaning set forth in Section 2.11(a).
“GAAP”
has
the
meaning set forth in the Transaction Agreement.
“Governmental
Approvals”
has
the
meaning set forth in the Transaction Agreement.
“Governmental
Entity”
has
the
meaning set forth in the Transaction Agreement.
“Group”
means
either the Spinco Group or the Weyerhaeuser Group, as the context
requires.
“Hawesville
IRB Indebtedness”
means
all indebtedness evidenced by the $600 million ▇▇▇▇▇▇▇ County, Kentucky
Industrial Revenue Bonds, Series 1996 (Hawesville) issued pursuant to the Trust
Indenture dated December 1, 1996, between ▇▇▇▇▇▇▇ County, Kentucky and the
Bank
of New York (including any evidences of such indebtedness), as amended by the
Agreement of Amendment of Lease Agreement, Trust Indenture and Contract of
Purchase dated November 30, 1999 among the County of ▇▇▇▇▇▇▇, Kentucky,
Willamette Industries, Inc., The Bank of New York and Investment Company of
Oregon, and all Liabilities of Weyerhaeuser or any member of the Weyerhaeuser
Group under Contracts entered into by Weyerhaeuser or such member of the
Weyerhaeuser Group in connection therewith.
“Hawesville
IRB Rights”
means
all rights, claims, causes of action and credits of Weyerhaeuser or any other
member of the Weyerhaeuser Group in connection with the Hawesville IRB
Indebtedness.
“Hazardous
Materials”
means
(i) any petroleum or petroleum products, radioactive materials or wastes,
asbestos in any form, urea formaldehyde foam insulation and polychlorinated
biphenyls; and (ii) any other chemical, material, substance or waste that
in relevant form or concentration is prohibited, limited or regulated under
any
Environmental Law.
“Indemnified
Party”
has
the
meaning set forth in Section 4.06(a).
“Indemnifying
Party”
has
the
meaning set forth in Section 4.06(a).
“Indemnitees”
means
the Spinco Indemnitees and the Weyerhaeuser Indemnitees.
“Intellectual
Property”
has
the
meaning set forth in Section 2.02(a)(v).
“Intellectual
Property License Agreement”
means
the license of Intellectual Property by and between Weyerhaeuser and Newco
substantially in the form attached as Exhibit B.
“Interim
Newco Balance Sheet”
has
the
meaning set forth in the Transaction Agreement.
“Inventory”
has
the
meaning set forth in Section 2.02(a)(ii).
“ITA”
has
the
meaning set forth in the Transaction Agreement.
“Judgment”
has
the
meaning set forth in the Transaction Agreement.
“Laws”
has
the
meaning set forth in the Transaction Agreement.
“Legal
Impediment”
means
a
legal impediment preventing or restricting the transfer of a Newco Asset or
the
assumption of a Newco Liability, as the case may be, in the Contribution as
of
the Contribution Date.
“Liabilities”
has
the
meaning set forth in Section 2.03(a).
“Liabilities
Assumption Documents”
has
the
meaning set forth in Section 2.05.
“LIFO
Reserve Amount”
has
the
meaning set forth in Section 2.04(f).
“Losses”
has
the
meaning set forth in Section 4.02.
“Marlboro
IRB Indebtedness”
means
all indebtedness evidenced by the $450,000,000 State of Carolina Marlboro County
Fee-In-Lieu-Of-Taxes Industrial Revenue Bond (Willamette Industries, Inc.
Project) Series 1991 issued pursuant to an Ordinance of Marlboro County passed
on August 8, 1991 and a Bond Purchase Agreement between Marlboro County and
Willamette Industries, Inc. dated as of August 1, 1991 (including any
evidences of such indebtedness), and all Liabilities of Weyerhaeuser or any
member of the Weyerhaeuser Group under Contracts entered into by Weyerhaeuser
or
any member of the Weyerhaeuser Group in connection therewith.
“Marlboro
IRB Rights”
means
all rights, claims, causes of action and credits of Weyerhaeuser or any other
member of the Weyerhaeuser Group in connection with the Marlboro IRB
Indebtedness.
“Measurement
Date”
has
the
meaning set forth in Section 2.12(b)(3).
“Mill
Employee”
has
the
meaning set forth in Section 2.11(a).
“New
Benefit Plan”
has
the
meaning set forth in the Transaction Agreement.
“Newco”
has
the
meaning set forth in the heading of this Agreement.
“Newco
Assets”
has
the
meaning set forth in Section 2.02(a).
“Newco
Benefit Agreement”
has
the
meaning set forth in the Transaction Agreement.
“Newco
Benefit Plan”
has
the
meaning set forth in the Transaction Agreement.
“Newco
Business”
means
(i) the uncoated free sheet and paper grade pulp operations as conducted at
Weyerhaeuser’s, Weyerhaeuser Saskatchewan’s and Weyerhaeuser Canada’s facilities
in Hawesville, Kentucky; Marlboro, South Carolina; Kingsport, Tennessee;
Johnsonburg, Pennsylvania; Rothschild, Wisconsin; Dryden, Ontario (Canada);
and
Prince ▇▇▇▇▇▇, Saskatchewan (Canada), (ii) the chip mill, uncoated free
sheet, paper grade pulp and fluff pulp operations as conducted at Weyerhaeuser’s
facility in Plymouth, North Carolina, (iii) the paper grade pulp operations
as
conducted at Weyerhaeuser Canada’s facilities in Kamloops, British Columbia
(Canada), (iv) the uncoated free sheet converting operations as conducted
at Weyerhaeuser’s, Weyerhaeuser Saskatchewan’s and Weyerhaeuser Canada’s
facilities listed under the heading ‘Converting’ on Schedule 2.02(a)(i),
(v) the forms operations as conducted at Weyerhaeuser’s facilities in Dallas,
Texas; Indianapolis, Indiana; Langhorne, Pennsylvania; Rock Hill, South
Carolina; and Cerritos, California, (vi) the coated groundwood and TMP
operations as conducted at Weyerhaeuser's facility in Columbus, Mississippi,
(vii) the chip mill operations as conducted at Weyerhaeuser’s facilities listed
under the heading ‘▇▇▇▇ ▇▇▇▇▇’ on Schedule 2.02(a)(i), (viii) the
operations as conducted at Weyerhaeuser’s facilities in Fort Mill, South
Carolina, specifically excluding the medium density fiber board and particle
board operations conducted at Fort Mill, South Carolina, (ix) the logging and
forest management operations as conducted pursuant to the Forest Licenses,
(x)
the saw mill operations as conducted at Weyerhaeuser Canada’s facilities in
Ear Falls, Ontario and at Weyerhaeuser Saskatchewan’s facilities in Big River,
Saskatchewan, and (xi) the operations as conducted at Weyerhaeuser’s regional
replenishment centers, warehouses and sales offices used in connection with
any
of the other operations referred to above in this definition; provided,
however,
that
the Newco Business shall in no event include any specialty pulp operations
and
any operations conducted with the Excluded Assets.
“Newco
Canada”
has
the
meaning set forth in the recitals.
“Newco
Canada Exchangeco”
has
the
meaning set forth in the recitals.
“Newco
Canada Exchangeco Assets”
means
the business, properties, assets, goodwill and rights of Weyerhaeuser Canada
and
Weyerhaeuser Saskatchewan listed under such heading in Exhibit A.
“Newco
Canada Exchangeco Indemnitees”
has
the
meaning set forth in Section 4.04.
“Newco
Canada Exchangeco Liabilities”
means
the obligations, liabilities and commitments of Weyerhaeuser Canada and
Weyerhaeuser Saskatchewan listed under such heading in Exhibit A.
“Newco
Canadian Pension Plans”
has
the
meaning set forth in the Transaction Agreement.
“Newco
Contribution”
has
the
meaning set forth in the recitals.
“Newco
Employees”
has
the
meaning set forth in the Transaction Agreement.
“Newco
Equity Interests”
has
the
meaning set forth in the recitals.
“Newco
Holding”
has
the
meaning set forth in the recitals.
“Newco
Liabilities”
has
the
meaning set forth in Section 2.03(a).
“Newco
Subsidiaries”
has
the
meaning set forth in the Transaction Agreement.
“Newco
U.S. Pension Plans”
has
the
meaning set forth in the Transaction Agreement.
“New
Debt”
means
the indebtedness to be incurred by Spinco pursuant to the New Debt Commitment
Letter.
“New
Debt Amount”
means
$1,350,000,000.
“New
Debt Commitment Letter”
has
the
meaning set forth in the recitals.
“Notice
of Disagreement”
has
the
meaning set forth in Section 2.04(b).
“NYSE”
means
the New York Stock Exchange, Inc.
“Permits”
has
the
meaning set forth in Section 2.02(a)(vii).
“Person”
means
an individual, a general or limited partnership, a corporation, a trust, a
joint
venture, an unincorporated organization, a limited liability entity, any other
entity and any Governmental Entity.
“Proceeding”
has
the
meaning set forth in Section 2.03(a)(vi).
“Pulp
Inventory Adjustment Amount”
has
the
meaning set forth in Section 2.04(f).
“Record
Date”
means
the close of business on a date to be determined by the Weyerhaeuser Board
of
Directors as the record date for determining the shareholders of Weyerhaeuser
and, if applicable, the holders of Weyerhaeuser Canada Exchangeable Shares,
in
each case entitled to receive shares of Spinco Common Stock in the Distribution
if the Distribution is effected, in whole or in part, as a pro rata
dividend.
“Records”
has
the
meaning set forth in Section 2.02(a)(xii).
“Release”
means
any actual or threatened release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into
or
through the environment (including ambient air, surface water, groundwater,
land
surface or subsurface strata) or within any building, structure, facility or
fixture.
“Retained
Benefit Liabilities”
has
the
meaning set forth in Section 2.03(b)(iii).
“Retained
Liabilities”
has
the
meaning set forth in Section 2.03(b).
“Retained
Names”
means
the names and marks set forth on Schedule 1.01 and any name or ▇▇▇▇ derived
from, similar to or including any of the foregoing (in each case, in any style
or design).
“SEC”
has
the
meaning set forth in the Transaction Agreement.
“Securities
Act”
means
the Securities Act of 1933, as amended, together with the rules and regulations
promulgated thereunder.
“Shared
Accounts Payable”
has
the
meaning set forth in Section 2.03(a)(xi).
“Shared
Accounts Receivable”
has
the
meaning set forth in Section 2.02(a)(xx).
“Shared
Inventory”
has
the
meaning set forth in Section 2.02(a)(xix).
“Shared
Payment Amount”
has
the
meaning set forth in Section 2.04(f).
“Site
Services Agreements”
has
the
meaning set forth in the Transaction Agreement.
“Spinco”
has
the
meaning set forth in the heading of this Agreement.
“Spinco
Common Stock”
has
the
meaning set forth in the recitals.
“Spinco
Contribution”
has
the
meaning set forth in the recitals.
“Spinco
Group”
means
Spinco, Newco, each subsidiary of Newco and each other Person that is controlled
directly or indirectly by Spinco.
“Spinco
Indemnitees”
has
the
meaning set forth in Section 4.02.
“Statement”
has
the
meaning set forth in Section 2.04(a).
“subsidiary”
of
any
Person means any corporation or other organization whether incorporated or
unincorporated of which at least a majority of the securities or interests
having by the terms thereof ordinary voting power to elect at least a majority
of the board of directors or others performing similar functions with respect
to
such corporation or other organization is directly or indirectly owned or
controlled (i) by such Person, (ii) by any one or more of such Person’s
subsidiaries, or (iii) by such Person and one or more of its subsidiaries;
provided,
however,
that no
Person that is not directly or indirectly wholly-owned by any other Person
shall
be a subsidiary of such other Person unless such other Person controls, or
has
the right, power or ability to control, that Person.
“Taxes”
has
the
meaning set forth in the Tax Sharing Agreement.
“Tax
Sharing Agreement”
has
the
meaning set forth in the Transaction Agreement.
“Technology”
has
the
meaning set forth in Section 2.02(a)(vi).
“Third
Party Claim”
has
the
meaning set forth in Section 4.06(a).
“Transaction
Agreement”
has
the
meaning set forth in the recitals.
“Transaction
Debt”
has
the
meaning set forth in the Transaction Agreement.
“Transaction
Documents”
has
the
meaning set forth in the Transaction Agreement.
“Transferred
Contracts”
has
the
meaning set forth in Section 2.02(a)(viii).
“Transferred
Employee”
has
the
meaning set forth in the Transaction Agreement.
“Transferred
Equipment”
has
the
meaning set forth in Section 2.02(a)(iii).
“Transferred
Intellectual Property”
has
the
meaning set forth in Section 2.02(a)(v).
“Transferred
Inventory”
has
the
meaning set forth in Section 2.02(a)(ii).
“Transferred
Permits”
has
the
meaning set forth in Section 2.02(a)(vii).
“Transferred
Real Property”
has
the
meaning set forth in Section 2.02(a)(i).
“Transferred
Records”
has
the
meaning set forth in Section 2.02(a)(xii).
“Transferred
Technology”
has
the
meaning set forth in Section 2.02(a)(vi).
“Transition
Services Agreement”
has
the
meaning set forth in the Transaction Agreement.
“U.S.
WC Newco Employees”
has
the
meaning set forth in the Transaction Agreement.
“Wapawekka
Lumber”
means
Wapawekka Lumber Ltd., a corporation incorporated under the laws of
Saskatchewan, in which Weyerhaeuser Canada is a shareholder.
“Wapawekka
Lumber Partnership”
means
Wapawekka Lumber Limited Partnership, a partnership formed under the laws of
Saskatchewan, in which Weyerhaeuser Saskatchewan and Wapawekka Lumber are
partners.
“Weyerhaeuser”
has
the
meaning set forth in the heading of this Agreement.
“Weyerhaeuser
Benefit Plan Shares”
means,
to the extent the Distribution is effected in the form of a pro rata dividend,
the shares of Weyerhaeuser Common Stock issued by Weyerhaeuser after the Record
Date and prior to the Distribution Date pursuant to any benefit plan (including
any stock option plan, SAR arrangement or restricted stock arrangement)
maintained by Weyerhaeuser to any director, officer or employee of Weyerhaeuser
or its subsidiaries.
“Weyerhaeuser
Business”
means:
(i) the business and operations of the Weyerhaeuser Group other than the
Newco Business, (ii) all other businesses and operations acquired or
commenced by any member of the Weyerhaeuser Group at any time after the
Contribution Date, and (iii) any terminated, divested or discontinued
businesses or operations that at the time of termination, divestiture or
discontinuation did not primarily relate to the Newco Business as then
conducted.
“Weyerhaeuser
Canada”
means
Weyerhaeuser Company Limited, a corporation incorporated under the laws of
Canada and an indirect subsidiary of Weyerhaeuser.
“Weyerhaeuser
Canada Exchangeable Shares”
means
the shares of Weyerhaeuser Canada issued in connection with the acquisition
by
Weyerhaeuser of MacMillan ▇▇▇▇▇▇▇ Limited, which are exchangeable from time
to
time for shares of Weyerhaeuser Common Stock in accordance with the terms and
conditions as set forth in Appendix 1 to the Plan of Arrangement attached as
Schedule D to the Transaction Agreement dated June 20, 1999 among Weyerhaeuser,
586476 B.C. Ltd. and MacMillan ▇▇▇▇▇▇▇ Limited, as such terms and conditions
may
be amended prior to the Effective Time.
“Weyerhaeuser
Canada Indemnitees”
has
the
meaning set forth in Section 4.05(a).
“Weyerhaeuser
Common Stock”
means
outstanding shares of common stock of Weyerhaeuser, par value $1.25 per
share.
“Weyerhaeuser
Group”
means
Weyerhaeuser, each subsidiary of Weyerhaeuser and any other Person that is
controlled directly or indirectly by Weyerhaeuser (other than any member of
the
Spinco Group).
“Weyerhaeuser
Indemnitees”
has
the
meaning set forth in Section 4.03.
“Weyerhaeuser
Insurance Policies”
has
the
meaning set forth in Section 6.01(a).
“Weyerhaeuser
Saskatchewan”
means
Weyerhaeuser Saskatchewan Ltd., a corporation incorporated under the laws of
Saskatchewan and a wholly-owned subsidiary of Weyerhaeuser Canada.
“Weyerhaeuser
Stock Plans”
has
the
meaning set forth in the Transaction Agreement.
“Working
Capital”
has
the
meaning set forth in Section 2.04(d).
“Working
Capital Principles”
has
the
meaning set forth in Section 2.04(d).
The
Contribution
SECTION
2.01. Transfer
of Assets and Assumption of Liabilities between Weyerhaeuser and
Newco. (a)
At
a time
on or prior to the Distribution Date (the “Contribution
Date”),
Weyerhaeuser shall, and shall cause any other applicable members of the
Weyerhaeuser Group to, sell, assign, transfer, convey and deliver to Newco,
and
Newco shall accept from Weyerhaeuser and any such members of the Weyerhaeuser
Group, all of Weyerhaeuser’s and such members’ right, title and interest in, to
and under all the Newco Assets other than the Delayed Transfer Assets in
exchange for (i) the Newco Equity Interests issued pursuant to
Section 2.01(e), and (ii) the assumption and agreement by Newco to
pay, perform and discharge all the Newco Liabilities other than the Delayed
Transfer Liabilities as provided in Section 2.01(b).
(b)
On
the
Contribution Date, Newco shall irrevocably assume and agree to faithfully pay,
perform and discharge when due all the Newco Liabilities other than the Delayed
Transfer Liabilities in exchange for the sale, assignment, transfer, conveyance
or delivery by Weyerhaeuser or any other member of the Weyerhaeuser Group of
all
the Newco Assets other than the Delayed Transfer Assets as provided in
Section 2.01(a).
(c)
Anything
in this Agreement to the contrary notwithstanding, Weyerhaeuser shall not be
obligated to assign, transfer, convey or deliver to Newco and Newco shall not
be
obligated to assume any of the rights and obligations under any Delayed Transfer
Asset or Delayed Transfer Liability until such time as all Legal Impediments
are
removed and/or all Consents and/or Governmental Approvals necessary for the
legal transfer and/or assumption thereof are obtained. Each of the parties
hereto agrees that the Delayed Transfer Assets shall be assigned, transferred,
conveyed and delivered, and any Delayed Transfer Liabilities shall be assumed,
in accordance with the provisions of Section 2.09. On the Contribution Date,
Weyerhaeuser shall deliver to Newco a schedule setting forth all material
Delayed Transfer Assets and Delayed Transfer Liabilities existing as of the
Contribution Date.
(d)
In
the
event that at any time or from time to time (whether prior to or after the
Distribution Date), any party hereto (or any member of such party’s respective
Group), shall receive or otherwise possess any asset that is allocated to any
other Person pursuant to this Agreement or any other Transaction Document,
such
party shall promptly transfer, or cause to be transferred, such asset to the
Person so entitled thereto. Prior to any such transfer, the Person receiving
or
possessing such asset shall hold such asset in trust for any such other
Person.
(e)
Simultaneously
with the Newco Contribution, Newco shall issue additional units of Newco Equity
Interests to Weyerhaeuser, as its sole member, in consideration for the transfer
of the Newco Assets and assumption of the Newco Liabilities in accordance with
this Section 2.01.
