--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ LUMBER CO. LTD.
6.750% SENIOR NOTES
DUE MARCH 15, 2014
--------------------------------
INDENTURE
Dated as of May 19, 2004
--------------------------------
The Bank of New York
Trustee
--------------------------------------------------------------------------------
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
----------- -----------------
310(a)(1) .................................................................... 7.10
(a)(2) .................................................................... 7.10
(a)(3) .................................................................... N.A.
(a)(4) .................................................................... N.A.
(a)(5)..................................................................... 7.10
(b)........................................................................ 7.10
(c)........................................................................ N.A.
311(a)........................................................................ 7.11
(b)........................................................................ 7.11
(c)........................................................................ N.A.
312(a).......................................................................... 2.05
(b)........................................................................ 12.03
(c)........................................................................ 12.03
313(a)........................................................................ 7.06
(b)(1)..................................................................... N.A.
(b)(2)..................................................................... 7.07
(c)........................................................................ 7.06;12.02
(d)........................................................................ 7.06
314(a)........................................................................ 4.03;12.02
(b)........................................................................ N.A.
(c)(1)..................................................................... 12.04
(c)(2)..................................................................... 12.04
(c)(3)..................................................................... N.A.
(d)........................................................................ N.A.
(e)........................................................................ 12.05
(f)........................................................................ N.A.
315(a)........................................................................ 7.01
(b)........................................................................ 7.05;12.02
(c)........................................................................ 7.01
(d)........................................................................ 7.01
(e)........................................................................ 6.14
316(a)(last sentence)......................................................... 2.09
(a)(1)(A).................................................................. 6.05
(a)(1)(B).................................................................. 6.04
(a)(2)..................................................................... N.A.
(b)........................................................................ 6.07
(c)........................................................................ 2.12; 9.04
317(a)(1)..................................................................... 6.08
(a)(2)..................................................................... 6.12
(b)........................................................................ 2.04
318(a)........................................................................ 12.01
(b)........................................................................ N.A.
(c)........................................................................ 12.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE.....................................................1
Section 1.01 Definitions.....................................................................1
"144A Global Note"................................................................................1
"Acquired Indebtedness"...........................................................................1
"Additional Notes"................................................................................1
"Affiliate".......................................................................................1
"Agent"...........................................................................................2
"Applicable Procedures"...........................................................................2
"Asset Sale"......................................................................................2
"Attributable Debt"...............................................................................3
"Bankruptcy Law"..................................................................................3
"Beneficial Owner"................................................................................3
"Board of Directors"..............................................................................3
"Borrowing Base"..................................................................................3
"Broker-Dealer"...................................................................................3
"Business Day"....................................................................................3
"Buy/Sell Option".................................................................................3
"Capital Lease Obligation"........................................................................3
"Capital Stock"...................................................................................4
"Cash Equivalents"................................................................................4
"Change of Control"...............................................................................4
"Clearstream".....................................................................................5
"Commission"......................................................................................5
"Common Stock"....................................................................................5
"Company".........................................................................................5
"Company Request" or "Company Order"..............................................................5
"Consolidated Cash Flow"..........................................................................5
"Consolidated Net Income".........................................................................6
"Consolidated Net Tangible Assets"................................................................7
"Corporate Trust Office of the Trustee"...........................................................7
"Credit Facilities"...............................................................................7
"Custodian".......................................................................................7
"Default".........................................................................................7
"Definitive Note".................................................................................7
"Depositary"......................................................................................8
"Disqualified Stock"..............................................................................8
"Equity Interests"................................................................................8
"Euroclear".......................................................................................8
"Exchange Act"....................................................................................8
"Exchange Notes"..................................................................................8
"Exchange Offer"..................................................................................8
"Exchange Registration Statement".................................................................8
"Existing Indebtedness"...........................................................................8
i
PAGE
----
"Fixed Charges"...................................................................................8
"Fixed Charge Coverage Ratio".....................................................................9
"GAAP"...........................................................................................10
"Global Notes"...................................................................................10
"Global Note Legend".............................................................................10
"Government Securities"..........................................................................10
"Grant"..........................................................................................10
"Guarantee"......................................................................................10
"Guarantors".....................................................................................11
"Hedging ▇▇▇▇▇▇▇▇▇▇▇"............................................................................11
"High Level Memorandum of Agreement".............................................................11
"High Level Project".............................................................................11
"Holder".........................................................................................11
"Indebtedness"...................................................................................11
"Indenture"......................................................................................12
"Indirect Participant"...........................................................................12
"Initial Notes"..................................................................................12
"Institutional Accredited Investor"..............................................................12
"Interest Payment Date"..........................................................................12
"Investment Grade Ratings".......................................................................12
"Investments"....................................................................................12
"Legal Holiday"..................................................................................13
"Letter of Transmittal"..........................................................................13
"Lien"...........................................................................................13
"▇▇▇▇▇'▇"........................................................................................13
"Net Income".....................................................................................13
"Net Proceeds"...................................................................................13
"Non-Guarantor Restricted Subsidiaries"..........................................................14
"Non-Recourse Debt"..............................................................................14
"Non-U.S. Person"................................................................................14
"North American Restricted Subsidiary"...........................................................14
"Notes"..........................................................................................14
"Obligations"....................................................................................15
"Offering Circular"..............................................................................15
"Officer"........................................................................................15
"Officers' Certificate"..........................................................................15
"Opinion of Counsel".............................................................................15
"Participant"....................................................................................15
"Permitted Business".............................................................................15
"Permitted Holder"...............................................................................15
"Permitted Investments"..........................................................................15
"Permitted Joint Venture"........................................................................16
"Permitted Liens"................................................................................16
"Permitted Refinancing Indebtedness".............................................................18
"Person".........................................................................................18
"Private Placement Legend".......................................................................18
ii
PAGE
----
"QIB"............................................................................................19
"Rating Agencies"................................................................................19
"Rating Category"................................................................................19
"Record Date"....................................................................................19
"Registration Rights Agreement"..................................................................19
"Regulation S"...................................................................................19
"Regulation S Global Note".......................................................................19
"Related Person".................................................................................19
"Responsible Officer"............................................................................19
"Restricted Definitive Note".....................................................................20
"Restricted Global Note".........................................................................20
"Restricted Investment"..........................................................................20
"Restricted Subsidiary"..........................................................................20
"Right of First Refusal".........................................................................20
"Rule 144".......................................................................................20
"Rule 144A"......................................................................................20
"Rule 903".......................................................................................20
"Rule 904".......................................................................................20
"S&P"............................................................................................20
"Securities Act".................................................................................20
"Shelf Registration Statement"...................................................................20
"Significant Subsidiary".........................................................................20
"Special Interest"...............................................................................20
"Stated Maturity"................................................................................20
"Subsidiary".....................................................................................20
"Subsidiary Guarantee"...........................................................................21
"TIA"............................................................................................21
"Trustee"........................................................................................21
"Unrestricted Definitive Note"...................................................................21
"Unrestricted Global Note".......................................................................21
"Unrestricted Subsidiary"........................................................................21
"U.S." and "United States".......................................................................22
"U.S. Dollar" and "US$"..........................................................................22
"$"..............................................................................................22
"U.S. Person"....................................................................................22
"Voting Stock"...................................................................................22
"Weighted Average Life to Maturity"..............................................................22
"Wholly Owned Restricted Subsidiary".............................................................23
Section 1.02 Other Definitions..............................................................23
Section 1.03 Incorporation by Reference of Trust Indenture Act..............................24
Section 1.04 Rules of Construction..........................................................25
ARTICLE 2 THE NOTES.....................................................................................25
Section 2.01 Form and Dating; Terms.........................................................25
Section 2.02 Execution and Authentication...................................................26
Section 2.03 Registrar and Paying Agent for the Notes.......................................27
Section 2.04 Paying Agent to Hold Money in Trust............................................27
iii
PAGE
----
Section 2.05 Holder Lists....................................................................32
Section 2.06 Transfer and Exchange...........................................................33
Section 2.07 Replacement Notes...............................................................46
Section 2.08 Outstanding Notes...............................................................46
Section 2.09 Treasury Notes..................................................................47
Section 2.10 Temporary Notes.................................................................47
Section 2.11 Cancellation....................................................................47
Section 2.12 Defaulted Interest..............................................................47
ARTICLE 3 REDEMPTION.....................................................................................48
Section 3.01 Notices to Trustee..............................................................48
Section 3.02 Selection of Notes to be Redeemed...............................................48
Section 3.03 Notice of Redemption............................................................49
Section 3.04 Effect of Notice of Redemption..................................................50
Section 3.05 Deposit of Redemption Price.....................................................50
Section 3.06 Notes Redeemed in Part..........................................................50
Section 3.07 Optional Redemption.............................................................50
Section 3.08 Mandatory Redemption............................................................51
Section 3.09 Offers to Repurchase............................................................52
ARTICLE 4 COVENANTS......................................................................................54
Section 4.01 Payment of Notes................................................................54
Section 4.02 Maintenance of Office or Agency.................................................54
Section 4.03 Reports to Holders..............................................................55
Section 4.04 Compliance Certificate..........................................................55
Section 4.05 Taxes...........................................................................56
Section 4.06 Stay, Extension and Usury Laws..................................................56
Section 4.07 Restricted Payments.............................................................56
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.......59
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock......................61
Section 4.10 Asset Sales.....................................................................64
Section 4.11 Transactions with Affiliates....................................................66
Section 4.12 Liens...........................................................................68
Section 4.13 Payments for Consent............................................................68
Section 4.14 Corporate Existence.............................................................68
Section 4.15 Change of Control...............................................................69
Section 4.16 Additional Subsidiary Guarantees................................................69
Section 4.17 Designation of Restricted and Unrestricted Subsidiaries.........................70
Section 4.18 Additional Amounts..............................................................70
Section 4.19 Limitation on Guarantees by Restricted Subsidiaries.............................72
Section 4.20 Money for Security Payments to Be Held in Trust.................................72
Section 4.21 Maintenance of Properties.......................................................73
Section 4.22 Maintenance of Insurance........................................................74
Section 4.23 Certain Fall-Away Covenants.....................................................74
ARTICLE 5 SUCCESSORS.....................................................................................75
Section 5.01 Merger, Amalgamation, Consolidation or Sale of Assets...........................75
Section 5.02 Successor Corporation Substituted...............................................76
iv
PAGE
----
ARTICLE 6 DEFAULTS AND REMEDIES..........................................................................76
Section 6.01 Events of Default...............................................................78
Section 6.02 Acceleration....................................................................78
Section 6.03 Other Remedies..................................................................79
Section 6.04 Waiver of Past Defaults.........................................................79
Section 6.05 Control by Majority.............................................................80
Section 6.06 Limitation on Suits.............................................................80
Section 6.07 Rights of Holders of Notes to Receive Payment...................................80
Section 6.08 Collection Suit by Trustee......................................................80
Section 6.09 Restoration of Rights and Remedies..............................................81
Section 6.10 Rights and Remedies Cumulative..................................................81
Section 6.11 Delay or Omission Not Waiver....................................................81
Section 6.12 Trustee May File Proofs of Claim................................................81
Section 6.13 Priorities......................................................................82
Section 6.14 Undertaking for Costs...........................................................82
ARTICLE 7 TRUSTEE........................................................................................83
Section 7.01 Duties of Trustee...............................................................83
Section 7.02 Rights of Trustee...............................................................84
Section 7.03 Individual Rights of Trustee....................................................85
Section 7.04 Trustee's Disclaimer............................................................85
Section 7.05 Notice of Defaults..............................................................85
Section 7.06 Reports by Trustee to Holders of the Notes......................................86
Section 7.07 Compensation and Indemnity......................................................86
Section 7.08 Replacement of Trustee..........................................................87
Section 7.09 Successor Trustee by Merger, etc................................................88
Section 7.10 Eligibility; Disqualification...................................................88
Section 7.11 Preferential Collection of Claims Against Company...............................88
Section 7.12 Appointment of Co-Trustee.......................................................88
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE.......................................................89
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance........................89
Section 8.02 Legal Defeasance and Discharge..................................................89
Section 8.03 Covenant Defeasance.............................................................90
Section 8.04 Conditions to Legal or Covenant Defeasance......................................91
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions........................................................92
Section 8.06 Repayment to Company............................................................93
Section 8.07 Reinstatement...................................................................93
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER...............................................................93
Section 9.01 Without Consent of Holders of Notes.............................................93
Section 9.02 With Consent of Holders of Notes................................................94
Section 9.03 Compliance with Trust Indenture Act.............................................96
Section 9.04 Revocation and Effect of Consents...............................................96
Section 9.05 Notation on or Exchange of Notes................................................96
Section 9.06 Trustee to Sign Amendments, etc.................................................96
ARTICLE 10 GUARANTEES....................................................................................97
Section 10.01 Subsidiary Guarantee............................................................97
v
PAGE
----
Section 10.02 Limitation on Guarantor Liability..............................................94
Section 10.03 Execution and Delivery of Subsidiary Guarantee.................................95
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.............................95
Section 10.05 Releases Following Sale of Assets..............................................96
Section 10.06 Subrogation....................................................................97
Section 10.07 Benefits Acknowledged..........................................................97
ARTICLE 11 SATISFACTION AND DISCHARGE...................................................................97
Section 11.01 Satisfaction and Discharge.....................................................97
Section 11.02 Application of Trust Money.....................................................98
ARTICLE 12 MISCELLANEOUS................................................................................99
Section 12.01 Trust Indenture Act Controls...................................................99
Section 12.02 Notices........................................................................99
Section 12.03 Communication by Holders of Notes with Other Holders of Notes.................100
Section 12.04 Certificate and Opinion as to Conditions Precedent............................100
Section 12.05 Statements Required in Certificate or Opinion.................................101
Section 12.06 Rules by Trustee and Agents...................................................101
Section 12.07 No Personal Liability of Directors, Officers Employees and Shareholders.......101
Section 12.08 Governing Law.................................................................101
Section 12.09 Waiver of Jury Trial..........................................................102
Section 12.10 Force Majeure.................................................................102
Section 12.11 No Adverse Interpretation of Other Agreements.................................102
Section 12.12 Successors....................................................................102
Section 12.13 Agent for Service; Submission to Jurisdiction; Waiver of Immunities...........102
Section 12.14 Conversion of Currency........................................................103
Section 12.15 Currency Equivalent...........................................................104
Section 12.16 Severability..................................................................104
Section 12.17 Counterpart Originals.........................................................104
Section 12.18 Table of Contents, Headings, etc..............................................104
Exhibit A Form of Global Note
Exhibit B Form of Certificate of Transfer
Exhibit C Form of Certificate of Exchange
Exhibit D Form of Certificate From Acquiring Institutional Accredited Investor
Exhibit E Form of Notation of Guarantor
Exhibit F Form of Supplemental Indenture to be Delivered by Subsequent Guarantors
vi
INDENTURE dated as of May 19, 2004 between ▇▇▇▇▇▇▇▇▇ Lumber Co. Ltd., a
British Columbia corporation (the "Company") and The Bank of New York, a New
York banking corporation, as Trustee.
The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the 6.750% Senior Notes
due March 15, 2014 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Indebtedness" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person
is merged with or into or became a Subsidiary of such specified Person, whether
or not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Additional Notes" means Notes other than the Initial Notes issued under this
Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same
class as the Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control",
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling", "controlled by" and "under common control
with" have correlative meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of or
for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, other than sales of inventory in the ordinary course of business
consistent with past practices, but excluding the Equity Interests or other
Investments in Unrestricted Subsidiaries; provided that the sale, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Restricted Subsidiaries taken as a whole will be governed by Sections 4.15
and/or Sections 5.01 hereof and not by Section 4.10 hereof; and
(2) the issuance of Equity Interests in any of the Company's Restricted
Subsidiaries or the sale of Equity Interests in any of its Restricted
Subsidiaries other than directors' qualifying shares;
provided that, the following items will not be deemed to be Asset Sales:
(1) any single transaction or series of related transactions that involves
assets having a fair market value of less than US$1.0 million;
(2) a transfer of assets between or among the Company and its Wholly Owned
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to the
Company or to a Wholly Owned Restricted Subsidiary;
(4) the sale or other disposition of cash or Cash Equivalents, or the sale
of accounts receivable in the ordinary course of business or in connection with
the compromise, settlement or collection thereof;
(5) the disposition of surplus, obsolete, discontinued or worn-out
equipment or other immaterial assets no longer used in the ongoing business of
the Company and its Restricted Subsidiaries; and
(6) a sale or other disposition that immediately results in a Permitted
Investment or a Restricted Payment that is permitted by Section 4.07 hereof.
"Attributable Debt" in respect of a sale and leaseback transaction means, at the
time of determination, the present value of the obligation of the lessee for net
rental payments during the remaining term of the lease included in such sale and
leaseback transaction including any period for which such lease has been
extended or may, at the option of the lessor, be extended. Such present value
shall be calculated using a discount rate equal to the rate of interest implicit
in such transaction, determined in accordance with GAAP.
2
"Bankruptcy Law" means Title 11, U.S. Code, the Bankruptcy and Insolvency Act
(Canada) or any similar United States federal or state law or Canadian federal,
provincial or territorial law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule
13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the Board of Directors of the general
partner of the partnership; and
(3) with respect to any other Person, the board or committee of such Person
serving a similar function.
"Borrowing Base" means, as of any date, an amount equal to:
(1) 85% of the face amount of all accounts receivable owned by the Company
and the Guarantors as of the end of the most recent fiscal quarter preceding
such date for which internal financial statements are available that were not
more than 90 days past due; plus
(2) 65% of the book value of all inventory owned by the Company and the
Guarantors as of the end of the most recent fiscal quarter preceding such date
for which internal financial statements are available,
all calculated on a consolidated basis and in accordance with GAAP.
"Broker-Dealer" has the meaning set forth in the Registration Rights Agreement.
"Business Day" means any day other than a Legal Holiday.
"Buy/Sell Option" means a compulsory offer to purchase or sell an interest in
the High Level Project made pursuant to the High Level Memorandum of Agreement
or similar or replacement documents relating to the High Level Project.
"Capital Lease Obligation" means, at the time any determination is to be made,
the amount of the liability in respect of a capital lease that would at that
time be required to be capitalized on a balance sheet in accordance with GAAP.
3
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock;
(3) in the case of a partnership or limited liability company, partnership
or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of assets of,
the issuing Person.
"Cash Equivalents" means:
(1) United States dollars or Canadian dollars;
(2) securities issued or directly and fully guaranteed or insured by the
United States government or the Canadian government or any agency or
instrumentality of the United States government or the Canadian government
(provided that the full faith and credit of the United States or Canada, as
applicable, is pledged in support of those securities) having maturities of not
more than six months from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with maturities of
six months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case,
with any lender party to a Credit Facility or U.S. or Canadian commercial bank
having capital and surplus in excess of US$500.0 million and a Thomson Bank
Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications specified
in clause (3) above;
(5) commercial paper having the highest rating obtainable from ▇▇▇▇▇'▇
Investors Service, Inc. or Standard & Poor's Rating Services and in each case
maturing within six months after the date of acquisition; and
(6) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger, amalgamation or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets
of the Company and its
4
Restricted Subsidiaries taken as a whole to any "person" (as that term is used
in Section 13(d)(3) of the Exchange Act) other than the Permitted Holders;
(2) the adoption of a plan relating to the liquidation or dissolution of
the Company;
(3) the consummation of any transaction (including, without limitation, any
merger, amalgamation or consolidation) the result of which is that any "person"
(as defined above in clause (1)), together with any Affiliates or Related
Persons thereof, other than the Permitted Holders, becomes the Beneficial Owner,
directly or indirectly, of at least 50% of the total voting power of Voting
Stock of the Company;
(4) any "person" (as defined above in clause (1)), together with any
Affiliates or Related Persons thereof, other than the Permitted Holders, shall
succeed in having a sufficient number of its nominees elected to the Board of
Directors of the Company such that such nominees, when added to any existing
director remaining on the Board of Directors of the Company after such election
who was a nominee of or is an Affiliate or Related Person of such person, will
constitute a majority of the Board of Directors of the Company; or
(5) the Company consolidates or amalgamates with, or merges with or into,
any Person, or any Person consolidates or amalgamates with, or merges with or
into, the Company, in any such event pursuant to a transaction in which any of
the outstanding Voting Stock of the Company or such other Person is converted
into or exchanged for cash, securities or other property, other than any such
transaction where the Voting Stock of the Company outstanding immediately prior
to such transaction is converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee Person constituting a
majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such issuance).
