Document:

exv10w25

 

     FIRST SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of
May 19, 2004, among Ainsworth Engineered Corp. (the “Guaranteeing Subsidiary”),
a subsidiary of Ainsworth Lumber Co. Ltd., a corporation incorporated under the
laws of the Province of British Columbia (the “Company”), the Company, 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 (the “Indenture”), dated as of May 19, 2004 providing for the
issuance of an unlimited aggregate principal amount of Senior Notes due March
15, 2014 (the “Notes”);

     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

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(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 the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever.

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     (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 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

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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

     (2) the Net Proceeds of such sale or other disposition are
applied in accordance with the provisions of Section 4.10 of the
Indenture;

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     (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.

     (b) The Guaranteeing Subsidiary not released from its obligations
under this Subsidiary Guarantee shall remain liable for the full amount
of principal of

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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 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.

	 	 	 	 	 
	Dated: May 19, 2004,
	 	 	 	 
	

	 	 	 	 
	 	 	Ainsworth Lumber Co. Ltd.
	

	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	Ainsworth Engineered Corp.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	The Bank of New York, as Trustee
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Authorized Signatory

7exv10w27

 

AINSWORTH LUMBER CO. LTD.

6.750% Senior Notes due March 15, 2014

Exchange and Registration Rights Agreement

May 19, 2004

Goldman, Sachs & Co.

85 Broad Street

New York, New York 10004

Ladies and Gentlemen:

     Ainsworth Lumber Co. Ltd., a corporation amalgamated under the laws of the
Province of British Columbia (the “Company”), proposes to issue and sell to the
Purchaser (as defined herein) upon the terms set forth in the Purchase
Agreement (as defined herein) US$110,000,000 aggregate principal amount of its
6.750% Senior Notes due March 15, 2014. As an inducement to the Purchaser to
enter into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Purchaser thereunder, the Company agrees with the Purchaser
for the benefit of holders (as defined herein) from time to time of the
Transfer Restricted Securities (as defined herein) as follows:

	1.	 	Certain Definitions. For purposes of this Exchange and Registration
Rights Agreement, the following terms shall have the following respective
meanings:

     “Base Interest” shall mean the interest that would otherwise accrue on the
Securities under the terms thereof and the Indenture, without giving effect to
the provisions of this Agreement.

     The term “broker-dealer” shall mean any broker or dealer registered with
the Commission under the Exchange Act.

     “Canadian Securities Laws” shall mean securities legislation promulgated
by any province of Canada and the rules and regulations thereunder.

     “Closing Date” shall mean the date on which the Securities are initially
issued.

     “Commission” shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.

     “Effective Time,” in the case of (i) an Exchange Registration, shall mean
the time and date as of which the Commission declares the Exchange Registration
Statement effective or as of which the Exchange Registration Statement
otherwise becomes effective and (ii) a Shelf Registration, shall mean the time
and date as of which the Commission declares the Shelf

 

 

Registration Statement effective or as of which the Shelf Registration
Statement otherwise becomes effective.

     “Electing Holder” shall mean any holder of Transfer Restricted Securities
that has returned a completed and signed Notice and Questionnaire to the
Company in accordance with Section 3(d)(ii) or 3(d)(iii) hereof.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, or any
successor thereto, as the same shall be amended from time to time.

     “Exchange Offer” shall have the meaning assigned thereto in Section 2(a)
hereof.

     “Exchange Registration” shall have the meaning assigned thereto in Section
3(c) hereof.

     “Exchange Registration Statement” shall have the meaning assigned thereto
in Section 2(a) hereof.

     “Exchange Securities” shall have the meaning assigned thereto in Section
2(a) hereof.

     The term “holder” shall mean the Purchaser and other persons who acquire
Transfer Restricted Securities from time to time (including any successors or
assigns), in each case for so long as such person owns any Transfer Restricted
Securities; provided that for purposes of any obligation of the Company to give
notice to any holders, “holder” shall mean the record owner of Transfer
Restricted Securities.

     “Indenture” shall mean the Indenture dated as of May 19, 2004 among the
Company and The Bank of New York, as Trustee (the “Trustee”), as the same shall
be amended from time to time.

     “Notice and Questionnaire” means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Exhibit A
hereto.

     The term “person” shall mean a corporation, association, partnership,
organization, business, individual, government or political subdivision thereof
or governmental agency.

     “Purchase Agreement” shall mean the Purchase Agreement, dated as of May
11, 2004 between the Purchaser and the Company relating to the Securities.

     “Purchaser” shall mean the Goldman, Sachs & Co.

     “Registration Default” shall have the meaning assigned thereto in Section
2(c) hereof.

     “Registration Expenses” shall have the meaning assigned thereto in Section
4 hereof.

     “Resale Period” shall have the meaning assigned thereto in Section 2(a)
hereof.

     “Restricted Holder” shall mean (i) a holder that is an affiliate of the
Company within the meaning of Rule 405, (ii) a holder who acquires Exchange
Securities outside the ordinary course of such holder’s business, (iii) a
holder who has arrangements or understandings with any person to participate in
the Exchange Offer for the purpose of distributing Exchange Securities and (iv)

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a holder that is a broker-dealer, but only with respect to Exchange
Securities received by such broker-dealer pursuant to an Exchange Offer in
exchange for Transfer Restricted Securities acquired by the broker-dealer
directly from the Company.

     “Rule 144,” “Rule 405” and “Rule 415” shall mean, in each case, such rule
promulgated under the Securities Act (or any successor provision), as the same
shall be amended from time to time.

     “Securities” shall mean, collectively, the US$110,000,000 aggregate
principal amount of 6.750% Senior Notes due March 15, 2014 of the Company to be
issued and sold to the Purchaser on the Closing Date, and securities issued in
exchange therefor or in lieu thereof pursuant to the Indenture.

     “Securities Act” shall mean the Securities Act of 1933, or any successor
thereto, as the same shall be amended from time to time.

     “Shelf Registration” shall have the meaning assigned thereto in Section
2(b) hereof.

     “Shelf Registration Statement” shall have the meaning assigned thereto in
Section 2(b) hereof.

     “Special Interest” shall have the meaning assigned thereto in Section 2(c)
hereof.

     “Transfer Restricted Securities” shall mean each Security; until:

	 	(1)	 	the date on which such Security has been exchanged by a
Person other than a broker-dealer for an Exchange Security in the
Exchange Offer;
	 
	 	(2)	 	following the exchange by a broker-dealer in the Exchange
Offer of a Security for an Exchange Security, the date on which such
Exchange Security is sold to a purchaser who receives from such
broker-dealer on or prior to the date of such sale a copy of the
prospectus contained in the Exchange Registration Statement;
	 
	 	(3)	 	the date on which such Security has been effectively
registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement;
	 
	 	(4)	 	the date on which such Security is distributed to the public
pursuant to Rule 144(k) under the Securities Act; or
	 
	 	(5)	 	such Security shall cease to be outstanding.

     “Trust Indenture Act” shall mean the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
all as the same shall be amended from time to time.

     Unless the context otherwise requires, any reference herein to a “Section”
or “clause” refers to a Section or clause, as the case may be, of this Exchange
and Registration Rights Agreement, and the words “herein,” “hereof” and
“hereunder” and other words of similar import

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refer to this Exchange and Registration Rights Agreement as a whole and
not to any particular Section or other subdivision.

	2.	 	Registration Under the Securities Act.

(a) Except as set forth in Section 2(b) below, the Company agrees to file
under the Securities Act on or prior to June 30, 2004, a registration
statement relating to an offer to exchange (such registration statement,
the “Exchange Registration Statement”, and such offer, the “Exchange
Offer”) any and all of the Securities for a like aggregate principal
amount of debt securities issued by the Company, which debt securities
are substantially identical to the Securities (and are entitled to the
benefits of a trust indenture which is substantially identical to the
Indenture or is the Indenture and which has been qualified under the
Trust Indenture Act), except that they have been registered pursuant to
an effective registration statement under the Securities Act and do not
contain provisions for the additional interest contemplated in Section
2(c) below (such new debt securities hereinafter called “Exchange
Securities”). The Exchange Securities will be issued as evidence of the
same continuing indebtedness of the Company and will not constitute the
creation of new indebtedness. The Company agrees to use its best efforts
to cause the Exchange Registration Statement to become effective under
the Securities Act on or prior to 180 days after March 3, 2004 and the
Company further agrees to use its commercially reasonable efforts to
cause the Exchange Registration Statement to become effective under the
Securities Act as promptly as reasonably possible. The Exchange Offer
will be registered under the Securities Act on the appropriate form and
will comply with all applicable tender offer rules and regulations under
the Exchange Act. The Company further agrees to use its best efforts to
commence and complete the Exchange Offer on or prior to 45 business days
after such registration statement has become effective, hold the Exchange
Offer open for at least 30 days and exchange Exchange Securities for all
Transfer Restricted Securities that have been properly tendered and not
withdrawn on or prior to the expiration of the Exchange Offer. The
Exchange Offer will be deemed to have been “completed” only if the debt
securities received by holders other than Restricted Holders in the
Exchange Offer for Transfer Restricted Securities are, upon receipt,
transferable by each such holder without restriction under the Securities
Act and the Exchange Act and without material restrictions under blue sky
or securities laws of a substantial majority of the States of the United
States. The Exchange Offer shall be deemed to have been completed upon
the earlier to occur of (i) the Company having exchanged the Exchange
Securities for all outstanding Transfer Restricted Securities pursuant to
the Exchange Offer and (ii) the Company having exchanged, pursuant to the
Exchange Offer, Exchange Securities for all Transfer Restricted
Securities that have been properly tendered and not withdrawn before the
expiration of the Exchange Offer, which shall be on a date that is at
least 30 days following the commencement of the Exchange Offer. The
Company agrees (x) to include in the Exchange Registration Statement a
prospectus for use in any resales by any holder of Exchange Securities
that is a broker-dealer that has acquired such Transfer Restricted
Securities for its own account as a result of market-making activities or
other trading activities and not directly from the Company, and (y) to
keep such Exchange Registration Statement effective for a period (the
“Resale Period”) beginning when Exchange Securities are first issued in
the Exchange Offer and ending upon the earlier of the expiration of the
180th day after the Exchange Offer has been completed or such time as
such broker-dealers no longer own

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any Transfer Restricted Securities, other than Transfer Restricted
Securities acquired from the Company. With respect to such Exchange
Registration Statement, such holders shall have the benefit of the rights
of indemnification and contribution set forth in Sections 6(a), (c), (d)
and (e) hereof.

