Exhibit 10.19
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SEVENTH SUPPLEMENTAL INDENTURE
Dated as of January 31, 2006
among
AINSWORTH LUMBER CO. LTD.
as Issuer
XXXXXXXXX ENGINEERED CORP.,
XXXXXXXXX ENGINEERED (USA), LLC,
XXXXXXXXX ENGINEERED CANADA LIMITED PARTNERSHIP,
and XXXXXXXXX CORP.
as Subsidiary Guarantors
and THE BANK OF NEW YORK
as Trustee
to the
INDENTURE
dated as of July 10, 1997,
as supplemented by the First Supplemental Indenture,
dated as of February 14, 2001,
the Second Supplemental Indenture,
dated as of December 20, 2001,
the Third Supplemental Indenture,
dated as of February 27, 2004,
the Fourth Supplemental Indenture,
dated as of May 19, 2004,
the Fifth Supplemental Indenture,
dated as of September 22, 2004,
and the Sixth Supplemental Indenture,
dated as of January 10, 2005
among
XXXXXXXXX LUMBER CO. LTD.
as Issuer
XXXXXXXXX ENGINEERED CORP.,
XXXXXXXXX ENGINEERED (USA), LLC,
and XXXXXXXXX ENGINEERED CANADA LIMITED PARTNERSHIP
as Subsidiary Guarantors
and THE BANK OF NEW YORK
as Trustee
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12 1/2% Senior Secured Securities due July 15, 2007
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SEVENTH SUPPLEMENTAL INDENTURE, dated as of January 31, 2006 (the
"Seventh Supplemental Indenture"), by and among Xxxxxxxxx Lumber Co. Ltd., a
British Columbia corporation (the "Issuer"), Xxxxxxxxx Engineered Corp., a Nova
Scotia Unlimited Liability Company, Xxxxxxxxx Engineered (USA), LLC, a Delaware
Limited Liability Company, Xxxxxxxxx Engineered Canada Limited Partnership, a
British Columbia Limited Partnership, and Xxxxxxxxx Corp., a Minnesota
corporation (the "Guaranteeing Subsidiary") (together, the "Prior Guarantors"),
and The Bank of New York, as successor to Bank of Montreal Trust Company, as
trustee (the "Trustee").
WHEREAS, the Issuer issued 12 1/2% Senior Secured Securities due July
15, 2007 (the "Securities") pursuant to the Indenture, dated as of July 10,
1997, among Xxxxxxxxx Lumber Co. Ltd. (as Issuer), Xxxxxxxxx Lumber Inc. (as
Subsidiary Guarantor) and Bank of Montreal Trust Company (as predecessor
Trustee), as supplemented by the First Supplemental Indenture, dated as of
February 14, 2001, the Second Supplemental Indenture, dated as of December 20,
2001, the Third Supplemental Indenture, dated as of February 27, 2004, the
Fourth Supplemental Indenture, dated as of May 19, 2004, the Fifth Supplemental
Indenture, dated as of September 22, 2004 (as supplemented, the "Indenture"),
which Securities have previously been guaranteed by the Prior Guarantors
pursuant to the provisions of the Indenture;
WHEREAS, Xxxxx River Forest Products Ltd., a former Guarantor under
the Indenture, was formally dissolved, effective March 3, 2004, and is no longer
in existence;
WHEREAS, the Indenture provides that under certain circumstances a
Subsidiary providing a Subsidiary Guarantee shall execute and deliver to the
Trustee a supplemental indenture pursuant to which such Subsidiary shall
unconditionally guarantee all of the Company's Obligations under the Securities
and the Indenture (the "Subsidiary Guarantee");
WHEREAS, pursuant to Section 901 of the Indenture, the Trustee is
authorized to execute and deliver this Seventh Supplemental Indenture; and
WHEREAS, all things necessary to make this Seventh Supplemental
Indenture a valid supplement to the Indenture have been done.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties mutually covenant and agree for the equal and ratable benefit of the
Holders of the Securities as follows:
SECTION 1. Certain Definitions. Unless otherwise stated, all
capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Indenture.
SECTION 2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby
agrees as follows:
(a) Along with all Subsidiary Guarantors named in the Indenture, to
jointly and severally unconditionally guarantee to each Holder of a Security
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of the Indenture,
the Securities or the obligations of the Company hereunder or thereunder, that:
(i) the principal of and interest and premium, if any, on the
Securities will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, according to
the terms thereof and of the Indenture; and
(ii) in case of failure by the Company to punctually pay the
principal of and interest and premium, if any, on the Securities
when due, whether at stated maturity, by acceleration or
otherwise, the Subsidiary Guarantors shall be jointly and
severally obligated to pay the same immediately.