"Clearstream" means Clearstream Banking S.A.
"Commission" means the United States Securities and Exchange Commission.
"Common Stock" of any Person means Capital Stock of such Person that does not
rank prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding-up of such
Person, to shares of Capital Stock of any other class of such Person.
"Company" means ▇▇▇▇▇▇▇▇▇ Lumber Co. Ltd., and any and all successors thereto.
"Company Request" or "Company Order" means a written request or order signed in
the name of the Company by one or more of its Chairman, Chief Executive Officer,
President, Chief Financial Officer, any Vice President, its Treasurer or its
Secretary, and delivered to the Trustee.
"Consolidated Cash Flow" means, with respect to any specified Person for any
period, the Consolidated Net Income of such Person for such period plus:
5
(1) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus
(2) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging Obligations), to the
extent that any such expense was deducted in computing such Consolidated Net
Income; plus
(3) depreciation, amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period) and other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that was
paid in a prior period) of such Person and its Restricted Subsidiaries for such
period to the extent that such depreciation, amortization and other non-cash
expenses were deducted in computing such Consolidated Net Income; minus
(4) non-cash items increasing such Consolidated Net Income for such period,
other than the accrual of revenue in the ordinary course of business,
in each case, on a consolidated basis and determined in accordance with GAAP;
provided that, if the consolidated financial statements of the Company include a
minority interest, the amounts in the foregoing clauses (1) to (5) shall be
calculated net of any such amounts included in determining the minority
interest.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash expenses
of, a Restricted Subsidiary of the Company will be added to Consolidated Net
Income to compute Consolidated Cash Flow of the Company only to the extent that
a corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Restricted Subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
6
(1) the Net Income (but not loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting will be
included only to the extent of the amount of dividends or distributions paid in
cash to the specified Person or a Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded to the
extent that the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition will be
excluded; and
(4) the cumulative effect of a change in accounting principles will be
excluded.
"Consolidated Net Tangible Assets" means the total amount of assets of any
Person on a consolidated basis, including deferred pension costs, after
deducting therefrom (i) all current liabilities (excluding any indebtedness
classified as a current liability), (ii) all goodwill, trade names, trademarks,
patents, unamortized debt discount and financing costs and all other like
intangible assets and (iii) appropriate adjustments on account of minority
interests of other Persons holding shares of the Subsidiaries of such Person,
all as set forth in the most recent balance sheet of such Person and its
consolidated Subsidiaries (but, in any event, as of a date within 150 days of
the date of determination) and computed in accordance with generally accepted
accounting principles.
"Corporate Trust Office of the Trustee" shall be at the address of the Trustee
specified in Section 12.02 hereof or such other address as to which the Trustee
may give notice to the Company.
"Credit Facilities" means one or more debt facilities or commercial paper
facilities, in each case with banks or other institutional lenders providing for
revolving credit loans, term loans, receivables financing (including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, in each
case, as amended, extended, restated, modified, renewed, refunded, replaced or
refinanced in whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes in global
form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the giving of
notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the Holder
thereof and issued in accordance with Section 2.06(c) hereof, substantially in
the form of Exhibit A
7
hereto, except that such Note shall not bear the Global Note Legend and shall
not have the "Schedule of Exchanges of Interests in the Global Note" attached
thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole or in
part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as Depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Disqualified Stock" means any Capital Stock of the Company that, by its terms
(or by the terms of any security into which it is convertible, or for which it
is exchangeable, in each case at the option of the holder of the Capital Stock),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of the Capital Stock, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.07 hereof.
"Equity Interests" means Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).
"Euroclear" means Euroclear S.A./N.V., as operator of the Euroclear system.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant to
Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights Agreement.
"Exchange Registration Statement" has the meaning set forth in the Registration
Rights Agreement.
"Existing Indebtedness" means the Indebtedness of the Company and its Restricted
Subsidiaries in existence on March 3, 2004 after giving effect to the
application of the proceeds of the Company's offering of 6.750% Senior Notes due
March 15, 2014 issued on March 3, 2004, until such amounts are repaid.
"Fixed Charges" means, with respect to any specified Person and its Restricted
Subsidiaries for any period, the sum, without duplication, of:
8
(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including, without
limitation, amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries, whether or
not such Guarantee or Lien is called upon; plus
(4) the amount of all payments charged to shareholder's equity on any
"compound financial instrument" (as described under GAAP) paid, accrued or
scheduled to be paid or accrued during such period; plus
(5) the product of (a) all dividends, whether paid or accrued and whether
or not in cash, on any series of Disqualified Stock or preferred stock of such
Person or any of its Restricted Subsidiaries, other than dividends on Equity
Interests payable solely in Equity Interests of the Company (other than
Disqualified Stock) or to the Company or a Wholly Owned Restricted Subsidiary of
the Company, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, provincial,
state and local statutory tax rate of such Person, expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any specified Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the specified
Person or any of its Restricted Subsidiaries incurs, assumes, guarantees,
repays, repurchases or redeems any Indebtedness (other than ordinary working
capital borrowings) or issues, repurchases or redeems Disqualified Stock or
preferred stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated and on or prior to the date on which
the event for which the calculation of the Fixed Charge Coverage Ratio is made
(the "Calculation Date"), then the Fixed Charge Coverage Ratio will be
calculated giving pro forma effect to such incurrence, assumption, Guarantee,
repayment, repurchase or redemption of Indebtedness, or such issuance,
repurchase or redemption of Disqualified Stock or preferred stock, and the use
of the proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
9
(1) acquisitions that have been made by the specified Person or any of its
Restricted Subsidiaries, including through mergers, amalgamation or
consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date will be given pro forma effect as if they had
occurred on the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period will be calculated on a pro forma basis in
accordance with Regulation S-X under the Securities Act, but without giving
effect to clause (3) of the proviso set forth in the definition of Consolidated
Net Income;
(2) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, will be excluded;
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, will be excluded, but only to the extent that the
obligations giving rise to such Fixed Charges will not be obligations of the
specified Person or any of its Restricted Subsidiaries following the Calculation
Date; and
(4) the consolidated interest expense of the specified Person and its
Restricted Subsidiaries attributable to interest on any Indebtedness (whether
existing or being incurred) computed on a pro forma basis and bearing a floating
interest rate shall be computed as if the rate in effect on the Calculation Date
(taking into account Hedging Obligations applicable to such Indebtedness if such
agreement has a remaining term in excess of 12 months or, if shorter, at least
equal to the remaining term of such Indebtedness) had been the applicable rate
for the entire period.
"GAAP" means, as of any date of determination, generally accepted accounting
principles in Canada and which are applicable as of any date of determination.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes, substantially in the form of
Exhibit A hereto, issued in accordance with Section 2.01, 2.06(b), 2.06(d) or
2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii), which is
required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations guaranteed
by, the United States of America, and the payment for which the United States
pledges its full faith and credit.
"Grant" means Grant Forest Products Inc., an Ontario corporation, any other
Person or Persons who replace ▇▇▇▇▇ and become co-owners of the High Level
Project, any successor entity thereto, and any Affiliate thereof.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including,
10
without limitation, by way of a pledge of assets or through letters of credit or
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.
"Guarantors" means any Subsidiary that executes a Subsidiary Guarantee in
accordance with the provisions of this Indenture and its respective successors
and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in currency exchange rates, commodity prices or interest
rates.
"High Level Memorandum of Agreement" means the memorandum of agreement, dated as
of December 9, 1999, between the Company and Grant Forest Products Corp.,
relating to the High Level Project.
"High Level Project" means the oriented strand board facility, jointly owned by
the Company and Grant, located near High Level, Alberta, together with all
associated, operating, shareholder and ownership agreements and rights held by
Footner Forest Products Ltd. to harvest logs processed through such facility
pursuant to a deciduous timber allocation issued by the government of Alberta.
"Holder" means a Person in whose name a Note is registered in the Note Register.
"Indebtedness" means, with respect to any specified Person, any indebtedness of
such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price of
any property, except any such balance that constitutes an accrued expense or
trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP; provided, however, that
Indebtedness shall not include obligations of any Person (i) arising from the
honoring by a bank or other
11
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business, provided
that such obligations are extinguished within 15 days of their incurrence, (ii)
resulting from the endorsement of negotiable instruments for collection in the
ordinary course of business and consistent with past business practices and
(iii) under stand-by letters of credit to the extent collateralized by cash or
cash equivalents. In addition, the term "Indebtedness" includes all Indebtedness
of others secured by a Lien on any asset of the specified Person (whether or not
such Indebtedness is assumed by the specified Person) and, to the extent not
otherwise included, the Guarantee by the specified Person of any indebtedness of
any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness
issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with any interest on
the Indebtedness that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Notes" means the US$110,000,000 aggregate principal amount of Notes
issued under this Indenture on the date hereof.
"Institutional Accredited Investor" means an institution that is an "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who is not also a QIB.
"Interest Payment Date" means June 30th and December 30th of each year to Stated
Maturity.
"Investment Grade Ratings" means (i) BBB- or above, in the case of S&P (or its
equivalent under any successor Rating Categories of S&P) and Baa3 or above, in
the case of Moody's (or its equivalent under any successor Rating Categories of
Moody's), or (ii) the equivalent in respect of the Rating Categories of any
Rating Agencies substituted for S&P or Moody's.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP, but shall not
include trade accounts receivable in the ordinary course of business on credit
terms made
12
generally available to customers of such Person. If the Company or any
Subsidiary of the Company sells or otherwise disposes of any Equity Interests of
any direct or indirect Subsidiary of the Company such that, after giving effect
to any such sale or disposition, such Person is no longer a Subsidiary of the
Company, the Company will be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Subsidiary not sold or disposed of in an amount determined as
provided in Section 4.07(c) hereof. The acquisition by the Company or any
Subsidiary of the Company of a Person that holds an Investment in a third Person
will be deemed to be an Investment by the Company or such Subsidiary in such
third Person in an amount equal to the fair market value of the Investment held
by the acquired Person in such third Person in an amount determined as provided
in Section 4.07(c) hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which commercial banking
institutions in the City of New York, the City of Toronto, the City of
Vancouver, or the City of the Corporate Trust Office of the Trustee are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by the
Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.
"Moody's" means ▇▇▇▇▇'▇ Investors Service.
"Net Income" means, with respect to any specified Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes on such
gain or loss, realized in connection with: (a) any Asset Sale; or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related provision for
taxes on such extraordinary gain or loss.
"Net Proceeds" means the aggregate cash proceeds received by the Company or any
of its Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any
13
cash received upon the sale or other disposition of any non-cash consideration
received in any Asset Sale), net of the direct costs relating to such Asset
Sale, including, without limitation, legal, accounting and investment banking
fees, and sales commissions, and any relocation expenses incurred as a result of
the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each
case, after taking into account any available tax credits or deductions and any
tax sharing arrangements, and amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"Non-Guarantor Restricted Subsidiaries" means any North American Restricted
Subsidiaries that collectively do not have total assets in excess of US$3.0
million, and which are designated by the Board of Directors of the Company as
evidenced by a resolution of the Board of Directors delivered to the Trustee.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness), (b) is directly or indirectly
liable as a guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights that the holders
of the Indebtedness may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of any
other Indebtedness of the Company or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment of the
Indebtedness to be accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that they will
not have any recourse to the stock or assets of the Company or any of its
Restricted Subsidiaries;
except for any limited recourse guarantee solely for the purpose of supporting
the pledge by the Company or any of its Restricted Subsidiaries of the Equity
Interests of any Unrestricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person as defined in
Rule 902(k) under the Securities Act.
"North American Restricted Subsidiary" means any Restricted Subsidiary of
the Company that was formed under the laws of the United States or any state of
the United States or the District of Columbia or under the laws of Canada or any
province or territory thereof.
"Notes" has the meaning assigned to it in the preamble to this Indenture
and more particularly means any Note authenticated and delivered under this
Indenture. For all purposes of this Indenture, the term "Notes" shall include
any Additional Notes that may
14
be issued under a supplemental indenture and, for all purposes under this
Indenture, both the Initial Notes and the Additional Notes shall be treated as a
single class.
"Obligations" means any principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.
"Offering Circular" means the offering circular of the Company dated May 11,
2004 relating to the sale of the Initial Notes.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, any Vice President, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of a Person by two
Officers of such Person, one of whom must be the principal executive officer,
the principal financial officer, the treasurer or the principal accounting
officer of such Person that meets the requirements of Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 12.05 hereof.
The counsel may be an employee of or counsel to the Company, or any Restricted
Subsidiary.
"Participant" means, with respect to the Depositary, Euroclear or Clearstream, a
Person who has an account with the Depositary, Euroclear or Clearstream,
respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Business" means any business that derives a majority of its revenues
from the businesses engaged in by the Company and its Restricted Subsidiaries on
March 3, 2004 and/or activities that are reasonably similar, ancillary or
related to, or a reasonable extension, development or expansion of, the
businesses in which the Company and its Restricted Subsidiaries were engaged on
March 3, 2004.
"Permitted Holder" means (i) each of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, (ii) the members of the immediate family of each of the
persons referred to in clause (i) above, (iii) any trust created for the benefit
of any of the persons referred to in clauses (i) and (ii) above or (iv) any
Person at least 85% of the outstanding Capital Stock of which is owned by one or
more of the persons described in clauses (i), (ii) and (iii) above.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary;
(2) any Investment in Cash Equivalents;
15
(3) any Investment by the Company or any Guarantor in a Person, if as a
result of such Investment:
(i) such Person becomes a Guarantor; or
(ii) such Person is merged, consolidated or amalgamated with or into,
or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Guarantor;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.10 hereof;
(5) any acquisition of assets, Capital Stock or other securities solely in
exchange for the issuance of Equity Interests (other than Disqualified Stock) of
the Company;
(6) any Investments by the Company or a Restricted Subsidiary received in
compromise of claims, settlements of debts or disputes or satisfaction of
judgments relating to obligations payable to the Company or such Restricted
Subsidiary, as the case may be, in its capacity as trade creditor or from
customers, which obligations were incurred in the ordinary course of business,
including pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer;
(7) Hedging Obligations in the ordinary course of business and not for
speculative purposes;
(8) an Investment by the Company or any Restricted Subsidiary in a
Permitted Joint Venture; provided that the aggregate amount of all Investments
made pursuant to this clause (8) does not exceed US$3.0 million at any one time
outstanding; and
(9) other Investments in any Person having an aggregate fair market value
(measured on the date each such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (9) since March 3, 2004, not to exceed 5% of the
Consolidated Net Tangible Assets of the Company.
"Permitted Joint Venture" means any joint venture arrangement created by the
Company or one of its Restricted Subsidiaries, the primary purpose of which is
to obtain fiber to supply the operations of the Company or its Restricted
Subsidiaries, provided that the Company and its Restricted Subsidiaries own an
equity interest in such arrangement of at least 40% of the Equity Interests in
such arrangement.
"Permitted Liens" means:
(1) Liens to secure Indebtedness permitted by Section 4.09(b)(1) hereof on
the accounts receivable and inventories (including spare parts) of the Company
and its
16
Restricted Subsidiaries, including the proceeds thereof and all money,
securities and property of the Company and its Restricted Subsidiaries and the
proceeds thereof held by any lender of such indebtedness, and all related books
and records and other intangibles evidencing such collateral;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property of a Person existing at the time such Person is
merged with or into or amalgamated or consolidated with the Company or any
Restricted Subsidiary of the Company; provided that such Liens were in existence
prior to the contemplation of such merger, amalgamation or consolidation and do
not extend to any assets other than those of the Person merged into or
consolidated or amalgamated with the Company or the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition of the property
by the Company or any Restricted Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition;
(5) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature incurred
in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by Section 4.09(b)(4) hereof covering only the assets acquired with
such Indebtedness;
(7) Liens existing on March 3, 2004;
(8) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision as is required in conformity with GAAP
has been made therefor;
(9) Liens securing Indebtedness under Hedging Obligations in the ordinary
course of business and not for speculative purposes; provided, that (i) such
Liens are only secured by property or assets that secure the Indebtedness
subject to the Hedging Obligation or (ii) if such Hedging Obligations are with
one or more parties to Credit Facilities, then secured by the same collateral as
secures the applicable Credit Facilities;
(10) Liens on the Equity Interests of Unrestricted Subsidiaries or
Permitted Joint Ventures securing Indebtedness of such Unrestricted Subsidiaries
or Permitted Joint Ventures not otherwise prohibited by this Indenture;
(11) Liens securing Permitted Refinancing Indebtedness incurred to
refinance any secured Indebtedness; provided that the Liens securing such
Permitted Refinancing Indebtedness are not extended to any additional assets or
property;
17
(12) Liens incurred in the ordinary course of business of the Company or
any Restricted Subsidiary of the Company with respect to obligations that do not
exceed at any one time outstanding 5% of the Consolidated Net Tangible Assets of
the Company; and
(13) a general security agreement between the Company and Grant securing
the obligations of the Company or its Subsidiaries under the High Level
Memorandum of Agreement or similar documents relating to the High Level Project.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company or
any of its Restricted Subsidiaries or Disqualified Stock of the Company or
preferred stock of Restricted Subsidiaries of the Company issued in exchange
for, or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund other Indebtedness of the Company or any of its Restricted
Subsidiaries or Disqualified Stock of the Company or preferred stock of
Restricted Subsidiaries of the Company (other than intercompany Indebtedness,
Disqualified Stock or preferred stock); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness, Disqualified Stock or
preferred stock extended, refinanced, renewed, replaced, defeased or refunded
(plus all accrued interest or dividends on the Indebtedness, Disqualified Stock
or preferred stock and the amount of all expenses and premiums incurred in
connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes or a
Subsidiary Guarantee, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is subordinated in
right of payment to, the Notes or such Subsidiary Guarantee on terms at least as
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary that is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Private Placement Legend" means the legend set forth in Section 2.06(g)(i) to
be placed on all Notes issued under this Indenture, except where otherwise
permitted by the provisions of this Indenture.
18
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Rating Agencies" means (i) S&P and ▇▇▇▇▇'▇ or (ii) if S&P or ▇▇▇▇▇'▇ or both of
them are not making ratings of the Notes publicly available, a nationally
recognized U.S. rating agency or agencies, as the case may be, selected by the
Company, which will be substituted for S&P or ▇▇▇▇▇'▇ or both, as the case may
be.
"Rating Category" means (i) with respect to S&P, any of the following categories
(and any associated "+" or "-" designation): AAA, AA, A, BBB, BB, B, CCC, CC, C
and D (or equivalent successor categories); (ii) with respect to ▇▇▇▇▇'▇, any of
the following categories (and any associated "1", "2" or "3" designation): Aaa,
Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories); and
(iii) the equivalent of any such categories of S&P or ▇▇▇▇▇'▇ used by another
Rating Agency, if applicable.
"Record Date" for the interest or Special Interest, if any, payable on any
Interest Payment Date means June 15th or December 15th (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
"Registration Rights Agreement" means the Exchange and Registration Rights
Agreement, dated the date hereof by and among the Company and the other parties
named on the signature pages thereof, as such agreement may be amended, modified
or supplemented from time to time and, with respect to any Additional Notes, one
or more registration rights agreements between the Company and the other parties
thereto, as such agreement(s) may be amended, modified or supplemented from time
to time, relating to rights given by the Company to the purchasers of Additional
Notes to register such Additional Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Global Note in the form of Exhibit A hereto
bearing the Global Note Legend (but without the Private Placement Legend) and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee.
"Related Person" of any Person means any other Person directly or indirectly
owning (a) 5% or more of the outstanding Common Stock of such Person (or, in the
case of a Person that is not a corporation, 5% or more of the equity interest in
such Person) or (b) 5% or more of the combined voting power of the Voting Stock
of such Person.
"Responsible Officer" means , when used with respect to the Trustee, any officer
within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
19
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Investment" means an Investment other than a Permitted Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of that Person that is
not an Unrestricted Subsidiary.
"Right of First Refusal" means the exercise by the Company of the right to
acquire the interest of ▇▇▇▇▇ in the High Level Project pursuant to the right of
first refusal option contained in the High Level Memorandum of Agreement or
similar or replacement documents related to the High Level Project.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"S&P" means Standard & Poor's Ratings Services.