(b) If (i) on or prior to the time the Exchange Offer is completed
existing Commission interpretations are changed such that the debt
securities received by holders other than Restricted Holders in the
Exchange Offer for Transfer Restricted Securities are not or would not
be, upon receipt, transferable by each such holder without restriction
under the Securities Act, (ii) the Exchange Offer has not been completed
within the applicable time period set forth in section 2(a) hereof or
(iii) the Exchange Offer is not available to any holder of the
Securities, the Company and the Guarantor shall, in lieu of (or, in the
case of clause (iii), in addition to) conducting the Exchange Offer
contemplated by Section 2(a), file under the Securities Act on or prior
to 60 days after the time such obligation to file arises, a “shelf”
registration statement providing for the registration of, and the sale on
a continuous or delayed basis by the holders of, all of the Transfer
Restricted Securities, pursuant to Rule 415 or any similar rule that may
be adopted by the Commission (such filing, the “Shelf Registration” and
such registration statement, the “Shelf Registration Statement”). The
Company agrees to use its best efforts (x) to cause the Shelf
Registration Statement to become or be declared effective on or prior to
150 days after such obligation to file arises and to keep such Shelf
Registration Statement continuously effective for a period ending on the
earlier of the second anniversary of the Effective Time or such time as
there are no longer any Transfer Restricted Securities outstanding,
provided, however, that no holder shall be entitled to be named as a
selling securityholder in the Shelf Registration Statement or to use the
prospectus forming a part thereof for resales of Transfer Restricted
Securities unless such holder is an Electing Holder, and (y) after the
Effective Time of the Shelf Registration Statement, promptly upon the
request of any holder of Transfer Restricted Securities that is not then
an Electing Holder, to take any action reasonably necessary to enable
such holder to use the prospectus forming a part thereof for resales of
Transfer Restricted Securities, including, without limitation, any action
necessary to identify such holder as a selling securityholder in the
Shelf Registration Statement, provided, however, that nothing in this
clause (y) shall relieve any such holder of the obligation to return a
completed and signed Notice and Questionnaire to the Company in
accordance with Section 3(d)(iii) hereof. The Company further agrees to
supplement or make amendments to the Shelf Registration Statement, as and
when required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration
Statement or by the Securities Act or rules and regulations thereunder
for shelf registration, and the Company agrees to furnish to each
Electing Holder copies of any such supplement or amendment prior to its
being used or promptly following its filing with the Commission.

(c) In the event that (i) the Company has not filed the Exchange
Registration Statement or Shelf Registration Statement on or prior to the
date on which such registration statement is required to be filed
pursuant to Section 2(a) or 2(b), respectively, or (ii) such Exchange
Registration Statement or Shelf Registration Statement has not become
effective or been declared effective by the Commission on or prior to the
date on which such registration statement is required to become or be
declared effective pursuant to Section 2(a) or 2(b), respectively, or
(iii) the Exchange Offer has not been completed

5

 

within 45 business days after the initial effective date of the Exchange
Registration Statement relating to the Exchange Offer (if the Exchange
Offer is then required to be made) or (iv) any Exchange Registration
Statement or Shelf Registration Statement required by Section 2(a) or
2(b) hereof is filed and declared effective but thereafter ceases to be
effective or usable in connection with resales of Transfer Restricted
Securities during the time periods specified herein (each such event
referred to in clauses (i) through (iv), a “Registration Default” and
each period during which a Registration Default has occurred and is
continuing, a “Registration Default Period”), then, as liquidated damages
for such Registration Default, subject to the provisions of Section 9(b),
special interest (“Special Interest”), in addition to the Base Interest
shall accrue, with respect to the first 90-day period immediately
following the occurrence of the first Registration Default in an amount
equal to US$.05 per week per US$1,000 principal amount of Securities held
by such Holder. The amount of the Special Interest will increase by an
additional US$.05 per week per US$1,000 principal amount of Securities
with respect to each subsequent 90 day Registration Default Period until
all Registration Defaults have been cured, up to a maximum amount of
Special Interest for all Registration Defaults of US$.50 per week per
US$1,000 principal amount of Securities. The Company shall not be
required to pay Special Interest for more than one Registration Default
at any given time. Following the cure of all Registration Defaults, the
accrual of Special Interest will cease. The Company shall pay all
Special Interest, if any, in the manner and on the dates specified in the
Indenture.

(d) The Company shall use its best efforts to take all actions necessary
or advisable to be taken by it to ensure that the transactions
contemplated herein are effected as so contemplated.

(e) Any reference herein to a registration statement as of any time shall
be deemed to include any document incorporated, or deemed to be
incorporated, therein by reference as of such time and any reference
herein to any post-effective amendment to a registration statement as of
any time shall be deemed to include any document incorporated, or deemed
to be incorporated, therein by reference as of such time.

	3.	 	Registration Procedures.

     If the Company files a registration statement pursuant to Section 2(a) or
Section 2(b), the following provisions shall apply:

(a) At or before the Effective Time of the Exchange Offer or the Shelf
Registration, as the case may be, the Company shall qualify the Indenture
under the Trust Indenture Act.

(b) In the event that qualification of the Indenture under the Trust
Indenture Act would require the appointment of a new trustee under the
Indenture, the Company shall appoint a new trustee thereunder pursuant to
the applicable provisions of the Indenture.

(c) In connection with the Company’s obligations with respect to the
registration of Exchange Securities as contemplated by Section 2(a) (the
“Exchange Registration”), if applicable, the Company shall, as soon as
practicable (or as otherwise specified):

6

 

	 	(i)	 	prepare and file with the Commission on or prior
to June 30, 2004, an Exchange Registration Statement on any
form which may be utilized by the Company and which shall
permit the Exchange Offer and resales of Exchange Securities
by broker-dealers that have not acquired Transfer Restricted
Securities directly from the Company during the Resale Period
to be effected as contemplated by Section 2(a), and use its
best efforts to cause such Exchange Registration Statement to
become effective on or prior to 180 days after March 3, 2004;
	 
	 	(ii)	 	as soon as practicable prepare and file with the
Commission such amendments and supplements to such Exchange
Registration Statement and the prospectus included therein as
may be necessary to effect and maintain the effectiveness of
such Exchange Registration Statement for the periods and
purposes contemplated in Section 2(a) hereof and as may be
required by the applicable rules and regulations of the
Commission and the instructions applicable to the form of such
Exchange Registration Statement, and promptly provide each
broker-dealer holding Exchange Securities not acquired
directly from the Company with such number of copies of the
prospectus included therein (as then amended or supplemented),
in conformity in all material respects with the requirements
of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder, as such
broker-dealer reasonably may request prior to the expiration
of the Resale Period, for use in connection with resales of
Exchange Securities;
	 
	 	(iii)	 	promptly notify each broker-dealer that has
requested or, to the knowledge of the Company, received copies
of the prospectus included in such registration statement, and
confirm such advice in writing, (A) in cases where a
broker-dealer has specifically requested such information,
when such Exchange Registration Statement or the prospectus
included therein or any prospectus amendment or supplement or
post-effective amendment has been filed, (B) with respect to
such Exchange Registration Statement or any post-effective
amendment, when the same has become effective, (C) in cases
where a broker-dealer has specifically requested such
information, of any comments by the Commission and by the blue
sky or securities commissioner or regulator of any state or
province with respect thereto or any request by the Commission
for amendments or supplements to such Exchange Registration
Statement or prospectus or for additional information, (D) of
the issuance by the Commission of any stop order suspending
the effectiveness of such Exchange Registration Statement or
the initiation or threatening of any proceedings for that
purpose, (E) if at any time the representations and warranties
of the Company contemplated by Section 5 cease to be true and
correct in all material respects, (F) of the receipt by the
Company of any notification with respect to the suspension of
the qualification of the Exchange Securities for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose, or (G) at any time during the
Resale Period when a prospectus is required to be delivered
under the Securities Act, that such Exchange Registration

7

 

	 	 	 	Statement, prospectus, prospectus amendment or supplement or
post-effective amendment does not conform in all material
respects to the applicable requirements of the Securities Act
and the Trust Indenture Act and the rules and regulations of
the Commission thereunder or any applicable Canadian
Securities Laws or contains an untrue statement of a material
fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
	 
	 	(iv)	 	in the event that the Company would be required,
pursuant to Section 3(c)(iii)(F) above, to notify any
broker-dealers holding Exchange Securities, without delay
prepare and furnish to each such holder a reasonable number of
copies of a prospectus supplemented or amended so that, as
thereafter delivered to purchasers of such Exchange Securities
during the Resale Period, such prospectus shall conform in all
material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and shall not contain
an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances then existing;
	 
	 	(v)	 	use its best efforts to obtain the withdrawal of
any order suspending the effectiveness of such Exchange
Registration Statement or any post-effective amendment thereto
at the earliest practicable date;
	 
