1
EXHIBIT 10.02
CARAUSTAR INDUSTRIES, INC.
AS ISSUER,
THE GUARANTORS PARTY HERETO
and
THE BANK OF NEW YORK,
AS TRUSTEE
---------------------------------
INDENTURE
DATED AS OF MARCH 29, 2001
---------------------------------
$285,000,000
9-7/8% SENIOR SUBORDINATED NOTES DUE 2011
2
CROSS REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
----------- -------
310(a)(1)......................................................................................................7.10
(a)(2).........................................................................................................7.10
(a)(3).........................................................................................................N.A.
(a)(4).........................................................................................................N.A.
(a)(5).........................................................................................................7.10
(b)............................................................................................................7.10
(c)............................................................................................................N.A.
311(a).........................................................................................................7.11
(b)............................................................................................................7.11
(c)............................................................................................................N.A.
312(a)..........................................................................................................2.5
(b)............................................................................................................13.3
(c)............................................................................................................13.3
313 (a).........................................................................................................7.6
(b)(1).........................................................................................................N.A.
(b)(2).....................................................................................................7.6, 7.7
(c).......................................................................................................7.6, 13.2
(d).............................................................................................................7.6
314(a)..........................................................................................................4.3
(b)............................................................................................................N.A.
(c)(1).........................................................................................................13.3
(c)(2).........................................................................................................13.3
(c)(3).........................................................................................................N.A.
(d)............................................................................................................N.A.
(e)............................................................................................................13.3
(f)............................................................................................................N.A.
315(a).........................................................................................................7.1.
(b)............................................................................................................13.2
(c).............................................................................................................7.1
(d).............................................................................................................7.1
(e)............................................................................................................6.11
i
3
316(a)(last sentence)...........................................................................................2.9
(a)(1)(A).......................................................................................................6.5
(a)(1)(B).......................................................................................................6.4
(a)(2).........................................................................................................N.A.
(b).............................................................................................................6.7
(c)............................................................................................................2.12
317(a)(1).......................................................................................................6.8
(a)(2)..........................................................................................................6.9
(b).............................................................................................................2.4
318(a).........................................................................................................13.1
(b)............................................................................................................N.A.
(c)............................................................................................................13.1
"N.A." means "Not Applicable."
*This Cross Reference Table is not part of the Indenture.
ii
4
TABLE OF CONTENTS
ARTICLE 1.........................................................................................................1
DEFINITIONS AND INCORPORATION BY REFERENCE........................................................................1
SECTION 1.01 DEFINITIONS.............................................................................1
SECTION 1.1. OTHER DEFINITIONS......................................................................19
SECTION 1.2. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT......................................20
SECTION 1.3. RULES OF CONSTRUCTION..................................................................20
ARTICLE 2........................................................................................................22
THE NOTES........................................................................................................22
SECTION 2.1. FORM AND DATING........................................................................22
SECTION 2.2. EXECUTION AND AUTHENTICATION...........................................................22
SECTION 2.3. REGISTRAR AND PAYING AGENT.............................................................23
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST....................................................23
SECTION 2.5. HOLDER LISTS...........................................................................23
SECTION 2.6. TRANSFER AND EXCHANGE..................................................................24
SECTION 2.7. REPLACEMENT NOTES......................................................................31
SECTION 2.8. OUTSTANDING NOTES......................................................................31
SECTION 2.9. TREASURY NOTES.........................................................................32
SECTION 2.10. TEMPORARY NOTES.......................................................................32
SECTION 2.11. CANCELLATION..........................................................................32
SECTION 2.12. RECORD DATE...........................................................................32
SECTION 2.13. DEFAULTED INTEREST....................................................................32
SECTION 2.14. CUSIP NUMBERS.........................................................................33
ARTICLE 3........................................................................................................33
REDEMPTION AND PREPAYMENT........................................................................................33
SECTION 3.1. NOTICES TO TRUSTEE.....................................................................33
SECTION 3.2. SELECTION OF NOTES TO BE REDEEMED......................................................33
SECTION 3.3. NOTICE OF REDEMPTION...................................................................34
SECTION 3.4. EFFECT OF NOTICE OF REDEMPTION.........................................................35
SECTION 3.5. DEPOSIT OF REDEMPTION PRICE............................................................35
SECTION 3.6. NOTES REDEEMED IN PART.................................................................35
SECTION 3.7. OPTIONAL REDEMPTION....................................................................36
SECTION 3.8. MANDATORY REDEMPTION...................................................................36
ARTICLE 4........................................................................................................36
COVENANTS........................................................................................................36
SECTION 4.1. PAYMENT OF NOTES.......................................................................36
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY........................................................37
SECTION 4.3. REPORTS................................................................................37
SECTION 4.4. COMPLIANCE CERTIFICATE.................................................................38
SECTION 4.5. TAXES..................................................................................39
SECTION 4.6. STAY, EXTENSION AND USURY LAWS.........................................................39
SECTION 4.7. RESTRICTED PAYMENTS....................................................................39
SECTION 4.8. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.........................42
SECTION 4.9. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.............................44
SECTION 4.10. ASSET SALES...........................................................................46
SECTION 4.11. TRANSACTIONS WITH AFFILIATES..........................................................50
SECTION 4.12. LIENS.................................................................................52
SECTION 4.13. SALE AND LEASEBACK TRANSACTIONS.......................................................52
SECTION 4.14. LIMITATIONS ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS................................52
SECTION 4.15. CORPORATE EXISTENCE...................................................................53
SECTION 4.16. REPURCHASE AT THE OPTION OF HOLDERS - CHANGE OF CONTROL...............................53
SECTION 4.17. LIMITATION ON OTHER SENIOR SUBORDINATED DEBT..........................................55
SECTION 4.18. LIMITATION ON ISSUANCES AND SALES OF EQUITY INTERESTS IN WHOLLY OWNED SUBSIDIARIES....55
SECTION 4.19. ADDITIONAL SUBSIDIARY GUARANTEES......................................................56
Section 4.20. Limitation on Restricted and Unrestricted Subsidiaries................................57
iii
5
ARTICLE 5........................................................................................................58
SUCCESSORS.......................................................................................................58
SECTION 5.1. MERGER, CONSOLIDATION OR SALE OF ASSETS.................................................58
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED......................................................59
ARTICLE 6........................................................................................................60
DEFAULTS AND REMEDIES............................................................................................60
SECTION 6.1. EVENTS OF DEFAULT......................................................................60
SECTION 6.2. ACCELERATION...........................................................................62
SECTION 6.3. OTHER REMEDIES.........................................................................62
SECTION 6.4. WAIVER OF PAST DEFAULTS/RESCISSION OF ACCELERATION.....................................62
SECTION 6.5. CONTROL BY MAJORITY....................................................................62
SECTION 6.6. LIMITATION ON SUITS....................................................................63
SECTION 6.7. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT..........................................63
SECTION 6.8. COLLECTION SUIT BY TRUSTEE.............................................................63
SECTION 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM.......................................................64
SECTION 6.10. PRIORITIES............................................................................64
SECTION 6.11. UNDERTAKING FOR COSTS.................................................................65
ARTICLE 7........................................................................................................65
TRUSTEE..........................................................................................................65
SECTION 7.1. DUTIES OF TRUSTEE......................................................................65
SECTION 7.2. RIGHTS OF TRUSTEE......................................................................66
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE...........................................................67
SECTION 7.4. TRUSTEE'S DISCLAIMER...................................................................67
SECTION 7.5. NOTICE OF DEFAULTS.....................................................................68
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.............................................68
SECTION 7.7. COMPENSATION AND INDEMNITY.............................................................68
SECTION 7.8. REPLACEMENT OF TRUSTEE.................................................................69
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.......................................................70
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.........................................................70
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.................................70
ARTICLE 8........................................................................................................71
LEGAL DEFEASANCE AND COVENANT DEFEASANCE.........................................................................71
SECTION 8.1. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE...............................71
SECTION 8.2. LEGAL DEFEASANCE AND DISCHARGE.........................................................71
SECTION 8.3. COVENANT DEFEASANCE....................................................................72
SECTION 8.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.............................................72
SECTION 8.5. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS
PROVISIONS.......................................................................................74
SECTION 8.6. REPAYMENT TO THE COMPANY OR THE GUARANTORS.............................................74
SECTION 8.7. REINSTATEMENT..........................................................................75
ARTICLE 9........................................................................................................75
AMENDMENT, SUPPLEMENT AND WAIVER.................................................................................75
SECTION 9.1. WITHOUT CONSENT OF HOLDERS.............................................................75
SECTION 9.2. WITH CONSENT OF HOLDERS OF NOTES.......................................................76
SECTION 9.3. COMPLIANCE WITH TRUST INDENTURE ACT....................................................77
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS......................................................77
SECTION 9.5. NOTATION ON OR EXCHANGE OF NOTES.......................................................78
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC........................................................78
ARTICLE 10.......................................................................................................78
SUBORDINATION....................................................................................................78
SECTION 10.1. AGREEMENT TO SUBORDINATE..............................................................78
SECTION 10.2. LIQUIDATION; DISSOLUTION; BANKRUPTCY..................................................79
SECTION 10.3. DEFAULT ON DESIGNATED SENIOR DEBT.....................................................79
SECTION 10.4. ACCELERATION OF NOTES.................................................................80
SECTION 10.5. WHEN DISTRIBUTION MUST BE PAID OVER...................................................80
SECTION 10.6. NOTICE BY COMPANY.....................................................................81
iv
6
SECTION 10.7. SUBROGATION...........................................................................81
SECTION 10.8. RELATIVE RIGHTS.......................................................................81
SECTION 10.9. SUBORDINATION MAY NOT BE IMPAIRED.....................................................82
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.............................................82
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT...................................................82
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION................................................82
SECTION 10.13. AMENDMENTS...........................................................................83
SECTION 10.14. MISCELLANEOUS........................................................................83
ARTICLE 11.......................................................................................................83
SUBSIDIARY GUARANTEES............................................................................................83
SECTION 11.1. ABSOLUTE AND UNCONDITIONAL GUARANTEE..................................................83
SECTION 11.2. SEVERABILITY..........................................................................84
SECTION 11.3. RELEASE OF A GUARANTOR................................................................84
SECTION 11.4. LIMITATION OF GUARANTOR'S LIABILITY...................................................85
SECTION 11.5. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS....................................85
SECTION 11.6. CONTRIBUTION..........................................................................86
SECTION 11.7. WAIVER OF SUBROGATION.................................................................86
SECTION 11.8. EXECUTION OF SUBSIDIARY GUARANTEE.....................................................87
ARTICLE 12.......................................................................................................87
SUBORDINATION OF SUBSIDIARY GUARANTEES...........................................................................87
SECTION 12.1. AGREEMENT TO SUBORDINATE..............................................................87
SECTION 12.2. LIQUIDATION; DISSOLUTION; BANKRUPTCY..................................................87
SECTION 12.3. DEFAULT ON DESIGNATED SENIOR DEBT.....................................................88
SECTION 12.4. ACCELERATION OF NOTES.................................................................89
SECTION 12.5. WHEN DISTRIBUTION MUST BE PAID OVER...................................................89
SECTION 12.6. NOTICE BY COMPANY.....................................................................90
SECTION 12.7. SUBROGATION...........................................................................90
SECTION 12.8. RELATIVE RIGHTS.......................................................................90
SECTION 12.9. SUBORDINATION MAY NOT BE IMPAIRED.....................................................91
SECTION 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.............................................91
SECTION 12.11. RIGHTS OF TRUSTEE AND PAYING AGENT...................................................91
SECTION 12.12. AUTHORIZATION TO EFFECT SUBORDINATION................................................91
SECTION 12.13. AMENDMENTS...........................................................................92
SECTION 12.14. MISCELLANEOUS........................................................................92
ARTICLE 13.......................................................................................................92
MISCELLANEOUS....................................................................................................92
SECTION 13.1. TRUST INDENTURE ACT CONTROLS..........................................................92
SECTION 13.2. NOTICES...............................................................................92
SECTION 13.3. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.........................93
SECTION 13.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT....................................94
SECTION 13.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.........................................94
SECTION 13.6. RULES BY TRUSTEE AND AGENTS...........................................................94
SECTION 13.7. NO PERSONAL LIABILITY OF PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES, AND STOCKHOLDERS
AND STOCKHOLDERS.................................................................................95
SECTION 13.8. GOVERNING LAW.........................................................................95
SECTION 13.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.........................................95
SECTION 13.10. SUCCESSORS...........................................................................95
SECTION 13.11. SEVERABILITY/INDEPENDENCE OF COVENANTS...............................................95
SECTION 13.12. COUNTERPART ORIGINALS................................................................95
SECTION 13.13. TABLE OF CONTENTS, HEADINGS, ETC.....................................................96
v
7
INDENTURE dated as of March 29, 2001 among CARAUSTAR INDUSTRIES, INC.,
a North Carolina corporation (the "Company"), the Guarantors (as defined herein)
and THE BANK OF NEW YORK, a New York banking corporation, 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 (the "Holders") of
the 9-7/8% Series A Senior Subordinated Notes due 2011 of the Company initially
issued hereunder (the "Series A Notes") and the 9-7/8% Series B Senior
Subordinated Notes due 2011 of the Company issued in exchange for the Series A
Notes pursuant to the Registered Exchange Offer (the "Series B Notes" and,
together with the Series A Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Subsidiary of
such specified Person, whether or not such Indebtedness is
incurred in connection with, or in contemplation of, such
other Person merging with or into, or becoming a Subsidiary
of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired
by such specified Person.
"Additional Interest" means the interest on the Notes (in addition to
that set forth herein) that the Company may be required to pay pursuant to the
terms of the Registration Rights Agreement and as such term is defined in the
Registration Rights Agreement.
"Adjusted Net Assets" of a Guarantor at any date shall mean the lesser
of the amount by which (a) the fair value of the property of such Guarantor
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date), but excluding liabilities under
the Subsidiary Guarantee of such Guarantor at such date and (b) the present fair
salable value of the assets of such Guarantor at such date exceeds the amount
that will be required to pay the probable liability of such Guarantor on its
debts (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date and after giving effect to any collection from
any Subsidiary of such Guarantor in respect of the obligations of such
Subsidiary under the Subsidiary Guarantee), excluding debt in respect of the
Subsidiary Guarantee, as they become absolute and matured.
"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, however, that beneficial ownership of 10% or
more of the Voting Stock of a Person shall be deemed to be
8
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 or any
successor thereto.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets
or rights (including any Equity Interest of any Person), other
than sales of inventory and dispositions of obsolete equipment
in the ordinary course of business consistent with past
practices; provided, however, that the sale, conveyance or
other disposition of all or substantially all of the assets of
the Company and its Restricted Subsidiaries taken as a whole
will be governed by the provisions of Section 4.16 and 5.1 and
5.2 hereof, and not by Section 4.10; and
(2) the issuance of Equity Interests by any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any
of its Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to be
Asset Sales:
(1) any single transaction or series of related transactions that:
(a) involves assets having a fair market value of less than
$1.0 million; or (b) results in Net Proceeds to the Company
and its Restricted Subsidiaries of less than $1.0 million;
(2) a transfer of assets from the Company or a Restricted
Subsidiary to the Company or to a Guarantor;
(3) an issuance of Equity Interests by a Restricted Subsidiary to
the Company or to a Guarantor;
(4) any Permitted Investment and any Restricted Payment that is
permitted by Section 4.7 hereof; and
(5) the sale or disposition of the Chicago Paperboard Assets;
provided, however, that such sale or disposition must be on
fair and reasonable terms.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such sale and leaseback transaction including any period for which such lease
has been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
2
9
"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 such 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, whether such
right is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition.
"Board of Directors" means the board of directors (or other body having
similar management functions) or any committee thereof duly authorized to act on
behalf of such board. Except as expressly forth herein, any reference to the
Board of Directors shall be a reference to the Board of Directors of the
Company.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"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:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or
limited); and
(4) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) 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 one year from the date of
acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year
and overnight bank deposits, in each case, with any domestic
commercial bank having capital and surplus in excess of $500
million and a ▇▇▇▇▇▇▇▇ Bank Watch Rating of "B" or better;
3
10
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses
(2) and (3) above entered into with any financial institution
meeting the qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from
▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Ratings
Service and in each case maturing within six months after the
date of acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses
(1) through (5) of this definition.
"Certificated Securities" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for by
footnotes 1 and 5 thereof.
"Change of Control" means the occurrence of any of the following:
(1) the sale, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole to
any "person" (as such term is used in Section 13(d)(3) of the
Exchange Act);
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which
is that any "person" (as defined above) becomes the Beneficial
Owner, directly or indirectly, of (i) more than 35% of the
Voting Stock of the Company, measured by voting power rather
than number of shares and/or (ii) more than 35% of the Equity
Interests of the Company;
(4) the first day on which a majority of the members of the Board
of Directors of the Company are not Continuing Directors; or
(5) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction
in which any of the outstanding Voting Stock of the Company is
converted into or exchanged for cash, securities or other
property, other than any such transaction where the Voting
Stock of the Company outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock
(other than Disqualified Stock) of the surviving or transferee
Person constituting a majority of the outstanding shares of
such Voting Stock of such surviving or transferee Person
immediately after giving effect to such issuance.
"Chicago Paperboard Assets" means all real and personal property assets
(as of the Issue Date) relating to the Company's Chicago Paperboard mill located
at ▇▇▇▇▇▇ Avenue and the Chicago River in Chicago, Illinois.
"Claim" means any claim arising from rescission of the purchase or sale
of the Notes, for damages arising from the purchase or sale of the Notes or for
reimbursement or contribution on account of such a claim.
4
11
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period excluding
therefrom that portion of Consolidated Net Income attributable to each
Significant Joint Venture of such Person whether or not such Significant Joint
Venture is consolidated with such Person for accounting and financial reporting
purposes plus:
(1) an amount equal to any extraordinary loss plus any net loss
realized in connection with an Asset Sale, to the extent such
losses were deducted in computing such Consolidated Net
Income; plus
(2) 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
(3) 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 payments, if any, pursuant to Hedging
Obligations), to the extent that any such expense was deducted
in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill
and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period) and other
non-cash expenses (excluding any such non-cash expense to the
extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid
cash expense that was paid in a prior period) of such Person
and its Restricted Subsidiaries for such period to the extent
that such depreciation, amortization and other non-cash
expenses were deducted in computing such Consolidated Net
Income; minus
(5) non-cash items increasing such Consolidated Net Income for
such period, other than items that were accrued in the
ordinary course of business, in each case, on a consolidated
basis and determined in accordance with GAAP; plus (or, if
less than $0, minus)
(6) such Person's pro rata share (as determined in accordance with
the percentage ownership of Capital Stock or, if applicable,
profit-sharing percentage) of the Consolidated Cash Flow (as
determined in accordance with this definition) of each
Significant Joint Venture of such Person to the extent that
such Significant Joint Venture is not subject to an
encumbrance or restriction on the ability of such Significant
Joint Venture to pay dividends or make other distributions
(including distributions of Consolidated Cash Flow) on its
Capital Stock to such Person.
Notwithstanding the preceding, the provision for taxes based on the income or
profits of, and the depreciation and amortization and other non-cash charges of,
a Restricted Subsidiary of the Company shall be added to Consolidated Net Income
to compute Consolidated Cash Flow of the Company
5
12
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 approval, pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its shareholders.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided, however, that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity
method of accounting 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; provided, that in any event Consolidated Net Income
of such Person shall include the Net Income (loss) of each
Significant Joint Venture regardless of the amount of
dividends or distributions paid to such Person, if any;
(2) 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 Restricted Subsidiary or its shareholders;
(3) 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; and
(4) the cumulative effect of a change in accounting principles
shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of:
(1) the consolidated equity of the common shareholders of such
Person and its consolidated Subsidiaries as of such date; plus
(2) the respective amounts reported on such Person's balance sheet
as of such date with respect to any series of preferred stock
(other than Disqualified Stock) that by its terms is not
entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of
the year of such declaration and payment, but only to the
extent of any cash received by such Person upon issuance of
such preferred stock.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the Issue Date; or
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such
nomination or election.