SECTION
2.02. Newco
Assets. (a)
For
purposes of this Agreement, “Newco
Assets”
means
all the business, properties, assets, goodwill and rights (including lease,
license and other contractual rights) of whatever kind and nature, real or
personal, tangible or intangible, that are owned by Weyerhaeuser or any other
member of the Weyerhaeuser Group immediately prior to the Contribution and
used
or held for use primarily in the operation or conduct of the Newco Business,
other than (A) the Excluded Assets and (B) as otherwise provided for in this
Section 2.02(a), which Newco Assets shall include (in each case, other than
the Excluded Assets):
(i) all
owned
real property, leaseholds and other interests in real property of Weyerhaeuser
or any other member of the Weyerhaeuser Group used or held for use primarily
in
the operation or conduct of the Newco Business, including the owned real
property, leaseholds and other interests in real property set forth on
Schedule 2.02(a)(i), in each case together with Weyerhaeuser’s and any
other member of the Weyerhaeuser Group’s right, title and interest in, to and
under all plants, facilities, buildings, structures, improvements and fixtures
thereon and all easements and rights of way pertaining thereto or accruing
to
the benefit thereof and all other appurtenances and real property rights
pertaining thereto (the “Transferred
Real Property”);
(ii) all
raw
materials, work-in-process, finished goods and products, supplies, parts
and
other inventories owned by Weyerhaeuser or any other member of the Weyerhaeuser
Group (“Inventory”)
that
as of the close of business on the Contribution Date are located on the
Transferred Real Property and all other Inventory as of the close of business
on
the Contribution Date, in each case that are used or held for use primarily
in
the operation or conduct of the Newco Business or produced by the Newco Business
for use in or sale by the Newco Business (the “Transferred
Inventory”);
(iii) (A)
all
other tangible personal property and interests therein owned by Weyerhaeuser
or
any other member of the Weyerhaeuser Group (including all machinery, equipment,
furniture, furnishings, tools and vehicles owned by Weyerhaeuser or any other
member of the Weyerhaeuser Group) that are used or held for use primarily
in the
operation or conduct of the Newco Business, and (B) the machinery and
equipment set forth on Schedule 2.02(a)(iii) (collectively, the
“Transferred
Equipment”);
(iv) all
accounts receivable solely arising out of the operation or conduct of the
Newco
Business;
(v) (A)
all
patents (including all reissues, divisions, continuations and extensions
thereof), patent applications, patent rights, trademarks, trademark
registrations, trademark applications, servicemarks, trade names, business
names, brand names, copyrights, copyright registrations, designs, design
registrations, and all rights to any of the foregoing (collectively, the
“Intellectual
Property”),
in
each case that are owned by Weyerhaeuser or any other member of the Weyerhaeuser
Group and used or held for use primarily in the operation or conduct of the
Newco Business, including the Intellectual Property set forth on
Schedule 2.02(a)(v) (the “Transferred
Intellectual Property”),
and
(B) all rights, if any, owned by Weyerhaeuser or any other member of the
Weyerhaeuser Group in the name and ▇▇▇▇ “Willamette”;
(vi) all
trade
secrets, inventions, know-how, formulae, processes, procedures, research
records, records of inventions, test information, market surveys, business
potential analysis, strategic plans, consultants reports, technical reports
and
marketing know-how (“Technology”),
in
each case that are owned by Weyerhaeuser or any other member of the Weyerhaeuser
Group and used or held for use solely in the operation or conduct of the
Newco
Business (the “Transferred
Technology”);
(vii) all
permits, licenses, franchises, approvals or authorizations from any Governmental
Entity (“Permits”)
set
forth on Schedule 2.02(a)(vii), and all other Permits that are held by
Weyerhaeuser or any other member of the Weyerhaeuser Group and used or held
for
use primarily in the operation or conduct of the Newco Business, in each
case to
the extent such Permits are transferable (the “Transferred
Permits”);
(viii) all
written contracts, leases, subleases, licenses, notes, bonds, debentures,
indentures, guarantees, agreements, commitments and all other legally binding
instruments, arrangements and understandings (“Contracts”)
to
which Weyerhaeuser or any other member of the Weyerhaeuser Group is a party
or
by which Weyerhaeuser or any other member of the Weyerhaeuser Group is bound
that are set forth on Schedule 2.02(a)(viii), and all other Contracts to
which Weyerhaeuser or any other member of the Weyerhaeuser Group is a party
or
by which Weyerhaeuser or any other member of the Weyerhaeuser Group is bound
that are used or held for use primarily in, or that arise primarily out of,
the
operation or conduct of the Newco Business (the “Transferred
Contracts”);
(ix) all
rights of Weyerhaeuser or any other member of the Weyerhaeuser Group in and
to
products sold or leased (including products returned after the Contribution
Date
and rights of Weyerhaeuser or any other member of the Weyerhaeuser Group
of
rescission, replevin and reclamation) primarily in the operation or conduct
of
the Newco Business;
(x) all
credits, prepaid expenses, deferred charges, advance payments, security deposits
and prepaid items that are used or held for use primarily in, or that arise
primarily out of, the operation or conduct of the Newco Business;
(xi) all
rights, claims, causes of action and credits owned by Weyerhaeuser or any
other
member of the Weyerhaeuser Group to the extent relating to any Newco Asset
or
any Newco Liability, including any such items arising under any guarantees,
warranties, indemnities, rights of recovery, rights of set-off and similar
rights in favor of Weyerhaeuser or any other member of the Weyerhaeuser Group
in
respect of any Newco Asset or any Newco Liability;
(xii) subject
to Section 7.01, all books, records and other documents (including all
books of account, ledgers, general, financial, accounting and personnel records,
files, invoices, customers’ and suppliers’ lists, other distribution lists,
operating, production and other manuals, manufacturing and quality control
records and procedures, billing records, sales and promotional literature)
(in
all cases, in any form or medium) owned by Weyerhaeuser or any other member
of
the Weyerhaeuser Group (“Records”)
(A) that as of the close of business on the Contribution Date are located
at the Transferred Real Property and that are used or held for use primarily
in,
or that arise primarily out of, the conduct or operation of the Newco Business,
or (B) that as of the close of business on the Contribution Date are not
located at the Transferred Real Property and that are solely used or held
for
use in the conduct or operation of the Newco Business (collectively, the
“Transferred
Records”);
(xiii) all
goodwill owned by Weyerhaeuser or any other member of the Weyerhaeuser Group
generated by or associated with the Newco Business or the Newco Assets;
(xiv) all
assets owned by Weyerhaeuser or any other member of the Weyerhaeuser Group
that
are expressly contemplated by the Tax Sharing Agreement as assets to be
transferred to Newco or any other member of the Spinco Group;
(xv) all
rights of Newco or any other member of the Spinco Group under this Agreement
or
any other Transaction Document;
(xvi) all
assets to be transferred to Newco or any member of the Spinco Group set forth
on
Schedule 2.02(a)(xvi) (the “Benefit
Plan Assets”);
(xvii) all
Hawesville IRB Rights and Marlboro IRB Rights;
(xviii) all
other
assets, properties, goodwill and rights of Weyerhaeuser or any other member
of
the Weyerhaeuser Group reflected in the Interim Newco Balance Sheet other
than
assets, properties, goodwill and rights that are (A) sold, disposed or
otherwise transferred after the date of such balance sheet, or (B) set
forth on Schedule 2.02(a)(xviii);
(xix) all
finished pulp manufactured at the Transferred Real Property owned by
Weyerhaeuser or any other member of the Weyerhaeuser Group and that, as of
the
close of business on the Contribution Date, is located at Weyerhaeuser’s
facilities other than the Transferred Real Property to the extent allocated
to
Newco in accordance with Schedule 2.04(d) (the “Shared
Inventory”);
and
(xx) all
accounts receivable with respect to pulp sales pursuant to which a payment
is
owed by a third party to the Newco Business and the Weyerhaeuser Business
to the
extent allocated to Newco in accordance with Schedule 2.04(d) (the “Shared
Accounts Receivable”).
(b)
For
the
purposes of this Agreement, “Excluded
Assets”
shall
mean the following assets owned by Weyerhaeuser or any other member of the
Weyerhaeuser Group:
(i) all
assets set forth on Schedule 2.02(b)(i) or 2.02(a)(xviii);
(ii) all
cash
and cash equivalents;
(iii) subject
to Section 6.01, all insurance policies and all rights and claims
thereunder and any proceeds thereof;
(iv) all
rights, claims and credits to the extent relating to any Excluded Asset or
any
Retained Liability, including any such items arising under any guarantees,
warranties, indemnities and similar rights in favor of Weyerhaeuser or any
other
member of the Weyerhaeuser Group in respect of any Excluded Asset or any
Retained Liability;
(v) all
shares of capital stock of, or other equity interests in, any affiliate of
Weyerhaeuser or any other Person (in each case, other than the Newco
Subsidiaries, Wapawekka Lumber and Wapawekka Lumber Partnership);
(vi) all
assets (other than the Benefit Plan Assets) relating to any employee benefit
plan in which any employees of Weyerhaeuser or any of its affiliates
participate;
(vii) subject
to Section 7.01 of this Agreement or, as applicable, Section 5.09 of the
Tax Sharing Agreement, all financial and tax Records relating to the Newco
Business that form part of Weyerhaeuser’s or any other member of the
Weyerhaeuser Group’s general ledger;
(viii) all
(A) Records that are not Transferred Records, and (B) Records prepared
in connection with the sale or transfer of the Newco Business, including
bids
received from third parties and analyses relating to the Newco
Business;
(ix) all
rights of Weyerhaeuser or any other member of the Weyerhaeuser Group under
this
Agreement or any other Transaction Document;
(x) the
Retained Names;
(xi) all
owned
real property, leaseholds and other interests in real property set forth
on
Schedule 2.02(b)(xi) and all owned real property, leaseholds and other interests
that are not Transferred Real Property, in each case together with
Weyerhaeuser’s and any other member of the Weyerhaeuser Group’s right, title and
interest in, to and under all buildings, improvements and fixtures thereon
and
all other appurtenances and real property rights pertaining
thereto;
(xii) all
Intellectual Property set forth on Schedule 2.02(b)(xii) and all other
Intellectual Property that is not Transferred Intellectual
Property;
(xiii) all
Technology that is used or held for use in Weyerhaeuser’s fluff pulp and
specialty pulp operations and all other Technology that is not Transferred
Technology;
(xiv) all
Permits set forth on Schedule 2.02(b)(xiv) and all other Permits that are
not
Transferred Permits;
(xv) all
Contracts set forth on Schedule 2.02(b)(xv) and all other Contracts that
are not Transferred Contracts;
(xvi) all
accounts receivable pursuant to which a payment is owed (i) by any member
of the Weyerhaeuser Group to any other member of the Weyerhaeuser Group,
or
(ii) by the Weyerhaeuser Business to the Newco Business;
(xvii) any
other
property or assets not constituting Newco Assets;
(xviii) all
corporate-level services of the type provided as of the date of this Agreement
to the Newco Business by Weyerhaeuser or any of its affiliates;
(xix) all
tangible personal property and interests therein (including all machinery,
equipment, furniture, furnishings, tools and vehicles) set forth on Schedule
2.02(b)(xix) and all other tangible personal property that is not Transferred
Equipment;
(xx) all
Excluded IRB Rights;
(xxi) the
Newco
Canada Exchangeco Assets and Canadian Excluded Assets;
(xxii) all
assets that are expressly contemplated by the Tax Sharing Agreement as assets
to
be retained by Weyerhaeuser or any other member of the Weyerhaeuser
Group;
(xxiii) the
Bowater Claim;
(xxiv) all
finished pulp manufactured at the Transferred Real Property owned by
Weyerhaeuser or any other member of the Weyerhaeuser Group and that, as of
the
close of business on the Contribution Date, is located at Weyerhaeuser’s
facilities other than the Transferred Real Property, other than the Shared
Inventory; and
(xxv) all
accounts receivable with respect to pulp sales pursuant to which a payment
is
owed by a third party to the Newco Business and the Weyerhaeuser Business,
other
than the Shared Accounts Receivable.
For
purposes of this Section 2.02(b) only, the “Newco Business” has the meaning
given to such term in Article I without regards to the proviso in such
definition.
SECTION
2.03. Newco
Liabilities. (a)
For
the
purposes of this Agreement, “Newco
Liabilities”
shall
mean all obligations, liabilities and commitments of any nature, whether known
or unknown, express or implied, primary or secondary, direct or indirect,
liquidated, absolute, accrued, contingent or otherwise and whether due or to
become due (“Liabilities”),
of
Weyerhaeuser or any other member of Weyerhaeuser Group arising out of or
primarily relating to the Newco Assets, the Newco Business or the operation
or
conduct of the Newco Business prior to, on or after the Contribution Date,
excluding the Retained Liabilities, which Newco Liabilities shall include (in
each case, other than the Retained Liabilities):
(i) all
Liabilities under the Transferred Contracts and the Transferred
Permits;
(ii)
all
accounts payable and accrued liabilities solely arising out of the operation
or
conduct of the Newco Business;
(iii)
all
Liabilities arising out of or primarily relating to any and all products
manufactured or sold by the Newco Business at any time, including obligations,
liabilities and commitments for refunds, adjustments, allowances, repairs,
exchanges, returns and warranty, product liability, merchantability and other
claims relating to such products;
(iv)
all
Liabilities arising as a result of at any time being the owner, lessee or
occupant of, or the operator of the activities conducted at, the Transferred
Real Property;
(v)
all
Environmental Liabilities at any time arising out of or primarily relating
to
the operation or conduct of the Newco Business or the ownership of, or
activities conducted at, the Transferred Real Property;
(vi)
all
Liabilities in respect of any suit, action or proceeding (a “Proceeding”),
pending or threatened, and claims, whether or not presently asserted, at
any
time arising out of or primarily relating to the operation or conduct of
the
Newco Business;
(vii) all
employment and employee benefit-related Liabilities with respect to Transferred
Employees and their dependents and beneficiaries (regardless of when or whether
such Liabilities arose, arise, were or are incurred), including under or
with
respect to any Newco Benefit Plan or Newco Benefit Agreement set forth on
Schedule 2.03(a)(vii), other than the Retained Benefit Liabilities (the
“Benefit
Plan Liabilities”);
(viii) all
Liabilities to be expressly assumed by any member of the Spinco Group pursuant
to this Agreement or the other Transaction Documents (including all Taxes
to the
extent responsibility therefor is assigned to Spinco under the Tax Sharing
Agreement);
(ix)
all
Liabilities to the extent arising out of the Hawesville IRB Indebtedness
and the
Marlboro IRB Indebtedness;
(x)
all
Liabilities reflected in the Interim Newco Balance Sheet other than Liabilities
discharged after the date of such balance sheet; and
(xi)
all
accounts payable with respect to pulp liabilities pursuant to which a payment
is
owed collectively by the Newco Business and the Weyerhaeuser Business to
any
third party to the extent allocated to Newco in accordance with Schedule
2.04(d)
(the “Shared
Accounts Payable”).
(b) For
the
purposes of this Agreement, “Retained
Liabilities”
shall
mean the following Liabilities of Weyerhaeuser or any other member of the
Weyerhaeuser Group:
(i) all
Liabilities not constituting Newco Liabilities;
(ii) the
Newco
Canada Exchangeco Liabilities and Canadian Retained Liabilities;
(iii) all
Liabilities (A) under the Weyerhaeuser Stock Plans (other than any Liabilities
with respect to Spinco equity awards issued or required to be issued pursuant
to
Section 6.08 of the Transaction Agreement) and the Newco U.S. Pension
Plans, (B) under or with respect to any Newco Benefit Plan or any Newco
Benefit Agreement not set forth on Schedule 2.03(a)(vii), and
(C) arising out of claims for medical benefits incurred on or prior to
Closing (such plans, collectively, the “Excluded
Benefit Plans”
and
such Liabilities, collectively, the “Retained
Benefit Liabilities”);
(iv) all
Liabilities to be expressly retained or assumed by any member of the
Weyerhaeuser Group pursuant to this Agreement or the other Transaction
Documents
(including all Taxes to the extent responsibility therefor is assigned
to
Weyerhaeuser under the Tax Sharing Agreement);
(v) all
Liabilities under Environmental Laws arising out of or primarily relating
to
real property, plants and other facilities formerly owned or leased by
Weyerhaeuser or any member of the Weyerhaeuser Group and not included in
the
Transferred Real Property;
(vi) all
Liabilities to the extent arising out of the Excluded IRB
Indebtedness;
(vii) all
accounts payable pursuant to which a payment is owed (i) by any member of
the Weyerhaeuser Group to any other member of the Weyerhaeuser Group, or
(ii) by the Newco Business to the Weyerhaeuser Business;
(viii) all
Liabilities to the extent arising out of (x) any exposure to asbestos or
asbestos-containing materials present in products formerly manufactured
at
facilities located on the Transferred Real Property or at any other facility
now
or formerly owned by Weyerhaeuser or any member of the Weyerhaeuser Group
or
(y) the pre-closing manufacture of these products at such
facilities;
(ix) all
accounts payable with respect to pulp liabilities pursuant to which a payment
is
owed collectively by the Newco Business and the Weyerhaeuser Business to
any
third party, other than the Shared Accounts Payable; and
(x) all
Liabilities set forth on Schedule 2.03(b)(x).
SECTION
2.04. Post-Closing
Working Capital Adjustment.
(a)
The
Statement.
Within
60 days after the Closing Date, Weyerhaeuser shall prepare and deliver to Spinco
a statement (the “Statement”),
setting forth (i) Working Capital of the Newco Business as of the close of
business on the day prior to the Closing Date (“Closing
Working Capital”),
and
(ii) the amounts of Shared Inventory, Shared Accounts Receivable and Shared
Accounts Payable as of the close of business on the day prior to the Closing
Date. Spinco shall provide reasonable assistance to Weyerhaeuser in the
preparation of the Statement and shall provide Weyerhaeuser reasonable access
at
all reasonable times to the personnel, properties, books and records of the
Newco Business for such purpose.
(b)
Objections;
Resolution of Disputes.
The
Statement shall become final and binding upon the parties on the 30th day
following delivery thereof, unless Spinco gives written notice of its
disagreement with the Statement (a “Notice
of Disagreement”)
to
Weyerhaeuser prior to such date. Any Notice of Disagreement shall (i) specify
in
reasonable detail the nature of any disagreement so asserted, and (ii) only
include disagreements based on mathematical errors or based on Closing Working
Capital not being calculated in accordance with this Section 2.04. If a Notice
of Disagreement is received by Weyerhaeuser in a timely manner, then the
Statement (as revised in accordance with this sentence) shall become final
and
binding upon Weyerhaeuser and Spinco on the earlier of (A) the date Weyerhaeuser
and Spinco resolve in writing any differences they have with respect to the
matters specified in the Notice of Disagreement, and (B) the date any disputed
matters are finally resolved in writing by the Accounting Firm. During the
30-day period following the delivery of a Notice of Disagreement, Weyerhaeuser
and Spinco shall seek in good faith to resolve in writing any differences that
they may have with respect to the matters specified in the Notice of
Disagreement. At the end of such 30-day period, Weyerhaeuser and Spinco shall
submit to an independent accounting firm (the “Accounting
Firm”)
for
arbitration any and all matters that remain in dispute and were properly
included in the Notice of Disagreement. The Accounting Firm shall be Deloitte
& Touche LLP or, if such firm is unable or unwilling to act, such other
nationally recognized independent public accounting firm as shall be agreed
upon
by the parties hereto in writing. Weyerhaeuser and Spinco shall use reasonable
efforts to cause the Accounting Firm to render a decision resolving the matters
submitted to the Accounting Firm within 30 days of receipt of the submission.
Judgment may be entered upon the determination of the Accounting Firm in any
court having jurisdiction over the party against which such determination is
to
be enforced. The cost of any arbitration (including the fees and expenses of
the
Accounting Firm and reasonable attorney fees and expenses of the parties)
pursuant to this Section 2.04 shall be equally shared by Spinco and
Weyerhaeuser. Other than the fees and expenses referred to in the immediately
preceding sentence, the fees and disbursements of Weyerhaeuser’s independent
auditors shall be borne by Weyerhaeuser and the fees and disbursements of
Spinco’s independent auditors shall be borne by Spinco.
(c)
Adjustment
Payment.
If the
Closing Working Capital is less than $500,000,000, Weyerhaeuser shall, within
ten business days after the Statement becomes final and binding on the parties,
pay to Spinco the amount by which Closing Working Capital is less than
$500,000,000. If the Closing Working Capital exceeds $600,000,000, Spinco shall,
within 10 Business Days after the Statement becomes final and binding on the
parties, pay to Weyerhaeuser the amount by which Closing Working Capital exceeds
$600,000,000. Any payment made pursuant to this Section 2.04(c) shall be
made by wire transfer in immediately available funds to one or more accounts
designated in writing at least two business days prior to such payment by the
party entitled to receive such payment together with interest thereon at a
rate
of interest per annum equal to the rate of interest from time to time announced
publicly by JPMorgan Chase Bank as its prime rate, calculated on the basis
of
the actual number of days elapsed divided by 365, from the Closing Date to
the
date of payment.
(d)
Working
Capital.
The term
“Working
Capital”
means
Current Assets minus Current Liabilities. The terms “Current
Assets”
and
“Current
Liabilities”
mean
the current assets and current liabilities, respectively, of the portion of
the
Newco Business, calculated in the same way, using the same methods, policies,
principles and methodologies, as the line items on the Interim Newco Balance
Sheet, subject to adjustment in accordance with the Working Capital Principles.
Closing Working Capital shall include the Shared Payment Amount. Without
limiting the generality of the foregoing, Closing Working Capital is to be
calculated (i) using the methods, policies, principles and methodologies set
forth on Schedule 2.04(d), whether or not doing so is in accordance with (A)
the
methods used for calculating Working Capital on the Interim Newco Balance Sheet
or (B) GAAP, (ii) if Schedule 2.04(d) does not set forth relevant methods,
policies, principles and methodologies, the Closing Working Capital is to be
calculated in the same way, using the same methods, policies, principles and
methodologies, as were used by Weyerhaeuser in preparation of the Interim Newco
Balance Sheet, whether or not doing so is in accordance with GAAP, and (iii)
if
no relevant methods, policies, principles and methodologies are available
pursuant to the foregoing clauses (i) and (ii), the Closing Working Capital
is
to be calculated in accordance with GAAP applied in a manner consistent with
Weyerhaeuser’s historic methods, policies, principles and methodologies
excluding any effects of the transactions contemplated by this Agreement. The
foregoing principles are referred to in this Agreement as the “Working
Capital Principles”.