	 	(vi)	 	use its best efforts to (A) register or qualify
the Exchange Securities under the securities laws or blue sky
laws of such jurisdictions as are contemplated by Section 2(a)
and ensure that the Exchange Securities can be offered in a
private placement in each of the provinces of Canada where
holders are resident on or prior to the commencement of the
Exchange Offer, (B) keep such registrations or qualifications
in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such
jurisdictions until the expiration of the Resale Period and
(C) take any and all other actions as may be reasonably
necessary or advisable to enable each broker-dealer holding
Exchange Securities not acquired directly from the Company to
consummate the disposition thereof in such jurisdictions;
provided, however, that the Company shall not be required for
any such purpose to (1) qualify as a foreign corporation in
any jurisdiction wherein it would not otherwise be required to
qualify but for the requirements of this Section 3(c)(vi), (2)
consent to general service of process in any such
jurisdiction, (3) make any changes to its constating documents
or by-laws or any agreement between it and its shareholders or
(4) file a prospectus in any province or territory of Canada
to make the Transfer Restricted Securities or Exchange
Securities freely tradeable in Canada;

8

 

	 	(vii)	 	use its best efforts to obtain the consent or
approval of each governmental agency or authority, whether
federal, state, provincial or local, which may be required to
effect the Exchange Registration, the Exchange Offer and the
offering and sale of Exchange Securities by broker-dealers
during the Resale Period;
	 
	 	(viii)	 	provide a CUSIP number for all Exchange Securities, not
later than the applicable Effective Time; and
	 
	 	(ix)	 	comply with all applicable rules and regulations
of the Commission and make generally available to its
securityholders as soon as practicable but no later than
eighteen months after the effective date of such Exchange
Registration Statement, an earning statement of the Company
and its subsidiaries complying with Section 11(a) of the
Securities Act (including, at the option of the Company, Rule
158 thereunder).

(d) In connection with the Company’s obligations with respect to the
Shelf Registration, if applicable, the Company shall, as soon as
practicable (or as otherwise specified):

	 	(i)	 	prepare and file with the Commission, within the
time periods specified in Section 2(b), a Shelf Registration
Statement on any form which may be utilized by the Company and
which shall register all of the Transfer Restricted Securities
for resale by the holders thereof in accordance with such
method or methods of disposition as may be specified by such
of the holders as, from time to time, may be Electing Holders
and use its best efforts to cause such Shelf Registration
Statement to become effective within the time periods
specified in Section 2(b);
	 
	 	(ii)	 	not less than 30 calendar days prior to the
Effective Time of the Shelf Registration Statement, mail the
Notice and Questionnaire to the holders of Transfer Restricted
Securities; provided that no holder shall be entitled to be
named as a selling securityholder in the Shelf Registration
Statement as of the Effective Time, and no holder shall be
entitled to use the prospectus forming a part thereof for
resales of Transfer Restricted Securities at any time, unless
such holder has returned a completed and signed Notice and
Questionnaire to the Company by the deadline for response set
forth therein; and provided, further, holders of Transfer
Restricted Securities shall have at least 28 calendar days
from the date on which the Notice and Questionnaire is first
mailed to such holders to return a completed and signed Notice
and Questionnaire to the Company;
	 
	 	(iii)	 	after the Effective Time of the Shelf
Registration Statement, upon the request of any holder of
Transfer Restricted Securities that is not then an Electing
Holder, promptly send a Notice and Questionnaire to such
holder; provided that the Company shall not be required to
take any action to name such holder as a selling
securityholder in the Shelf Registration Statement or to
enable such holder to use the prospectus forming a part
thereof for resales of Transfer Restricted Securities until 30
days after

9

 

	 	 	 	such holder has returned a completed and signed Notice and
Questionnaire to the Company;
	 
	 	(iv)	 	as soon as practicable prepare and file with the
Commission such amendments and supplements to such Shelf
Registration Statement and the prospectus included therein as
may be necessary to effect and maintain the effectiveness of
such Shelf Registration Statement for the period specified in
Section 2(b) hereof and as may be required by the applicable
rules and regulations of the Commission and the instructions
applicable to the form of such Shelf Registration Statement,
and furnish to the Electing Holders copies of any such
supplement or amendment simultaneously with or prior to its
being used or filed with the Commission;
	 
	 	(v)	 	comply with the provisions of the Securities Act
and any applicable Canadian Securities Laws with respect to
the disposition of all of the Transfer Restricted Securities
covered by such Shelf Registration Statement in accordance
with the intended methods of disposition by the Electing
Holders provided for in such Shelf Registration Statement;
	 
	 	(vi)	 	provide (A) the Electing Holders, (B) the
underwriters (which term, for purposes of this Exchange and
Registration Rights Agreement, shall include a person deemed
to be an underwriter within the meaning of Section 2(a)(11) of
the Securities Act), if any, thereof, (C) any sales or
placement agent therefor, (D) counsel for any such underwriter
or agent and (E) not more than one counsel for all the
Electing Holders, the opportunity to review and provide
comments in connection with the preparation of such Shelf
Registration Statement, each prospectus included therein or
filed with the Commission and each amendment or supplement
thereto;
	 
	 	(vii)	 	for a reasonable period prior to the filing of
such Shelf Registration Statement, and throughout the period
specified in Section 2(b), make available during reasonable
business hours at the Company’s principal place of business or
such other reasonable place for inspection by the persons
referred to in Section 3(d)(vi) who shall certify to the
Company that they have a current intention to sell the
Transfer Restricted Securities pursuant to the Shelf
Registration such financial and other information and books
and records of the Company, and cause the officers, employees,
counsel and independent chartered accountants of the Company
to respond to such inquiries, as shall be reasonably
necessary, in the judgment of the respective counsel referred
to in such Section, to conduct a reasonable investigation
within the meaning of Section 11 of the Securities Act;
provided, however, that each such party shall be required to
agree in writing maintain in confidence and not to disclose to
any other person any information or records reasonably
designated by the Company as being confidential, until such
time as (A) such information becomes a matter of public record
(whether by virtue of its inclusion in such Shelf Registration
Statement or otherwise), or (B) such person shall be required
so to

10

 

	 	 	 	disclose such information pursuant to a subpoena or order of
any court or other governmental agency or body having
jurisdiction over the matter (subject to the requirements of
such order, and only after such person shall have given the
Company prompt prior written notice of such requirement), or
(C) such information is required to be set forth in such
Shelf Registration Statement or the prospectus included
therein or in an amendment to such Shelf Registration
Statement or an amendment or supplement to such prospectus in
order that such Shelf Registration Statement, prospectus,
amendment or supplement, as the case may be, complies with
applicable requirements of the federal securities laws of the
United States and the rules and regulations of the Commission
and does not contain an untrue statement of a material fact
or omit to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
	 
	 	(viii)	 	promptly notify each of the Electing Holders, any sales or
placement agent therefor and any underwriter thereof (which
notification may be made through any managing underwriter that
is a representative of such underwriter for such purpose) and
confirm such advice in writing, (A) when such Shelf
Registration Statement or the prospectus included therein or
any prospectus amendment or supplement or post-effective
amendment has been filed, and, with respect to such Shelf
Registration Statement or any post-effective amendment, when
the same has become effective, (B) in cases where an Electing
Holder has specifically requested such information in writing,
of any comments by the Commission and by the blue sky or
securities commissioner or regulator of any state or province
with respect thereto or any request by the Commission for
amendments or supplements to such Shelf Registration Statement
or prospectus or for additional information, (C) of the
issuance by the Commission of any stop order suspending the
effectiveness of such Shelf Registration Statement or the
initiation or threatening of any proceedings for that purpose,
(D) if at any time the representations and warranties of the
Company contemplated by Section 3(d)(xvii) or Section 5 cease
to be true and correct in all material respects, (E) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Transfer Restricted
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, or (F) if at
any time when a prospectus is required to be delivered under
the Securities Act, that such Shelf Registration Statement,
prospectus, prospectus amendment or supplement or
post-effective amendment does not conform in all material
respects to the applicable requirements of the Securities Act
and the Trust Indenture Act and the rules and regulations of
the Commission thereunder or any applicable Canadian
Securities Laws or contains an untrue statement of a material
fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;

11

 

	 	(ix)	 	use its best efforts to obtain the withdrawal of
(A) any order suspending the effectiveness of such Shelf
Registration Statement or any post-effective amendment thereto
at the earliest practicable date or (B) the suspension of the
qualification of the Transfer Restricted Securities for sale
in any jurisdiction;
	 
	 	(x)	 	if requested by any managing underwriter or
underwriters, any placement or sales agent or any Electing
Holder, promptly incorporate in a prospectus supplement or
post-effective amendment such information as is required by
the applicable rules and regulations of the Commission and as
such managing underwriter or underwriters, such agent or such
Electing Holder specifies should be included therein relating
to the terms of the sale of such Transfer Restricted
Securities, including information with respect to the
principal amount of Transfer Restricted Securities being sold
by such Electing Holder or agent or to any underwriters, the
name and description of such Electing Holder, agent or
underwriter, the offering price of such Transfer Restricted
Securities and any discount, commission or other compensation
payable in respect thereof, the purchase price being paid
therefor by such underwriters and with respect to any other
terms of the offering of the Transfer Restricted Securities to
be sold by such Electing Holder or agent or to such
underwriters; and make all required filings of such prospectus
supplement or post-effective amendment promptly after
notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
	 