6
13
"Corporate Trust Office" shall be the address of the Trustee specified
in Section 4.2 hereof or such other address as to which the Trustee gives notice
to the Company.
"Credit Facilities" means, with respect to the Company or any
Restricted Subsidiary, the New Credit Facility or one or more replacement debt
facilities or commercial paper facilities, in each case with banks or other
institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement to which such
Person is a party or beneficiary.
"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.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.3 hereof as
the Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture and, thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Debt" means any Senior Debt permitted under this
Indenture the principal amount of which is (or the commitments to lend under
which are) $25.0 million or more and that has been designated by the Company as
"Designated Senior Debt." Without limitation of the foregoing, the New Credit
Facility and the New Senior Notes shall be Designated Senior Debt.
"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 4.7
hereof.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and all rules and regulations of the SEC promulgated thereunder.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries in existence on the Issue Date, until such amounts are
repaid. Without limitation of the foregoing, "Existing Indebtedness" includes
the New Senior Notes.
7
14
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, Guarantees or redeems any Indebtedness (other than revolving credit
borrowings) or issues or redeems preferred stock subsequent to the commencement
of the period for which the Fixed Charge Coverage Ratio is being calculated but
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 or redemption of Indebtedness, or such issuance or
redemption of preferred stock, 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:
(1) 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 deemed to have occurred on the first
day of the four-quarter reference period and Consolidated Cash
Flow for such reference period shall be calculated without
giving effect to clause (3) of the proviso set forth in the
definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and
operations or businesses disposed of prior to the Calculation
Date, shall be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, 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.
"Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of the following, but excluding from such sum that
portion of the amounts set forth in items (1) through (4) below attributable to
each Significant Joint Venture of such Person whether or not such Significant
Joint Venture is consolidated with such Person for accounting or financial
reporting purposes:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or
accrued, including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment
obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect
to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments, if any,
pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
8
15
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or
one of its Restricted Subsidiaries, whether or not such
Guarantee or Lien is called upon; plus
(4) the product of (a) all dividend payments, whether or not in
cash, on any series of preferred stock of such Person or any
of its Restricted Subsidiaries, other than dividend payments
on Equity Interests payable solely in Equity Interests of the
Company (other than Disqualified Stock) or to the Company or a
Restricted Subsidiary of the Company, times (b) a fraction,
the numerator of which is one and the denominator of which is
one minus the then current combined federal, state and local
statutory tax rate of such Person, expressed as a decimal, in
each case, on a consolidated basis and in accordance with
GAAP; plus
(5) such Person's pro rata share (as determined in accordance with
the percentage ownership of Capital Stock or, if applicable,
profit-sharing percentage) of the Fixed Charges (as determined
in accordance with this definition) of each Significant Joint
Venture of such Person.
"Foreign Subsidiary" means any Restricted Subsidiary not created or
organized in the United States, any state thereof or the District of Columbia
and that conducts substantially all of its operations outside of the United
States.
"Funding Guarantor" has the meaning provided in Section 11.6.
"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 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" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 5 to the form of
the Note attached hereto as Exhibit A.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee or other assurance other than by
endorsement of negotiable instruments for collection in the ordinary course of
business, direct or indirect, in any manner including, without limitation, by
way of a pledge of assets or through letters of credit or reimbursement
agreements in respect thereof, of all or any part of any Indebtedness.
"Guarantors" means each of:
(1) the Subsidiaries of the Company a party hereto; and
9
16
(2) any other Subsidiary that executes a Subsidiary Guarantee in
accordance with Section 4.19 hereof;
and their respective successors and assigns.
"Gypsum Limited Partnership Agreement" means that certain Partnership
Agreement of Standard Gypsum, L.P. dated as of December 31, 2000, among
Temple-Inland Forest Products Corporation, Gypsum MGC, Inc., ▇▇▇▇▇▇▇▇▇ Gypsum
Company, LLC, and Temple Gypsum Company, as the same may be amended, modified,
replaced, supplemented or substituted from time to time.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under Currency Agreements and Interest Rate
Agreements.
"Holder" and "Holder of Note" mean a Person in whose name a Note is
registered.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) and
evidenced thereby;
(3) banker's acceptances;
(4) Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued
expense or trade payable; or
(6) any Hedging Obligations relating to Indebtedness,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. 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 such Person of any Indebtedness of any other Person. The incurrence of
Indebtedness Guaranteed by the specified Person shall, for purposes of this
Indenture, be the incurrence of Indebtedness by such specified Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount;
(2) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any
other Indebtedness; and
10
17
(3) the amount of Indebtedness of such specified Person arising by
reason of a Guarantee of Indebtedness shall equal the
outstanding principal amount of the Guaranteed Indebtedness.
"Indenture" means this Indenture, as amended, modified or supplemented
from time to time.
"Interest Rate Agreement" means in respect of a Person any interest
rate swap agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect such Person against fluctuations in interest
rates.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness and whether or not
evidenced by a note) or other obligations, advances or capital contributions
(including by means of transfer of property) (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 Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted 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 Restricted Subsidiary not sold or disposed of in an amount determined as
provided in Section 4.7(d) hereof.
"Issue Date" means March 29, 2001.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or in the city in which the principal
corporate trust office of the Trustee 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
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in such asset, and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person and its Restricted Subsidiaries, determined in accordance with
GAAP and before any reduction in respect of preferred stock dividends,
excluding, however:
(1) any gain (but not loss), together with any related provision
for taxes on such gain (but not 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
11
18
(2) any extraordinary gain (but not loss), together with any
related provision for taxes on such extraordinary gain (but
not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
(i) the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, sales commissions, and any
relocation expenses incurred as a result thereof, (ii) taxes paid or payable as
a result thereof, 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 Senior Debt, secured by
a Lien on the asset or assets that were the subject of such Asset Sale, (iii)
any reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP, or against any liabilities associated with
the Asset Sale, or the assets subject thereto, and retained by the Company or
any Restricted Subsidiary, and (iv) amounts required to be applied to the
repayment of Indebtedness secured by a Lien on the asset or assets existing on
the Issue Date, or entered into after the Issue Date in connection with the
payment of deferred purchase price of the properties or assets that were the
subject of such Asset Sale.
"New Credit Facility" means that certain credit agreement providing for
a revolving credit facility of up to $75.0 million to be entered into among the
Company, as borrower, certain subsidiaries of the Company from time to time a
party thereto, as guarantors, the lenders party thereto and Bank of America,
N.A., as administrative agent, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith.
"New Senior Notes" means the 7-1/4% Senior Notes due 2010 in the
aggregate principal amount equal to $29.0 million issued by the Company on the
Issue Date.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable
as a guarantor or otherwise, or (c) constitutes the lender;
and
(2) no default with respect to which (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 of its Restricted
Subsidiaries to declare a default on such other Indebtedness
or cause the payment thereof to be accelerated or payable
prior to its stated maturity.
"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Notes" has the meaning in the introductory clause hereof.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
12
19
"Officer" means, with respect to any Person, the Chief Executive
Officer, the President, the Chief Financial Officer, any Vice President whose
principal duties relate to financial matters, the Treasurer or the Secretary of
such Person.
"Officers' Certificate" means a certificate signed on behalf of a
Person by two Officers of such Person, one of whom must be the principal
executive officer, the principal financial officer or the principal accounting
officer of such Person, which meets the applicable requirements of Section 13.4
hereof.
"Opinion of Counsel" means a written opinion in form and substance
reasonably satisfactory to and from legal counsel who is reasonably acceptable
to the Trustee that meets the applicable requirements of Section 13.4 hereof.
Such counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company, or the Trustee.
"Pari Passu Debt" means Indebtedness that ranks pari passu in right of
payment with the Notes.
"Permitted Investments" means:
(1) Investments in the Company or in a Guarantor;
(2) Investments in Cash Equivalents;
(3) Investments in prepaid expenses, negotiable instruments held
for collection and lease, utility and workers' compensation,
performance and other similar deposits;
(4) Investments constituting loans, advances or extensions of
credit to employees, officers, supervisory or management board
members and directors made in the ordinary course of business
which, when taken together with all other Investments made
pursuant to this clause (4) since the Issue Date, do not
exceed $7.5 million in the aggregate;
(5) Investments representing Hedging Obligations;
(6) bonds, notes, debentures, other securities or other
Investments made as a result of receipt of non-cash
consideration from Asset Sales made in compliance with Section
4.10 hereof;
(7) Investments in any Person as a result of which (a) such Person
becomes a Guarantor, 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 Guarantor;
(8) Investments the payment of which consists of Capital Stock of
the Company (other than Disqualified Stock);
(9) Investments existing on the Issue Date;
(10) Investments acquired by the Company or any of its Restricted
Subsidiaries (a) in exchange for any other Investment or
accounts receivable held by the Company or any
13
20
such Restricted Subsidiary in connection with or as a result
of a bankruptcy, workout, reorganization or recapitalization
of the issuer of such other Investment or accounts receivable
or (b) as a result of a foreclosure by the Company or any of
its Restricted Subsidiaries with respect to any secured
Investment or other transfer of title with respect to any
secured Investment in default;
(11) Investments consisting of the licensing or contribution of
intellectual property pursuant to joint marketing arrangements
with other Persons or otherwise in the ordinary course of
business;
(12) Investments consisting of purchases and acquisitions of
inventory, supplies, materials and equipment or licenses,
contributions or leases of intellectual property, in any case,
in the ordinary course of business; and
(13) 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 (13) since the Issue Date, not to
exceed $25.0 million.
"Permitted Junior Securities" means (1) Equity Interests in the Company
or any Guarantor or (2) debt securities of the Company or any Guarantor that are
subordinated to all Senior Debt and any debt securities issued in exchange for
Senior Debt to at least the same extent as, or to a greater extent than, the
Notes and the Subsidiary Guarantees are subordinated to Senior Debt pursuant to
this Indenture.
"Permitted Liens" means:
(1) Liens on the assets of the Company and any Guarantor to secure
Senior Debt of the Company or such Guarantor that was
permitted by the terms of this Indenture to be incurred;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property of a Person existing at the time such Person
is merged with or into or consolidated with the Company or any
Restricted Subsidiary of the Company; provided, however, 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 Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition thereof
by the Company or any Restricted Subsidiary of the Company,
provided, that such Liens were in existence prior to the
contemplation of such acquisition;
(5) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations
of a like nature incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by Section 4.9(b)(4) covering only the
assets acquired with such Indebtedness;
14
21
(7) Liens existing on the Issue Date;
(8) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and
diligently concluded; provided, however, that any reserve or
other appropriate provision as shall be required in conformity
with GAAP shall have been made therefor;
(9) Liens of carriers, warehousemen, mechanics, vendors (solely to
the extent arising by operation of law), laborers and
materialmen incurred in the ordinary course of business for
sums not yet due or being contested in good faith, if reserves
or other appropriate provision shall have been made therefor;
(10) Liens incurred in the ordinary course of business in
connection with workers' compensation and unemployment
insurance, social security obligations, assessments or
governmental charges which are not overdue for more than 60
days;
(11) judgment Liens that do not result in an Event of Default
hereunder;
(12) Liens in connection with escrow deposits made in connection
with any acquisition of assets;
(13) Liens consisting of easements, rights-of-way, zoning
restrictions, licenses or restrictions on use and other
similar encumbrances on the use of real property that (a) are
not incurred in connection with the borrowing of money and (b)
do not in the aggregate materially detract from the value of
the property or materially impair the use thereof in the
operation of business by the Company or any Restricted
Subsidiary; and
(14) other Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company with
respect to obligations that do not exceed $25.0 million at any
one time outstanding.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided, however, that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the
principal amount of (or accreted value, if applicable), plus
accrued interest on, the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity
date no earlier 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;
15
22
(3) 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 no earlier 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
(4) the principal obligor of such Indebtedness being incurred by
the Company or by the Restricted Subsidiary is the principal
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, limited liability company,
unincorporated organization or government or agency or political subdivision
thereof (including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"Premier Operating Agreement" means that certain Operating Agreement
dated May 6, 1999, by and between Inland Paperboard and Packaging, Inc. and PBL
Inc., as the same may be amended, modified, replaced, supplemented or
substituted from time to time.
"Public Equity Offering" means an underwritten public offering of
common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Purchase Agreement" means the Purchase Agreement, dated as of March
22, 2001, by and between the Company and Credit Suisse/First Boston and the
other parties thereto, as such Agreement may be amended, modified, or
supplemented from time to time.
"Registered Exchange Offer" means the Registered Exchange Offer to be
effected pursuant to, and as defined in, the Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 22, 2001, by and among the Company and the other
parties named on the signature pages thereto, as such Agreement may be amended,
modified, or supplemented from time to time.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Debt; provided, however, 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.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the corporate trust administration department 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 employee to whom such matter is referred because of his
knowledge of, and familiarity with, the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
16
23
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission (or any successor
federal regulatory body having similar jurisdiction).
"Securities Act" means the Securities Act of 1933, as amended, and all
rules and regulations of the SEC promulgated thereunder.
"Senior Debt" means with respect to the Company and each Guarantor:
(1) all Indebtedness outstanding under Credit Facilities and all
Hedging Obligations with respect thereto;
(2) any other Indebtedness permitted to be incurred by such
Persons under the terms of this Indenture (including Existing
Indebtedness), 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
(3) all Obligations with respect to the items listed in the
preceding clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding, Senior Debt will not
include:
(1) any liability for federal, state, local or other taxes owed or
owing by such Person;
(2) any Indebtedness of such Person to any of its Subsidiaries or
other Affiliates;
(3) any trade payables; or
(4) any Indebtedness that is incurred in violation of this
Indenture.
"Significant Joint Venture" means each of Premier Boxboard Limited LLC,
a Delaware limited liability company ("Premier"), and Standard Gypsum, L.P., a
Delaware limited partnership ("Gypsum"), so long as, (a) in each case, 50% of
the Voting Stock is owned, directly or through one or more Wholly Owned
Restricted Subsidiaries, by the Company, (b) with respect to Premier, the
Company does not agree to any modifications or amendments to any provisions of
the Premier Operating Agreement, including Sections 5.3 and 5.4 and the
definition "cash available for distribution" therein, which modifications or
amendments limit Premier's ability to make distributions to the Company in a
manner that is more restrictive than set forth in the Premier Operating
Agreement as of the Issue Date; provided, however, that the Company may agree to
establish additional reserves on the cash available for distribution in an
aggregate amount not to exceed 15% of cash available for distribution and (c)
with respect to Gypsum, the Company does not agree to any modifications or
amendments to any provisions of the Gypsum Limited Partnership Agreement,
including Sections 5.3 and 5.4 and the definition of "net free cash flow"
therein, which modifications or amendments limit Gypsum's ability to make
distributions to the Company in a manner that is more restrictive than set forth
in the Gypsum Limited Partnership Agreement as of the Issue Date; provided,
however, that the Company may agree to establish reserves on the net free cash
flow in an aggregate amount not to exceed 15% of net free cash flow.
17
24
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"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
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subordinated Indebtedness" means any Indebtedness of the Company or
any Guarantor (whether outstanding on the Issue Date or thereafter incurred)
which is subordinate or junior in right of payment to, in the case of the
Company, the Notes, or, in the case of such Guarantor, its Guarantee of the
Notes, pursuant to a written agreement to that effect.
"Subsidiary" means, with respect to any Person:
(1) any corporation, association or other business entity of which
more than 50% of the Voting Stock 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
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are such
Person or of one or more Subsidiaries of such Person (or any
combination thereof).
"Subsidiary Guarantee" means the Guarantees executed and delivered by
each Guarantor with respect to the Company's Obligations under this Indenture
and the Notes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77aaa-77bbbb), as in effect on the date on which this Indenture is qualified
under the TIA, except as provided by Section 9.3 hereof.
"Total Assets" means, with respect to any Person as of any date, the
total consolidated assets of such Person and its Subsidiaries as of such date,
as reflected on the most recently available internal consolidated financial
statements of such Person prepared in accordance with GAAP.
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.6 hereof.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Unrestricted 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:
(1) has no Indebtedness other than Non-Recourse Debt;
18
25
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of
the Company;
(3) is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or
(b) to maintain or preserve such Person's financial condition
or to cause such Person to achieve any specified levels of
operating results; and
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or
any of its Restricted Subsidiaries.
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 by Section 4.7 hereof.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount
of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including
payment at final maturity, in respect 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
(2) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person and/or by one or more Wholly Owned Restricted
Subsidiaries of such Person.
SECTION 1.1. OTHER DEFINITIONS
Defined in
Term Section
"Affiliate Transaction".................................................4.11
"Asset Sale Offer"......................................................4.10
"Asset Sale Offer Purchase Date"........................................4.10
"Asset Sale Offer Trigger Date".........................................4.10
"Calculation Date"......................................................1.01
"Change of Control Offer"...............................................4.16
"Change of Control Payment".............................................4.16
19
26
"Change of Control Payment Date"........................................4.16
"Covenant Defeasance"....................................................8.3
"DTC"....................................................................2.3
"Event of Default".......................................................6.1
"Excess Proceeds".......................................................4.10
"Funding Guarantor".....................................................11.6
"incur"..................................................................4.9
"Legal Defeasance".......................................................8.2
"Offer Amount"..........................................................4.10
"Offer Period"..........................................................4.10
"Paying Agent"...........................................................2.3
"Permitted Debt".........................................................4.9
"Purchase Date"..........................................................3.9
"Registrar"..............................................................2.3
"Regulation S Global Note"...............................................2.6
"Restricted Payments"....................................................4.7
"Series A Notes".........................................introductory clause
"Series B Notes".........................................introductory clause
SECTION 1.2. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligors" on the Notes means the Company and any successor obligor
upon the Notes and not otherwise defined herein.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein have the meanings so assigned to them.
SECTION 1.3. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
20
27
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement or
successor sections or rules adopted by the SEC from time to
time.
21
28
ARTICLE 2.
THE NOTES
SECTION 2.1. FORM AND DATING.
The Notes, the notation thereon relating to the Subsidiary Guarantees
and the Trustee's certificate of authentication shall be substantially in the
form of Exhibit A hereto, the terms of which are incorporated in and made part
of this Indenture. The Notes may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Company is subject
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be issued initially in denominations of $1,000 and integral multiples
thereof. Notes and the notation thereon relating to the Subsidiary Guarantees
issued in global form shall be substantially in the form of Exhibit A attached
hereto (including the text referred to in footnote 1 and the additional schedule
referred to in footnote 5 thereto). Notes and the notation thereon relating to
the Subsidiary Guarantees issued in definitive form shall be substantially in
the form of Exhibit A attached hereto (but without including the text referred
to in footnote 1 and the additional schedule referred to in footnote 5 thereto).
Each Global Note shall represent such of the outstanding Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate 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 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
2.6 hereof.
SECTION 2.2. EXECUTION AND AUTHENTICATION.
Two Officers of the Company shall sign the Notes by manual or facsimile
signature. The seal of the Company, if any, shall be reproduced on the Notes and
may be in facsimile form. 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. Each Guarantor shall execute the Subsidiary Guarantee in
the manner set forth in Section 11.8. 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 Indenture.
The form of the Trustee's certificate of authentication to be borne by the Notes
shall be substantially as set forth in Exhibit A attached hereto. The Trustee
shall, upon a written order of the Company signed by two Officers of the Company
directing the Trustee to authenticate the Notes and certifying that all
conditions precedent to the issuance of the Notes contained herein have been
complied with, 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 2.7 hereof. The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Notes. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or Affiliates of the Company.
