EXHIBIT 4.3
EXECUTION COPY
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PACKAGING CORPORATION OF AMERICA
12 3/8% SUBORDINATED EXCHANGE DEBENTURES DUE 2010
EXCHANGE INDENTURE
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Dated as of April 12, 1999
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U.S. TRUST COMPANY OF TEXAS, N.A.
Trustee
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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
(i)(c)............................................................ N.A.
312(a)............................................................ 2.05
(b)............................................................... 13.03
(c)............................................................... 13.03
313(a)............................................................ 7.06
(b)(2)............................................................ 7.07
(c)............................................................... 7.06; 13.02
(d)............................................................... 7.06
314(a)............................................................ 4.03; 13.02
(c)(1)............................................................ 13.04
(c)(2)............................................................ 13.04
(c)(3)............................................................ N.A.
(e)............................................................... 13.05
(f)............................................................... N.A.
315(a)............................................................ 7.01
(b) .............................................................. 7.05; 13.02
(A)(c)............................................................ 7.01
(d)............................................................... 7.01
(e)............................................................... 6.11
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
317(a)(1)......................................................... 6.08
(a)(2)............................................................ 6.09
(b) .............................................................. 2.04
318(a)............................................................ 13.01
(b)............................................................... N.A.
(c)............................................................... 12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Exchange Indenture.
TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE........................1
Section 1.01. Definitions.................................................1
Section 1.02. Other Definitions..........................................23
Section 1.03. Trust Indenture Act Definitions............................23
Section 1.04. Rules of Construction......................................24
ARTICLE 2. THE NOTES........................................................24
Section 2.01. Form and Dating............................................24
Section 2.02. Execution and Authentication...............................25
Section 2.03. Registrar and Paying Agent.................................25
Section 2.04. Paying Agent to Hold Money in Trust........................26
Section 2.05. Holder Lists...............................................26
Section 2.06. Transfer and Exchange......................................26
Section 2.07. Replacement Notes..........................................37
Section 2.08. Outstanding Notes..........................................37
Section 2.09. Treasury Notes.............................................38
Section 2.10. Temporary Notes............................................38
Section 2.11. Cancellation...............................................38
Section 2.12. Defaulted Interest.........................................39
Section 2.13. CUSIP Numbers..............................................39
ARTICLE 3. REDEMPTION AND PREPAYMENT........................................39
Section 3.01. Notices to Trustee.........................................39
Section 3.02. Selection of Notes to Be Redeemed..........................39
Section 3.03. Notice of Redemption.......................................40
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Section 3.04. Effect of Notice of Redemption.............................41
Section 3.05. Deposit of Redemption Price................................41
Section 3.06. Notes Redeemed in Part.....................................41
Section 3.07. Optional Redemption........................................41
Section 3.08. Mandatory Redemption.......................................42
Section 3.09. Offer to Purchase by Application of Excess
Proceeds................................................42
ARTICLE 4. COVENANTS........................................................44
Section 4.01. Payment of Notes...........................................44
Section 4.02. Maintenance of Office or Agency............................44
Section 4.03. Reports....................................................45
Section 4.04. Compliance Certificate.....................................45
Section 4.05. Taxes......................................................46
Section 4.06. Stay, Extension and Usury Laws.............................46
Section 4.07. Restricted Payments........................................47
Section 4.08. Dividend and Other Payment Restrictions
Affecting Subsidiaries..................................49
Section 4.09. Incurrence of Indebtedness and Issuance of
Preferred Stock.........................................50
Section 4.10. Asset Sales................................................54
Section 4.11. Transactions with Affiliates...............................56
Section 4.12. Liens......................................................57
Section 4.13. Sale and Leaseback Transactions............................57
Section 4.14. Corporate Existence........................................58
Section 4.15. Offer to Repurchase Upon Change of Control.................58
Section 4.17. Business Activities........................................59
Section 4.18. Designation of Restricted and Unrestricted
Subsidiaries............................................59
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ARTICLE 5. SUCCESSORS.......................................................60
Section 5.01. Merger, Consolidation, or Sale of Assets...................60
Section 5.02. Successor Corporation Substituted..........................60
ARTICLE 6. DEFAULTS AND REMEDIES............................................61
Section 6.01. Events of Default..........................................61
Section 6.02. Acceleration...............................................62
Section 6.03. Other Remedies.............................................63
Section 6.04. Waiver of Past Defaults....................................63
Section 6.05. Control by Majority........................................64
Section 6.06. Limitation on Suits........................................64
Section 6.07. Rights of Holders of Notes to Receive Payment..............64
Section 6.08. Collection Suit by Trustee.................................64
Section 6.09. Trustee May File Proofs of Claim...........................65
Section 6.10. Priorities.................................................65
Section 6.11. Undertaking for Costs......................................65
ARTICLE 7. TRUSTEE..........................................................66
Section 7.01. Duties of Trustee..........................................66
Section 7.02. Rights of Trustee..........................................67
Section 7.03. Individual Rights of Trustee...............................67
Section 7.04. Trustee's Disclaimer.......................................67
Section 7.05. Notice of Defaults.........................................68
Section 7.06. Reports by Trustee to Holders of the Notes.................68
Section 7.07. Compensation and Indemnity.................................68
Section 7.08. Replacement of Trustee.....................................69
Section 7.09. Successor Trustee by Merger, etc...........................70
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Section 7.10. Eligibility; Disqualification..............................70
Section 7.11. Preferential Collection of Claims Against
Company.................................................70
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.........................71
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance..............................................71
Section 8.02. Legal Defeasance and Discharge.............................71
Section 8.03. Covenant Defeasance........................................71
Section 8.04. Conditions to Legal or Covenant Defeasance.................72
Section 8.05. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions...........73
Section 8.06. Repayment to Company.......................................73
Section 8.07. Reinstatement..............................................74
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER.................................74
Section 9.01. Without Consent of Holders of Notes........................74
Section 9.02. With Consent of Holders of Notes...........................75
Section 9.03. Compliance with Trust Indenture Act........................76
Section 9.04. Revocation and Effect of Consents..........................76
Section 9.05. Notation on or Exchange of Notes...........................76
Section 9.06. Trustee to Sign Amendments, etc............................77
ARTICLE 10. SUBORDINATION...................................................77
Section 10.01. Agreement to Subordinate..................................77
Section 10.02. Certain Definitions.......................................77
Section 10.03. Liquidation; Dissolution; Bankruptcy......................79
Section 10.04. Default on Designated Senior Debt.........................79
Section 10.05. Acceleration of Notes.....................................80
Section 10.06. When Distribution Must Be Paid Over.......................80
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Section 10.07. Notice by Company.........................................81
Section 10.08. Subrogation...............................................81
Section 10.09. Relative Rights...........................................81
Section 10.10. Subordination May Not Be Impaired by Company..............82
Section 10.11. Distribution or Notice to Representative..................82
Section 10.12. Rights of Trustee and Paying Agent........................82
Section 10.13. Authorization to Effect Subordination.....................83
Section 10.14. Amendments................................................83
ARTICLE 11. SATISFACTION AND DISCHARGE......................................83
Section 11.01. Satisfaction and Discharge of Indenture...................83
Section 11.02. Application of Trust Money................................84
ARTICLE 12. MISCELLANEOUS...................................................84
Section 12.01. Trust Indenture Act Controls..............................84
Section 12.02. Notices...................................................84
Section 12.03. Communication by Holders of Notes with Other
Holders of Notes.......................................86
Section 12.04. Certificate and Opinion as to Conditions
Precedent..............................................86
Section 12.05. Statements Required in Certificate or Opinion.............86
Section 12.06. Rules by Trustee and Agents...............................86
Section 12.07. No Personal Liability of Directors, Officers,
Employees and Shareholders.............................87
Section 12.08. Governing Law.............................................87
Section 12.09. No Adverse Interpretation of Other Agreements.............87
Section 12.10. Successors................................................87
Section 12.11. Severability..............................................87
Section 12.12. Counterpart Originals.....................................87
Section 12.13. Table of Contents, Headings, etc..........................87
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EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR
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EXCHANGE INDENTURE dated as of April 12, 1999 by and among Packaging
Corporation of America, a Delaware corporation (the "Company") and U.S. Trust
Company of Texas, N.A., a bank and trust company organized under the New York
Banking Law, as trustee (the "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 12 3/8%
Subordinated Exchange Debentures due 2010 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A Global Note" means a global note 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 Debt" means, with respect to any specified Person:
(i) 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
(ii) Indebtedness secured by a Lien encumbering any asset acquired
by such specified Person.
"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, shall mean 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 shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" shall have correlative meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Premium" means, with respect to any Note on any
Redemption Date, the greater of:
(i) 1.0% of the principal amount of such Note; or
(ii) the excess of:
(A) the present value at the Redemption Date of (1) the
redemption price of such Note at April 1, 2004 (such redemption price
being set forth in the table in Section 3.07 hereof) plus (2) all required
interest payments due on such Note through April 1, 2004 (excluding
accrued but unpaid interest), computed using a discount rate equal to the
Treasury Rate at the Redemption Date plus 50 basis points; over
(B) the principal amount of such Note, if greater.
"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 CEDEL that apply to such transfer or
exchange.
"Asset Sale" means:
(i) the sale, lease, conveyance or other disposition of any assets
or rights, other than sales of inventory in the ordinary course of business;
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 shall be governed by the provisions of Section 4.15 hereof and/or the
provisions of Section 5.01 hereof and not by the provisions of Section 4.10
hereof; and
(ii) the issuance of Equity Interests by any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any of the Company's
Subsidiaries.
Notwithstanding the foregoing, the following items shall not be
deemed to be Asset Sales:
(i) any single transaction or series of related transactions that
involves assets having a fair market value of less than $10.0 million;
(ii) a transfer of assets between or among the Company and its
Wholly Owned Restricted Subsidiaries;
(iii) an issuance of Equity Interests by a Wholly Owned Restricted
Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary;
(iv) the sale, license or lease of equipment, inventory, accounts
receivable or other assets in the ordinary course of business;
(v) the sale or other disposition of cash or Cash Equivalents or
Marketable Securities;
(vi) the transfer or disposition of assets and the sale of Equity
Interests pursuant to the Contribution;
(vii) sales of accounts receivables and related assets of the type
specified in the definition of "Qualified Receivables Transaction" to a
Receivables Subsidiary for the fair market value thereof including cash or Cash
Equivalents or Marketable Securities in an amount at least equal to 75% of the
fair market value thereof as determined in accordance with GAAP; and
(viii) a Restricted Payment or Permitted Investment that is
permitted under 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
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using a discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state 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" shall 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. For purposes of this definition, the terms "Beneficially Owns" and
"Beneficially Owned" shall have corresponding meanings.
"Board of Directors" means:
(i) with respect to a corporation, the board of directors of the
corporation;
(ii) with respect to a partnership, the Board of Directors of the
general partner of the partnership; and
(iii) with respect to any other Person, the board or committee of
such Person serving a similar function.
"Broker-Dealer" has the meaning set forth in the Preferred Stock
Registration Rights Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof 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.
"Capital Stock" means:
(i) in the case of a corporation, corporate stock;
(ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(iv) 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.
3
"Cash Equivalents" means:
(i) United States dollars;
(ii) securities issued or directly and fully guaranteed or insured
by the United States government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in
support thereof) having maturities of not more than six months from the date of
acquisition;
(iii) 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 twelve months and overnight bank
deposits, in each case, with any lender party to the Credit Agreement or with
any domestic commercial bank having capital and surplus in excess of $500.0
million and a Thomson Bank Watch Rating of "B" or better;
(iv) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications specified
in clause (iii) above;
(v) commercial paper having the highest rating obtainable from
▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Rating Services and in each
case maturing within twelve months after the date of acquisition; and
(vi) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (i) through (v) of
this definition.
"CEDEL" means CEDEL Bank, SA.
"Change of Control" means the occurrence of any of the following:
(i) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger, consolidation or transfer of the
Company's Voting Stock), in one or a series of related transactions, of all or
substantially all of the properties or assets of the Company and its 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 to a Principal or a Related Party of a
Principal;
(ii) the adoption of a plan relating to the liquidation or
dissolution of the Company (other than a plan relating to the sale or other
disposition of timberlands);
(iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related Parties
or a Permitted Group, becomes the Beneficial Owner, directly or indirectly, of
more than 50% of the Voting Stock of the Company, measured by voting power
rather than number of shares; or
(iv) the first day on which a majority of the members of the Board
of Directors of the Company are not Continuing Directors.
"Company" means Packaging Corporation of America, and any and all
successors thereto.