"Securities Act" means the U.S. Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Shelf Registration Statement" means the Shelf Registration Statement as defined
in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
"Special Interest" means all special interest then owing pursuant to the
Registration Rights Agreement.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees
20
of the corporation, association or other business entity is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are that Person or one or more Subsidiaries of that
Person (or any combination thereof).
"Subsidiary Guarantee" means the Guarantee by each Guarantor of the Company's
payment obligations under this Indenture and on the Notes, executed pursuant to
the provisions of this Indenture.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date on which
this Indenture is qualified under the TIA.
"Trustee" means the party named as such above until a successor replaces it in
accordance with the applicable provisions of this Indenture and thereafter means
the successor serving hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes that do not
bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent Global Note, substantially in the
form of Exhibit A attached hereto, that bears the Global Note Legend and that
has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing Notes that do not bear the Private Placement
Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is designated
by the Board of Directors as an Unrestricted Subsidiary pursuant to a resolution
of the Board of Directors of the Company, but only to the extent that such
Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or understanding
with the Company or any Restricted Subsidiary of the Company unless the terms of
any such agreement, contract, arrangement or understanding are no less favorable
to the Company or such Restricted Subsidiary than those that might be obtained
at the time from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe
for additional Equity Interests or (b) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results;
(4) has not Guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Company or any of its Restricted
Subsidiaries; and
21
(5) has at least one director on its Board of Directors that is not a
director or executive officer of the Company or any of its Restricted
Subsidiaries and has at least one executive officer that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company will be in
default of such covenant. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation will be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation will only be permitted if (1) such
Indebtedness is permitted under the covenant described under Section 4.09
hereof, calculated on a pro forma basis as if such designation had occurred at
the beginning of the four-quarter reference period; and (2) no Default or Event
of Default would be in existence following such designation.
"U.S." and "United States" means the United States of America, its territories
and possessions, any state of the United states, and the District of Columbia.
"U.S. Dollar" and "US$" mean United States dollars.
"$" means Canadian dollars.
"U.S. Person" means a U.S. person as defined in Rule 902(k) under the Securities
Act.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness at
any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect of the
Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
22
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted Subsidiary
of such Person all of the outstanding Capital Stock or other ownership interests
of which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Restricted Subsidiaries of such
Person or by such Person and one or more Wholly Owned Restricted Subsidiaries of
such Person.
Section 1.02 Other Definitions.
Defined in
Term Section
---- -----------
"Additional Amounts" ....................................... 4.18
"Affiliate Transaction" .................................... 4.11
"Asset Sale Offer" ......................................... 4.10
"Asset Sale Payment" ....................................... 4.10
"Authentication Order" ..................................... 2.02
"Change of Control Offer ................................... 4.15
"Change of Control Payment ................................. 4.15
"Covenant Defeasance" ...................................... 8.03
"DTC" ...................................................... 2.03
"Documentary Taxes" ........................................ 4.18
"Event of Default" ......................................... 6.01
"Excess Proceeds" .......................................... 4.10
"Excluded Holder" .......................................... 4.18
"Fall-Away Covenants" ...................................... 4.23
"Fall-Away Period" ......................................... 4.23
"First Currency" ........................................... 12.15
"incur" .................................................... 4.09
"judgment currency" ........................................ 12.14
"Legal Defeasance" ......................................... 8.02
23
Defined in
Term Section
---- -----------
"Note Register" ............................................ 2.03
"Offer Amount" ............................................. 3.09
"Offer Period" ............................................. 3.09
"Other Currency" ........................................... 12.15
"owner" .................................................... 4.18
"Paying Agent" ............................................. 2.03
"Payment Default" .......................................... 6.01
"Permitted Indebtedness" ................................... 4.09
"Purchase Date" ............................................ 3.09
"Registrar" ................................................ 2.03
"Repurchase Offer" ......................................... 3.09
"Restricted Payments" ...................................... 4.07
"Taxes" .................................................... 4.18
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Subsidiary Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Subsidiary Guarantees, respectively.
24
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include the
singular;
(e) provisions apply to successive events and transactions;
(f) references to sections of, or rules under, the Securities Act shall be
deemed to include substitute, replacement or successor sections or rules adopted
by the Commission from time to time;
(g) unless the context otherwise requires, any reference to an "Article",
"Section" or "clause" refers to an Article, Section or clause, as the case may
be of this Indenture; and
(h) the words "herein," "hereof" and "hereunder" and other words of similar
import, refer to this Indenture as a whole and not any particular Article,
Section, clause or other subdivision.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating; Terms.
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rules or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of US$1,000 and integral multiples thereof.
(b) Global Notes. Notes issued in global form shall be substantially in the
form of Exhibit A attached hereto (including the Global Note Legend thereon and
the "Schedule of Exchanges of Interests in the Global Note" attached thereto).
Notes issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of
25
Interests in the Global Note" attached thereto). Each Global Note shall
represent such of the outstanding Notes as shall be specified therein and each
shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
(c) Terms. The aggregate principal amount of Notes which may be
authenticated and delivered under this Indenture is unlimited.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby. However, to the extent any provision of
any Note conflicts with the express provisions of this Indenture, the provisions
of this Indenture shall govern and be controlling.
The Notes shall be subject to repurchase by the Company pursuant to an
Asset Sale Offer as provided in Section 4.10 hereof or a Change of Control Offer
as provided in Section 4.15 hereof. The Notes shall not be redeemable, other
than as provided in Article 3.
Additional Notes ranking pari passu with the Initial Notes may be created
and issued from time to time by the Company without notice to or consent of the
Holders and shall be consolidated with and form a single class with the Initial
Notes and shall have the same terms as to status, redemption or otherwise as the
Initial Notes; provided that the Company's ability to issue Additional Notes
shall be subject to the Company's compliance with Section 4.09 hereof. Any
Additional Notes shall be issued with the benefit of an indenture supplemental
to this Indenture.
(d) Euroclear and Clearstream Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in the Regulation S Global Notes that are held
by Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
Two Officers shall execute the Notes on behalf of the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
26
A Note shall not be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose until authenticated substantially in the
form of Exhibit A attached hereto by the manual or facsimile signature of the
Trustee. The signature shall be conclusive evidence that the Note has been duly
authenticated and delivered under this Indenture.
The Trustee shall, upon a Company Order (an "Authentication Order")
authenticate and deliver Notes for original issue in an aggregate principal
amount of US$110,000,000 for the Initial Notes and in an aggregate principal
amount specified in an Authentication Order for any Additional Notes issued
hereunder.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent for the Notes.
The Company shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency where Notes may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Notes ("Note Register") and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without prior notice to any Holder. The Company
shall notify the Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar or Paying Agent, the Trustee shall act as such. The Company
or any Guarantor may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Paying Agent and
Registrar for the Notes and to act as Custodian with respect to the Global
Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent shall hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium, if any, or Special Interest, if any, or interest on the Notes, and will
notify the Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a Restricted
Subsidiary) shall have no further liability for the money. If the Company
27
or a Restricted Subsidiary acts as Paying Agent, it shall segregate and hold in
a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each Interest Payment Date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. Except as otherwise set forth in
this Section 2.06, a Global Note may be transferred in whole and not in part
only to a nominee of the Depositary, or to a successor Depositary or a nominee
of such successor Depositary. A beneficial interest in a Global Note may not be
exchanged for a Definitive Note unless (i) the Depositary (x) notifies the
Company that it is unwilling or unable to continue as Depositary for such Global
Note or (y) has ceased to be a clearing agency registered under the Exchange
Act, and in either case, a successor Depositary is not appointed by the Company
within 120 days, (ii) in the case of a Global Note held for an account of
Euroclear or Clearstream, Euroclear or Clearstream, as the case may be, (A) is
closed for business for a continuous period of 14 days (other than by reason of
statutory or other holidays) or (B) announces an intention permanently to cease
business or does in fact do so, (iii) the Company is required by law to exchange
Global Notes for Definitive Notes and the Company delivers a written notice to
the Trustee to such effect, (iv) there shall have occurred and be continuing an
Event of Default with respect to the Notes or (v) a request for certificates has
been made upon 60 days' prior written notice given to the Trustee in accordance
with the Depositary's customary procedures and a copy of such notice has been
received by the Company from the Trustee. Upon the occurrence of any of the
preceding events in (i) to (v) above, Definitive Notes delivered in exchange for
any Global Note or beneficial interest therein will be registered in the names,
and shall be issued in such denominations as the Depositary (in accordance with
its customary procedures) shall instruct the Trustee. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note, except for Definitive Notes issued subsequent
to any of the preceding events in (i) to (v) above or pursuant to Section
2.06(c) hereof. A Global Note may not be exchanged for another Note other than
as provided in this Section 2.06(a), however, beneficial interests in a Global
Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f)
hereof.
28
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend. Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described
in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause
to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer
or exchange referred to in (1) above. Upon consummation of an Exchange
Offer by the Company in accordance with Section 2.06(f) hereof, the
requirements of this Section 2.06(b)(ii) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions contained in
the Letter of Transmittal delivered by the Holder of such beneficial
interests in the Global Notes. Upon satisfaction of all of the requirements
for transfer or exchange of beneficial interests in Global Notes contained
in this Indenture and the Notes or otherwise applicable under the
Securities Act, the Trustee shall adjust the principal amount of the
relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person
29
who takes delivery thereof in the form of a beneficial interest in another
Restricted Global Note if the transfer complies with the requirements of
Section 2.06(b)(ii) above and the Registrar receives a certificate in the
form of Exhibit B hereto, including the certifications in item (1) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) hereof and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such Holder substantially in the form of
Exhibit C hereto, including the certifications in item (1)(a)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained
30
herein and in the Private Placement Legend are no longer required
in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above.
Beneficial interests in an Unrestricted Global Note can be exchanged for,
or transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Note without any certification.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon the occurrence of any of the preceding events in 2.06(a)(i) - (v) and
receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder
substantially in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate
substantially in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate substantially in
the form of Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act, a certificate
substantially in the form of Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in
31
subparagraph (B) above, a certificate substantially in the form of
Exhibit B hereto, including the certifications in item 3(d) thereof
and such certificates and Opinion of Counsel required by item (3)
thereof, if applicable; or
(F) if such beneficial interest is being transferred to the
Company or any of its Restricted Subsidiaries, a certificate
substantially in the form of Exhibit B hereto, including the
certifications in item (3)(b) thereof,
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate substantially in the form of Exhibit B hereto, including
the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only upon
the occurrence of any of the preceding events in 2.06(a)(i) - (v) and if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
32
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder substantially in
the form of Exhibit C hereto, including the certifications in
item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder substantially in the form
of Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for
a Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Definitive Note, then, upon the
occurrence of any of the preceding events in 2.06(a)(i) - (v) and
satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the
Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iii) shall be registered in such
name or names and in such authorized denomination or denominations as the
holder of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect
Participant. The Trustee shall deliver such Definitive Notes to the Persons
in whose names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(iii)
shall not bear the Private Placement Legend.
33
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note,
then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder substantially in the form of
Exhibit C hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate substantially in the form of Exhibit B hereto, including
the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate substantially in
the form of Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate substantially in the form of Exhibit B hereto, including
the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate
substantially in the form of Exhibit B hereto, including the
certification in item 3(d) thereof and such certificates and Opinion
of Counsel required therein by item, if applicable; or
(F) if such Restricted Definitive Note is being transferred to
the Company or any of its Restricted Subsidiaries, a certificate
substantially in the form of Exhibit B hereto, including the
certifications in item (3)(b) thereof,
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate substantially in the form of Exhibit B hereto,
including the certifications in item (3)(c) thereof,
34
the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
appropriate 144A Global Note, and in the case of clause (C) above, the
appropriate Regulation S Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder substantially in the
form of Exhibit C hereto, including the certifications in item
(1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof
in the form of a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder substantially in the form of
Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
35
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase
or cause to be increased the aggregate principal amount of the Unrestricted
Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
(iv) Unrestricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in a Restricted Global Note or
transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in a Restricted Global Note at any time.
Upon receipt of a request for such an exchange or transfer, the Trustee
shall cancel the applicable Unrestricted Definitive Note and increase or
cause to be increased the aggregate principal amount of one of the
Restricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D)
or (iii) above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of Definitive Notes so
transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to a QIB in accordance
with Rule 144A under the Securities Act, then the transferor must
deliver
36
a certificate substantially in the form of Exhibit B hereto, including
the certifications in item (1) thereof;
(B) if the transfer shall be made pursuant to Rule 903 or Rule
904 then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof; or
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder substantially in the form of
Exhibit C hereto, including the certifications in item (1)(d)
thereof; or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder substantially in the form of
Exhibit B hereto, including the certifications in item (4)
thereof;
37
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
A Holder of Unrestricted Definitive Notes may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note. Upon receipt of a request to register such a transfer, the Registrar
shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance
with the Registration Rights Agreement, the Company shall issue and, upon
receipt of an Authentication Order in accordance with Section 2.02 hereof, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Global Notes tendered for acceptance by Persons that certify in
the applicable Letters of Transmittal that (x) they are not broker-dealers, (y)
they are not participating in a distribution of the Exchange Notes and (z) they
are not affiliates (as defined in Rule 144) of the Company, and accepted for
exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate
principal amount equal to the principal amount of the Definitive Notes accepted
for exchange in the Exchange Offer. Concurrently with the issuance of such
Notes, the Trustee shall cause the aggregate principal amount of the applicable
Global Notes to be reduced accordingly, and the Company shall execute and the
Trustee shall authenticate and deliver to the Persons designated by the Holders
of Definitive Notes so accepted Definitive Notes in the appropriate principal
amount. Any Notes that remain outstanding after the consummation of the Exchange
Offer, and Exchange Notes issued in connection with the Exchange Offer, shall be
treated as a single class of securities under this Indenture.
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
38
EXCEPT (A)(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER
THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING
WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
(3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, OR (5) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES AND OTHER JURISDICTIONS."
(B) Notwithstanding the foregoing, any Regulation S Global Note
and any other Global Note or Definitive Note issued pursuant to
subparagraphs (b)(iv), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii)
or (f) to this Section 2.06 (and all Notes issued in exchange therefor
or substitution thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION
2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if
39
any beneficial interest in a Global Note is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the principal amount of Notes
represented by such Global Note shall be reduced accordingly and an endorsement
shall be made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such reduction; and if the beneficial
interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note,
such other Global Note shall be increased accordingly and an endorsement shall
be made on such Global Note by the Trustee or by the Depositary at the direction
of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).
(iii) Neither the Registrar nor the Company shall be required to
register the transfer of or exchange any Note selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed
in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global Notes
or Definitive Notes surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (C) to register the transfer
of or to exchange a Note between a record date and the next succeeding
Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the
40
purpose of receiving payment of principal of (and premium, if any) and
interest (including Special Interest, if any) on such Notes and for all
other purposes, and none of the Trustee, any Agent or the Company shall be
affected by notice to the contrary.
(vii) Upon surrender for registration of transfer of any Security at
the office or agency of the Company designated pursuant to Section 4.02,
the Company shall execute, and the Trustee shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more
replacement Notes of any authorized denomination or denominations of a like
aggregate principal amount.
(viii) At the option of the Holder, Notes may be exchanged for other
Notes of any authorized denomination or denominations of a like aggregate
principal amount upon surrender of the Notes to be exchanged at such office
or agency. Whenever any Global Notes or Definitive Notes are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate
and deliver, the replacement Global Notes and Definitive Notes which the
Holder making the exchange is entitled to in accordance with the provisions
of Section 2.02 hereof.
(ix) All certifications, certificates and Opinions of Counsel required
to be submitted to the Registrar pursuant to this Section 2.06 to effect a
registration of transfer or exchange may be submitted by facsimile.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section as
not outstanding. Except as set forth in
41
Section 2.09 hereof, a Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Affiliate of the Company, shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that a Responsible Officer of the Trustee knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good faith shall not be
disregarded if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right to deliver any such direction, waiver or consent with respect to
the Notes and that the pledgee is not the Company or any obligor upon the Notes
or any Affiliate of the Company or of such other obligor.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
Holders and beneficial holders, as the case may be, of temporary Notes
shall be entitled to all of the benefits accorded to Holders, or beneficial
holders, respectively, of Notes under this Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement
42
or cancellation and shall dispose of cancelled Notes (subject to the record
retention requirement of the Exchange Act). Certification of the disposal of all
cancelled Notes shall be delivered to the Company. The Company may not issue new
Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such defaulted interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such defaulted interest as provided in this Section 2.12. The Trustee shall
fix or cause to be fixed each such special record date and payment date;
provided that no such special record date shall be less than 10 days prior to
the related payment date for such defaulted interest. The Trustee shall promptly
notify the Company of such special record date. At least 15 days before the
special record date, the Company (or, upon the written request of the Company,
the Trustee in the name and at the expense of the Company) shall mail or cause
to be mailed, first-class postage prepaid, to each Holder a notice at his or her
address as it appears in the Note Register that states the special record date,
the related payment date and the amount of such interest to be paid.
Subject to the foregoing provisions of this Section 2.12 and for greater
certainty, each Note delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Note shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Note.
ARTICLE 3
REDEMPTION
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
Section 3.02 Selection of Notes to be Redeemed.
If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee shall select the Notes to be redeemed or
purchased among the Holders of the Notes in compliance with the requirements of
the principal
43
national securities exchange, if any, on which the Notes are listed or, if the
Notes are not so listed, on a pro rata basis, by lot or by such other method the
Trustee considers fair and appropriate. In the event of partial redemption by
lot, the particular Notes to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the redemption
date by the Trustee from the outstanding Notes not previously called for
redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of US$1,000 or whole multiples of US$1,000;
no Notes of US$1,000 or less can be redeemed in part, except that if all of the
Notes of a Holder are to be redeemed, the entire outstanding amount of Notes
held by such Holder, even if not a multiple of US$1,000, shall be redeemed.
Except as provided in the preceding sentence, provisions of this Indenture that
apply to Notes called for redemption also apply to portions of Notes called for
redemption.
Section 3.03 Notice of Redemption.
Subject to Section 3.09 hereof, the Company shall mail or cause to be
mailed by first class mail notices of redemption at least 30 days but not more
than 60 days before the redemption date to each Holder of Notes to be redeemed
at its registered address, except that redemption notices may be mailed more
than 60 days prior to a redemption date if the notice is issued in connection
with Article 8 or Article 11 hereof. Notices of redemption may not be
conditional.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is to be redeemed in part only, the portion of the
principal amount of that Note that is to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in principal
amount equal to the unredeemed portion of the original Note representing the
same indebtedness to the extent not redeemed will be issued in the name of the
Holder of the Notes upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
redemption date;
44
(g) the paragraph of the Notes and/or Section of this Indenture pursuant to
which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided that the Company shall have
delivered to the Trustee, at least 35 days prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. Subject to Section 3.05 hereof, on and after the
redemption date, interest ceases to accrue on Notes or portions of Notes called
for redemption.
Section 3.05 Deposit of Redemption Price.
One Business Day prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued and unpaid interest (including Special Interest, if any) on
all Notes to be redeemed on that date. The Trustee or the Paying Agent shall
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued and unpaid interest on, all Notes to be
redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after a
Record Date but on or prior to the related Interest Payment Date, then any
accrued and unpaid interest shall be paid to the Person in whose name such Note
was registered at the close of business on such Record Date. If any Note called
for redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest accrued to the redemption date
not paid on such unpaid principal, in each case at the rate provided in the
Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and, upon the Company's written request, the Trustee shall authenticate for the
Holder at the expense of the Company a new Note equal in principal amount to the
unredeemed portion of the Note surrendered representing the same indebtedness to
the extent not redeemed;
45
provided that each new Note will be in a principal amount of US$1,000 or an
integral multiple of US$1,000.
Section 3.07 Optional Redemption.
(a) At any time prior to March 15, 2007, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes issued
under this Indenture, calculated after giving effect to the issuance of
Additional Notes, if any, at a redemption price of 106.750% of the principal
amount, plus accrued and unpaid interest and Special Interest, if any, to the
redemption date, with the net cash proceeds of a sale of Common Stock of the
Company; provided that:
(1) at least 65% of the aggregate principal amount of Notes issued
under this Indenture, calculated after giving effect to the issuance of
Additional Notes, if any issued, remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and its
Subsidiaries); and
(2) the redemption occurs within 60 days of the date of the closing of
such sale of Common Stock.