Closing Working Capital is to be calculated as of close of business on the
day
prior to the Closing Date in accordance with the Working Capital Principles.
The
scope of the disputes to be resolved by the Accounting Firm as provided in
Section 2.04(b) shall be solely limited to whether such calculation was
done in accordance with the Working Capital Principles, and whether there were
mathematical errors in the Statement. Under no circumstances shall the
Accounting Firm be authorized or permitted to make any other determination
or
adjustment based on GAAP if Working Capital Principles can be determined
pursuant to clauses (i) and (ii) of the definition thereof. For purposes of
this
Section 2.04(d), any items on or omissions from the Interim Newco Balance Sheet
that are based upon errors of fact or mathematical errors or that are not in
accordance with GAAP shall be retained for purposes of calculating Closing
Working Capital. Without limiting the generality of the foregoing, the
Accounting Firm is not authorized or permitted to make any determination as
to
the accuracy of any representation or warranty in this Agreement or as to
compliance by Weyerhaeuser with any of its covenants in this Agreement (other
than in this Section 2.04).
(e)
Post-Closing
Books and Records.
Following the Closing Date, neither Spinco nor Weyerhaeuser shall take any
actions with respect to the accounting books and records of the Business on
which the Statement is to be based that would affect the Statement. During
the
period of time from and after the Closing Date through the resolution of any
payment contemplated by Section 2.04(c) or 2.04(f), each of Spinco and
Weyerhaeuser shall afford to each other and their respective accountants and
counsel in connection with any actions contemplated by this Section 2.04
reasonable access during normal business hours to all the properties, books,
contracts, personnel and records of such party relevant to the Statement, the
Notice of Disagreement and any payments contemplated by this Section
2.04.
(f)
Shared
Payment Amount.
On the
day that Weyerhaeuser delivers to Spinco the Statement in accordance with
Section 2.04(a), Weyerhaeuser shall pay to Spinco an amount equal to (1)(A)
the
sum of the amount of Shared Accounts Receivable and the amount of Shared
Inventory, in each case as reflected on the Statement, minus (B) the amount
of
the Shared Accounts Payable as reflected on the Statement (the amount so
calculated, the “Shared
Payment Amount”),
plus
(2) an amount (the “Pulp
Inventory Adjustment Amount”)
equal
to 100% of the sum of (A) the LIFO reserve applicable to the Shared Inventory
reflected on the Statement (the “LIFO
Reserve Amount”)
and
(B) an amount equal to 5% multiplied by the sum of the Shared Inventory, as
reflected in the Statement, and the LIFO Reserve Amount. On the day that the
Statement becomes final in accordance with Section 2.04(b), (i) if the
Statement (as revised in accordance with Section 2.04(b)) reflects an increase
in the Shared Payment Amount or the Pulp Inventory Adjustment Amount,
Weyerhaeuser shall pay to Spinco the amount of such increase, and (ii) if
the Statement (as revised in accordance with Section 2.04(b)) reflects a
decrease in the Shared Payment Amount or the Pulp Inventory Adjustment Amount,
Spinco shall pay to Weyerhaeuser the amount of such decrease. Any payment made
pursuant to this Section 2.04(f) shall be made by wire transfer in immediately
available funds to one or more accounts designated in writing at least two
Business Days prior to such payment by the party entitled to receive such
payment together. The payment pursuant to this Section 2.04(f) shall be
independent of whether a payment is due pursuant to Section 2.04(c). Immediately
following the Effective Time, (i) Newco shall transfer and assign to
Weyerhaeuser the Shared Inventory and the Shared Accounts Receivable, and (ii)
Weyerhaeuser shall assume from Newco the Shared Accounts Receivable. At such
time, Newco and Spinco shall have no further rights with respect to the Shared
Accounts Receivable and the Shared Inventory (which will become Excluded Assets)
and shall have no further obligations with respect to the Shared Accounts
Payable (which will become Retained Liabilities) other than the right to receive
the payments provided for in this Section 2.04(f). Notwithstanding anything
to the contrary in the Transaction Documents, Weyerhaeuser shall at any time
control the collection of the Shared Accounts Receivables and the sale of the
Shared Inventory and Newco and Spinco shall have no rights to dispute at any
time any actions or omissions by Weyerhaeuser in connection
therewith.
(g)
Allocations
and Payments to the Weyerhaeuser Subsidiary.
All
payments provided for in this Section 2.04, shall be allocated among
Weyerhaeuser, Weyerhaeuser Canada and Weyerhaeuser Saskatchewan according to
the
respective amounts of Working Capital, Shared Accounts Receivable, Shared
Accounts Payable and Shared Inventory attributable to each of them as determined
by Weyerhaeuser. At Weyerhaeuser’s direction, such payments may be made to or by
Weyerhaeuser, Weyerhaeuser Canada or Weyerhaeuser Saskatchewan. Any payments
allocable to Weyerhaeuser Canada or Weyerhaeuser Saskatchewan which are received
or made by Weyerhaeuser shall be received or made as agent for Weyerhaeuser
Canada or, as applicable, Weyerhaeuser Saskatchewan and shall promptly be
remitted by Weyerhaeuser to Weyerhaeuser Canada or, as applicable, Weyerhaeuser
Saskatchewan (or paid by Weyerhaeuser Canada or, as applicable, Weyerhaeuser
Saskatchewan to Weyerhaeuser).
(h)
Tax
Treatment.
Any
payments to Spinco pursuant to this Section 2.04 shall be treated for all
Tax purposes as a capital contribution to Spinco. Any payments made by Spinco
pursuant to this Section 2.04 shall be treated for all Tax purposes as an
adjustment to the value of the consideration paid for the Contribution. This
Section 2.04(h) shall not apply to any payment under Section
2.04(f).
SECTION
2.05. Documents
Relating to Transfers of Newco Assets and Assumption of Newco
Liabilities.
In
furtherance of the assignment, transfer and conveyance of Newco Assets and
the
assumption of Newco Liabilities pursuant to Section 2.01, on or prior to the
Contribution Date and, with respect to Delayed Transfer Assets and Delayed
Transfer Liabilities, at such time after the Distribution Date as such Delayed
Transfer Asset or Delayed Transfer Liability can be transferred (a) Weyerhaeuser
shall execute and deliver, and shall cause its subsidiaries to execute and
deliver, such bills of sale, deeds, lease assignments and assumptions, leases,
subleases, stock powers, certificates of title, assignments of contracts and
other instruments of transfer, conveyance and assignment (including supplemental
transfer tax forms, if applicable) as and to the extent necessary to evidence
the transfer, conveyance and assignment of Weyerhaeuser’s or the applicable
subsidiary’s right, title and interest in and to the Newco Assets to Newco
(collectively, the “Asset
Conveyance Documents”),
and
(b) Newco shall execute and deliver to Weyerhaeuser such assignments of
contracts and other instruments of assumption as and to the extent necessary
to
evidence the valid and effective assumption by Newco of the Newco Liabilities
(collectively, the “Liabilities
Assumption Documents”);
provided,
that
any instruments executed and delivered pursuant to this Section 2.05 shall
be in a form acceptable to Domtar, which consent shall not be unreasonably
withheld or delayed.
SECTION
2.06. Other
Ancillary Agreements.
Effective as of the Contribution Date, each of Weyerhaeuser, Spinco and Newco
shall execute and deliver, and cause its subsidiaries to execute and deliver,
all Ancillary Agreements to which it is a party.
SECTION
2.07. The
Canadian Asset Sale. (a)
Subject
to Section 7.08, on or prior to the Contribution Date, Newco shall cause
Newco Canada Exchangeco (or a subsidiary of Newco Canada Exchangeco) to purchase
from Weyerhaeuser Canada and Weyerhaeuser Saskatchewan the Newco Canada
Exchangeco Assets for fair market value, which shall be an aggregate purchase
price of (i) $500,000,000 in cash, and (ii) the assumption by Newco Canada
Exchangeco (or a subsidiary of Newco Canada Exchangeco) of the Newco Canada
Exchangeco Liabilities (the “Canadian
Asset Sale”).
(b)
Subject
to Section 7.08, in connection with the Canadian Asset Sale, Newco and
Newco Canada Exchangeco (or a subsidiary of Newco Canada Exchangeco) shall
enter
into an agreement or agreements with Weyerhaeuser Canada and Weyerhaeuser
Saskatchewan (the “Canadian
Purchase Agreement”)
and
such other documents and instruments, in each case in such form as shall be
approved by Weyerhaeuser and Domtar, (i) to provide for and evidence the
sale of the Newco Canada Exchangeco Assets to Newco Canada Exchangeco (or a
subsidiary of Newco Canada Exchangeco) and the assumption of the Newco Canada
Exchangeco Liabilities by Newco Canada Exchangeco (or a subsidiary of Newco
Canada Exchangeco), (ii) to provide for indemnification of Weyerhaeuser Canada,
Weyerhaeuser Saskatchewan and Newco Canada Exchangeco (or a subsidiary of Newco
Canada Exchangeco) as provided in Sections 4.04 and 4.05, (iii) to provide
for
the tax elections set forth under such heading in Exhibit A, and
(iv) to provide for the assumption of the Assumed Canadian Plans by Newco
Canada Exchangeco (or a subsidiary of Newco Canada Exchangeco) pursuant to
Section 6.09(g) of the Transaction Agreement.
(c)
Subject
to Section 7.08, prior to the Canadian Asset Sale, Weyerhaeuser shall (i)
transfer to Newco an amount in cash equal to the purchase price set forth in
Section 2.07(a)(i), (ii) cause Newco to transfer such amount to Newco Holding,
(iii) cause Newco Holding to transfer, in its turn, such amount to Newco
Canada, and (iv) cause Newco Canada to transfer, in its turn, such amount
to Newco Canada Exchangeco (or a subsidiary of Newco Canada
Exchangeco).
(d)
Prior
to
the Contribution and with the consent of Domtar, Weyerhaeuser and Newco shall
agree to the Schedules for attachment to Exhibit A.
SECTION
2.08. Disclaimer
of Representations and Warranties.
EXCEPT
AS MAY EXPRESSLY BE SET FORTH IN THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT, (A) NONE OF WEYERHAEUSER OR ANY MEMBER OF THE WEYERHAEUSER GROUP
MAKES
ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED,
WITH
RESPECT TO THE NEWCO EQUITY INTERESTS, THE NEWCO ASSETS, THE NEWCO LIABILITIES
OR THE NEWCO BUSINESS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
(INCLUDING ANY CONSENTS OR APPROVALS REQUIRED IN CONNECTION THEREWITH) OR THE
BUSINESS, ASSETS, CONDITION OR PROSPECTS (FINANCIAL OR OTHERWISE) OF, OR ANY
OTHER MATTER INVOLVING THE NEWCO EQUITY INTERESTS, THE NEWCO ASSETS, THE NEWCO
LIABILITIES OR THE NEWCO BUSINESS; (B) ALL OF THE NEWCO EQUITY INTERESTS, THE
NEWCO ASSETS TO BE TRANSFERRED OR THE NEWCO LIABILITIES TO BE ASSUMED OR
TRANSFERRED IN ACCORDANCE WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT
SHALL BE TRANSFERRED OR ASSUMED ON AN “AS IS, WHERE IS” BASIS, AND ALL IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE
ARE
HEREBY EXPRESSLY DISCLAIMED; AND (C) NONE OF THE PARTIES HERETO OR ANY OTHER
PERSON MAKES ANY REPRESENTATION OR WARRANTY WITH RESPECT TO ANY INFORMATION,
DOCUMENTS OR MATERIAL MADE AVAILABLE IN CONNECTION WITH THE CONTRIBUTION, THE
DISTRIBUTION OR THE ENTERING INTO OF THIS AGREEMENT OR THE OTHER TRANSACTION
DOCUMENTS OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
SECTION
2.09. Governmental
Approvals and Consents. (a)
Subject
to Section 6.07(c) of the Transaction Agreement, upon the terms and subject
to
the conditions set forth in this Agreement, each of the parties hereto shall
use
its reasonable best efforts to take, or cause to be taken, all actions, and
to
do, or cause to be done, and to assist and cooperate with the other parties
in
doing, all things necessary, proper or advisable to consummate and make
effective, on the Contribution Date or the Distribution Date, as applicable,
the
transactions contemplated by this Agreement and the other Transaction Documents,
including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of
all
necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary
to
obtain an approval or waiver from, or to avoid an action or proceeding by,
any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals
or
waivers from third parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement
or
any other Transaction Document including seeking to have any stay or temporary
restraining order entered by any court or other Governmental Entity vacated
or
reversed and (iv) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by this Agreement and
the
Ancillary Agreements.
(b)
If
the
transfer, assignment or assumption of any Delayed Transfer Asset or any Delayed
Transfer Liability intended to be transferred, assigned or assumed hereunder
is
not consummated prior to or at the Contribution Date then the member of the
Weyerhaeuser Group retaining such Delayed Transfer Asset or such Delayed
Transfer Liability shall thereafter hold such Delayed Transfer Asset or such
Delayed Transfer Liability for the use and benefit, insofar as reasonably
practicable, of Newco (at the expense of Newco). In addition, the member of
the
Weyerhaeuser Group retaining such Delayed Transfer Asset or such Delayed
Transfer Liability shall take such other actions in order to place Newco,
insofar as reasonably practicable, in the same position as if such Delayed
Transfer Asset or such Delayed Transfer Liability had been transferred or
assumed as contemplated hereby and so that all the benefits and burdens relating
to such Delayed Transfer Asset or such Delayed Transfer Liability, including
possession, use, risk of loss, potential for gain, and dominion, control and
command over such asset, are to inure from and after the Contribution Date
to
Newco. To the extent permitted by law and to the extent otherwise permissible
in
light of any Legal Impediment or required Consent and/or Governmental Approval,
Newco shall be entitled to, and shall be responsible for, the management and
the
benefits and burdens of any Delayed Transfer Asset or any Delayed Transfer
Liability not yet transferred to or assumed by it as a result of this
Section 2.09(b) and the parties hereto agree to use reasonable best efforts
to cooperate and coordinate with respect thereto.
(c)
If
and
when the Legal Impediments and the Consents and/or Governmental Approvals,
the
failure to remove or the absence of which caused the deferral of the transfer
or
assumption of any Newco Asset or Newco Liability pursuant to Section 2.01(c),
are removed or obtained, as the case may be, the transfer and assumption of
the
applicable Newco Asset or Newco Liability shall be promptly effected in
accordance with the terms of this Agreement and/or the other applicable
Transaction Documents, without the payment of additional consideration. After
the Distribution Date, subject to Section 2.09(d), Weyerhaeuser and Newco
agree to, and shall cause their respective subsidiaries to, use reasonable
best
efforts to remove such Legal Impediments and obtain such Consents and/or
Governmental Approvals as promptly as practicable.
(d)
The
member of the Weyerhaeuser Group retaining a Delayed Transfer Asset or Delayed
Transfer Liability due to the deferral of the transfer or assumption of such
Newco Asset or Newco Liability pursuant to Section 2.01(c) shall not be
obligated, in connection with this Section 2.09, to expend any money unless
the necessary funds are advanced by Newco, other than reasonable out-of-pocket
expenses, attorneys’ fees and recording or similar fees, all of which shall be
promptly reimbursed by Newco. Any member of the Spinco Group holding an Excluded
Asset or a Retained Liability improperly transferred to or assumed by the Spinco
Group shall not be obligated, in connection with the foregoing, to expend any
money unless the necessary funds are advanced by Weyerhaeuser, other than
reasonable out-of-pocket expenses, attorneys’ fees and recording or similar
fees, all of which shall be promptly reimbursed by Weyerhaeuser.
(e)
If
consent to assign the Bowater Agreement is needed but has not been obtained,
the
Bowater Agreement shall be a Delayed Transfer Asset in accordance with this
Section 2.09. In such event, Weyerhaeuser shall pursue, and cause its
subsidiaries to pursue, upon written request of Newco and subject to Sections
2.09(b) and 2.09(d), any claims for indemnification or reimbursement with
respect to any liabilities and obligations for which the Bowater Agreement
provides that Weyerhaeuser and/or Weyerhaeuser Canada has an indemnification
or
reimbursement claim. To the extent Newco makes any payment with respect to
any
liability of Weyerhaeuser or Weyerhaeuser Canada for which Weyerhaeuser or
Weyerhaeuser Canada would be entitled to indemnification or reimbursement under
the Bowater Agreement, Newco shall be subrogated to the maximum extent permitted
by applicable Law to all rights of Weyerhaeuser and Weyerhaeuser Canada to
indemnification and reimbursement under the Bowater Agreement with respect
to
such liability, and Weyerhaeuser or Weyerhaeuser Canada shall promptly pay
to
Newco the proceeds received by Weyerhaeuser or Weyerhaeuser Canada from any
claims for indemnification or reimbursement under the Bowater Agreement. The
foregoing shall not apply to any liabilities and obligations with respect to
the
Bowater Claim, which is expressly excluded from this Section 2.09.
SECTION
2.10. Separation
of Contractual Arrangements. (a)
Weyerhaeuser
and Newco shall in good faith negotiate and use commercially reasonable efforts
to enter into a joint purchase agreement with respect to the Contracts that
are
set forth on Schedule 2.10(a).
(b)
Upon
request of Newco after the Effective Time, Weyerhaeuser shall provide reasonable
assistance to Newco, at Newco’s expense, so that Newco may, with respect to each
Contract set forth on Schedule 2.10(b), either, at Newco’s election,
(i) obtain a new Contract between any member of the Spinco Group and the
third party to such Contract under terms and conditions acceptable to Newco,
or
(ii) benefit from such Contract as a partial assignee or sublessee
thereunder.
SECTION
2.11. Employee
Matters. (a)
Employees.
On or
prior to the Distribution Date, Weyerhaeuser shall use reasonable best efforts
to transfer to the appropriate member of the Spinco Group, including by causing
the appropriate member of the Spinco Group to offer employment to, (a) each
Newco Employee set forth on Schedule 2.11(a)(i), (b) each Mill
Employee other than those set forth on Schedule 2.11(a)(ii), (c) each
Newco Employee set forth on Schedule 2.11(a)(iii), (d) each Newco
Employee employed in connection with the Forest Licenses in Ontario and
Saskatchewan to be transferred to Newco (the “Forest
Management Employees”)
set
forth on Schedule 2.11(a)(iv), and (e) Newco Employees or new hires to
perform the functions set forth on Schedule 2.11(a)(v) in accordance with
Section 6.09(a)(iii) of the Transaction Agreement, provided,
that,
with the exception of the new hires included in clause (e), such Newco
Employees are employed by Weyerhaeuser or any other member of the Weyerhaeuser
Group immediately prior to the Distribution Date. Notwithstanding the foregoing,
no Disabled Newco Employee shall be transferred to any member of the Spinco
Group other than in accordance with Section 6.09(a)(ii) of the Transaction
Agreement. The parties agree that no employee (other than the new hires
referenced in clause (e) above) who is not engaged in the Newco Business will
be
a Transferred Employee. For purposes of this Section 2.11, “Mill
Employee”
means
any Newco Employee employed by Weyerhaeuser or a Weyerhaeuser Subsidiary at
the
Transferred Real Property immediately prior to the Distribution Date (including
any individuals who are not actively at work on the Distribution Date due to
vacation, holiday, illness, jury duty, bereavement leave or other authorized
leave of absence, Disabled Newco Employees, except to the extent contemplated
in
Sections 6.09(a)(ii) of the Transaction Agreement and U.S. WC Newco
Employees, except to the extent contemplated in Section 6.09(a)(iii) of the
Transaction Agreement).
(b)
Transfer
of Assets and Assumption of Liabilities.
On or
prior to the Distribution Date, (i) Weyerhaeuser shall transfer the Benefit
Plan Assets to Newco (or the appropriate member of the Spinco Group or New
Benefit Plan (including any related trust)), and (ii) Newco (or the
appropriate member of the Spinco Group or New Benefit Plan (including any
related trust)) shall assume the Benefit Plan Liabilities, in each case in
accordance with the provisions of Section 6.09 of the Transaction
Agreement.
(c)
Collective
Bargaining Agreements.
During
the period starting on the date of this Agreement and ending on the Distribution
Date, as contemplated in Section 6.09 of the Transaction Agreement,
Weyerhaeuser shall cause Newco (or the appropriate member of the Spinco Group)
to comply in all material respects with CBAs (including all obligations to
contribute to any pension plans) that cover one or more Transferred
Employees.
(d)
Retiree
Benefits.