	 	(xi)	 	furnish to each Electing Holder, each placement
or sales agent, if any, therefor, each underwriter, if any,
thereof and the respective counsel referred to in Section
3(d)(vi) an executed copy (or, in the case of an Electing
Holder, a conformed copy) of such Shelf Registration
Statement, each such amendment and supplement thereto (in each
case including all exhibits thereto (in the case of an
Electing Holder of Transfer Restricted Securities, upon
request) and documents incorporated by reference therein) and
such number of copies of such Shelf Registration Statement
(excluding exhibits thereto and documents incorporated by
reference therein unless specifically so requested by such
Electing Holder, agent or underwriter, as the case may be) and
of the prospectus included in such Shelf Registration
Statement (including each preliminary prospectus and any
summary prospectus), in conformity in all material respects
with the applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of the
Commission thereunder and any applicable Canadian Securities
Laws, and such other documents, as such Electing Holder,
agent, if any, and underwriter, if any, may reasonably request
in order to facilitate the offering and disposition of the
Transfer Restricted Securities owned by such Electing Holder,
offered or sold by such agent or underwritten by such
underwriter and to permit such Electing Holder, agent and
underwriter to satisfy the prospectus delivery requirements of
the Securities Act and any applicable Canadian Securities
Laws; and the Company hereby consents to the use of such
prospectus

12

 

	 	 	 	(including such preliminary and summary prospectus) and any
amendment or supplement thereto by each such Electing Holder
and by any such agent and underwriter, in each case in the
form most recently provided to such person by the Company, in
connection with the offering and sale of the Transfer
Restricted Securities covered by the prospectus (including
such preliminary and summary prospectus) or any supplement or
amendment thereto provided, however, that the Company shall
not be required for any such purpose to file a prospectus in
any province or territory of Canada to make the Transfer
Restricted Securities or Exchange Securities freely tradable
in Canada;
	 
	 	(xii)	 	use its best efforts to (A) register or qualify
the Transfer Restricted Securities to be included in such
Shelf Registration Statement under such securities laws or
blue sky laws of such jurisdictions as any Electing Holder and
each placement or sales agent, if any, therefor and
underwriter, if any, thereof shall reasonably request and
ensure that any Transfer Restricted securities can be offered
in a private placement in all the provinces of Canada where
the holders are resident, (B) keep such registrations or
qualifications in effect and comply with such laws so as to
permit the continuance of offers, sales and dealings therein
in such jurisdictions during the period the Shelf Registration
is required to remain effective under Section 2(b) above and
for so long as may be necessary to enable any such Electing
Holder, agent or underwriter to complete its distribution of
Securities pursuant to such Shelf Registration Statement and
(C) take any and all other actions as may be reasonably
necessary or advisable to enable each such Electing Holder,
agent, if any, and underwriter, if any, to consummate the
disposition in such jurisdictions of such Transfer Restricted
Securities; provided, however, that the Company shall not be
required for any such purpose to (1) qualify as a foreign
corporation in any jurisdiction wherein it would not otherwise
be required to qualify but for the requirements of this
Section 3(d)(xii), (2) consent to general service of process
in any such jurisdiction, (3) make any changes to its
constating documents or by-laws or any agreement between it
and its shareholders or, as applicable, (4) file a prospectus
in any province or territory of Canada to make the Transfer
Restricted Securities or Exchange Securities freely tradeable
in Canada;
	 
	 	(xiii)	 	use its best efforts to obtain the consent or approval of
each governmental agency or authority, whether federal or
state, which may be required to effect the Shelf Registration
or the offering or sale in connection therewith or to enable
the selling holder or holders to offer, or to consummate the
disposition of, their Transfer Restricted Securities in the
United States;
	 
	 	(xiv)	 	unless any Transfer Restricted Securities shall
be in book-entry only form, cooperate with the Electing
Holders and the managing underwriters, if any, to facilitate
the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold, which
certificates, if so required by any securities exchange upon
which any Transfer

13

 

	 	 	 	Restricted Securities are listed, shall be penned,
lithographed or engraved, or produced by any combination of
such methods, on steel engraved borders, and which
certificates shall not bear any restrictive legends; and, in
the case of an underwritten offering, enable such Transfer
Restricted Securities to be in such denominations and
registered in such names as the managing underwriters may
request at least two business days prior to any sale of the
Transfer Restricted Securities;
	 
	 	(xv)	 	provide a CUSIP number for all Transfer
Restricted Securities, not later than the applicable Effective
Time;
	 
	 	(xvi)	 	enter into one or more underwriting agreements,
engagement letters, agency agreements, “best efforts”
underwriting agreements or similar agreements, as appropriate,
including customary provisions relating to indemnification and
contribution, and take such other actions in connection
therewith as any Electing Holders aggregating at least 33% in
aggregate principal amount of the Transfer Restricted
Securities at the time outstanding shall request in order to
expedite or facilitate the disposition of such Transfer
Restricted Securities in the United States; provided that the
Company shall not be required to enter into any such agreement
more than twice with respect to all of the Transfer Restricted
Securities and may delay entering into any such agreement
until the consummation of any underwritten public offering in
which the Company shall be engaged provided that such delay is
reasonable;
	 
	 	(xvii)	 	whether or not an agreement of the type referred to in
Section 3(d)(xvi) hereof is entered into and whether or not
any portion of the offering contemplated by the Shelf
Registration is an underwritten offering or is made through a
placement or sales agent or any other entity, (A) make such
representations and warranties to the Electing Holders and the
placement or sales agent, if any, therefor and the
underwriters, if any, thereof in form, substance and scope as
are customarily made in connection with an offering of debt
securities pursuant to any appropriate agreement or to a
registration statement filed on the form applicable to the
Shelf Registration; (B) obtain an opinion of counsel to the
Company in customary form and covering such matters, of the
type customarily covered by such an opinion as the managing
underwriters, if any, or as any Electing Holders of at least
33% in aggregate principal amount of the Transfer Restricted
Securities at the time outstanding may reasonably request,
addressed to such Electing Holder or Electing Holders and the
placement or sales agent, if any, therefor and the
underwriters, if any, thereof and dated the effective date of
such Shelf Registration Statement (and if such Shelf
Registration Statement contemplates an underwritten offering
of a part or all of the Transfer Restricted Securities, dated
the date of the closing under the underwriting agreement
relating thereto) (it being agreed that the matters to be
covered by such opinion shall include the due incorporation or
amalgamation, as applicable, and good standing of the Company
and its subsidiaries, if any; the qualification of the Company
and

14

 

	 	 	 	its subsidiaries, if any, to transact business as foreign
corporations or extra-provincial corporations; the due
authorization, execution and delivery of the relevant
agreement of the type referred to in Section 3(d)(xvi)
hereof; the due authorization, execution, authentication and
issuance, and the validity and enforceability, of the
Securities; the absence of material legal or governmental
proceedings involving the Company or any of its subsidiaries;
the absence of a conflict of the Offering with material
agreements binding upon the Company or any subsidiary of the
Company; the absence of governmental approvals required to be
obtained in connection with the Shelf Registration, the
offering and sale of the Transfer Restricted Securities, this
Exchange and Registration Rights Agreement or any agreement
of the type referred to in Section 3(d)(xvi) hereof, except
such approvals as may be required under state securities or
blue sky laws; the material compliance as to form of such
Shelf Registration Statement and any documents incorporated
by reference therein and of the Indenture with the
requirements of the Securities Act and the Trust Indenture
Act and the rules and regulations of the Commission
thereunder, respectively; and, as of the date of the opinion
and of the Shelf Registration Statement or most recent
post-effective amendment thereto, as the case may be, the
absence from such Shelf Registration Statement and the
prospectus included therein, as then amended or supplemented,
and from the documents incorporated by reference therein (in
each case other than the financial statements and other
financial information contained therein) of an untrue
statement of a material fact or the omission to state therein
a material fact necessary to make the statements therein not
misleading (in the case of such documents, in the light of
the circumstances existing at the time that such documents
were filed with the Commission under the Exchange Act)); (C)
obtain a “cold comfort” letter or letters from the
independent chartered accountants of the Company addressed to
the selling Electing Holders, the placement or sales agent,
if any, therefor or the underwriters, if any, thereof, dated
(i) the effective date of such Shelf Registration Statement
and (ii) the effective date of any prospectus supplement to
the prospectus included in such Shelf Registration Statement
or post-effective amendment to such Shelf Registration
Statement which includes unaudited or audited financial
statements as of a date or for a period subsequent to that of
the latest such statements included in such prospectus (and,
if such Shelf Registration Statement contemplates an
underwritten offering pursuant to any prospectus supplement
to the prospectus included in such Shelf Registration
Statement or post-effective amendment to such Shelf
Registration Statement which includes unaudited or audited
financial statements as of a date or for a period subsequent
to that of the latest such statements included in such
prospectus, dated the date of the closing under the
underwriting agreement relating thereto), such letter or
letters to be in customary form and covering such matters of
the type customarily covered by letters of such type; (D)
deliver such documents and certificates, including officers’
certificates, as may be reasonably requested by any Electing
Holders of at least 33% in aggregate principal amount of the

15

 

	 	 	 	Transfer Restricted Securities at the time outstanding or the
placement or sales agent, if any, therefor and the managing
underwriters if any, thereof to evidence the accuracy of the
representations and warranties made pursuant to clause (A)
above or those contained in Section 5(a) hereof and the
compliance with or satisfaction of any agreements or
conditions contained in the underwriting agreement or other
agreement entered into by the Company; and (E) undertake such
obligations relating to expense reimbursement,
indemnification and contribution as are provided in Section 6
hereof;
	 
	 	(xviii)	 	notify in writing each holder of Transfer Restricted
Securities of any proposal by the Company to amend or waive
any provision of this Exchange and Registration Rights
Agreement pursuant to Section 9(h) hereof and of any amendment
or waiver effected pursuant thereto, each of which notices
shall contain the text of the amendment or waiver proposed or
effected, as the case may be;
	 