22
29
SECTION 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and (ii) 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, Registrar or co-registrar without prior notice to any Holder. The
Company or any of its Subsidiaries may act as Paying Agent, Registrar or
co-registrar. The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the TIA. Such agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such, and shall be entitled to appropriate compensation in accordance with
Section 7.7 hereof. 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.
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company will require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, or interest (including Additional Interest), if
any, on the Notes, and will promptly notify the Trustee of any Default by the
Company in making any such payment. While any such Default continues, the
Trustee may require a Paying Agent to pay all such money held by it to the
Trustee. The Company at any time may require a Paying Agent to pay all such
money held by it to the Trustee and to account for any funds disbursed by it
prior to such time. 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
delivered to the Trustee. If the Company or a Subsidiary acts as Paying Agent,
such Person shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by such Person as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent.
SECTION 2.5. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee, at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders,
including the aggregate principal amount of Notes held by each thereof, and the
Company shall otherwise comply with TIA Section 312(a).
23
30
SECTION 2.6. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Certificated Securities. When
Certificated Securities are presented by a Holder to the Registrar with a
request:
(x) to register the transfer of the Certificated
Securities; or
(y) to exchange such Certificated Securities for an equal
principal amount of Certificated Securities of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Certificated Securities presented or surrendered for register of transfer or
exchange:
(i) shall be 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; and
(ii) in the case of a Certificated Security that
is a Transfer Restricted Security, such
request shall be accompanied by the
following additional information and
documents, as applicable:
(A) if such Transfer Restricted Security
is being delivered to the Registrar
by a Holder for registration in the
name of such Holder, without
transfer, a certification to that
effect from such Holder (in
substantially the form of Exhibit B
attached hereto); or
(B) if such Transfer Restricted Security
is being transferred to a "qualified
institutional buyer" (as defined in
Rule 144A under the Securities Act)
in accordance with Rule 144A under
the Securities Act or pursuant to an
exemption from registration in
accordance with Rule 144 under the
Securities Act, or pursuant to an
exemption from registration in
accordance with Rule 144 or Rule 904
under the Securities Act or pursuant
to an effective registration
statement under the Securities Act,
a certification to that effect from
such Holder (in substantially the
form of Exhibit B (or, if pursuant
to Rule 904, Exhibit C) attached
hereto).
(b) Transfer of a Certificated Security for a Beneficial Interest
in a Global Note. A Certificated Security may not be exchanged for a beneficial
interest in a Global Note except upon satisfaction of the requirements set forth
below. Upon receipt by the Trustee of a Certificated Security, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Trustee, together with:
(i) if such Certificated Security is a Transfer
Restricted Security, a certification from the Holder
thereof (in substantially the form of Exhibit B
hereto) to the effect that such Certificated Security
is being transferred by such Holder
24
31
either (x) to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act or
(y) based upon an Opinion of Counsel from such Holder
or the transferee reasonably acceptable to the
Company, the Trustee and to the Registrar, pursuant
to another exemption from the registration
requirements of the Securities Act provided by Rule
144 under the Securities Act; and
(ii) whether or not such Certificated Security is a
Transfer Restricted Security, written instructions
from the Holder thereof directing the Trustee to
make, or to direct the Note Custodian to make, an
endorsement on the Global Note to reflect an increase
in the aggregate principal amount of the Notes
represented by the Global Note, in which case the
Trustee shall cancel such Certificated Security in
accordance with Section 2.11 hereof and cause, or
direct the Note Custodian to cause, in accordance
with the standing instructions and procedures
existing between the Depositary and the Note
Custodian, the aggregate principal amount of Notes
represented by the Global Note to be increased
accordingly. If no Global Notes are then outstanding,
the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.2
hereof, the Trustee shall authenticate, a new Global
Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture and the procedures of
the Depositary therefor, which shall include restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (e) of this Section 2.6), a Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(d) Transfer of a Beneficial Interest in a Global Note for a
Certificated Security.
(i) Any Person having a beneficial interest in a Global
Note may upon request exchange such beneficial
interest for a Certificated Security. Upon receipt by
the Trustee of written instructions or such other
form of instructions as is customary for the
Depositary, from the Depositary or its nominee on
behalf of any Person having a beneficial interest in
a Global Note, and, in the case of a Transfer
Restricted Security, the following additional
information and documents (all of which may be
submitted by facsimile):
(A) if such beneficial interest is being
transferred to the Person designated by the
Depositary as being the beneficial owner, a
certification to that effect; or
(B) if such beneficial interest is being
transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule
25
32
144A under the Securities Act or pursuant to
an exemption from registration in accordance
with Rule 144 or Rule 904 under the
Securities Act or pursuant to an effective
registration statement under the Securities
Act, a certification to that effect from the
transferor (in substantially the form of
Exhibit B (or, if pursuant to Rule 904,
Exhibit C) attached hereto);
in which case the Trustee or the Note Custodian, at
the direction of the Trustee, shall, in accordance
with the standing instructions and procedures
existing between the Depositary and the Note
Custodian, cause the aggregate principal amount of
Global Notes to be reduced accordingly and, following
such reduction, the Company shall execute and the
Trustee shall authenticate and deliver to the
transferee, a Certificated Security in the
appropriate principal amount.
(ii) Certificated Securities issued in exchange for a
beneficial interest in a Global Note pursuant to this
Section 2.6(d) shall be registered in such names and
in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Certificated
Securities to the Persons in whose names such Notes
are so registered.
(e) Authentication of Certificated Securities in Absence of Depositary.
If at any time:
(i) the Depositary for the Notes notifies the Company
that the Depositary is unwilling or unable to
continue as Depositary for the Global Notes or has
ceased to be a clearing agency registered under the
Exchange Act and, in either case, a successor
Depositary for the Global Notes is not appointed by
the Company within 90 days after delivery of such
notice; or
(ii) the Company, at its sole discretion, notifies the
Trustee in writing it elects to cause the issuance of
Certificated Securities under this Indenture,
then the Company shall execute, and the Trustee shall, upon
receipt of an authentication order in accordance with Section
2.2 hereof, authenticate and deliver, Certificated Securities
in an aggregate principal amount equal to the principal amount
of the Global Notes in exchange for such Global Notes.
(f) Legends.
(i) Except as permitted by the following paragraphs (ii)
and (iii), each Note certificate evidencing Global
Notes and Certificated Securities (and all Notes
issued in exchange therefor or substitution thereof)
shall bear legends in substantially the following
form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
26
33
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
(A) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) (A "QIB") OR (B) IT HAS ACQUIRED THIS NOTE IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT;
(B) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144 UNDER THE SECURITIES ACT, (E) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY), OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH
THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION; AND
(C) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS
A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security
represented by a Global Note) pursuant to Rule 144
under the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted
Security that is a Certificated Security,
the Registrar shall permit the Holder
thereof to exchange
27
34
such Transfer Restricted Security for a Certificated
Security that does not bear the legend set forth in
(i) above and rescind any restriction on the transfer
of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted
Security represented by a Global Note, such
Transfer Restricted Security shall not be
required to bear the legend set forth in (i)
above, but shall continue to be subject to
the provisions of Section 2.6(c) hereof;
provided, however, that with respect to any
request for an exchange of a Transfer
Restricted Security that is represented by a
Global Note for a Certificated Security that
does not bear the legend set forth in (i)
above, which request is made in reliance
upon Rule 144, the Holder thereof shall
certify in writing to the Registrar that
such request is being made pursuant to Rule
144 (such certification to be substantially
in the form of Exhibit B attached hereto).
(iii) Notwithstanding the foregoing, upon consummation of
the Registered Exchange Offer, the Company shall
issue and, upon receipt of an authentication order in
accordance with Section 2.2 hereof, the Trustee shall
authenticate, Series B Notes in exchange for Series A
Notes accepted for exchange in the Registered
Exchange Offer, which Series B Notes shall not bear
the legend set forth in (i) above, and the Registrar
shall rescind any restriction on the transfer of such
Notes, in each case unless the Holder of such Series
A Notes is either (A) a broker-dealer who purchased
such Series A Notes directly from the Company to
resell pursuant to Rule 144A or any other available
exemption under the Securities Act, (B) a Person
participating in the distribution of the Series A
Notes or (C) a Person who is an affiliate (as defined
in Rule 144 under the Securities Act) of the Company.
(g) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall
authenticate Certificated Securities and Global Notes
at the Registrar's request.
(ii) No service charge shall be made to a Holder 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 3.6, 4.10,
4.16 and 9.5 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.
28
35
(iv) All Certificated Securities and Global Notes issued
upon any registration of transfer or exchange of
Certificated Securities or Global Notes shall be the
valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this
Indenture, as the Certificated Security or Global
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 Notes during a period beginning at
the opening of business 15 days before the
date on which a notice of redemption is
mailed under Section 3.3 hereof and ending
at the close of business on the date on
which such notice is mailed; or
(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, premium, if any, interest (including
Additional Interest), if any, on such Note, and
neither the Trustee, any Agent nor the Company shall
be affected by notice to the contrary.
(vii) The Trustee shall authenticate Certificated
Securities and Global Notes in accordance with the
provisions of Section 2.2 hereof.
(viii) Each Holder of a Note agrees to indemnify the Trustee
against any liability that may result from the
transfer, exchange or assignment of such Holder's
Note in violation of any provision of this Indenture
and/or applicable United States federal or state
securities law.
(ix) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with
any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any
transfers between or among Depositary participants or
beneficial owners of interests in any Global Note)
other than to require delivery of such certificates
and other documentation or evidence as are expressly
required by the terms of, this Indenture, and to
29
36
examine the same to determine substantial compliance
as to form with the express requirements hereof.
(h) Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in Global Notes have been exchanged for Certificated
Securities, or are redeemed, repurchased or canceled, all Global Notes 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 Certificated Securities, or are redeemed,
repurchased or canceled, 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 the Note Custodian, at the direction of the
Trustee, to reflect such reduction.
(i) Transfer to Non-U.S. Persons.
The following additional provisions shall apply with respect to the
registration of any proposed transfer of a Transfer Restricted Security to any
"non-U.S. person" (as defined in Regulation S of the Securities Act):
(i) the Registrar shall register the transfer of any Transfer
Restricted Security if (x) the requested transfer is after the second
anniversary of the Issue Date; provided, however, that neither the
Company nor any Affiliate of the Company has held any beneficial
interest in such Note, or portion thereof, at any time on or prior to
the second anniversary of the Issue Date and such transfer can
otherwise be lawfully made under the Securities Act without registering
such Initial Notes thereunder or (y) the proposed transferor has
delivered to the Registrar a certificate substantially in the form of
Exhibit C hereto;
(ii) if the Notes to be transferred consist of Certificated
Securities which, after transfer, are to be evidenced by an interest in
a Global Note sold in reliance on Regulation S under the Securities Act
(a "Regulation S Global Note") upon receipt by the Registrar of (x)
written instructions given in accordance with the Depository's and the
Registrar's procedures and (y) the appropriate certificate, if any,
required by clause (y) of paragraph (i) above, together with any
required legal opinions and certifications, the Registrar shall
register the transfer and reflect on its books and records the date and
an increase in the principal amount of the Regulation S Global Note in
an amount equal to the principal amount of Certificated Securities to
be transferred, and the Trustee shall cancel the Certificated
Securities so transferred;
(iii) if the Notes to be transferred consist of a transfer of
an interest in a Global Note, upon receipt by the Registrar of (x)
written instructions given in accordance with the Depository's and the
Registrar's procedures and (y) the appropriate certificate, if any,
required by clause (y) of paragraph (i) above, together with any
required legal opinions and certifications, the Registrar shall
register the transfer and reflect on its books and records the date and
(A) a decrease in the principal amount of the Global Note from which
such interests are to be transferred in an amount equal to the
principal amount of the Notes to be transferred and (B) an increase in
the principal amount of the Regulation
30
37
S Global Note in an amount equal to the principal amount of the Global
Note to be transferred; and
(iv) until the 41st day after the Issue Date (the "Restricted
Period"), an owner of a beneficial interest in the Regulation S Global
Note may not transfer such interest to a transferee that is a U.S.
person or for the account or benefit of a U.S. person within the
meaning of Rule 902(o) of the Securities Act. During the Restricted
Period, all beneficial interests in the Regulation S Global Note shall
be transferred only through Euroclear System or Clearstream Banking,
S.A., either directly if the transferor and transferee are participants
in such systems, or indirectly through organizations that are
participants.
SECTION 2.7. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, the Note
Custodian, the Depositary 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 the written order of the Company signed by two
Officers of the Company, shall authenticate a replacement Note if the Trustee's
requirements for replacements of Notes are met. 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 and the Trustee may charge for their expenses in replacing a Note. Every
replacement Note is an additional obligation of the Company and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
SECTION 2.8. 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. If a Note is replaced pursuant to Section 2.7
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;
provided, however, that the aggregate principal amount of the Notes shall not
increase by reason of this Section 2.8 or Section 2.7 hereof. If the principal
amount of any Note is considered paid under Section 4.1 hereof, it ceases to be
outstanding and interest on it ceases to accrue. Subject to Section 2.9 hereof,
a Note does not cease to be outstanding because the Company, a Guarantor or an
Affiliate of the Company holds the Note; provided, however, that in determining
the maximum principal amount of Notes that the Company may redeem pursuant to
Section 3.7(b) hereof, Notes owned by the Company or any Subsidiary thereof
shall not be deemed outstanding. If the Paying Agent (other than the Company or
a Subsidiary 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.
31
38
SECTION 2.9. 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, a Guarantor or by any Affiliate thereof shall be considered as though
not outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that a Responsible Officer actually knows to be so owned shall be so
considered.
SECTION 2.10. TEMPORARY NOTES.
Until Certificated Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a written order
of the Company signed by two Officers of the Company directing the Trustee to
authenticate the Notes and certifying that all conditions precedent to the
issuance of the Notes contained herein have been complied with. Temporary Notes
shall be substantially in the form of Certificated Securities but may have
variations that the Company and the Trustee consider 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 Certificated
Securities in exchange for temporary Notes. Holders of temporary Notes shall be
entitled to all of the benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall return
canceled Notes to the Company. The Company may not issue new Notes to replace
Notes that the Company has redeemed or paid or that have been delivered to the
Trustee for cancellation.
SECTION 2.12. RECORD DATE.
The record date for purposes of determining the identity of Holders of
the Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided for
in TIA Section 316(c).
SECTION 2.13. 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, which date shall be at the earliest practicable
date but in all events at least five Business Days prior to the payment date, in
each case at the rate provided in the Notes and in Section 4.1 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, with the consent of the Trustee, fix or
32
39
cause to be fixed each such special record date and payment date. At least 15
days before the special record date, the Company (or, upon the written request
of the Company, the Trustee in the name and at the expense of the Company) shall
mail or cause to be mailed to the Holders a notice that states the special
record date, the related payment date and the amount of such interest to be
paid.
SECTION 2.14. 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, however, 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
omission of such numbers. The Company shall promptly notify the Trustee of any
change in the CUSIP numbers.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.1. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof and paragraph 5 of the Notes, it
shall furnish to the Trustee, at least 30 days but not more than 60 days before
the redemption date, an Officers' Certificate setting forth (i) the Section of
this Indenture pursuant to which the redemption shall occur, (ii) the redemption
date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption
price.
If the Company is required to make an offer to redeem Notes pursuant to
the provisions of Section 4.10 or 4.16 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 Section of this Indenture pursuant
to which the redemption shall occur, (ii) the redemption date, (iii) the maximum
principal amount of Notes to be redeemed, (iv) the redemption price and (v)
further setting forth a statement to the effect that (a) the Company or one of
its Subsidiaries has effected an Asset Sale and the conditions set forth in
Section 4.10 have been satisfied or (b) a Change of Control has occurred and the
conditions set forth in Section 4.16 have been satisfied.
The Company shall also provide the Trustee with any additional
information that the Trustee reasonably requests in connection with any
redemption.
Except as expressly set forth herein, the Company shall have no right
to redeem Notes.
SECTION 3.2. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders in compliance
with the requirements of the principal
33
40
national securities exchange, if any, on which the Notes are listed or, if the
Notes are not so listed, on a pro rata basis, by lot or in accordance with any
other method the Trustee deems fair and appropriate; provided, however, that no
Notes of $1,000 or less shall be redeemed in part. 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 Company shall promptly notify the Trustee in writing of the
listing of the Notes on any national securities exchange and of any delisting
thereof. 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
them selected shall be in amounts of $1,000 or whole multiples of $1,000; except
that if all 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
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption. In the event the Company is required to make an
offer to redeem Notes pursuant to Sections 4.10 or 4.16 hereof and the amount of
the Excess Proceeds from the Asset Sale are not evenly divisible by $1,000, the
Trustee shall promptly refund to the Company any remaining Excess Proceeds such
that the amount of Excess Proceeds shall be evenly distributed by $1000 (and no
more).
SECTION 3.3. NOTICE OF REDEMPTION.
Subject to the provisions of Section 4.10 or 4.16 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 (including CUSIP numbers) and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, 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 in the name of the Holder
thereof upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
34
41
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, 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 3.4. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3
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 3.5. DEPOSIT OF REDEMPTION PRICE.
Not less than one Business Day prior to the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent immediately
available funds sufficient to pay the redemption price of and accrued interest
(including Additional Interest), if any, on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest
(including Additional 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 4.1 hereof.
SECTION 3.6. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company, a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
35
42
SECTION 3.7. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) below of this Section 3.7,
the Company shall not have the option to redeem the Notes prior to April 1,
2006. On or after April 1, 2006, the Company shall have the option to redeem the
Notes at any time, in whole or in part, upon not less than 30 nor more than 60
days' prior written notice, at the redemption prices (expressed as percentages
of principal amount) set forth below plus accrued and unpaid interest (including
Additional Interest), if any, thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on April 1 of each of the
years indicated below:
YEAR PERCENTAGE
---- ----------
2006............................................105.25%
2007............................................103.50%
2008............................................101.75%
2009 and thereafter.............................100.00%
(b) Notwithstanding the provisions of clause (a) of this Section
3.7, prior to April 1, 2004, the Company may redeem up to 35% in aggregate
principal amount of the Notes originally issued under this Indenture at a
redemption price of 110.50% of the principal amount thereof, plus accrued and
unpaid interest (including Additional Interest), if any, thereon to the
redemption date, with the net cash proceeds of one or more Public Equity
Offerings; provided,, that at least $185.25 million in aggregate principal
amount of the Notes remain outstanding following such redemption (excluding
those Notes owned by the Company or any Subsidiary thereof); and provided
further, that such redemption shall have occurred within 60 days of the closing
of any such Public Equity Offering.
(c) Any redemption pursuant to this Section 3.7 shall be made, to
the extent applicable, pursuant to the provisions of Sections 3.1 through 3.6
hereof.
SECTION 3.8. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.16 hereof, the Company
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
ARTICLE 4.
COVENANTS
SECTION 4.1. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest and Additional Interest, if any, on the Notes on the dates and
in the manner provided in the Notes. Principal of, premium, if any, and interest
(including Additional Interest), if any, on the Notes 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
36
43
the Company in immediately available funds and designated for and sufficient to
pay all principal of, premium, if any, and interest (including any Additional
Interest), if any, on the Notes then due. The Paying Agent shall return to the
Company, no later than five days following the date of payment, any money
(including accrued interest) that exceeds such amount of principal of, premium,
if any, interest (including Additional Interest), if any, paid on the Notes. The
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, and interest
on overdue installments of interest, to the extent lawful, at a rate per annum
equal to the rate of interest applicable to the Notes. All such default interest
shall be payable on demand.