Notwithstanding any provision of this Agreement to the contrary, following
the
Distribution, if Spinco or any affiliate of Spinco negotiates any changes in
benefit levels or cost sharing that increase the retiree benefits for Canadian
Newco Employees under a collective bargaining agreement, Spinco shall ensure
that such changes will not apply to any persons who retired prior to the
Distribution Date. In the event that, notwithstanding the preceding limitation
or anything to the contrary in this Agreement, Spinco or any affiliate of Spinco
negotiates any changes in benefit levels or cost sharing that increase the
retiree benefits under a collective bargaining agreement for Canadian Newco
Employees who do not become Transferred Employees and who retired prior to
the
Distribution Date, Spinco shall promptly reimburse Weyerhaeuser for all costs,
expenses or liabilities resulting from such increase and shall indemnify and
hold harmless Weyerhaeuser and all its affiliates for any Liabilities arising
in
connection therewith.
SECTION
2.12. Transfer
of Newco Equity Interests and Issuance of Spinco Common Stock. (a)
On
the
Contribution Date, (i) Weyerhaeuser shall sell, assign, transfer and convey
to Spinco all the Newco Equity Interests held by Weyerhaeuser and constituting
all the issued and outstanding Newco Equity Interests, (ii) Spinco shall
issue and deliver to Weyerhaeuser the number of shares of Spinco Common Stock
determined in accordance with Section 2.12(b), and (iii) Spinco shall
pay to Weyerhaeuser an amount in cash equal to the New Debt Amount.
(b)
On
the
Contribution Date, Spinco shall issue to Weyerhaeuser the number of shares
of
Spinco Common Stock equal to (x) the product, rounded to the nearest whole
number, of (i) 11/9, and (ii) the sum of (A) the number of Domtar
Common Shares issued and outstanding on the Measurement Date, (B) the number
of
Domtar Restricted Shares outstanding on the close of business on the Measurement
Date to the extent not included in clause (A) above, (C) the aggregate
number of Domtar Common Shares issuable pursuant to Domtar DSUs, Domtar PSUs
and
Domtar Rights, in each case outstanding on the close of business on the
Measurement Date, (D) the aggregate number of Domtar Common Shares issuable
pursuant to Domtar Options granted after January 1, 2006 outstanding on the
close of business on the Measurement Date, and (E) the aggregate number of
Domtar Common Shares that would have been issuable pursuant to Exchanged Options
(as defined below) outstanding on the close of business on the Measurement
Date
had the Domtar Options (other than Domtar Options granted after January 1,
2006) been exchanged for Exchanged Options as of the Measurement Date in
accordance with the principles set out in the calculation model in
Section 1.04(j) of the Domtar Disclosure Letter, minus (y) the sum of
(A) the aggregate number of shares of Spinco Common Stock issuable pursuant
to Substituted Spinco RSUs, Substituted Spinco SARs and Substituted Spinco
Options, and (B) the number of shares of Spinco Common Stock outstanding
prior to the Contribution. For purposes of this
Section 2.12(b):
| (1) |
“Domtar
Options”,
“Amended
Replacement Options”,
“Domtar
Restricted Shares”,
“Domtar
Rights”,
“Domtar
DSUs”,
“Domtar
PSUs”,
“Substituted
Spinco Options”,
“Substituted
Spinco SARs”
and “Substituted
Spinco RSUs”
have the meanings set forth in the Transaction
Agreement.
|
| (2) |
“Exchanged
Options”
means options to purchase Domtar Common Shares having an exercise
price
equal to the volume weighted average (rounded to the nearest 1/10,000)
of
the trading prices of the Domtar Common Shares on the NYSE as reported
by
Bloomberg Financial Markets (or such other source as the parties
shall
agree in writing) on the last trading day immediately prior to the
Measurement Date.
|
| (3) |
“Measurement
Date”
means (i) if the Distribution is effected in its entirety as a pro
rata
dividend, the last trading day immediately prior to the Contribution
Date,
and (ii) to the extent that the Distribution is effected, in whole
or in
part, pursuant to an exchange offer, the trading day designated by
Weyerhaeuser not more than 11 Business Days prior to the Distribution
Date.
|
| (4) |
The
number of shares of Spinco Common Stock issuable pursuant to Substituted
Spinco Options, Substituted Spinco SARs and Substituted Spinco RSUs
shall
be calculated as provided in Section 6.08 of the Transaction Agreement,
except that, for purposes of this Section 2.12(b) only, the “Option
Exchange Ratio” shall be a fraction (A) the numerator of which shall
be the Average Weyerhaeuser Pre-Distribution Price as defined in
Section 6.08 of the Transaction Agreement unless on the Measurement
Date the Weyerhaeuser Common Stock is trading ex-dividend with respect
to
the Distribution, in which case the numerator of which shall be the
volume
weighted average (rounded to the nearest 1/10,000) of the trading
prices
of Weyerhaeuser Common Stock on the NYSE as reported by Bloomberg
Financial Markets (or such other source as the parties shall agree
in
writing) on the last trading day immediately prior to the Measurement
Date
on which the Weyerhaeuser Common Stock does not trade ex-dividend
with
respect to the Distribution, and (B) the denominator of which shall
be the Average Spinco Distribution Price as defined in Section 6.08
of the Transaction Agreement unless on the Measurement Date the Average
Spinco Distribution Price cannot be determined, in which case the
denominator of which shall be the volume weighted average (rounded
to the
nearest 1/10,000) of the trading prices of the Domtar Common Shares
on the
NYSE as reported by Bloomberg Financial Markets (or such other source
as
the parties shall agree in writing) on the last trading day immediately
prior to the Measurement Date.
|
The
Distribution
SECTION
3.01. Form
of Distribution. (a)
Weyerhaeuser
may elect to effect the Distribution in the form of either a dividend of shares
of Spinco Common Stock distributed to the Eligible Holders on a pro rata basis,
an offer to exchange shares of Spinco Common Stock for Eligible Shares or a
combination thereof.
(b)
If
Weyerhaeuser elects to effect all or a portion of the Distribution in the form
of a pro rata dividend, prior to the Distribution Date, the Board of Directors
of Weyerhaeuser, in accordance with applicable law, shall establish the Record
Date and the Distribution Date and any appropriate procedures in connection
with
the Distribution and all shares of Spinco Common Stock held by Weyerhaeuser
on
the Distribution Date shall be distributed to the Eligible Holders as provided
in Section 3.03. To the extent the Distribution is effected as an exchange
offer followed by a pro rata dividend of the remaining shares of Spinco Common
Stock held by Weyerhaeuser, Weyerhaeuser shall use its reasonable best efforts
to set the Record Date as the date on which the validly tendered Eligible Shares
are accepted for payment or as soon thereafter as practicable.
(c)
If
Weyerhaeuser elects to effect all or a portion of the Distribution as an
exchange offer of shares of Spinco Common Stock for Eligible Shares,
Weyerhaeuser shall determine the terms of such exchange offer, including the
number of shares of Spinco Common Stock that shall be offered for each validly
tendered Eligible Share, the period during which such exchange offer shall
remain open, the procedures for the tender and exchange of shares and all other
provisions of such exchange offer, which shall comply with securities law
requirements applicable to such exchange offer. In the event the exchange offer
is not fully subscribed, any shares of Spinco Common Stock issued to
Weyerhaeuser on the Contribution Date that are not exchanged pursuant to the
exchange offer will be distributed as a dividend to the Eligible Holders on
a
pro rata basis with a Record Date established in the same manner as provided
in
Section 3.01(b).
SECTION
3.02. The
Distribution. (a)
Subject
to the satisfaction or waiver of the conditions set forth in Section 5.01,
to the extent the Distribution is effected as a pro rata dividend, each Eligible
Holder shall be entitled to receive for each Eligible Share held by such
Eligible Holder a number of shares of Spinco Common Stock equal to the total
number of shares of Spinco Common Stock held by Weyerhaeuser on the Distribution
Date, in each case after giving effect to any prior Distribution effected as
an
exchange offer, divided by the sum of (A) the total number of shares of
Weyerhaeuser Common Stock outstanding on the Record Date, (B) the total
number of shares of Weyerhaeuser Common Stock to be issued upon the exchange
of
all Weyerhaeuser Canada Exchangeable Shares outstanding on the Record Date,
and
(C) if and to the extent determined by Weyerhaeuser, the total number of
Weyerhaeuser Benefit Plan Shares issued by Weyerhaeuser after the Record Date
and prior to the Distribution Date (rounded down to the nearest 1/10,000 of
a
share).
(b)
Subject
to the satisfaction or waiver of the conditions set forth in Section 5.01,
to the extent the Distribution is effected as an exchange offer, the number
of
shares of Spinco Common Stock to be exchanged for each Eligible Share in such
exchange offer shall be determined by Weyerhaeuser in its sole
discretion.
(c)
Fractional
shares of Spinco Common Stock that would otherwise be allocable to any Eligible
Holders shall be aggregated, and Weyerhaeuser shall cause the whole shares
obtained thereby to be sold, in the open market or otherwise, and the net
proceeds thereof, after deducting any required withholding taxes and brokerage
charges, commissions and transfer taxes, to be distributed to such Eligible
Holders.
(d)
None
of
the parties hereto or the Exchange Agent shall be liable to any person in
respect of any shares of Spinco Common Stock (or dividends or distributions
with
respect thereto) or proceeds from a sale pursuant to Section 3.02(c) that are
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar Law.
(e)
Weyerhaeuser,
Spinco and Newco Canada Exchangeco, as the case may be, shall be entitled,
and
may instruct the transfer agent or the Exchange Agent, to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement such amounts
required to be deducted and withheld with respect to the making of such payments
under the Code, the ITA or any provision of local or foreign tax law. Any
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the persons otherwise entitled thereto.
SECTION
3.03. Delivery
of Shares of Spinco Common Stock. (a)
To
the
extent the Distribution is effected as a pro rata dividend, Weyerhaeuser shall
give irrevocable instructions to the transfer agent to deliver the appropriate
number of shares of Spinco Common Stock (in accordance with Section 3.02(a))
to
each Eligible Holder, which delivery may be in the form of a certificate or,
in
whole or in part, in book-entry form through the direct registration
system.
(b)
To
the
extent the Distribution is effected as an exchange offer, Weyerhaeuser shall
(i)
determine the procedures for the tender and exchange of shares,
(ii) appoint a bank or trust company (or similar institution) (the
“Exchange
Agent”),
and
(iii) enter into an agreement with the Exchange Agent providing for, among
other things, the actions to be taken to effect the exchange offer.
SECTION
3.04. Timing
of the Distribution.
Subject
to Sections 6.04(d) and 6.17 of the Transaction Agreement, Weyerhaeuser
shall consummate the Contribution and the Distribution as promptly as
practicable after satisfaction (or waiver to the extent permissible) of all
of
the conditions to the Contribution and the Distribution specified in
Section 5.01 (other than conditions that by their nature are to be
satisfied at the time of the Contribution, the Distribution or the Arrangement
and shall in fact be satisfied at such time(s)). Subject to the preceding
sentence and in accordance with applicable law, the Board of Directors of
Weyerhaeuser will determine the Contribution Date and the Distribution
Date.
Mutual
Releases; Indemnification
SECTION
4.01. Release
of Pre-Distribution Claims. (a)
Except
as
provided in Section 4.01(c), effective as of the Distribution Date, Spinco
does
hereby, for itself and each other member of the Spinco Group, their respective
affiliates (other than any member of the Weyerhaeuser Group), successors and
assigns, remise, release and forever discharge Weyerhaeuser and the members
of
the Weyerhaeuser Group, their respective affiliates (other than any member
of
the Spinco Group), successors and assigns from any and all liabilities
whatsoever, whether at law or in equity (including any right of contribution),
whether arising under any contract or agreement, by operation of law or
otherwise, existing or arising from any acts or events occurring or failing
to
occur or alleged to have occurred or to have failed to occur or any conditions
existing or alleged to have existed on or before the Distribution Date,
including in connection with the transactions and all other activities to
implement any of the Contribution and the Distribution.
(b)
Except
as
provided in Section 4.01(c), effective as of the Distribution Date, Weyerhaeuser
does hereby, for itself and each other member of the Weyerhaeuser Group, their
respective affiliates (other than any member of the Spinco Group), successors
and assigns, remise, release and forever discharge Spinco, the respective
members of the Spinco Group, their respective affiliates (other than any member
of the Weyerhaeuser Group), successors and assigns from any and all liabilities
whatsoever, whether at law or in equity (including any right of contribution),
whether arising under any contract or agreement, by operation of law or
otherwise, existing or arising from any acts or events occurring or failing
to
occur or alleged to have occurred or to have failed to occur or any conditions
existing or alleged to have existed on or before the Distribution Date,
including in connection with the transactions and all other activities to
implement any of the Contribution and the Distribution.
(c)
Nothing
contained in Section 4.01(a) or 4.01(b) shall impair any right of any Person
to
enforce this Agreement or any other Transaction Document. Nothing contained
in
Section 4.01(a) or 4.01(b) shall release any Person from:
(i) any
liability, contingent or otherwise, assumed, transferred, assigned or allocated
to the Group of which such Person is a member in accordance with, or any other
liability of any member of any Group under this Agreement or any other
Transaction Document;
(ii) any
liability that the parties may have with respect to indemnification pursuant
to
this Agreement for claims brought against the parties by third Persons, which
liability shall be governed by the provisions of this Article IV and, if
applicable, the appropriate provisions of the other Transaction Documents;
or
(iii) any
liability the release of which would result in the release of any Person other
than a Person released pursuant to this Section 4.01.
(d)
Spinco
shall not make, and shall not permit any member of the Spinco Group and, after
the Effective Time, Domtar and Domtar’s Subsidiaries, to make, any claim or
demand, or commence any Action asserting any claim or demand, including any
claim of contribution or any indemnification, against Weyerhaeuser or any member
of the Weyerhaeuser Group, or any other Person released pursuant to Section
4.01(a), with respect to any liabilities released pursuant to Section 4.01(a).
Weyerhaeuser shall not, and shall not permit any member of the Weyerhaeuser
Group, to make any claim or demand, or commence any Action asserting any claim
or demand, including any claim of contribution or any indemnification against
Spinco or any member of the Spinco Group, or any other Person released pursuant
to Section 4.01(b), with respect to any liabilities released pursuant to Section
4.01(b).
(e)
At
any
time, at the request of any other party, each party shall cause each member
of
its respective Group to execute and deliver releases reflecting the provisions
of this Section 4.01.
SECTION
4.02. Indemnification
by Weyerhaeuser.
From and
after the Distribution Date, Weyerhaeuser shall indemnify, defend and hold
harmless Spinco, each member of the Spinco Group and each of their affiliates
and their respective officers, directors, employees, shareholders, agents and
representatives (the “Spinco
Indemnitees”)
from
and against any and all claims, losses, damages, liabilities, obligations or
expenses, including reasonable legal fees and expenses (collectively,
“Losses”),
to
the extent arising or resulting from any of the following:
(i) any
Retained Liability (other than any Newco Canada Exchangeco Liability);
(ii) all
liabilities (including third party claims) imposed on, sustained, incurred
or
suffered by any of the Spinco Indemnitees arising out of or relating primarily
to the Weyerhaeuser Business, the assets of the Weyerhaeuser Business or the
failure of any member of the Weyerhaeuser Group to pay, perform or otherwise
promptly discharge any Retained Liabilities (other than any Newco Canada
Exchangeco Liabilities) in accordance with their terms, whether occurring,
existing or asserted before, on or after the Distribution Date;
(iii) any
fees,
expenses or other payments incurred or owed by Weyerhaeuser to any agent,
broker, investment banker or other firm or Person retained or employed by it
in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents, except to the extent set forth in Section 6.11 of
the Transaction Agreement; and
(iv) any
claim
that the transactions contemplated by this Agreement and the other Transaction
Documents effected prior to or at Closing give rise to any severance or other
similar benefits with respect to, or constitute an actual or constructive
termination or severance of employment of, any Transferred Employee or any
employee of Weyerhaeuser or any member of the Weyerhaeuser Group who is not
a
Transferred Employee.
SECTION
4.03. Indemnification
by Spinco.
From and
after the Distribution Date, Spinco and Newco, jointly and severally, shall
indemnify, defend and hold harmless Weyerhaeuser, each member of the
Weyerhaeuser Group and each of their affiliates and their respective officers,
directors, employees, shareholders, agents and representatives (the
“Weyerhaeuser
Indemnitees”)
from
and against any and all Losses, to the extent arising or resulting from any
of
the following:
(i) any
Newco
Liability;
(ii) any
liabilities (including third party claims) imposed on, sustained, incurred
or
suffered by any of the Weyerhaeuser Indemnitees arising out of or relating
primarily to the Newco Business, the Newco Assets or the failure of Spinco
or
any other member of the Spinco Group to pay, perform or otherwise promptly
discharge any Newco Liabilities in accordance with their terms, whether
occurring, arising, existing or asserted before, on or after the Distribution
Date (other than the Retained Liabilities);
(iii) any
claim
that any action taken or omission by Spinco or any member of the Spinco Group
after the Closing with respect to any Transferred Employee gives rise to any
severance or other similar benefits with respect to, or constitutes an actual
or
constructive termination or severance of employment of, any Transferred
Employee;
(iv) any
discontinuance, suspension or modification by Spinco, Newco or any of their
respective affiliates on or after the Distribution Date of any employee benefit
plan, program, arrangement or policy, including those described in
Section 4.11(a) of the Transaction Agreement; and
(v) any
liabilities in respect of the financing of the Transaction Debt and all
agreements relating to such financing.
SECTION
4.04. Indemnification
by Weyerhaeuser Canada and Weyerhaeuser Saskatchewan. (a)
From
and
after the Distribution Date, Weyerhaeuser shall cause Weyerhaeuser Canada and
Weyerhaeuser Saskatchewan, jointly and severally, to indemnify, defend and
hold
harmless Newco Canada Exchangeco and its affiliates and each of their respective
officers, directors, employees, shareholders, agents and representatives (the
“Newco
Canada Exchangeco Indemnitees”)
from
and against any and all Losses, to the extent arising or resulting from any
of
the following:
(i) any
Canadian Retained Liability;
(ii) any
liabilities (including third party claims) imposed on, sustained, incurred
or
suffered by any of the Newco Canada Exchangeco Indemnitees arising out of or
relating primarily to the operation of any portion of the Weyerhaeuser Business
by Weyerhaeuser Canada or Weyerhaeuser Saskatchewan, the assets of the
Weyerhaeuser Business owned by Weyerhaeuser Canada or Weyerhaeuser Saskatchewan
or the failure of Weyerhaeuser Canada or Weyerhaeuser Saskatchewan to pay,
perform or otherwise promptly discharge any Canadian Retained Liabilities in
accordance with their terms, whether occurring, existing or asserted before,
on
or after the Distribution Date;
(iii) any
fees,
expenses or other payments incurred or owed by Weyerhaeuser Canada or
Weyerhaeuser Saskatchewan to any agent, broker, investment banker or other
firm
or Person retained or employed by it in connection with the transactions
contemplated by this Agreement and the other Transaction Documents, except
to
the extent set forth in Section 6.11 of the Transaction Agreement;
and
(iv) any
claim
that the transactions contemplated by this Agreement and the other Transaction
Documents effected prior to or at Closing give rise to an severance or other
similar benefits with respect to, or constitute an actual or constructive
termination or severance of employment of, any Transferred Employee or any
employee of Weyerhaeuser Canada or Weyerhaeuser Saskatchewan who is not a
Transferred Employee.
(b)
From
and
after the Distribution Date, Weyerhaeuser shall guarantee the due and complete
performance by Weyerhaeuser Canada and Weyerhaeuser Saskatchewan of their
respective obligations under Section 4.04(a).
SECTION
4.05. Indemnification
by Newco Canada Exchangeco.
(a) From
and after the Distribution Date, Spinco and Newco, jointly and severally, shall
cause Newco Canada Exchangeco to indemnify, defend and hold harmless
Weyerhaeuser Canada, Weyerhaeuser Saskatchewan and each of their respective
affiliates, officers, directors, employees, shareholders, agents and
representatives (the “Weyerhaeuser
Canada Indemnitees”)
from
and against any and all Losses, to the extent arising or resulting from any
of
the following:
(i) any
Newco
Canada Exchangeco Liability;
(ii) any
liabilities (including third party claims) imposed on, sustained, incurred
or
suffered by any of the Weyerhaeuser Canada Indemnitees arising out of or
relating primarily to the operation of any portion of the Newco Business by
Newco Canada Exchangeco, the Newco Canada Exchangeco Assets or the failure
of
Newco Canada Exchangeco to pay, perform or otherwise promptly discharge any
Newco Canada Exchangeco Liabilities in accordance with their terms, whether
occurring, arising, existing or asserted before, on or after the Distribution
Date (other than any Canadian Retained Liability and each other Retained
Liability (other than any Newco Canada Exchangeco Liability));
(iii) any
claim
that any action taken or omission by Newco Canada Exchangeco after the Closing
gives rise to any severance or other similar benefits with respect to, or
constitutes an actual or constructive termination or severance of employment
of,
any Transferred Employee; and
(iv) any
discontinuance, suspension or modification by ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
Exchangeco or any of their respective Canadian affiliates of any New Benefit
Plan or Assumed Canadian Plan after the Distribution Date.