	 	(xix)	 	in the event that any broker-dealer registered
under the Exchange Act shall underwrite any Transfer
Restricted Securities or participate as a member of an
underwriting syndicate or selling group or “assist in the
distribution” (within the meaning of the Conduct Rules (the
“Conduct Rules) of the National Association of Securities
Dealers, Inc. (“NASD”) or any successor thereto, as amended
from time to time) thereof, whether as a holder of such
Transfer Restricted Securities or as an underwriter, a
placement or sales agent or a broker or dealer in respect
thereof, or otherwise, assist such broker-dealer in complying
with the requirements of such Conduct Rules, including by (A)
if such Conduct Rules shall so require, engaging a “qualified
independent underwriter” (as defined in such Conduct Rules) to
participate in the preparation of the Shelf Registration
Statement relating to such Transfer Restricted Securities, to
exercise usual standards of due diligence in respect thereto
and, if any portion of the offering contemplated by such Shelf
Registration Statement is an underwritten offering or is made
through a placement or sales agent, to recommend the yield of
such Transfer Restricted Securities, (B) indemnifying any such
qualified independent underwriter to the extent of the
indemnification of underwriters provided in Section 6 hereof
(or to such other customary extent as may be requested by such
underwriter), and (C) providing such information to such
broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Conduct
Rules; and
	 
	 	(xx)	 	comply with all applicable rules and regulations
of the Commission, and make generally available to its
securityholders as soon as practicable but in any event not
later than eighteen months after the effective date of such
Shelf Registration Statement, an earning statement of the
Company and its subsidiaries complying with Section 11(a) of
the Securities Act (including, at the option of the Company,
Rule 158 thereunder).

16

 

(e) In the event that the Company would be required, pursuant to Section
3(c)(iii)(F) or Section 3(d)(viii)(F) above, to notify each
broker-dealer, the Electing Holders, the placement or sales agent, if
any, therefor and the managing underwriters, if any, thereof, the Company
shall without delay prepare and furnish to each of the Electing Holders,
to each placement or sales agent, if any, and to each such underwriter,
if any, a reasonable number of copies of a prospectus supplemented or
amended so that, as thereafter delivered to purchasers of Transfer
Restricted Securities, such prospectus shall conform in all material
respects to the applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of the Commission
thereunder and any applicable Canadian Securities Laws and shall not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing. Each Electing Holder agrees that upon receipt of any notice
from the Company pursuant to Section 3(c)(iii)(F) or Section
3(d)(viii)(F) hereof, such broker-dealer, Electing Holder, underwriter or
placement or sales agent shall forthwith discontinue the disposition of
Transfer Restricted Securities pursuant to the Shelf Registration
Statement applicable to such Transfer Restricted Securities until such
broker-dealer, Electing Holder, underwriter or placement or sales agent
shall have received copies of such amended or supplemented prospectus and
if so directed by the Company, such broker-dealer, Electing Holder,
underwriter or placement or sales agent shall destroy or deliver to the
Company (at the Company’s expense) all copies, other than permanent file
copies, then in such Electing Holder’s possession of the prospectus
covering such Transfer Restricted Securities at the time of receipt of
such notice.

(f) In the event of a Shelf Registration, in addition to the information
required to be provided by each Electing Holder in its Notice
Questionnaire, the Company may require such Electing Holder to furnish to
the Company such additional information regarding such Electing Holder
and such Electing Holder’s intended method of distribution of Transfer
Restricted Securities as may be required in the reasonable judgment of
counsel for the Company in order to comply with the Securities Act. Each
such Electing Holder agrees to notify the Company as promptly as
practicable of any inaccuracy or change in information previously
furnished by such Electing Holder to the Company or of the occurrence of
any event in either case as a result of which any prospectus relating to
such Shelf Registration contains or would contain an untrue statement of
a material fact regarding such Electing Holder or such Electing Holder’s
intended method of disposition of such Transfer Restricted Securities or
omits to state any material fact regarding such Electing Holder or such
Electing Holder’s intended method of disposition of such Transfer
Restricted Securities required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing, and promptly to furnish to the Company any additional
information required to correct and update any previously furnished
information or required so that such prospectus shall not contain, with
respect to such Electing Holder or the disposition of such Transfer
Restricted Securities, an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing.

(g) As a condition to its participation in the Exchange Offer pursuant to
the terms of this Agreement, each holder of Transfer Restricted
Securities shall furnish, upon the request

17

 

of the Company, prior to the completion of the Exchange Offer, a written
representation to the Company (which may be contained in the letter of
transmittal contemplated by the Exchange Registration Statement) to the
effect that (A) it is not an affiliate of the Company, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the
Exchange Securities to be issued in the Exchange Offer and (C) it is
acquiring the Exchange Securities in its ordinary course of business, and
such holder shall make such other written representations as the Company
may reasonably request in order to comply with applicable Canadian
securities laws. As a condition to its participation in the Exchange
Offer pursuant to the terms of this Agreement, each holder shall
acknowledge and agree that any broker-dealer and any such holder using
the Exchange Offer to participate in a distribution of the securities to
be acquired in the Exchange Offer (1) could not under Commission policy
as in effect on the date of this Agreement rely on the position of the
Commission enunciated in Morgan Stanley and Co., Inc. (available June 5,
1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as
interpreted in the Commission’s letter to Shearman & Sterling dated July
2, 1993, and similar no-action letters and (2) must comply with the
registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective registration
statement containing the selling security holder information required by
Item 507 or 508, as applicable, of Regulation S-K if the resales are of
Exchange Securities obtained by such holder in exchange for Securities
acquired by such holder directly from the Company.

(h) Until the expiration of two years after the Closing Date, the Company
will not, and will not permit any of its “affiliates” (as defined in Rule
144) to, resell any of the Securities that have been reacquired by any of
them except pursuant to an effective registration statement under the
Securities Act.

	4.	 	Registration Expenses.

The Company agrees to bear and to pay or cause to be paid promptly all
expenses incident to the Company’s performance of or compliance with this
Exchange and Registration Rights Agreement, including (a) all Commission
and any NASD registration, filing and review fees and expenses including
reasonable fees and disbursements of counsel for the placement or sales
agent or underwriters in connection with such registration, filing and
review, (b) all fees and expenses in connection with the qualification of
the Securities for offering and sale under the State securities and blue
sky laws referred to in Section 3(d)(xii) hereof and determination of
their eligibility for investment under the laws of such jurisdictions as
any managing underwriters or the Electing Holders may designate,
including any reasonable fees and disbursements of counsel for the
Electing Holders or underwriters in connection with such qualification
and determination, (c) all expenses relating to the preparation,
printing, production, distribution and reproduction of each registration
statement required to be filed hereunder, each prospectus included
therein or prepared for distribution pursuant hereto, each amendment or
supplement to the foregoing, the expenses of preparing the Securities for
delivery and the expenses of printing or producing any underwriting
agreements, agreements among underwriters, selling agreements and blue
sky or legal investment

18

 

memoranda and all other documents in connection with the offering, sale
or delivery of Securities to be disposed of (including certificates
representing the Securities), (d) messenger, telephone and delivery
expenses relating to the offering, sale or delivery of Securities and the
preparation of documents referred in clause (c) above, (e) fees and
expenses of the Trustee under the Indenture, any agent of the Trustee and
any counsel for the Trustee and of any collateral agent, security trustee
or custodian, (f) internal expenses (including all salaries and expenses
of the Company’s officers and employees performing legal or accounting
duties), (g) fees, disbursements and expenses of counsel of the Company
and independent chartered accountants of the Company (including the
expenses of any opinions or “cold comfort” letters required by or
incident to such performance and compliance), (h) fees, disbursements and
expenses of any “qualified independent underwriter” engaged pursuant to
Section 3(d)(xix) hereof, (i) reasonable fees, disbursements and expenses
of one counsel for the Electing Holders retained in connection with a
Shelf Registration, as selected by the Electing Holders of at least a
majority in aggregate principal amount of the Transfer Restricted
Securities held by Electing Holders (which counsel shall be reasonably
satisfactory to the Company), (j) any fees charged by securities rating
services for rating the Securities, and (k) fees, expenses and
disbursements of any other persons, including special experts, retained
by the Company in connection with such registration (collectively, the
“Registration Expenses”). To the extent that any Registration Expenses
are incurred, assumed or paid by any holder of Transfer Restricted
Securities or any placement or sales agent therefor or underwriter
thereof, the Company shall reimburse such person for the full amount of
the Registration Expenses so incurred, assumed or paid promptly after
receipt of a request therefor. Notwithstanding the foregoing, the
holders of the Transfer Restricted Securities being registered shall pay
all agency fees and commissions and underwriting discounts and
commissions attributable to the sale of such Transfer Restricted
Securities and the fees and disbursements of any counsel or other
advisors or experts retained by such holders (severally or jointly),
other than the counsel and experts specifically referred to above.