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain within the City and State of New York an
office or agency (which may be an office of the Trustee or an affiliate of the
Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, 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 within the City and
State 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, located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as one such office or agency of the Company in
accordance with Section 2.3 hereof.
SECTION 4.3. REPORTS.
(a) Whether or not required by the rules and regulations of the
SEC, so long as any Notes are outstanding, the Company shall furnish to 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 thereon 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, whether or not required by the rules and regulations of
the SEC, the Company shall file a copy of all such information and reports with
the SEC for public availability (unless the SEC will not accept such a filing)
and make such information available to securities analysts and prospective
investors upon request.
37
44
(b) The Company shall at all times comply with TIA Section 314(a).
(c) For so long as any Notes remain outstanding and are not freely
transferable under the Securities Act, the Company shall furnish to the Holders
and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
(d) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of the covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
(e) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required 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 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 4.4. 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 each has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that, to the best of his or her knowledge, each has
kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action each 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, premium, if any, or interest (including
Additional Interest), if any, on the Notes is prohibited or if such event has
occurred, a description of the event and what action each is taking or proposes
to take with respect thereto.
(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 4.3(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation reasonably satisfactory to the
Trustee) 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
38
45
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, forthwith 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 propose to
take with respect thereto.
(d) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of the covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.5. TAXES.
The Company shall, 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.
SECTION 4.6. STAY, EXTENSION AND USURY LAWS.
The Company and each Guarantor covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each Guarantor (to the extent that each of them 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 4.7. RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(1) 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
39
46
Interests in their capacity as such (other than dividends or
distributions payable in Equity Interests (other than Disqualified
Stock) of the Company or to the Company or a Restricted Subsidiary of
the Company);
(2) 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 (i) the
Company or any Unrestricted Subsidiary or (ii) any Restricted
Subsidiary held by any Affiliate of the Company (other than, in either
case, any such Equity Interests owned by the Company or any of its
Restricted Subsidiaries);
(3) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value, any
Subordinated Indebtedness except (i) a payment of interest or principal
at the Stated Maturity thereof or (ii) the purchase, repurchase or
other acquisition of any such Subordinated Indebtedness purchased in
anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case, due within one year of the
date of such purchase, repurchase or other acquisition; or
(4) make any Restricted Investment (all such payments and
other actions set forth in clauses (1) through (4) 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;
(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 Section
4.9(a) hereof; and
(iii) such Restricted Payment, together with the aggregate of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issue Date (excluding Restricted Payments
permitted by clauses (2) and (3) of paragraph (c) below), is less than
the sum, without duplication, of:
(w) 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
(x) 100% of the aggregate net cash proceeds
received by the Company since the Issue Date
as a contribution to its common equity
capital
40
47
or from the issue or sale of Equity
Interests of the Company (other than
Disqualified Stock) or from the issue or
sale of convertible or exchangeable
Disqualified Stock or convertible or
exchangeable debt securities of the Company
that have been converted into or exchanged
for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt
securities) sold to a Subsidiary of the
Company), plus
(y) 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, plus
(z) $5.0 million.
(b) Notwithstanding paragraph (a) above, the Company may declare
or pay a dividend if:
(1) the dividend is declared or paid within one year of
the Issue Date;
(2) the dividend relates to common stock of the Company
that is listed on a national securities exchange;
(3) no Default or Event of Default has occurred and is
continuing;
(4) the Company could have paid the dividend pursuant to
Section 4.7(a)(iii) above but without having to satisfy the Fixed
Charge Coverage Ratio test as contemplated by 4.7(a)(ii) above; and
(5) the amount of the dividend, when taken together with
the aggregate amount of all other dividends paid by the Company
pursuant to this Section 4.7(b), does not exceed $10.0 million.
(c) Further, so long as no Default or Event of Default has
occurred and is continuing or would be caused thereby, Section 4.7(a) above
shall not prohibit:
(1) 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 Indenture;
(2) the redemption, repurchase, retirement, defeasance or
other acquisition of any Subordinated Indebtedness of
the Company or any Guarantor or of any Equity
Interests of the Company or any Restricted Subsidiary
in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a
Subsidiary of the Company) of, Equity
41
48
Interests of the Company (other than Disqualified
Stock); provided, however, 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 (x)
of Section 4.7(a)(iii) above;
(3) the defeasance, redemption, repurchase or other
acquisition of Subordinated Indebtedness of the
Company or any Guarantor with the net cash proceeds
from an incurrence of Permitted Refinancing
Indebtedness;
(4) the payment of any dividend by a Restricted
Subsidiary of the Company to the holders of its
common Equity Interests on a pro rata basis; and
(5) the repurchase or other acquisition of shares of
Capital Stock of the Company or any of its
Subsidiaries from employees, former employees,
directors or former directors of the Company or any
of its Subsidiaries (or permitted transferees of such
employees, former employees, directors or former
directors), pursuant to the terms of the agreements
(including employment agreements) or plans (or
amendments thereto) approved by the Board of
Directors under which such individuals purchase or
sell or are granted the option to purchase or sell,
shares of such Capital Stock; provided, however, that
the aggregate amount of such repurchases and other
acquisitions shall not exceed $1.0 million in any
calendar year (with unused amounts in any calendar
year (without giving effect to any carry-forward from
any prior year) being permitted to be carried over
for the next succeeding calendar year).
(d) 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 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 Section 4.7 shall be determined by the Board of Directors pursuant to a
Board Resolution that shall be delivered to the Trustee. Not later than the date
of making any Restricted Payment, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section 4.7
were computed.
SECTION 4.8. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
(a) 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:
(1) pay dividends or make any other distributions on its
Capital Stock to the Company or any of the Company's Restricted
Subsidiaries, or with respect to any other
42
49
interest or participation in, or measured by, its
profits, or pay any Indebtedness owed to the Company
or any of the Company's Restricted Subsidiaries;
(2) make loans or advances to the Company or any of the
Company's Restricted Subsidiaries; or
(3) transfer any of its properties or assets to the
Company or any of the Company's Restricted
Subsidiaries.
(b) However, the restrictions described in paragraph (a) above
will not apply to encumbrances or restrictions existing under
or by reason of:
(1) Credit Facilities;
(2) Existing Indebtedness as in effect on the Issue Date
and Permitted Refinancing Indebtedness, provided, that such Permitted
Refinancing Indebtedness is, in the good faith judgment of the Board of
Directors, not materially less favorable, taken as a whole, with
respect to such dividend and other payment restrictions than those
contained in the Indebtedness being refinanced;
(3) the Indenture and the Notes;
(4) applicable law;
(5) 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 Indenture to be
incurred;
(6) customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent with past
practices;
(7) 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 (3) of paragraph
(a) above;
(8) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by such Restricted
Subsidiary pending its sale or other disposition;
43
50
(9) Liens securing Indebtedness otherwise permitted to be
incurred pursuant to Sections 4.9 and 4.12 hereof that limit the right
of the Company or any of its Restricted Subsidiaries to dispose of the
assets subject to such Lien;
(10) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements and
other similar agreements entered into in the ordinary course of
business; and
(11) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business.
SECTION 4.9. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
(a) 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 and any Guarantor may incur
Indebtedness (including Acquired Debt), and the Company may issue Disqualified
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 is issued would have been at least 2.50 to 1.00 (if
such incurrence occurs during the period from the Issue Date to the third
anniversary of the Issue Date) and 2.75 to 1.00 (if such incurrence occurs after
the third anniversary of the Issue Date), determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred, or the Disqualified Stock had been
issued, as the case may be, at the beginning of such four-quarter period.
(b) So long as no Default or Event of Default shall have occurred and
be continuing or would be caused thereby, paragraph (a) above shall not prohibit
the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(1) the incurrence by the Company and its Restricted
Subsidiaries of Indebtedness under Credit Facilities; provided, however,
that the aggregate principal amount of all Indebtedness outstanding
under all Credit Facilities after giving effect to such incurrence (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and its Restricted
Subsidiaries thereunder) does not exceed an amount equal to $75.0
million less the aggregate amount of all Net Proceeds of Asset Sales
applied by the Company or any of its Subsidiaries since the Issue Date
to repay Indebtedness under a Credit Facility pursuant to Section 4.10
hereof;
(2) the incurrence by the Company and its Subsidiaries of
Existing Indebtedness;
44
51
(3) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the Subsidiary Guarantees;
(4) 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 not to exceed $25.0 million
at any time outstanding;
(5) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace,
Indebtedness (other than intercompany Indebtedness) that was permitted
to be incurred under Section 4.9(a) above or clauses (2), (3), (4) or
(11) of this paragraph (b);
(6) 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:
(a) if the Company or any Guarantor is the obligor on
such Indebtedness, such Indebtedness must be
expressly subordinated to the prior payment in full
in cash of all Obligations with respect to the Notes,
in the case of the Company, or the Subsidiary
Guarantee of such Guarantor, in the case of a
Guarantor; and
(b) (i) 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 Wholly
Owned Restricted Subsidiary thereof and (ii) any sale
or other transfer of any such Indebtedness to a
Person that is not either the Company or a Wholly
Owned Restricted Subsidiary thereof 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 (6);
(7) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations under or with respect to (a)
Interest Rate Agreements not for the purpose of speculation and (b)
Currency Agreements entered into in the ordinary course of business and
not for the purpose of speculation;
(8) Indebtedness of the Company or any Restricted Subsidiary in
respect of performance bonds and surety or appeal bonds entered into by
the Company and the Restricted Subsidiaries in the ordinary course of
their business;
45
52
(9) Indebtedness of the Company or any Restricted Subsidiary
arising from the honoring by a bank or other financial institution of a
check, draft or similar instrument inadvertently (except in the case of
daylight overdrafts) drawn against insufficient funds in the ordinary
course of business, provided that such Indebtedness is satisfied within
three business days of incurrence;
(10) the Guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this Section
4.9;
(11) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including
all Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (11), not to
exceed $25.0 million;
(12) 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 (12); and
(13) the accrual of interest, 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; provided, in each such case, that
the amount thereof is included in Fixed Charges of the Company as
accrued.
For purposes of determining compliance with this Section 4.9, in the event
that an item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (13) of paragraph
(b) above, or is entitled to be incurred pursuant to paragraph (a) of this
Section 4.9, the Company will be permitted to classify such item of Indebtedness
on the date of its incurrence in any manner that complies with this Section 4.9.
SECTION 4.10. ASSET SALES.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the
case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or
sold or otherwise disposed of;
(2) such fair market value is determined by the Board of
Directors pursuant to a Board Resolution as set forth
in an Officers' Certificate delivered to the Trustee
(or determined by the Company and evidenced by an
Officers' Certificate delivered to the Trustee in the
case of an Asset Sale of assets or
46
53
Equity Interests with a fair market value of less
than $2.5 million) and, in the case of an Asset Sale
with respect to assets having a fair market value in
excess of $35.0 million, the Company shall deliver to
the Trustee an opinion of an accounting, appraisal or
investment banking firm of national standing that
such Asset Sale is fair to the Company or the
applicable Restricted Subsidiary from a financial
point of view; and
(3) at least 90% of the consideration therefor received
by the Company or such Restricted Subsidiary is in
the form of cash or Cash Equivalents; provided,
however, that the amount of (x) 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
liabilities that are by their terms subordinated to
the Notes or any Subsidiary Guarantee) that are
assumed by the transferee of any such assets pursuant
to a customary novation agreement that releases the
Company or such Restricted Subsidiary from further
liability and (y) any securities, notes or other
obligations received by the Company or any such
Restricted Subsidiary from such transferee that are
promptly converted by the Company or any such
Restricted Subsidiary into cash (to the extent of the
cash received), shall be deemed to be cash for
purposes of this provision.
(b) Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company may apply such Net Proceeds at its
option:
(1) to repay its Senior Debt (and, in the event any such
Senior Debt constitutes revolving Indebtedness, there shall be a
corresponding and permanent reduction in the revolving commitment with
respect thereto in an amount equal to the amount of such repayment);
(2) to acquire all or substantially all of the assets of,
or a majority of the Voting Stock of, another Person;
(3) to make a capital expenditure; or
(4) to acquire other long-term assets that are used or
useful in the business of the Company.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving Indebtedness under a Credit Facility or otherwise
invest such Net Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as described
in clauses (1) through (4) above of this paragraph (b) shall be deemed to
constitute "Excess Proceeds."
(c) As soon as practicable, but in no event later than 30 Business
Days, after any date (each, an "Asset Sale Offer Trigger Date") that the
aggregate amount of Excess Proceeds exceeds $10.0 million, the Company shall
commence an offer to purchase the maximum principal
47
54
amount of Notes and other Pari Passu Debt of the Company containing provisions
similar to those set forth herein with respect to an offer to purchase or redeem
such Indebtedness with the proceeds of sales of assets that may be purchased out
of the Excess Proceeds (each, an "Asset Sale Offer"). Any Notes and other Pari
Passu Debt to be purchased pursuant to an Asset Sale Offer shall be purchased
pro rata based on the aggregate principal amount of Notes and such other
applicable Pari Passu Debt outstanding and all Notes shall be purchased at an
offer price in cash (or in respect of such other Pari Passu Debt, in cash and/or
such other property, if any, as may be provided for or permitted by the terms of
such indebtedness) equal to 100% of the principal amount thereof, plus accrued
and unpaid interest (including Additional Interest), if any, to the date of
purchase (or if such Asset Sale Offer is with respect to any discount or zero
coupon securities prior to the date of their full accretion, 100% of the
accreted value thereof on the date of purchase) or, in respect of such other
Pari Passu Debt, such lesser price, if any, as may be provided for by the terms
of such Pari Passu Debt. To the extent that any Excess Proceeds remain after
completion of an Asset Sale Offer, the Company may use the remaining amount for
any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes and such other Pari Passu Debt tendered with respect
to such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee
shall select the Notes and such other Pari Passu Debt to be purchased on a pro
rata basis but in round denominations, which in the case of the Notes shall be
denominations of $1,000 principal amount or multiples thereof. Upon completion
of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(d) The Asset Sale Offer shall set forth the date (the "Asset Sale
Offer Purchase Date"), which shall be no earlier than 30 days but no later than
60 days following the date notice of the Asset Sale Offer has been given, upon
which the Company shall redeem Notes hereunder. The Asset Sale Offer shall
remain open until 5 Business Days prior to the Asset Sale Offer Purchase Date
and no longer, except to the extent that a longer period is required by
applicable law (the "Offer Period"). On the Asset Sale Offer Purchase Date, the
Company shall purchase the principal amount of Notes required to be purchased
pursuant to this Section 4.10 (the "Asset Sale Offer Amount") or, if less than
the Asset Sale 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.
(e) If the Asset Sale Offer 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.
(f) Upon (and in any event within 10 days after) the commencement of an
Asset Sale Offer, the Company shall send, by overnight courier, a notice to the
Trustee and to 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 and the procedures to withdraw their election to accept such
offer. The Asset Sale Offer shall be made to all Holders of Notes. The notice,
which shall, to the extent not inconsistent with this Indenture, govern the
terms of the Asset Sale Offer, shall state:
48
55
(1) that the Asset Sale Offer is being made pursuant to
this Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
(2) the Asset Sale Offer Amount, the purchase price of the
Notes and any other Pari Passu Debt (plus accrued but unpaid interest
(including Additional Interest) to the Asset Sale Purchase Date) and
the Asset Sale Offer Purchase Date, which shall be established in a
manner consistent with paragraph (d) hereof;
(3) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(4) 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 Asset Sale Offer Purchase Date;
(5) 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;
(6) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with the
form titled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, or transfer by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice at least three Business Days before the
Asset Sale Offer Purchase Date;
(7) 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
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;
(8) 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
(9) 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).
Other than as specifically provided in this Section 4.10, any purchase pursuant
to this Section 4.10 shall be made pursuant to the provisions of Sections 3.03
through 3.06 hereof.
49
56
(g) On the Asset Sale Offer Purchase Date, the Company shall (i) accept
for payment the maximum principal amount of Notes or portions thereof validly
tendered and not withdrawn pursuant to the Asset Sale Offer that can be
purchased out of the Excess Proceeds, (ii) deposit with the Trustee or the
Paying Agent the aggregate purchase price of all Notes or portions thereof
accepted for payment and any accrued and unpaid interest (including Additional
Interest), if any, on such Notes as of the Asset Sale Offer Purchase Date, and
(iii) deliver or cause to be delivered to the Trustee all Notes so tendered
pursuant to the Asset Sale Offer. If less than all of the Notes tendered
pursuant to the Asset Sale Offer are accepted for payment by the Company for any
reason consistent with this Indenture, selection of the Notes to be purchased by
the Company shall be in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed or, if the
Notes are not so listed, among Notes of a particular series and Pari Passu Debt
on a pro rata basis by lot or by such other method as the Trustee shall deem
fair and appropriate; provided, however, that Notes accepted for payment in part
shall only be purchased in integral multiples of $1,000. The Paying Agent shall
promptly mail to each Holder of Notes or portions thereof accepted for payment
an amount equal to the purchase price for such Notes plus any accrued and unpaid
interest (including Additional Interest), if any, thereon, and, if applicable,
the Company shall execute and issue, and the Trustee shall promptly authenticate
and mail to such Holder of Notes accepted for payment in part, a new Note equal
in principal amount of any unpurchased portion of the Notes, and any Note not
accepted for payment in whole or in part shall be promptly returned to the
Holder of such Note.
(h) The Company shall announce the results of the Asset Sale Offer to
Holders of the Notes on or as soon as practicable after the Asset Sale Purchase
Date. The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act, and any other securities laws or
regulations in connection with any Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with provisions of
this Section, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section by virtue of its compliance with such securities laws or regulations. In
such event, the Company shall deliver to the Trustee an Opinion of Counsel
regarding such matter and describing such conflict and the reasons for the
deviation from the terms of the Indenture.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
(a) 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:
(1) such Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant
Restricted Subsidiary than those that could have been
obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated
Person; and
50
57
(2) 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 $1.0 million, a Board Resolution set
forth in an Officers' Certificate certifying
that such Affiliate Transaction complies
with this Section 4.11(a) 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 $10.0 million, an opinion as to the
fairness to the Company and/or the
applicable Restricted Subsidiary of such
Affiliate Transaction from a financial point
of view issued by an accounting, appraisal
or investment banking firm of national
standing.
(b) The following items shall not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of paragraph
(a) above:
(1) 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;
(2) transactions between or among the Company and/or the
Guarantors;
(3) Restricted Payments that are permitted by Section 4.7
hereof;
(4) any issuance of securities, or other payments, awards
or grants in cash, securities or otherwise pursuant
to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the
Board of Directors;
(5) the grant of stock options or similar rights to
employees and directors of the Company pursuant to
plans approved by the Board of Directors;
(6) reasonable fees, compensation or employee benefit
arrangements to and indemnity provided for the
benefit of directors, officers or employees of the
Company or any Subsidiary in the ordinary course of
business; and
(7) the issuance or sale of any Equity Interests (other
than Disqualified Stock) of the Company.
51
58
SECTION 4.12. LIENS.
(a) 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 securing Indebtedness, Attributable Debt or trade payables on any
asset now owned or hereafter acquired, or any income or profits therefrom, or
assign or convey any right to receive income therefrom, except Permitted Liens.
(b) If the Company or any Restricted Subsidiary shall create or assume
any Lien that is not permitted, the Company will make or cause to be made
effective provision whereby the Notes will be secured by such Lien equally and
ratably with any and all other Indebtedness thereby secured so long as any such
other Indebtedness shall be so secured. This paragraph (b) will not be deemed a
consent to any Lien or Liens not otherwise permitted nor shall it constitute a
waiver of any Event of Default arising by reason of the existence of such
unpermitted Lien.