(b)
From
and
after the Distribution Date, Spinco and Newco, jointly and severally, shall
guarantee the due and complete performance by Newco Canada Exchangeco of its
obligations under Section 4.05(a). In addition, if the Newco Canada Exchangeco
Assets and the Newco Canada Exchangeco Liabilities shall be transferred to
or
assumed by a subsidiary of Newco Canada Exchangeco pursuant to
Section 2.07, such subsidiary shall guarantee (jointly and severally with
Spinco and Newco) the due and complete performance by Newco Canada Exchangeco
of
its obligations under Section 4.05(a).
SECTION
4.06. Indemnification
Procedures. (a)
Procedures
Relating to Indemnification of Third Party Claims.
If any
party (the “Indemnified
Party”)
receives written notice of the commencement of any action or proceeding or
the
assertion of any claim by a third party or the imposition of any penalty or
assessment for which indemnity may be sought under Section 4.02, 4.03, 4.04
or 4.05 (a “Third
Party Claim”),
and
such Indemnified Party intends to seek indemnity pursuant to this
Article IV, the Indemnified Party shall promptly provide the other party
(the “Indemnifying
Party”)
with
written notice of such Third Party Claim, stating the nature, basis and the
amount thereof, to the extent known, along with copies of the relevant documents
evidencing such Third Party Claim and the basis for indemnification sought.
Failure of the Indemnified Party to give such notice will not relieve the
Indemnifying Party from liability on account of this indemnification, except
if
and to the extent that the Indemnifying Party is materially prejudiced thereby.
The Indemnifying Party will have 30 days from receipt of any such notice of
a
Third Party Claim to give notice to assume the defense thereof. If notice to
the
effect set forth in the immediately preceding sentence is given by the
Indemnifying Party, the Indemnifying Party will have the right to assume the
defense of the Indemnified Party against the Third Party Claim with counsel
of
its choice; provided,
however,
that
such counsel is reasonably satisfactory to the Indemnified Party; provided,
further,
however,
that in
the event the Indemnifying Party assumes the defense of any Third Party Claim
it
shall actively pursue such defense in good faith. If the Indemnifying Party
does
not assume the defense of such Third Party Claim within 30 days of receipt
of
such notice, the Indemnified Party against which such Third Party Claim has
been
asserted will have the right to assume the defense thereof, at its sole cost
and
expense, upon delivery of notice to such effect to the Indemnifying Party;
provided,
however,
that if
the Indemnifying Party at any time thereafter agrees to assume the defense
of
such Third Party Claim, the Indemnifying Party shall bear the reasonable fees,
costs and expenses of the Indemnified Party’s counsel incurred prior to the time
of the Indemnifying Party’s assumption of such defense. So long as the
Indemnifying Party has assumed the defense of the Third Party Claim in
accordance herewith, (i) the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the defense of the
Third Party Claim, (ii) the Indemnified Party will not file any papers or
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Indemnifying
Party and (iii) the Indemnifying Party will not (A) admit to any
wrongdoing or (B) consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim to the extent such judgment
or
settlement provides for (x) relief other than money damages or
(y) money damages if the Indemnifying Party has not acknowledged in writing
that it shall be responsible for such money damages, in each case, without
the
prior written consent of the Indemnified Party (which consent shall not be
unreasonably withheld or delayed). The parties will use their reasonable best
efforts to minimize Losses from Third Party Claims and will act in good faith
in
responding to, defending against, settling or otherwise dealing with such
claims. The parties will also cooperate in any such defense and give each other
reasonable access to all information relevant thereto. Whether or not the
Indemnifying Party has assumed the defense, such Indemnifying Party will not
be
obligated to indemnify the Indemnified Party hereunder for any settlement
entered into or any judgment that was consented to without the Indemnifying
Party’s prior written consent.
(b)
Procedures
for Non-Third Party Claims.
The
Indemnified Party will notify the Indemnifying Party in writing promptly of
its
discovery of any matter that does not involve a Third Party Claim giving rise
to
the claim of indemnity pursuant hereto. The failure so to notify the
Indemnifying Party shall not relieve the Indemnifying Party from liability
on
account of this indemnification, except only to the extent that the Indemnifying
Party is materially prejudiced thereby. The Indemnifying Party will have 30
days
from receipt of any such notice to give notice of dispute of the claim to the
Indemnified Party. The Indemnified Party will reasonably cooperate and assist
the Indemnifying Party in determining the validity of any claim for indemnity
by
the Indemnified Party and in otherwise resolving such matters. Such assistance
and cooperation will include providing reasonable access to and copies of
information, records and documents relating to such matters, furnishing
employees to assist in the investigation, defense and resolution of such matters
and providing legal and business assistance with respect to such
matters.
SECTION
4.07. Indemnification
as Sole and Exclusive Remedy.
Subject
to Section 4.09(a), Weyerhaeuser, Spinco and Newco acknowledge and agree
that, should the Distribution occur, Weyerhaeuser’s, Weyerhaeuser Canada’s,
Weyerhaeuser Saskatchewan’s, Spinco’s, Newco’s and Newco Canada Exchangeco’s
sole and exclusive remedy with respect to any and all claims relating to this
Agreement, the Newco Business, the Newco Assets, the Excluded Assets, the Newco
Liabilities, the Retained Liabilities, the Newco Canada Exchangeco Assets,
the
Canadian Excluded Assets, the Newco Canada Exchangeco Liabilities, the Canadian
Retained Liabilities or the transactions contemplated by this Agreement and
the
Ancillary Agreements shall be pursuant to the indemnification provisions set
forth in this Article IV. In furtherance of the foregoing and subject to
the indemnification provision set forth in this Article IV, Weyerhaeuser,
Spinco and Newco hereby waive, from and after the Distribution Date, any and
all
rights, claims and causes of action Weyerhaeuser or any other Weyerhaeuser
Indemnitee, on the one hand, and Spinco or any other Spinco Indemnitee, on
the
other hand, may have against Spinco or any of its affiliates or, respectively,
Weyerhaeuser or any of its affiliates, or their respective directors, officers
and employees arising under or based upon any Federal, state, provincial, local
or foreign statute, law, ordinance, rule or regulation or otherwise (including
with respect to environmental matters generally and any matters under the
Comprehensive Environmental Response, Compensation, and Liability Act). This
Section 4.07 will not apply to any breach following the Effective Time of
the Transaction Agreement, the Tax Sharing Agreement, the Intellectual Property
License Agreement, the Site Services Agreements, the Fiber Supply Agreements
and
the Transition Services Agreement.
SECTION
4.08. Calculation
of Indemnity Payments.
The
amount of any Loss for which indemnification is provided under this
Article IV shall be net of any amounts recovered by the Indemnified Party
under insurance policies or underground storage tank reimbursement programs,
with respect to such Loss and shall be (a) increased to take account of any
net Tax cost actually incurred by the Indemnified Party arising from the receipt
of indemnity payments hereunder (grossed up for such increase) and (b) reduced
to take account of any net Tax benefit actually realized by the Indemnified
Party arising from the incurrence or payment of any such indemnified amount.
In
computing the amount of any such Tax cost or Tax benefit, the Indemnified Party
shall be deemed to recognize all other items of income, gain, loss, deduction
or
credit before recognizing any item arising from the receipt of any indemnity
payment hereunder or the incurrence or payment of any indemnified amount. For
purposes of indemnification under Sections 4.02 and 4.04, the amount of any
Loss shall be reduced to the extent of any related “current liability” in the
Statement (as fully resolved).
SECTION
4.09. Additional
Matters. (a)
Notwithstanding
anything to the contrary in this Agreement, indemnification for Tax matters
shall be governed by the terms, provisions and procedures of the Tax Sharing
Agreement and not by this Article IV.
(b)
In
no
event shall an Indemnifying Party be liable for special, punitive, exemplary,
incidental, consequential or indirect damages, or lost profits, whether based
on
contract, tort, strict liability, other law or otherwise other than in the
case
of Third Party Claims.
Conditions
to the Contribution and Distribution
SECTION
5.01. Transaction
Agreement.
The
obligations of Weyerhaeuser pursuant to this Agreement to effect the
Contribution and the Distribution shall be subject to the fulfillment (or waiver
by Weyerhaeuser), at or prior to the Contribution Date, of the condition that
each of the parties to the Transaction Agreement shall have irrevocably
confirmed to each other that each condition in Article VII of the Transaction
Agreement to such parties’ respective obligations to effect the transactions
contemplated thereby have been fulfilled or shall be fulfilled at the Effective
Time or are or have been waived by such party, as the case may be.
SECTION
5.02. Spinco
Financing. (a)
Spinco
shall have entered into a credit facility or facilities (or replacement
facilities therefor) on the terms and conditions set forth in the New Debt
Commitment Letter, or on terms and conditions which are not materially more
burdensome to Spinco than those set forth in the New Debt Commitment Letter
in
an amount at least equal to $2.65 billion.
(b)
Spinco
shall have received the proceeds of the financing referenced in Section 5.02(a)
in an amount at least equal to the New Debt Amount.
Certain
Other Matters
SECTION
6.01. Rights
Under Weyerhaeuser Insurance Policies. (a)
Weyerhaeuser
shall, and shall cause its subsidiaries to, keep all insurance policies
currently maintained with respect to the Newco Assets, the Newco Canada
Exchangeco Assets and the Newco Business (the “Weyerhaeuser
Insurance Policies”),
or
suitable replacements therefor, in full force and effect through the close
of
business on the Distribution Date. Spinco and Newco acknowledge that any and
all
Weyerhaeuser Insurance Policies are owned and maintained by Weyerhaeuser or
any
member of the Weyerhaeuser Group (and not the Newco Business) and are Excluded
Assets. Subject to Section 6.01(b), Spinco and Newco will not have any
rights under the Weyerhaeuser Insurance Policies from and after the Distribution
Date.
(b)
If
any
Newco Asset, any Newco Canada Exchangeco Asset or the Newco Business suffers
or
has suffered any damage, destruction or other casualty loss or any Assumed
Liability or Newco Canada Exchangeco Liability that is insured under the
Weyerhaeuser Insurance Policies and arises or has arisen prior to the
Distribution Date (but, in the case a loss arising from damage, destruction
or
other casualty loss to any Newco Asset or any Newco Canada Exchangeco Asset,
after March 25, 2006), Weyerhaeuser shall, or shall cause the appropriate
member of the Weyerhaeuser Group to, (i) assert a claim under the appropriate
Weyerhaeuser Insurance Policies, and (ii) (x) surrender to Newco after
the Distribution Date any insurance proceeds received by Weyerhaeuser or any
member of the Weyerhaeuser Group under any Weyerhaeuser Insurance Policy with
respect to such damage, destruction, liability or loss, less any amount of
cash
or proceeds applied by Weyerhaeuser or any other member of the Weyerhaeuser
Group to the physical restoration of such asset or payment of such liability,
and (y) assign to Newco after the Distribution Date all rights of
Weyerhaeuser or any member of the Weyerhaeuser Group with respect to any causes
of action (other than the rights with respect to causes of actions under the
Weyerhaeuser Insurance Policies, which are hereby expressly retained by
Weyerhaeuser), whether or not litigation has commenced as of the Distribution
Date, in connection with such damage, destruction, liability or loss;
provided,
however,
that
the amount of the insurance proceeds to be surrendered to Newco shall be reduced
by the amount of any applicable deductibles and co-payment provisions or any
payment, reinsurance or reimbursement obligations of Weyerhaeuser or any member
of the Weyerhaeuser Group in respect thereof. During three years after the
Distribution Date (or, if later, until the final resolution of any relevant
claim relating to the Newco Business), Weyerhaeuser shall not and shall cause
the other members of the Weyerhaeuser Group not to amend, terminate, buy-out,
extinguish or otherwise modify its or their respective liability under any
Weyerhaeuser Insurance Policies in a manner that would adversely affect Newco’s
rights pursuant to this Section 6.01(b); provided,
however,
that
this sentence shall not require Weyerhaeuser to renew or keep from lapsing
any
Weyerhaeuser Insurance Policy.
SECTION
6.02. Registration
Prior to the Distribution Date. (a)
If
required by applicable law, the parties shall use their reasonable best efforts
to prepare and file with the Commission a registration statement under the
Securities Act and each party shall use its reasonable best efforts to have
such
registration statement declared effective by the Commission as promptly as
practicable after such filing and to keep such registration statement effective
as long as necessary to consummate the Distribution. The parties shall use
their
reasonable best efforts to prepare and file with the Commission any necessary
amendment or supplement to such registration statement.
(b)
The
parties hereto shall take all such actions as may reasonably be required or
appropriate under federal or state securities or Blue Sky laws (and any
comparable laws under any foreign jurisdiction) in connection with the
transactions contemplated by this Agreement or any Ancillary
Agreement.
(c)
The
parties shall cooperate in preparing, filing with the Commission and causing
to
become effective any registration statements or amendments thereto, if any,
which are necessary or appropriate to reflect the establishment of, or
amendments to, any employee benefit plans contemplated by Sections 6.08 and
6.09
of the Transaction Agreement requiring registration under the Securities
Act.
SECTION
6.03. Financing
Arrangements.
Prior to
the Distribution, Spinco shall enter into an agreement or agreements providing
for the New Debt. Weyerhaeuser, Spinco and Newco shall participate in the
preparation of all materials and presentations as may be reasonably necessary
to
secure funding pursuant to such agreement or agreements, including rating agency
presentations necessary to obtain the requisite ratings needed to secure the
New
Debt. Notwithstanding anything to the contrary in this Agreement or any other
Transaction Document, Spinco and Newco, jointly and severally, shall pay all
third party costs and expenses incurred by any member of the Weyerhaeuser Group
associated with the New Debt.
SECTION
6.04. Enforcement
of Confidentiality Agreements.
Weyerhaeuser shall not, and shall not permit any other member of the
Weyerhaeuser Group to, waive or amend any confidentiality agreement between
Weyerhaeuser or any other member of the Weyerhaeuser Group and any Person (other
than any member of the Weyerhaeuser Group) to the extent such waiver or
amendment adversely affects the confidentiality of information related to the
Newco Business. At Spinco’s written request, Weyerhaeuser shall, and shall cause
each other member of the Weyerhaeuser Group to, enforce in accordance with
its
terms any confidentiality agreement between Weyerhaeuser or any other member
of
the Weyerhaeuser Group and any Person (other than any member of the Weyerhaeuser
Group) to the extent such agreement protects the confidentiality of information
related to the Newco Business; provided,
however,
that no
member of the Weyerhaeuser Group shall be obligated to expend any money in
connection with this Section 6.04 unless the necessary funds are advanced
by Spinco, other than reasonable out-of-pocket expenses, which shall be promptly
reimbursed by Spinco.
SECTION
6.05. Site
Separation Requirements.
The
parties acknowledge and agree that the Newco Business includes only portions
of
the operations conducted at the Weyerhaeuser facilities located in Plymouth,
North Carolina; Kamloops, British Columbia and Columbus, Mississippi.
Weyerhaeuser will use reasonable best efforts to (i) secure any
Governmental Approvals required for separation of these operations from the
other operations conducted at these facilities as set forth on
Schedule 6.05, subject to such modifications as may be required or
requested by Governmental Entities, and (ii) accomplish the subdivision, in
accordance with the Governmental Approvals, so as to be able to convey the
fee
interests in such subdivided portions to Newco. In addition, with respect to
each such portion, the subdivision of which shall have been accomplished by
the
Contribution Date, to the extent that Schedule 6.05 provides for easements
and/or operating agreements to be entered into in connection with the separation
of the operations described in this Section 6.05, Weyerhaeuser or the applicable
member(s) of the Weyerhaeuser Group and Newco will execute and deliver such
agreements on the Contribution Date. Notwithstanding the foregoing, to the
extent that Weyerhaeuser has not accomplished the subdivision required for
the
conveyance of fee interests in the applicable portions of one or more of these
facilities to Newco on the Contribution Date, (a) Weyerhaeuser or the
applicable member(s) of the Weyerhaeuser Group and Newco, on the Contribution
Date, will enter into interim net leases, under the terms set forth in Schedule
6.05, leasing to Newco the applicable portions of each of such facilities for
which the subdivision has not been accomplished by the Contribution Date,
pending the obtaining of such Governmental Approvals, it being the parties’
intent that the conveyance of the fee interest of the premises demised under
each of such leases to Newco (with such modifications as may be required by
the
Governmental Entities in granting such Governmental Approvals) shall occur
promptly after the accomplishment of the applicable subdivision, and (b) to
the extent that Schedule 6.05 provides for easements and/or operating agreements
to be entered into in connection with the separation of the operations at such
facilities, Weyerhaeuser or the applicable member(s) of the Weyerhaeuser Group
and Newco shall, in lieu of causing such agreements to be executed and delivered
on the Contribution Date, arrange for the easements and/or services to be
provided to Newco on an interim basis under the Transition Services Agreement
or
otherwise pending conveyance of fee interests in the premises demised under
such
leases to Newco, until the conveyance of such fee interests. Newco will
cooperate with Weyerhaeuser in connection with the separation of the operations
at the facilities and Weyerhaeuser's efforts to secure the Governmental
Approvals described in this Section 6.05.
Additional
Covenants
SECTION
7.01. Agreement
for Exchange of Information; Archives. (a)
Following
the Distribution Date, for so long as such information is retained by a party
or
any of its subsidiaries (which shall be for a period of at least four years),
upon reasonable written notice, each party shall afford or cause to be afforded
to the other party and its agents, representatives and auditors reasonable
access to the personnel, properties, books, systems, Contracts, and Records
(including financial records) relating to the Newco Business for any reasonable
business purpose, including in respect of litigation, insurance matters and
financial reporting of such party and its affiliates, including by, as and
when
reasonably requested by the other party, providing copies of any the foregoing
books, systems, Contracts and Records (including financial records) related
to
the Newco Business to the other party; provided,
that
the party requesting such access agrees to reimburse the other party promptly
for all reasonable and necessary out-of-pocket costs and expenses incurred
in
connection with any such request. Notwithstanding the foregoing, a party will
not be required to disclose any information (i) which such party is prohibited
from disclosing by a confidentiality agreement with a third party if such party
has used reasonable best efforts to obtain the consent of the third party to
such disclosure (it being understood that no party shall be obligated to pay
any
consideration to any third party from whom such consent is requested), or
(ii) which would constitute privileged attorney-client communications or
attorney work product, the transfer of which or the provision of access to
which
would, as reasonably determined by such party’s counsel, constitute a waiver of
any such privilege. If any material is withheld by a party pursuant to the
immediately preceding sentence, such party shall inform the other party as
to
the general nature of what is being withheld. Weyerhaeuser may redact such
portions of any books and records (including any Records and Transferred
Records) that do not relate to the Newco Assets, the Newco Canada Exchangeco
Assets, the Newco Liabilities, the Newco Canada Exchangeco Liabilities or the
Newco Business.
(b)
After
the
Distribution Date, except in the case of an Action by one party against another
party, each party hereto shall use its reasonable best efforts to make available
to each other party, upon written request, the former, current and future
directors, officers, employees, other personnel and agents of members of the
Newco Business as witnesses, to the extent that any such Person (giving
consideration to business demands of such directors, officers, employees, other
personnel and agents) may reasonably be required in connection with any Action
in which the requesting party may from time to time be involved, regardless
of
whether such Action is a matter with respect to which indemnification may be
sought hereunder. The requesting party shall bear all costs and expenses in
connection therewith.
SECTION
7.02. Further
Assurances.
From
time to time, as and when requested by any party, each party shall execute
and
deliver, or cause to be executed and delivered, all such documents and
instruments and shall take, or cause to be taken, all such further or other
actions, as such other party may reasonably deem necessary or desirable to
consummate the transactions contemplated by this Agreement and the Ancillary
Agreements.
SECTION
7.03. No
Use
of Certain Retained Names.