4
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus:
(i) 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
(ii) 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
(iii) depletion, 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 depletion,
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; plus
(iv) all one-time charges incurred in 1999 in connection with the
Contribution (including the impairment charge described under the section
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Overview" in the Offering Memorandum) to the extent such charges
were deducted in computing such Consolidated Net Income; plus
(v) all restructuring charges incurred prior to the Issue Date
(including the restructuring charge that was added to pro forma EBITDA to
calculate adjusted pro forma EBITDA as set forth in footnote 4 under the section
"Selected Combined Financial and Other Data" in the Offering Memorandum); minus
(vi) 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.
Notwithstanding the preceding, the provision for taxes based on the income or
profits of, and the depletion, depreciation and amortization and other non-cash
expenses of, a Restricted Subsidiary of the Company shall 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.
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"Consolidated Indebtedness" means, with respect to any Person as of
any date of determination, the sum, without duplication, of:
(i) the total amount of Indebtedness of such Person and its
Restricted Subsidiaries; plus
(ii) the total amount of Indebtedness of any other Person, to the
extent that such Indebtedness has been Guaranteed by the referent Person or one
or more of its Restricted Subsidiaries; plus
(iii) the aggregate liquidation value of all Disqualified Stock of
such Person and all preferred stock of Restricted Subsidiaries of such Person,
in each case, determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that:
(i) 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 shall be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Wholly Owned Restricted
Subsidiary thereof;
(ii) the Net Income of any Restricted Subsidiary shall 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 Subsidiary or its stockholders;
(iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded;
(iv) the cumulative effect of a change in accounting principles
shall be excluded; and
(v) for purposes of calculating Consolidated Cash Flow to determine
the Debt to Cash Flow Ratio or the Fixed Charge Coverage Ratio, the Net Income
(but not loss) of any Unrestricted Subsidiary shall be excluded, whether or not
distributed to the specified Person or one of its Subsidiaries.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(i) was a member of such Board of Directors on the Issue Date; or
(ii) was nominated for election or elected to such Board of
Directors either (A) with the approval of a majority of the Continuing Directors
who were members of such Board at the time of such nomination or election or (B)
pursuant to and in accordance with the terms of the Stockholders Agreement as in
effect on the Issue Date.
"Contribution" means the Contribution contemplated by the
Contribution Agreement.
6
"Contribution Agreement" means that certain Contribution Agreement
dated as of January 25, 1999 among TPI, PCA Holdings and the Company as the same
is in effect on the Issue Date.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 13.02 hereof or such other address as to which
the Trustee may give notice to the Company.
"Credit Agreement" means that certain Credit Agreement, dated as of
the date hereof by and among the Company, ▇.▇. ▇▇▇▇▇▇ Securities Inc. and BT
Alex.▇▇▇▇▇ Incorporated, as co-lead arrangers, Bankers Trust Company, as
syndication agent, and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
administrative agent, and the other lenders party thereto, together with the
related documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder or adding Subsidiaries
of the Company as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group of
lenders.
"Credit Facilities" means one or more debt facilities (including,
without limitation, the Credit Agreement) 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), working capital loans, swing lines,
advances or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced, restructured or refinanced in whole or in part from
time to time.
"Debt to Cash Flow Ratio" means, as of any date of determination,
the ratio of:
(i) the Consolidated Indebtedness of the Company as of such date to
(ii) the Consolidated Cash Flow of the Company for the four most
recent full fiscal quarters ending immediately prior to such date for which
internal financial statements are available, determined on a pro forma basis
after giving effect to all acquisitions or dispositions of assets made by the
Company and its Restricted Subsidiaries from the beginning of such four-quarter
period through and including such date of determination (including any related
financing transactions) as if such acquisitions and dispositions had occurred at
the beginning of such four-quarter period.
In addition, for purposes of making the computation referred to
above:
(i) acquisitions that have been made by the Company or any
Restricted Subsidiary of the Company, including through mergers 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 date of determination shall 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 shall be calculated on a pro
forma basis in accordance with Regulation S-X under the Securities Act and
including those cost savings that management reasonably expects to realize
within six months of the consummation of the acquisition, but without giving
effect to clause (iii) of the proviso set forth in the definition of
Consolidated Net Income;
7
(ii) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the date of determination, shall be excluded;
(iii) for any four-quarter reference period that includes any period
of time prior to the consummation of the Contribution, pro forma effect shall be
given for such period to the Transactions and the related corporate overhead
savings and cost savings that were added to pro forma EBITDA to calculate
adjusted pro forma EBITDA as set forth in footnote 4 under the section "Selected
Combined Financial and Other Data" in the Offering Memorandum, all as calculated
in good faith by a responsible financial or accounting officer of the Company,
as if they had occurred on the first day of such four-quarter reference period;
and
(iv) the impact of the Treasury Lock shall be excluded.
"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 hereof, in the
form of Exhibit A 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 Exchange Indenture.
"Designated Noncash Consideration" means any non-cash consideration
received by the Company or one of its Restricted Subsidiaries in connection with
an Asset Sale that is designated as Designated Noncash Consideration pursuant to
an Officers' Certificate executed by the principal executive officer and the
principal financial officer of the Company or such Restricted Subsidiary. Such
Officers' Certificate shall state the basis of such valuation, which shall be a
report of a nationally recognized investment banking firm with respect to the
receipt in one or a series of related transactions of Designated Noncash
Consideration with a fair market value in excess of $10.0 million. A particular
item of Designated Noncash Consideration shall no longer be considered to be
outstanding when it has been sold for cash or redeemed or paid in full in the
case of non-cash consideration in the form of promissory notes or equity.
"Disqualified Stock" means any Capital Stock 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 thereof), 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
thereof, 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 thereof have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall 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. The Preferred Stock as in effect on the date of this Exchange Indenture
shall not constitute Disqualified Stock for purposes of this Exchange Indenture.
8
"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 ▇▇▇▇▇▇ Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Indenture" means this Exchange Indenture, as amended or
supplemented from time to time.
"Exchange Offer" means the exchange and issuance by the Company of
New Notes, as applicable, which shall be registered pursuant to a registration
statement, in an amount equal to the aggregate principal amount of all Notes
that are tendered by the Holders thereof in connection with such exchange or
issuance.
"Exchange Offer Registration Statement" means the registration
statement relating to the Exchange Offer, including the related prospectus.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the Issue Date, until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any period,
the sum, without duplication, of:
(i) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued, including,
without limitation, 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,
excluding amortization of debt issuance costs and net of the effect of all
payments made or received pursuant to Hedging Obligations; plus
(ii) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(iii) 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
(iv) the product of (A) all cash dividends, whether paid or accrued,
times (B) a fraction, the numerator of which is one and the denominator of which
is one minus the Company's then current effective combined federal, state and
local 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
9
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 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 shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of 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:
(i) acquisitions that have been made by the specified Person or any
of its Restricted Subsidiaries, including through mergers 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 shall 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 shall be calculated on a pro forma basis in accordance with Regulation
S-X under the Securities Act and including those cost savings that management
reasonably expects to realize within six months of the consummation of the
acquisition, but without giving effect to clause (iii) of the proviso set forth
in the definition of Consolidated Net Income;
(ii) 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, shall be excluded;
(iii) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall 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;
(iv) for any four-quarter reference period that includes any period
of time prior to the consummation of the Contribution, pro forma effect shall be
given for such period to the Transactions and the related corporate overhead
savings and cost savings that were added to pro forma EBITDA to calculate
adjusted pro forma EBITDA as set forth in footnote 4 under the section "Selected
Combined Financial and Other Data" in the Offering Memorandum, all as calculated
in good faith by a responsible financial or accounting officer of the Company,
as if they had occurred on the first day of such four-quarter reference period;
and
(v) the impact of the Treasury Lock shall be excluded.
"Foreign Subsidiary Working Capital Indebtedness" means Indebtedness
of a Restricted Subsidiary that is organized outside of the United States under
lines of credit extended after the Issue Date to any such Restricted Subsidiary
by Persons other than the Company or any Restricted Subsidiary of the Company,
the proceeds of which are used for such Restricted Subsidiary's working capital
purposes.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such
10
other statements by such other entity as have been approved by a significant
segment of the accounting profession, which are in effect from time to time.
"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 Exchange Indenture.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"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.
"Guarantee" means a guarantee of all or any part of any Indebtedness
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), including, without limitation, by way of a pledge
of assets or through letters of credit or reimbursement agreements in respect
thereof.
"Hedging Obligations" means, with respect to any specified Person,
the obligations of such Person under:
(i) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(ii) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means the global Note 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 to Institutional Accredited Investors.
"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) in respect of the deferred balance of the purchase price of any
property outside of the ordinary course of business which remains unpaid,
except any such balance that constitutes an operating lease payment,
accrued expense, trade payable or similar current liability; or
11
(6) in respect of any Hedging Obligations or Other Hedging Agreements,
if and to the extent any of the preceding items (other than letters of credit,
Hedging Obligations and Other Hedging Agreements) would appear as a liability
upon a balance sheet of the specified Person prepared in accordance with GAAP.
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.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Initial Purchasers" means ▇.▇. ▇▇▇▇▇▇ Securities Inc. and BT
Alex.▇▇▇▇▇ Incorporated.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, which is not also a QIB.
"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. 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 shall 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 the final paragraph of Section 4.07 hereof. The
acquisition by the Company or any Subsidiary of the Company of a Person that
holds an Investment in a third Person shall 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 the final paragraph of Section 4.07
hereof.
"Issue Date" means the closing date for sale and original issuance
of the Preferred Stock.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment 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.
12
"Liquidated Damages" means all amounts owing pursuant to Section 5
of the Preferred Stock Registration Rights Agreement.
"Marketable Securities" means publicly traded debt or equity
securities that are listed for trading on a national securities exchange and
that were issued by a corporation whose debt securities are rated in one of the
three highest rating categories by either Standard & Poor's Rating Services or
▇▇▇▇▇'▇ Investors Service, Inc.
"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, (i) 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 (ii) any extraordinary gain (or loss), together with any
related provision for taxes on such extraordinary gain (or loss).
"New Notes" means the Company's 12 3/8% Subordinated Exchange
Debentures due 2010 issued pursuant to this Exchange Indenture (i) in the
Exchange Offer or (ii) in connection with a resale of Notes in reliance on a
shelf registration statement.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any Restricted Subsidiary of the Company in respect of any Asset Sale
(including, without limitation, any 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, sales commissions, any relocation
expenses incurred as a result thereof, all taxes of any kind paid or payable as
a result thereof and reasonable reserves established to cover any indemnity
obligations incurred in connection therewith, 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, other than Indebtedness under a Credit Facility, 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-Recourse Debt" means Indebtedness:
(i) as to which neither the Company nor any Restricted Subsidiary of
the Company (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;
(ii) with respect to which no default (including any rights that the
holders thereof 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 (other than the Notes) of the Company or any Restricted
Subsidiary of the Company to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and
(iii) 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
Restricted Subsidiary of the Company.
"Non-U.S. Person" means a Person who is not a U.S. Person.
13
"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Notes" has the meaning given to such term in the preamble hereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, expenses, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Offering" means the offering of the Initial Notes by the Company.
"Offering Memorandum" means the Offering Memorandum, dated March 31,
1999, pursuant to which the Initial Notes were offered and sold.
"Officer" means, with respect to the Company or any Guarantor, any
Chairman of the Board, President, Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer, Senior Vice President, Vice President,
Treasurer, Secretary or Assistant Secretary of such Person.
"Officers' Certificate" means a certificate that meets the
requirements of Section 13.5 and has been signed by two Officers.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Other Hedging Agreements" means any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency or
commodity values.
"PCA Holdings" means PCA Holdings LLC, a Delaware limited liability
company.
"Participant" means, with respect to the Depositary, Euroclear or
CEDEL, a Person who has an account with the Depositary, Euroclear or CEDEL,
respectively (and, with respect to The Depository Trust Company, shall include
Euroclear and CEDEL).
"Permitted Business" means the containerboard, paperboard and
packaging products business and any business in which the Company and its
Restricted Subsidiaries are engaged on the Issue Date or any business reasonably
related, incidental or ancillary to any of the foregoing.
"Permitted Group" means any group of investors that is deemed to be
a "person" (as that term is used in Section 13(d)(3) of the Exchange Act) at any
time prior to the Company's initial public offering of common stock, by virtue
of the Stockholders Agreement, as the same may be amended, modified or
supplemented from time to time, provided that no single Person (other than the
Principals and their Related Parties) Beneficially Owns (together with its
Affiliates) more of the Voting Stock of the Company that is Beneficially Owned
by such group of investors than is then collectively Beneficially Owned by the
Principals and their Related Parties in the aggregate.