(b) Except pursuant to clause (a) above and as described below under
clause (d) of this Section 3.07, the Notes will not be redeemable at the
Company's option before March 15, 2009.
(c) On or after March 15, 2009, the Company may redeem all or a part
of the Notes upon not less than 30 nor more than 60 days' prior notice, at
the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest and Special Interest, if any,
on the Notes redeemed, to the applicable redemption date, if redeemed
during the twelve-month period beginning on March 15 of the years indicated
below:
YEAR PERCENTAGE
---- ----------
2009................................. 103.375%
2010................................. 102.250%
2011................................. 101.125%
2012 and thereafter.................. 100.000%
(d) Redemption for Changes in Canadian Withholding Taxes: The Company may
redeem all, but not less than all, of the Notes at any time at 100% of the
aggregate principal amount of the Notes, together with accrued and unpaid
interest and Special Interest, if any, on the Notes redeemed to the applicable
redemption date, if the Company has become or would become obligated to pay, on
the next date on which any amount would be payable with respect to the Notes,
any Additional Amounts as a result of a change in the laws (including any
regulations promulgated thereunder) of Canada (or any political subdivision or
taxing authority thereof or therein), or any change in any official position of
any governmental agency, taxing authority or regulatory authority regarding
46
the application or interpretation of such laws or regulations, which change is
announced or becomes effective on or after February 27, 2004.
(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
The Company shall not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
Section 3.09 Offers to Repurchase.
(a) In the event that, pursuant to Section 4.10 or 4.15 hereof, the Company
shall be required to commence an Asset Sale Offer or a Change of Control Offer,
as the case may be, (each, a "Repurchase Offer"), it shall follow the procedures
specified below.
(b) The Repurchase Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 or 4.15, as applicable, (the "Offer Amount")
or, if less than the Offer Amount has been tendered, all Notes tendered in
response to the Repurchase Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
(c) If the Purchase Date is on or after a Record Date and on or before the
related Interest Payment Date, any accrued and unpaid interest shall be paid to
the Person in whose name a Note is registered at the close of business on such
record date, and no additional interest shall be payable to Holders who tender
Notes pursuant to the Repurchase Offer.
(d) Upon the commencement of a Repurchase Offer, the Company shall send, by
first class mail, a notice to each of the Holders, with a copy to the Trustee.
The notice shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Repurchase Offer. The Repurchase Offer
shall be made to all Holders. The notice, which shall govern the terms of the
Repurchase Offer, shall state:
(i) that the Repurchase Offer is being made pursuant to this Section
3.09 and Section 4.10 or 4.15, as applicable, the length of time the
Repurchase Offer shall remain open and that all Notes properly tendered
will be accepted for payment. If the Repurchase Offer is a Change of
Control Offer made pursuant to Section 4.15 such notice shall describe the
transaction or transactions that constitute the Change of Control;
(ii) the Offer Amount, the Asset Sale Payment or Change of Control
Payment, as applicable, and the Purchase Date;
47
(iii) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(iv) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Repurchase Offer shall cease to
accrue interest after the Purchase Date;
(v) that Holders electing to have a Note purchased pursuant to a
Repurchase Offer may elect to have Notes purchased in integral multiples of
US$1,000 only;
(vi) that Holders electing to have a Note purchased pursuant to any
Repurchase Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(vii) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such ▇▇▇▇▇▇ is withdrawing his election to have such Note
purchased;
(viii) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount required pursuant to Section 4.10, the
Company shall select the Notes to be purchased pursuant to Section 3.02
(with such adjustments as may be deemed appropriate by the Company so that
only Notes in denominations of US$1,000, or integral multiples thereof,
shall be purchased); and
(ix) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer) representing
the same indebtedness to the extent not repurchased.
(e) On or before the Purchase Date, the Company shall, to the extent
lawful, (1) accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Repurchase
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
(2) deposit with the Paying Agent an amount equal to the Offer Amount plus
premium, if any, and any accrued and unpaid interest and Special Interest, if
any, in respect of all Notes, or portions thereof, properly tendered, and (3)
shall deliver or cause to be delivered to the Trustee the Notes properly
accepted together with an Officers' Certificate stating the aggregate principal
amount of Notes or portions of Notes being purchased by the Company in
accordance with the terms of this Section 3.09.
48
(f) The Company, the Depositary or the Paying Agent, as the case may be,
shall promptly (but in any case not later than five days after the Purchase
Date) mail or deliver to each tendering Holder an amount equal to the purchase
price of the Notes properly tendered by such Holder and accepted by the Company
for purchase, and the Company shall promptly issue a new Note, and the Trustee,
upon written request from the Company shall authenticate and mail or deliver (or
cause to be transferred by book entry) such new Note to such Holder in a
principal amount equal to any unpurchased portion of the Note surrendered
representing the same indebtedness to the extent not repurchased. Any Note not
so accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Repurchase Offer
on or as soon as practicable after the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium, if
any, Special Interest, if any, and interest on the Notes on the dates and in the
manner provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company,
a Subsidiary or an Affiliate thereof, holds as of 2:00 p.m. Eastern Time on the
due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Special Interest (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan in the City of New
York an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations,
49
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan in the
City of New York for such purposes. The Company shall give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03 hereof.
Section 4.03 Reports to Holders.
(a) Whether or not required by the Commission, so long as any Notes are
outstanding, the Company will furnish to the Holders of Notes, within the time
periods specified in the Commission's rules and regulations (i) all quarterly
and annual financial information that the Company would have been required to
file with the Commission on (A) Forms 10-Q and 10-K if the Company were required
to file on such Forms, or (B) on Form 6-K and Form 20-F or 40-F (if eligible) if
the Company were required to file such form and was a reporting issuer under the
securities laws of the Province of Ontario, including in each case a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report on the
annual financial statements by the Company's certified independent accountants
and (ii) all current reports that the Company would have been required to (a)
file with or furnish to the Commission on Form 8-K if the Company were required
to file or furnish such reports, or (b) furnish to the Commission on Form 6-K if
the Company were required to furnish such reports and were a reporting issuer
under the securities laws of the Province of Ontario.
(b) If, at any time after consummation of the Exchange Offer the Company is
no longer subject to the periodic reporting requirements of the Exchange Act for
any reason, the Company will nevertheless continue filing the reports specified
in the preceding paragraph with the Commission within the time periods specified
above unless the Commission will not accept such a filing. The Company agrees
that it will not take any action for the purpose of causing the Commission not
to accept any such filings. If, notwithstanding the foregoing, the Commission
will not accept the Company's filings for any reason, the Company will post the
reports referred to in the preceding paragraph on its website within the time
periods that would apply if the Company were required to file those reports with
the Commission. In addition, the Company agrees that, for so long as any Notes
remain outstanding, it will furnish to the Holders and to securities analysts
and prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act and including any
information that would be required by clause (ii) of Section 4.03(a) hereof.
50
(c) Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to conclusively rely exclusively on Officers' Certificates).
Section 4.04 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year ending after March 3, 2004, a certificate from the principal
executive officer, principal financial officer or principal accounting officer
stating that a review of the activities of the Company and its Restricted
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every condition and covenant
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions, covenants and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto).
(b) When any Default or Event of Default has occurred and is continuing
under this Indenture, or if the Trustee or the holder of any other evidence of
Indebtedness of the Company or any Subsidiary gives any notice or takes any
other action with respect to a claimed Default or Event of Default, the Company
shall as soon as practicable (and, in any event, within 10 days after the
Company's knowledge thereof) deliver to the Trustee by registered or certified
mail or by facsimile transmission an Officers' Certificate specifying such event
and what action the Company proposes to take with respect thereto.
Section 4.05 Taxes.
The Company shall pay, and shall cause each of its Restricted Subsidiaries
to pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate
negotiations or proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and
51
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not, by
resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law has been enacted.
Section 4.07 Restricted Payments.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger, amalgamation or consolidation involving the
Company or any of its Restricted Subsidiaries) or to the direct or indirect
holders of the Company's or any of its Restricted Subsidiaries' Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company
or to the Company or a Restricted Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger, amalgamation
or consolidation involving the Company) any Equity Interests of the Company
or any direct or indirect parent of the Company;
(iii) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes or the Subsidiary Guarantees, except a payment of
interest or principal at the Stated Maturity thereof or any payment on
Indebtedness permitted under Section 4.09(b)(6) hereof; or
(iv) make any Restricted Investment (all such payments and other
actions set forth in these clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would
occur as a consequence of such Restricted Payment; and
(2) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to Section 4.09(a)
hereof; and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted Subsidiaries
after March 3,
52
2004 (excluding Restricted Payments permitted by clauses (2), (3), (5), (6) and
(7)(ii) of Section 4.07(b) hereof), is less than the sum, without duplication,
of:
(i) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) beginning on January 1, 2004 to the end of
the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted Payment
(or, if such Consolidated Net Income for such period is a deficit, less
100% of such deficit), excluding any charges incurred in connection with
the Company's purchase of its 12 1/2% Senior Secured Notes due July 15,
2007 and 13.875% Senior Secured Notes due July 15, 2007 pursuant to the
Company's Offer to Purchase and Consent Solicitation Statement, dated
February 17, 2004, plus
(ii) 100% of the aggregate net cash proceeds received by the Company
since March 3, 2004 as a contribution to its common equity capital or from
the issue or sale of Equity Interests of the Company (other than
Disqualified Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt
securities of the Company that have been converted into or exchanged for
such Equity Interests (other than Equity Interests (or Disqualified Stock
or debt securities) sold to a Subsidiary of the Company), plus
(iii) to the extent that any Restricted Investment that was made after
March 3, 2004 is sold for cash or otherwise liquidated or repaid for cash
or, in the case of a Restricted Investment that is a Guarantee, released,
the lesser of (A) the cash return of capital with respect to such
Restricted Investment (less the cost of disposition, if any) and (B) the
initial amount of such Restricted Investment, less, in the case of a
Guarantee, any amounts paid under such Guarantee, plus
(iv) to the extent that any Unrestricted Subsidiary of the Company is
redesignated as a Restricted Subsidiary after March 3, 2004, the lesser of
(A) the fair market value of the Company's Investment in such Subsidiary as
of the date of such redesignation and (B) such fair market value as of the
date on which such Subsidiary was originally designated as an Unrestricted
Subsidiary, plus
(v) US$15.0 million.
(b) So long as no Default has occurred and is continuing or would be caused
thereby, Section 4.07(a) hereof will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend payment
would have complied with the provisions of this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition
of any subordinated Indebtedness of the Company or any Restricted Subsidiary or
of any Equity Interests of the Company in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other than to a Restricted
Subsidiary of the Company) of,
53
Equity Interests of the Company (other than Disqualified Stock); provided that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition will be
excluded from clause (3)(ii) of Section 4.07(a) hereof;
(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company or any Restricted Subsidiary with the
net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of the Company
that is not a Wholly Owned Restricted Subsidiary to the holders of its Equity
Interests on a pro rata basis;
(5) an Investment by the Company that increases the ownership interest of
the Company in the High Level Project out of the net cash proceeds of the
substantially concurrent sale (other than from or to a Subsidiary or from or to
an employee stock ownership plan financed by loans from the Company or a
Subsidiary of the Company) of Equity Interests (other than Disqualified Stock)
of the Company; provided that the amount of any such net cash proceeds that are
utilized for any such Investment will be excluded from clause (3)(ii) of Section
4.07(a) hereof;
(6) repurchases of Equity Interests deemed to occur upon the exercise of
stock options; and
(7) payments of (i) dividends on, and (ii) the repurchase, redemption or
acquisition at the scheduled maturity, scheduled repayment or scheduled sinking
fund date of, Disqualified Stock, the incurrence of which was permitted by this
Indenture.
(c) The amount of all Restricted Payments (other than cash) will be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this covenant will be determined by the Board of Directors whose resolution
with respect thereto will be delivered to the Trustee. The Board of Directors'
determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing in Canada
or the United States if the fair market value exceeds US$10.0 million. Not later
than the date of making any Restricted Payment, other than a Restricted Payment
under clauses (2), (3), (4) and (6) of Section 4.07(b) hereof, which, together
with any Restricted Payments not previously reported pursuant to this sentence,
exceeds US$2.0 million, the Company will deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.
54
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock to
the Company or any of its Restricted Subsidiaries, or with respect to any other
interest or participation in, or measured by, its profits, or pay any
indebtedness owed to the Company or any of its Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries.
(b) Notwithstanding the foregoing, Section 4.08(a) will not apply to
encumbrances or restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit Facilities
(provided that, with respect to Credit Facilities, such encumbrances and
restrictions are not materially more restrictive, taken as a whole, than
customary provisions in comparable financings) and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of those agreements, provided that the amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of such instrument are no more restrictive, taken
as a whole, with respect to such dividend and other payment restrictions than
those contained in such agreement on March 3, 2004 or in such Credit Facilities;
(2) this Indenture, the Notes and any Subsidiary Guarantee or any other
instrument governing debt securities of the Company incurred in compliance with
Section 4.09 hereof that are no more restrictive, taken as a whole, than those
contained in this Indenture, the Notes and any Subsidiary Guarantee;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred or such Capital Stock was issued in connection with or in contemplation
of such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to
be incurred;
(5) customary non-assignment provisions in leases entered into in the
ordinary course of business;
55
(6) purchase money obligations and Capital Lease Obligations for property
acquired in the ordinary course of business that impose restrictions on that
property of the nature described in Section 4.08(a)(3) hereof;
(7) any agreement for the sale or other disposition of Capital Stock or
assets of a Restricted Subsidiary that restricts distributions by that
Restricted Subsidiary pending its sale or other disposition;
(8) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are no more restrictive, taken as a whole, than those contained in the
agreements governing the Indebtedness being refinanced;
(9) Liens securing Indebtedness otherwise permitted to be incurred under
Section 4.12 hereof that limit the right of the debtor to dispose of the assets
subject to such Liens;
(10) restrictions on cash or other deposits imposed by customers under
contracts entered into in the ordinary course of business;
(11) restrictions contained in agreements between Grant and the Company or
a Restricted Subsidiary with respect to the High Level Project, as extended,
amended, restated, modified or replaced from time to time on terms that are no
more restrictive, taken as a whole, than those contained in such agreements as
of March 3, 2004; and
(12) provisions with respect to the disposition or distribution of assets
or property in Permitted Joint Venture agreements.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Indebtedness), and the Company will not issue any Disqualified Stock and will
not permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company or any Guarantor may incur
Indebtedness (including Acquired Indebtedness) or the Company may issue
Disqualified Stock and any Guarantor may issue shares of preferred stock, if the
Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock or preferred stock is issued would have been at least
2.0 to 1, determined on a pro forma basis (including a pro forma application of
the net proceeds therefrom), as if the additional Indebtedness had been incurred
or the Disqualified Stock or preferred stock had been issued, as the case may
be, at the beginning of such four-quarter period;
56
(b) Notwithstanding the foregoing, Section 4.09(a) hereof will not prohibit
the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Indebtedness"):
(1) the incurrence by the Company or any of the Guarantors of Indebtedness
and letters of credit under Credit Facilities, in an aggregate principal amount
at any one time outstanding under this clause (1) (with letters of credit being
deemed to have a principal amount equal to the maximum potential liability of
the Company and the Guarantors thereunder) not to exceed the greater of:
(i) $50.0 million less the aggregate amount of all Net Proceeds of
Asset Sales applied by the Company or any of its Restricted Subsidiaries
since March 3, 2004 to repay term Indebtedness under a Credit Facility or
to repay revolving credit Indebtedness and effect a corresponding
commitment reduction under a Credit Facility, in each case, pursuant to
Section 4.10 hereof; or
(ii) the amount of the Borrowing Base as of the date of such
incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of
Existing Indebtedness;
(3) the incurrence by the Company of Indebtedness represented by (i) the
notes to be issued in exchange for the 6.750% Senior Notes due March 15, 2014
issued by the Company on March 3, 2004 pursuant to the registration rights
agreement of the same date and any related Subsidiary Guarantees; and (ii) the
notes to be issued on the date of this Indenture and the Exchange Notes to be
issued pursuant to the Registration Rights Agreement and any related Subsidiary
Guarantees;
(4) the incurrence by the Company or any Restricted Subsidiary of
Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case, incurred for the purpose of financing
all or any part of the purchase price or cost of construction or improvement of
property, plant or equipment used in the business of the Company or such
Restricted Subsidiary, in an aggregate principal amount, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (4), not to exceed, at any time
outstanding, the greater of (i) US$10.0 million and (ii) 2% of the Consolidated
Net Tangible Assets of the Company;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which
are used to refund, refinance or replace Indebtedness (other than intercompany
Indebtedness) that was permitted by this Indenture to be incurred under clause
(a) of Section 4.09 hereof or clauses (2), (3), (4) or (13) of this Section
4.09(b);
(6) the incurrence by the Company of Indebtedness to, or the issuance of
Disqualified Stock to, any Wholly Owned Restricted Subsidiary of the Company or
the incurrence by any Restricted Subsidiary of the Company of Indebtedness to,
or the
57
issuance of preferred stock to, the Company or any Wholly Owned Restricted
Subsidiary of the Company; provided, however, that:
(i) such Indebtedness owing by the Company or a Guarantor to a Wholly
Owned Restricted Subsidiary of the Company must be expressly subordinated
to the prior payment in full in cash of all Obligations with respect to the
Notes, in the case of the Company, or the Subsidiary Guarantee, in the case
of a Guarantor; and
(ii) (A) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness, Disqualified Stock or preferred stock
being held by a Person other than the Company or a Wholly Owned Restricted
Subsidiary of the Company and (B) any sale or other transfer of any such
Indebtedness, Disqualified Stock or preferred stock to a Person that is not
either the Company or a Wholly Owned Restricted Subsidiary of the Company;
will be deemed, in each case, to constitute an incurrence of such
Indebtedness or issuance of Disqualified Stock or preferred stock by the
Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of
Hedging Obligations in the ordinary course of business and not for speculative
purposes;
(8) the guarantee by the Company or any of the Guarantors of Indebtedness
of the Company or a Guarantor of the Company that was permitted to be incurred
by another provision of this Section 4.09;
(9) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends on
Disqualified Stock or preferred stock in the form of additional shares of the
same class of Disqualified Stock or preferred stock will not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Stock or preferred
stock for purposes of this Section 4.09; provided, in each such case, that the
amount thereof is included in the Fixed Charges of the Company as accrued;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness in respect of statutory obligations, bid, performance, surety and
appeal bonds and trade and standby letters of credit, in each case entered into
in the ordinary course of business and consistent with past practice;
(11) Indebtedness of the Company or any Restricted Subsidiary consisting of
guarantees, indemnities or obligations in respect of purchase price adjustments
in connection with the acquisition or disposition of assets, including, without
limitation, Equity Interests, in accordance with the provisions of this
Indenture;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness to fund a purchase by the Company or a Restricted Subsidiary of
▇▇▇▇▇'▇ interest in the High Level Project pursuant to a Right of First Refusal
initiated by ▇▇▇▇▇
58
or the Buy/Sell Option; provided, that (i) (x) the Company or such Restricted
Subsidiary has accepted an offer from any Person, other than the Company or a
Restricted Subsidiary, to purchase the interest in the High Level Project that
is acquired from Grant at a concurrent closing for an amount not less than the
purchase price payable to Grant; and (y) such Indebtedness is repaid in full at
such concurrent closing from the transfer of the interest in the High Level
Project purchased from Grant at such closing; or (ii) there shall not have been
a decrease in the rating of the Notes by any Rating Agency by one or more Rating
Categories that occurs within 90 days (which period shall be extended so long as
the rating of the Notes is under publicly announced consideration for a possible
downgrade by any Rating Agency) after the date of the later of (A) notice to the
public or the Rating Agencies of the intention of the Company or any of its
Restricted Subsidiaries to incur Indebtedness to fund such a purchase or (B) the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
to fund such a purchase; and
(13) the incurrence by the Company or any of its Restricted Subsidiaries of
additional Indebtedness in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (13), not to exceed US$50.0 million.