	5.	 	Representations and Warranties.

The Company represents and warrants to, and agrees with, the Purchaser and each
of the holders from time to time of Transfer Restricted Securities that:

(a) Each registration statement covering Transfer Restricted Securities
and each prospectus (including any preliminary or summary prospectus)
contained therein or furnished pursuant to Section 3(d) or Section 3(c)
hereof and any further amendments or supplements to any such registration
statement or prospectus, when it becomes effective or is filed with the
Commission, as the case may be, and, in the case of an underwritten
offering of Transfer Restricted Securities, at the time of the closing
under the underwriting agreement relating thereto, will conform in all
material respects to the requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission thereunder
and any applicable Canadian Securities Laws and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
in the case of a registration statement, not misleading, and in the case
of a prospectus not misleading in light of the circumstances under which
they were made; and at all times subsequent to the Effective Time when a
prospectus would be required to be delivered under the Securities

19

 

Act, other than from (i) such time as a notice has been given to holders
of Transfer Restricted Securities pursuant to Section 3(d)(viii)(F) or
Section 3(c)(iii)(F) hereof until (ii) such time as the Company furnishes
an amended or supplemented prospectus pursuant to Section 3(e) or Section
3(c)(iv) hereof, each such registration statement, and each prospectus
(including any summary prospectus) contained therein or furnished
pursuant to Section 3(d) or Section 3(c) hereof, as then amended or
supplemented, will conform in all material respects to the requirements
of the Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and any applicable Canadian
Securities Laws and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of
the circumstances then existing; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by a holder of Transfer Restricted
Securities or any underwriter or placement agent of any offering
described therein expressly for use therein.

(b) Any documents incorporated by reference in any prospectus referred to
in Section 5(a) hereof, when they become or became effective or are or
were filed with the Commission, as the case may be, will conform or
conformed in all material respects to the requirements of the Securities
Act, the Exchange Act or any applicable Canadian Securities Laws, as
applicable, and none of such documents will contain or contained an
untrue statement of a material fact or will omit or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by a holder of Transfer Restricted
Securities or any underwriter or placement agent of any offering
described therein expressly for use therein.

(c) The compliance by the Company with all of the provisions of this
Exchange and Registration Rights Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any subsidiary of the
Company is a party or by which the Company or any subsidiary of the
Company is bound or to which any of the property or assets of the Company
or any subsidiary of the Company is subject, nor will such action result
in any violation of the provisions of the articles of amalgamation or
incorporation or the by-laws or other organizational documents, as
applicable, of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any subsidiary of the Company or any of
their properties and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the consummation by the Company of the
transactions contemplated by this Exchange and Registration Rights
Agreement, except the registration under the Securities Act of the
Transfer Restricted Securities and the Exchange Securities, qualification
of the Indenture under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under any applicable Canadian Securities Laws, Canadian federal
or provincial

20

 

corporate law or State securities or blue sky laws in connection with the
offering and distribution of the Transfer Restricted Securities and the
Exchange Securities.

(d) This Exchange and Registration Rights Agreement has been duly
authorized, executed and delivered by the Company.

	6.	 	Indemnification.

(a) Indemnification by the Company. The Company will indemnify and hold
harmless each of the holders of Transfer Restricted Securities included
in an Exchange Registration Statement, each of the Electing Holders of
Transfer Restricted Securities included in a Shelf Registration Statement
and each person who participates as a placement or sales agent or as an
underwriter in any offering or sale of such Transfer Restricted
Securities against any losses, claims, damages or liabilities, joint or
several, to which such holder, agent or underwriter may become subject
under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Exchange Registration Statement or Shelf
Registration Statement, as the case may be, under which such Transfer
Restricted Securities were registered under the Securities Act, or any
preliminary, final or summary prospectus contained therein or furnished
by the Company to any such holder, Electing Holder, agent or underwriter,
or any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse such holder, such Electing Holder,
such agent and such underwriter for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable to any such person in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration
statement, or preliminary, final or summary prospectus, or amendment or
supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by such person expressly for use
therein provided, further, that in a disposition of Transfer Restricted
Securities that does not involve (in whole or in part) an underwritten
offering conducted pursuant to Section 7 hereof or a “best efforts”
offering on an agency basis, the Company shall not be liable to any
Electing Holder pursuant to the foregoing with respect to any prospectus
contained in a Shelf Registration Statement (a “Prior Prospectus”) to the
extent the Company shall sustain the burden of proving that any such
loss, claim, damage or liability resulted from the fact that such
Electing Holder sold Transfer Restricted Securities to a person to whom
such Electing Holder failed to send or give, at or prior to the
settlement date (the “Settlement Date”) of such sale, a copy of an
amended or supplemented prospectus (the “Amended Prospectus”), if: (i)
the notice required by Section 3(d)(viii) hereof in respect of the
Amended Prospectus has been given to such Electing Holder prior to the
Settlement Date, (ii) the Company has previously delivered copies of the
Amended Prospectus to the Electing Holder (in sufficient quantities and
sufficiently in advance of the Settlement Date to allow for delivery of
the Amended Prospectus by the Electing Holder to the transferee of such
Transfer Restricted Securities by the Settlement Date) and the loss,

21

 

claim, damage or liability of such Electing Holder resulted from an
untrue statement or omission of a material fact contained in or omitted
from a Prior Prospectus that was identified in writing at such time to
such Electing Holder and corrected in the Amended Prospectus prior to the
Settlement Date and the Amended Prospectus was required by law to be
delivered at or prior to the Settlement Date to such person and (iii) and
delivery of the Amended Prospectus by the Settlement Date would have
cured the defect giving rise to such loss, claim, damage or liability.

(b) Indemnification by the Holders and any Agents and Underwriters. The
Company may require, as a condition to including any Transfer Restricted
Securities in any registration statement filed pursuant to Section 2(b)
hereof and to entering into any underwriting agreement with respect
thereto, that the Company shall have received an undertaking reasonably
satisfactory to it from the Electing Holder of such Transfer Restricted
Securities and from each underwriter named in any such underwriting
agreement severally and not jointly, to (i) indemnify and hold harmless
the Company and all other holders of Transfer Restricted Securities,
against any losses, claims, damages or liabilities to which the Company
or such other holders of Transfer Restricted Securities may become
subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in such registration statement, or any
preliminary, final or summary prospectus contained therein or furnished
by the Company to any such Electing Holder, agent or underwriter, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company by such Electing Holder, agent or
underwriter expressly for use therein, and (ii) reimburse the Company for
any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that no such Electing
Holder shall be required to undertake liability to any person under this
Section 6(b) for any amounts in excess of the dollar amount of the
proceeds to be received by such Electing Holder from the sale of such
Electing Holder’s Transfer Restricted Securities pursuant to such
registration.

(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the
commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against an indemnifying party pursuant to
the indemnification provisions of or contemplated by this Section 6,
notify such indemnifying party in writing of the commencement of such
action; but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party
otherwise than under the indemnification provisions of or contemplated by
Section 6(a) or 6(b) hereof. In case any such action shall be brought
against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel

22

 

reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, such indemnifying
party shall not be liable to such indemnified party for any legal
expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party
from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.

(d) Contribution. If for any reason the indemnification provisions
contemplated by Section 6(a) or Section 6(b) are unavailable to or
insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact
relates to information supplied by such indemnifying party or by such
indemnified party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 6(d) were determined
by pro rata allocation (even if the holders or any agents or underwriters
or all of them were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in this Section 6(d). The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages, or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of
this Section 6(d), no holder shall be required to contribute any amount
in excess of the amount by which the dollar amount of the proceeds
received by such holder from the sale of any Transfer Restricted
Securities (after deducting any fees, discounts and commissions
applicable thereto) exceeds the amount of any damages which such holder
has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, and no underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Transfer Restricted Securities
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages

23

 

which such underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The holders’ and any underwriters’ obligations in this Section 6(d) to
contribute shall be several in proportion to the principal amount of
Transfer Restricted Securities registered or underwritten, as the case
may be, by them and not joint.

(e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each officer, director and
partner of each holder, agent and underwriter and each person, if any,
who controls any holder, agent or underwriter within the meaning of the
Securities Act; and the obligations of the holders and any agents or
underwriters contemplated by this Section 6 shall be in addition to any
liability which the respective holder, agent or underwriter may otherwise
have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his
consent, is named in any registration statement as about to become a
director of the Company) and to each person, if any, who controls the
Company within the meaning of the Securities Act.

	7.	 	Underwritten Offerings.

(a) Selection of Underwriters. If any of the Transfer Restricted
Securities covered by the Shelf Registration are to be sold pursuant to
an underwritten offering, the managing underwriter or underwriters
thereof shall be designated by Electing Holders holding at least a
majority in aggregate principal amount of the Transfer Restricted
Securities to be included in such offering, provided that such designated
managing underwriter or underwriters is or are reasonably acceptable to
the Company.

(b) Participation by Holders. Each holder of Transfer Restricted
Securities hereby agrees with each other such holder that no such holder
may participate in any underwritten offering hereunder unless such holder
(i) agrees to sell such holder’s Transfer Restricted Securities on the
basis provided in any underwriting arrangements approved by the persons
entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the
terms of such underwriting arrangements.

	8.	 	Rule 144.

     The Company covenants to the holders of Transfer Restricted Securities
that to the extent it shall be required to do so under the Exchange Act, it
shall timely file the reports required to be filed by it under the Exchange Act
or the Securities Act (including the reports under Section 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder, and shall take such further action as any holder of
Transfer Restricted Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell Transfer Restricted
Securities without registration under the Securities Act within the limitations
of the exemption provided by Rule 144 under the Securities Act, as such Rule
may be amended

24

 

from time to time, or any similar or successor rule or regulation
hereafter adopted by the Commission. Upon the request of any holder of Transfer
Restricted Securities in connection with that holder’s sale pursuant to Rule
144, the Company shall deliver to such holder a written statement as to whether
it has complied with such requirements.

	9.	 	Miscellaneous.

(a) No Inconsistent Agreements. The Company represents, warrants,
covenants and agrees that it has not granted, and shall not grant,
registration rights with respect to Transfer Restricted Securities or any
other securities which would be inconsistent with the terms contained in
this Exchange and Registration Rights Agreement.