"Permitted Investments" means:
(i) any Investment in the Company or in a Restricted Subsidiary of
the Company;
14
(ii) any Investment in Cash Equivalents;
(iii) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (A) such Person
becomes a Restricted Subsidiary of the Company or (B) 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 Restricted
Subsidiary of the Company;
(iv) 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;
(v) any acquisition of assets to the extent acquired in exchange for
the issuance of Equity Interests (other than Disqualified Stock) of the Company;
(vi) Hedging Obligations and Other Hedging Agreements;
(vii) any Investment existing on the Issue Date;
(viii) loans and advances to employees and officers of the Company
and its Restricted Subsidiaries in the ordinary course of business;
(ix) any Investment in securities of trade creditors or customers
received in compromise of obligations of such persons incurred in the ordinary
course of business, including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of such trade creditors or
customers;
(x) negotiable instruments held for deposit or collection in the
ordinary course of business;
(xi) loans, guarantees of loans and advances to officers, directors,
employees or consultants of the Company or a Restricted Subsidiary of the
Company not to exceed $7.5 million in the aggregate outstanding at any time;
(xii) any Investment by the Company or any Restricted Subsidiary of
the Company in a Receivables Subsidiary or any Investment by a Receivables
Subsidiary in any other Person in connection with a Qualified Receivables
Transaction; provided that each such Investment is in the form of a Purchase
Money Note, an equity interest or interests in accounts receivables generated by
the Company or any Restricted Subsidiary of the Company; and
(xiii) 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 (xiii) that are at the time
outstanding not to exceed the greater of $50.0 million or 5% of Total Assets.
"Permitted Liens" means:
(i) Liens of the Company and its Restricted Subsidiaries securing
Senior Debt that was permitted by the terms of this Exchange Indenture to be
incurred;
(ii) Liens in favor of the Company or its Restricted Subsidiaries;
15
(iii) Liens on property of a Person existing at the time such Person
is merged with or into or consolidated with the Company or any Subsidiary of the
Company; provided that such Liens were in existence prior to the contemplation
of such merger or consolidation and do not extend to any assets other than those
of the Person merged into or consolidated with the Company or the Subsidiary;
(iv) Liens on property existing at the time of acquisition thereof
by the Company or any Subsidiary of the Company, provided that such Liens were
in existence prior to the contemplation of such acquisition;
(v) 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;
(vi) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iv) of the second paragraph of Section 4.09
hereof covering only the assets acquired with such Indebtedness;
(vii) Liens existing on the Issue Date together with any Liens
securing Permitted Refinancing Indebtedness incurred under clause (v) of the
second paragraph of Section 4.09 hereof in order to refinance the Indebtedness
secured by Liens existing on the date of this Exchange Indenture; provided that
the Liens securing the Permitted Refinancing Indebtedness shall not extend to
property other than that pledged under the Liens securing the Indebtedness being
refinanced;
(viii) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries;
(ix) 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 shall be required in
conformity with GAAP shall have been made therefor;
(x) Liens to secure Foreign Subsidiary Working Capital Indebtedness
permitted by this Exchange Indenture to be incurred so long as any such Lien
attached only to the assets of the Restricted Subsidiary which is the obligor
under such Indebtedness;
(xi) Liens securing Attributable Debt;
(xii) Liens on assets of a Receivables Subsidiary incurred in
connection with a Qualified Receivables Transaction; and
(xiii) Liens incurred in the ordinary course of business of the
Company or any Subsidiary of the Company with respect to obligations that do not
exceed $15.0 million at any one time outstanding.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any Restricted Subsidiary 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 Restricted Subsidiary of the
Company (other than intercompany Indebtedness); provided that:
(i) 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
16
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus all accrued interest thereon and the amount of all expenses and premiums
incurred in connection therewith);
(ii) 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;
(iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the Notes,
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 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
(iv) such Indebtedness is incurred either by the Company or by the
Subsidiary who 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.
"Preferred Stock" means the Company's 12 3/8% Senior Exchangeable
Preferred Stock due 2010.
"Preferred Stock Registration Rights Agreement" means the
registration rights agreement to be entered into by the Company on or before the
Issue Date relating to the registration of the Notes with the SEC.
"Principals" means (i) Madison Dearborn Partners, LLC and its
Affiliates and (ii) TPI and its Affiliates.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Exchange Indenture except
where otherwise permitted by the provisions of this Exchange Indenture.
"Purchase Money Note" means a promissory note evidencing a line of
credit, which may be irrevocable, from, or evidencing other Indebtedness owed
to, the Company or any Restricted Subsidiary of the Company in connection with a
Qualified Receivables Transaction, which note shall be repaid from cash
available to the maker of such note, other than amounts required to be
established as reserves pursuant to agreements, amounts paid to investors in
respect of interest, principal and other amounts owing to such investors and
amounts paid in connection with the purchase of newly generated receivables.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Qualified Receivables Transaction" means any transaction or series
of transactions that may be entered into by the Company or any Restricted
Subsidiary of the Company pursuant to which the Company or any Restricted
Subsidiary of the Company may sell, convey or otherwise transfer to (i) a
Receivables Subsidiary (in the case of a transfer by the Company or any
Restricted Subsidiary of the Company) and (ii) any other Person (in the case of
a transfer by a Receivables Subsidiary), or may grant a security interest in,
any accounts receivable (whether now existing or arising in the future) of the
17
Company or any Restricted Subsidiary of the Company, and any assets related
thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations in respect of
such accounts receivable, proceeds of such accounts receivable and other assets
that are customarily transferred, or in respect of which security interests are
customarily granted, in connection with asset securitization transactions
involving accounts receivable.
"Receivables Subsidiary" means a Wholly Owned Subsidiary of the
Company that engages in no activities other than in connection with the
financing of accounts receivable and that is designated by the Board of
Directors of the Company (as provided below) as a Receivables Subsidiary and
(i) has no Indebtedness or other Obligations (contingent or
otherwise) that (A) are guaranteed by the Company or any Restricted Subsidiary
of the Company, other than contingent liabilities pursuant to Standard
Securitization Undertakings, (B) are recourse to or obligate the Company or any
Restricted Subsidiary of the Company in any way other than pursuant to Standard
Securitization Undertakings or (C) subjects any property or asset of the Company
or any Restricted Subsidiary of the Company, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings;
(ii) has no contract, agreement, arrangement or undertaking (except
in connection with a Purchase Money Note or Qualified Receivables Transaction)
with the Company or its Restricted Subsidiaries other than on terms no less
favorable to the Company or such Restricted Subsidiaries than those that might
be obtained at the time from Persons that are not Affiliates of the Company,
other than fees payable in the ordinary course of business in connection with
servicing accounts receivable; and
(iii) neither the Company nor any Restricted Subsidiary of the
Company has any obligation to maintain or preserve the Receivables Subsidiary's
financial condition or cause the Receivables Subsidiary to achieve certain
levels of operating results.
Any such designation by the Board of Directors of the Company shall
be evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of the Board of Directors of the Company giving effect to such
designation and an Officers' Certificate certifying, to the best of such
officers' knowledge and belief after consulting with counsel, that such
designation complied with the foregoing conditions.
"Regulation S Global Note" means a global Note 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, issued in a denomination equal to the outstanding principal
amount of Notes transferred in reliance on Rule 903 of Regulation S.
"Related Party" means:
(i) any controlling stockholder, 80% (or more) owned Subsidiary, or
immediate family member (in the case of an individual) of any Principal; or
(ii) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% or more controlling interest of which consist of any one or more Principals
and/or such other Persons referred to in the immediately preceding clause (i).
18
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"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 the
referent Person that is not an Unrestricted Subsidiary.
"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.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Subordinated Notes" means the Company's 9 5/8% Senior
Subordinated Notes due 2009 issued under the Senior Subordinated Notes
Indenture.
"Senior Subordinated Notes Indenture" means the Indenture among the
Company, the guarantors named therein and United States Trust Company of New
York, as trustee, governing the Senior Subordinated Notes.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Preferred Stock 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 Act, as such Regulation is in effect on the date
hereof.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or any
Restricted Subsidiary of the Company that are reasonably customary in an
accounts receivable transaction.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
19
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Stockholders Agreement" means that certain Stockholders Agreement
dated April 12, 1999 by and among PCA Holdings, TPI and the Company, as in
effect on the Issue Date.
"Subsidiary" means, with respect to any specified Person:
(i) 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 thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof); and
(ii) 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 such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
▇▇.▇▇. 77aaa-77bbbb) as in effect on the date on which this Exchange Indenture
is qualified under the TIA.
"TPI" means Tenneco Packaging Inc., a Delaware corporation.
"Timberlands Net Proceeds" means the Net Proceeds from Timberlands
Sales in excess of $500.0 million, up to a maximum of $100.0 million (or such
larger amount as may be necessary to repurchase or redeem all outstanding
Preferred Stock or Notes in the event of a repurchase or redemption of all
outstanding Preferred Stock or Notes), as long as at least $500.0 million of Net
Proceeds have been applied to repay Indebtedness under the Credit Agreement.
"Timberlands Repurchase" means the repurchase or redemption of,
payment of a dividend on, or return of capital with respect to any Equity
Interests of the Company, or the repurchase or redemption of the Notes in
accordance with the terms of this Exchange Indenture.
"Timberlands Sale" means a sale or series of sales by the Company or
a Restricted Subsidiary of the Company of timberlands.
"Total Assets" means the total consolidated assets of the Company
and its Restricted Subsidiaries, as set forth on the Company's most recent
consolidated balance sheet.
"Transacations" has the meaning given to such term in the Offering
Memorandum.
"Transaction Agreements" means:
(i) those certain Purchase/Supply Agreements between the Company and
each of TPI, Tenneco Automotive, Inc. and Tenneco Packaging Specialty and
Consumer Products, Inc. each dated the Issue Date;
(ii) that certain Facilities Use Agreement between the Company and
TPI, dated the Issue Date;
20
(iii) that certain Human Resources Agreement among the Company, TPI
and Tenneco Inc., dated the Issue Date;
(iv) that certain Transition Services Agreement between the Company
and TPI, dated the Issue Date;
(v) that certain Holding Company Support Agreement between the
Company and PCA Holdings, dated the Issue Date;
(vi) that certain Registration Rights Agreement among the Company,
PCA Holdings and TPI, dated the Issue Date; and
(vii) the Stockholders Agreement.
"Treasury Lock" means the interest rate protection agreement dated
as of March 5, 1999 between the Company and ▇.▇. ▇▇▇▇▇▇ Securities Inc.
"Treasury Rate" means, as of any redemption date, the yield to
maturity as of such Redemption Date of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
business days prior to the redemption date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the redemption date to April 1, 2004; provided,
however, that if the period from the redemption date to April 1, 2004 is less
than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named in the preamble until a successor
replaces it in accordance with the applicable provisions of this Exchange
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 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 a series of 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 Board Resolution, but only to the extent that such Subsidiary:
(i) has no Indebtedness other than Non-Recourse Debt;
(ii) 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;
21
(iii) is a Person with respect to which neither the Company nor any
Restricted Subsidiary of the Company 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; and
(iv) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Company or any Restricted Subsidiary
of the Company.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall 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 under Section 4.07 hereof. If, at any
time, any Unrestricted Subsidiary would fail to meet the preceding requirements
as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Exchange Indenture and any Indebtedness of such
Subsidiary shall 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 shall be in
default of Section 4.09. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation shall 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 shall only be permitted if (x) such
Indebtedness is permitted 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 (y) no Default or Event of Default would be in existence
following such designation.
"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:
(i) 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
thereof, 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
(ii) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any specified Person means
any Wholly Owned Subsidiary of such Person which at the time of determination is
a Restricted Subsidiary.
"Wholly Owned Subsidiary" of any specified Person means a 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 and/or by one or more Wholly Owned Subsidiaries of such Person.
22
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- -------
"Affiliate Transaction" 4.11
"Asset Sale Offer" 4.10
"Authentication Order" 2.02
"Change of Control Offer" 4.15
"Change of Control Payment" 4.15
"Change of Control Payment Date" 4.15
"Covenant Defeasance" 8.03
"Designated Senior Debt" 10.02
"Designation" 4.07
"Event of Default" 6.01
"Exchange Indenture Permitted Indebtedness" 4.09
"Excess Proceeds" 4.10
"incur" 4.09
"Legal Defeasance" 8.02
"Offer Amount" 3.09
"Offer Period" 3.09
"Paying Agent" 2.03
"Payment Blockage Notice" 10.04
"Permitted Junior Securities" 10.02
"Purchase Date" 3.09
"Redemption Date" 3.07
"Registrar" 2.03
"Representative" 10.02
"Restricted Payments" 4.07
"Revocation" 4.07
"Senior Debt" 10.02
SECTION 1.03. TRUST INDENTURE ACT DEFINITIONS
Whenever this Exchange Indenture refers to a provision of the TIA,
the provision is incorporated by reference in and made a part of this Exchange
Indenture.
The following TIA terms used in this Exchange 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 Exchange Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the Notes means the Company and any successor obligor
upon the Notes.
23
All other terms used in this Exchange Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC 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;
and
(f) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
SECTION 2.01. FORM AND DATING.