(c) The Company will not, and will not permit any Guarantor to, incur any
Indebtedness (including Permitted Indebtedness) that is contractually
subordinated in right of payment to any other Indebtedness of the Company or
such Guarantor unless such Indebtedness is also contractually subordinated in
right of payment to the Notes or the applicable Subsidiary Guarantee on
substantially identical terms; provided, however, that Indebtedness of the
Company or a Guarantor will not be deemed to be contractually subordinated in
right of payment to any other Indebtedness of the Company or such Guarantor
solely by virtue of being unsecured.
(d) For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Indebtedness described in clauses (1) through
(13) of Section 4.09(b) hereof, or is entitled to be incurred pursuant to
Section 4.09(a) hereof, the Company will be permitted to classify such item of
Indebtedness or later reclassify all or a portion of such item of Indebtedness
in any manner that complies with this Section 4.09. Indebtedness under Credit
Facilities outstanding on the date on which Notes are first issued and
authenticated under this Indenture will be deemed to have been incurred pursuant
to the category of Permitted Indebtedness described in Section 4.09(b)(1)
hereof.
Section 4.10 Asset Sales.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale in any single transaction or series of
related transactions unless:
59
(1) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of the Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or sold or otherwise disposed of;
(2) the fair market value is determined by the Company's Board of Directors
and evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee; and
(3) at least 75% of the consideration received in the Asset Sale by the
Company or such Restricted Subsidiary is in the form of (i) cash, (ii) Cash
Equivalents, (iii) the majority of the Voting Stock of a Person engaged in a
Permitted Business that will become on the date of acquisition thereof a
Restricted Subsidiary, or (iv) long-term property or assets that are used or
useful in a Permitted Business. For purposes of this provision, each of the
following will be deemed to be cash:
(A) any liabilities, as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet, of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by
their terms subordinated to the Notes or any Subsidiary Guarantee) that are
assumed by the transferee of any such assets pursuant to a customary
novation agreement or other agreement that releases the Company or such
Restricted Subsidiary from further liability; and
(B) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that
are contemporaneously, subject to ordinary settlement periods,
converted by the Company or such Restricted Subsidiary into cash or
Cash Equivalents, to the extent of the cash or Cash Equivalents
received in that conversion.
(b) In the case of consideration received in an Asset Sale in a form
specified in Section 4.10(a)(3)(iii) or 4.10(a)(3)(iv) hereof, the Board of
Directors' determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing in Canada
or the United States if the fair market value exceeds US$10.0 million.
(c) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or such Restricted Subsidiary may apply those Net Proceeds at
its option:
(1) to repay term or revolving credit Indebtedness under or cash
collateralize letters of credit under a Credit Facility (other than any such
Indebtedness that is subordinate in right of payment to the Notes or any
Subsidiary Guarantee) and, if the Indebtedness repaid is revolving credit
Indebtedness, to correspondingly reduce commitments with respect thereto;
(2) if the Asset Sale is by a Restricted Subsidiary that is not a
Guarantor, to repay, redeem or repurchase any Indebtedness of that Restricted
Subsidiary;
60
(3) to acquire all or substantially all of the assets of, or a majority of
the Voting Stock of, a Person engaged in a Permitted Business;
(4) to make a capital expenditure; or
(5) to acquire other long-term assets that are used or useful in a
Permitted Business.
Pending the final application of any Net Proceeds, the Company or such
Restricted Subsidiary may temporarily reduce revolving credit borrowings or
otherwise invest the Net Proceeds in any manner that is not prohibited by this
Indenture.
(d) Any Net Proceeds from Asset Sales that are not applied or invested as
provided in Section 4.10(c) hereof and any Net Proceeds used to cash
collateralize letters of credit which no longer cash collateralize a letter of
credit and which have not otherwise been applied or invested as provided in
Section 4.10(c) hereof will constitute "Excess Proceeds". The Company may use
Excess Proceeds to make at any time, and when the aggregate amount of Excess
Proceeds exceeds US$10.0 million the Company will make, an offer (an "Asset Sale
Offer") to all Holders of Notes and all holders of other Indebtedness that is
pari passu with the Notes containing provisions similar to those set forth in
this Indenture with respect to offers to purchase or redeem such indebtedness
with the proceeds of sales of assets, to purchase the maximum principal amount
of Notes and such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100%
of the principal amount plus accrued and unpaid interest and Special Interest,
if any, to the date fixed for the closing of such offer, and will be payable in
cash (the "Asset Sale Payment"). If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company or such Restricted Subsidiary
may use those Excess Proceeds for any purpose not otherwise prohibited by this
Indenture. If the aggregate principal amount of Notes and other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee will select the Notes and such other pari passu
Indebtedness to be purchased on a pro rata basis based on the principal amount
of Notes and other pari passu Indebtedness tendered. Upon completion of each
Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.
(e) The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with Sections 3.09 or
4.10 hereof, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations hereunder by
virtue of such conflict.
Section 4.11 Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any
61
of its properties or assets to, or purchase any property or assets from, or
enter into or make or amend any transaction, contract, agreement, understanding,
loan, advance or guarantee with, or for the benefit of, any Affiliate (each, an
"Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that could have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(i) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
US$5.0 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies
with this Section 4.11 and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of
Directors; and
(ii) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of US$15.0 million, an opinion issued by an accounting,
appraisal or investment banking firm of national standing in Canada or
the United States stating that such Affiliate Transaction is on terms
that are no less favorable to the Company or the relevant Restricted
Subsidiary than those that could have been obtained in a comparable
transaction by the Company or such Restricted Subsidiary with an
unrelated person.
(b) The following items will not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of Section 4.11(a) hereof:
(1) compensation, employment or indemnification agreements or arrangements
(including stock options) entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business of the Company or such
Restricted Subsidiary;
(2) transactions between or among the Company and/or its Restricted
Subsidiaries; provided, that any transaction with a Restricted Subsidiary that
is not a Wholly Owned Restricted Subsidiary shall be in the ordinary course of
business and on terms that are no less favorable to the Company or the relevant
Restricted Subsidiary than those that could have been obtained in a comparable
transaction by the Company or such Restricted Subsidiary with an unrelated
Person;
(3) payment of reasonable directors fees to Persons who are not otherwise
Affiliates of the Company;
(4) sales of Equity Interests (other than Disqualified Stock) to Affiliates
of the Company;
62
(5) Permitted Investments or Restricted Payments that are permitted by
Section 4.07 hereof;
(6) the pledge of Equity Interests of Unrestricted Subsidiaries to support
the Indebtedness thereof;
(7) transactions undertaken pursuant to contractual obligations in
existence on March 3, 2004 and disclosed in the Offering Circular, as extended,
renewed, amended, restated, modified or replaced from time to time on terms no
less favorable, taken as a whole, to the Company or the relevant Restricted
Subsidiary than such contractual obligations in existence on March 3, 2004;
(8) transactions between or among the Company and/or its Restricted
Subsidiaries and Grant relating to the High Level Project in the ordinary course
of business of the Company or any such Restricted Subsidiary and on terms that
are no less favorable to the Company or the relevant Restricted Subsidiary than
those that could have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person;
(9) any purchase or sale by the Company made pursuant to the Buy/Sell
Option or the Right of First Refusal; and
(10) transactions between or among the Company and/or its Restricted
Subsidiaries and a Permitted Joint Venture on terms that are no less favorable
to the Company or the relevant Restricted Subsidiary than those that could have
been obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person.
Section 4.12 Liens.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind securing Indebtedness or Attributable Debt on any
asset now owned or hereafter acquired except Permitted Liens, unless it has made
or will make effective provision whereby the Notes or any Subsidiary Guarantee
will be secured by such Lien equally and ratably with (or, if such other
Indebtedness constitutes subordinated Indebtedness, prior to) all other
Indebtedness of the Company or any Restricted Subsidiary secured by such Lien
for so long as such other Indebtedness is secured by such ▇▇▇▇.
Section 4.13 Payments for Consent.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
to all Holders of the Notes and is paid to all Holders of the Notes that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
63
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or other existence of each of its
Restricted Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses
and franchises of the Company and its Restricted Subsidiaries; provided, that
the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of its
Restricted Subsidiaries, if the Company in good faith shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Holders of the Notes.
Section 4.15 Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall make an
offer (a "Change of Control Offer") to each Holder to repurchase all or any part
(equal to US$1,000 or an integral multiple thereof) of each Holder's Notes at a
purchase price in cash equal to 101% of the aggregate principal amount thereof
plus accrued and unpaid interest and Special Interest, if any, thereon, to the
date of repurchase (the "Change of Control Payment").
(b) Within 10 days following a Change of Control, the Company will mail a
notice to each Holder describing the transaction or transactions that constitute
the Change of Control and offering to repurchase Notes on a date specified in
the notice, which date will be no earlier than 30 days and no later than 60 days
from the date the notice is mailed, pursuant to the procedures required by
Section 3.09 hereof and described in the notice. Any Change of Control Offer
shall be made in accordance with Section 3.09 hereof. The Company shall comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with Sections 3.09 or 4.15 of this
Indenture, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations hereunder by
virtue of such conflict.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.15 and Section 3.09 hereof and all other provisions of this Indenture
applicable to a Change of Control Offer made by the Company and purchases all
Notes properly tendered and not withdrawn under the Change of Control Offer.
64
Section 4.16 Additional Subsidiary Guarantees.
If (i) the Company or any of its Restricted Subsidiaries acquires or
creates another North American Restricted Subsidiary, other than a Non-Guarantor
Restricted Subsidiary, after March 3, 2004 or (ii) the aggregate amount of
assets held by all Non-Guarantor Restricted Subsidiaries exceeds US$3.0 million,
then that newly acquired or created Subsidiary, in the case of clause (i), will
become a Guarantor, and in the case of clause (ii), such of the Non-Guarantor
Restricted Subsidiaries will become a Guarantor as is necessary so that after
giving effect to the issuance of such guarantees, the remaining Non-Guarantor
Restricted Subsidiaries will have aggregate assets of less than US$3.0 million.
In each case, such Restricted Subsidiary shall execute a supplemental indenture
in the form of Exhibit F hereto and deliver to the Trustee an Opinion of Counsel
within 10 Business Days of the date on which it was acquired or created, or
required to become a Guarantor, as the case may be, to the effect that such
supplemental indenture has been duly authorized and constitutes a valid, binding
and enforceable obligation of such Restricted Subsidiary; provided, however,
that all Subsidiaries that have properly been designated as Unrestricted
Subsidiaries in accordance with this Indenture for so long as they continue to
constitute Unrestricted Subsidiaries will not have to comply with this Section
4.16.
Section 4.17 Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors of the Company may designate any Restricted
Subsidiary of the Company to be an Unrestricted Subsidiary if that designation
would not cause a Default. If a Restricted Subsidiary is designated as an
Unrestricted Subsidiary, the aggregate fair market value of all outstanding
Investments owned by the Company and its Restricted Subsidiaries in the
Subsidiary properly designated shall be deemed to be an Investment made as of
the time of the designation and shall reduce the amount available for Restricted
Payments under Section 4.07(a) hereof or Permitted Investments. That designation
shall only be permitted if the Investment would be permitted at that time and if
the Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. In addition, no such designation may be made unless the proposed
Unrestricted Subsidiary does not own any Capital Stock in any Restricted
Subsidiary that is not simultaneously subject to designation as an Unrestricted
Subsidiary. The Board of Directors of ▇▇▇▇▇▇▇▇▇ may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a
Default.
Section 4.18 Additional Amounts
(a) All amounts paid or credited by the Company under or with respect to
the Notes, or by any Guarantor pursuant to the Subsidiary Guarantees, will be
made free and clear of and without withholding or deduction for or on account of
any present or future tax, duty, ▇▇▇▇, impost, assessment or other governmental
charge (including penalties, interest and other liabilities or expenses related
thereto) imposed or levied by or on behalf of the Government of Canada or of any
province or territory thereof or by any authority or agency therein or thereof
having power to tax (hereinafter, the "Taxes"), unless the Company or such
Guarantor, as the case may be, is required to withhold or deduct any
65
amount for or an account of Taxes by law or by the interpretation or
administration thereof. If the Company or any Guarantor is required to withhold
or deduct any amount for or on account of Taxes from any amount paid or credited
under or with respect to the Notes or the Subsidiary Guarantees, the Company or
such Guarantor will pay such additional amounts (the "Additional Amounts") as
may be necessary so that the net amount received by each owner of a beneficial
interest in the Notes (an "owner" for the purposes of this Section 4.18)
(including Additional Amounts) after such withholding or deduction (including
any withholding or deduction in respect of Additional Amounts) will not be less
than the amount such owner would have received if such Taxes had not been
withheld or deducted; provided, however, that no Additional Amounts will be
payable with respect to a payment or credit made to an owner (an "Excluded
Holder") (or to a Holder on behalf of an Excluded Holder) (i) with which the
Company or such Guarantor does not deal at arm's length (within the meaning of
the Income Tax Act (Canada)) at the time of making such payment, (ii) which is
subject to such Taxes by reason of such owner being connected with Canada or any
province or territory thereof otherwise than solely by reason of the owner's
activity in connection with purchasing the Notes, by the mere holding of Notes
or by reason of the receipt of payments thereunder or the enforcement of the
Holder's or owner's rights thereunder, (iii) which failed to duly and timely
comply with a timely request of the Company to provide information, documents,
certification or other evidence concerning such owner's nationality, residence,
entitlement to treaty benefits, identity or connection with Canada or any
political subdivision or authority thereof, if and to the extent that due and
timely compliance with such request would have resulted in the reduction or
elimination of any Taxes as to which Additional Amounts would have otherwise
been payable to such owner or Holder on behalf of such owner of Notes but for
this clause (iii), (iv) which is a fiduciary, a partnership or not the
beneficial owner of any payment or credit on a Note, if and to the extent that
any beneficiary or settlor of such fiduciary, any partner in such partnership or
the beneficial owner of such payment (as the case may be) would not have been
entitled to receive Additional Amounts with respect to such payment if such
beneficiary, settlor, partner or beneficial owner had been the Holder of such
Note or (v) any combination of the foregoing numbered clauses of this proviso.
The Company or such Guarantor will also (a) make such withholding or deduction
and (b) remit the full amount deducted or withheld to the relevant authority in
accordance with and in the time required under applicable law.
(b) The Company or the Guarantor will furnish the Holders of the Notes,
within 30 days after the date the payment of any Taxes is due pursuant to
applicable law, evidence of such payment by the Company or such Guarantor. In
the event that the Company or the Guarantor fails to remit any Taxes in respect
of which Additional Amounts are payable, the Company or the Guarantor will
indemnify and hold harmless each owner of a beneficial interest in the Notes
(other than an Excluded Holder or owner to the extent that such owner has
already received Additional Amounts in respect of the relevant payment or
credit) and will, upon written request of a Holder on behalf of an owner (other
than an Excluded Holder), reimburse each such Holder or owner for the amount of
(i) any Taxes so levied or imposed and paid by such Holder or owner as a result
of payments or credits made under or with respect to the Notes or the Subsidiary
Guarantees, and (ii) any Taxes so levied or imposed with respect to any
reimbursement
66
under the foregoing clause (i) but excluding any such Taxes on the net income of
such Holder or owner so that the net amount received by such Holder or owner
(net of payments made under or with respect to the Notes or Subsidiary
Guarantees) after such reimbursement will not be less than the net amount the
Holder or owner would have received if Taxes on such reimbursement had not been
imposed.
(c) At least 30 days prior to each date on which any payment under or with
respect to the Notes is due and payable, if the Company or any Guarantor will be
obligated to pay Additional Amounts with respect to such payment, the Company or
such Guarantor will deliver to the Trustee an Officers' Certificate stating the
fact that such Additional Amounts will be payable and the amounts so payable and
will set forth such other information necessary to enable the Trustee to pay
such Additional Amounts to Holders or owners on the payment date. Whenever in
this Indenture there is mentioned, in any context, the payment of principal,
premium, if any, redemption price, Change of Control Payment, Asset Sale
Payment, interest or any other amount payable under or with respect to any Note,
such mention shall be deemed to include mention of the payment of Additional
Amounts to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof.
(d) The Company or a Guarantor will pay any present or future stamp, court,
documentary or other similar Taxes, charges or levies that arise in any taxing
jurisdiction from the execution, delivery or registration of, or enforcement of
rights under, the Notes, this Indenture, any Subsidiary Guarantee or any related
document ("Documentary Taxes").
(e) The obligation to pay any Additional Amounts (and any associated
reimbursement) and Documentary Taxes under the terms and conditions described
above will survive any termination, defeasance or discharge of this Indenture.
Section 4.19 Limitation on Guarantees by Restricted Subsidiaries.
If any Restricted Subsidiary of the Company that is not a Guarantor
directly or indirectly Guarantees the payment of any Indebtedness of the Company
or a Guarantor, that Restricted Subsidiary will become a Guarantor and execute a
supplemental indenture in the form of Exhibit F hereto and deliver to the
Trustee an Opinion of Counsel within 10 Business Days of the date on which it
entered into such Guarantee to the effect that such supplemental indenture has
been duly authorized and constitutes a valid, binding and enforceable obligation
of such Restricted Subsidiary. If the Restricted Subsidiary is released from its
Guarantee of such other Indebtedness of the Company, it will automatically be
released from its obligations as a Guarantor.
Section 4.20 Money for Security Payments to Be Held in Trust.
(a) If the Company or any of its Restricted Subsidiaries shall at any time
act as Paying Agent hereunder, it shall, on or before each due date of the
principal of (and premium, if any) or interest and Special Interest, if any, on
any of the Notes, segregate and hold in trust for the benefit of the Person
entitled thereto a sum sufficient to pay the
67
principal (and premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
shall promptly notify the Trustee of its action or failure so to act.
(b) Whenever the Company shall have one or more Paying Agents for the
Notes, it shall, on or before each due date of the principal of (and premium, if
any) or interest and Special Interest, if any, on any Notes, deposit with a
Paying Agent a sum in same day funds (or New York Clearing House funds if such
deposit is made prior to the date on which such deposit is required to be made)
sufficient to pay the principal (and premium, if any) or interest and Special
Interest, if any, so becoming due, such sum to be held in trust for the benefit
of the Persons entitled to such principal, premium or interest and the Company
shall promptly notify the Trustee of such action or any failure so to act.
(c) The Company shall cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 4.20,
that such Paying Agent shall:
(i) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest and Special Interest, if any, on Notes in
trust for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided;
(ii) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal
(and premium, if any) or interest and Special Interest, if any; and
(iii) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
(d) The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest and Special Interest, if any, on any Note and remaining unclaimed
for two years after such principal (and premium, if any) or interest and Special
Interest, if any has become due and payable shall be paid to the Company on
Company request, unless an abandoned property law designates another person, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the
68
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided that the
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the written direction and at the expense of the Company, cause to be
published once, in the New York Times, The Wall Street Journal (national
edition), the Globe and Mail and the National Post, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
Section 4.21 Maintenance of Properties.
The Company shall cause all properties owned by the Company or any
Restricted Subsidiary and used or useful in the conduct of its business or the
business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order (reasonable wear and tear excepted) and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 4.21 shall prevent the Company
or any Restricted Subsidiary from discontinuing the maintenance of any of such
properties if such discontinuance is, as determined by the Company or such
Restricted Subsidiary in good faith, desirable in the conduct of its business or
the business of any Restricted Subsidiary and not disadvantageous in any
material respect to the Holders.
Section 4.22 Maintenance of Insurance.
The Company shall, and shall cause its Restricted Subsidiaries to, keep at
all times all of their properties which are of an insurable nature insured
(which may include self-insurance) against loss or damage with insurers believed
by the Company to be responsible to the extent that property of similar
character is usually so insured or self-insured by corporations similarly
situated and owning like properties in accordance with customary business
practices.
Section 4.23 Certain Fall-Away Covenants.
(a) During any period of time that (i) the Notes have Investment Grade
Ratings from both Rating Agencies and (ii) no Default or Event of Default has
occurred and is continuing hereunder, the Company and its Restricted
Subsidiaries will not be subject to Sections 4.07 (except to the extent
applicable under Section 4.17), 4.08, 4.09, 4.10, 4.11 and 4.15 (collectively,
the "Fall-Away Covenants") hereof and Sections 6.01(a)(3) and 6.01(a)(4) hereof,
to the extent that such Sections 6.01(a)(3) and 6.01(a)(4) apply to such
Fall-Away Covenants.