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,
however, that the Company or any Restricted Subsidiary of the Company may enter
into a sale and leaseback transaction if:
(1) 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 set
forth in Section 4.9(a); and
(2) the gross cash proceeds of that sale and leaseback transaction
are at least equal to the fair market value, as determined in
good faith by the Board of Directors of the Company pursuant
to a Board Resolution (or as determined in good faith by the
Company in the case of a sale and leaseback transaction
resulting in gross cash proceeds of less than $2.5 million);
and
(3) the transfer of assets in that sale and leaseback transaction
is permitted by, and the Company applies the proceeds of such
transaction in compliance with, Section 4.10 hereof.
SECTION 4.14. LIMITATIONS ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS.
The Company shall not permit any of its Restricted Subsidiaries,
directly or indirectly, to Guarantee any other Indebtedness of the Company
unless such Restricted Subsidiary simultaneously executes and delivers a
supplemental indenture to this Indenture providing for the Guarantee of the
payment of the Notes by such Restricted Subsidiary, which Guarantee shall be
senior to or pari passu with such Restricted Subsidiary's Guarantee of such
other Indebtedness unless such other Indebtedness is Senior Debt, in which case
the Guarantee of the Notes may be subordinated to the Guarantee of such Senior
Debt to at least the same extent as the Notes are subordinated to such Senior
Debt. Any such Guarantee by a Restricted Subsidiary of the Notes
52
59
shall provide by its terms that it will be automatically and unconditionally
released and discharged upon any of the circumstances described in clauses (i)
through (iv) of Section 11.3(a) hereof. Such supplemental indenture shall be in
form and substance satisfactory to the Trustee and such Restricted Subsidiary
shall accede to and assume the obligations of a Guarantor under Articles 11 and
12 hereof (and any other applicable provision of this Indenture) and shall be
accompanied by an Opinion of Counsel. The obligations under this Section 4.14
shall be in addition to, and not in any way in derogation of, the obligations of
the Company under Section 4.19 hereof.
SECTION 4.15. 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 its existence
as a corporation and the corporate, partnership or other existence of each
Restricted Subsidiary, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or each
Restricted Subsidiary thereof and the material rights (charter and statutory),
licenses and franchises of the Company and each Restricted Subsidiary; 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 Restricted 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 4.16. REPURCHASE AT THE OPTION OF HOLDERS - CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, 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 such Holder's Notes pursuant to
the offer described in clause (b) below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest (including Additional Interest), if any, thereon to
the date of purchase (the "Change of Control Payment").
(b) Within 30 days following any Change of Control, the Company shall
mail a notice to the Trustee and each Holder stating:
(1) that a Change of Control has occurred and describing
the transaction or transactions that constitute or
give rise to the Change of Control;
(2) that the Change of Control Offer is being made
pursuant to this Section 4.16 and that all Notes
tendered shall be accepted for payment;
(3) the purchase price and purchase date, which 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");
(4) that any Note not tendered shall continue to accrue
interest;
53
60
(5) that, unless the Company defaults in the payment of
the Change of Control Payment, all Notes accepted for
payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control
Payment Date;
(6) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer shall be
required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on the
reverse of the Notes completed, to the Paying Agent
at the address specified in the notice prior to the
close of business on the third Business Day preceding
the Change of Control Payment Date;
(7) that Holders shall be entitled to withdraw their
election if the Paying Agent receives, not later than
the close of business on the second Business Day
preceding the Change of Control Payment Date, a
facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes
delivered for purchase, and a statement that such
Holder is withdrawing his election to have the Notes
purchased; and
(8) that Holders whose Notes are being purchased only in
part shall be issued new Notes equal in principal
amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal
to $1,000 in principal amount or an integral multiple
thereof.
(c) 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 provisions of
this Section, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section by virtue of its compliance with such securities laws or regulations. In
such event, the Company shall deliver an Opinion of Counsel to the Trustee
describing such conflict and the reasons for the deviation from the terms of the
Indenture.
(d) On the Change of Control Payment Date, the Company shall, to the
extent lawful:
(1) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control
Offer,
(2) 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
(3) 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.
54
61
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 the unpurchased portion of the Notes
surrendered, if any; provided, however, that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof.
(e) The Change of Control provisions described above shall be
applicable whether or not any other provisions of this Indenture are applicable.
(f) Prior to complying with any of the provisions of this Section 4.16,
but in any event within 90 days following a Change of Control, the Company shall
effect one of the following: (i) repay in full in cash all Senior Debt, the
terms of which provide that such Senior Debt is due and payable by reason of the
occurrence of a Change of Control; (ii) make an offer to repay Senior Debt if
the instrument governing such Senior Debt contains a Change of Control Offer
provision similar to this Section 4.16; or (iii) obtain the requisite consents,
if any, under all agreements governing any such outstanding Senior Debt to
permit the repurchase of Notes required by this Section 4.16.
(g) 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.
(h) Notwithstanding the foregoing provisions of this Section, 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 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.
SECTION 4.17. LIMITATION ON OTHER SENIOR SUBORDINATED DEBT.
The Company shall not, and shall not permit any Guarantor or any other
Restricted Subsidiary to, incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any Senior Debt and senior in any respect in right of payment to the
Notes.
SECTION 4.18. LIMITATION ON ISSUANCES AND SALES OF EQUITY INTERESTS IN WHOLLY
OWNED SUBSIDIARIES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose
of any Equity Interests of any Wholly Owned Restricted Subsidiary of the Company
to any Person (other than the Company or a Wholly Owned Restricted Subsidiary of
the Company), unless:
(i) such transfer, conveyance, sale, lease or other
disposition is of all the Equity Interests of such Wholly Owned
Restricted Subsidiary; and
55
62
(ii) the cash Net Proceeds from such transfer, conveyance,
sale, lease or other disposition are applied in accordance with the
provisions of Section 4.10 hereof.
(b) The Company shall not permit any Wholly Owned Restricted Subsidiary
of the Company to issue any of its Equity Interests (other than, if necessary,
shares of its Capital Stock constituting directors' qualifying shares) to any
Person other than to the Company or a Wholly Owned Restricted Subsidiary of the
Company.
SECTION 4.19. ADDITIONAL SUBSIDIARY GUARANTEES
If the Company or any of its Restricted Subsidiaries acquires
or creates another Restricted Subsidiary (other than a Foreign Subsidiary) after
the Issue Date, then that newly acquired or created Restricted Subsidiary shall
become a Guarantor and execute a supplemental indenture in form and substance
satisfactory to the Trustee pursuant to which, among other things, such
Restricted Subsidiary shall accede to and assume the obligations of a Guarantor
under Articles 11 and 12 hereof and shall deliver an Opinion of Counsel to the
Trustee within 10 Business Days of the date on which such Restricted Subsidiary
was acquired or created. Any such Guarantee by a Restricted Subsidiary of the
Notes shall provide by its terms that it will be automatically and
unconditionally released and discharged upon any of the circumstances described
in clauses (i) through (iv) of Section 11.3(a) hereof. Such supplemental
indenture shall be in form and substance satisfactory to the Trustee and such
Restricted Subsidiary shall accede to and assume the obligations of a Guarantor
under Articles 11 and 12 hereof (and any other applicable provision of this
Indenture) and shall be accompanied by an Opinion of Counsel.
56
63
SECTION 4.20. LIMITATION ON RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
(a) Subject to, and in accordance with, the provisions hereof, the
Company may from time to time designate Subsidiaries as "Restricted
Subsidiaries" or "Unrestricted Subsidiaries." As of the Issue Date, all
Subsidiaries of the Company shall be "Restricted Subsidiaries." Upon any change
in designation, the Company shall promptly deliver an Officers' Certificate to
the Trustee notifying it of such designation, the Subsidiary subject to such
designation, the effective date of such designation and a certification (with
supporting calculations, as necessary) that the conditions to such redesignation
as set forth herein have been satisfied.
(b) The Board of Directors of the Company may, if no Default or
Event of Default would arise therefrom, designate an Unrestricted Subsidiary to
be a Restricted Subsidiary, provided, however, that (i) any such redesignation
shall be deemed to be an incurrence as of the date of such redesignation by the
Company and its Restricted Subsidiaries of the Indebtedness (if any) of such
redesignated Subsidiary for purposes of Section 4.9 hereof, and (ii) unless such
redesignated Subsidiary shall not have any Indebtedness outstanding (other than
Permitted Indebtedness), no such designation shall be permitted if immediately
after giving effect to such redesignation and the incurrence of any such
additional Indebtedness (other than Permitted Indebtedness) the Company could
not incur $1.00 of additional Indebtedness under the Fixed Charge Coverage Ratio
test set forth in Section 4.9(a) hereof.
(c) The Board of Directors of the Company also may, if no Default
or Event of Default would arise therefrom, designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if (i) such designation is at that time
permitted under Section 4.7 and (ii) such Subsidiary meets the requirements of
the definition of the term "Unrestricted Subsidiary." 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 Board Resolution giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions and was permitted by Section
4.7 and setting forth in reasonable detail the underlying calculations.
(d) For purposes of Section 4.7, (i) an "Investment" shall be
deemed to have been made at the time any Restricted Subsidiary of the Company is
designated as an Unrestricted Subsidiary in an amount (proportionate to the
Company's equity interest in such Subsidiary) equal to the net worth of such
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
as an Unrestricted Subsidiary and shall reduce the amount available for
Restricted Payments under Section 4.7(a) or the amount available for Permitted
Investments, as applicable, and (ii) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer.
(e) If, at any time, any Unrestricted Subsidiary would fail to
meet the requirements of the definition of the term "Unrestricted Subsidiary,"
it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this
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
57
64
Indebtedness is not permitted to be incurred as of such date under Section 4.9,
the Company shall be in default of such covenant).
(e) The Subsidiaries of the Company that are not designated by the
Board of Directors of the Company as Restricted or Unrestricted Subsidiaries
shall be deemed to be Restricted Subsidiaries of the Company. Notwithstanding
the foregoing, all Subsidiaries of an Unrestricted Subsidiary shall be
Unrestricted Subsidiaries.
ARTICLE 5.
SUCCESSORS
SECTION 5.1. MERGER, CONSOLIDATION OR SALE OF ASSETS.
(a) The Company may not (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 its properties or assets, in one or more related transactions, to another
Person unless:
(1) the Company is the surviving corporation 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 is a corporation organized or
existing under the laws of the United States, any state thereof or the
District of Columbia;
(2) 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 and
this Indenture pursuant to a supplemental Indenture in a form
reasonably satisfactory to the Trustee;
(3) immediately after such transaction no Default or
Event of Default exists;
(4) the Company or the Person formed by or surviving such
consolidation or merger (if other than the Company) or to which such
sale, assignment, transfer, conveyance or other disposition shall have
been made:
(x) will have Consolidated Net Worth immediately
after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately
preceding the transaction; and
(y) will, on the date of such transaction after
giving pro forma effect thereto and to 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 Section 4.9(a) hereof;
58
65
provided, however, that this clause (y) shall not
apply in the event such consolidation or merger is
effected solely for the purpose of changing the
jurisdiction of incorporation of the Company; and
(5) the Company or the Person formed by or surviving any such
consolidation or merger shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, assignment, transfer, conveyance or other
disposition and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture comply with the
applicable provisions of this Indenture and that all conditions
precedent in this Indenture relating to such transaction have been
satisfied.
(b) Notwithstanding paragraph (a) above, the Company shall not
lease all or substantially all of its assets to any Person.
(c) This Section 5.1 shall be in addition to, and not in any way
supersede or be in derogation of, Section 4.16 hereof in the case of a Change of
Control described in the definition thereof and the Company shall in any event
comply with the provisions of Section 4.16.
(d) This Section 5.1 shall not apply to a sale, assignment, transfer,
conveyance or other disposition of assets by the Company to a Wholly Owned
Restricted Subsidiary that is a Guarantor.
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.1 hereof, the successor Person formed by
such consolidation or into or with which the Company is merged or to which such
sale, assignment, transfer, conveyance or other disposition is made shall
succeed to, and be substituted for (so that, in the case of 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, from and after the
date of such event, the provisions of this Indenture referring to the Company
shall refer instead to the successor Person and not to the Company), and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor 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 predecessor's assets or a consolidation or merger that
meets the requirements of Section 5.1 hereof.
59
66
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) default which continues for 30 days in the payment when due of
interest (including Additional Interest) on the Notes (whether or not such
payment is prohibited by the provisions of Article 10 hereof);
(b) default in payment when due of the principal of or premium, if
any, on the Notes (whether or not such payment is prohibited by the provisions
of Article 10 hereof);
(c) failure by the Company or any Restricted Subsidiary to comply
with the provisions of Sections 4.7, 4.9, 4.10 or 4.16 and the continuance of
such failure for a period of 30 days after receipt of a notice of such failure
from the Trustee or Holders of at least 25% in principal amount of the then
outstanding Notes issued under this Indenture;
(d) failure by the Company or any Restricted Subsidiary to comply
with any of its other agreements or obligations in this Indenture or the Notes
and the continuance of such failure for a period of 60 days after receipt of a
notice of such failure from the Trustee or Holders of at least 25% in principal
amount of the then outstanding Notes issued under this Indenture;
(e) Indebtedness of the Company or any Restricted Subsidiary
(other than Indebtedness owed to the Company or any Restricted Subsidiary) or
any Indebtedness that is Guaranteed by the Company or a Restricted Subsidiary,
is not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default (or similar event or
circumstance) and the total amount of such Indebtedness unpaid or accelerated
exceeds $10.0 million;
(f) failure by the Company or any of its Restricted Subsidiaries
to pay final judgments for the payment of money (other than judgments which are
covered by enforceable insurance policies issued by reputable carriers and as to
which such insurance carriers have acknowledged liability in writing)
aggregating in excess of $10.0 million, which judgments are not paid,
discharged, bonded or stayed for a period of 60 days after notice thereof has
been given by the Trustee or Holders of at least 25% in principal amount of the
then outstanding Notes issued under this Indenture;
(g) except as permitted by this Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Subsidiary Guarantee;
60
67
(h) the Company, any Significant Subsidiary or group of
Subsidiaries that, taken together, would constitute a Significant Subsidiary,
pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against
it in an involuntary case;
(iii) consents to the appointment of a custodian of it or
for all or substantially all of its property;
(iv) makes a general assignment for the benefit of its
creditors;
(v) admits in writing the failure generally to pay debts
as they become due; or
(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company, any Significant
Subsidiary or group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary,
in an involuntary case;
(ii) appoints a custodian of the Company, any Significant
Subsidiary or group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary
for all or substantially all of the property of the
Company, any Significant Subsidiary or group of
Subsidiaries that, taken together, would constitute a
Significant Subsidiary; or
(iii) orders the liquidation of the Company, any
Significant Subsidiary or group of Subsidiaries that,
taken together, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
61
68
SECTION 6.2. ACCELERATION.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes issued
under this Indenture may declare all such Notes to be due and payable
immediately; provided, however, that so long as any Designated Senior Debt is
outstanding, such declaration shall not become effective until the earlier of
(i) the day which is five Business Days after the receipt by Representatives of
Designated Senior Debt of written notice of acceleration or (ii) the date of
acceleration of any Designated Senior Debt. Notwithstanding the foregoing, in
the case of an Event of Default arising from an event specified in clause (h) or
(i) of Section 6.1 hereof with respect to the Company, any Restricted Subsidiary
that is a Significant Subsidiary or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary, all outstanding Notes
shall become due and payable without further action or notice
SECTION 6.3. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal of, premium, if any,
and interest (including Additional Interest), if any, on the Notes or to enforce
the performance of any provision of the Notes or this Indenture. The Trustee may
maintain a proceeding even if it does not possess any of the Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or any
Holder of a Note in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
SECTION 6.4. WAIVER OF PAST DEFAULTS/RESCISSION OF ACCELERATION.
The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
such Notes waive any existing Default or Event of Default and its consequences
under this Indenture except a continuing Default or Event of Default in the
payment of principal of, premium, if any, or interest (including Additional
Interest), if any, on such Notes. When a Default or Event of Default is waived,
it is deemed cured and ceases to exist for every purpose of this Indenture, but
no such waiver shall extend to any subsequent or other Default or Event of
Default or impair any right consequent thereon. Further, the Holders of 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 such Notes,
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 acceleration) have been cured or waived. No such rescission shall
affect any subsequent Event of Default or impair any right consequent thereto.
SECTION 6.5. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to
62
69
follow any direction that conflicts with applicable law or this Indenture that
the Trustee determines may be unduly prejudicial to the rights of other Holders
of Notes or that may involve the Trustee in personal liability.
SECTION 6.6. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
SECTION 6.7. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal of, premium, if any, and
interest (including Additional Interest), if any, 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 6.8. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(a) or (b) 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 or any Guarantor for the whole
amount of principal of, premium, if any, and interest (including Additional
Interest), if any, 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.
63
70
SECTION 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), their creditors or their 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 7.7 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 7.7 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 Section 6.8, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.7 hereof, including payment of all compensation, expenses and
liabilities incurred, and all advances made, by the Trustee, and the reasonable
costs and expenses of collection actually incurred;
Second: to Holders for amounts due and unpaid on the Notes for
principal, premium, and interest (including Additional Interest), if any,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium, and interest (including
Additional Interest), if any, respectively; and
Third: to the Company, the Guarantors 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.
64
71
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit instituted by the Trustee, any
suit instituted by a Holder of a Note (whether pursuant to Section 6.6 hereof or
otherwise) or a suit instituted by Holders of more than 10% in principal amount
of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
SECTION 7.1. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent 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 Indenture and the
Trustee need perform only those duties that are
specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case
of any such certificates or opinions which by any
provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine
the certificates and opinions to determine whether or
not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
65
72
(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 6.5 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), (c), (e) and (g) of this Section 7.1 and to Section 7.2.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability.
(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.
(g) Except with respect to Sections 4.1 and 4.4 hereof, the
Trustee shall have no duties to inquire as to the performance of the Company's
covenants in Article 4 hereof. In addition, the Trustee shall not be deemed to
have knowledge of any Default or Event of Default except (i) any Event of
Default occurring pursuant to Sections 6.1(a) or 6.1(b) hereof or (ii) any
Default or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.1 and to the provisions of the TIA.
SECTION 7.2. 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.
Subject to Section 7.1(b)(ii) hereof, the Trustee need not investigate any fact
or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
66
73
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders unless such Holders shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or expense
that might be incurred by it in compliance with such request or direction.
(g) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder.
(h) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 7.3. 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 7.4. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision hereof,
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
furnished or issued in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
67
74
SECTION 7.5. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to the Holders of the Notes a
notice of the Default or Event of Default within 90 days after it occurs. Except
in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest (including Additional Interest), if any, on any
Note, the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Notes.
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each December 15, beginning with the December 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange and of any delisting thereof.
SECTION 7.7. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation as shall be agreed in writing between the Company and the Trustee
for its acceptance of this Indenture and for its services hereunder. To the
extent permitted by law, 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, fees 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.