Newco
shall, and shall cause its subsidiaries to, promptly, and in any event (a)
within 60 days after the Distribution Date, make all necessary filings and
take all other necessary actions to discontinue any references to the Retained
Names, (b) within 180 days after the Distribution Date, to revise print
advertising, product labeling and all other information or other materials,
including any Internet or other electronic communications vehicles, to delete
all references to the Retained Names and (c) within 180 days after the
Distribution Date, to change signage and stationery and otherwise discontinue
use of the Retained Names. In no event shall Newco or any of its subsidiaries
use any Retained Names after the Distribution in any manner or for any purpose
different from the use of such Retained Names by Weyerhaeuser or any of its
subsidiaries during the 90-day period preceding the Distribution Date. With
respect to the Transferred Inventory, Newco may continue to sell such inventory,
notwithstanding that it or its labeling or packaging bears one or more of the
Retained Names, for 12 months after the Distribution. None of the foregoing
provisions of this Section 7.03 shall be construed to obligate Newco to require
any wholesaler, retailer or other merchant or customers of the Newco Business
to
conduct themselves in accordance therewith. After the Distribution Date, Newco
shall file applications to amend or terminate any certificate of assumed name
or
d/b/a filings, within 60 days after Newco shall have become aware of such
assumed name or d/b/a filing so as to eliminate the right of Newco to use the
Retained Names.
SECTION
7.04. Permits.
Weyerhaeuser, Spinco and Newco shall use their reasonable best efforts to
obtain, or to cause to be obtained, a Permit for Newco or Newco Canada
Exchangeco or a subsidiary of Newco Canada Exchangeco with respect to each
Permit currently used by Weyerhaeuser, Weyerhaeuser Canada or Weyerhaeuser
Saskatchewan in connection with the operation of, the Newco Business that is
not
transferred pursuant to Section 2.02(a)(vii) or pursuant to the Canadian
Purchase Agreement; provided,
however,
that
Weyerhaeuser shall not be obligated to pay any consideration to any third party
or Governmental Entity from whom such Permits are requested under this Section
7.04.
SECTION
7.05. Removal
of Certain Property.
If the
containerboard machine (and related old corrugated container assets) set forth
on Schedule 2.02(b)(i) have not been removed from the facility located in
Plymouth, North Carolina, prior to the Distribution Date, Newco shall allow
Weyerhaeuser to have reasonable access to such facility after the Distribution
Date for the purpose of removing such machine and related assets. Weyerhaeuser
shall bear all costs of such removal and shall reimburse Newco for the
reasonable costs of repairing any damage to the facility caused by such removal
and shall reimburse Newco for any other reasonable expenses Newco may incur
in
connection with such removal (including the reasonable cost of any work stoppage
at such facility caused by such removal). Weyerhaeuser shall complete the asset
removals provided under this Section 7.05 within one year of the
Distribution Date.
SECTION
7.06. Covenant
Not to Compete. (a)
In
consideration of the mutual covenants provided for in this Agreement and the
other Transaction Documents and other good and valuable consideration to be
delivered to Weyerhaeuser and its shareholders in connection with the
transactions contemplated hereby or thereby (the sufficiency of which is hereby
acknowledged), during the period beginning on the Distribution Date and ending
on the third year anniversary of the Distribution Date, Weyerhaeuser shall
not,
and shall cause each of its subsidiaries not to, directly or indirectly, engage
in activities or businesses, or establish any new businesses, within North
America that are substantially in competition with the uncoated free sheet
operations (including uncoated free sheet converting operations) and the forms
operations included in the Newco Business as conducted on the Distribution
Date
(“Competitive
Activities”);
provided,
however,
that:
(i) this
Section 7.06(a) shall be deemed not breached as a result of the ownership by
Weyerhaeuser or any of its subsidiaries of: (A) any other securities (other
than
20% or more of stock having general voting power in the election of directors
(or securities exchangeable for such stock)) of a Person (other than a
subsidiary of Weyerhaeuser) engaged, directly or indirectly, in Competitive
Activities; or (B) any securities of a Person (other than a subsidiary of
Weyerhaeuser) that engages, directly or indirectly, in Competitive Activities
if, at the time such securities are acquired, such Competitive Activities
account for less than 10% of such Person’s consolidated annual
revenues;
(ii) nothing
contained in this Section 7.06(a) shall prohibit or restrict
(A) activities or businesses of Weyerhaeuser or any of its subsidiaries
related to the Excluded Assets, (B) the sale of goods and services produced
by or related to the Excluded Assets, or (C) subject to
Section 7.06(a)(i), any restructuring or sale of any of the Excluded
Assets; and
(iii) nothing
contained in this Section 7.06(a) shall prohibit or restrict Weyerhaeuser
or any of its subsidiaries from being acquired after the Distribution Date
by a
non-affiliated third Person which prior to such acquisition conducted
Competitive Activities in North America.
(b)
The
parties agree that the covenants included in this Section 7.06 are, taken as
a
whole, reasonable in their geographic and temporal coverage, and no party shall
raise any issue of geographic or temporal reasonableness in any proceeding
to
enforce such covenant; provided,
however,
that if
the provisions of this Section 7.06 should ever be deemed to exceed the time
or
geographic limitations or any other limitations permitted by applicable Law
in
any jurisdiction, then such provisions shall be deemed reformed in such
jurisdiction to the minimum extent required by applicable Law to cure such
problem.
(c)
The
parties acknowledge and agree that in the event of a breach of the provisions
of
this Section 7.06, monetary damages shall not constitute a sufficient remedy.
Consequently, in the event of any such breach, the non-breaching party may,
in
addition to any other rights and remedies existing in its favor, apply to any
court referred to in Section 9.09 for specific performance and/or preliminary
and final injunctive relief or other relief to enforce or prevent any violation
of the provisions hereof.
SECTION
7.07. Cooperation
with respect to Quarterly Reports.
Following the Distribution Date, Weyerhaeuser shall cooperate, and shall request
its independent accountants to cooperate, with Spinco in providing information
for the preparation of any reports that are required to be filed by Spinco
with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act with respect to
any
fiscal quarter up to and including the fourth complete fiscal quarter following
the Distribution Date. Notwithstanding anything to the contrary in the
Transaction Documents, Spinco shall pay all fees and expenses of Weyerhaeuser’s
independent accountants and Weyerhaeuser’s reasonable expenses in connection
with the preparation of such reports. Spinco and Newco, jointly and severally,
shall indemnify, defend and hold harmless Weyerhaeuser from and against any
and
all Losses, under the Exchange Act or otherwise, in connection with such
quarterly reports except to the extent arising or resulting from information
provided by Weyerhaeuser for inclusion in such reports that is inaccurate or
incomplete in any material respect.
SECTION
7.08. Canadian
Asset Sale Structure.
The
parties shall use reasonable best efforts to cause the Canadian Asset Sale
to be
structured in the most mutually Tax-efficient manner; provided,
however,
that no
party will be required to agree to a structure that would reasonably be expected
to increase costs, expenses or liabilities expected to be incurred by such
party
in connection with the transactions contemplated by the Transaction
Documents.
Termination
SECTION
8.01. Termination
by Mutual Consent.
This
Agreement may be terminated at any time prior to the Distribution Date with
the
consent of Weyerhaeuser, Spinco, Newco and Domtar.
SECTION
8.02. Other
Termination.
Notwithstanding any provision hereof, this Agreement may be terminated by
Weyerhaeuser prior to the Distribution Date at any time following termination
of
the Transaction Agreement in accordance with its terms.
SECTION
8.03. Effect
of Termination.
In the
event of any termination of this Agreement prior to the Distribution Date
pursuant to Section 8.01, no party to this Agreement (or any of its
directors or officers) shall have any liability or further obligation to any
other party with respect to this Agreement.
Miscellaneous
SECTION
9.01. Notices.
All
notices, requests, claims, demands, waivers and other communications under
this
Agreement shall be in writing and shall be deemed given (a) five Business Days
following sending by registered or certified mail, postage prepaid, (b) when
sent, if sent by facsimile, provided that the facsimile transmission is promptly
confirmed by telephone, (c) when delivered, if delivered personally to the
intended recipient and (d) one Business Day following sending by overnight
delivery via a national courier service and, in each case, addressed to a party
at the following address for such party:
If
to
Weyerhaeuser, to:
Weyerhaeuser
Company
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇
▇▇▇▇▇▇
Facsimile:
▇-▇▇▇-▇▇▇-▇▇▇▇
with
a
copy to:
Cravath,
Swaine & ▇▇▇▇▇ LLP
Worldwide
Plaza
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile:
▇-▇▇▇-▇▇▇-▇▇▇▇
If
to
Spinco, to:
Weyerhaeuser
Company
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇
▇▇▇▇▇▇
Facsimile:
▇-▇▇▇-▇▇▇-▇▇▇▇
with
a
copy to:
Cravath,
Swaine & ▇▇▇▇▇ LLP
Worldwide
Plaza
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile:
▇-▇▇▇-▇▇▇-▇▇▇▇
If
to
Newco, to:
Weyerhaeuser
Company
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇
▇▇▇▇▇▇
Facsimile:
▇-▇▇▇-▇▇▇-▇▇▇▇
with
a
copy to:
Cravath,
Swaine & ▇▇▇▇▇ LLP
Worldwide
Plaza
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile:
▇-▇▇▇-▇▇▇-▇▇▇▇
If
to
Domtar, to:
Domtar
Inc.
▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile:
▇-▇▇▇-▇▇▇-▇▇▇▇
with
a
copy to:
Debevoise
& ▇▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇
Facsimile:
▇-▇▇▇-▇▇▇-▇▇▇▇
Any
party
may, by notice to the other party, change the address to which such notices
are
to be given. Domtar shall be copied on any notice given pursuant to this
Section 9.01 at the address provided above.
SECTION
9.02. Interpretation.
When a
reference is made in this Agreement to an Article or a Section, such reference
shall be to an Article or a Section of this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words “include”, “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation”.
SECTION
9.03. Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule or Law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon
such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as
possible to the end that the transactions contemplated hereby are fulfilled
to
the extent possible.
SECTION
9.04. Counterparts.
This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties hereto and delivered
to the other parties.
SECTION
9.05. Entire
Agreement.
This
Agreement, taken together with the other Transaction Documents, constitute
the
entire agreement, and supersede all prior agreements and understandings, both
written and oral, among the parties hereto with respect to the Contribution
and
the Distribution.
SECTION
9.06. Third
Party Beneficiaries.
Except
for the provisions hereof relating to indemnification, which are also for the
benefit of the Indemnitees, and except for those provisions of the Agreement
that provide for the consent of Domtar, which are for the benefit of Domtar,
nothing in this Agreement, express or implied, is intended to or shall confer
upon any Person (other than Weyerhaeuser, Spinco, Newco and their respective
successors or permitted assigns) any legal or equitable right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement and no Person
(other than as so specified) shall be deemed a third party beneficiary under
or
by reason of this Agreement.
SECTION
9.07. Governing
Law.
This
Agreement and, unless expressly provided therein, each Ancillary Agreement,
shall be governed by, and construed in accordance with, the laws of the State
of
Delaware, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
SECTION
9.08. Assignment.
Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by any of the parties hereto without the prior written consent of
the
other parties. Any purported assignment without such consent shall be void.
Subject to the preceding sentences, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the parties hereto and their
respective successors and assigns.
SECTION
9.09. Enforcement.
The
parties hereto agree that irreparable damage would occur in the event that
any
of the provisions of this Agreement or any Ancillary Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It
is accordingly agreed that the parties hereto shall be entitled to an injunction
or injunctions to prevent breaches of any this Agreement or any Ancillary
Agreement and to enforce specifically the terms and provisions of this Agreement
and any Ancillary Agreement in any Federal court located in the State of
Delaware or, if such Federal courts do not have subject matter jurisdiction,
any
Delaware state court, this being in addition to any other remedy to which they
are entitled at law or in equity. In addition, each of the parties hereto
(a) consents to submit itself to the personal jurisdiction of any Federal
court located in the State of Delaware or, if such Federal courts do not have
subject matter jurisdiction, any Delaware state court in the event any dispute
arises out of the Contribution, the Distribution, this Agreement or any
Ancillary Agreement, (b) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court, (c) agrees that it will not bring any action relating to the
Contribution, the Distribution, this Agreement or any Ancillary Agreement in
any
court other than any Federal court sitting in the State of Delaware or, if
such
Federal courts do not have subject matter jurisdiction, any Delaware state
court
and (d) waives any right to trial by jury with respect to any action
related to or arising out of the Contribution, the Distribution, this Agreement
or any Ancillary Agreement.
SECTION
9.10. Amendments.
No
provisions of this Agreement or any Ancillary Agreement shall be deemed waived,
amended, supplemented or modified by any party, unless such waiver, amendment,
supplement or modification is in writing and signed by the authorized
representatives of (i) the Person against whom it is sought to enforce such
waiver, amendment, supplement or modification, and (ii) if such waiver,
amendment, supplement or modification occurs prior to the Effective Time,
Domtar.
SECTION
9.11. Expenses.
Except
as expressly set forth in this Agreement or in any Transaction Document, all
costs and expenses and third party fees, paid or incurred in connection with
the
Contribution, the Distribution, this Agreement or any Transaction Document
shall
be paid in accordance with Section 6.11 of the Transaction
Agreement.
IN
WITNESS WHEREOF, the parties have caused this Contribution and Distribution
Agreement to be executed by their duly authorized representatives.
EXHIBIT
A
DESCRIPTION
OF NEWCO CANADA EXCHANGECO ASSETS AND
NEWCO
CANADA EXCHANGECO LIABILITIES
Newco Canada Exchangeco Assets
1. “Newco
Canada Exchangeco Assets” shall mean all the business, properties, assets,
goodwill and rights (including lease, license and other contractual rights)
of
whatever kind and nature, real or personal, tangible or intangible, that
are
owned by Weyerhaeuser Canada or Weyerhaeuser Saskatchewan immediately prior
to
the purchase and sale of the Newco Canada Exchangeco Assets and Newco Canada
Exchangeco Liabilities and used or held for use primarily in the operation
or
conduct of the Newco Business, other than (A) the Canadian Excluded Assets
and
(B) as otherwise provided for in this Section 1, which Newco Canada Exchangeco
Assets shall include (in each case, other than the Canadian Excluded Assets)
:
|
(i)
|
all
owned real property, leaseholds and other interests in real property
of
Weyerhaeuser Canada or Weyerhaeuser Saskatchewan used or held for
use
primarily in the operation or conduct of the Newco Business, including
the
owned real property, leaseholds and other interests in real property
set
forth on Schedule 2.02(a)(i), in each case together with Weyerhaeuser
Canada’s or Weyerhaeuser Saskatchewan’s right, title and interest in, to
and under all plants, facilities, buildings, structures, improvements
and
fixtures thereon and all easements and rights of way pertaining
thereto or
accruing to the benefit thereof and all other appurtenances and
real
property rights pertaining thereto (the “Transferred Real
Property”);
|
|
(ii)
|
all
raw materials, work-in-process, finished goods and products,
supplies,
parts and other inventories owned by Weyerhaeuser Canada or
Weyerhaeuser
Saskatchewan (“Inventory”) that as of the close of business on the
Closing Date are located on the Transferred Real Property and
all other
Inventory as of the close of business on the Closing Date,
in each case
that are used or held for use primarily in the operation or
conduct of the
Newco Business or produced by the Newco Business for use in
or sale by the
Newco Business (the “Transferred
Inventory”);
|
|
(iii)
|
(A)
all other tangible personal property and interests therein
owned by
Weyerhaeuser Canada or Weyerhaeuser Saskatchewan (including
all machinery,
equipment, furniture, furnishings, tools and vehicles owned
by
Weyerhaeuser Canada or Weyerhaeuser Saskatchewan) that are
used or held
for use primarily in the operation or conduct of the
Newco Business, and (B) the machinery and equipment set forth
on
Schedule 2.02(a)(iii) (collectively, the “Transferred
Equipment”);
|
|
(iv)
|
all
accounts receivable of Weyerhaeuser Canada or Weyerhaeuser
Saskatchewan
solely arising out of the operation or conduct of the Newco
Business;
|
|
(v)
|
(A)
all patents (including all reissues, divisions, continuations
and
extensions thereof), patent applications, patent rights,
trademarks,
trademark registrations, trademark applications, servicemarks,
trade
names, business names, brand names, copyrights, copyright
registrations,
designs, design registrations, and all rights to any of
the foregoing
(collectively, the “Intellectual Property”), in each case that are
owned by Weyerhaeuser Canada or Weyerhaeuser Saskatchewan
and used or held
for use primarily in the operation or conduct of the Newco
Business,
including the Intellectual Property set forth on Schedule 2.02(a)(v)
(the “Transferred Intellectual Property”), and (B) all rights, if
any, owned by Weyerhaeuser Canada or Weyerhaeuser Saskatchewan
in the name
and ▇▇▇▇ “Willamette”;
|
|
(vi)
|
all
trade secrets, inventions, know-how, formulae,
processes, procedures,
research records, records of inventions, test information,
market surveys,
business potential analysis, strategic plans, consultants
reports,
technical reports and marketing know-how (“Technology”), in each
case that are owned by Weyerhaeuser Canada or Weyerhaeuser
Saskatchewan
and used or held for use solely in the operation
or conduct of the Newco
Business (the “Transferred
Technology”);
|
|
(vii)
|
all
permits, licenses, franchises, approvals or authorizations
from any
Governmental Entity (“Permits”) set forth on Schedule 2.02(a)(vii),
and all other Permits that are held by Weyerhaeuser Canada
or Weyerhaeuser
Saskatchewan and used or held for use primarily in the operation
or
conduct of the Newco Business, in each case to the extent
such Permits are
transferable (the
“Transferred Permits”);
|
|
(viii)
|
all
written contracts, leases, subleases, licenses, notes,
bonds, debentures,
indentures, guarantees, agreements, commitments and all
other legally
binding instruments, arrangements and understandings (“Contracts”)
to which Weyerhaeuser Canada or Weyerhaeuser Saskatchewan
is a party or by
which Weyerhaeuser Canada or Weyerhaeuser Saskatchewan
is bound that are
set forth on Schedule 2.02(a)(viii), and all other Contracts to which
Weyerhaeuser Canada or Weyerhaeuser Saskatchewan is a party
or by which
Weyerhaeuser Canada or Weyerhaeuser Saskatchewan is bound
that are used or
held for use primarily in, or that arise primarily out
of, the operation
or conduct of the Newco Business (the
“Transferred Contracts”);
|
|
(ix)
|
all
rights of Weyerhaeuser Canada or Weyerhaeuser Saskatchewan
in and to
products sold or leased (including products returned
after the Closing
Date and rights of Weyerhaeuser Canada or Weyerhaeuser
Saskatchewan of
rescission, replevin and reclamation) primarily in the
operation or
conduct of the Newco
Business;
|
|
(x)
|
all
credits, prepaid expenses, deferred charges, advance
payments, security
deposits and prepaid items that are used or held
for use primarily in, or
that arise primarily out of, the operation or conduct
of the Newco
Business;
|
|
(xi)
|
all
rights, claims, causes of action and credits owned
by Weyerhaeuser Canada
or Weyerhaeuser Saskatchewan to the extent relating
to any Newco Canada
Exchangeco Asset or any Newco Canada Exchangeco
Liability, including any
such items arising under any guarantees, warranties,
indemnities, rights
of recovery, rights of set-off and similar rights
in favor of Weyerhaeuser
Canada or Weyerhaeuser Saskatchewan in respect
of any Newco Canada
Exchangeco Asset or any Newco Canada Exchangeco
Liability;
|
|
(xii)
|
subject
to Section 7.01 of the Contribution and Distribution
Agreement, all books,
records and other documents (including all
books of account, ledgers,
general, financial, accounting and personnel
records, files, invoices,
customers’ and suppliers’ lists, other distribution lists, operating,
production and other manuals, manufacturing
and quality control records
and procedures, billing records, sales and
promotional literature) (in all
cases, in any form or medium) owned by Weyerhaeuser
Canada or Weyerhaeuser
Saskatchewan (“Records”) (A) that as of the close of business
on the Closing Date are located at the Transferred
Real Property and that
are used or held for use primarily in, or that
arise primarily out of, the
conduct or operation of the Newco Business,
or (B) that as of the
close of business on the Closing Date are not
located at the Transferred
Real Property and that are solely used or held
for use in the conduct or
operation of the Newco Business (collectively,
the “Transferred
Records”);
|
|
(xiii)
|
all
goodwill owned by Weyerhaeuser Canada or
Weyerhaeuser Saskatchewan
generated by or associated with the Newco
Business or the Newco Canada
Exchangeco
Assets;
|
|
(xiv)
|
all
assets owned by Weyerhaeuser Canada
or Weyerhaeuser Saskatchewan that
are
expressly contemplated by the Tax
Sharing Agreement as assets to be
transferred to the Spinco
Group;
|
|
(xv)
|
all
rights of Newco Canada
Exchangeco or any subsidiary
of Newco Canada
Exchangeco under the Canadian
Purchase Agreement or any
Transaction
Document;
|
|
(xvi)
|
all
assets to be transferred
to Newco Canada Exchangeco
or any subsidiary
of
Newco Canada Exchangeco
set forth on Schedule
2.02(a)(xvi) (the
“Benefit Plan
Assets”);
|
|
(xvii)
|
all
other assets, properties, goodwill
and rights of Weyerhaeuser Canada or
Weyerhaeuser Saskatchewan reflected
in the Interim Newco Balance Sheet
other than assets, properties, goodwill
and rights that are (A) sold,
disposed or otherwise transferred after
the date of such balance sheet, or
(B) set forth on Schedule
2.02(a)(xviii);
|
|
(xviii)
|
all
finished pulp manufactured
at the Transferred Real Property
owned by
Weyerhaeuser Canada or Weyerhaeuser
Saskatchewan and that, as
of the close
of business on the Closing
Date, is located at Weyerhaeuser
Canada’s or
Weyerhaeuser Saskatchewan’s facilities other than the
Transferred Real
Property to the extent allocated
to Newco Canada Exchangeco
or any
subsidiary of Newco Canada
Exchangeco in accordance
with Schedule 2.04(d)
(the “Shared Inventory”);
and
|
|
(xix)
|
all
accounts receivable
with respect to pulp
sales pursuant to which
a payment
is owed by a third
party to the Newco
Business and the Weyerhaeuser
Business to the extent
allocated to Newco
Canada Exchangeco or
any
subsidiary of Newco
Canada Exchangeco in
accordance with Schedule
2.04(d)
(the “Shared Accounts
Receivable”).
|
2.
