▇▇▇▇▇▇ WESTERN FOREST PRODUCTS LTD.
7.75% SENIOR NOTES DUE 2013
------------------
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
November 25, 2003
▇▇▇▇▇▇▇, Sachs & Co.,
As representatives of the several Purchasers
named in Schedule I to the Purchase Agreement
c/o Goldman, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇ Western Forest Products Ltd., a corporation established under
the laws of the Province of Alberta (the "Company"), proposes to issue and sell
to the Purchasers (as defined herein) upon the terms set forth in the Purchase
Agreement (as defined herein) US$190,000,000 aggregate principal amount of its
7.75% Senior Notes Due 2013. As an inducement to the Purchasers to enter into
the Purchase Agreement and in satisfaction of a condition to the obligations of
the Purchasers thereunder, the Company agrees with the Purchasers 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 Offer Registration Statement effective or as of which the
Exchange Offer Registration Statement otherwise becomes effective and
(ii) a Shelf Registration,
1
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.
"Effectiveness Target Date" shall have the meaning assigned
thereto in Section 2(c) hereof.
"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, and the rules and regulations promulgated
thereunder as the same shall be amended from time to time.
"Exchange Notes" shall have the meaning assigned thereto in
Section 2(a) hereof.
"Exchange Offer" shall have the meaning assigned thereto in
Section 2(a) hereof.
"Exchange Offer Registration Statement" shall have the meaning
assigned thereto in Section 2(a) hereof.
"Exchange Registration" shall have the meaning assigned
thereto in Section 3(c) hereof.
"Guarantor" shall have the meaning assigned thereto in the
Indenture.
The term "holder" shall mean the registered holders of the
Transfer Restricted Securities on the Closing Date and other persons
who subsequently 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 November 25,
2003, between the Company and The Bank of New York, as 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 November 20, 2003, between the Purchasers and the Company
relating to the Securities.
"Purchasers" shall mean the Purchasers named in Schedule I to
the Purchase Agreement.
"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 Notes 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 Notes and (iv) a holder that is a
broker-
2
dealer, but only with respect to Exchange Notes 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$190,000,000
7.75% Senior Notes Due 2013 of the Company to be issued and sold to the
Purchasers 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, and the rules and regulations promulgated thereunder
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 the Securities;
until:
(1) the date on which such Security has been exchanged by
a Person other than a broker-dealer for an Exchange
Note in the Exchange Offer;
(2) following the exchange by a broker-dealer in the
Exchange Offer of a Security for an Exchange Note,
the date on which such Exchange Note 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 Offer
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 under circumstances in
which any legend borne by such Security relating to
the restrictions on transferability thereof, under
the Securities Act or otherwise, is removed by the
Company or pursuant to the Indenture; 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 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 90 days after
the Closing Date, a registration statement relating to an offer to
exchange
3
(such registration statement, the "Exchange Offer 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 Transfer Restricted 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 Notes"). The Exchange Notes 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 reasonable best efforts to cause the Exchange Offer
Registration Statement to become effective under the Securities Act on
or prior to 180 days after the Closing Date. 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 reasonable best
efforts to commence and complete the Exchange Offer, on or prior to 45
business days (or longer to the extent required by United States
federal securities laws) after such registration statement has become
effective and exchange Exchange Notes 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 the 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
Notes for all outstanding Transfer Restricted Securities pursuant to
the Exchange Offer and (ii) the Company having exchanged, pursuant to
the Exchange Offer, Exchange Notes for all Transfer Restricted
Securities that have been properly tendered and not withdrawn before
the expiration of the Exchange Offer. The Company agrees to include in
the Exchange Offer Registration Statement a prospectus for use in any
resales by any holder of Exchange Notes that is a broker-dealer, which
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 to keep such Exchange Offer
Registration Statement effective for a period (the "Resale Period")
beginning when Exchange Notes 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 the Company
reasonably believes that such broker-dealers no longer own any Transfer
Restricted Securities, other than Transfer Restricted Securities
acquired from the Company. With respect to such Exchange Offer
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) the Company is not (A) required to file the
Exchange Offer Registration Statement; or (B) permitted to consummate
the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy, or (ii) any holder of Transfer
Restricted Securities notifies the Company in writing prior to the 20th
day following the consummation of the Exchange Offer that (X) it is
prohibited by applicable law or Commission policy from participating in
the Exchange Offer; or (Y) that it may not resell the Exchange Notes
acquired by it in the Exchange Offer to the public in the United States
without delivering a prospectus and the prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available
for such resales; or (Z) it is a broker-dealer and owns Securities
acquired directly from the Company or an affiliate of the Company, the
Company will file under the Securities Act, on or prior to 60 days
after such obligation 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 affected thereby, pursuant to Rule 415 or
4
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 reasonable best
efforts (x) to cause the Shelf Registration Statement to become or be
declared effective on or prior to 150 days after such obligation 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 Offer 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 Offer 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 (the "Effectiveness Target Date") or (iii) the
Exchange Offer has not been completed within 45 business days after the
initial effective date of the Exchange Offer Registration Statement
relating to the Exchange Offer (if the Exchange Offer is then required
to be made), or (iv) any Exchange Offer 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 to
each holder of Transfer Restricted Securities, with respect to the
first 90-day period immediately following the occurrence of the first
Registration Default, in an amount equal to US$0.05 per week per
US$1,000 principal amount of Transfer Restricted Securities held by the
Holders. The amount of Special Interest will increase by an additional
US$0.05 per week per US$1,000 principal amount of Transfer Restricted
Securities with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of
Special Interest for all Registration Defaults of US$0.50 per week per
US$1,000 principal amount of Transfer Restricted 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. All
accrued Special Interest through each record date with respect to the
succeeding Interest Payment Date will be paid by the Company on each
Interest Payment Date (as defined in the Indenture) to the Global Note
Holder (as defined in the Indenture) by wire transfer of immediately
available funds or by federal funds check and to Holders of
Certificated Notes (as
5
defined in the Indenture) by wire transfer to the accounts specified by
them or by mailing checks to their registered addresses if no such
accounts have been specified.