(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 rule or usage. Each Note
shall be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Exchange Indenture and the Company
and the Trustee, by their execution and delivery of this Exchange 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 Exchange Indenture, the provisions of this Exchange Indenture shall govern
and be controlling.
(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 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
24
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 Note
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for 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.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Exchange Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers (an "Authentication Order"), authenticate Notes for original issue up
to the aggregate principal amount stated in paragraph 4 of the Notes. The
aggregate principal amount of Notes outstanding at any time may not exceed such
amount except as provided in Section 2.07 hereof.
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 Exchange 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.
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 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 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
Exchange 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
of its Subsidiaries 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 Registrar
and Paying Agent and to act as Note Custodian with respect to the Global Notes.
The Trustee is authorized to enter into a letter of representations
with DTC in the form provided to the Trustee by the Company and to act in
accordance with such letter.
25
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 will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee in writing 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
Subsidiary) shall have no further liability for the money. If the Company or a
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 ss. 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 ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes.
A Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary. All
Global Notes will be exchanged by the Company for Definitive Notes if (i) the
Company gives written notice to the Trustee from the Depositary that it is
unwilling or unable to continue to act as Depositary or that it is no longer a
clearing agency registered under the Exchange Act and, in either case, a
successor Depositary is not appointed by the Company within 120 days after the
date of such notice from the Depositary or (ii) the Company in its sole
discretion determines that the Global Notes (in whole but not in part) should be
exchanged for Definitive Notes and delivers a written notice to such effect to
the Trustee. Upon the occurrence of either of the preceding events in (i) or
(ii) above, Definitive Notes shall be issued in such names as the Depositary
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. 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.
(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 Exchange Indenture and the Applicable
26
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 Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global
Notes contained in this Exchange 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 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 the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of
27
Exhibit B hereto, including the certifications and certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(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) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Preferred Stock 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 or via the Depositary's book-entry system 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 Preferred Stock
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Preferred Stock 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 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 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.
28
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(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 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 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, a certificate to the effect set forth
in 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, a certificate to the effect set forth in 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, a certificate to the effect set
forth in 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 subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in 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
29
such beneficial interest shall instruct the Registrar through written
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 if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Preferred Stock 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 Preferred Stock
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Preferred Stock 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 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 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
satisfaction of the conditions set forth in Section
30
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.
(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 Notes 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 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, a certificate to the effect set
forth in 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, a certificate to the effect set forth in 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, a certificate to the
effect set forth in 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
to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to
the Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
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(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
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 144A Global Note, in the case of clause (c) above, the
Regulation S Global Note, and in all other cases, the IAI 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 Preferred Stock 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 Preferred Stock
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Preferred Stock 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 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 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.
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.
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(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.
If any such exchange or transfer from a Definitive Note to a
beneficial interest in a Global Note 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 his 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 Rule 144A, then
the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;
(B) if the transfer will 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;
and
(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 Preferred Stock 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
33
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 Preferred Stock
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Preferred Stock 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 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 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, 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.
34
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Preferred Stock 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 Restricted Global Notes tendered for acceptance
by Persons that certify in the applicable Letters of Transmittal or via the
Depositary's book-entry system 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 Restricted 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 Restricted 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.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Exchange Indenture unless
specifically stated otherwise in the applicable provisions of this Exchange
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:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (SUBJECT TO THE
DELIVERY OF SUCH EVIDENCE, IF ANY REQUIRED UNDER THE EXCHANGE INDENTURE
PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), SUBJECT TO THE
35
RECEIPT BY THE REGISTRAR OF A CERTIFICATION OF THE TRANSFEROR, (2) TO THE
COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL AND EACH SUBSEQUENT HOLDER IS REQUIRED TO NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTION SET
FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii),
(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 EXCHANGE
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 2.07 OF THE
EXCHANGE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE EXCHANGE INDENTURE, (III)
THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE EXCHANGE 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 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.
36
(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 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).
(iii) The Registrar shall not 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 Exchange 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 the mailing of notice of
redemption under Section 3.02 hereof and ending at the close of business
on such day, (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 purpose of receiving payment of principal of and interest 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) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(viii) 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.
37
Every replacement Note is an additional obligation of the Company
and shall be entitled to all of the benefits of this Exchange 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 Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(ii) hereof.
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 or protected 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 Person directly or indirectly controlling or controlled by or
under direct or indirect common control with 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 the Trustee actually knows are so owned shall be so disregarded.
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 of temporary Notes shall be entitled to all of the benefits
of this Exchange Indenture.
38
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 or cancellation and shall destroy
canceled Notes (subject to the record retention requirements of the Exchange
Act). Certification of the destruction of all canceled 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 for which the
Company has received notice of cancellation from the Trustee..
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. The Company 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. 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 to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
SECTION 2.13. CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or the
omission of such numbers. The Company will promptly notify the Trustee of any
change in the CUSIP numbers.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
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 Exchange Indenture
pursuant to which the redemption shall occur, (ii) the redemption date, (iii)
the principal amount of Notes to be redeemed, (iv) the redemption price and (v)
the CUSIP numbers of the Notes to be redeemed.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select Notes for redemption as follows
39
(a) if the Notes are listed, in compliance with the requirements of
the principal national securities exchange on which the Notes are listed; or
(b) if the Notes are not so listed, on a pro rata basis, by lot or
by such method as the Trustee shall deem 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 $1,000 or whole multiples of $1,000;
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
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Exchange 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 the provisions of Section 3.09 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company shall mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price;
(iii) if any Note is being redeemed in part, the portion of the
principal amount of such Note 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 shall be issued upon cancellation of the original Note;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(vi) 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;
(vii) the paragraph of the Notes and/or Section of this Exchange
Indenture pursuant to which the Notes called for redemption are being redeemed;
and
(viii) 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.
40
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 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. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE
Prior to 9:00 a.m. (New York City time) on 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 interest 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
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 an interest 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 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 receipt of an Authentication Order, 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.
SECTION 3.07. OPTIONAL REDEMPTION.
(i) Except as provided below, the Notes shall not be redeemable at
the Company's option prior to April 1, 2004. Thereafter, the Company may redeem
all or a part of the Notes upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the applicable redemption date, if redeemed during the twelve-month
period beginning on April 1 of the years indicated below:
41
Year Percentage
---- ----------
2004......................................................106.1875%
2005......................................................104.6406%
2006......................................................103.0938%
2007......................................................101.5469%
2008 and thereafter.......................................100.0000%
(ii) Notwithstanding the foregoing, at any time prior to April 1,
2002, the Company may on any one occasion redeem all, or on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes originally
issued under this Exchange Indenture at a redemption price of 112.375% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the redemption date, with the net cash proceeds of
one or more offerings of common stock of the Company or a capital contribution
to the Company's common equity made with the net cash proceeds of an offering of
common stock of the Company's direct or indirect parent or with Timberlands Net
Proceeds (which amount shall be reduced on a dollar for dollar basis by the
amount of Timberlands Net Proceeds used to make a Timberlands Repurchase in
accordance with the fourth paragraph of Section 4.10 hereof); provided that:
(A) except in the case of a redemption of all of the then
outstanding Notes, at least 65% of the aggregate principal
amount of Notes issued under this Exchange Indenture remains
outstanding immediately after the occurrence of such
redemption (excluding Notes held by the Company and its
Subsidiaries); and
(B) the redemption must occur within 60 days of the date of the
closing of such offering, the making of such capital
contribution or the consummation of a Timberlands Sale.
(iii) At any time prior to April 1, 2004, the Company may also
redeem the Notes, in whole but not in part, upon the occurrence of a Change of
Control, upon not less than 30 nor more than 60 days' prior written notice, at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued and unpaid interest and Liquidated
Damages, if any, thereon, to, the date of redemption.
(iv) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof. Nothing in this
Exchange Indenture prohibits the Company from acquiring the Notes by means other
than a redemption, whether pursuant to an issuer tender offer or otherwise,
assuming such acquisition does not otherwise violate the terms of this Exchange
Indenture.
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. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company
shall be required to commence an Asset Sale Offer, it shall follow the
procedures specified below.
42
The Asset Sale 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 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.
If the Purchase Date is on or after an interest 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 Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders. The
notice shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer
shall be made to all Holders. The notice, which shall govern the terms of the
Asset Sale Offer, shall state:
(i) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall
remain open;
(ii) the Offer Amount, the purchase price and the Purchase Date;
(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 Asset Sale Offer shall cease to accrue
interest after the Purchase Date;
(v) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and may not
elect to have only a portion of such Note purchased;
(vi) that Holders electing to have a Note purchased pursuant to any
Asset Sale 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 the Note 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
Holder 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, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
43
(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)
On or before 10:00 a.m. on the Purchase Date, the Company shall, to
the extent lawful, accept for payment, on a pro rata basis to the extent
necessary, the Offer Amount or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09. 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 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 such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. 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 Asset Sale Offer on 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, and interest and Liquidated Damages, if any, on the Notes on the dates
and in the manner provided in the Notes. Principal, premium, if any, and
interest and Liquidated Damages, if any, shall be considered paid on the date
due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.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 and Liquidated Damages, if any,
then due. The Company shall pay all Liquidated Damages, if any, in the same
manner on the dates and in the amounts set forth in the Preferred Stock
Registration Rights Agreement.
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
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
On or prior to April 1, 2004, the Company may, at its option, make
interest payments (1) in cash or (2) in additional Notes having an aggregate
principal amount equal to the amount of such interest. After April 1, 2004, the
Company shall pay interest in cash only.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, 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-
44
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 Exchange 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, 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,
however, 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, 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.
(a) Whether or not required by the SEC, so long as any Notes are
outstanding, the Company shall furnish to the Trustee and the Holders of Notes,
within the time periods specified in the SEC's rules and regulations:
(i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the
Company were required to file such Forms, including 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 would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports.
In addition, following the consummation of the Exchange Offer
contemplated by the Preferred Stock Registration Rights Agreement, whether or
not required by the rules and regulations of the SEC, the Company shall file a
copy of all the information and reports referred to in clauses (i) and (ii)
above with the SEC for public availability within the time periods specified in
the SEC's rules and regulations (unless the SEC will not accept such a filing)
and make such information available to securities analysts and prospective
investors upon request. The Company shall at all times comply with TIA ss.314(a)
(b) For so long as any Notes remain outstanding, the Company shall
furnish to the Trustee and 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.
If the Company designates any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
clauses (i) and (ii) above shall include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes thereto, and
in Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the
45
financial condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its 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 Exchange 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 covenant
contained in this Exchange Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Exchange
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) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto. For purposes of this paragraph, such compliance shall
be determined without regard to any period of grace or requirement of notice
provided under this Exchange Indenture.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 hereof shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, promptly upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto unless such Default or Event of Default is no longer continuing.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate 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
46
covenants or the performance of this Exchange Indenture; and 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.
The Company shall not, and shall 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 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 other than dividends or distributions
payable (A) in Equity Interests (other than Disqualified Stock) of the Company
or (B) to the Company or a Restricted Subsidiary of the Company;
(ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company; or
(iii) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iii) above being collectively referred
to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted
Payment:
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(ii) 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 the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof; and
(iii) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issue Date (excluding Restricted Payments permitted by
clauses (ii), (iii) and (iv) of the next succeeding paragraph), is less than the
sum, without duplication, of:
(A) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the first
fiscal quarter commencing after the Issue Date 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), plus
(B) 100% of the aggregate net cash proceeds received by the
Company since the Issue Date 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
47
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), together with the net proceeds received by the Company upon such
conversion or exchange, if any, plus
(C) to the extent that any Restricted Investment that was made
after the Issue Date is sold for cash or otherwise liquidated or repaid
for cash, the lesser of (i) the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any) and (ii)
the initial amount of such Restricted Investment.
The preceding provisions shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Exchange Indenture;
(ii) the redemption, repurchase, retirement, defeasance or other
acquisition 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, 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 shall be excluded from clause (iii)(B) of the preceding
paragraph;
(iii) so long as no Default or Event of Default has occurred and is
continuing or would be caused thereby, any Timberlands Repurchase pursuant to
and in accordance with the fourth paragraph of Section 4.10 hereof;
(iv) the payment of any dividend by a Restricted Subsidiary of the
Company to the holders of its common Equity Interests on a pro rata basis;
(v) so long as no Default or Event of Default has occurred and is
continuing or would be caused thereby, the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Company or
any Restricted Subsidiary of the Company held by any current or former officers,
directors or employees of the Company (or any of its Restricted Subsidiaries')
pursuant to any management equity subscription agreement, stock option agreement
or stock plan entered into in the ordinary course of business; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $5.0 million in any calendar year;
(vi) repurchases of Equity Interests of the Company deemed to occur
upon exercise of stock options to the extent Equity Interests represent a
portion of the exercise price of such options;
(vii) cash payments, advances, loans or expense reimbursements made
to PCA Holdings to permit PCA Holdings to pay its general operating expenses
(other than management, consulting or similar fees payable to Affiliates of the
Company), franchise tax obligations, accounting, legal, corporate reporting and
administrative expenses incurred in the ordinary course of its business in an
amount not to exceed $1.0 million in the aggregate in any fiscal year; and
(viii) so long as no Default or Event of Default has occurred and is
continuing or would be caused thereby, other Restricted Payments in an aggregate
amount not to exceed $25.0 million since the Issue Date.