“Canadian
Excluded Assets”
shall
mean the following assets owned by Weyerhaeuser Canada or Weyerhaeuser
Saskatchewan:
|
(i)
|
all
assets set forth on Schedule 2.02(b)(i)
or
2.02(a)(xviii);
|
|
(ii)
|
all
cash and cash
equivalents;
|
|
(iii)
|
subject
to Section
6.01 of the
Contribution
and Distribution
Agreement,
all
insurance
policies
and all rights
and claims
thereunder
and any proceeds
thereof;
|
|
(iv)
|
all
rights,
claims
and
credits
to
the
extent
relating
to
any
Canadian
Excluded
Asset
or
any
Canadian
Retained
Liability,
including
any
such
items
arising
under
any
guarantees,
warranties,
indemnities
and
similar
rights
in
favor
of
Weyerhaeuser
Canada
or
Weyerhaeuser
Saskatchewan
in
respect
of
any
Canadian
Excluded
Asset
or
any
Canadian
Retained
Liability;
|
|
(v)
|
all
shares
of
capital
stock
of,
or
other
equity
interests
in,
any
affiliate
of
Weyerhaeuser
Canada
or
Weyerhaeuser
Saskatchewan
or
any
other
Person
(in
each
case,
other
than
Wapawekka
Lumber
and
Wapawekka
Lumber
Partnership);
|
|
(vi)
|
all
assets
(other
than
the
Benefit
Plan
Assets)
relating
to
any
employee
benefit
plan
in
which
any
employees
of
Weyerhaeuser
Canada
or
Weyerhaeuser
Saskatchewan
or
any
of
their
respective
affiliates
participate;
|
|
(vii)
|
subject
to
Section
7.01
of
the
Contribution
and
Distribution
Agreement
or,
as
applicable,
Section
5.09
of
the
Tax
Sharing
Agreement,
all
financial
and
tax
Records
relating
to
the
Newco
Business
that
form
part
of
Weyerhaeuser
Canada’s
or
Weyerhaeuser
Saskatchewan’s
general
ledger;
|
|
(viii)
|
all
(A)
Records
that
are
not
Transferred
Records,
and
(B)
Records
prepared
in
connection
with
the
sale
or
transfer
of
the
Newco
Business,
including
bids
received
from
third
parties
and
analyses
relating
to
the
Newco
Business;
|
|
(ix)
|
all
rights
of
Weyerhaeuser
Canada
or
Weyerhaeuser
Saskatchewan
under
this
Agreement
or
any
Transaction
Document;
|
|
(x)
|
the
Retained
Names;
|
|
(xi)
|
all
owned
real
property,
leaseholds
and
other
interests
in
real
property
set
forth
on
Schedule
2.02(b)(xi)
and
all
owned
real
property,
leaseholds
and
other
interests
that
are
not
Transferred
Real
Property,
in
each
case
together
with
Weyerhaeuser
Canada’s
or
Weyerhaeuser
Saskatchewan’s
right,
title
and
interest
in,
to
and
under
all
buildings,
improvements
and
fixtures
thereon
and
all
other
appurtenances
and
real
property
rights
pertaining
thereto;
|
|
(xii)
|
all
Intellectual Property set
forth on Schedule 2.02(b)(xii)
and all other
Intellectual Property that
is not Transferred Intellectual
Property;
|
|
(xiii)
|
all
Technology that is
used or held for use
in Weyerhaeuser Canada’s or
Weyerhaeuser Saskatchewan’s fluff pulp and specialty
pulp operations and
all other Technology
that is not Transferred
Technology;
|
|
(xiv)
|
all
Permits
set
forth
on
Schedule
2.02(b)(xiv)
and
all
other
Permits
that
are
not
Transferred
Permits;
|
|
(xv)
|
all
Contracts
set
forth
on
Schedule
2.02(b)(xv)
and
all
other
Contracts
that
are
not
Transferred
Contracts;
|
|
(xvi)
|
all
accounts receivable pursuant to which
a payment is owed (i) by
Weyerhaeuser Canada or Weyerhaeuser Saskatchewan
to any other member of
the Weyerhaeuser Group, or (ii) by the
Weyerhaeuser Business to the Newco
Business;
|
|
(xvii)
|
any
other property
or assets not
constituting
Newco Canada
Exchangeco
Assets;
|
|
(xviii)
|
all
corporate-level services of the type
provided as of the date of the
Canadian Purchase Agreement to the
Newco Business by Weyerhaeuser Canada
or Weyerhaeuser
Saskatchewan;
|
|
(xix)
|
all
tangible personal property and interests
therein (including all machinery,
equipment, furniture, furnishings, tools
and vehicles) set forth on
Schedule 2.02(b)(xix) and all other tangible
personal property that is not
Transferred Equipment;
|
|
(xx)
|
all
assets that are expressly contemplated
by the Tax Sharing Agreement as
assets to be retained by Weyerhaeuser
Canada or Weyerhaeuser Saskatchewan
or any other member of the Weyerhaeuser
Group;
|
|
(xxi)
|
the
Bowater
Claim;
|
|
(xxii)
|
all
finished pulp manufactured
at the Transferred Real
Property owned by
Weyerhaeuser Canada or
Weyerhaeuser Saskatchewan
and that, as of the close
of business on the Closing
Date, is located at Weyerhaeuser
Canada’s or
Weyerhaeuser Saskatchewan’s facilities other than
the Transferred Real
Property, other than the
Shared Inventory;
and
|
|
(xxiii)
|
all
accounts receivable with
respect to pulp sales
pursuant to which a payment
is owed by a third party
to the Newco Business
and the Weyerhaeuser
Business, other than
the Shared Accounts
Receivable.
|
For
the
purposes of this Section 2 only, the “Newco
Business”
has
the
meaning given to such term in Article I of the Contribution and
Distribution Agreement without regards to the proviso in such
definition.
Newco Canada Exchangeco Liabilities
3.
“Newco
Canada Exchangeco Liabilities”
shall
mean all obligations, liabilities and commitments of any nature, whether
known
or unknown, express or implied, primary or secondary, direct or indirect,
liquidated, absolute, accrued, contingent or otherwise and whether due
or to
become due (“Liabilities”),
of
each of Weyerhaeuser Canada and Weyerhaeuser Saskatchewan arising out of
or
primarily relating to the Newco Canada Exchangeco Assets, the Newco Business
or
the operation or conduct of the Newco Business prior to, on or after the
Closing
Date, excluding the Canadian Retained Liabilities, which Newco Canada Exchangeco
Liabilities shall include (in each case, other than the Canadian Retained
Liabilities):
|
(i)
|
all
Liabilities of each of Weyerhaeuser
Canada and Weyerhaeuser Saskatchewan
under the Transferred Contracts
and the Transferred
Permits;
|
|
(ii)
|
all
accounts payable and accrued liabilities
of each of Weyerhaeuser Canada
and Weyerhaeuser Saskatchewan solely
arising out of the operation or
conduct of the Newco Business;
|
|
(iii)
|
all
Liabilities
of each
of Weyerhaeuser
Canada
and Weyerhaeuser
Saskatchewan
arising
out of
or primarily
relating
to any
and all
products
manufactured
or sold
by the
Newco
Business
at any
time,
including
obligations,
liabilities
and commitments
for refunds,
adjustments,
allowances,
repairs,
exchanges,
returns
and warranty,
product
liability,
merchantability
and
other
claims
relating
to such
products;
|
|
(iv)
|
all
Liabilities
of
each
of
Weyerhaeuser
Canada
and
Weyerhaeuser
Saskatchewan
arising
as
a
result
of
at
any
time
being
the
owner,
lessee
or
occupant
of,
or
the
operator
of
the
activities
conducted
at,
the
Transferred
Real
Property;
|
|
(v)
|
all
Environmental
Liabilities
of
each
of
Weyerhaeuser
Canada
and
Weyerhaeuser
Saskatchewan
at
any
time
arising
out
of
or
primarily
relating
to
the
operation
or
conduct
of
the
Newco
Business
or
the
ownership
of,
or
activities
conducted
at,
the
Transferred
Real
Property;
|
|
(vi)
|
all
Liabilities
of
each
of
Weyerhaeuser
Canada
and
Weyerhaeuser
Saskatchewan
in
respect
of
any
suit,
action
or
proceeding
(a
“Proceeding”),
pending
or
threatened,
and
claims,
whether
or
not
presently
asserted,
at
any
time
arising
out
of
or
primarily
relating
to
the
operation
or
conduct
of
the
Newco
Business;
|
|
(vii)
|
all
employment
and
employee
benefit-related
Liabilities
of
each
of
Weyerhaeuser
Canada
and
Weyerhaeuser
Saskatchewan
with
respect
to
Transferred
Employees
and
their
dependents
and
beneficiaries
(regardless
of
when
or
whether
such
Liabilities
arose,
arise,
were
or
are
incurred),
including
under
or
with
respect
to
any
Newco
Benefit
Plan
or
Newco
Benefit
Agreement
set
forth
on
Schedule
2.03(a)(vii),
other
than
the
Retained
Benefit
Liabilities
(the
“Benefit
Plan
Liabilities”);
|
|
(viii)
|
all
Liabilities
to
be
expressly
assumed
by
any
member
of
the
Spinco
Group
pursuant
to
the
Canadian
Purchase
Agreement
or
any
Transaction
Documents
(including
all
Taxes
to
the
extent
responsibility
therefor
is
assigned
to
Spinco
under
the
Tax
Sharing
Agreement);
|
|
(ix)
|
all
Liabilities
of
each
of
Weyerhaeuser
Canada
and
Weyerhaeuser
Saskatchewan
reflected
in
the
Interim
Newco
Balance
Sheet
other
than
Liabilities
discharged
after
the
date
of
such
balance
sheet;
and
|
|
(x)
|
all
accounts
payable
with
respect
to
pulp
liabilities
pursuant
to
which
a
payment
is
owed
collectively
by
the
Newco
Business
and
the
Weyerhaeuser
Business
to
any
third
party
to
the
extent
allocated
to
Newco
Canada
Exchangeco
or
any
subsidiary
of
Newco
Canada
Exchangeco
in
accordance
with
Schedule
2.04(d)
(the
“Shared
Accounts
Payable”).
|
4.
“Canadian
Retained Liabilities”
shall
mean the following Liabilities of Weyerhaeuser Canada or Weyerhaeuser
Saskatchewan:
|
(i)
|
all
Liabilities not constituting Newco Canada
Exchangeco
Liabilities;
|
|
(ii)
|
all
Liabilities (A) under the Weyerhaeuser
Stock Plans (other than any
Liabilities with respect to Spinco equity
awards issued or required to be
issued pursuant to Section 6.08 of the
Transaction Agreement) and the
Newco Canadian Pension Plans (other than
the Assumed Canadian Plans), (B)
under or with respect to any Newco Benefit
Plan or any Newco Benefit
Agreement not set forth on Schedule 2.03(a)(vii),
(C) for severance
benefits payable to salaried employees
of Weyerhaeuser Saskatchewan at its
facilities located in Prince ▇▇▇▇▇▇,
Saskatchewan and Big River,
Saskatchewan in respect of terminations
occurring prior to the Closing
Date and (D) arising out of claims for
medical benefits incurred on or
prior to the Closing Date (such plans,
collectively, the “Excluded
Benefit Plans”
and such Liabilities, collectively, the
“Retained
Benefit Liabilities”);
|
|
(iii)
|
all
Liabilities to be expressly
retained or assumed by
Weyerhaeuser Canada or
Weyerhaeuser Saskatchewan
pursuant to the Canadian
Purchase Agreement or
any Transaction Documents
(including all Taxes
to the extent
responsibility therefor
is assigned to the Weyerhaeuser
Canada or
Weyerhaeuser Saskatchewan
as members of the Weyerhaeuser
Group under the
Tax Sharing Agreement);
|
|
(iv)
|
all
Liabilities
under Environmental
Laws arising
out of
or primarily
relating
to real
property,
plants
and other
facilities
formerly
owned or
leased
by
Weyerhaeuser
Canada
or Weyerhaeuser
Saskatchewan
and not
included
in the
Transferred
Real Property;
|
|
(v)
|
all
accounts
payable
pursuant
to
which
a
payment
is
owed
(i)
by
Weyerhaeuser
Canada
or
Weyerhaeuser
Saskatchewan
to
any
other
member
of
the
Weyerhaeuser
Group,
or
(ii)
by
the
Newco
Business
to
the
Weyerhaeuser
Business;
|
|
(vi)
|
all
Liabilities
to
the
extent
arising
out
of
(x)
any
exposure
to
asbestos
or
asbestos-containing
materials
present
in
products
formerly
manufactured
at
facilities
located
on
the
Transferred
Real
Property
or
at
any
other
facility
now
or
formerly
owned
by
Weyerhaeuser
Canada
or
Weyerhaeuser
Saskatchewan
or
(y)
the
pre-closing
manufacture
of
these
products
at
such
facilities;
|
|
(vii)
|
all
accounts
payable
with
respect
to
pulp
liabilities
pursuant
to
which
a
payment
is
owed
collectively
by
the
Newco
Business
and
the
Weyerhaeuser
Business
to
any
third
party,
other
than
the
Shared
Accounts
Payable;
and
|
|
(viii)
|
all
Liabilities
set
forth
on
Schedule 2.03(b)(x).
|
Tax Elections
1.
Newco
Canada Exchangeco or a subsidiary of Newco Canada Exchangeco and each of
Weyerhaeuser Canada and Weyerhaeuser Saskatchewan will, if applicable,
jointly
execute and file an election under subsection 20(24) of the ITA in the
manner
required by Section 20(25) of the ITA and under the equivalent or corresponding
provisions of any other applicable provincial or territorial law, and under
any
other applicable provincial or territorial law, as to such amount paid
by
Weyerhaeuser Canada and Weyerhaeuser Saskatchewan to Newco Canada Exchangeco
for
assuming future obligations.
2.
Newco Canada Exchangeco or a subsidiary of Newco Canada Exchangeco and
each of
Weyerhaeuser Canada and Weyerhaeuser Saskatchewan will elect jointly under
Section 22 of the ITA and the corresponding provisions of any other applicable
taxing statute as to the sale of the accounts receivable transferred by
Weyerhaeuser Canada and/or Weyerhaeuser Saskatchewan and designate in such
election an amount equal to the portion of the purchase price allocated
to such
accounts receivable.
3.
Newco
Canada Exchangeco or a subsidiary of Newco Canada Exchangeco and each of
Weyerhaeuser Canada and Weyerhaeuser Saskatchewan shall execute jointly
an
election under Section 167 of the Excise Tax Act (Canada) with each of
Weyerhaeuser Canada and Weyerhaeuser Saskatchewan to have the sale of the
Newco
Canada Exchangeco Assets take place on a goods and services tax-free basis
under
Part IX of the Excise Tax Act (Canada).
Defined
terms used but not otherwise defined in this Exhibit A shall have the meanings
as set forth in the Contribution and Distribution Agreement, with the exception
of the definition of the Closing Date, which shall mean the date on which
the
closing of the purchase by Newco Canada Exchangeco or by a subsidiary of
Newco
Canada Exchangeco of the Newco Canada Exchangeco Assets and the assumption
by
Newco Canada Exchangeco or by a subsidiary of Newco Canada Exchangeco of
the
Newco Canada Exchangeco Liabilities occurs.
In
this Exhibit A, all Schedule numbers refer to the corresponding schedules
to the
Contribution and Distribution Agreement, it being the intention of the
parties
that the schedules to the Canadian Purchase Agreement (i) shall consist
solely of items currently set forth in the schedules to the Contribution
and
Distribution Agreement and (ii) shall be prepared in accordance with
Section 2.07(d) of the Contribution and Distribution Agreement.
EXHIBIT
B
FORM
OF INTELLECTUAL
PROPERTY LICENSE AGREEMENT
This
Intellectual Property License Agreement (this “Agreement”)
dated
as of [ ], 2006, between Weyerhaeuser Company, a Washington corporation
(“Licensor”),
and
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, LLC, a Delaware limited liability company (“Licensee”).
WHEREAS,
Licensee and Licensor have entered into a Contribution and Distribution
Agreement dated as of August 22, 2006 (the “Contribution
and Distribution Agreement”),
pursuant to which Licensor has agreed to transfer to Licensee the Transferred
Assets related to the Newco Business, and Licensee has agreed to assume from
Licensor the Assumed Liabilities;
WHEREAS,
the patents and patent applications listed on Schedule A to this Agreement,
and
the respective inventions disclosed therein, are owned by Licensor and are
used
in the operation of the Newco Business, but are not being transferred to
Licensee pursuant to the Contribution and Distribution Agreement (collectively,
the “Retained
Licensed Patents”);
WHEREAS,
the copyrights, mask works, copyright registrations, designs, and design
registrations, including, but not limited to, those items identified on Schedule
B hereto, owned by Licensor and used or held for use both in the operation
of
the Newco Business and in the operation of other businesses of Licensor but
not
primarily used or held for use in the Newco Business (collectively, the
“Retained
Licensed Copyrights”)
are
not being transferred to Licensee pursuant to the Contribution and Distribution
Agreement;
WHEREAS,
the trade secrets, inventions, know-how, formulae, processes, procedures,
research records, records of inventions, test information, software programs,
market surveys, business potential analysis, strategic plans, consultants
reports, technical reports and marketing know-how owned by Licensor and used
or
held for use both in the operation of the Newco Business and in the operation
of
other businesses of Licensor are not being transferred to Licensee pursuant
to
the Contribution and Distribution Agreement (collectively and to the extent
material to the Newco Business as currently conducted, the “Retained
Licensed Technology”
and,
together with the Retained Licensed Patents, the Retained Licensed Copyrights,
the Solaia Patents and the Lemelson Patents, the “Retained
Licensed Intellectual Property”);
and
WHEREAS,
Licensee wishes to use the Retained Licensed Intellectual Property in its
operation of the Newco Business, and Licensor, as the owner of the entire
right,
title and interest in and to the Retained Licensed Intellectual Property,
has
agreed to license the Retained Licensed Intellectual Property to Licensee
for
use exclusively in the Newco Business and in each facility and business that
is
part of the Newco Business, subject to the limitations set forth
herein.
NOW,
THEREFORE, in consideration of the premises and mutual covenants herein it
is
hereby agreed:
SECTION
1. Definitions.
Capitalized terms that are not otherwise defined in this Agreement shall
have
the meanings ascribed to them in the Contribution and Distribution Agreement.
“Solaia Patents” means U.S. Patent No. 5,038,318 and all continuations,
continuations-in-part, divisionals, reissues and re-examinations based thereon
and all corresponding foreign patents related thereto. “Lemelson Patents” means
all patents (including reexamination certificates and reissue patents) that
have
either issued or in the future may issue, in any country of the world with
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as a named inventor, except for those patents identified
in
Schedule C to this Agreement.