(b) The obligations hereunder shall be absolute and unconditional,
irrespective of and shall be unaffected by the validity, regularity or
enforceability of the Securities or the Indenture, the absence of any action to
enforce the same, any release, amendment, waiver or indulgence granted to the
Company or any other guarantor, or any consent to departure from any requirement
of any other guarantee of all or of any of the Securities, or any other
circumstances which might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor; provided, however, that, notwithstanding the
foregoing, no such release, amendment, waiver or indulgence shall, without the
consent of the Guaranteeing Subsidiary, increase the principal amount of the
Securities, or increase the interest rate thereon, or alter the Stated Maturity
thereof.
(c) The obligations of the Guaranteeing Subsidiary under the
Subsidiary Guarantee are independent of the obligations guaranteed by the
Guaranteeing Subsidiary hereunder, and a separate action or actions may be
brought and prosecuted by the Trustee on behalf of, or by, the Holders, subject
to the terms and conditions set forth in the Indenture, against the Guaranteeing
Subsidiary to enforce the Subsidiary Guarantee, irrespective of whether any
action is brought against the Company or whether the Company is joined in any
such action or actions.
(d) In the event of a default in payment of principal (or premium, if
any) or interest on a Security, whether at its stated maturity, by acceleration,
purchase or otherwise, legal proceedings may be instituted by the Trustee on
behalf of, or by, the Holder of such Security, subject to the terms and
conditions set forth in the Indenture, directly against the Guaranteeing
Subsidiary to enforce the Subsidiary Guarantee without first proceeding against
the Company or any other Guarantor. If, after the occurrence and during the
continuance of an Event of Default, the Trustee or any of the Holders are
prevented by applicable law from exercising their respective rights to
accelerate the maturity of the Securities, to collect interest on the
Securities, or to enforce or exercise any other right or remedy with respect to
the Securities, the Guaranteeing Subsidiary shall pay to the Trustee for the
account of the Holders, upon demand therefor, the amount that would otherwise
have been due and payable had such rights and remedies been permitted to be
exercised by the Trustee or any of the Holders.
(e) The following is hereby waived: diligence, presentment, demand for
payment, any requirement that the Trustee or any of the Holders protect, secure,
perfect or insure any security interest in or other Lien on any property subject
thereto or exhaust any right or take any action against the Company or any other
Person or any collateral, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest or notice with respect to the Securities, the
Indenture and this Supplemental Indenture and all demands whatsoever.
(f) This Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Securities, the
Indenture and this Supplemental Indenture, and the Guaranteeing Subsidiary
accepts all obligations of a Subsidiary Guarantor under the Indenture.
(g) If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Subsidiary Guarantors (including the Guaranteeing
Subsidiary), or any custodian, trustee, liquidator or other similar official
acting in relation to either the Company or the Subsidiary Guarantors, any
amount paid either to the Trustee or such Holder, this Subsidiary Guarantee, to
the extent theretofore discharged, shall be reinstated in full force and effect.
(h) The Guaranteeing Subsidiary shall be subrogated to all rights of
the Holders of the Securities against the Company in respect of any amounts paid
by the Guaranteeing Subsidiary on account of the Securities pursuant to the
provisions of the Subsidiary Guarantee or the Indenture, as supplemented by this
Supplemental Indenture; provided, however, that the Guaranteeing Subsidiary
shall not be entitled to enforce or to receive any payments arising out of, or
based upon, such right of subrogation until the principal of (and premium, if
any) and interest on the Securities shall have been paid in full.
(i) As between the Guaranteeing Subsidiary, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 5 of the Indenture
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 5 of the Indenture, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guaranteeing Subsidiary for the purpose of this Subsidiary
Guarantee.
(j) The Guaranteeing Subsidiary shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under this Subsidiary Guarantee.
(k) Pursuant to Section 1201 of the Indenture, after giving effect to
all other contingent and fixed liabilities that are relevant under any
applicable Bankruptcy or fraudulent conveyance laws, and after giving effect to
any collections from, rights to receive contribution from or payments made by or
on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under Article
12 of the Indenture, this new Subsidiary Guarantee shall be limited to the
maximum amount permissible such that the obligations of such Guaranteeing
Subsidiary under this Subsidiary Guarantee will not constitute a fraudulent
transfer or conveyance.