The Company shall indemnify and hold harmless the Trustee against any
and all losses, liabilities, damages, claims or expenses including taxes (other
than taxes based on the income of the Trustee) incurred by it arising out of or
in connection with the acceptance or administration of its duties under this
Indenture, including the reasonable costs and expenses actually incurred of
enforcing this Indenture against the Company (including this Section 7.7) 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, willful
misconduct or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee
68
75
shall reasonably cooperate in the defense. The Trustee 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 7.7 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal of,
premium, if any, and interest (including Additional Interest), if any, on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
SECTION 7.8. 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 7.8.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
69
76
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 at least 10% in principal amount of the then outstanding Notes
may petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder who has been a
Holder of a Note for at least six months, fails to comply with Section 7.10,
such Holder may petition, at the expense of the Company, any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee; provided,
however, that all sums owing to the Trustee hereunder have been paid and subject
to the Lien provided for in Section 7.7 hereof. Notwithstanding replacement of
the Trustee pursuant to this Section 7.8, the Company's obligations under
Section 7.7 hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.9. 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 or
banking association, 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
or banking association 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 Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
70
77
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of the Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.2 or 8.3 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.2. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company and the Guarantors shall, subject to
the satisfaction of the conditions set forth in Section 8.4 hereof, be deemed to
have been discharged from their 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 8.5 hereof and the other Sections of this
Indenture referred to in (i) and (ii) below, and to have satisfied all their
other obligations under such Notes and this Indenture (and the Trustee, on the
written 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 payments in respect of the principal
of, premium, if any, and interest (including Additional Interest), if any, on
such Notes when such payments are due from the trust referred to in Section 8.5
hereof, (ii) the Company's obligations with respect to the Notes under Article 2
and Section 4.2 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 8.2 notwithstanding the prior
exercise of its option under Section 8.3.
71
78
SECTION 8.3. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company and the Guarantors shall, subject to
the satisfaction of the conditions set forth in Section 8.4 hereof, be released
from their obligations under the covenants contained in Sections 4.3, 4.5, 4.7,
4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18, 4.19 and 4.20 and the
limitations contained in Section 5.1(a)(4) with respect to the outstanding Notes
on and after the date the conditions set forth below 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 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 6.1 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.1 hereof of the option applicable to this
Section 8.3 hereof, subject to the satisfaction of the conditions set forth in
Section 8.4 hereof, Sections 6.1(c) through 6.1(g) hereof shall no longer
constitute Events of Default.
SECTION 8.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(i) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the Notes, cash in U.S.
dollars, non-callable Government Securities, or a combination thereof,
in such amounts as shall be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal
of, premium, if any, and interest (including Additional Interest), if
any, on such outstanding Notes on the stated maturity or on the
applicable redemption date, as the case may be, and the Company must
specify whether such Notes are being defeased to maturity or to a
particular redemption date;
(ii) in the case of Legal Defeasance, the Company shall have
delivered 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 hereof, 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
72
79
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 shall
have delivered 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 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 insofar as Sections 6.1(h) or 6.1(i) hereof are concerned,
at any time in the period ending on the 91st day after the date of
deposit (or greater period of time in which any such deposit of trust
funds may remain subject to bankruptcy or insolvency laws insofar as
those apply to the deposit by the Company);
(v) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Restricted Subsidiaries is a party or by
which the Company or any of its Restricted Subsidiaries is bound;
(vi) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that, as of the date of such opinion,
assuming no intervening bankruptcy of the Company between the date of
deposit and the 91st day following the deposit and assuming no Holder
of Notes is an insider of the Company, after the 91st day following the
deposit, the trust funds shall not be subject to the effects of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally under any applicable United
States or state law;
(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 Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others; and
(viii) the Company must deliver to the applicable Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
73
80
SECTION 8.5. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6 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 8.5, the
"Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company 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 of, premium, if any, and interest
(including Additional Interest), if any, 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 8.4 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 8.4 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
8.4(i) 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 8.6. REPAYMENT TO THE COMPANY OR THE GUARANTORS.
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, or
interest (including Additional Interest), if any, on, any Note and remaining
unclaimed for two years after such principal, premium, or interest (including
Additional Interest) has become due and payable shall be paid to the Company (or
if deposited with the Trustee or any Paying Agent by a Guarantor, such
Guarantor) on its request or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Note shall thereafter look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, shall, at
the expense of the Company, cause to be published once, in the New York Times
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 shall be repaid to the Company (or if deposited
with the Trustee or any Paying Agent by a Guarantor, such Guarantor).
74
81
SECTION 8.7. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.2 or
8.3 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.2 or 8.3 hereof,
as the case may be; provided, however, that, if the Company makes any payment of
principal of, premium, or interest (including Additional Interest), if any, 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 9.1. WITHOUT CONSENT OF HOLDERS.
Notwithstanding Section 9.2 hereof, the Company and the Trustee may
amend or supplement this Indenture or the Notes, as applicable, without the
consent of any Holder:
(a) to cure any ambiguity, omission, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(c) to provide for the assumption of the Company's obligations to
the Holders of the Notes in the case of a merger, consolidation or sale of all
or substantially all of the Company's assets pursuant to Section 5.1 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect the legal
rights under this Indenture of any such Holder; or
(e) to comply with the requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of the
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
9.6 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
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 Indenture or otherwise.
75
82
SECTION 9.2. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.2, the Company and the
Trustee may amend or supplement this Indenture or the Notes, as applicable, with
the consent of the Holders of at least a majority in principal amount of the
Notes then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes),
and, subject to Sections 6.4 and 6.7 hereof, any existing Default or Event of
Default (other than an Event of Default in the payment of the principal of,
premium, or interest (including Additional Interest), if any, on the Notes
resulting from an acceleration that has been rescinded) or compliance with any
provision of this Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes).
However, without the consent of each Holder affected, an amendment or
waiver may not (with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity
of any Note or alter the provisions with respect to
the redemption of the Notes (other than provisions
described in Sections 4.10 and 4.16 hereof);
(3) reduce the rate of or change the time for payment of
interest on any Note;
(4) waive a Default or Event of Default in the payment of
principal of, premium, if any, or interest (including
Additional Interest), if any, on the Notes (except a
rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal
amount of the Notes and a waiver of the payment
default that resulted from such acceleration);
(5) make any Note payable in money other than that stated
in the Notes;
(6) make any change in the provisions of this Indenture
relating to waivers of past Defaults or Events of
Defaults or the rights of Holders of Notes to receive
payments of principal of or premium, if any, or
interest (including Additional Interest), if any, on
the Notes;
(7) waive a redemption payment with respect to any Note
(other than a payment required by any of the
provisions of Sections 4.10 and 4.16 hereof); or
(8) make any change in the foregoing amendment and waiver
provisions.
76
83
In addition, any amendment to the provisions of Articles 10 and 12
hereof, including the related definitions, shall require the consent of the
Holders of at least 75% in aggregate principal amount of the Notes issued
hereunder that are then outstanding if such amendment would adversely affect the
rights of Holders of any of the Notes. Further, no amendment may be made to the
provisions of Articles 8, 10 or 12 hereof that adversely affects the rights of
any holder of Senior Debt then outstanding unless such holder of Senior Debt (or
a Representative thereof authorized to give consent) consents to such amendment.
Upon the request of the Company accompanied by a Board Resolution
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 as aforesaid, and upon receipt by the Trustee of the
documents described in Section 9.6 hereof, the Trustee shall join with the
Company in the execution of such amended or supplemental indenture unless such
amended or supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or
supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of each Note 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.
SECTION 9.3. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental indenture that complies with the TIA as
then in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder 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 or subsequent Holder may revoke the consent as to
its Note if the Trustee receives written notice of revocation before the date
the waiver, supplement or amendment becomes effective. An amendment, supplement
or waiver becomes effective in accordance with its terms and thereafter binds
every Holder.
The Company may, but shall not be obligated to, fix a record date for
determining which Holders must consent to such amendment or waiver. If the
Company fixes a record date, the record date shall be fixed at the later of (a)
30 days prior to the first solicitation of such consent or the date of the most
recent list of Holders furnished to the Trustee prior to such solicitation
77
84
pursuant to Section 2.5 or (b) such other date as the Company shall lawfully
designate. If a record date is fixed, then notwithstanding the immediately
preceding paragraph, those Persons who held Notes at such record date (or their
duly designated proxies), and only those Persons, shall be entitled to give such
consent or to revoke any consent previously given or to take any such action,
whether or not such Persons continue to be Holders after such record date.
SECTION 9.5. 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 authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.6. 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 pursuant to a Board Resolution. In executing any amended or
supplemental indenture or in connection with any waiver or consent to the
departure from the terms of this Indenture, the Trustee shall be entitled to
request and receive, and (subject to Section 7.1) shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture, waiver or consent is
authorized or permitted by this Indenture and that all conditions precedent to
the effectiveness of such amended or supplemental indenture, waiver or consent
have been satisfied.
ARTICLE 10.
SUBORDINATION
SECTION 10.1. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder of Notes by accepting a Note
agrees, that the Indebtedness evidenced by the Notes, all Obligations of the
Company under this Indenture (including any obligation of the Company to
repurchase Notes), the Purchase Agreement and the Registration Rights Agreement
(including, without limitation, Additional Interest, if any) and the payment of
any Claims are subordinated in right of payment, to the extent and in the manner
provided in this Article, to the prior payment in full of all Senior Debt
(whether outstanding on the date hereof or hereafter created, incurred, assumed
or guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt.
Each Holder of Notes by the Holder's acceptance thereof acknowledges
and agrees that each holder of any Senior Debt, whether such Senior Debt was
created or acquired before or
78
85
after the issuance of the Notes, shall be deemed conclusively to have relied on
the provisions of this Article 10 in acquiring and continuing to hold, or in
continuing to hold, such Senior Debt.
SECTION 10.2. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon or in the event of any distribution to creditors of the Company
(i) in a total or partial liquidation or dissolution of the Company; (ii) in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property; (iii) in an assignment for the benefit
of creditors of the Company; or (iv) in any marshalling of the Company's assets
and liabilities:
(1) holders of Senior Debt shall be entitled to receive
payment in full in cash of all Obligations due or to become due in
respect of such Senior Debt (including interest after the commencement
of any such proceeding at the rates specified in the applicable Senior
Debt) before the Holders of Notes shall be entitled to receive any
payment or distribution with respect to the Notes or on account of any
Claim; and
(2) until all Obligations with respect to Senior Debt (as
provided in subsection (1) above) are paid in full in cash, any payment
or distribution (including, without limitation, any payment or
distribution that may be payable or deliverable by reason of the
payment of any other Indebtedness of the Company being subordinated to
the payment of the Notes) to which the Holders of Notes would be
entitled but for this Article shall be made to holders of Senior Debt;
except that, in either case, Holders of Notes may receive (x) Permitted Junior
Securities and (y) payments and other distributions made from the trust
described in Article 8 hereof, as their interests may appear.
SECTION 10.3. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company may not make any payment or distribution (including,
without limitation, any payment or distribution that may be payable or
deliverable by reason of the payment of any other Indebtedness of the Company
being subordinated to the payment of the Notes) to the Trustee or any Holder of
Notes in respect of Obligations or Claims with respect to the Notes and may not
acquire from the Trustee or any Holder of Notes any Notes for cash or property
(except that Holders of Notes may receive (x) Permitted Junior Securities and
(y) payments and other distributions made from the trust described in Article 8
hereof) until all principal, interest and other Obligations with respect to the
Senior Debt have been paid in full in cash if:
(i) a default occurs in the payment when due of the principal of,
interest on, or any other Obligation with respect to, any
Designated Senior Debt;
(ii) a default, other than a payment default, occurs and is
continuing with respect to any Designated Senior Debt that
permits the holders of Designated Senior Debt as to which such
default relates to accelerate its maturity and the Trustee
receives a
79
86
notice of such default (a "Payment Blockage Notice") from the
Representative of any Designated Senior Debt.
The Company may and shall resume payments on, and distributions in
respect of, the Notes and may acquire them upon:
(1) in the case of a default referred to in Section 10.3(i)
hereof, the date on which such default is cured or waived in accordance
with the terms of such Designated Senior Debt, or
(2) in the case of a default referred to in Section 10.3(ii)
hereof, the earlier of (x) the date on which such default is cured or
waived in accordance with the terms of such Designated Senior Debt or
(y) 179 days after the date on which the applicable Payment Blockage
Notice is received by the Trustee, unless the maturity of any
Designated Senior Debt has been accelerated.
If the Trustee receives any such Payment Blockage Notice, no new
Payment Blockage Notice shall be delivered pursuant to this Section 10.3 unless
and until:
(a) 360 days shall have elapsed since the effectiveness of the
immediately prior Payment Blockage Notice; and
(b) all scheduled payments of principal of, premium, if any, and
interest on the Notes that have come due have been paid in full in cash.
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 cured or waived for a period of not less than 90 days.
SECTION 10.4. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default,
the Company or the Trustee shall promptly notify each Representative of
Designated Senior Debt of the acceleration; provided, however, that so long as
any Designated Senior Debt is outstanding, any such acceleration shall not
become effective, and the Company shall not make, and the Holders of Notes may
not accept or receive, any payment with respect to the Notes until the day which
is five Business Days after the receipt by Representatives of Designated Senior
Debt of written notice of acceleration. Thereafter, the Company may make
payments with respect to the Notes only in accordance with the terms of this
Indenture.
SECTION 10.5. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder of Notes receives any
payment or distribution with respect to the Notes at a time when the Trustee or
such Holder, as applicable, has actual knowledge that such payment or
distribution is prohibited by Section 10.3 or 10.4 hereof, such
80
87
payment or distribution shall be held by the Trustee or such Holder, in trust
for the benefit of, and shall be segregated from other funds and property of the
Trustee or such Holder of Notes and be paid forthwith over and delivered in the
same form as received (with any necessary endorsement), upon written request,
to, the holders of Senior Debt as their interests may appear or their
Representative under this Indenture or other agreement (if any) pursuant to
which Senior Debt may have been issued, as their respective interests may
appear, 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
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
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 Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders of Notes 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.
SECTION 10.6. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to an Officer of the Company that would cause a payment of any
Obligations with respect to the Notes or of any Claim to violate this Article,
but failure to give such notice shall not affect the subordination of the Notes
and all Claims to the Senior Debt as provided in this Article.
SECTION 10.7. SUBROGATION.
After all Senior Debt is paid in full in cash and until the Notes are
paid in full in cash, Holders of Notes shall be subrogated (equally and ratably
with all other Pari Passu Debt) to the rights of holders of Senior Debt to
receive distributions applicable to Senior Debt to the extent that distributions
otherwise payable to the Holders of Notes have been applied to the payment of
Senior Debt. A distribution made under this Article to holders of Senior Debt
that otherwise would have been made to Holders of Notes is not, as between the
Company and Holders of Notes, a payment by the Company on the Notes.
SECTION 10.8. RELATIVE RIGHTS.
This Article defines the relative rights of Holders of the Notes and
holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of, premium, and interest (including Additional Interest), if
any, on the Notes in accordance with their terms;
81
88
(2) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders
of Senior Debt; or
(3) 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 to receive
distributions and payments otherwise payable to Holders of Notes.
SECTION 10.9. SUBORDINATION MAY NOT BE IMPAIRED.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes shall be impaired by any act or failure
to act by the Company or the Holders of any Notes or by the failure of the
Company or any Holder of Notes to comply with this Indenture.
SECTION 10.10. 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 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this 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 two Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
or any Claim with respect to the Notes to violate this Article. Only the Company
or a Representative may give the notice.
Nothing in this Article 10 shall impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.7 hereof. The Trustee in its
individual or any other capacity may hold Senior Debt with the same rights it
would have if it were not the Trustee. Any Agent may do the same with like
rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to
82
89
effectuate the subordination as provided in this Article 10, and appoints the
Trustee to act as the 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 6.9 hereof at least 30
days before the expiration of the time to file such claim, the Representative
under a Credit Facility (or if no Credit Facility then exists, the
Representative of other Designated Senior Debt) is hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Notes. Nothing herein
contained shall be deemed to authorize the Trustee or the holders of Senior Debt
or their Representative to authorize or consent to or accept or adopt on behalf
of any Holders any plan or reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Senior Debt or their Representative to
vote in respect of the claim or any Holder in any such proceeding.
SECTION 10.13. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
except in accordance with Section 9.1 and 9.2, including, if applicable, the
third paragraph of Section 9.2.
SECTION 10.14. MISCELLANEOUS.
(a) The agreement contained in this Article 10 shall continue to
be effective or be reinstated, as the case may be, if at any time any payment of
any Senior Debt is avoided, rescinded or must otherwise be returned by any
holder of Senior Debt upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, all as though such payment had not been made.
(b) The failure to make a payment on account of principal of, or
interest on, or other Obligations relating to, the Notes by reason of any
provision of this Article 10 shall not be construed as preventing the occurrence
of an Event of Default.
ARTICLE 11.
SUBSIDIARY GUARANTEES
SECTION 11.1. ABSOLUTE AND UNCONDITIONAL GUARANTEE.
Each Guarantor fully, absolutely, irrevocably, unconditionally, and
jointly and severally, Guarantees (such guarantee to be referred to herein as
the "Subsidiary Guarantee") to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, the Notes and
the obligations of the Company hereunder or thereunder, that: (a) the principal
of and interest (including Additional Interest, if any) on the Notes shall be
promptly paid in full when due, subject to any applicable grace period, whether
at maturity, by acceleration or otherwise and interest on the overdue principal,
if any, and interest on any interest (including Additional Interest, if any), to
the extent lawful, of the Notes and all other Obligations of the Company to the
Holders or the Trustee hereunder or thereunder and under the Purchase Agreement
and the Registration Rights Agreement will be promptly paid in full or
83
90
performed, all in accordance with the terms hereof and thereof and (b) in case
of any extension of time of payment or renewal of any Notes or of any such other
obligations, the same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, subject to any applicable
grace period, whether at stated maturity, by acceleration or otherwise, subject,
however, in the case of clauses (a) and (b) above, to the limitations set forth
in Section 11.4. Each Guarantor agrees that its Obligations hereunder shall be
absolute, unconditional and irrevocable, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the Notes
with respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstances
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor and each such legal or equitable discharge is hereby irrevocably and
forever waived. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that (except as
otherwise set forth in this Section 11) this Subsidiary Guarantee shall not be
discharged except by complete performance of the Obligations contained in the
Notes, this Indenture and in this Subsidiary Guarantee. If any Holder or the
Trustee is required by any court or otherwise to return to the Company, any
Guarantor, or any Custodian acting in relation to the Company or any Guarantor,
any amount paid by the Company or any Guarantor to the Trustee or such Holder,
this Subsidiary Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect as to such amount only. Each Guarantor
further agrees that as between each Guarantor, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Obligations
Guaranteed hereby may be accelerated as provided in Article 6 for the purposes
of this Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article 6, such Obligations (whether or not due and payable)
shall forthwith become due and payable by each Guarantor for the purpose of this
Subsidiary Guarantee. The obligation of each Guarantor shall be joint and
several and each Guarantor shall be fully liable for all of the indebtedness and
obligations described in this Section 11.1. No full or partial discharge,
release or forgiveness of the obligations of a Guarantor hereunder shall in any
way discharge, release, forgive or otherwise amend or modify the guarantee
obligations of any other Guarantor. Each Guarantor agrees that its obligations
hereunder are unconditional and absolute and not subject to any right of offset
or counterclaim, all of which are waived by each Guarantor. Each Guarantor shall
satisfy its guarantee obligations hereunder, and pay all guaranteed obligations
hereunder within one Business Day after demand has been made therefor.
SECTION 11.2. SEVERABILITY.
In case any provision of this Subsidiary Guarantee shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.3. RELEASE OF A GUARANTOR.
84
91
(a) In the event of any of the following: (i) a sale or other
disposition of all or substantially all of the assets of any Guarantor to a
third party other than the Company or an Affiliate of the Company (including by
way of merger or consolidation), (ii) a sale of all of the Capital Stock of any
Guarantor, (iii) the Company designates any Guarantor to be an Unrestricted
Subsidiary, in each case, in a manner in accordance with, and pursuant to, the
terms of this Indenture, or (iv) upon the Legal Defeasance of the Notes, then
such Guarantor (in the event of a sale or other disposition, by way of such a
merger or consolidation, of all of the Capital Stock of such Guarantor or any
such designation) or the entity acquiring the property (in the event of a sale
or other disposition of all or substantially all of the assets of such
Guarantor) shall be released and relieved of any obligations under its
Subsidiary Guarantee; provided, that the Net Proceeds of any such sale or other
disposition are applied in accordance with Section 4.10(b).
