SECOND SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of September 22, 2004, among Xxxxxxxxx Engineered (USA), LLC (the "Guaranteeing
Subsidiary"), a subsidiary of Xxxxxxxxx Lumber Co. Ltd., a corporation
incorporated under the laws of the Province of British Columbia (the "Company"),
the Company, Xxxxxxxxx Engineered Corp., a subsidiary of the Company (the "Prior
Guarantor"), and The Bank of New York, as Trustee under the Indenture referred
to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture, dated as of March 3, 2004 providing for the issuance of an
unlimited aggregate principal amount of Senior Notes due March 15, 2014 (the
"Notes"), as supplemented by the First Supplemental Indenture, dated as of May
19, 2004 among the Prior Guarantor, the Company and the Trustee (as
supplemented, the "Indenture");
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 Notes and
the Indenture on the terms and conditions set forth herein (the "Subsidiary
Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
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 Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees as
follows:
(a) Along with all Guarantors named in the Indenture, to jointly
and severally unconditionally guarantee to each Holder of a Note
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 Notes or the obligations of the Company hereunder
or thereunder, that:
(i) the principal of and interest, premium and Special
Interest, if any, on the Notes will be promptly paid in full
when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest
on the Notes, if any, if lawful, and
all other obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof;
and
(ii) in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due
of any amount so guaranteed or any performance so guaranteed for
whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes
or the Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any
provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of
a guarantor.
(c) The obligations of the Guaranteeing Subsidiary under this
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 this
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 and Special Interest, if any) or interest on a Note, 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 Note, 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 Notes, to collect interest on the
Notes, or to enforce or exercise any other right or remedy with respect
to the Notes, the Guaranteeing Subsidiary shall pay to the Trustee for
the account of the Holder, 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 of payment, filing of claims with a court in the event of
insolvency or bankruptcy of
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the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever.
(f) This Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes, the
Indenture and this Supplemental Indenture, and the Guaranteeing
Subsidiary accepts all obligations of a Guarantor under the Indenture.
(g) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors (including the
Guaranteeing Subsidiary), or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
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 not be entitled to any
right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
(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
6 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 6 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 10.02 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
Guarantor in respect of the obligations of such other Guarantor under
Article 10 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) This 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, reorganization, should the Company
become insolvent or make an
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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 Notes are, pursuant to applicable law, rescinded
or reduced in amount, or must otherwise be restored or returned by any
obligee on the Notes 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
Note 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.
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 Note a notation of this Subsidiary Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) Except as otherwise provided in Section 10.05 of the
Indenture, the Guaranteeing Subsidiary may not sell or otherwise
dispose of all or substantially all of its assets to, or consolidate,
amalgamate with or merge with or into (whether or not such Guaranteeing
Subsidiary is the surviving Person) another Person other than the
Company or another Guarantor unless:
(b) immediately after giving effect to that transaction, no
Default or Event of Default exists; and
(c) either:
(1) the Guaranteeing Subsidiary is the surviving Person, or
the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such
consolidation, amalgamation or merger assumes all the
obligations of the Guaranteeing Subsidiary under the Indenture,
this Subsidiary Guarantee and the Registration Rights Agreement
pursuant to a supplemental indenture satisfactory to the Trustee
and completes all other required documentation; or
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(2) the Net Proceeds of such sale or other disposition are
applied in accordance with the provisions of Section 4.10 of the
Indenture;
(d) In case of any such consolidation, amalgamation, merger,
sale or conveyance and upon the assumption by the successor Person
(where applicable), by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of this
Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of the Indenture to
be performed by the Guaranteeing Subsidiary, such successor Person
shall succeed to and be substituted for the Guaranteeing Subsidiary
with the same effect as if it had been named herein as a Guaranteeing
Subsidiary. Such successor Person thereupon may cause to be signed the
Subsidiary Guarantee to be endorsed upon all of the Notes issuable
hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. The Subsidiary Guarantee so issued shall
in all respects have the same legal rank and benefit under the
Indenture as the Subsidiary Guarantees theretofore and thereafter
issued in accordance with the terms of the Indenture as though all of
such Subsidiary Guarantees had been issued at the date of the execution
hereof.