(l) The Subsidiary Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation or reorganization, should the Company become insolvent or make
an assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Securities
are, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee on the Securities and
Subsidiary Guarantee, whether as a "voidable preference", "fraudulent transfer"
or otherwise, all as though such payment or performance had not been made. In
the event that any payment or any part thereof, is rescinded, reduced, restored
or returned, the Security shall, to the fullest extent permitted by law, be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
(m) In case any provision of this Subsidiary Guarantee shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
(n) This Subsidiary Guarantee shall be a general unsecured obligation
of such Guaranteeing Subsidiary, ranking pari passu with any other future senior
Indebtedness of the Guaranteeing Subsidiary, if any.
(o) Each payment to be made by the Guaranteeing Subsidiary in respect
of this Subsidiary Guarantee shall be made without set-off, counterclaim,
reduction or diminution of any kind or nature.
SECTION 3. Execution and Delivery. The Guaranteeing Subsidiary agrees
that the Subsidiary Guarantee shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation of this
Subsidiary Guarantee.
SECTION 4. Releases. Notwithstanding Section 3 above, if:
(i) the Subsidiary Guarantor ceases to be a Restricted Subsidiary
in compliance with the applicable provisions of the Indenture;
(ii) the Securities are defeased and discharged pursuant to
Section 1502 of the Indenture; or
(iii) all or substantially all of the assets of the Subsidiary
Guarantor or all of the Capital Stock of the Subsidiary Guarantor
are sold (including by issuance, amalgamation, merger,
consolidation or otherwise) by the Company or any Restricted
Subsidiary in a transaction constituting an Asset Disposition and
in which the Net Available Proceeds from such Assets Disposition
are applied in accordance with requirements of Section 1013 of
the Indenture,
then, in each case of (i), (ii) or (iii), upon delivery by the Company
of an Officers' Certificate and an Opinion of Counsel stating that all
conditions precedent contained in the Indenture provided for relating to the
release of the Subsidiary Guarantor from its obligations under the Subsidiary
Guarantee and Article Twelve of the Indenture have been complied with, the
Subsidiary Guarantor or the Person acquiring such assets (in the event of a sale
or other disposition of all or substantially all of the assets or Capital Stock
of such Subsidiary Guarantor) shall be released and discharged of its
obligations under the Subsidiary Guarantee and under Article Twelve of the
Indenture without any action on the part of the Trustee or any Holder, and the
Trustee shall execute any documents reasonably required in order to acknowledge
the release of the Subsidiary Guarantor from its obligations under this
Subsidiary Guarantee endorsed on the Securities and under Article Twelve of the
Indenture.
SECTION 5. No Recourse Against Others. No past, present or future
director, officer, employee, incorporator, shareholder or agent of the
Guaranteeing Subsidiary, as such, shall have any liability for any obligations
of the Company or any Subsidiary under the Securities, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Securities by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Securities. Such waiver may not be effective to waive liabilities under
the federal securities laws and it is the view of the Commission that such a
waiver is against public policy.
SECTION 6. Governing Law. This Seventh Supplemental Indenture shall be
governed by and construed in accordance with the laws of the State of New York,
as applied to contracts made and performed within the State of New York.
SECTION 7. Counterparts. This Seventh Supplemental Indenture may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 8. Severability. In case any provision in this Seventh
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 9. Ratification. Except as expressly amended hereby, each
provision of the Indenture shall remain in full force and effect and, as amended
hereby, the Indenture is in all respects agreed to, ratified and confirmed by
each of the Issuer, the Prior Guarantors, the Guaranteeing Subsidiary and the
Trustee.
SECTION 10. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Seventh Supplemental
Indenture. The statements and recitals herein are deemed to be those of the
Issuer and the Guaranteeing Subsidiary and not of the Trustee.
SECTION 11. Successors and Assigns. All covenants and agreements in
this Seventh Supplemental Indenture by the Issuer, the Prior Guarantors, the
Guaranteeing Subsidiary, the Trustee and the Holders shall bind their respective
successors and assigns, whether so expressed or not.
SECTION 12. Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first above written.
Xxxxxxxxx Lumber Co. Ltd.
By:
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Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Chief Operating Officer
By:
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Name: D. Xxxxxxx Xxxxxxxxx
Title: Executive Vice-President
Xxxxxxxxx Engineered Corp.
By:
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Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Secretary
Xxxxxxxxx Engineered (USA), LLC
By:
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Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Secretary
Xxxxxxxxx Engineered Canada Limited
Partnership
By:
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Xxxxxxxxx Lumber Co. Ltd., as
General Partner
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
Xxxxxxxxx Corp.
By:
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Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
The Bank of New York, as Trustee
By:
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Authorized Signatory