(b) In the case of a sale or other disposition of all or
substantially all of the assets of a Guarantor, upon the assumption provided for
in Section 11.5(b), such Guarantor shall be discharged from all further
liability and obligation under this Indenture.
(c) The Trustee shall deliver an appropriate instrument evidencing
such release upon receipt of a written request by the Company accompanied by an
Officers' Certificate certifying as to the compliance with this Section 11.3 and
the other provisions of this Indenture.
(d) Any Guarantor not so released remains liable for the full
amount of principal of and interest on the Notes as provided in this Article 11.
SECTION 11.4. LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor and by its acceptance hereof each Holder hereby confirms
that it is the intention of all such parties that the Guarantee by such
Guarantor pursuant to its Subsidiary Guarantee not constitute a fraudulent
transfer or conveyance for purposes of any Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law. To effectuate the foregoing intention, the Holders and
each such Guarantor hereby irrevocably agree that the Obligations of such
Guarantor under its Subsidiary Guarantee shall be limited to the maximum amount
as will, after giving effect to all other contingent and fixed liabilities of
such Guarantor (including, without limitation, any Obligations under the New
Credit Facility) and after giving effect to any collections from or payments
made by or on behalf of any other Guarantor in respect of the obligations of
such other Guarantor under its Subsidiary Guarantee or pursuant to Section 11.6,
result in the Obligations of such Guarantor under its Subsidiary Guarantee not
constituting such fraudulent transfer or conveyance.
SECTION 11.5. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
No Guarantor may sell or dispose of all or substantially all of its
assets to, or consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person), another Person (other than the Company or
another Guarantor) whether or not affiliated with such
85
92
Guarantor unless, immediately after giving effect to that transaction, no
Default or Event of Default exists and either:
(a) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) assumes all the Obligations of such
Guarantor under the Notes, the Subsidiary Guarantee, the Indenture, and the
Registration Rights Agreement pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee; or
(b) the Net Proceeds of such sale of disposition are applied in
accordance with Section 4.10 hereof.
Further, Section 4.16 and Article 5 hereof, and not this Section 11.5,
shall be applicable in the event such sale, merger or consolidation constitutes
a Change of Control or sale of substantially all of the assets of the Company,
respectively.
SECTION 11.6. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under this
Subsidiary Guarantee, such Funding Guarantor shall be entitled to a contribution
from all other Guarantors in a pro rata amount based on the Adjusted Net Assets
of each Guarantor (including the Funding Guarantor) for all payments, damages
and expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Notes or any other Guarantor's Obligations with
respect to this Subsidiary Guarantee.
SECTION 11.7. WAIVER OF SUBROGATION.
Until payment in full in cash of the Notes, each Guarantor hereby
irrevocably waives any claim or other rights which it may now or hereafter
acquire against the Company that arise from the existence, payment, performance
or enforcement of such Guarantor's Obligations under this Subsidiary Guarantee
and this Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, indemnification, and any right to participate in any
claim or remedy of any Holder of Notes against the Company, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by setoff or in
any other manner, payment or security on account of such claim or other rights.
If any amount shall be paid to any Guarantor in violation of the preceding
sentence and the Notes shall not have been paid in full, such amount shall have
been deemed to have been paid to such Guarantor for the benefit of, and held in
trust for the benefit of, the Holders of the Notes, and shall forthwith be paid
to the Trustee for the benefit of such Holders to be credited and applied upon
the Notes, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set forth in this Section 11.7 is knowingly made in contemplation of
such benefits.
86
93
SECTION 11.8. EXECUTION OF SUBSIDIARY GUARANTEE.
To evidence their guarantee to the Holders specified in Section 11.1,
the Guarantors hereby agree to execute the Subsidiary Guarantee in substantially
the form of Exhibit A required to be endorsed on each Note ordered to be
authenticated and delivered by the Trustee. Each Guarantor hereby agrees that
its Subsidiary Guarantee set forth in Section 11.1 shall remain in full force
and effect notwithstanding any failure to endorse on each Note a notation of
such Subsidiary Guarantee. Each such Subsidiary Guarantee shall be signed on
behalf of each Guarantor by two Officers, or an Officer and an Assistant
Secretary or one Officer shall sign and one Officer or an Assistant Secretary
(each of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to such Subsidiary Guarantee prior to the
authentication of the Note on which it is endorsed, and the delivery of such
Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Subsidiary Guarantee on behalf of such
Guarantor. Such signatures upon the Subsidiary Guarantee may be by manual or
facsimile signature of such officers and may be imprinted or otherwise
reproduced on the Subsidiary Guarantee, and in case any such officer who shall
have signed the Subsidiary Guarantee shall cease to be such officer before the
Note on which such Subsidiary Guarantee is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the Company, such
Note nevertheless may be authenticated and delivered or disposed of as though
the person who signed the Subsidiary Guarantee had not ceased to be such officer
of the Guarantor.
ARTICLE 12.
SUBORDINATION OF SUBSIDIARY GUARANTEES
SECTION 12.1. AGREEMENT TO SUBORDINATE.
Each Guarantor agrees, and each Holder of Notes by accepting a Note
agrees, that the Indebtedness evidenced by the Subsidiary Guarantees, all
Obligations of such Guarantor under this Indenture, the Purchase Agreement and
the Registration Rights Agreement (including, without limitation, Additional
Interest, if any) and the payment of any Claims are subordinated in right of
payment, to the extent and in the manner provided in this Article, to the prior
payment in full of all Senior Debt (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed and whether or not a
Guarantor is a primary obligor or a guarantor or surety), and that the
subordination is for the benefit of the holders of Senior Debt.
Each Holder of Notes by the Holder's acceptance thereof acknowledges
and agrees that each holder of any Senior Debt, whether such Senior Debt was
created or acquired before or after the issuance of the Subsidiary Guarantees,
shall be deemed conclusively to have relied on the provisions of this Article 12
in acquiring and continuing to hold, or in continuing to hold, such Senior Debt.
SECTION 12.2. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
87
94
Upon or in the event of any distribution to creditors of each Guarantor
(i) in a total or partial liquidation or dissolution of the such Guarantor; (ii)
in a bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to such Guarantor or its property; (iii) in an assignment for the
benefit of creditors of such Guarantor; or (iv) in any marshalling of such
Guarantor's assets and liabilities:
(1) holders of Senior Debt shall be entitled to receive
payment in full in cash of all Obligations due or to become due in
respect of such Senior Debt (including interest after the commencement
of any such proceeding at the rates specified in the applicable Senior
Debt) before the Holders of Notes shall be entitled to receive any
payment or distribution with respect to the Notes or on account of any
Claim; and
(2) until all Obligations with respect to Senior Debt (as
provided in subsection (1) above) are paid in full in cash, any payment
or distribution (including, without limitation, any payment or
distribution that may be payable or deliverable by reason of the
payment of any other Indebtedness of such Guarantor being subordinated
to the payment of the Notes) to which the Holders of Notes would be
entitled but for this Article shall be made to holders of Senior Debt;
except that, in either case, Holders of Notes may receive (x) Permitted Junior
Securities and (y) payments and other distributions made from the trust
described in Article 8 hereof, as their interests may appear.
SECTION 12.3. DEFAULT ON DESIGNATED SENIOR DEBT.
No Guarantor may make any payment or distribution (including, without
limitation, any payment or distribution that may be payable or deliverable by
reason of the payment of any other Indebtedness of such Guarantor being
subordinated to the payment of the Notes) to the Trustee or any Holder of Notes
in respect of Obligations or Claims with respect to the Notes and may not
acquire from the Trustee or any Holder of Notes any Notes for cash or property
(except that Holders of Notes may receive (x) Permitted Junior Securities and
(y) payments and other distributions made from the trust described in Article 8
hereof) until all principal, interest and other Obligations with respect to the
Senior Debt have been paid in full in cash if:
(i) a default occurs in the payment when due of the principal of,
interest on, or any other Obligation with respect to, any
Designated Senior Debt;
(ii) a default, other than a payment default, occurs and is
continuing with respect to any Designated Senior Debt that
permits the holders of Designated Senior Debt as to which such
default relates to accelerate its maturity and the Trustee
receives a notice of such default (a "Payment Blockage
Notice") from the Representative of any Designated Senior
Debt.
Such Guarantor may and shall resume payments on, and distributions in
respect of, its Subsidiary Guarantee and may acquire them upon:
88
95
(1) in the case of a default referred to in Section 12.3(i)
hereof, the date on which such default is cured or waived in accordance
with the terms of such Designated Senior Debt, or
(2) in the case of a default referred to in Section 12.3(ii)
hereof, the earlier of (x) the date on which such default is cured or
waived in accordance with the terms of such Designated Senior Debt or
(y) 179 days after the date on which the applicable Payment Blockage
Notice is received by the Trustee, unless the maturity of any
Designated Senior Debt has been accelerated.
If the Trustee receives any such Payment Blockage Notice, no new
Payment Blockage Notice shall be delivered pursuant to this Section 12.3 unless
and until:
(a) 360 days shall have elapsed since the effectiveness of the
immediately prior Payment Blockage Notice; and
(b) all scheduled payments of principal of, premium, if any, and
interest on the Notes that have come due have been paid in full in cash.
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 cured or waived for a period of not less than 90 days.
SECTION 12.4. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default,
the Company or the Trustee shall promptly notify each Representative of
Designated Senior Debt of the acceleration; provided, however, that so long as
any Designated Senior Debt is outstanding, any such acceleration shall not
become effective, and no Guarantor shall make, and the Holders of Notes may
not accept or receive, any payment with respect to such Guarantor's Subsidiary
Guarantee until the day which is five Business Days after the receipt by
Representatives of Designated Senior Debt of written notice of acceleration.
Thereafter, each Guarantor may make payments with respect to its Subsidiary
Guarantee only in accordance with the terms of this Indenture.
SECTION 12.5. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder of Notes receives any
payment or distribution with respect to any Subsidiary Guarantee at a time when
the Trustee or such Holder, as applicable, has actual knowledge that such
payment or distribution is prohibited by Section 12.3 or 12.4 hereof, such
payment or distribution shall be held by the Trustee or such Holder, in trust
for the benefit of, and shall be segregated from other funds and property of the
Trustee or such Holder of Notes and be paid forthwith over and delivered in the
same form as received (with any necessary endorsement), upon written request,
to, the holders of Senior Debt as their interests may appear or their
Representative under the Indenture or other agreement (if any) pursuant to
89
96
which Senior Debt may have been issued, as their respective interests may
appear, 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
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
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 12, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders of Notes, any
Guarantor or any other Person money or assets to which any holders of Senior
Debt shall be entitled by virtue of this Article 12, except if such payment is
made as a result of the willful misconduct or gross negligence of the Trustee.
SECTION 12.6. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to an Officer of the Company that would cause a payment of any
Obligations with respect to any Subsidiary Guarantee or of any Claim to violate
this Article, but failure to give such notice shall not affect the subordination
of the Notes, the Subsidiary Guarantees and all Claims to the Senior Debt as
provided in this Article.
SECTION 12.7. SUBROGATION.
After all Senior Debt is paid in full in cash and until the Notes and
any Obligations under the Subsidiary Guarantees are paid in full in cash,
Holders of Notes shall be subrogated (equally and ratably with all other Pari
Passu Debt) to the rights of holders of Senior Debt to receive distributions
applicable to Senior Debt to the extent that distributions otherwise payable to
the Holders of Notes have been applied to the payment of Senior Debt. A
distribution made under this Article to holders of Senior Debt that otherwise
would have been made to Holders of Notes is not, as between any Guarantor and
Holders of Notes, a payment by such Guarantor on its Subsidiary Guarantee.
SECTION 12.8. RELATIVE RIGHTS.
This Article defines the relative rights of Holders of the Notes and
holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between each Guarantor and Holders of Notes,
the obligation of such Guarantor, which is absolute and unconditional,
to pay principal of and premium, interest (including Additional
Interest), if any, on the Notes in accordance with the terms of its
Subsidiary Guarantee;
(2) affect the relative rights of Holders of Notes and
creditors of such Guarantor other than their rights in relation to
holders of Senior Debt; or
90
97
(3) 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 to receive
distributions and payments otherwise payable to Holders of Notes.
SECTION 12.9. SUBORDINATION MAY NOT BE IMPAIRED.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes and the Subsidiary Guarantees shall be
impaired by any act or failure to act by the Company, any Guarantor or the
Holders of any Notes or by the failure of the Company, any Guarantor or any
Holder of Notes to comply with this Indenture.
SECTION 12.10. 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 any Guarantor
referred to in this Article 12, 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 such Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 12.
SECTION 12.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 12 or any other
provision of this 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 two Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
or any Claim with respect to the Notes to violate this Article. Only the Company
or a Representative may give the notice.
Nothing in this Article 12 shall impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.7 hereof. The Trustee in its
individual or any other capacity may hold Senior Debt with the same rights it
would have if it were not the Trustee. Any Agent may do the same with like
rights.
SECTION 12.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 12, and appoints the Trustee to act as the 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
6.9
91
98
hereof at least 30 days before the expiration of the time to file such claim,
the Representative under a Credit Facility (or if no Credit Facility then
exists, the Representative of other Designated Senior Debt) is hereby authorized
to file an appropriate claim for and on behalf of the Holders of the Notes.
Nothing herein contained shall be deemed to authorize the Trustee or the holders
of Senior Debt or their Representative to authorize or consent to or accept or
adopt on behalf of any Holders any plan or reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee or the holders of Senior Debt or their
Representative to vote in respect of the claim or any Holder in any such
proceeding.
SECTION 12.13. AMENDMENTS.
The provisions of this Article 12 shall not be amended or modified except in
accordance with Section 9.1 and Section 9.2, including, if applicable, the third
paragraph of Section 9.2.
SECTION 12.14. MISCELLANEOUS.
The agreement contained in this Article 12 shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any Senior Debt is avoided, rescinded or must otherwise be returned by any
holder of Senior Debt upon the insolvency, bankruptcy or reorganization of any
Guarantor or otherwise, all as though such payment had not been made.
ARTICLE 13.
MISCELLANEOUS
SECTION 13.1. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 13.2. NOTICES.
Any notice or communication by the Company or the Trustee to the other
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 other's address:
92
99
If to the Company or any Guarantor:
Caraustar Industries, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Trustee Administration
Each of the Company, the Guarantors and 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, or by overnight air courier guaranteeing next day delivery to its address
shown on the register kept by the Registrar. Any notice or communication shall
also be so mailed to any Person described in TIA Section 313(c), to the extent
required by the TIA. Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 13.3. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Guarantors, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
93
100
SECTION 13.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 13.5 hereof) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 13.5
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
SECTION 13.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 13.6. 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.
94
101
SECTION 13.7. NO PERSONAL LIABILITY OF PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES,
AND STOCKHOLDERS AND STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator or
shareholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company under the Notes or this 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 13.8. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES AND WITHOUT
GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 13.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 13.10. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture, the
Subsidiary Guarantees and the Notes shall bind their successors. All agreements
of the Trustee in this Indenture shall bind its successors.
SECTION 13.11. SEVERABILITY/INDEPENDENCE OF COVENANTS.
In case any provision in this Indenture, in the Notes or in the
Subsidiary Guarantees 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. Each covenant or obligation set forth herein shall
be independent of the others and any waiver or consent to departure with respect
to one covenant shall not be deemed or construed to be a waiver or consent to
departure with respect to any other covenant.
SECTION 13.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
95
102
SECTION 13.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
96
103
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Indenture as of the date and year first written above.
THE COMPANY:
CARAUSTAR INDUSTRIES, INC.
By: /s/ H. ▇▇▇ ▇▇▇▇▇▇ III
-----------------------------------------
Name: H. ▇▇▇ ▇▇▇▇▇▇ III
Title: Chief Financial Officer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
THE GUARANTORS:
AUSTELL BOX BOARD CORPORATION
AUSTELL HOLDING COMPANY, LLC
BUFFALO PAPERBOARD CORPORATION
CAMDEN PAPERBOARD CORPORATION
CARAUSTAR CUSTOM PACKAGING GROUP, INC.
CARAUSTAR CUSTOM PACKAGING GROUP (MARYLAND), INC.
CARAUSTAR INDUSTRIAL & CONSUMER PRODUCTS GROUP, INC.
CARAUSTAR PAPERBOARD CORPORATION
CARAUSTAR RECOVERED FIBER GROUP, INC.
CAROLINA COMPONENT CONCEPTS, INC.
CAROLINA CONVERTING INCORPORATED
CAROLINA PAPER BOARD CORPORATION
CAROTELL PAPER BOARD CORPORATION
CHATTANOOGA PAPERBOARD CORPORATION
CHICAGO PAPERBOARD CORPORATION
CINCINNATI PAPERBOARD CORPORATION
COLUMBUS RECYCLING, INC.
FEDERAL TRANSPORT, INC.
GYPSUM MGC, INC.
HALIFAX PAPER BOARD COMPANY, INC.
▇▇▇▇▇▇▇▇▇ GYPSUM COMPANY
[List of Guarantors Continued on Next Page]
104
[SIGNATURE PAGE OF GUARANTORS TO CARAUSTAR 9-7/8% SENIOR SUBORDINATED NOTES
INDENTURE]
▇▇▇▇▇▇▇▇ GYPSUM COMPANY, LLC
NEW AUSTELL BOX BOARD COMPANY
PAPER RECYCLING, INC.
PBL INC.
READING PAPERBOARD CORPORATION
RICHMOND PAPERBOARD CORPORATION
▇▇▇▇▇▇▇ PAPERBOARD, INC.
SWEETWATER PAPER BOARD COMPANY, INC.
By: /s/ H. ▇▇▇ ▇▇▇▇▇▇ III
----------------------------------------
Name: H. ▇▇▇ ▇▇▇▇▇▇ III
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Secretary
CARAUSTAR, G.P.
BY: CARAUSTAR INDUSTRIES, INC.,
ITS CO-GENERAL PARTNER
By: /s/ H. ▇▇▇ ▇▇▇▇▇▇ III
----------------------------------------
Name: H. ▇▇▇ ▇▇▇▇▇▇ III
Title: Chief Financial Officer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
BY: CARAUSTAR INDUSTRIAL & CONSUMER
PRODUCTS GROUP, INC.,
ITS CO-GENERAL PARTNER
By: /s/ H. ▇▇▇ ▇▇▇▇▇▇ III
----------------------------------------
Name: H. ▇▇▇ ▇▇▇▇▇▇ III
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Secretary
[SIGNATURES CONTINUED ON NEXT PAGE]
105
THE TRUSTEE:
THE BANK OF NEW YORK, AS TRUSTEE
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Assistant Vice President
--------------------------------------
106
EXHIBIT A TO SENIOR SUBORDINATED INDENTURE
------------------------------------------
(Face of Senior Subordinated Note)
9-7/8% Senior Subordinated Notes due 2011
No. ____-_____ [$____________]
CUSIP NO. [144A-▇▇▇▇▇▇▇▇▇]
[Reg S-▇▇▇▇▇▇▇▇▇]
CARAUSTAR INDUSTRIES, INC.
promises to pay to CEDE & CO(1)., or registered assigns,
the principal sum of ____________________ Dollars ($________) on April 1, 2011.
Interest Payment Dates: April 1 and October 1.
Record Dates: March 15 and September 15.
CARAUSTAR INDUSTRIES, INC.
(SEAL) By:
-------------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
-------------------------------------
Name:
-------------------------------
Title:
------------------------------
This is one of the Notes referred to in the within-mentioned Indenture:
Dated: March 29, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇,
AS TRUSTEE
By:_________________________________________
Authorized Signatory
----------------------
(1) To be included only if the Note is issued in Global Form.