(d) The Company shall use its reasonable 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 such qualification 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 Notes as contemplated by Section 2(a)
(the "Exchange Registration"), if applicable, the Company shall, as
soon as practicable (or as otherwise specified):
(i) prepare and file with the Commission, on or prior
to 90 days after the Closing Date, an Exchange Offer
Registration Statement on any form which may be utilized by
the Company and which shall permit the Exchange Offer and
resales of Exchange Notes 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 reasonable best
efforts to cause such Exchange Offer Registration Statement to
become effective on or prior to 180 days after the Closing
Date;
(ii) as soon as practicable prepare and file with the
Commission such amendments and supplements to such Exchange
Offer Registration Statement and the prospectus included
therein as may be necessary to effect and maintain the
effectiveness of such Exchange Offer 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 Offer Registration Statement, and
promptly provide each broker-dealer holding Exchange Notes 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, as such broker-dealer reasonably may request prior to the
expiration of the Resale Period, for use in connection with
resales of Exchange Notes;
(iii) promptly notify each broker-dealer that has
requested and 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 information on when such Exchange Offer Registration
Statement or the prospectus included therein or any prospectus
amendment
6
or supplement or post-effective amendment has been filed, or,
information with respect to any comments by the Commission and
by the blue sky or securities commissioner or regulator of any
state or province with respect thereto or on any request by
the Commission for amendments or supplements to such Exchange
Registration Statement or prospectus or for additional
information, (B) with respect to the Exchange Offer
Registration Statement or any post-effective amendment, when
the same has become effective, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of
such Exchange Offer 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 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 Exchange Notes for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose, or (F) at any time during the
Resale Period when a prospectus is required to be delivered
under the Securities Act, that such Exchange Offer
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 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(e)(iii)(F) above, to notify any
broker-dealers holding Exchange Notes, 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 Notes 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 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 reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of such
Exchange Offer Registration Statement or any post-effective
amendment thereto at the earliest practicable date;
(vi) use its reasonable best efforts to (A) register
or qualify the Exchange Notes 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 Notes 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 or
taxation in any such jurisdiction, (3) make any changes to its
articles of incorporation 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 tradable
in Canada;
7
(vii) use its reasonable best efforts to obtain the
consent or approval of each governmental agency or authority,
whether federal, state or local, which may be required to
effect the Exchange Registration, the Exchange Offer and the
offering and sale of Exchange Notes by broker-dealers during
the Resale Period;
(viii) provide a CUSIP number for all Exchange Notes,
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
Offer 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
business days after 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;
8
(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 with respect to 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 to 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 registration
statement or otherwise), or (B) such person shall be required
so to 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 United States federal securities laws 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) in cases
where a broker-dealer has specifically requested information
on when such Shelf Registration Statement or the prospectus
included therein or any prospectus amendment or supplement or
post-effective amendment has been filed, or, with respect to
any comments by the Commission and by the blue sky or
securities commissioner or regulator of any state or province
with respect thereto (which comments need only be provided to
any underwriter in the event of an underwritten offering
pursuant to Section 7 hereof or any sales or placement agent
in an offering of such Electing Holders' Transfer Restricted
Securities and in the event there is no such underwriter or
sales or placement agent
9
the Company will not be under an obligation to provide such
comments to any Electing Holder) or on any request by the
Commission for amendments or supplements to such Shelf
Registration Statement or prospectus or for additional
information, (B) with respect to such Shelf Registration
Statement or any post-effective amendment, when the same has
become effective, (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 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;
(ix) use its reasonable best efforts to obtain the
withdrawal of (A) any order suspending the effectiveness of
such registration statement or any post-effective amendment
thereto at the earliest practicable date, (B) the suspension
of the qualification of the Transfer Restricted Securities for
sale in any jurisdiction or (C) the initiation or threatening
of any proceeding for such purpose;
(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
10
conformity in all material respects with the applicable
requirements of the Securities Act and the Trust Indenture Act
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
(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 reasonable 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
or taxation in any such jurisdiction, (3) make any changes to
its certificate of incorporation 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
tradable in Canada;
(xiii) use its reasonable 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 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 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
11
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;
(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
and good standing of the Company; the qualification of the
Company to transact business as a foreign corporation or extra
provincial corporation; 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; the
absence of a conflict of the offering with material agreements
binding upon 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, 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
12
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
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
13
(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).