(b) Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of
its obligations hereunder and that the Purchaser and the holders from
time to time of the Transfer Restricted Securities may be irreparably
harmed by any such failure, and accordingly agree that the Purchaser and
such holders, in addition to any other remedy to which they may be
entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of the Company under this Exchange and
Registration Rights Agreement in accordance with the terms and conditions
of this Exchange and Registration Rights Agreement, in any court of the
United States or any State thereof having jurisdiction.

(c) Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand, if delivered personally or by
courier, or three days after being deposited in the mail (registered or
certified mail, postage prepaid, return receipt requested) as follows: If
to the Company, to Ainsworth Lumber Co. Ltd., Suite 3194 Bentall IV, PO
Box 49307, 1055 Dunsmuir Street, Vancouver, British Columbia, Canada V7X
1L3, Attention: Catherine Ainsworth, Chief Operating Officer, and if to a
holder, to the address of such holder set forth in the security register
or other records of the Company, or to such other address as the Company
or any such holder may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be
effective only upon receipt.

(d) Parties in Interest. All the terms and provisions of this Exchange
and Registration Rights Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the parties hereto and the
holders from time to time of the Transfer Restricted Securities and the
respective successors and assigns of the parties hereto and such holders.
In the event that any transferee of any holder of Transfer Restricted
Securities shall acquire Transfer Restricted Securities, in any manner,
whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be
deemed a beneficiary hereof for all purposes and such Transfer Restricted
Securities shall be held subject to all of the terms of this Exchange and
Registration Rights Agreement, and by taking and holding such Transfer
Restricted Securities such transferee shall be entitled to receive the
benefits of, and be conclusively deemed to have agreed to be bound by all
of the applicable terms and provisions of this Exchange and Registration
Rights Agreement. If the Company shall so

25

 

request, any such successor, assign or transferee shall agree in writing
to acquire and hold the Transfer Restricted Securities subject to all of
the applicable terms hereof.

(e) Guarantors. The Company hereby covenants that in the event that
prior to (i) the consummation of the Exchange Offer, if the Exchange
Offer is consummated or (ii) the termination of the period referred to in
Section 2(b) of this agreement, if the Shelf Registration is effected,
any subsidiary of the Company becomes a Subsidiary Guarantor under
Section 10.01 of the Indenture, the Company shall, as soon as
practicable, cause such subsidiary to become a party hereto and by
becoming a party hereto such subsidiary shall make the warranties,
agreements, representations and covenants to the holders of the Transfer
Restricted Securities as those of the Company herein.

Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Exchange and
Registration Rights Agreement or made pursuant hereto shall remain in
full force and effect regardless of any investigation (or statement as to
the results thereof) made by or on behalf of any holder of Transfer
Restricted Securities, any director, officer or partner of such holder,
any agent or underwriter or any director, officer or partner thereof, or
any controlling person of any of the foregoing, and shall survive
delivery of and payment for the Transfer Restricted Securities pursuant
to the Purchase Agreement and the transfer and registration of Transfer
Restricted Securities by such holder and the consummation of an Exchange
Offer.

(f) Governing Law. This Exchange and Registration Rights Agreement shall
be governed by and construed in accordance with the laws of the State of
New York.

(g) Headings. The descriptive headings of the several Sections and
paragraphs of this Exchange and Registration Rights Agreement are
inserted for convenience only, do not constitute a part of this Exchange
and Registration Rights Agreement and shall not affect in any way the
meaning or interpretation of this Exchange and Registration Rights
Agreement.

(h) Entire Agreement; Amendments. This Exchange and Registration Rights
Agreement and the other writings referred to herein (including the
Indenture and the form of Securities) or delivered pursuant hereto which
form a part hereof contain the entire understanding of the parties with
respect to its subject matter. This Exchange and Registration Rights
Agreement supersedes all prior agreements and understandings between the
parties with respect to its subject matter. This Exchange and
Registration Rights Agreement may be amended and the observance of any
term of this Exchange and Registration Rights Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company
and the holders of at least a majority in aggregate principal amount of
the Transfer Restricted Securities at the time outstanding. Each holder
of any Transfer Restricted Securities at the time or thereafter
outstanding shall be bound by any amendment or waiver effected pursuant
to this Section 9(h), whether or not any notice, writing or marking
indicating such amendment or waiver appears on such Transfer Restricted
Securities or is delivered to such holder.

26

 

(i) Inspection. For so long as this Exchange and Registration Rights
Agreement shall be in effect, this Exchange and Registration Rights
Agreement and a complete list of the names and addresses of all the
holders of Transfer Restricted Securities shall be made available for
inspection and copying on any business day by any holder of Transfer
Restricted Securities for proper purposes only (which shall include any
purpose related to the rights of the holders of Transfer Restricted
Securities under the Securities, the Indenture and this Agreement) at the
offices of the Company at the address thereof set forth in Section 9(c)
above and at the office of the Trustee under the Indenture.

(j) Counterparts. This agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all
such respective counterparts shall together constitute one and the same
instrument.

(k) Service of Process. The Company irrevocably (i) agrees that any
legal suit, action or proceeding against the Company brought by any
holder, Purchaser, agent or underwriter or by any person who controls any
holder, agent or underwriter arising out of or based upon this Exchange
and Registration Rights Agreement or the transactions contemplated hereby
may be instituted in any Federal or state court located in the Borough of
Manhattan in the City of New York in the State of New York (“New York
Court”), (ii) waives, to the fullest extent each party may effectively do
so, any objection which such party may now or hereafter have to the
laying of venue of any such proceeding and (iii) submits to the
non-exclusive jurisdiction of such courts in any such suit, action or
proceeding. The Company has appointed CT Corporation Systems, 111-Eighth
Avenue, New York, New York, 10011, as its authorized agent (the
“Authorized Agent”) upon whom process may be served in any such action
arising out of or based on this Exchange and Registration Rights
Agreement or the transactions contemplated hereby which may be instituted
in any New York Court by any holder, agent or underwriter or by any
person who controls any holder, agent or underwriter, expressly consents
to the jurisdiction of any such court in respect of any such action, and
waives any other requirements of or objections to personal jurisdiction
with respect thereto. Such appointments shall be irrevocable. The
Company represents and warrants that the Authorized Agent has agreed to
act as such agent for service of process and agrees to take any and all
action, including the filing of any and all documents and instruments,
that may be necessary to continue such appointment in full force and
effect as aforesaid. Service of process upon the Authorized Agent and
written notice of such service to the Company shall be deemed, in every
respect, effective service of process upon the Company.

(l) Judgment Currency. In respect of any judgment or order given or made
for any amount due hereunder that is expressed and paid in a currency
(the “judgment currency”) other than United States dollars, the Company
shall indemnify each holder, agent or underwriter against any loss
incurred by such holder, agent or underwriter as a result of any
variation as between (i) the rate of exchange at which the United States
dollar amount is converted into the judgment currency for the purpose of
such judgment or order and (ii) the rate of exchange at which a holder,
agent or underwriter is able to purchase United States dollars with the
amount of judgment currency actually received by such holder, agent or
underwriter. The foregoing indemnity shall constitute a separate and
independent obligation of the Company and shall continue in full force
and effect notwithstanding any such judgment or order as aforesaid. The
term “rate of exchange”

27

 

shall include any premiums and costs of exchange payable in connection with the
purchase of or conversion into United States dollars.

28

 

If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you, on
behalf of the Purchaser, this letter and such acceptance hereof shall
constitute a binding agreement between the Purchaser and the Company.

	 	 	 	 	 	 	 
	 	 	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	AINSWORTH LUMBER CO. LTD.
	 
	 	 	 	 	 	 
	

	 	 	 	By:
	 	/s/ D. Michael Ainsworth
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	Name: D. Michael Ainsworth
	

	 	 	 	 	 	Title: Executive Vice President
	 
	 	 	 	 	 	 
	Ainsworth Lumber Co. Ltd.	 	 	 	 
	Exchange and Registration Rights Agreement	 	 	 	 
	 
	 	 	 	 	 	 
	Accepted as of the date hereof:	 	 	 	 
	 
	 	 	 	 	 	 
	Goldman, Sachs & Co.	 	 	 	 
	By:

	 	/s/ Authorized Officer	 	 	 	 
	

	 	
 	 	 	 	 
	

	 	(Goldman, Sachs & Co.)	 	 	 	 

 

 

Exhibit A

AINSWORTH LUMBER CO. LTD.

INSTRUCTION TO DTC PARTICIPANTS

[Date of Mailing]

URGENT — IMMEDIATE ATTENTION REQUESTED

DEADLINE FOR RESPONSE: [DATE] *

The Depository Trust Company (“DTC”) has identified you as a DTC Participant
through which beneficial interests in the Ainsworth Lumber Co. Ltd. (the
“Company”) 6.750% Senior Notes due March 15, 2014 (the “Securities”) are held.

The Company is in the process of registering the Securities under the
Securities Act of 1933 for resale by the beneficial owners thereof. In order
to have their Securities included in the registration statement, beneficial
owners must complete and return the enclosed Notice of Registration Statement
and Selling Securityholder Questionnaire.

It is important that beneficial owners of the Securities receive a copy of the
enclosed materials as soon as possible as their rights to have the Securities
included in the registration statement depend upon their returning the Notice
and Questionnaire by [Deadline For Response]. Please forward a copy of the
enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials
or have any questions pertaining to this matter, please contact Ainsworth
Lumber Co. Ltd., Suite 3194 Bentall IV, PO Box 49307, 1055 Dunsmuir Street,
Vancouver, British Columbia, Canada, V7X 1L3, telephone: (604) 661-3200.

	*	 	Not less than 28 calendar days from date of mailing.

1

 

Ainsworth Lumber Co. Ltd.