(b) If the Company and its Restricted Subsidiaries are not subject to the
Fall-Away Covenants for any period of time as a result of the previous sentence
(a "Fall-Away Period") and, subsequently, one, or both, of the Rating Agencies
withdraws its
69
ratings or downgrades the ratings assigned to the Notes below the required
Investment Grade Ratings or a Default or Event of Default occurs and is
continuing, then the Company and its Restricted Subsidiaries will thereafter
again be subject to the Fall-Away Covenants. The ability of the Company and its
Restricted Subsidiaries to make Restricted Payments after the time of such
withdrawal, downgrade, Default or Event of Default will be calculated as if
Section 4.07 had been in effect during the entire period of time from March 3,
2004. Notwithstanding the foregoing, the continued existence after the end of
the Fall-Away Period of facts and circumstances or obligations arising from
transactions which occurred during a Fall-Away Period shall not constitute a
breach of any covenant set forth in this Indenture or cause a Default or Event
of Default thereunder; provided, that (i) the Company and its Restricted
Subsidiaries did not incur or otherwise cause such facts and circumstances or
obligations to exist in anticipation of (x) a ratings withdrawal or downgrade
below an Investment Grade Rating or (y) a Default or Event of Default and (ii)
the Company and its Restricted Subsidiaries did not reasonably believe that such
transactions would result in such withdrawal or downgrade, Default or Event of
Default.
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Amalgamation, Consolidation or Sale of Assets.
(a) The Company will not, directly or indirectly: (i) consolidate,
amalgamate with or merge with or into another Person (whether or not the Company
is the surviving corporation); or (ii) sell, assign, transfer, convey or
otherwise dispose of all or substantially all of the properties or assets of the
Company and its Restricted Subsidiaries taken as a whole, in one or more related
transactions, to another Person; unless:
(1) either: (x) the Company is the surviving corporation; or (y) the
Person formed by or surviving any such consolidation, amalgamation or
merger (if other than the Company) or to which such sale, assignment,
transfer, conveyance or other disposition has been made is a corporation
organized or existing under the laws of Canada or any province or territory
thereof, the United States, any state of the United States or the District
of Columbia;
(2) the Person formed by or surviving any such consolidation,
amalgamation or merger (if other than the Company) or the Person to which
such sale, assignment, transfer, conveyance or other disposition has been
made assumes all of the obligations of the Company under the Notes, this
Indenture and the Registration Rights Agreement pursuant to a supplemental
indenture, executed and delivered to the Trustee, in a form satisfactory to
the Trustee;
(3) immediately after such transaction no Default or Event of Default
exists; and
(4) the Company or the Person formed by or surviving any such
consolidation, amalgamation or merger (if other than the Company), or to
which
70
such sale, assignment, transfer, conveyance or other disposition has been
made, will, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if the same had occurred
at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to Section 4.09(a)
hereof.
(b) The Company will not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.01 will not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or among
the Company and any of its Wholly Owned Restricted Subsidiaries, provided that
the surviving entity of any transaction involving the Company shall be a
corporation organized and existing under the laws of Canada or any province or
territory thereof, the United States, any state of the United States or the
District of Columbia.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.01 hereof, the successor corporation formed
by such consolidation or into or with which the Company is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the Company shall refer instead to the
successor corporation and not to the Company), and may exercise every right and
power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided that the
predecessor Company shall not be relieved from the obligation to pay the
principal of and interest and Special Interest, if any, on the Notes except in
the case of a sale, assignment, transfer, conveyance or other disposition of all
of the Company's assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
(a) An "Event of Default" wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) Default in payment of any principal of, or premium, if any, on the
Notes when due (whether at maturity, upon redemption or otherwise);
(2) Default in the payment of any interest on, or Special Interest
with respect to, any Note when due, which Default continues for 30 days or
more;
71
(3) failure by the Company or any of its Restricted Subsidiaries to
comply with Sections 3.09, 4.10, 4.15 or 5.01 hereof;
(4) Default by the Company or any Restricted Subsidiary in the
observance or performance of any other covenant in the Notes or this
Indenture for 30 days after written notice from the Trustee or the Holders
of not less than 25% in aggregate principal amount of the Notes then
outstanding;
(5) Default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Restricted Subsidiaries), whether such Indebtedness or guarantee now
exists, or is created after March 3, 2004, if that default:
(i) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a
"Payment Default"); or
(ii) results in the acceleration of such Indebtedness prior to its
expressed maturity,
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
US$10.0 million or more;
(6) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments aggregating in excess of US$10.0 million, net of
applicable insurance coverage, provided that the Company or such Restricted
Subsidiary has submitted a claim for such judgment and the provider of such
insurance has not disputed such coverage, which judgments are not paid,
discharged or stayed for a period of 60 days;
(7) except as permitted by this Indenture, any Subsidiary Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Guarantor,
or any Person acting on behalf of any Guarantor, shall deny or disaffirm
its obligations under its Subsidiary Guarantee;
(8) if the Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, pursuant to or within
the meaning of Bankruptcy Law:
(i) commences proceedings to be adjudicated bankrupt or insolvent;
72
(ii) consents to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under applicable Bankruptcy law;
(iii) consents to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator or other similar official of it or for all or
substantially all of its property;
(iv) makes a general assignment for the benefit of its creditors; or
(v) generally is not paying its debts as they become due; and
(9) if a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary, in a proceeding in which the Company or any such Restricted
Subsidiaries, that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary, is to be adjudicated bankrupt or insolvent;
(ii) appoints a receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary, or for all or substantially all of the property of the Company
or any of its Restricted Subsidiaries that is a Significant Subsidiary or
any group of Restricted Subsidiaries that, taken together, would constitute
a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days.
(b) The Company shall deliver to the Trustee, as soon as practicable and in
any event within 10 days after the Company's knowledge thereof, written notice
in the form of an Officers' Certificate of any Default under this Indenture, its
status and what action the Company proposes to take with respect thereto.
Section 6.02 Acceleration.
(a) If any Event of Default (other than an Event of Default specified in
clauses (8) or (9) of Section 6.01(a) hereof with respect to the Company or any
of its Restricted Subsidiaries) occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be
73
due and payable immediately. Upon any such declaration, the Notes shall become
due and payable immediately. Notwithstanding the foregoing, if an Event of
Default specified in clauses (8) or (9) of Section 6.01(a) hereof occurs with
respect to the Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding Notes shall
be due and payable immediately without further action or notice. The Holders of
a majority in aggregate principal amount of the then outstanding Notes by
written notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest, Special Interest, if any, or premium that has become due
solely because of the acceleration) have been cured or waived.
(b) If an Event of Default occurs by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the intention
of avoiding payment of the premium that the Company would have had to pay if the
Company then had elected to redeem the Notes pursuant to Section 3.07 hereof,
then, upon acceleration of the Notes, an equivalent premium shall also become
and be immediately due and payable, to the extent permitted by law.
(c) Notwithstanding the preceding paragraph, in the event of a declaration
of acceleration in respect of the Notes because of an Event of Default specified
in Section 6.01(a)(5) shall have occurred and be continuing, such declaration of
acceleration shall be automatically annulled if the Indebtedness that is the
subject of such Event of Default has been discharged or the Holders thereof have
rescinded their declaration of acceleration in respect of such Indebtedness, and
written notice of such discharge or rescission, as the case may be, shall have
been given to the Trustee by the Company and countersigned by the Holders of
such Indebtedness or a trustee, fiduciary or agent for such Holders, within 30
days after such declaration of acceleration in respect of the Notes, and no
other Event of Default has occurred during such 30-day period which has not been
cured or waived during such period.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Special Interest, if any, or interest
on, the Notes (including in connection with a Repurchase Offer); provided,
subject to Section 6.02 hereof, that the Holders of a majority in aggregate
principal amount of the then outstanding Notes may rescind an acceleration and
its consequences, including any related payment default that resulted from such
acceleration. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of other Holders of Notes or that may involve the Trustee in
personal liability.
Section 6.06 Limitation on Suits.
Subject to Section 6.07, a Holder of a Note may pursue a remedy with
respect to this Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then outstanding
Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal amount
of the then outstanding Notes do not give the Trustee a direction inconsistent
with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
75
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and Special
Interest, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with a Repurchase Offer), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and Special Interest, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceedings, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding has been instituted.
Section 6.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes in Section 2.07, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders
76
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders, as the case may be.
Section 6.12 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes including the Guarantors), its creditors or
its property and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such claims
and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
Section 6.13 Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
(i) to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
(ii) to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium, if any, and Special Interest, if any, and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium, if any, and
Special Interest, if any and interest, respectively; and
77
(iii) to the Company or to such party as a court of competent
jurisdiction shall direct including a Guarantor, if applicable.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.13.
Section 6.14 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to
Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount
of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
78
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved in a court of
competent jurisdiction that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section 7.01.
(e) The Trustee shall be under no obligation to exercise any of its rights
and powers under this Indenture at the request of any Holders, unless such
Holder shall have offered to the Trustee security and indemnity satisfactory to
it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its selection and the written advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent or attorney appointed
with due care.
79
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(f) None of the provisions of this Agreement shall require the Trustee to
expend or risk its own funds or otherwise to incur any liability, financial or
otherwise, in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers if it shall have reasonable grounds for believing
that repayment of such funds or indemnity satisfactory to it against such risk
or liability is not assured to it.
(g) The Trustee shall not be deemed to have notice of any Default or Event
of Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Notes and this Indenture
(h) In no event shall the Trustee be responsible or liable for special,
indirect, or consequential loss or damage of any kind whatsoever (including, but
not limited to, loss of profit) irrespective of whether the Trustee has been
advised of the likelihood of such loss or damage and regardless of the form of
action.
(i) The rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed to act hereunder.
(j) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission for permission to continue
as trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to Sections 7.10 and 7.11 hereof.
80
Section 7.04 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest or Special Interest, if any, on any Note, the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes and the Trustee shall withhold the notice of any Default under Section
6.01(d) hereof until 30 days after notice under such section is given. The
Trustee shall not be deemed to know of any default or Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless
written notice of any event which is such a default is received by the Trustee
at the Corporate Trust Office of the Trustee.
Section 7.06 Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA Section 313(a) (but if no event described in TIA
Section 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA
Section 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
Section 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such compensation
for its acceptance of this Indenture and services hereunder as the parties shall
agree in writing from time to time. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses
81
incurred or made by it in addition to the compensation for its services. Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee's agents and counsel.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture or the earlier resignation or
removal of the Trustee.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
Section 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
82
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the Company's
expense), the Company, or the Holders of at least 10% in principal amount of the
then outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder who has been a Holder
for at least six months, fails to comply with Section 7.10, such Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee; provided, all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by ▇▇▇▇▇▇, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
83
Section 7.12 Appointment of Co-Trustee.
It is recognized that in case of litigation under this Indenture, and in
particular in case of the enforcement thereof on default, or in the case the
Trustee deems that by reason of any present or future law of any jurisdiction it
may not exercise any of the powers, rights or remedies herein granted to the
Trustee or hold title to the properties, in trust, as herein granted or take any
action which may be desirable or necessary in connection therewith, it may be
necessary that the Trustee appoint an individual or institution as a separate or
co-trustee. The following provisions of this Section are adopted to these ends.
In the event that the Trustee appoints an additional individual or
institution as a separate or co-trustee, each and every remedy, power, right,
claim, demand, cause of action, immunity, estate, title, interest and lien
expressed or intended by this Indenture to be exercised by or vested in or
conveyed to the Trustee with respect thereto shall be exercisable by and vest in
such separate or co-trustee but only to the extent necessary to enable such
separate or co-trustee to exercise such powers, rights and remedies, and only to
the extent that the Trustee by the laws of any jurisdiction is incapable of
exercising such powers, rights and remedies and every covenant and obligation
necessary to the exercise thereof by such separate or co-trustee shall run to
and be enforceable by either of them.
Should any instrument in writing from the Company be required by the
separate or co-trustee so appointed by the Trustee for more fully and certainly
vesting in and confirming to it such properties, rights, powers, trusts, duties
and obligations, any and all such instruments in writing shall, on request, be
executed, acknowledged and delivered by the Company; provided, that if an Event
of Default shall have occurred and be continuing, if the Company does not
execute any such instrument within fifteen (15) days after request therefor, the
Trustee shall be empowered as an attorney-in-fact for the Company to execute any
such instrument in the Company's name and stead. In case any separate or
co-trustee or a successor to either shall die, become incapable of acting,
resign or be removed, all the estates, properties, rights, powers, trusts,
duties and obligations of such separate or co-trustee, so far as permitted by
law, shall vest in and be exercised by the Trustee until the appointment of a
new trustee or successor to such separate or co-trustee.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights and powers, conferred or imposed upon the Trustee shall
be conferred or imposed upon and may be exercised or performed by such
separate trustee or co-trustee; and
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder.
84
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and the conditions
of this Article.
Any separate trustee or co-trustee may at any time appoint the Trustee as
its agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Indenture on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at its option and at any time, elect to have either
Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance
with the conditions set forth below in this Article Eight.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
deemed to have been discharged from their obligations with respect to all
outstanding Notes and Subsidiary Guarantees on the date the conditions set forth
below are satisfied ("Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the
other Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Indenture
including that of the Guarantors (and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which shall survive until otherwise
terminated or discharged hereunder:
(a) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, or interest or premium and Special Interest, if
any, on such Notes when such payments are due from the trust fund described in
Section 8.04 hereof;
(b) the Company's obligations with respect to the Notes under Article 2 and
Section 4.02 hereof;
(c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's and the Guarantor's obligations in connection
therewith; and
85
(d) this Article Eight.
Subject to compliance with this Article Eight, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
released from their obligations under the covenants contained in Sections 4.03,
4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.19, 4.21 and
4.22 hereof and clause (4) of Section 5.01(a) hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
hereof are satisfied ("Covenant Defeasance"), and the Notes shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03 hereof, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, Sections 6.01(4), 6.01(5),
6.01(6), and 6.01(7) hereof shall not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) The Company shall irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable
Government Securities, or a combination of cash in U.S. dollars and non-callable
Government Securities, in such amounts as will be sufficient, in the opinion of
a nationally recognized firm of independent public accountants, to pay the
principal of, or interest and premium and Special Interest, if any, on the
outstanding Notes on the stated maturity or on the applicable redemption date,
as the case may be, and the Company must specify whether the Notes are being
defeased to maturity or to a particular redemption date;
86
(b) in the case of an election under Section 8.02 hereof, the Company shall
have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee confirming that (a) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since March 3, 2004,
there has been a change in the applicable U.S. federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders of the outstanding Notes will not recognize income, gain or
loss for U.S. federal income tax purposes as a result of such Legal Defeasance
and will be subject to U.S. federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company shall
have delivered to the Trustee an Opinion of Counsel confirming that the Holders
of the outstanding Notes will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of such Covenant Defeasance and will be
subject to U.S. federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Covenant Defeasance had
not occurred;
(d) in the case of Section 8.02 or Section 8.03, the Company shall have
delivered to the Trustee an Opinion of Counsel in Canada to the effect that
Holders and beneficial owners of the outstanding Notes will not recognize
income, gain or loss for Canadian federal, provincial or territorial income tax
or other tax purposes as a result of such Legal Defeasance or Covenant
Defeasance, as applicable, and will be subject to Canadian federal, provincial
or territorial income tax and other tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance or
Covenant Defeasance, as applicable, had not occurred (which condition may not be
waived by any Holder or the Trustee);
(e) no Default or Event of Default may have occurred and be continuing on
the date of such deposit (other than a Default or Event of Default resulting
from the borrowing of funds to be applied to such deposit);
(f) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of Notes over the other creditors of the Company with
the intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
87
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company or a Guarantor acting as Paying
Agent) as the Trustee may determine, to the Holders of such Notes of all sums
due and to become due thereon in respect of principal, premium and Special
Interest, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium and Special
Interest, if any, or interest on any Note and remaining unclaimed for two years
after such principal, and premium and Special Interest, if any, or interest has
become due and payable shall be paid to the Company on its request or (if then
held by the Company) shall be discharged from such trust; and the Holder of such
Note shall thereafter look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in the New York Times, The Wall Street Journal (national edition), the
Globe and Mail and the National Post, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
88
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States dollars
or non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided that, if the Company makes any payment of
principal of, premium and Special Interest, if any, or interest on any Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 hereof, the Company, the Guarantors and the
Trustee may amend or supplement this Indenture, the Subsidiary Guarantees or the
Notes without the consent of any Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) to provide for the assumption of the Company's obligations to Holders
of Notes by a successor to the Company pursuant to Article 5 hereof;
(4) to make any change that would provide any additional rights or benefits
to the Holders of Notes or that in the good faith opinion of the Board of
Directors of the Company (evidenced by a resolution of the Board of Directors
set forth in an Officers' Certificate delivered to the Trustee) does not
adversely affect the rights under this Indenture of any such Holder;
(5) to add a Guarantor; or
(6) to comply with requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental indenture authorized or permitted by
the terms of this Indenture and to
89
make any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such amended or
supplemental indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the Trustee
may amend or supplement this Indenture, the Notes and the Subsidiary Guarantees
with the consent of the Holders of at least a majority in principal amount of
the Notes (including Additional Notes, if any) then outstanding voting as a
single class (including, without limitation, consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the Notes), and,
subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of
Default (other than a Default or Event of Default in the payment of the
principal of, premium and Special Interest, if any, or interest on the Notes,
except a payment default resulting from an acceleration that has been rescinded)
or compliance with any provision of this Indenture, the Subsidiary Guarantees or
the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including Additional Notes, if
any) voting as a single class (including consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes).
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental indenture
unless such amended or supplemental indenture directly affects the Trustee's own
rights, duties or immunities under this indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver.
Without the consent of each Holder affected, an amendment or waiver under
this Section 9.02 may not (with respect to any Notes held by a non-consenting
Holder):
(1) reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
90
(2) reduce the principal of or change the fixed maturity of any Note or
alter the provisions with respect to the redemption of the Notes (other than
Sections 3.09, 4.10 or 4.15);
(3) reduce the rate of or change the time for payment of interest on any
Note, including Additional Amounts;
(4) waive a Default or Event of Default in the payment of principal of, or
interest or premium, or Special Interest, if any, on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the Notes and a waiver of the payment default that
resulted from such acceleration);
(5) make any Note payable in money other than that stated in the Notes;
(6) make any change in the provisions of this Indenture relating to waivers
of past Defaults or the rights of Holders of Notes to receive payments of
principal of or interest or premium or Special Interest, if any, on the Notes;
(7) waive a redemption payment with respect to any Note (other than a
payment required by Section 4.10 or Section 4.15 hereof);
(8) release any Guarantor from any of its obligations under its Subsidiary
Guarantee or this Indenture, except in accordance with the terms of this
Indenture; or
(9) make any change in Section 6.04 or 6.07 hereof or to this Article 9.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a amended or supplemental Indenture that complies with the TIA as then
in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting ▇▇▇▇▇▇'s Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement, or waiver. If a record date is fixed, then, notwithstanding the
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only such Persons, shall be entitled to
consent to such amendment, supplement, or waiver or to
91
revoke any consent previously given, whether or not such Persons continue to be
Holders after such record date. No such consent shall be valid or effective for
more than 120 days after such record date unless the consent of the requisite
number of Holders has been obtained.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article Nine if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment, supplement or waiver until the Board of Directors
approves it. In executing any amendment, supplement or waiver, the Trustee shall
be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
12.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE 10
GUARANTEES
Section 10.01 Subsidiary Guarantee.
Subject to this Article 10, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that: (a) the principal,
interest, premium and Special Interest, if any, on the Notes will be promptly
paid in full when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest on the Notes,
if any, if lawful, and all other obligations of the Company to the Holders or
the Trustee hereunder or thereunder will be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same
92
immediately. Each Guarantor agrees that this is a guarantee of payment and not a
guarantee of collection.
The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.
The obligations of the Guarantor under its Subsidiary Guarantee are
independent of the obligations guaranteed by such Guarantor hereunder, and a
separate action or actions may be brought and prosecuted by the Trustee on
behalf of, or by, the Holders, subject to the terms and conditions set forth in
this Indenture against a Guarantor to enforce the Subsidiary Guarantee,
irrespective of whether any action is brought against the Company or whether the
Company is joined in any such action or actions.