A-1
107
9-7/8% Senior Subordinated Notes due 2011
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("DTC") to
the Company (as defined below) or their agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY
ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(A) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR
(B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT;
(B) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S OF THE SECURITIES ACT,
(D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY), OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH
THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION; AND
A-2
108
(C) AGREES THAT IT WLL DELIVER TO EACH PERSON TO WHOM THIS
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF
THE FOREGOING.
[THIS NOTE IS A REGULATION S GLOBAL NOTE WITHIN THE MEANING OF THE
INDENTURE.](2)
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
(Reverse of Senior Subordinated Note)
1. INTEREST. The Notes will be limited in aggregate principal amount to
$285,000,000 and will mature on April 1, 2011. Caraustar Industries, Inc., a
North Carolina corporation (the "Company"), promises to pay interest on the
principal amount of this Note at the rate of 9-7/8% per annum from March 29,
2001 until maturity (including any Additional Interest required to be paid
pursuant to the provisions of the Registration Rights Agreement). The Company
will pay interest semiannually in arrears on April 1 and October 1 of each year,
or if any such day is not a Business Day, on the next succeeding Business Day
(each an "Interest Payment Date"). Interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of original issuance; provided, however, that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; and, provided further, that the first Interest Payment Date shall
be October 1, 2001. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, and interest on overdue installments of interest, to the extent
lawful, at a rate per annum equal to the rate of interest applicable to the
Notes. All such default interest shall be payable on demand. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Additional Interest to the Persons who are
registered Holders of Notes at the close of business on March 15 or September 15
immediately preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.13 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium, and interest (including any
Additional Interest), if any, at the office or agency of the Company maintained
for such purpose or, at the option of the Company, payment of interest
(including Additional Interest), if any, may be made by check mailed to the
Holders at their addresses set forth in the register of Holders; provided,
however, that payment by wire transfer of immediately available funds will be
required with respect to principal of, and
----------------
(2) To be included only in Regulation S Global Note.
A-3
109
premium and interest (including Additional Interest), if any, on all Global
Notes and all other Notes the Holders of which shall have provided appropriate
wire transfer instructions to the Company or the Paying Agent. Until otherwise
designated by the Company, the Company's office or agency will be the office of
the Trustee maintained for such purpose. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued this Note under an Indenture dated as
of March 29, 2001 (as the same may be amended, modified or supplemented from
time to time, the "Indenture") among the Company, the Guarantors party thereto,
and the Trustee. The terms of the Notes include those stated in the Indenture
and those made a part of the Indenture by reference to the Trust Indenture Act
of 1939, as amended (15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb) (the "TIA"). The Notes
are subject to all such terms and Holders are referred to the Indenture and the
TIA for a statement of such terms. The Notes are general unsecured obligations
of the Company limited to $285,000,000 in aggregate principal amount. As
provided in Article 11 of the Indenture, the payment on each Note is Guaranteed
on a senior subordinated basis by the Guarantors. The Holder of Notes are
subject to, and entitled to all of the benefits of, the Indenture, including the
Subsidiary Guarantees of the Guarantors, as set forth therein.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) below of this Paragraph 5,
the Company shall not have the option to redeem the Notes prior to April 1,
2006. On or after April 1, 2006, the Company shall have the option to redeem the
Notes at any time, in whole or in part, upon not less than 30 nor more than 60
days' prior written notice, at the redemption prices (expressed as percentages
of principal amount) set forth below plus accrued and unpaid interest (including
Additional Interest), if any, thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on April 1 of the years
indicated below:
YEAR PERCENTAGE
---- ----------
2006.............................................105.25%
2007.............................................103.50%
2008.............................................101.75%
2009 and thereafter..............................100.00%
(b) Notwithstanding the provisions of clause (a) of this Paragraph
5, prior to April 1, 2004, the Company may redeem up to 35% in aggregate
principal amount of the Notes originally issued under the Indenture at a
redemption price of 110.50% of the principal amount thereof, plus accrued and
unpaid interest (including Additional Interest), if any, thereon to the
redemption date, with the net cash proceeds of one or more Public Equity
Offerings; provided that at least $185.25 million in aggregate principal amount
of the Notes remain outstanding following such redemption (excluding those Notes
owned by the Company or any Subsidiary thereof); and provided further, that
A-4
110
such redemption shall have occurred within 60 days of the closing of any such
Public Equity Offering.
6. MANDATORY REDEMPTION.
Subject to Section 4.10 and Section 4.16 of the Indenture, the Company
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
7. REPURCHASE AT THE OPTION OF HOLDERS.
(a) If there is a Change of Control, each Holder of Notes will have the
right to require the Company to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of such Holder's Notes pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest (including Additional Interest) thereon, if any, to the date of
purchase (the "Change of Control Payment"). Within 30 days following any Change
of Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes pursuant to the procedures required by the Indenture and
described in such notice. The Company shall comply with the requirements of Rule
l4e-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.
(b) If the Company or a Subsidiary consummates any Asset Sales, as soon
as practicable, but in no event later than 30 Business Days, after any date that
the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company shall
commence an Asset Sale Offer to purchase the maximum principal amount of Notes
and other Pari Passu Debt of the Company (to the extent required by the
instrument governing such other Indebtedness), that may be purchased out of the
Excess Proceeds. Any Notes and other Pari Passu Debt to be purchased pursuant to
an Asset Sale Offer shall be purchased pro rata based on the aggregate principal
amount of Notes and such other applicable Pari Passu Debt outstanding and all
Notes shall be purchased at an offer price in cash (or in respect of such other
Pari Passu Debt, in cash and/or such other property, if any, as may be provided
for or permitted by the terms of such Indebtedness and the Indenture) equal to
100% of the principal amount thereof, plus accrued and unpaid interest
(including Additional Interest), if any, to the date of purchase or, in respect
of such other Pari Passu Debt, such lesser price, if any, as may be provided for
by the terms of such Indebtedness (or if such Asset Sale Offer is with respect
to any discount or zero coupon securities prior to the date of their full
accretion, 100% of the accreted value thereof on the date of purchase). To the
extent that any Excess Proceeds remain after completion of an Asset Sale Offer,
the Company may use the remaining amount for any purpose permitted by the
Indenture and the amount of Excess Proceeds shall be reset at zero. Holders of
Notes that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related Asset Sale Offer Purchase Date and
may elect to have such Notes purchased by completing the form titled "Option of
Holder to Elect Purchase" on the reverse of the Notes.
8. NOTICE OF REDEMPTION.
Notice of redemption shall be mailed by first class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Notes to be redeemed at its registered address. If any Note is to be redeemed in
part only, the notice of redemption that relates to such Note shall state
A-5
111
the portion of the principal amount thereof to be redeemed. Notes may be
redeemed in part but only in whole multiples of $1,000, unless all of the Notes
held by a Holder are to be redeemed. On and after the redemption date, interest
ceases to accrue on Notes or portions thereof called for redemption.
9. SUBORDINATION.
The Notes and Subsidiary Guarantees are subordinated in right of
payment, in the manner and to the extent set forth in the Indenture, to the
prior payment in full of all Senior Debt, whether outstanding on the Issue Date
or thereafter created, incurred, assumed or guaranteed. Each Holder by its
acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on its behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee its attorney-in-fact for such purposes.
10. DENOMINATIONS, TRANSFER, EXCHANGE.
The Notes are in registered form without interest coupons in
denominations of $1,000 and integral multiples of $1,000. The transfer of Notes
may be registered and Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Note or portion of
a Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, the Company need not exchange or register the
transfer of any Notes for a period of 15 days before the date on which a notice
of redemption is mailed or during the period between a record date and the
corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture, the Notes or the Subsidiary Guarantees may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes), and 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 (including Additional Interest), if any, on the Notes, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of the Indenture or the Notes may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding Notes
(including consent obtained in connection with a purchase of or tender offer or
exchange for Notes). Without the consent of any Holder of a Note, the Indenture
or the Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of the Company's obligations
to the Holders of the Notes in the case of a merger, consolidation or sale of
all or substantially all of the assets of the Company, to make any change that
would provide any additional rights or benefits to the Holders of the Notes or
that does not adversely affect the legal rights under the Indenture of any such
Holder, or
A-6
112
to comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) default which
continues for 30 days in the payment when due of interest (including Additional
Interest) on, the Notes; (ii) default in payment when due of the principal of or
premium, if any, on the Notes; (iii) failure by the Company or any Restricted
Subsidiary for 30 days after receipt of notice from the Trustee or Holders of at
least 25% in principal amount of the then outstanding Notes to comply with the
provisions of Section 4.07, 4.09, 4.10 or 4.16 of the Indenture (iv) failure by
the Company or any Restricted Subsidiary for 60 days after receipt of notice
from the Trustee or Holders of at least 25% in principal amount of the then
outstanding Notes to comply with any of its other agreements or obligations in
the Indenture or the Notes; (v) Indebtedness of the Company or any Restricted
Subsidiary (other than Indebtedness owed to the Company or any Restricted
Subsidiary) or any Indebtedness that is Guaranteed by the Company or a
Restricted Subsidiary is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default (or
similar event or circumstance) and the total amount of such Indebtedness unpaid
or accelerated exceeds $10.0 million; (vi) failure by the Company or any of its
Restricted Subsidiaries to pay final judgments for the payment of money (other
than judgments which are covered by enforceable insurance policies issued by
reputable carriers and as to which such insurance carriers have acknowledged
liability in writing) aggregating in excess of $10.0 million, which judgments
are not paid, discharged, bonded or stayed for a period of 60 days after notice
thereof has been given by the Trustee or Holders of at least 25% in principal
amount of the then outstanding Notes issued under the Indenture; (vii) except as
permitted by the Indenture, any Subsidiary Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor, or any Person acting on behalf
of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee; and (viii) certain events of bankruptcy or insolvency with respect to
the Company, any Significant Subsidiary or group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary. The Trustee must, within 90
days after the occurrence of a Default or Event of Default, give to the Holders
notice of all uncured Defaults or Events of Default known to it; provided,
however, that except in the case of a Default or Event of Default in payment of
any Note, the Trustee may withhold such notice if a committee of its Responsible
Officers in good faith determines that the withholding of such notice is in the
interest of the Holders. The Company is required to furnish annually to the
Trustee a certificate as to their compliance with the terms of the Indenture.
14. TRUSTEE DEALINGS WITH COMPANY. 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.
15. No RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or shareholder of the Company or any Guarantor,
as such, shall have any liability for any obligations of the Company or the
Guarantors under the Notes, the Subsidiary Guarantees or the 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.
16. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
▇-▇
▇▇▇
▇▇. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER-RESTRICTED SECURITIES. In
addition to the rights provided to Holders of the Notes under the Indenture,
Holders shall have all the rights set forth in the Registration Rights Agreement
dated as of March 22, 2001 among the Company and the parties named on the
signature pages thereof (the "Registration Rights Agreement").
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to the Holders. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE AND THE NOTES WITHOUT GIVING EFFECT
TO CONFLICTS OF LAWS PRINCIPLES.
21. Terms used herein and not defined herein have their respective
defined meanings as set forth in the Indenture.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Caraustar Industries, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
A-8
114
SENIOR SUBORDINATED SUBSIDIARY GUARANTEE
Austell Box Board Corporation, Austell Holding Company, LLC, Buffalo
Paperboard Corporation, Camden Paperboard Corporation, Caraustar, G.P.,
Caraustar Custom Packaging Group, Inc., Caraustar Custom Packaging Group
(Maryland), Inc., Caraustar Industrial & Consumer Products Group, Inc.,
Caraustar Paperboard Corporation, Caraustar Recovered Fiber Group, Inc.,
Carolina Component Concepts, Inc., Carolina Converting Incorporated, Carolina
Paper Board Corporation, Carotell Paper Board Corporation, Chattanooga
Paperboard Corporation, Chicago Paperboard Corporation, Cincinnati Paperboard
Corporation, Columbus Recycling, Inc., Federal Transport, Inc., Gypsum MGC,
Inc., Halifax Paper Board Company, Inc., ▇▇▇▇▇▇▇▇▇ Gypsum Company, ▇▇▇▇▇▇▇▇
Gypsum Company, LLC, New Austell Box Board Company, Paper Recycling, Inc., PBL
Inc., Reading Paperboard Corporation, Richmond Paperboard Corporation, ▇▇▇▇▇▇▇
Paperboard, Inc., and Sweetwater Paper Board Company, Inc. (the "Guarantors")
have unconditionally guaranteed on a senior subordinated basis (such guarantee
by each Guarantor being referred to herein as the "Subsidiary Guarantee") (i)
the due and punctual payment of the principal of and interest on the Notes,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of interest on the overdue principal and interest, if any, on the Notes, to the
extent lawful, and the due and punctual performance of all other Obligations of
the Company to the Holders or the Trustee all in accordance with the terms set
forth in Article 11 of the Indenture and (ii) in case of any extension of time
of payment or renewal of any Notes or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.
The obligations of each Guarantor to the Holders and to the Trustee
pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth
and are expressly subordinated and subject in right of payment to the prior
payment in full in cash of all Senior Debt of such Guarantor, to the extent and
in the manner provided, in Article 12 of the Indenture, and reference is hereby
made to such Indenture for the precise terms of the Subsidiary Guarantee therein
made.
No director, officer, employee or stockholder, as such, of the
Guarantor shall have any liability under the Subsidiary Guarantee. Each holder
of a Note by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Subsidiary
Guarantees.
A-9
115
The Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Notes upon which the
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
AUSTELL BOX BOARD CORPORATION
AUSTELL HOLDING COMPANY, LLC
BUFFALO PAPERBOARD CORPORATION
CAMDEN PAPERBOARD CORPORATION
CARAUSTAR CUSTOM PACKAGING GROUP, INC.
CARAUSTAR CUSTOM PACKAGING GROUP (MARYLAND), INC.
CARAUSTAR INDUSTRIAL & CONSUMER PRODUCTS GROUP, INC.
CARAUSTAR PAPERBOARD CORPORATION
CARAUSTAR RECOVERED FIBER GROUP, INC.
CAROLINA COMPONENT CONCEPTS, INC.
CAROLINA CONVERTING INCORPORATED
CAROLINA PAPER BOARD CORPORATION
CAROTELL PAPER BOARD CORPORATION
CHATTANOOGA PAPERBOARD CORPORATION
CHICAGO PAPERBOARD CORPORATION
CINCINNATI PAPERBOARD CORPORATION
COLUMBUS RECYCLING, INC.
FEDERAL TRANSPORT, INC.
GYPSUM MGC, INC.
HALIFAX PAPER BOARD COMPANY, INC.
▇▇▇▇▇▇▇▇▇ GYPSUM COMPANY
▇▇▇▇▇▇▇▇ GYPSUM COMPANY, LLC
NEW AUSTELL BOX BOARD COMPANY
PAPER RECYCLING, INC.
PBL INC.
[LIST OF GUARANTORS CONTINUED ON NEXT PAGE]
A-10
116
[SIGNATURE PAGE OF GUARANTORS TO CARAUSTAR 9-7/8% GLOBAL NOTE]
READING PAPERBOARD CORPORATION
RICHMOND PAPERBOARD CORPORATION
▇▇▇▇▇▇▇ PAPERBOARD, INC.
SWEETWATER PAPER BOARD COMPANY,
INC.
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
CARAUSTAR, G.P.
BY: CARAUSTAR INDUSTRIES, INC.,
ITS CO-GENERAL PARTNER
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
BY: CARAUSTAR INDUSTRIAL & CONSUMER
PRODUCTS GROUP, INC.,
ITS CO-GENERAL PARTNER
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
A-11
117
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
--------------------------------------------------------------------------------
(Insert assignee's Soc. Sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________________________________ to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.
--------------------------------------------------------------------------------
Date: ___________________
Your Signature:____________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee(3):____________________
---------------------
(3) Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-1
118
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.16 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.16
Subject to Section 3.02 of the Indenture, if you want to elect to have only part
of the Note purchased by the Company pursuant to Section 4.10 or Section 4.16 of
the Indenture, state the amount you elect to have purchased: $____________
Date: Your Signature:________________________________
_________(Sign exactly as your name appears on
the Note)
Tax Identification No.:____________
Signature Guarantee(4):________________________
--------------------
(4) Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-2
119
SCHEDULE OF EXCHANGES OF CERTIFICATED SECURITIES
The following exchanges of a part of this Global Note for Certificated
Securities have been made:(5)
Principal
Amount of Amount of Amount of Signature of
decrease in increase in this Global Note authorized
Date of Principal Principal following such signatory of
Exchange Amount of Amount of decrease (or Trustee or
this Global Note this Global Note increase) Note Custodian
------------------------------------------------------------------------------------------------------
---------------------
(5) To be included only if the Note is to be issued in Global form.
A-3
120
EXHIBIT B TO SENIOR SUBORDINATED INDENTURE
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF NOTES
The Bank of New York, as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: 9-7/8% Senior Subordinated Notes due 2011 of Caraustar
Industries, Inc.
This Certificate relates to $_________________ principal amount of
Notes held in *______________ book-entry or *____________ definitive form by
______________ (the "Transferor").
The Transferor:
[ ] has requested the Trustee by written order to deliver in
exchange for its beneficial interest in the Global Note held
by the Depositary a Note or Notes in definitive, registered
form of authorized denominations in an aggregate principal
amount equal to its beneficial interest in such Global Note
(or the portion thereof indicated above); or
[ ] has requested the Trustee by written order to exchange or
register the transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above captioned Notes and as provided in Section 2.6 of such
Indenture, the transfer of this Note does not require registration under the
Securities Act (as defined below) because:*
[ ] Such Note is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.6(a)(ii)(A) or
Section 2.6(d)(i)(A) of the Indenture).
[ ] Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of
1933, as amended (the "Securities Act")) in reliance on Rule
144A (in satisfaction, to the extent applicable, of Section
2.6(a)(ii)(B), Section 2.6(b)(1)(x) or Section 2.6(d)(i)(B) of
the Indenture).
[ ] Such Note is being transferred in accordance with Rule 144 or
Rule 904 under the Securities Act.
------------------
*Check applicable box.
B-1
121
[ ] Such Note is being transferred pursuant to an effective
registration statement under the Securities Act (in
satisfaction of Section 2.06(a)(1i)(B) or Section
2.06(d)(1)(B) of the Indenture).
_____________________________________
[INSERT NAME OF TRANSFEROR]
By:__________________________________
Date:_________________
--------------------
*Check applicable box.
B-2
122
EXHIBIT C TO SENIOR SUBORDINATED INDENTURE
FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S
-------- --, ----
The Bank of New York, as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: 9-7/8% Senior Subordinated Notes due 2011 (the "Notes") of
Caraustar Industries, Inc. (the "Company")
Ladies and Gentlemen:
In connection with our proposed sale of $________________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transaction was executed in,
on, or through the facilities of a designated offshore securities
market and neither we nor any person acting on our behalf knows that
the transaction has been pre-arranged with a buyer in the United
States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer
restrictions applicable to the Notes;
(6) if the circumstances set forth in Rule 904(c) under the
Securities Act are applicable, we have complied with the additional
conditions therein, including (if applicable) sending a confirmation or
other notice stating that the Securities may be offered and sold during
the restricted period specified in Rule 903(c)(2) or (3), as
applicable, in accordance with the provisions of Regulation S, pursuant
to registration of
C-1
123
the Notes under the Securities Act, or pursuant to an available
exemption from the registration requirements under the Securities Act;
and
(7) if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) are applicable thereto, we confirm that
such sale has been made in accordance with such provisions.
You and the Company are entitled to rely upon this letter and
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
(Name of Transferor)
By:
-----------------------------------------
Authorized Signature
C-2