48
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or 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 shall be determined by the Board of Directors whose resolution
with respect thereto shall be conclusive. 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 if the fair market value exceeds
$25.0 million.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall 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:
(i) pay dividends or make any other distributions to the Company or
any of its Restricted Subsidiaries on its Capital Stock 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;
(ii) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(iii) transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries.
However, the preceding restrictions shall not apply to encumbrances
or restrictions existing under or by reason of:
(i) Existing Indebtedness as in effect on the Issue Date;
(ii) the Senior Subordinated Notes Indenture, the Senior
Subordinated Notes and the subsidiary guarantees of the Senior Subordinated
Notes;
(iii) this Exchange Indenture;
(iv) applicable law;
(v) 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 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 Exchange Indenture to be
incurred;
(vi) non-assignment provisions in leases, licenses or similar
agreements entered into in the ordinary course of business and consistent with
past practices;
(vii) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the property so acquired
of the nature described in clause (iii) of the first paragraph of this Section
4.08;
49
(viii) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted Subsidiary
pending its sale or other disposition;
(ix) Liens securing Indebtedness that limit the right of the debtor
to dispose of the assets subject to such Lien;
(x) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements, stock
sale agreements and other similar agreements entered into in the ordinary course
of business;
(xi) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
(xii) the Credit Agreement as in effect on the Issue Date;
(xiii) restrictions on the transfer of assets subject to any Lien
permitted under this Exchange Indenture imposed by the holder of such Lien;
(xiv) any Purchase Money Note or other Indebtedness or other
contractual requirements of a Receivables Subsidiary in connection with a
Qualified Receivables Transaction; provided that such restrictions apply only to
such Receivables Subsidiary;
(xv) encumbrances or restrictions existing under or arising pursuant
to Credit Facilities entered into in accordance with this Exchange Indenture;
provided that the encumbrances or restrictions in such Credit Facilities are not
materially more restrictive than those contained in the Credit Agreement as in
effect on the Issue Date; and
(xvi) any encumbrances or restrictions imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or obligations
referred to in clauses (i) through (xv) above; provided, that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are, in the good faith judgment of the Board of
Directors of the Company, not materially more restrictive with respect to such
dividend and other payment restrictions than those contained in the dividends or
other payment restrictions prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall 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
Debt), and the Company shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company may incur Indebtedness (including
Acquired Debt) or issue Disqualified Stock, and the Restricted Subsidiaries of
the Company may incur Indebtedness or issue 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 or, if a
Timberlands Repurchase has occurred pursuant to and in accordance with the
fourth paragraph of Section 4.10 hereof, 2.25 to 1, in either case determined on
a pro forma basis (including a pro forma application of the net
50
proceeds therefrom), as if the additional Indebtedness had been incurred or the
preferred stock or Disqualified Stock had been issued, as the case may be, at
the beginning of such four-quarter period.
The first paragraph of this Section 4.09 shall not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Exchange Indenture Permitted Indebtedness"):
(i) the incurrence by the Company and its Restricted Subsidiaries of
additional Indebtedness under Credit Facilities and letters of credit under
Credit Facilities in an aggregate principal amount at any one time outstanding
under this clause (i) (with letters of credit being deemed to have a principal
amount equal to the face amount) not to exceed $1.51 billion less the aggregate
amount of all Net Proceeds of Asset Sales that have been applied by the Company
or any of its Restricted Subsidiaries since the Issue Date to permanently repay
Indebtedness under a Credit Facility pursuant to Section 4.10 hereof and less
the amount of Indebtedness outstanding under clause (xviii) below; provided that
the amount of Indebtedness permitted to be incurred pursuant to Credit
Facilities in accordance with this clause (i) shall be in addition to any
Indebtedness permitted to be incurred pursuant to Credit Facilities, in reliance
on, and in accordance with, clauses (iv) and (xix) below or in the first
paragraph hereof;
(ii) the incurrence by the Company and its Restricted Subsidiaries
of the Existing Indebtedness;
(iii) the incurrence by the Company and its Restricted Subsidiaries
of Indebtedness represented by the Notes to be issued on the Issue Date and the
New Notes to be issued pursuant to the Preferred Stock Registration Rights
Agreement;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries 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 (which amount
may, but need not be, incurred in whole or in part under Credit Facilities),
including all Permitted Refinancing Indebtedness incurred to refund, refinance,
replace, amend, restate, modify or renew, in whole or in part, any Indebtedness
incurred pursuant to this clause (iv), not to exceed the greater of 7.5% of
Total Assets as of the date of incurrence and $50.0 million at any time
outstanding;
(v) 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, replace, amend, restate, modify
or renew, in whole or in part, Indebtedness (other than intercompany
Indebtedness) that was permitted by this Exchange Indenture to be incurred under
the first paragraph hereof or clauses (ii), (iii), (iv), (xv) or (xix) of this
paragraph;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and any
of its Restricted Subsidiaries; provided, however, that each of the following
shall be deemed, in each case, to constitute an incurrence of such Indebtedness
by the Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (vi):
(A) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other than
the Company or a Restricted Subsidiary thereof; and
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(B) any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Restricted Subsidiary thereof;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing
or hedging interest rate risk with respect to any floating or fixed rate
Indebtedness that is permitted by the terms of this Exchange Indenture to be
outstanding and the incurrence of Indebtedness under Other Hedging Agreements
providing protection against fluctuations in currency values or in the price of
energy, commodities and raw materials in connection with the Company's or any of
its Restricted Subsidiaries' operations so long as management of the Company or
such Restricted Subsidiary, as the case may be, has determined that the entering
into of such Other Hedging Agreements are bona fide hedging activities;
(viii) the guarantee by the Company or any of its Restricted
Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the
Company that was permitted to be incurred by another provision of this Section
4.09;
(ix) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be
Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to
constitute an incurrence of Indebtedness by a Restricted Subsidiary of the
Company that was not permitted by this clause (ix);
(x) 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 in the form of additional shares of the same class of
Disqualified Stock shall not be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Stock for purposes of this Section 4.09; provided, in
each such case, that the amount thereof is included in Fixed Charges and
Consolidated Indebtedness of the Company as accrued;
(xi) the incurrence by the Company of Indebtedness and the issuance
by the Company of preferred stock, in each case, that is deemed to be incurred
or issued, as the case may be, in connection with the Contribution;
(xii) the incurrence by the Company or any of its Restricted
Subsidiaries of obligations pursuant to foreign currency agreements entered into
in the ordinary course of business and not for speculative purposes;
(xiii) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in connection
with the disposition of any business, assets or a Subsidiary, other than
guarantees of Indebtedness incurred by any Person acquiring all or any portion
of such business, assets or a Subsidiary for the purpose of financing such
acquisition; provided, however, that:
(A) such Indebtedness is not reflected on the balance sheet of
the Company or any Restricted Subsidiary (contingent obligations referred
to in a footnote to financial statements and not otherwise reflected on
the balance sheet will not be deemed to be reflected on such balance sheet
for purposes of this clause (A)) and
(B) the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds including noncash
proceeds (the fair market value of such
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noncash proceeds being measured at the time received and without giving
effect to any subsequent changes in value) actually received by the
Company and its Restricted Subsidiaries in connection with such
disposition;
(xiv) the incurrence of obligations in respect of performance and
surety bonds and completion guarantees provided by the Company or any of its
Restricted Subsidiaries in the ordinary course of business;
(xv) the incurrence of Indebtedness by any Restricted Subsidiary
that is organized outside of the United States in connection with the
acquisition of assets or a new Restricted Subsidiary in an aggregate principal
amount, including all Permitted Refinancing Indebtedness incurred to refund,
refinance, replace, amend, restate, modify or renew, in whole or in part, any
Indebtedness incurred pursuant to this clause (xv), not to exceed $25.0 million
at any one time outstanding; provided that such Indebtedness was incurred by the
prior owner of such asset or such Restricted Subsidiary prior to such
acquisition by the Restricted Subsidiary and was not incurred in connection
with, or in contemplation of, such acquisition by the Restricted Subsidiary;
(xvi) the incurrence of Indebtedness consisting of guarantees of
loans made to management for the purpose of permitting management to purchase
Equity Interests of the Company, in an amount not to exceed $7.5 million at any
one time outstanding;
(xvii) Indebtedness of the Company that may be deemed to exist under
the Contribution Agreement as a result of the Company's obligation to pay
purchase price adjustments; provided that the incurrence of Indebtedness to pay
the purchase price adjustment shall be deemed to constitute an incurrence of
Indebtedness that was not permitted by this clause (xvii);
(xviii) the incurrence of Indebtedness by a Receivables Subsidiary
in a Qualified Receivables Transaction that is not recourse to the Company or
any of its Subsidiaries (except for Standard Securitization Undertakings);
provided that the aggregate principal amount of Indebtedness outstanding under
this clause (xviii) and clause (i) above does not exceed $1.51 billion less the
aggregate amount of all Net Proceeds of Asset Sales that have been applied by
the Company or any of its Restricted Subsidiaries since the Issue Date to
permanently repay Indebtedness under a Credit Facility pursuant to Section 4.10
hereof; and
(xix) the incurrence by the Company of additional Indebtedness in an
aggregate principal amount (or accreted value, as applicable) (which amount may,
but need not be, incurred in whole or in part under the Credit Facilities) at
any time outstanding, including all Permitted Refinancing Indebtedness incurred
to refund, refinance, replace, amend, restate, modify or renew, in whole or in
part, any Indebtedness incurred pursuant to this clause (xix), not to exceed
$75.0 million.
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 Exchange Indenture Permitted Indebtedness described in
clauses (i) through (xix) above, or is entitled to be incurred pursuant to the
first paragraph of this Section 4.09, the Company shall be permitted to classify
or later reclassify such item of Indebtedness in any manner that complies with
this Section 4.09. Indebtedness under Credit Facilities outstanding on the Issue
Date shall be deemed to have been incurred on such date in reliance on the
exception provided by clause (i) of the definition of Exchange Indenture
Permitted Indebtedness.
53
SECTION 4.10. ASSET SALES
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(i) the Company (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale which, taken as a whole,
is at least equal to the fair market value of the assets or Equity Interests
issued or sold or otherwise disposed of;
(ii) such 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
(iii) at least 75% of the consideration therefor received by the
Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents
or Marketable Securities.
For purposes of this provision, each of the following shall be
deemed to be cash:
(i) 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 that are assumed by the transferee
of any such assets;
(ii) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are
converted, sold or exchanged by the Company or such Restricted Subsidiary into
cash within 30 days of the related Asset Sale (to the extent of the cash
received in that conversion); and
(iii) any Designated Noncash Consideration received by the Company
or any of its Restricted Subsidiaries in such Asset Sale having an aggregate
fair market value, taken together with all other Designated Noncash
Consideration received since the Issue Date pursuant to this clause (iii) that
is at that time outstanding, not to exceed 10% of Total Assets at the time of
the receipt of such Designated Noncash Consideration (with the fair market value
of each item of Designated Noncash Consideration being measured at the time
received and without giving effect to subsequent changes in value)
Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds at its option:
(i) to repay Senior Debt and, if the Senior Debt repaid is revolving
credit Indebtedness, to correspondingly reduce commitments with respect thereto;
(ii) to invest in or to acquire other properties or assets to
replace the properties or assets that were the subject of the Asset Sale or that
will be used in businesses of the Company or its Restricted Subsidiaries, as the
case may be, existing at the time such assets are sold;
(iii) to make a capital expenditure or commit, or cause such
Restricted Subsidiary to commit, to make a capital expenditure (such commitments
to include amounts anticipated to be expended pursuant to the Company's capital
investment plan as adopted by the Board of Directors of the Company) within 24
months of such Asset Sale; or
(iv) to make a Timberlands Repurchase in accordance with Section
3.07(ii) hereof.