SECTION
2. Grant.
Subject to the terms and conditions set forth in this Agreement, Licensor
grants
to Licensee (a) a fully paid-up, royalty-free, non-exclusive license to use
the
Retained Licensed Technology and the Retained Licensed Copyrights in the
manufacture, use and sale of any and all products other than fluff and specialty
pulp and in administrative and operational services, including finance, human
resource and information technology services, provided
that
Licensee may use the Retained Licensed Technology and the Retained Licensed
Copyrights in the manufacture of fluff pulp in the Plymouth facility (but
at no
other facilities) and in the use and sale of such fluff pulp, (b) a fully
paid-up, royalty-free, non-exclusive license to use the Retained Licensed
Patents and the Retained Licensed Technology in the manufacture of any and
all
products at the Kamloops facility (but at no other facilities) and in the
use
and sale of such products; (c) a fully paid-up, royalty-free, non-exclusive
license under any claim of any patent and patent application (other than
the
patents and patent applications listed as Excluded Assets) owned by Licensor
as
of the Effective Time to manufacture and sell those products that were
commercially manufactured or sold in the operation of the Newco Business
during
the 18 months prior to the Effective Time in a facility other than Plymouth
or
Kamloops, and use those processes, that were commercially used in the operation
of the Newco Business during the 18 months prior to the Effective Time in
a
facility other than Plymouth or Kamloops; (d) a fully paid-up, royalty-free,
non-exclusive license to use the Solaia Patents, which license is strictly
limited to the facilities acquired from Licensor pursuant to the Contribution
and Distribution Agreement; and (e) a fully paid-up, royalty-free, non-exclusive
right not to have the Lemelson Patents asserted against the Licensee which
right
is strictly limited to the facilities acquired from Licensor pursuant to
the
Contribution and Distribution Agreement (collectively the rights granted
in (a),
(b), (c), (d) and (e) will be referred to as the “License”).
This
License shall be effective as of the date first above written.
SECTION
3. Ownership.
If Licensee makes modifications or improvements to any Retained Licensed
Intellectual Property, Licensee will have sole and exclusive ownership of
such
modifications and improvements. Subject to terms of the Transition Services
Agreement, dated as of the date hereof, between Licensor and Licensee, if
Licensor makes modifications or improvements to any Retained Licensed
Intellectual Property, Licensor will have sole and exclusive ownership of
such
modifications and improvements.
SECTION
4. Term
and Termination.
The License granted by Section 2 of this Agreement shall extend (a) for the
period during which the Retained Licensed Patents and any renewals thereof
are
in force with respect to each such Retained Licensed Patents, (b) the period
during which the Retained Licensed Copyrights are in force with respect to
each
such Retained Licensed Copyright, and (c) indefinitely and without time limit
with respect to Retained Licensed Technology; provided
that, in
each of clauses (a), (b) and (c) of this Section 3, (x) this Agreement may
be
terminated by Licensor in the event Licensee makes or attempts to make an
assignment of this Agreement in violation of Section 22 below, and fails
to
rescind such assignment within 90 days after being notified of such assignment
by Licensor, and (y) the License granted by Section 2 with respect to any
Retained Licensed Intellectual Property may be terminated by Licensor only
with
respect to such Retained Licensed Intellectual Property in the event that
(i)
Licensee grants a sublicense to such Retained Licensed Intellectual Property
in
violation of Section 22 below, and fails to terminate such grant within 90
days
after being notified of such grant by Licensor, or (ii) Licensee uses any
such
Retained Licensed Intellectual Property at facilities other than as permitted
by
Section 2, and fails to cease such use within 90 days after being notified
of
such use by Licensor.
SECTION
5. Representations
and Warranties.
Each party represents and warrants to the other party that such party has
the
legal right, power and authority to enter into and perform its obligations
under
this Agreement. Licensor represents and warrants that it (a) is the owner
of the
Retained Licensed Intellectual Property and (b) has granted no other license
to
use any of the Retained Licensed Intellectual Property that would conflict
with
the rights granted hereunder.
SECTION
6. No
Other Representations and Warranties.
EXCEPT AS MAY EXPRESSLY BE SET FORTH IN THIS AGREEMENT, THE CONTRIBUTION
AND
DISTRIBUTION AGREEMENT OR ANY ANCILLARY AGREEMENT, (A) LICENSOR MAKES NO
REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO THE LICENSE OF ANY RETAINED LICENSED INTELLECTUAL PROPERTY, (B)
ALL
OF THE RETAINED LICENSED INTELLECTUAL PROPERTY TO BE LICENSED IN ACCORDANCE
WITH
THIS AGREEMENT, THE CONTRIBUTION AND DISTRIBUTION AGREEMENT OR ANY ANCILLARY
AGREEMENT SHALL BE LICENSED ON AN “AS IS, WHERE IS” BASIS, AND ALL IMPLIED
WARRANTIES AS TO THE VALIDITY OR NON-INFRINGEMENT OF THE RETAINED LICENSED
INTELLECTUAL PROPERTY AND AS TO THE ADEQUACY OF THE RETAINED LICENSED
INTELLECTUAL PROPERTY FOR THEIR PURPOSE ARE HEREBY EXPRESSLY DISCLAIMED,
AND (C)
NONE OF THE PARTIES HERETO OR ANY OTHER PERSON MAKES ANY REPRESENTATION OR
WARRANTY WITH RESPECT TO ANY INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE
IN CONNECTION WITH THE ENTERING INTO OF THIS AGREEMENT, THE CONTRIBUTION
AND
DISTRIBUTION AGREEMENT, ANCILLARY AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
SECTION
7. Registration
and Maintenance.
(a)
Licensor
and Licensee will use commercially reasonable efforts to protect the Retained
Licensed Technology as trade secrets. Licensor will use commercially reasonable
efforts to maintain the Retained Licensed Patents and the Retained Licensed
Copyrights (collectively, the “Registerable
Intellectual Property”)
and
all registrations thereof and/or applications therefor. Licensee will execute
all documents as are reasonably necessary or expedient to aid in, and will
otherwise cooperate at Licensor’s expense with, Licensor’s efforts to prepare,
obtain, file, record and maintain all such registrations and applications.
(b)
To the extent Licensor has not registered any Registerable Intellectual
Property, Licensee may, at its own expense, register such Registerable
Intellectual Property, in the name of, and on behalf of, Licensor provided
that (x)
Licensee gives written notice of its intention to register such Registerable
Intellectual Property, and (y) within 30 days of such notice, (i) Licensor
does
not object to Licensee registering such Registerable Intellectual Property
or
(ii) Licensor fails to register such Registerable Intellectual Property.
(c) To
the extent Licensor has not maintained or does not intend to maintain any
registrations or applications for Registerable Intellectual Property, Licensee
may, at its own expense, make such filings as are necessary to maintain any
registrations or applications therefor, in the name of, and on behalf of,
Licensor. Licensor will give notice to Licensee as soon as it decides not
to
maintain any such registrations or applications but in any event not less
than
60 days before such filings are due. Within 30 days of Licensee’s receipt of
such notice, Licensee will give notice to Licensor
whether it will or will not make such filings. Licensor will execute all
documents as are reasonably necessary or expedient to aid in, and will otherwise
cooperate at Licensee’s expense with, Licensee’s efforts to prepare, obtain,
file, record and maintain all such registrations and applications.
SECTION
8. Infringement
Actions.
(a)
Licensor
will from time to time take all steps that it considers (in its sole discretion)
necessary to protect Licensor’s and Licensee’s rights in and to the Retained
Licensed Intellectual Property (other than the Solaia Patents and the Lemelson
Patents), and Licensee agrees forthwith to communicate to Licensor any
infringements or misappropriations or threatened infringements or
misappropriations of any such rights of Licensor which may come to its notice
and, at Licensor’s expense, to do all and any such acts as Licensor may
reasonably require for preventing such infringements or misappropriations
or
threatened infringements or misappropriations. In the event Licensor takes
affirmative action against an infringement or misappropriation, Licensee
agrees
to assist Licensor in whatever manner Licensor reasonably requests, at the
expense of Licensor. Recovery of damages resulting from any such action shall
be
solely for the account of Licensor. Licensee will provide information reasonably
requested by Licensor in any infringement or misappropriation action, including
in connection with the calculation of damages.
Licensee
may participate, at its expense, in any action taken by or proceeding instituted
by or brought against Licensor through separate counsel of Licensee’s own
choosing; provided
that
Licensor will at all times retain full control over such action.
(b)
Licensor
will use reasonable efforts to enforce Licensor’s contractual or other
confidentiality rights against an individual employee to the extent that
such
rights relate to an unauthorized disclosure or use of Retained Licensed
Technology after the individual has left the employment of Licensor. If,
in the
case of such an unauthorized disclosure or use of any Retained Licensed
Technology by an individual who becomes a former employee of Licensor, Licensee
(a) determines to take action against such an individual, whether by commencing
a proceeding or otherwise, and (b) requests that Licensor join such action
by
enforcing Licensor’s rights against such individual, Licensor will enforce such
rights and otherwise provide reasonable cooperation to Licensee.
(c)
Notwithstanding
any limitations on Licensee’s rights to use any of the Retained Licensed
Intellectual Property pursuant to Section 2, if (i) a third party is, in
the
reasonable opinion of Licensee, infringing or misappropriating any of such
Retained Licensed Intellectual Property (other than the Solaia Patents and
the
Lemelson Patents) in a manner that is material to the Newco Business, (ii)
Licensee notifies Licensor of such third party activities in accordance
with Section
12, and (iii) Licensor does not take affirmative action either to prevent
such
activities or subject to Section 22, to license to such third party under
the
Retained Licensed Intellectual Property (other than the Solaia Patents and
the
Lemelson Patents) required for such activities, then Licensee’s ability to use
such Retained Licensed Intellectual Property (other than the Solaia Patents
and
the Lemelson Patents) is no longer subject to the restrictions set forth
in
Section 2 on the use of such Retained Licensed Intellectual Property (other
than
the Solaia Patents and the Lemelson Patents).
SECTION
9. Indemnification.
(a)
Each
party (the “Indemnifying
Party”)
shall
indemnify and hold harmless and, at the other party’s sole option, defend, the
other party and its affiliates and its and their respective officers, directors,
employees, agents, advisers and representatives (the “Indemnified
Parties”)
from
and against any and all claims, demands, liabilities, obligations, taxes,
losses, fines, costs, expenses, royalties, litigation, deficiencies or damages
(whether absolute, accrued, conditional or otherwise resulting from third-party
claims), including interest and penalties with respect thereto and out-of-pocket
expenses and reasonable attorneys’ and accountants’ fees and expenses incurred
in the investigation or defense of any of the same or in asserting, preserving
or enforcing any of their respective rights hereunder (collectively,
“Losses”),
resulting from or arising out of any claims or actions of third parties based
on
or arising out of any breach of any representation, warranty, covenant or
obligation under this Agreement.
(b)
In
the
event that any Indemnified Party elects to have the Indemnifying Party defend
any claim or action of third parties referred to in Section 9(a), (i) such
Indemnified Party will so notify the Indemnifying Party in writing, (ii)
such
Indemnified Party shall have the right to approve the Indemnifying Party’s
counsel, which approval shall not unreasonably be withheld, and to obtain
its
own counsel at such Indemnified Party’s own expense and (iii) the Indemnifying
Party shall obtain the approval of such Indemnified Party before entering
into
any compromise regarding such actions that would impose any liability or
obligation on such Indemnified Party, which approval will not be unreasonably
withheld. In the event that such Indemnified Party elects to defend any claim
or
action of third parties referred to in Section 9(a), the Indemnifying Party
shall pay all reasonable attorney’s fees and expenses in connection with such
defense. If any claim, demand, assessment or liability, or cost incidental
thereto, is asserted against an Indemnified Party in respect of which the
Indemnified Party proposes to demand indemnification from the Indemnifying
Party
pursuant to this Section 9, such Indemnified Party will promptly notify the
Indemnifying Party in writing. No failure of an Indemnified Party to promptly
notify the Indemnifying Party shall relieve the Indemnifying Party from the
obligation to indemnify the Indemnified Party unless and to the extent the
Indemnifying Party is actually prejudiced by such failure.
SECTION
10. Confidentiality.
Each party agrees and will undertake to keep any information regarding the
Retained Licensed Intellectual Property or otherwise received under this
Agreement confidential and will refrain from disclosing it to any third party,
unless (and to the extent) compelled to disclose by judicial or administrative
process or, in the opinion of such party’s counsel, by the requirements of
applicable law or regulations (including Securities and Exchange Commission
rules and regulations), in which case the party seeking to disclose such
information will give the other party reasonable advance notice of such
disclosure in order to permit the other party to seek an appropriate protective
order or to attempt to reach mutual agreement regarding the portions of such
information that should be subject to a request for confidential treatment,
and
except to the extent that such information (a) is required to be disclosed
by
either party in order to carry out its rights or obligations hereunder, (b)
is
in the public domain through no fault of the party to which it is furnished,
including through prior public disclosure made in accordance with this Section
10, (c) is independently developed by the party to which it is furnished
without
use of, reference to, or reliance upon, the furnishing party’s information, as
evidenced by written documentation, or (d) is later lawfully acquired from
other
sources (without obligations of confidentiality) by the party hereto to which
it
is furnished.
SECTION
11. No
Third-Party Beneficiaries.
This Agreement is for the sole benefit of the parties hereto and their permitted
assigns and nothing herein expressed or implied shall give or be construed
to
give to any person, other than the parties hereto and such assigns, any legal
or
equitable rights hereunder.
SECTION
12. Notices.
All notices, requests, permissions, waivers and other communications hereunder
shall be in writing and shall be deemed to have been duly given (a) five
business days following sending by registered or certified mail, postage
prepaid, (b) when sent, if sent by facsimile; provided
that the
facsimile transmission is promptly confirmed by telephone, (c) when delivered,
if delivered personally to the intended recipient and (d) one business day
following sending by overnight delivery via a national courier service and,
in
each case, addressed to a party at the following address for such
party:
if
to
Licensor:
[
]
Attention:
[ ]
Facsimile
No.: [ ]
with
copies to:
[
]
Attention:
[ ]
Facsimile
No.: [ ]
if
to
Licensee:
[
]
Attention:
[ ]
Facsimile
No.: [ ]
with
a
copy to:
[
]
Attention:
[ ]
Facsimile
No.: [ ]
or
to
such other address(es) as shall be furnished in writing by any such party
to the
other party to this Agreement in accordance with the provisions of this Section
12.
SECTION
13. Amendments.
This Agreement may be amended, modified, superseded or canceled and any of
the
terms, covenants or conditions hereof may be waived only by an instrument
in
writing signed by each of the parties hereto or, in the case of a waiver,
by or
on behalf of the party waiving compliance.
SECTION
14. Independent
Contractors.
The parties to this Agreement intend by this Agreement to enter into only
a
license agreement and this Agreement shall not in any way be deemed to establish
any other relation between them. Neither Licensee, on the one hand, nor
Licensor, on the other hand, shall be considered a partner, joint venturer,
agent or other representative of the other for any purpose whatsoever and
neither shall hold itself out as such. Neither Licensee, on the one hand,
nor
Licensor, on the other hand, nor any employee, officer, director or agent
of
either shall hold themselves out as an agent of the other party. Nothing
in this
Agreement shall be construed to grant either party any right or authority
to
assume or create any obligation on behalf or in the name of the other; to
accept
summons or legal process for the other; or to bind the other in any manner
whatsoever.
SECTION
15. Severability;
Enforcement.
The invalidity of any portion of this Agreement shall not affect the validity,
force or effect of the remaining portions hereof. If it is ever held that
any
restriction hereunder is too broad to permit enforcement of such restriction
to
its fullest extent, each party agrees that a court of competent jurisdiction
may
enforce such restriction to the maximum extent permitted by law, and each
party
hereby consents and agrees that such scope may be judicially modified
accordingly in any proceeding brought to enforce such restriction.
SECTION
16. Integrated
Contract; Schedule.
This Agreement, including the Schedules hereto, any written amendments to
the
foregoing satisfying the requirements of Section 13 hereof, the Contribution
and
Distribution Agreement, the Ancillary Agreements and the Confidentiality
Agreement, including the schedules, exhibits and annexes thereto, constitute
the
entire agreement among the parties with respect to the subject matter hereof
and
thereof and supersede any previous agreements and understandings between
the
parties with respect to such matters. The Schedules annexed to this Agreement
are hereby incorporated in and made a part of this Agreement as if set forth
in
full herein. Any terms used in the Schedules but not otherwise defined therein
shall be defined as set forth in this Agreement or the Contribution and
Distribution Agreement, as the case may be. There are no restrictions, promises,
representations, warranties, agreements or undertakings of any party to this
Agreement with respect to the transactions contemplated by this Agreement,
the
Contribution and Distribution Agreement, the Ancillary Agreements or the
Confidentiality Agreement other than those set forth herein or therein or
in any
other document required to be executed and delivered hereunder or thereunder.
In
the event of any conflict between the provisions of this Agreement (including
the Schedules hereto), on the one hand, and the provisions of the Contribution
and Distribution Agreement (including the schedules and exhibits thereto),
on
the other hand, the provisions of the Contribution and Distribution Agreement
shall control.
SECTION
17. Counterparts.
This Agreement may be executed in one or more counterparts, all of which
shall
be considered one and the same agreement, and shall become effective when
one or
more counterparts have been signed by each of the parties hereto and delivered,
in person, by facsimile or by electronic image scan, receipt acknowledged
in
each case, to the other party hereto.
SECTION
18. Governing
Law.
This Agreement and any disputes arising under or related hereto (whether
for
breach of contract, tortious conduct or otherwise) shall be governed and
construed in accordance with the laws of the State of New York, without
reference to its conflicts of law principles.
SECTION
19. Jurisdiction.
Each party irrevocably agrees that any legal action, suit or proceeding against
them arising out of or in connection with this Agreement or the transactions
contemplated by this Agreement or disputes relating hereto (whether for breach
of contract, tortious conduct or otherwise) shall be brought exclusively
in the
United States District Court for the Southern District of New York, or, if
such
court does not have subject matter jurisdiction, the state courts of New
York
located in New York County and hereby irrevocably accepts and submits to
the
exclusive jurisdiction and venue of the aforesaid courts in personam, with
respect to any such action, suit or proceeding.
SECTION
20. Service
of Process.
Each party agrees that service of any process, summons, notice or document
by
U.S. registered mail to such party’s respective address set forth above shall be
effective service of process for any action, suit or proceeding in New York
with
respect to any matters for which it has submitted to jurisdiction pursuant
to
Section 19.
SECTION
21. Waiver
of Jury Trial.
Each party hereby waives to the fullest extent permitted by the laws of the
State of New York, any right it may have to a trial by jury in respect of
any
litigation directly or indirectly arising out of, under or in connection
with
this Agreement or the transactions contemplated by this Agreement or disputes
relating hereto. Each party (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that
such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (b) acknowledges that it and the other party hereto have been
induced
to enter into this Agreement by, among other things, the mutual waivers and
certifications in this Section 21.
SECTION
22. Assignment;
Sublicense.
This Agreement and all rights and obligations of Licensee hereunder may not
be
assigned by Licensee or subject to a sublicense without the prior written
consent of Licensor; provided,
however,
that
Licensee may, without such consent, (a) grant sublicenses of any of the rights
granted pursuant to Section 2, in each case to any current or future affiliate
of Licensee but only so long as such affiliate remains an affiliate (in which
case Licensee shall continue to be bound by the terms of this Agreement),
or (b)
(i) assign this Agreement to a purchaser or transferee of all or substantially
all of the Newco Business or (ii) grant sublicenses of any of the rights
granted
pursuant to Section 2 for
any
facility or business that is part of the Newco Business to
any
purchaser or transferee of all or substantially all of such facility or
business; provided
that in
each case the assignee or sublicensee agrees to be bound by the terms and
conditions of this Agreement by executing an acknowledgement in the form
and
substance acceptable to Licensor. Licensor may not license any of the Retained
Licensed Intellectual Property to any Person engaged in Competitive Activities
(as defined in the Contribution and Distribution Agreement), including
selling goods or services of the type sold by the Newco Business in North
America,
other
than to (i) a current or future affiliate of Licensor or (ii) a purchaser
or
transferee of all or substantially all of any affiliate or facility of Licensor.
Any transfer or other disposition by Licensor of any Retained Licensed
Intellectual Property will be made subject to the terms of this Agreement
and
the person or entity acquiring such Retained Licensed Intellectual Property
from
Licensor shall agree to be bound by the terms and conditions of this Agreement
by executing an acknowledgement in form and substance acceptable to Licensee.
The term “affiliate” used in this Agreement shall have the meaning given to such
term in the Contribution and Distribution Agreement.
SECTION
23. Effectiveness.
Notwithstanding anything to the contrary in this Agreement, this Agreement
shall
only become effective as of the Closing and shall not become effective if
the
Closing does not occur.
SECTION
24. Headings.
The descriptive headings of the several Sections of this Agreement and the
Schedule hereto are inserted for convenience only, do not constitute a part
of
this Agreement and shall not affect in any way the meaning or interpretation
of
this Agreement. All references in this Agreement to “Sections” or “Schedules”
shall be deemed to be references to Sections of this Agreement or the Schedules
hereto unless otherwise indicated.
[SIGNATURE
PAGE IS THE NEXT PAGE]
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their
duly authorized representatives effective as of the date first set forth
above.
| [LICENSOR], | ||
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| By: | ||
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Name: Title:
|
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| [LICENSEE], | ||
| |
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| By: | ||
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Name: Title:
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