Notice of Registration Statement

and

Selling Securityholder Questionnaire

[Date]

Reference is hereby made to the Exchange and Registration Rights Agreement (the
“Exchange and Registration Rights Agreement”) between Ainsworth Lumber Co. Ltd.
(the “Company”), and the Purchaser named therein. Pursuant to the Exchange and
Registration Rights Agreement, the Company has filed with the United States
Securities and Exchange Commission (the “Commission”) a registration statement
on Form F-4 (the “Shelf Registration Statement”) for the registration and
resale under Rule 415 of the Securities Act of 1933, as amended (the
“Securities Act”), of the Company’s 6.750% Senior Notes due March 15, 2014 (the
“Securities”). A copy of the Exchange and Registration Rights Agreement is
attached hereto. All capitalized terms not otherwise defined herein shall have
the meanings ascribed thereto in the Exchange and Registration Rights
Agreement.

Each beneficial owner of Transfer Restricted Securities (as defined below) is
entitled to have the Transfer Restricted Securities beneficially owned by it
included in the Shelf Registration Statement. In order to have Transfer
Restricted Securities included in the Shelf Registration Statement, this Notice
of Registration Statement and Selling Securityholder Questionnaire (“Notice and
Questionnaire”) must be completed, executed and delivered to the Company’s
counsel at the address set forth herein for receipt ON OR BEFORE [Deadline for
Response]. Beneficial owners of Transfer Restricted Securities who do not
complete, execute and return this Notice and Questionnaire by such date (i)
will not be named as selling securityholders in the Shelf Registration
Statement and (ii) may not use the Prospectus forming a part thereof for
resales of Transfer Restricted Securities.

Certain legal consequences arise from being named as a selling securityholder
in the Shelf Registration Statement and related Prospectus. Accordingly,
holders and beneficial owners of Transfer Restricted Securities are advised to
consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and related Prospectus.

The term “Transfer Restricted Securities” is defined in the Exchange and
Registration Rights Agreement.

1

 

ELECTION

The undersigned holder (the “Selling Securityholder”) of Transfer Restricted
Securities hereby elects to include in the Shelf Registration Statement the
Transfer Restricted Securities beneficially owned by it and listed below in
Item (3). The undersigned, by signing and returning this Notice and
Questionnaire, agrees to be bound with respect to such Transfer Restricted
Securities by the terms and conditions of this Notice and Questionnaire and the
Exchange and Registration Rights Agreement, including, without limitation,
Section 6 of the Exchange and Registration Rights Agreement, as if the
undersigned Selling Securityholder were an original party thereto.

Upon any sale of Transfer Restricted Securities pursuant to the Shelf
Registration Statement, the Selling Securityholder will be required to deliver
to the Company and Trustee the Notice of Transfer set forth in Appendix A to
the Prospectus and as Exhibit B to the Exchange and Registration Rights
Agreement.

The Selling Securityholder hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:

QUESTIONNAIRE

	 	 	 	 	 
	(1)

	 	(a)
	 	Full Legal Name of Selling Securityholder:
	 
	 	 	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	(a)
	 	Full Legal Name of Registered Holder (if not the same as
in (a) above) of Transfer Restricted Securities Listed in Item
(3) below:
	 
	 	 	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	(b)
	 	Full Legal Name of DTC Participant (if applicable and if
not the same as (b) above) Through Which Transfer Restricted
Securities Listed in Item (3) below are Held:
	 
	 	 	 	 
	

	 	 	 	

	 
	 	 	 	 
	(2)	 	Address for Notices to Selling Securityholder:

	 	 	 
	 
	 	 
	

	 	

	 
	 	 
	

	 	

	 
	 	 
	

	 	

	 
	 	 
	Telephone:
	 	 
	 
	 	 
	

	 	

	 
	 	 
	Fax:
	 	 
	 
	 	 
	

	 	

	 
	 	 
	Contact Person:
	 	 
	 
	 	 
	

	 	

1

 

	(3)	 	Beneficial Ownership of Securities:
	 
	 	 	Except as set forth below in this Item (3), the undersigned does not
beneficially own any Securities.

	 	(a)	 	Principal amount of Transfer Restricted Securities
beneficially owned:
	 
	 	 	 	

	 
	 	 	 	CUSIP No(s). of such Transfer Restricted Securities:
	 
	 	 	 	

	 
	 	(b)	 	Principal amount of Securities other than Transfer Restricted
Securities beneficially owned:
	 
	 	 	 	

	 
	 	 	 	CUSIP No(s). of such other Securities:
	 
	 	 	 	

	 
	 	(c)	 	Principal amount of Transfer Restricted Securities which the
undersigned wishes to be included in the Shelf Registration
Statement:
	 
	 	 	 	

	 
	 	 	 	CUSIP No(s). of such Transfer Restricted Securities to be included
in the Shelf Registration Statement:
	 
	 	 	 	

	(4)	 	Beneficial Ownership of Other Securities of the Company:
	 
	 	 	Except as set forth below in this Item (4), the undersigned Selling
Securityholder is not the beneficial or registered owner of any other
securities of the Company, other than the Securities listed above in Item
(3).
	 
	 	 	State any exceptions here:
	 
	(5)	 	Relationships with the Company:
	 
	 	 	Except as set forth below, neither the Selling Securityholder nor any of
its affiliates, officers, directors or principal equity holders (5% or
more) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates) during
the past three years.
	 
	 	 	State any exceptions here:
	 
	(6)	 	Plan of Distribution:

2

 

	 	 	Except as set forth below, the undersigned Selling Securityholder intends
to distribute the Transfer Restricted Securities listed above in Item (3)
only as follows (if at all): Such Transfer Restricted Securities may be
sold from time to time directly by the undersigned Selling Securityholder
or, alternatively, through underwriters, broker-dealers or agents. Such
Transfer Restricted Securities may be sold in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at varying
prices determined at the time of sale, or at negotiated prices. Such
sales may be effected in transactions (which may involve crosses or block
transactions) (i) on any national securities exchange or quotation
service on which the Registered Securities may be listed or quoted at the
time of sale, (ii) in the over-the-counter market, (iii) in transactions
otherwise than on such exchanges or services or in the over-the-counter
market, or (iv) through the writing of options. In connection with sales
of the Transfer Restricted Securities or otherwise, the Selling
Securityholder may enter into hedging transactions with broker-dealers,
which may in turn engage in short sales of the Transfer Restricted
Securities in the course of hedging the positions they assume. The
Selling Securityholder may also sell Transfer Restricted Securities short
and deliver Transfer Restricted Securities to close out such short
positions, or loan or pledge Transfer Restricted Securities to
broker-dealers that in turn may sell such securities.
	 
	 	 	State any exceptions here:

By signing below, the Selling Securityholder acknowledges that it understands
its obligation to comply, and agrees that it will comply, with the provisions
of the Exchange Act and the rules and regulations thereunder, particularly
Regulation M.

In the event that the Selling Securityholder transfers all or any portion of
the Transfer Restricted Securities listed in Item (3) above after the date on
which such information is provided to the Company, the Selling Securityholder
agrees to notify the transferee(s) at the time of the transfer of its rights
and obligations under this Notice and Questionnaire and the Exchange and
Registration Rights Agreement.

By signing below, the Selling Securityholder consents to the disclosure of the
information contained herein in its answers to Items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and
related Prospectus. The Selling Securityholder understands that such
information will be relied upon by the Company in connection with the
preparation of the Shelf Registration Statement and related Prospectus.

In accordance with the Selling Securityholder’s obligation under Section 3(d)
of the Exchange and Registration Rights Agreement to provide such information
as may be required by law for inclusion in the Shelf Registration Statement,
the Selling Securityholder agrees to promptly notify the Company of any
inaccuracies or changes in the information provided herein which may occur
subsequent to the date hereof at any time while the Shelf Registration
Statement remains in effect. All notices hereunder and pursuant to the
Exchange and Registration Rights Agreement shall be made in writing, by
hand-delivery, first-class mail, or air courier guaranteeing overnight delivery
as follows:

	 	(i)	 	To the Company:

3

 

	 	(ii)	 	With a copy to:

Once this Notice and Questionnaire is executed by the Selling Securityholder
and received by the Company’s counsel, the terms of this Notice and
Questionnaire, and the representations and warranties contained herein, shall
be binding on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder (with respect to the Transfer Restricted
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above). This Agreement shall be governed in all respects by the laws of
the State of New York.

4

 

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by
its duly authorized agent.

Dated:                                       

	 	 	 
	
 
	Selling Securityholder
	(Print/type full legal name of beneficial owner of Transfer Restricted Securities)
	 
	 	 
	By:
	 	 
	

	 	
 
	

	 	Name:
	

	 	Title:

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT
ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY’S COUNSEL AT:

 

 

Exhibit B

NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

The Bank of New York

Ainsworth Lumber Co. Ltd.

c/o The Bank of New York

101 Barclay Street, Floor 21W

New York, NY 10286

Attention:

	 	Re:	 	Ainsworth Lumber Co. Ltd. (the “Company”)

6.750% Senior Notes due March 15, 2014

Dear Sirs:

Please be advised that                                        has transferred $                                       aggregate principal amount of the
above-referenced Notes pursuant to an effective Registration Statement on Form
F-4 (File No. 333-                   ) filed by the Company.

We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied and that the
above-named beneficial owner of the Notes is named as a “Selling Holder” in the
Prospectus dated [•, 2004] or in supplements thereto, and that the aggregate
principal amount of the Notes transferred are the Notes listed in such
Prospectus opposite such owner’s name.

	 	 	 	 	 
	Dated:
	 	 	 	 
	 
	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	
 
	

	 	(Name):	 	 
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	(Authorized Signature)

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