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Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Exchange Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested
as provided in the preceding paragraph shall constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $25.0 million, the Company shall
make 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 Exchange Indenture with respect to offers to purchase or
redeem 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 shall be equal
to 100% of the principal amount plus accrued and unpaid interest and Liquidated
Damages, if any, to the date of purchase, and shall be payable in cash. If any
Excess Proceeds remain after consummation of an Asset Sale Offer, the Company
may use such Excess Proceeds for any purpose not otherwise prohibited by this
Exchange Indenture. If the aggregate principal amount of Notes and such other
pari passu Indebtedness tendered into such 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 such other pari passu Indebtedness tendered. Upon completion of
each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Notwithstanding the three preceding paragraphs, the Company shall be
permitted to apply up to $100.0 million of Timberlands Net Proceeds (which
amount shall be reduced on a dollar for dollar basis by the amount of
Timberlands Net Proceeds used to make a Timberlands Repurchase in accordance
with Section 3.07(ii) hereof) to repurchase or redeem, or pay a dividend on, or
a return of capital with respect to, any Equity Interests of the Company, or
repurchase or redeem Notes, if:
(i) the repurchase, redemption, dividend or return of capital is
consummated within 90 days of the final sale of such Timberlands Sale;
(ii) the Company's Debt to Cash Flow Ratio at the time of such
Timberlands Repurchase, after giving pro forma effect to (A) such repurchase,
redemption, dividend or return of capital, (B) the Timberlands Sale and the
application of the net proceeds therefrom and (C) any increase or decrease in
fiber, stumpage or similar costs as a result of the Timberlands Sale as if the
same had occurred at the beginning of the most recently ended four full fiscal
quarter period of the Company for which internal financial statements are
available, would have been no greater than 5.0 to 1; and
(iii) in the case of a repurchase or redemption of all of the then
outstanding Preferred Stock or Notes, no Timberlands Net Proceeds have
previously been applied to redeem Notes or repurchase or redeem, or pay a
dividend on, or a return of capital with respect to, any other Equity Interests
of the Company.
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 each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section 4.10, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
the provisions of this Section 4.10 by virtue of such conflict.
55
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any 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:
(i) such Affiliate Transaction is on terms taken as a whole 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
(ii) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess
of $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
(B) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess
of $25.0 million, an opinion as to the fairness to the Holders of such
Affiliate Transaction from a financial point of view issued by an
accounting, appraisal, investment banking or advisory firm of national
standing; provided that this clause (B) shall not apply to transactions
with TPI and its subsidiaries in the ordinary course of business at a time
when Madison Dearborn Partners, LLC and its Affiliates are entitled,
directly or indirectly, to elect a majority of the Board of Directors of
the Company.
Notwithstanding the foregoing, the following items shall not be
deemed to be Affiliate Transactions and, therefore, will not be subject to the
provisions of the first paragraph of this Section 4.11:
(i) any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the Company or such Restricted Subsidiary;
(ii) transactions between or among the Company and/or its Restricted
Subsidiaries;
(iii) transactions with a Person that is an Affiliate of the Company
solely because the Company owns an Equity Interest in such Person;
(iv) payment of reasonable directors fees to Persons who are not
otherwise Affiliates of the Company;
(v) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of the Company;
(vi) the payment of transaction, management, consulting and advisory
fees and related expenses to Madison Dearborn Partners, LLC and its Affiliates;
provided that such fees shall not,
56
in the aggregate, exceed $15.0 million (plus out-of-pocket expenses) in
connection with the Contribution or $2.0 million in any twelve-month period
commencing after the date of the Contribution;
(vii) the payment of fees and expenses related to the Contribution
other than fees and expenses paid to Madison Dearborn Partners, LLC and its
Affiliates;
(viii) Restricted Payments that are permitted by Section 4.07
hereof;
(ix) transactions described in clause (xi) of the definition of
Permitted Investments;
(x) reasonable fees and expenses and compensation paid to, and
indemnity provided on behalf of, officers, directors or employees of the Company
or any Subsidiary as determined in good faith by the Board of Directors of the
Company or senior management;
(xi) payments made to PCA Holdings for the purpose of allowing PCA
Holdings to pay its general operating expenses, franchise tax obligations,
accounting, legal, corporate reporting and administrative expenses incurred in
the ordinary course of its business in an amount not to exceed $1.0 million in
the aggregate in any fiscal year;
(xii) transactions contemplated by the Contribution Agreement and
the Transaction Agreements as the same are in effect on the Issue Date;
(xiii) transactions in connection with a Qualified Receivables
Transaction; and
(xiv) transactions with either of the Initial Purchasers or any of
their respective Affiliates.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind on any asset now owned or hereafter acquired securing
Indebtedness, Attributable Debt or trade payables, except Permitted Liens.
SECTION 4.13. SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company or any Restricted Subsidiary may enter into a sale and leaseback
transaction if:
(i) either (A) the Company or that Restricted Subsidiary, as
applicable, could have incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction under the
Fixed Charge Coverage Ratio test in the first paragraph of Section 4.09 hereof
or (B) the Net Proceeds of such sale and leaseback transaction are applied to
repay outstanding Senior Debt; and
(ii) the transfer of assets in that sale and leaseback transaction
is permitted by, and the Company applies the net proceeds of such transaction in
compliance with, Section 4.10 hereof.
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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 Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Subsidiary; and
(ii) the rights (charter and statutory), licenses and franchises of
the Company and its Subsidiaries; provided, however, 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 Subsidiaries, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its 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. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) If a Change of Control occurs, each Holder of Notes shall have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of that Holder's Notes pursuant to the offer
described below (the "Change of Control Offer") on the terms set forth in this
Section 4.15. In the Change of Control Offer, the Company shall offer a payment
in cash equal to 101% of the aggregate principal amount of Notes repurchased
plus accrued and unpaid interest and Liquidated Damages, if any, thereon, to the
date of purchase (the "Change of Control Payment") Within thirty (30) days
following any Change of Control, the Company shall mail a notice to the Trustee
and each Holder describing the transaction or transactions that constitute the
Change of Control and offering to repurchase Notes on the date specified in such
notice, which date shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date"),
pursuant to the procedures required by this Exchange Indenture and described in
such notice.
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 the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.15, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.15 by virtue of such conflict.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful:
(i) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer;
(ii) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions thereof so
tendered; and
(iii) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being
purchased by the Company.
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The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book-entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof.
Prior to complying with any of the provisions of this Section 4.15,
but in any event within 90 days following a Change of Control, the Company shall
either repay all outstanding Senior Debt or obtain the requisite consents, if
any, under all agreements governing outstanding Senior Debt to permit the
repurchase of Notes required by this Section 4.15. The Company shall publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.
(c) The Company shall first comply with the first sentence in the
immediately preceding paragraph before it shall be required to repurchase Notes
pursuant to the provisions described above. The Company's failure to comply with
the first sentence in the immediately preceding paragraph may (with notice and
lapse of time) constitute an Event of Default described in clause (iii) of
Section 6.01 but shall not constitute an Event of Default described in clause
(ii) of Section 6.01.
(d) Notwithstanding anything to the contrary in this Section 4.15,
the Company shall not be required to make a Change of Control Offer upon the
occurrence of 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 all other provisions of this
Exchange Indenture applicable to a Change of Control Offer made by the Company
and purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
This Section 4.15 shall be applicable regardless of whether any
other provisions of this Exchange Indenture are applicable.
SECTION 4.17. BUSINESS ACTIVITIES
The Company shall not, and shall not permit any of Restricted
Subsidiary of the Company to, engage in any business other than Permitted
Businesses, except to such extent as would not be material to the Company and
its Restricted Subsidiaries taken as a whole.
SECTION 4.18. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES
The Board of Directors may designate any Restricted Subsidiary 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 so designated shall be deemed to be an
Investment made as of the time of such designation and shall either reduce the
amount available for Restricted Payments under the first paragraph of Section
4.07 hereof or reduce the amount available for future Investments under one or
more clauses of the definition of Permitted Investments, as the Company shall
determine. That designation shall only be permitted if such Investment would be
permitted at that time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Board of Directors may redesignate
any Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation
would not cause a Default.
59
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not, directly or indirectly:
(i) consolidate 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:
(i) either: (A) the Company is the surviving corporation; or (B) the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made is a corporation organized or existing under
the laws of the United States, any state thereof or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Notes, this Exchange Indenture and the
Preferred Stock Registration Rights Agreement pursuant to agreements reasonably
satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of
Default exists; and
(iv) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition shall have 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 the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 4.09 hereof.
In addition, the Company shall not, directly or indirectly, lease
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 any other Person. This Section 5.01 shall 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.
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 Exchange Indenture referring to the
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"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
Exchange Indenture with the same effect as if such successor Person had been
named as the Company herein; provided, however, that the predecessor Company
shall not be relieved from the obligation to pay the principal of and interest
on the Notes except in the case of a sale 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.
Each of the following is an Event of Default:
(i) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes (whether or not prohibited by
Article 10 hereof);
(ii) default in payment when due of the principal of, or premium, if
any, on the Notes (whether or not prohibited by Article 10 hereof);
(iii) failure by the Company or any of its Restricted Subsidiaries
to comply with Sections 4.10, 4.15 or 5.01 hereof;
(iv) failure by the Company or any of its Restricted Subsidiaries
for 30 days after notice by the Trustee or by the Holders of at least 25% in
principal amount of the Notes to comply with any of the other agreements in this
Exchange Indenture;
(v) default under any mortgage, indenture or instrument under which
there is issued and outstanding 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 the date of this
Exchange Indenture, if that default:
(A) is caused by a failure to pay principal at the final
stated maturity of such Indebtedness (a "Payment Default"); or
(B) results in the acceleration of such Indebtedness prior to
its express 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 $25.0 million or more;
(vi) failure by the Company or any of its Restricted Subsidiaries to
pay final nonappealable judgments aggregating in excess of $25.0 million, which
judgments are not paid, discharged or stayed for a period of 90 days;
(vii) the Company or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of Bankruptcy Law:
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(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a custodian of it or for
all or substantially all of its property;
(D) makes a general assignment for the benefit of its
creditors; or
(E) generally is not paying its debts as they become due; or
(viii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any of its
Significant Subsidiaries;
(B) appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary; or
(C) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days.
SECTION 6.02. ACCELERATION.
If any Event of Default occurs (other than an Event of Default
specified in clause (viii) or (ix) of Section 6.01 hereof with respect to the
Company) and is continuing, the Trustee, upon request of the Holders of at least
25% in principal amount of the Notes then outstanding, or the Holders of at
least 25% in principal amount of the Notes then outstanding may declare the
principal of, premium and accrued interest and Liquidated Damages, if any, on
all the Notes to be due and payable by notice in writing to the Company and the
Trustee specifying the respective Event of Default and that such notice is a
"notice of acceleration" (the "Acceleration Notice"), and the same (i) shall
become immediately due and payable or (ii) if there are any amounts outstanding
under the Credit Agreement, shall become immediately due and payable upon the
first to occur of (x) an acceleration under the Credit Agreement or (y) five
Business Days after receipt by the Company and the Representative under the
Credit Agreement of such Acceleration Notice but only if such Event of Default
is then continuing. Notwithstanding the foregoing, if an Event of Default
specified in clause (viii) or (ix) of Section 6.01 hereof occurs with respect to
the Company, 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 Notes then outstanding by written notice to the Trustee may on
behalf 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 or premium that has
become due solely because of the acceleration) have been cured or waived.
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If an Event of Default occurs on or after April 1, 2004 by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company in bad faith 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, anything in this Exchange Indenture or in the Notes to
the contrary notwithstanding. If an Event of Default occurs prior to April 1,
2004 by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company in bad faith with the intention of avoiding the
prohibition on redemption of the Notes prior to April 1, 2004, then, upon
acceleration of the Notes, an additional premium shall also become and be
immediately due and payable in an amount, for each of the years beginning on
April 1 of the years set forth below, as set forth below (expressed as a
percentage of the aggregate principal amount to the date of payment that would
otherwise be due but for the provisions of this sentence):
Year Percentage
---- ----------
1999...............................................113.9220%
2000...............................................112.3751%
2001...............................................110.8282%
2002...............................................109.2813%
2003...............................................107.344%
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 and Liquidated Damages, if any, on the Notes or to enforce the
performance of any provision of the Notes or this Exchange 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 written 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 Liquidated Damages, if any, or
interest on, the Notes (including in connection with an offer to purchase)
(provided, however, 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
Exchange 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
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or exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that conflicts with law or this Exchange
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.
A Holder of a Note may pursue a remedy with respect to this Exchange
Indenture or the Notes only if:
(i) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(ii) 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;
(iii) 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;
(iv) 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
(v) 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 Exchange Indenture to prejudice
the rights of another Holder of a Note or to obtain a preference or priority
over another Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Exchange Indenture, the
right of any Holder of a Note to receive payment of principal, premium and
Liquidated Damages, if any, and interest on the Note, on or after the respective
due dates expressed in the Note (including in connection with an offer to
purchase), 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(i) or (ii) hereof
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 and Liquidated Damages, 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. 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
64
obligor upon the Notes), 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 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
First: 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;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, 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 and Liquidated Damages, if any, and
interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Exchange 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 6.11 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.