The Guarantor hereby agrees that, in the event of a default in payment of
principal (or premium and Special Interest, if any) or interest on a Note,
whether at its stated maturity, by acceleration, purchase or otherwise, legal
proceedings may be instituted by the Trustee on behalf of, or by, the Holder of
such Note, subject to the terms and conditions set forth in this Indenture,
directly against each of the Guarantors to enforce such Guarantor's Subsidiary
Guarantee without first proceeding against the Company or any other Guarantor.
The Guarantor agrees that if, after the occurrence and during the continuance of
an Event of Default, the Trustee or any of the Holders are prevented by
applicable law from exercising their respective rights to accelerate the
maturity of the Notes, to collect interest on the Notes, or to enforce or
exercise any other right or remedy with respect to the Notes, such Guarantor
shall pay to the Trustee for the account of the Holder, upon demand therefor,
the amount that would otherwise have been due and payable had such rights and
remedies been permitted to be exercised by the Trustee or any of the Holders.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x)
93
the maturity of the obligations guaranteed hereby may be accelerated as provided
in Article 6 hereof for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article 6 hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this
Subsidiary Guarantee. The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Guarantee.
Each Subsidiary Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation, reorganization, should the Company become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Notes are,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee on the Notes or Subsidiary Guarantees,
whether as a "voidable preference", "fraudulent transfer" or otherwise, all as
though such payment or performance had not been made. In the event that any
payment or any part thereof, is rescinded, reduced, restored or returned, the
Note shall, to the fullest extent permitted by law, be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced, restored or
returned. The form of Subsidiary Guarantee is attached hereto as Exhibit E.
In case any provision of any Subsidiary Guarantee shall be invalid, illegal
or unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Subsidiary Guarantee issued by any Guarantor shall be a general
unsecured obligation of such Guarantor, ranking pari passu with any other future
senior Indebtedness of such Guarantor, if any.
Each payment to be made by a Guarantor in respect of its Subsidiary
Guarantee shall be made without set-off, counterclaim, reduction or diminution
of any kind or nature.
Section 10.02 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the guarantee by each
Guarantor pursuant to its Subsidiary Guarantee not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar United States
federal or state law or Canadian federal, provincial or territorial law relating
to fraudulent transfer or conveyance. To effectuate the foregoing intention, the
Trustee, the Holders and the Guarantors hereby irrevocably agree that the
obligations of each Guarantor shall be limited to the maximum amount as
94
will, after giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to its contribution obligations under
the Indenture, result in the obligations of such Guarantor under the Guarantee
not constituting a fraudulent conveyance or fraudulent transfer under applicable
law. Each Guarantor that makes a payment or distribution under a Guarantee shall
be entitled to a contribution from each other Guarantor in a proportional amount
based on the net assets of each Guarantor, determined in accordance with GAAP.
Section 10.03 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 10.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form included in Exhibit E shall be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Guarantor by its
President or one of its Vice Presidents.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 10.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth
in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any new Restricted
Subsidiaries, other than Non-Guarantor Restricted Subsidiaries, subsequent to
the date of this Indenture, if required by Section 4.16 hereof, the Company
shall cause such Restricted Subsidiaries to execute supplemental indentures to
this Indenture and Subsidiary Guarantees in accordance with Section 4.16 hereof
and this Article 10, to the extent applicable.
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 10.05 hereof, no Guarantor may sell
or otherwise dispose of all or substantially all of its assets to, or
consolidate, amalgamate with or merge with or into (whether or not such
Guarantor is the surviving Person) another Person, other than the Company or
another Guarantor unless:
(a) immediately after giving effect to that transaction, no Default or
Event of Default exists; and
(b) either:
95
(1) the Guarantor is the surviving Person, or the Person acquiring the
property in any such sale or disposition or the Person formed by or
surviving any such consolidation, amalgamation or merger assumes all the
obligations of that Guarantor under this Indenture, its Subsidiary
Guarantee and the Registration Rights Agreement pursuant to a supplemental
indenture satisfactory to the Trustee and completes all other required
documentation; or
(2) the Net Proceeds of such sale or other disposition are applied in
accordance with the provisions of Section 4.10 hereof;
In case of any such consolidation, amalgamation, merger, sale or conveyance
and upon the assumption by the successor Person (where applicable), by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Guarantee endorsed upon the Notes and the due and
punctual performance of all of the covenants and conditions of this Indenture to
be performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses
(a) and (b) above, nothing contained in this Indenture or in any of the Notes
shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 10.05 Releases Following Sale of Assets.
A Guarantor shall be released from all of its obligations under its
Guarantee if all of its Capital Stock is sold (including by way of merger,
amalgamation or consolidation in compliance with Section 5.01 hereof) to a
Person that is not (either before or after giving effect to such transaction)
the Company or a Restricted Subsidiary of the Company, provided that the sale
complies with Section 4.10 hereof. Further, if the Company redesignates any
Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in
accordance with Section 4.17 hereof then such Guarantor will be released and
relieved of any obligations under its Subsidiary Guarantee. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to
the effect that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture, including without limitation
Section 4.10 hereof, the Trustee shall execute any documents reasonably required
in order to evidence the release of any Guarantor from its obligations under its
Subsidiary Guarantee.
96
Any Guarantor not released from its obligations under its Subsidiary
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article 10.
Section 10.06 Subrogation
Each Guarantor shall be subrogated to all rights of Holders of Notes
against the Company in respect of any amounts paid by any Guarantor pursuant to
the provisions of Section 10.01; provided that, if an Event of Default has
occurred and is continuing, no Guarantor shall be entitled to enforce or receive
any payments arising out of, or based upon, such right of subrogation until all
amounts then due and payable by the Company under this Indenture or the Notes
shall have been paid in full.
Section 10.07 Benefits Acknowledged
Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the guarantee and waivers made by it pursuant to its Subsidiary Guarantee are
knowingly made in contemplation of such benefits.
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further effect as
to all Notes issued thereunder, when:
(a) either:
(1) all Notes that have been authenticated, except lost, stolen or
destroyed Notes that have been replaced or paid and Notes for whose payment
money has been deposited in trust and thereafter repaid to the Company,
have been delivered to the Trustee for cancellation; or
(2) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the mailing of a
notice of redemption or otherwise or will become due and payable within one
year and the Company or any Guarantor has irrevocably deposited or caused
to be deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination of cash in U.S. dollars and non-callable
Government Securities, in amounts as will be sufficient without
consideration of any reinvestment of interest, to pay and discharge the
entire indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium and Special Interest, if any, and
accrued interest to the date of maturity or redemption;
97
(b) no Default or Event of Default shall have occurred and be continuing on
the date of the deposit or shall occur as a result of the deposit and the
deposit will not result in a breach or violation of, or constitute a default
under, any other instrument to which the Company or any Guarantor is a party or
by which the Company or any Guarantor is bound;
(c) The Company or any Guarantor has paid or caused to be paid all sums
payable by it under this Indenture; and
(d) The Company has delivered irrevocable instructions to the Trustee under
this Indenture to apply the deposited money toward the payment of the Notes at
maturity or the redemption date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money
shall have been deposited with the Trustee pursuant to subclause (2) of clause
(a) of this Section 11.01, the provisions of Section 11.02 and Section 8.06
hereof shall survive.
Section 11.02 Application of Trust Money.
Subject to the provisions of Section 8.06 hereof, all money deposited with
the Trustee pursuant to Section 11.01 hereof shall be held in trust and applied
by it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium and Special Interest, if any)
and interest for whose payment such money has been deposited with the Trustee;
but such money need not be segregated from other funds except to the extent
required by law.
If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 11.01 hereof by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 11.01 hereof; provided that if the Company has made any payment of
principal of, premium and Special Interest, if any, or interest on any Notes
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money or Government Securities held by the Trustee or Paying Agent.
98
ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
Section 12.02 Notices.
Any notice or communication by the Company, any Guarantor or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telecopier
or overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company and/or any Guarantor:
▇▇▇▇▇▇▇▇▇ Lumber Co. Ltd.
Suite 3194, Bentall IV,
P.O. Box 49307,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
With copies to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Telephone Number (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
- and -
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇. Box 48600,
Vancouver, British Columbia,
Canada, V7X 1T2
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
If to the Trustee:
99
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery; provided that any notice or communication
delivered to the Trustee shall be deemed effective upon actual receipt thereof.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
Section 12.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
Section 12.04 Certificate and Opinion as to Conditions Precedent.
(a) Upon any request or application by the Company or any of the Restricted
Subsidiaries to the Trustee to take any action under this Indenture, the Company
or such Guarantor, as the case may be, shall furnish to the Trustee an Officers'
Certificate in form and substance reasonably satisfactory to the Trustee (which
shall include the statements set forth in Section 12.05 hereof) stating that, in
the opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have been
satisfied; and
(b) An Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 12.05
below) stating
100
that, in the opinion of such counsel, all such conditions precedent and
covenants have been satisfied.
Section 12.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to Section 4.04 hereof or TIA Section 314(a)(4)) shall comply with the
provisions of TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with (and, in the case of an Opinion of Counsel, may be limited to
reliance on an Officers' Certificate as to matters of fact); and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
Section 12.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07 No Personal Liability of Directors, Officers Employees and
Shareholders.
No past, present or future director, officer, employee, incorporator or
shareholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or the Guarantors under the Notes, this
Indenture, the Subsidiary Guarantees, or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
Section 12.08 Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS
INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
101
Section 12.09 Waiver of Jury Trial.
EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE
SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 12.10 Force Majeure.
In no event shall the Trustee be responsible or liable for any failure or
delay in the performance of its obligations under this Indenture arising out of
or caused by, directly or indirectly, forces beyond its reasonable control,
including without limitation strikes, work stoppages, accidents, acts of war or
terrorism, civil or military disturbances, nuclear or natural catastrophes or
acts of god, and interruptions, loss or malfunctions of utilities,
communications or computer (software or hardware) services.
Section 12.11 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or their Restricted Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
Section 12.12 Successors.
All agreements of the Company in this Indenture and the Notes shall bind
their successors. All agreements of the Trustee in this Indenture shall bind its
successors. All agreements of each Guarantor in this Indenture shall bind its
successors, except as otherwise provided in Section 10.05.
Section 12.13 Agent for Service; Submission to Jurisdiction; Waiver of
Immunities.
By the execution and delivery of this Indenture, the Company and each of
the Non-U.S. Guarantors (i) acknowledges that it has, by separate written
instrument, irrevocably designated and appointed CT Corporation System, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as its authorized agent upon
which process may be served in any suit, action or proceeding arising out of or
relating to the Notes, the Subsidiary Guarantees or this Indenture that may be
instituted in any U.S. federal or state court located in the Borough of
Manhattan in The City of New York, or brought under federal or state securities
laws, and acknowledges that CT Corporation System has accepted such designation,
(ii) submits to the non-exclusive jurisdiction of such courts in any such suit,
action or proceeding, and (iii) agrees that service of process upon CT
Corporation System and written notice of said service to it (mailed or delivered
to its Chief Financial Officer at its principal office in Vancouver, British
Columbia as specified in Section 12.02 hereof), shall be deemed in every respect
effective service of process upon it in any such suit or proceeding. The Company
further agrees to take any and all action, including the execution and filing of
any and all such documents and instruments,
102
as may be necessary to continue such designation and appointment in full force
and effect so long as this Indenture shall be in full force and effect.
To the extent that any of the Company or the Guarantors has or hereafter
may acquire any immunity from jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, each of the Company and the Guarantors hereby irrevocably
waives such immunity in respect of its obligations under this Indenture and the
Notes, to the extent permitted by law.
Section 12.14 Conversion of Currency.
(a) (i) If for the purpose of obtaining judgment in, or enforcing the
judgment of, any court in any country, it becomes necessary to convert into any
other currency (the "judgment currency") an amount due in U.S. dollars, then the
conversion shall be made at the rate of exchange prevailing on the Business Day
before the day on which the judgment is given or the order of enforcement is
made, as the case may be (unless a court shall otherwise determine). (ii) If
there is a change in the rate of exchange prevailing between the Business Day
before the day on which the judgment is given or an order of enforcement is
made, as the case may be (or such other date as a court shall determine), and
the date of receipt of the amount due, the Company will pay such additional (or,
as the case may be, such lesser) amount, if any, as may be necessary so that the
amount paid in the judgment currency when converted at the rate of exchange
prevailing on the date of receipt will produce the amount in U.S. dollars
originally due.
(b) In the event of the winding-up of the Company at any time while any
amount or damages owing under the Notes, Subsidiary Guarantees or this
Indenture, or any judgment or order rendered in respect thereof, shall remain
outstanding, the Company shall indemnify and hold the Holders and the Trustee
harmless against any deficiency arising or resulting from any variation in rates
of exchange between (1) the date as of which the equivalent of the amount in
U.S. dollars due or contingently due under the Notes, Subsidiary Guarantees or
this Indenture (other than under this Subsection (b)) is calculated for the
purposes of such winding-up and (2) the final date for the filing of proofs of
claim in such winding-up. For the purpose of this Clause (b), the final date for
the filing of proofs of claim in the winding-up of the Company shall be the date
fixed by the liquidator or otherwise in accordance with the relevant provisions
of applicable law as being the latest practicable date as at which liabilities
of the Company may be ascertained for such winding-up prior to payment by the
liquidator or otherwise in respect thereto.
(c) The obligations contained in Clauses (a)(ii) and (b) of this Section
12.12 shall constitute separate and independent obligations of the Company from
its other obligations under the Notes, Subsidiary Guarantees and this Indenture,
shall give rise to separate and independent causes of action against the
Company, shall apply irrespective of any waiver or extension granted by any
Holder or Trustee or either of them from time to time and shall continue in full
force and effect notwithstanding any judgment or order or the filing of any
proof of claim in the winding-up of the Company for a liquidated sum
103
in respect of amounts due hereunder (other than under ▇▇▇▇▇▇ (b) above) or under
any such judgment or order. Any such deficiency as aforesaid shall be deemed to
constitute a loss suffered by the Holders or the Trustee, as the case may be,
and no proof or evidence of any actual loss shall be required by the Company,
the Guarantors or the liquidator or otherwise. In the case of Clause (b) above,
the amount of such deficiency shall not be deemed to be reduced by any variation
in rates of exchange occurring between the said final date and the date of any
liquidating distribution.
(d) The term "rate(s) of exchange" shall mean the rate of exchange quoted
by the Federal Reserve Bank of New York, noon buying rate on the date of
determination for purchases of U.S. dollars with the judgment currency other
than U.S. dollars referred to in Clauses (a) and (b) above and includes any
premiums and costs of exchange payable.
(e) The Trustee shall have no duty or liability with respect to monitoring
or enforcing this Section 12.12.
Section 12.15 Currency Equivalent.
Except as provided in Section 12.12, for purposes of the construction of
the terms of this Indenture or of the Notes and Subsidiary Guarantees, in the
event that any amount is stated herein in the currency of one nation (the "First
Currency"), as of any date such amount shall also be deemed to represent the
amount in the currency of any other relevant nation (the "Other Currency") which
is required to purchase such amount in the First Currency at the rate of
exchange quoted by the Federal Reserve Bank of New York, noon buying rate on the
date of determination.
Section 12.16 Severability.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 12.17 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 12.18 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
104
SIGNATURES
▇▇▇▇▇▇▇▇▇ LUMBER CO. LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
By: /s/ D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice-President
The Bank of New York, as Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
EXHIBIT A
[Face of Note]
[Insert the Global Note Legend, if applicable pursuant to the provisions of
the Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the
provisions of the Indenture]
Rule 144A Note CUSIP: ▇▇▇▇▇▇▇▇▇
Rule 144A Note ISIN: US009037AC61
Regulation S Note CUSIP: ▇▇▇▇▇▇▇▇▇
Regulation S Note ISIN: USC01023AD98
6.750% Senior Notes due March 15, 2014
No. ___ US$▇
▇▇▇▇▇▇▇▇▇ LUMBER CO. LTD.
promises to pay to _____________________________ or registered assigns,
the principal sum of ___________________________________________________________
United States Dollars on March 15, 2014.
Interest Payment Dates: June 30 and December 30
Record Dates: June 15 and December 15
A-2
IN WITNESS HEREOF, the Company has caused this instrument to be duly
executed.
Dated:
▇▇▇▇▇▇▇▇▇ LUMBER CO. LTD.
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
This is one of the Notes referred to in the within-mentioned Indenture:
The Bank of New York
as Trustee
By:
------------------------------------
Authorized Signatory
A-3
[Back of Note]
6.750% Senior Notes due March 15, 2014
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. ▇▇▇▇▇▇▇▇▇ Lumber Co. Ltd., a corporation amalgamated under the
laws of the Province of British Columbia (the "Company"), promises to pay
interest on the principal amount of this Note at 6.750% per annum from March 3,
2004 until maturity and shall pay the Special Interest, if any, payable pursuant
to the Registration Rights Agreement referred to below. The Company will pay
interest and Special Interest, if any, semi-annually in arrears on June 30th and
December 30th of each year, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date"). Interest on the
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of issuance; provided that the first
Interest Payment Date shall be June 30, 2004. The Company will pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at the
interest rate on the Notes plus 1% to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Special Interest (without regard to any
applicable grace periods) from time to time on demand at the interest rate on
the Notes plus 1% to the extent lawful. Interest will be computed on the basis
of a 360-day year comprised of twelve 30-day months. For the purposes of
disclosure under the Interest Act (Canada), the yearly rate of interest which is
equivalent to the rate payable hereunder is the rate payable hereunder
multiplied by the actual number of days in the year divided by 360.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes and
Special Interest, if any, to the Persons who are registered Holders of Notes at
the close of business on the June 15 or December 15 (whether or not a Business
Day), as the case may be, next preceding the Interest Payment Date, even if such
Notes are canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect to
defaulted interest. Payment of interest and Special Interest, if any, may be
made by check mailed to the Holders at their addresses set forth in the register
of Holders, provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest, premium and
Special Interest, if any, on, all Global Notes and all other Notes the Holders
of which shall have provided wire transfer instructions to the Company or the
Paying Agent. Such payment shall be in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Company may
change any Paying Agent or Registrar without notice to the Holders. The Company
or any Guarantor may act in any such capacity.
A-4
4. INDENTURE. The Company issued the Notes under an Indenture, dated as of
May 19, 2004 (the "Indenture"), between the Company and the Trustee. The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"TIA"). The Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling.
5. OPTIONAL REDEMPTION.
(a) At any time prior to March 15, 2007 the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes,
calculated after giving effect to the issuance of Additional Notes, if any, at a
redemption price of 106.750% of the principal amount, plus accrued and unpaid
interest and Special Interest, if any, to the redemption date, with the net cash
proceeds of a sale of Common Stock of the Company; provided that:
(1) at least 65% of the aggregate principal amount of Notes theretofor
issued under the Indenture, calculated after giving effect to the issuance
of Additional Notes, if any, remain outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and its
Subsidiaries); and
(2) the redemption occurs within 60 days of the date of the closing of
such sale of Common Stock.
(b) Except pursuant to the preceding paragraph and as described below under
clause (d) hereof, the Notes will not be redeemable at the Company's option
before March 15, 2009.
(c) On or after March 15, 2009, the Company may redeem all or a part of the
Notes upon not less than 30 nor more than 60 days' prior notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Special Interest, if any, on the Notes
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on March 15 of the years indicated below:
YEAR PERCENTAGE
2009................................................. 103.375%
2010................................................. 102.250%
2011................................................. 101.125%
2012 and thereafter.................................. 100.000%
(d) The Company may redeem all, but not less than all, of the Notes at any
time at 100% of the aggregate principal amount of the Notes, together with
accrued and unpaid interest and Special Interest, if any, on the Notes redeemed
to the applicable redemption date, if the Company has become or would become
obligated to pay, on the
A-5
next date on which any amount would be payable with respect to the Notes, any
Additional Amounts as a result of a change in the laws (including any
regulations promulgated thereunder) of Canada (or any political subdivision or
taxing authority thereof or therein), or any change in any official position of
any governmental agency, taxing authority or regulatory authority regarding the
application or interpretation of such laws or regulations, which change is
announced or becomes effective on or after February 27, 2004.
6. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
7. NOTICE OF REDEMPTION. Subject to Section 3.09 of the Indenture, notice
of redemption will be mailed by first class mail at least 30 days but not more
than 60 days before the redemption date (except that redemption notices may be
mailed more than 60 days prior to a redemption date if the notice is issued in
connection with Article 8 or Article 11 of the Indenture) to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than US$1,000 may be redeemed in part but only in whole multiples of
US$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
8. OFFERS TO REPURCHASE.
(a) Upon the occurrence of a Change of Control, the Company shall make an
offer (a "Change of Control Offer") to each Holder to repurchase all or any part
(equal to US$1,000 or an integral multiple thereof) of each Holder's Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Special Interest thereon, if any, to the date of
purchase (the "Change of Control Payment"). The Change of Control Offer shall be
made in accordance with Sections 3.09 and 4.15 of the Indenture.
(b) If the Company or any of its Restricted Subsidiaries consummates an
Asset Sale, the Company may use Excess Proceeds to make at any time, and within
five days of each date on which the aggregate amount of Excess Proceeds exceeds
US$10.0 million the Company shall commence, an offer (an "Asset Sale Offer") to
all Holders of Notes and all Holders of other Indebtedness that is pari passu
with the Notes containing provisions similar to those set forth in the Indenture
with respect to offers to purchase or redeem such indebtedness with the proceeds
of sales of assets, to purchase the maximum principal amount of Notes (including
any Additional Notes) and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Special Interest thereon, if any, to the date fixed for the closing of such
offer, in accordance with the procedures set forth in the Indenture. To the
extent that the aggregate amount of Notes (including any Additional Notes) and
other pari passu Indebtedness tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds,
A-6
the Company (or such Restricted Subsidiary) may use those Excess Proceeds for
any purpose not otherwise prohibited by the Indenture. If the aggregate
principal amount of Notes and other pari passu Indebtedness tendered pursuant to
an Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes and such other pari passu Indebtedness to be purchased on a pro
rata basis based on the principal amount of Notes and other ▇▇▇▇ ▇▇▇▇▇
Indebtedness tendered. Holders of Notes that are the subject of an offer to
purchase will receive an Asset Sale Offer from the Company prior to any related
purchase date and may elect to have such Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of US$1,000 and integral multiples of US$1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes, except as set forth in Section 4.18 of the
Indenture.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Subsidiary Guarantees or the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes and Additional Notes, if any, voting as a single
class, and any existing default or compliance with any provision of the
Indenture, the Subsidiary Guarantees or the Notes may be waived (other than a
Default or Event of Default in the payment of the principal of, premium and
Special Interest, if any, or interest on the Notes, except a payment default
resulting from an acceleration that has been rescinded) with the consent of the
Holders of a majority in principal amount of the then outstanding Notes and
Additional Notes, if any, voting as a single class. Without the consent of any
Holder of a Note, the Indenture, the Notes and the Subsidiary Guarantees may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to Holders of
the Notes in case of a merger, amalgamation consolidation or sale of all or
substantially all of the Company's assets, to make any change that would provide
any additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, to add
a Guarantor, or to comply with the requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the TIA.
12. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are
defined in Section 6.01 of the Indenture. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding
A-7
Notes may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable immediately without further action or notice. Holders may not
enforce the Indenture, the Notes or the Subsidiary Guarantees except as provided
in the Indenture. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal, premium or Special
Interest, if any, or interest) if it determines that withholding notice is in
their interest. The Holders of a majority in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may on behalf of the Holders of
all of the Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest or Special Interest on, or the principal of, premium
and Special Interest, if any, or interest on, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
13. AUTHENTICATION. This Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose until authenticated by
the manual signature of the Trustee.
14. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED
DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement,
dated as of May 19, 2004, between the Company and the parties named on the
signature pages thereof (the "Registration Rights Agreement"), including the
right to receive Special Interest (as defined in the Registration Rights
Agreement).
15. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
16. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
A-8
▇▇▇▇▇▇▇▇▇ Lumber Co. Ltd.
Suite 3194, Bentall IV,
P.O. Box 49307,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ 1L3
Attention: Chief Financial Officer
A-9
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _____________________
Your Signature: ______________________________
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee*: __________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.15 of the Indenture, check the appropriate box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
US$_______________
Date: _____________________
Your Signature: ______________________________
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.: ______________________
Signature Guarantee*: _______________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-11
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Amount of increase Principal Amount of Signature of
in Principal this Global Note authorized officer
Amount of decrease Amount of this following such of Trustee or Note
Date of Exchange in Principal Amount Global Note decrease or increase Custodian
---------------- ------------------- ------------------ -------------------- ------------------
-------------------
*This schedule should be included only if the Note is issued in global form.
A-12
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
▇▇▇▇▇▇▇▇▇ Lumber Co. Ltd.
Suite 3194, Bentall IV,
P.O. Box 49307,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Re: 6.750% Senior Notes due March 15, 2014
Reference is hereby made to the Indenture, dated as of May 19, 2004 (the
"Indenture"), among ▇▇▇▇▇▇▇▇▇ Lumber Co. Ltd., a corporation amalgamated under
the laws of the Province of British Columbia and The Bank of New York, as
Trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
_______________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of US$___________ in such Note[s] or interests (the
"Transfer"), to _______________ (the "Transferee"), as further specified in
Annex A hereto. In connection with the Transfer, the Transferor hereby certifies
that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE
B-1
REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act (iii) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act and (iv) if the
proposed transfer is being made prior to the expiration of the Restricted
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT
OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in
compliance with the transfer restrictions applicable to beneficial interests in
Restricted Global Notes and Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby further
certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions
B-2
applicable to beneficial interests in a Restricted Global Note or Restricted
Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by
the Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Definitive Notes and in the Indenture and the
Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.
B-3
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By: _____________________________________
Name:
Title:
Dated: _______________________
ANNEX A TO CERTIFICATE OF TRANSFER
5. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(b) [ ] a Restricted Definitive Note.
6. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
▇▇▇▇▇▇▇▇▇ Lumber Co. Ltd.
Suite 3194, Bentall IV,
P.O. Box 49307,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ 1L3
Attention: Chief Financial Officer
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Re: 6.750% Senior Notes due March 15, 2014
Reference is hereby made to the Indenture, dated as of May 19, 2004 (the
"Indenture"), among ▇▇▇▇▇▇▇▇▇ Lumber Co. Ltd., a corporation amalgamated under
the laws of the Province of British Columbia and The Bank of New York, as
Trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
___________, (the "Owner") owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the principal amount of
US$__________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED
GLOBAL NOTE. In connection with the Exchange of the Owner's beneficial
interest in a Restricted Global Note for a beneficial interest in an
Unrestricted Global Note in an equal principal amount, the Owner
hereby certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to
the Global Notes and pursuant to and in accordance with the United
States Securities Act of 1933, as amended (the "Securities Act"),
(iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
C-1
b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted
Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and
the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is
being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with
the Owner's Exchange for a Restricted Definitive Note for a beneficial
interest in an Unrestricted Global Note, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and
the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange
of a Restricted Definitive Note for an Unrestricted Definitive Note,
the Owner hereby certifies (i) the Unrestricted Definitive Note is
being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend
are not required in order to maintain compliance with the Securities
Act and (iv) the Unrestricted Definitive Note is being acquired in
compliance with any applicable blue sky securities laws of any state
of the United States.
2) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a Restricted Definitive Note with an equal principal
amount, the Owner hereby certifies that the Restricted Definitive Note
is being acquired for the Owner's own account without transfer. Upon
consummation of the proposed Exchange in accordance with the terms of
the Indenture, the Restricted Definitive Note issued
C-2
will continue to be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Definitive
Note and in the Indenture and the Securities Act.
b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with
the Exchange of the Owner's Restricted Definitive Note for a
beneficial interest in the 144A Global Note, with an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any
applicable blue sky securities laws of any state of the United States.
Upon consummation of the proposed Exchange in accordance with the
terms of the Indenture, the beneficial interest issued will be subject
to the restrictions on transfer enumerated in the Private Placement
Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and are dated ______________________.
[Insert Name of Transferor]
By: _____________________________________
Name:
Title:
Dated: _______________________
C-3
EXHIBIT D
[FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR]
▇▇▇▇▇▇▇▇▇ Lumber Co. Ltd.
Suite 3194, Bentall IV,
P.O. Box 49307,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ 1L3
Attention: Chief Financial Officer
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Re: 6.750% Senior Notes due March 15, 2014
Reference is hereby made to the Indenture, dated as of May 19, 2004 (the
"Indenture"), among ▇▇▇▇▇▇▇▇▇ Lumber Co. Ltd., a corporation amalgamated under
the laws of the Province of British Columbia and The Bank of New York, as
Trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
In connection with our proposed purchase of US$___________ aggregate
principal amount of:
a) a beneficial interest in a Global Note, or
b) a Definitive Note,
we confirm that:
1) We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the United States Securities Act of
1933, as amended (the "Securities Act").
2) We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited
D-1
investor" (as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to you and to the Company a
signed letter substantially in the form of this letter and an Opinion of Counsel
in form reasonably acceptable to the Company to the effect that such transfer is
in compliance with the Securities Act, (D) outside the United States in
accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant
to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any person purchasing the Definitive Note or beneficial interest
in a Global Note from us in a transaction meeting the requirements of clauses
(A) through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.
3) We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
4) We are an institutional "accredited investor" (within the meaning of
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5) We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By: ___________________________________
Name:
Title:
Dated: _______________________
D-2
EXHIBIT E
[FORM OF NOTATION OF GUARANTEE]
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture (as defined below) and
subject to the provisions in the Indenture dated as of May 19, 2004 (the
"Indenture") among ▇▇▇▇▇▇▇▇▇ Lumber Co. Ltd., a corporation amalgamated under
the laws of the Province of British Columbia and The Bank of New York, as
Trustee (the "Trustee"), (a) the due and punctual payment of the principal of,
premium and Special Interest, if any, and interest on the Notes (as defined in
the Indenture), whether at maturity, by acceleration, redemption or otherwise,
the due and punctual payment of interest on overdue principal and premium, and,
to the extent permitted by law, interest, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms of the Indenture and (b) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations, that
the same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. The obligations of the Guarantors to the Holders of
Notes and to the Trustee pursuant to this Subsidiary Guarantee and the Indenture
are expressly set forth in the Indenture and reference is hereby made to the
Indenture for the precise terms of the Subsidiary Guarantee.
The laws of the State of New York shall govern and be used to construe this
Subsidiary Guarantee.
[Name of Guarantor(s)]
By: ___________________________________
Name:
Title:
E-1
EXHIBIT F
[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
Supplemental Indenture (this "Supplemental Indenture"), dated as of
__________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of ▇▇▇▇▇▇▇▇▇ Lumber Co. Ltd., a corporation incorporated under the
laws of the Province of British Columbia (the "Company"), the Company, and The
Bank of New York, as Trustee under the Indenture referred to below (the
"Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of May 19, 2004 providing for the
issuance of an unlimited aggregate principal amount of Senior Notes due March
15, 2014 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances a
Subsidiary providing a Subsidiary Guarantee shall execute and deliver to the
Trustee a supplemental indenture pursuant to which such Subsidiary shall
unconditionally guarantee all of the Company's Obligations under the Notes and
the Indenture on the terms and conditions set forth herein (the "Subsidiary
Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
mutually covenant and agree for the equal and ratable benefit of the Holders of
the Notes as follows:
(1) Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
(2) Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees as
follows:
(a) Along with all Guarantors named in the Indenture, to jointly and
severally unconditionally guarantee to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that:
(i) the principal of and interest, premium and Special Interest, if
any, on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on the Notes, if any, if lawful, and all
other obligations of the
F-1
Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the terms hereof
and thereof; and
(ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall be jointly and
severally obligated to pay the same immediately.
(b) The obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor.
(c) The obligations of the Guaranteeing Subsidiary under this Subsidiary
Guarantee are independent of the obligations guaranteed by the Guaranteeing
Subsidiary hereunder, and a separate action or actions may be brought and
prosecuted by the Trustee on behalf of, or by, the Holders, subject to the terms
and conditions set forth in the Indenture, against the Guaranteeing Subsidiary
to enforce this Subsidiary Guarantee, irrespective of whether any action is
brought against the Company or whether the Company is joined in any such action
or actions.
(d) In the event of a default in payment of principal (or premium and
Special Interest, if any) or interest on a Note, whether at its stated maturity,
by acceleration, purchase or otherwise, legal proceedings may be instituted by
the Trustee on behalf of, or by, the Holder of such Note, subject to the terms
and conditions set forth in the Indenture, directly against the Guaranteeing
Subsidiary to enforce the Subsidiary Guarantee without first proceeding against
the Company or any other Guarantor. If, after the occurrence and during the
continuance of an Event of Default, the Trustee or any of the Holders are
prevented by applicable law from exercising their respective rights to
accelerate the maturity of the Notes, to collect interest on the Notes, or to
enforce or exercise any other right or remedy with respect to the Notes, the
Guaranteeing Subsidiary shall pay to the Trustee for the account of the Holder,
upon demand therefor, the amount that would otherwise have been due and payable
had such rights and remedies been permitted to be exercised by the Trustee or
any of the Holders.
(e) The following is hereby waived: diligence presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever.
(f) This Subsidiary Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes, the Indenture and this
F-2
Supplemental Indenture, and the Guaranteeing Subsidiary accepts all obligations
of a Guarantor under the Indenture.
(g) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors (including the Guaranteeing Subsidiary),
or any custodian, trustee, liquidator or other similar official acting in
relation to either the Company or the Guarantors, any amount paid either to the
Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
(h) The Guaranteeing Subsidiary shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby.
(i) As between the Guaranteeing Subsidiary, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 of the Indenture
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6 of the Indenture, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guaranteeing Subsidiary for the purpose of this Subsidiary
Guarantee.
(j) The Guaranteeing Subsidiary shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under this Subsidiary Guarantee.
(k) Pursuant to Section 10.02 of the Indenture, after giving effect to all
other contingent and fixed liabilities that are relevant under any applicable
Bankruptcy or fraudulent conveyance laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under Article 10 of the Indenture, this new Subsidiary Guarantee shall
be limited to the maximum amount permissible such that the obligations of such
Guaranteeing Subsidiary under this Subsidiary Guarantee will not constitute a
fraudulent transfer or conveyance.
(l) This Subsidiary Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation, reorganization, should the Company become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Notes are,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee on the Notes and Subsidiary Guarantee,
whether as a "voidable preference", "fraudulent transfer" or otherwise, all as
though such payment or performance had not been made. In the event
F-3
that any payment or any part thereof, is rescinded, reduced, restored or
returned, the Note shall, to the fullest extent permitted by law, be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
(m) In case any provision of this Subsidiary Guarantee shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
(n) This Subsidiary Guarantee shall be a general unsecured obligation of
such Guaranteeing Subsidiary, ranking pari passu with any other future senior
Indebtedness of the Guaranteeing Subsidiary, if any.
(o) Each payment to be made by the Guaranteeing Subsidiary in respect of
this Subsidiary Guarantee shall be made without set-off, counterclaim, reduction
or diminution of any kind or nature.
(3) Execution and Delivery. The Guaranteeing Subsidiary agrees that the
Subsidiary Guarantee shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of this Subsidiary Guarantee.
(4) Guaranteeing Subsidiary may Consolidate, etc. on Certain Terms.
(a) Except as otherwise provided in Section 10.05 of the Indenture, the
Guaranteeing Subsidiary may not sell or otherwise dispose of all or
substantially all of its assets to, or consolidate, amalgamate with or merge
with or into (whether or not such Guaranteeing Subsidiary is the surviving
Person) another Person other than the Company or another Guarantor unless:
(b) immediately after giving effect to that transaction, no Default or
Event of Default exists; and
(c) either:
(1) the Guaranteeing Subsidiary is the surviving Person, or the
Person acquiring the property in any such sale or disposition or the
Person formed by or surviving any such consolidation, amalgamation or
merger assumes all the obligations of the Guaranteeing Subsidiary
under the Indenture, this Subsidiary Guarantee and the Registration
Rights Agreement pursuant to a supplemental indenture satisfactory to
the Trustee and completes all other required documentation; or
(2) the Net Proceeds of such sale or other disposition are
applied in accordance with the provisions of Section 4.10 of the
Indenture;
(d) In case of any such consolidation, amalgamation, merger, sale or
conveyance and upon the assumption by the successor Person (where applicable),
by supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of this Subsidiary Guarantee endorsed upon
the Notes and the due and
F-4
punctual performance of all of the covenants and conditions of the Indenture to
be performed by the Guaranteeing Subsidiary, such successor Person shall succeed
to and be substituted for the Guaranteeing with the same effect as if it had
been named herein as a Guaranteeing Subsidiary. Such successor Person thereupon
may cause to be signed the Subsidiary Guarantee to be endorsed upon all of the
Notes issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee. The Subsidiary Guarantee so issued shall
in all respects have the same legal rank and benefit under the Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of the Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
(e) Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding clauses (a) and (b) above, nothing contained in the Indenture or
in any of the Notes shall prevent any consolidation, amalgamation or merger of a
Guaranteeing Subsidiary with or into the Company or another Guarantor, or shall
prevent any sale or conveyance of the property of the Guaranteeing Subsidiary as
an entirety or substantially as an entirety to the Company or another Guarantor.
(5) Releases.
(a) In the event of a sale (including by way of merger, amalgamation or
consolidation in compliance with Section 5.01 of the Indenture) of all the
capital stock of the Guaranteeing Subsidiary to a Person that is not (either
before or after giving effect to such transaction) the Company or a Restricted
Subsidiary then the Guaranteeing Subsidiary (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of the capital
stock of such Guaranteeing Subsidiary) will be released and relieved of any
obligations under this Subsidiary Guarantee; provided, that the sale complies
with Section 4.10 of the Indenture. Further, if the Company redesignates any
Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in
accordance with Section 4.17 of the Indenture then the Guaranteeing Subsidiary
will be released and relieve of any obligations under this Subsidiary Guarantee.
Upon delivery by the Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such sale or other disposition was made by
the Company in accordance with the provisions of the Indenture, including
without limitation Section 4.10 of the Indenture, the Trustee shall execute any
documents reasonably required in order to evidence the release of the
Guaranteeing Subsidiary from its obligations under this Subsidiary Guarantee.
(b) The Guaranteeing Subsidiary not released from its obligations under
this Subsidiary Guarantee shall remain liable for the full amount of principal
of and interest on the Notes and for the other obligations of the Guaranteeing
Subsidiary under the Indenture a provided in Article 10 thereof.
(6) No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, shareholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Subsidiary under the Notes, any Subsidiary Guarantees, the Indenture or
this Supplemental Indenture or for
F-5
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of the Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the Commission that such
a waiver is against public policy.
(7) THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
THIS SUPPLEMENTAL INDENTURE, THE INDENTURE, THE NOTES AND THE SUBSIDIARY
GUARANTEES.
(8) Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
(9) Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
(10) the Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
(11) Subrogation. The Guaranteeing Subsidiary shall be subrogated to all
rights of Holders of Notes against the Company in respect of any amounts paid by
the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof;
provided, however, that, if an Event of Default has occurred and is continuing,
the Guaranteeing Subsidiary shall not be entitled to enforce or receive any
payments arising out of, or based upon, such right of subrogation until all
amounts then due and payable by the Company under the Indenture or the Notes
shall have been paid in full.
(12) Benefits Acknowledged. The Guaranteeing Subsidiary acknowledges that
it will receive direct and indirect benefits from the financing arrangements
contemplated by the Indenture and this Supplemental Indenture and that the
guarantee and waivers made by it pursuant to this Subsidiary Guarantee are
knowingly made in contemplation of such benefits.
(13) Successors. All agreements of the Guaranteeing Subsidiary in this
Supplemental Indenture shall bind its Successors, except as otherwise provided
in Section 2(k) hereof or elsewhere in this Supplemental Indenture. All
agreements of the Trustee in this Supplemental Indenture shall bind its
successors.
F-6
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first above written.
Dated:______________, ____
▇▇▇▇▇▇▇▇▇ LUMBER CO. LTD.
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
[GUARANTEEING SUBSIDIARY]
By: ___________________________________
Name:
Title:
F-7
The Bank of New York, as Trustee
By: ___________________________________
Authorized Signatory
F-8