(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 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 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
14
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 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 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 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 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
15
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, each 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 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 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 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 or the Exchange Act or any applicable Canadian
Securities Law, 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
16
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 certificate of
incorporation or 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
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 corporate law or State
securities or blue sky laws in connection with the offering and
distribution of the 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 Offer 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
Offer 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
17
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, 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 which 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 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
18
defense thereof, with counsel 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, and, no indemnified party
shall 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 without the consent of the indemnifying party from which
indemnification or contribution may be sought, which consent shall not
be unreasonably withheld.
(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 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
19
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, the
Company 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 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.
20
(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 Purchasers 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 Purchasers 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 it at ▇▇▇▇▇▇ Western
Forest Products Ltd. at ▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇,
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 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) Additional 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 o 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.
(f) 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.
21
(g) 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.
(h) 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.
(i) 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.
(j) 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.
(k) 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.
(l) 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 courts
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, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, 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
22
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.
(m) 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" shall
include any premiums and costs of exchange payable in connection with
the purchase of or conversion into United States dollars.
23
If the foregoing is in accordance with your understanding, please sign
and return to us nine counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers the Company.
It is understood that your acceptance of this letter on behalf of each of the
Purchasers is pursuant to the authority set forth in a form of Agreement among
Purchasers, the form of which shall be submitted to the Company for examination
upon request, but without warranty on your part as to the authority of the
signers thereof.
Very truly yours,
▇▇▇▇▇▇ WESTERN FOREST PRODUCTS LTD.
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President, Chief Executive Officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
▇▇▇▇▇▇ Western Forest Products Ltd.
Exchange and Registration Rights Agreement
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
CIBC World Markets Corp.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corp.
HSBC Securities (USA) Inc.
By: /s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
-----------------------------------------
(▇▇▇▇▇▇▇, Sachs & Co.)
On behalf of each of the Purchasers
24
EXHIBIT A
▇▇▇▇▇▇ WESTERN FOREST PRODUCTS LTD.
INSTRUCTION TO DTC PARTICIPANTS
(Date of Mailing)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: [ ], 2003 *
The Depository Trust Company ("DTC") has identified you as a DTC Participant
through which beneficial interests in the ▇▇▇▇▇▇ Western Forest Products Ltd.
(the "Company") 7.75% Senior Notes Due 2013 (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 ▇▇▇▇▇▇ Western
Forest Products Ltd. at ▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(Telephone: (▇▇▇) ▇▇▇-▇▇▇▇)).
------------------
* Not less than 28 calendar days from date of mailing.
▇-▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Products 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 ▇▇▇▇▇▇ Western Forest
Products Ltd. (the "Company") and the Purchasers 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 7.75% Senior Notes Due 2013 (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.
A-2
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:
______________________________________________________________________
(b) Full Legal Name of Registered Holder (if not the same as in (a) above)
of Transfer Restricted Securities Listed in Item (3) below:
______________________________________________________________________
(c) 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: ____________________________________________
(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:
____________________________________________
A-3
(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:
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.
A-4
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:
____________________________________________
____________________________________________
____________________________________________
____________________________________________
____________________________________________
(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
A-5
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.
A-6
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:
____________________________________________
____________________________________________
____________________________________________
____________________________________________
____________________________________________
A-7
EXHIBIT B
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
Bank of New York
▇▇▇▇▇▇ Western Forest Products Ltd.
▇/▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Trust Officer
Re: ▇▇▇▇▇▇ Western Forest Products Ltd. (the "Company")
7.75% Senior Notes Due 2013
Dear Sirs:
Please be advised that ________________________________________ has transferred
US$__________________ aggregate principal amount of the above-referenced Notes
pursuant to an effective Registration Statement on Form [____] (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 [ ], 2003 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)
B-1