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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
Exchange Indenture, and use the same degree of care and skill in its exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his 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 Exchange Indenture and the Trustee need perform
only those duties that are specifically set forth in this Exchange
Indenture and no others, and no implied covenants or obligations shall be
read into this Exchange 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 Exchange
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Exchange Indenture (but need not confirm or investigate the accuracy
of mathematical calculations or other facts purported to be stated
therein)
(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:
(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 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 Exchange Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section 7.01.
(e) No provision of this Exchange Indenture shall require the
Trustee to expend or risk its own funds or incur any liability. The Trustee
shall be under no obligation to exercise any of its rights and powers under this
Exchange 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.
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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.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and 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 attorney or agent
appointed with due care.
(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 Exchange Indenture.
(e) Unless otherwise specifically provided in this Exchange
Indenture, any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Exchange Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
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 SEC 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.
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 Exchange 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 Exchange 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 Exchange Indenture other than its certificate of authentication.
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SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is actually 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 becomes known
to the Trustee. Except in the case of a Default or Event of Default in payment
of principal of, premium, if any, or interest on any Note, the Trustee may
withhold the notice if and so long as its board of directors, its executive
committee or a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Notes.
Notwithstanding anything to the contrary expressed in this Exchange Indenture,
the Trustee shall not be deemed to have knowledge of any Default or Event of
Default hereunder, except in the case of an Event of Default under Section
6.01(i) or (ii) hereof (provided that the Trustee is the Paying Agent), unless
and until a Responsible Officer shall have actual knowledge thereof or shall
have received written notice, at its Principal Corporate Trust Office as
specified in Section 11.02 hereof, from the Company or any Holder of Senior
Notes that such a Default or an Event of Default has occurred.
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 Exchange 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 ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted) The Trustee also
shall comply with TIA ss. 313(b)(2) The Trustee shall also transmit by mail all
reports as required by TIA ss. 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 SEC and each stock
exchange on which the Notes are listed in accordance with TIA ss. 313(d) The
Company shall promptly notify the Trustee when the Notes are listed on any
securities exchange or of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Exchange Indenture and services
hereunder as the Company and the Trustee shall agree. 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 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 and any taxes.
The Company shall indemnify the Trustee and its officers, directors,
shareholders, agents and employees (each an "Indemnified Party") for and hold
each Indemnified Party harmless against any and all losses, liabilities or
expenses incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Exchange Indenture, including the costs
and expenses of enforcing this Exchange Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee and its officers, directors, shareholders,
agents and employees in its capacity as Paying Agent, Registrar, and Custodian
and Agent for services of notices and demands shall have the full benefit of the
foregoing indemnity. An
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Indemnified Party shall notify the Company promptly of any claim for which it
may seek indemnity. Failure by an Indemnified Party to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and an Indemnified Party shall cooperate in the defense. An
Indemnified Party may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Exchange Indenture.
To secure the Company's payment obligations in this Section with
respect to compensation and indemnity, 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 Exchange Indenture. The Trustee's
right to receive payment of any amounts under this Exchange Indenture shall not
be subordinated to any other liability or any of the Indebtedness of the
Company.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(viii) or (ix) 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 ss. 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 7.08.
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 Notes 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.
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If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes 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 of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10 hereof, such Holder of a Note 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 Exchange Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. 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 MERGER, 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 $50.0 million as set forth in its most recent published annual report of
condition.
This Exchange Indenture shall always have a Trustee who satisfies
the requirements of TIA ss. 310(a)(1), (2) and (5) The Trustee is subject to TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which any other
securities, or certificates of interest or participation in any other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA ss. 310 (b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b) A Trustee who has resigned or been removed
shall be subject to TIA ss. 311(a) to the extent indicated therein.
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ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.02 or 8.03 hereof applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
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 shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its Obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "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 Exchange
Indenture referred to in (i) and (ii) below, and to have satisfied all of its
obligations under such Notes and this Exchange Indenture (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:
(i) the rights of Holders of outstanding Notes to receive solely
from the trust fund described in Section 8.04 hereof, and as more fully set
forth in such Section 8.04, payments in respect of the principal of and premium,
interest and Liquidated Damages, if any, on such Notes when such payments are
due;
(ii) the Company's obligations with respect to such Notes under
Article 2 and Section 4.02 hereof;
(iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's obligations in connection therewith; and
(iv) this Article 8.
Subject to compliance with this Article 8, 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 shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from their
respective obligations under the covenants contained in Sections 4.07, 4.08,
4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16 and 4.17 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
are satisfied (hereinafter, "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
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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 Exchange 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, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(iii) through 6.01(vii) 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:
(i) the Company must irrevocably deposit, with the Trustee, in
trust, for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, 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 Liquidated
Damages, if any, on the outstanding Notes on the stated maturity thereof 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;
(ii) in the case of Legal Defeasance, the Company must deliver to
the Trustee an Opinion of Counsel in the United States 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 the date of
this Exchange Indenture, there has been a change in the applicable 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 federal income tax purposes as a result
of such Legal Defeasance and will be subject to 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;
(iii) in the case of Covenant Defeasance, the Company must deliver
to the Trustee an Opinion of Counsel in the United States reasonably acceptable
to the Trustee confirming that the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to 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;
(iv) no Default or Event of Default shall have occurred and be
continuing on (A) 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) or
(B) insofar as Events of Default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after the date of
deposit;
(v) such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under, any material agreement
or instrument (other than this Exchange
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Indenture but in any event including the Credit Agreement) to which the Company
or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(vi) the Company must deliver to the Trustee an Opinion of Counsel
in the United States to the effect that, assuming no intervening bankruptcy of
the Company between the date of deposit and the 91st day following the deposit
and assuming that no Holder is an "insider" of the Company under applicable
bankruptcy law, after the 91st day following the deposit, the trust funds will
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights and remedies
generally;
(vii) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of the Notes over other creditors of the Company, or
with the intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and
(viii) the Company must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating that
all conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
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 Exchange Indenture, to the
payment, either directly or through any Paying Agent (including the Company
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, 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 8 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(ii) 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,
interest or Liquidated Damages, if any, on any Note and remaining unclaimed for
two years after such principal, and premium, if any, or interest
73
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, as a secured creditor, 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, however, 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
(national edition) and The Wall Street Journal (national edition), 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.
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 Exchange 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, however, that, if the Company makes
any payment of principal of, premium, 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 and the Trustee may
amend or supplement this Exchange Indenture or the Notes without the consent of
any Holder of a Note:
(i) to cure any ambiguity, defect, error or inconsistency;
(ii) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(iii) to provide for the assumption of the Company's obligations to
the Holders of the Notes by a successor to the Company pursuant to Article 5
hereof;
(iv) 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 hereunder of any Holder of the Note; and
(v) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Exchange 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 in the execution of any
amended or supplemental indenture authorized or permitted by the terms of this
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Exchange Indenture and to 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 Exchange 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 Exchange Indenture (including Sections
3.09, 4.10 and 4.15 hereof) or the Notes with the consent of the Holders of at
least a majority in principal amount of Notes then outstanding voting as a
single class (including 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, 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 Exchange
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes voting as a single
class (including consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes. Without the consent of at least 75% in
principal amount of the Notes then outstanding (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes), no waiver or amendment to this Exchange Indenture may make any change in
the provisions of Article 10 hereof that adversely affects the rights of any
Holder of Notes. Section 2.08 hereof shall determine which Notes are considered
to be "outstanding" for purposes of this Section 9.02.
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 Exchange 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 9.02
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. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes (including
Additional Notes, if any) then outstanding voting as a single class may waive
compliance in a particular instance by the Company with any provision of this
Exchange Indenture or the Notes. However, 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:
(i) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
75
(ii) reduce the principal of or change the fixed maturity of any
Note or alter or waive any of the provisions with respect to the redemption of
the Notes, other than provisions relating to Sections 3.09, 4.10 or 4.15 hereof;
(iii) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(iv) waive a Default or Event of Default in the payment of principal
of, or premium, or Liquidated Damages, if any, or interest 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 then outstanding Notes and a waiver of the
payment default that resulted from such acceleration;
(v) make any Note payable in money other than that stated in the
Notes;
(vi) make any change in the provisions of this Exchange Indenture
relating to waivers of past Defaults or the rights of Holders of Notes to
receive payments of principal of or premium, interest or Liquidated Damages, if
any, on the Notes;
(vii) waive a redemption payment with respect to any Note, other
than a payment required by Section 3.09, 4.10 or 4.15 hereof; or
(viii) make any change in the foregoing amendment and waiver
provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Exchange 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 Holder'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.
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.
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SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Article 9 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 or supplemental indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01 hereof)
shall be fully protected in relying upon an Officer's Certificate and an Opinion
of Counsel stating that the execution of such amended or supplemental indenture
is authorized or permitted by this Exchange Indenture and that such amendment is
the legal, valid and binding obligation of the Company, enforceable against them
in accordance with their terms, subject to customary exceptions, and complies
with the provisions hereof (including Section 9.03)
ARTICLE 10.
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that
the principal of and premium, interest and Liquidated Damages, if any, and any
other Obligations on, or relating to the Notes are subordinated and junior in
right of payment, to the extent and in the manner provided in this Article 10,
to the prior payment in full in cash or Cash Equivalents (other than Cash
Equivalents of the type referred to in clauses (iii) and (iv) of the definition
thereof) of all Senior Debt of the Company (whether outstanding on the date
hereof or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of and shall be enforceable by, the holders of
Senior Debt of the Company, and that each holder of Senior Debt of the Company
whether now outstanding or hereafter created, incurred, assumed or guaranteed
shall be deemed to have acquired such Senior Debt in reliance upon the covenants
and provisions contained in this Exchange Indenture and the Notes.
SECTION 10.02. CERTAIN DEFINITIONS.
"Designated Senior Debt" means:
(i) any Indebtedness under or in respect of the Credit Agreement and
the Senior Subordinated Notes Indenture; and
(ii) any other Senior Debt permitted under this Exchange Indenture
the principal amount of which is $25.0 million or more and that has been
designated by the Company in the instrument or agreement relating to the same as
"Designated Senior Debt;"
provided, that for purposes of clause (ii) of Section 10.04 hereof, the Senior
Subordinated Notes Indenture shall not be deemed to be Designated Senior Debt so
long as the Credit Agreement is still in effect.
"Permitted Junior Securities" means debt or equity securities of the
Company or any successor corporation issued pursuant to a plan of reorganization
or readjustment of the Company that are subordinated to the payment of all then
outstanding Senior Debt of the Company at least to the same extent that the
Notes are subordinated to the payment of all Senior Debt of the Company on the
Issue Date, so long as:
77
(i) the effect of the use of this defined term in the provisions of
Article 10 hereof is not to cause the Notes to be treated as part of (A) the
same class of claims as the Senior Debt of the Company or (B) any class of
claims pari passu with, or senior to, the Senior Debt of the Company for any
payment or distribution in any case or proceeding or similar event relating to
the liquidation, insolvency, bankruptcy, dissolution, winding up or
reorganization of the Company; and
(ii) to the extent that any Senior Debt of the Company outstanding
on the date of consummation of any such plan of reorganization or readjustment
is not paid in full in cash or Cash Equivalents (other than Cash Equivalents of
the type referred to in clauses (iii) and (iv) of the definition thereof) on
such date, either (A) the holders of any such Senior Debt not so paid in full in
cash or Cash Equivalents (other than Cash Equivalents of the type referred to in
clauses (iii) and (iv) of the definition thereof) have consented to the terms of
such plan of reorganization or readjustment or (B) such holders receive
securities which constitute Senior Debt of the Company (which securities, if the
Senior Debt not so paid in full in cash or Cash Equivalents is guaranteed, are
also guaranteed pursuant to guarantees constituting Senior Debt of the relevant
guarantor) and which have been determined by the relevant court to constitute
satisfaction in full in money or money's worth of any Senior Debt of the Company
(and any related Senior Debt of the guarantors) not paid in full in cash or Cash
Equivalents (other than Cash Equivalents of the type referred to in clauses
(iii) and (iv) of the definition thereof)
"Representative" means the indenture trustee or other trustee, agent
or representative in respect of any Designated Senior Debt; provided that if,
and for so long as, any Designated Senior Debt lacks such a representative, then
the Representative for such Designated Senior Debt shall at all times constitute
the holders of a majority in outstanding principal amount of such Designated
Senior Debt in respect of any Designated Senior Debt.