(e) Except as set forth in Articles 4 and 5 of the Indenture,
and notwithstanding clauses (a) and (b) above, nothing contained in the
Indenture or in any of the Notes shall prevent any consolidation,
amalgamation or merger of a Guaranteeing Subsidiary with or into the
Company or another Guarantor, or shall prevent any sale or conveyance
of the property of the Guaranteeing Subsidiary as an entirety or
substantially as an entirety to the Company or another Guarantor.
5. RELEASES.
(a) In the event of a sale (including by way of merger,
amalgamation or consolidation in compliance with Section 5.01 of the
Indenture) of all the capital stock of the Guaranteeing Subsidiary to a
Person that is not (either before or after giving effect to such
transaction) the Company or a Restricted Subsidiary then the
Guaranteeing Subsidiary (in the event of a sale or other disposition,
by way of merger, consolidation or otherwise, of all of the capital
stock of such Guaranteeing Subsidiary) will be released and relieved of
any obligations under this Subsidiary Guarantee; provided, that the
sale complies with Section 4.10 of the Indenture. Further, if the
Company redesignates any Restricted Subsidiary that is a Guarantor as
an Unrestricted Subsidiary in accordance with Section 4.17 of the
Indenture then the Guaranteeing Subsidiary will be released and
relieved of any obligations under this Subsidiary Guarantee. Upon
delivery by the Company to the Trustee of an Officers' Certificate and
an Opinion of Counsel to the effect that such sale or other disposition
was made by the Company in accordance with the provisions of the
Indenture, including without limitation Section 4.10 of the Indenture,
the Trustee shall execute any documents reasonably required in order to
evidence the release of the Guaranteeing Subsidiary from its
obligations under this Subsidiary Guarantee.
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(b) The Guaranteeing Subsidiary not released from its
obligations under this Subsidiary Guarantee shall remain liable for the
full amount of principal of and interest on the Notes and for the other
obligations of the Guaranteeing Subsidiary under the Indenture as
provided in Article 10 thereof.
6. 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 Notes, 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 Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes. 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.
7. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS SUPPLEMENTAL INDENTURE, THE INDENTURE, THE NOTES AND THE
SUBSIDIARY GUARANTEES.
8. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
11. SUBROGATION. The Guaranteeing Subsidiary shall be subrogated to all
rights of Holders of Notes against the Company in respect of any amounts paid by
the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof;
provided, however, that, if an Event of Default has occurred and is continuing,
the Guaranteeing Subsidiary shall not be entitled to enforce or receive any
payments arising out of, or based upon, such right of subrogation until all
amounts then due and payable by the Company under the Indenture or the Notes
shall have been paid in full.
12. BENEFITS ACKNOWLEDGED. The Guaranteeing Subsidiary acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated by the Indenture and this Supplemental Indenture and
that the guarantee and waivers made by it pursuant to this Subsidiary Guarantee
are knowingly made in contemplation of such benefits.
13. SUCCESSORS. All agreements of the Guaranteeing Subsidiary in this
Supplemental Indenture shall bind its Successors, except as otherwise provided
in Section
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2(k) hereof or elsewhere in this Supplemental Indenture. All agreements of the
Trustee in this Supplemental Indenture shall bind its successors.
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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: /s/ Xxxxxxxxx Xxxxxxxxx
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Name: Xxxxxxxxx Xxxxxxxxx
Title: Chief Operating Officer
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Executive Vice-President
Xxxxxxxxx Engineered Corp.
By: /s/ Xxxxxxxxx Xxxxxxxxx
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Name: Xxxxxxxxx Xxxxxxxxx
Title: Secretary
Xxxxxxxxx Engineered (USA), LLC
By: /s/ Xxxxxxxxx Xxxxxxxxx
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Name: Xxxxxxxxx Xxxxxxxxx
Title: Secretary
The Bank of New York, as Trustee
By: /s/ Xxxxxxxx Xxxxxxxx-Coward
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Authorized Signatory
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