"Senior Debt" means:
(i) all Indebtedness outstanding under all Credit Facilities, all
Hedging Obligations and Other Hedging Agreements (including guarantees thereof)
with respect thereto of the Company and its Restricted Subsidiaries, whether
outstanding on the Issue Date or thereafter incurred;
(ii) all Indebtedness of the Company and its Restricted Subsidiaries
outstanding under the Senior Subordinated Notes or the guarantees of the Senior
Subordinated Notes;
(iii) any other Indebtedness incurred by the Company and its
Restricted Subsidiaries under the terms of this Exchange Indenture, unless the
instrument under which such Indebtedness is incurred expressly provides that it
is on a parity with or subordinated in right of payment to the Notes; and
(iv) all Obligations with respect to the items listed in the
preceding clauses (i), (ii) and (iii) (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law)
Notwithstanding anything to the contrary in the preceding, Senior
Debt shall not include:
(i) any liability for federal, state, local or other taxes owed or
owing by the Company or its Restricted Subsidiaries;
(ii) any Indebtedness of the Company or any of its Restricted
Subsidiaries to any of its Subsidiaries;
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(iii) any trade payables; or
(iv) the portion of any Indebtedness that is incurred in violation
of this Exchange Indenture (but only to the extent so incurred)
A "distribution" may consist of cash, securities or other property,
by set-off or otherwise.
SECTION 10.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors of the
Company in a liquidation or dissolution of the Company, in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property, in an assignment for the benefit of creditors or in any
marshalling of the Company's assets and liabilities:
(i) holders of Senior Debt of the Company shall receive payment in
full in cash or Cash Equivalents (other than Cash Equivalents of the type
referred to in clauses (iii) and (iv) of the definition thereof) of all
Obligations due in respect of such Senior Debt (including interest after the
commencement of any such proceeding at the rate specified in the applicable
Senior Debt, whether or not such interest is an allowable claim) before Holders
of the Notes shall be entitled to receive any payment or distribution of any
kind or character with respect to any Obligations on, or relating to, the Notes
(except that Holders may receive and retain (A) Permitted Junior Securities and
(B) payments and other distributions made from any defeasance trust created
pursuant to Article 8 hereof, so long as the trust was created in accordance
with all relevant conditions specified in Article 8 hereof); and
(ii) until all Obligations with respect to Senior Debt of the
Company (as provided in subsection (i) above) are paid in full, in cash or Cash
Equivalents (other than Cash Equivalents of the type referred to in clauses
(iii) and (iv) of the definition thereof), any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or
securities, to which Holders would be entitled but for this Article 10 shall be
made to holders of such Senior Debt (except that Holders of Notes may receive
(A) Permitted Junior Securities and (B) payments and other distributions made
from any defeasance trust created pursuant to Article 8 hereof, so long as the
trust was created in accordance with all relevant conditions specified in
Article 8 hereof), as their interests may appear.
SECTION 10.04. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company may not make any payment or distribution of any kind or
character to the Trustee or any Holder with respect to any Obligations on, or
relating to, the Notes and may not acquire from the Trustee or any Holder any
Notes for cash or property (other than (x) Permitted Junior Securities and (y)
payments and other distributions made from any defeasance trust created pursuant
to Article 8 hereof, so long as the trust was created in accordance with all
relevant conditions specified in Article 8 hereof) until all principal and other
Obligations with respect to the Senior Debt have been paid in full in cash or
Cash Equivalents (other than Cash Equivalents of the type referred to in clauses
(iii) and (iv) of the definition thereof) if:
(i) a default in the payment when due, whether at maturity, upon
redemption, declaration or otherwise, of any principal of, interest on,
unpaid drawings for letters of credit issued in respect of, or any other
Obligations with respect to any Designated Senior Debt of the Company
occurs and is continuing; or
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(ii) a default, other than a default referred to in clause (i) of
this Section 10.04, on Designated Senior Debt of the Company occurs and is
continuing that then permits holders of such Designated Senior Debt to
accelerate its maturity and the Trustee receives a written notice of such
default (a "Payment Blockage Notice") from the holders or a Representative
of such Designated Senior Debt. If the Trustee receives any such Payment
Blockage Notice, no subsequent Payment Blockage Notice shall be effective
for purposes of this Section 10.04 unless and until at least 360 days
shall have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice unless such default shall have been waived for a period of not less
than 90 consecutive days.
The Company may and shall resume payments on and distributions with
respect to any Obligations on, or with respect to, the Notes and may acquire
them upon the earlier of:
(i) in the case of a default referred to in clause (i) of the
immediately preceding paragraph, the date upon which the default is cured or
waived, or
(ii) in the case of a default referred to in clause (ii) of the
immediately preceding paragraph, the earlier of (A) the date on which all
nonpayment defaults are cured or waived, (B) 179 days after the date of delivery
of the applicable Payment Blockage Notice or (C) the date on which the Trustee
receives notice from the Representative for such Designated Senior Debt
rescinding the Payment Blockage Notice, unless the maturity of any such
Designated Senior Debt has been accelerated.
SECTION 10.05. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the Company
of the acceleration.
SECTION 10.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment or
distribution of any kind or character, whether in cash, properties or
securities, in respect of any Obligations with respect to the Notes (other than
(x) Permitted Junior Securities and (y) payments and other distributions made
from any defeasance trust created pursuant to Article 8 hereof) at a time when
such payment or distribution is prohibited by Section 10.03 or 10.04 hereof,
such payment shall be held by the Trustee or such Holder, in trust for the
benefit of, and shall be paid forthwith over and delivered, upon written
request, (on a pro rata basis based on the aggregate principal amount of such
Senior Debt held by such holders), to the holders of Senior Debt of the Company
or their Representative under the indenture or other agreement (if any) pursuant
to which such Senior Debt may have been issued for application to the payment of
all Obligations with respect to Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in cash or Cash Equivalents (other
than Cash Equivalents of the type referred to in clauses (iii) and (iv) of the
definition thereof) in accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior Debt.
If any Holder or the Trustee is required by any court or otherwise
to deliver payments it received by the Company or Guarantor to a holder of
Senior Debt, any amount so paid to the extent theretofore discharged, shall be
reinstated in full force and effect.
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With respect to the holders of Senior Debt, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Exchange Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Debt of the Company, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any holders
of Senior Debt shall be entitled by virtue of this Article 10, except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.
To the extent any payment of Senior Debt of the Company (whether by
or on behalf of the Company, as proceeds of security or enforcement of any right
of setoff or otherwise) is declared to be fraudulent or preferential, set aside
or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person, the Senior Debt of the Company or part
thereof originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred.
SECTION 10.07. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent
in writing of any facts known to the Company that would cause a payment of any
Obligations with respect to the Notes to violate this Article 10, but failure to
give such notice shall not affect the subordination of the Notes to the Senior
Debt of the Company as provided in this Article 10.
SECTION 10.08. SUBROGATION.
Subject to the payment in full in cash or Cash Equivalents (other
than Cash Equivalents of the type referred to in clauses (iii) and (iv) of the
definition thereof) of all Senior Debt of the Company, Holders of Notes shall be
subrogated (equally and ratably with all other Indebtedness pari passu with the
Notes) to the rights of holders of Senior Debt of the Company to receive
payments or distributions of cash, properties or securities of the Company
applicable to the Senior Debt of the Company until the Notes have been paid in
full. A distribution made under this Article 10 to holders of Senior Debt of the
Company that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company to or on account of
Senior Debt of the Company.
SECTION 10.09. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt of the Company. Nothing in this Exchange Indenture shall:
(i) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay principal
of and interest and Liquidated Damages, if any, on the Notes in accordance with
their terms;
(ii) affect the relative rights of Holders of Notes and creditors of
the Company other than their rights in relation to holders of Senior Debt of the
Company; or
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(iii) prevent the Trustee or any Holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt of the Company to receive distributions and
payments otherwise payable to Holders of Notes.
The failure to make a payment on account of principal of, or
interest on, the Notes by reason of any provision of this Article 10 will not be
construed as preventing the occurrence of a Default or Event of Default.
SECTION 10.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt of the Company to enforce the
subordination of the Indebtedness evidenced by the Notes as provided herein
shall at any time in any way be prejudiced or be impaired by any act or failure
to act by the Company or any Holder or by the failure of the Company or any
Holder to comply with this Exchange Indenture, regardless of any knowledge
thereof which any such Holder may have otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt of the Company may, at any time and from
time to time, without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article 10 or the obligations
hereunder of the Holders of the Notes to the holders of the Senior Debt of the
Company, do any one or more of the following: (i) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter, Senior
Debt of the Company, or otherwise amend or supplement in any manner Senior Debt
of the Company, or any instrument evidencing the same or any agreement under
which Senior Debt of the Company is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Debt of the Company; (iii) release any Person liable in any manner for the
payment or collection of Senior Debt of the Company; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
SECTION 10.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders
of Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred
to in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
SECTION 10.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Exchange Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment or distribution by the Trustee, and the Trustee and the Paying Agent may
continue to make payments on the Notes, unless the Trustee shall have received
at its Corporate Trust Office at least three Business Days prior to the date
upon which such payment would otherwise
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become due and payable written notice of facts that would cause the payment of
any Obligations with respect to the Notes to violate this Article 10. Only the
Company, the holders of Senior Debt of the Company or a Representative therefor
may give any such notice. Nothing in this Article 10 shall impair the claims of,
or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt of the Company with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights.
SECTION 10.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, holders of Senior Debt of the Company or their Representatives are
hereby authorized to file an appropriate claim for and on behalf of the Holders
of the Notes.
SECTION 10.14. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the parties holding a majority of the outstanding
Indebtedness under each credit agreement included in the Credit Facilities.
ARTICLE 11.
SATISFACTION AND DISCHARGE
SECTION 11.01. SATISFACTION AND DISCHARGE OF EXCHANGE INDENTURE.
This Exchange Indenture shall be discharged and shall cease to be of
further effect as to all Notes issued hereunder, when:
(i) either:
(A) all such Notes theretofore authenticated (except lost,
stolen or destroyed Notes that have been replaced or paid and Notes
for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Company) have been delivered to the Trustee
for cancellation; or
(B) all such Notes not theretofore delivered to such Trustee
for cancellation have become due and payable by reason of the making
of a notice of redemption or otherwise, in cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in
such amounts as will be sufficient without consideration of any
reinvestment of interest, to pay and discharge the entire
Indebtedness on such Notes not theretofore delivered to the Trustee
for cancellation for principal, premium and Liquidated Damages, if
any, and accrued interest to the date of maturity or redemption;
(ii) no Default or Event of Default with respect to this Exchange
Indenture or the Notes shall have occurred and be continuing on the date of such
deposit or shall occur as a result of such
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deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company is a party
or by which the Company is bound;
(iii) the Company has paid or caused to be paid all sums payable by
it under this Exchange Indenture; and
(iv) the Company has delivered irrevocable instructions to the
Trustee under this Exchange Indenture to apply the deposited money toward the
payment of such 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.
SECTION 11.02. APPLICATION OF TRUST MONEY
Subject to the provisions of the last paragraph of Section 4.19
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 Exchange Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to Persons entitled thereto, of the principal (and
premium, if any), interest and Liquidated Damages, if any, for whose payment
such money has been deposited with the Trustee.
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 obligations under this Exchange Indenture and the
Notes shall be revived and reinstated as though such deposit had occurred
pursuant to Section 11.01 hereof; provided that if the Company has made any
payment of principal of, premium, 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.
ARTICLE 12.
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Exchange Indenture limits, qualifies or
conflicts with the duties imposed by TIA ss. 318(c), the imposed duties shall
control.
SECTION 12.02. NOTICES.
Any notice or communication by the Company 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:
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If to the Company:
Packaging Corporation of America
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
With a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
If to the Trustee:
U.S. Trust Company of Texas, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
The Company, 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 receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
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 ss. 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.
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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 ss. 312(b) with other
Holders with respect to their rights under this Exchange Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA ss. 312(c)
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to
take any action under this Exchange Indenture, the Company shall furnish to the
Trustee:
(i) 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 Exchange
Indenture relating to the proposed action have been satisfied; and
(ii) an Opinion of Counsel 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 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 Exchange Indenture (other than a
certificate provided pursuant to TIA ss. 314(a)(4)) shall comply with the
provisions of TIA ss. 314(e) and shall include:
(i) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(ii) 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;
(iii) a statement that, in the opinion of such Person, he or she has
or they have 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 satisfied; and
(iv) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
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.
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SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS.
No past, present or future director, officer, employee, incorporator
or stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes, this Exchange Indenture 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.
THIS EXCHANGE INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Exchange Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Exchange Indenture.
SECTION 12.10. SUCCESSORS.
All agreements of the Company in this Exchange Indenture and the
Notes shall bind its successors. All agreements of the Trustee in this Exchange
Indenture shall bind its successors.
SECTION 12.11. SEVERABILITY.
In case any provision in this Exchange 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 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Exchange
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Exchange Indenture have been inserted for
convenience of reference only, are not to be considered a part of this Exchange
Indenture and shall in no way modify or restrict any of the terms or provisions
hereof.
[Exchange Indenture signature page follows]
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DATED APRIL 12, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Financial
Officer, Secretary
and Treasurer
U.S. TRUST COMPANY OF TEXAS, N.A.,
as Trustee
BY: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory