Exhibit 4.12
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RIVERWOOD INTERNATIONAL CORPORATION
10 5/8% Senior Notes due 2007
INDENTURE
Dated as of June 21, 0000
XXXXX XXXXXX BANK AND TRUST COMPANY,
Trustee
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.....................................................1
SECTION 1.02. Other Definitions..............................................29
SECTION 1.03. Incorporation by Reference of Trust Indenture Act..............30
SECTION 1.04. Rules of Construction..........................................30
ARTICLE 2
THE SECURITIES
SECTION 2.01. Form and Dating................................................31
SECTION 2.02. Execution and Authentication...................................31
SECTION 2.03. Registrar and Paying Agent.....................................32
SECTION 2.04. Paying Agent To Hold Money in Trust............................33
SECTION 2.05. Securityholder Lists...........................................33
SECTION 2.06. Transfer and Exchange..........................................33
SECTION 2.07. Replacement Securities.........................................34
SECTION 2.08. Outstanding Securities.........................................35
SECTION 2.09. Temporary Securities...........................................35
SECTION 2.10. Cancelation....................................................36
SECTION 2.11. Defaulted Interest.............................................36
SECTION 2.12. CUSIP and ISIN Numbers.........................................36
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee.............................................37
SECTION 3.02. Selection of Securities To Be Redeemed.........................37
SECTION 3.03. Notice of Redemption...........................................37
SECTION 3.04. Effect of Notice of Redemption.................................38
SECTION 3.05. Deposit of Redemption Price....................................38
SECTION 3.06. Securities Redeemed in Part....................................38
i
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Securities..........................................39
SECTION 4.02. SEC Reports....................................................39
SECTION 4.03. Limitation on Indebtedness.....................................39
SECTION 4.04. Limitation on Restricted Payments and Investments..............43
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries........................................50
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock.............52
SECTION 4.07. Limitation on Transactions with Affiliates.....................56
SECTION 4.08. Change of Control..............................................57
SECTION 4.09. Compliance Certificate.........................................58
SECTION 4.10. Further Instruments and Acts...................................59
SECTION 4.11. Limitation on Liens............................................59
SECTION 4.12. Limitation on the Sale or Issuance of Preferred
Stock of Restricted Subsidiaries...............................59
SECTION 4.13. Future Note Guarantors.........................................59
SECTION 4.14. Limitation on Sale/Leaseback Transactions......................60
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. When Company May Merge or Transfer Assets......................60
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default..............................................61
SECTION 6.02. Acceleration...................................................63
SECTION 6.03. Other Remedies.................................................64
SECTION 6.04. Waiver of Defaults.............................................64
SECTION 6.05. Control by Majority............................................64
SECTION 6.06. Limitation on Suits............................................64
SECTION 6.07. Rights of Holders To Receive Payment...........................65
SECTION 6.08. Collection Suit by Trustee.....................................65
SECTION 6.09. Trustee May File Proofs of Claim...............................65
ii
SECTION 6.10. Priorities.....................................................66
SECTION 6.11. Undertaking for Costs..........................................66
SECTION 6.12. Waiver of Stay or Extension Laws...............................66
SECTION 6.13. Restoration of Rights and Remedies.............................66
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee..............................................67
SECTION 7.02. Rights of Trustee..............................................68
SECTION 7.03. Individual Rights of Trustee...................................68
SECTION 7.04. Trustee's Disclaimer...........................................69
SECTION 7.05. Notice of Defaults.............................................69
SECTION 7.06. Reports by Trustee to Holders..................................69
SECTION 7.07. Compensation and Indemnity.....................................69
SECTION 7.08. Replacement of Trustee.........................................70
SECTION 7.09. Successor Trustee by Merger....................................71
SECTION 7.10. Eligibility; Disqualification..................................71
SECTION 7.11. Preferential Collection of Claims Against Company..............71
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Securities; Defeasance...............72
SECTION 8.02. Conditions to Defeasance.......................................73
SECTION 8.03. Application of Trust Money.....................................74
SECTION 8.04. Repayment to Company...........................................74
SECTION 8.05. Indemnity for Government Obligations...........................74
SECTION 8.06. Reinstatement..................................................74
ARTICLE 9
AMENDMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.....................................75
SECTION 9.02. With Consent of Holders........................................76
SECTION 9.03. Compliance with Trust Indenture Act............................77
iii
SECTION 9.04. Effect of Amendments; Revocation and Effect of Consents and
Waivers........................................................77
SECTION 9.05. Notation on or Exchange of Securities..........................77
SECTION 9.06. Trustee To Sign Amendments.....................................77
SECTION 9.07. Payment for Consent............................................78
ARTICLE 10
NOTE GUARANTEES
SECTION 10.01. Note Guarantees...............................................78
SECTION 10.02. Limitation on Liability.......................................80
SECTION 10.03. Successors and Assigns........................................80
SECTION 10.04. No Waiver.....................................................80
SECTION 10.05. Initial Note Guarantors; Execution of Supplemental Indenture
for Future Note Guarantors....................................81
SECTION 10.06. Release of Note Guarantee.....................................81
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls..................................81
SECTION 11.02. Notices.......................................................82
SECTION 11.03. Communication by Holders with Other Holders...................83
SECTION 11.04. Certificate and Opinion as to Conditions Precedent............83
SECTION 11.05. Statements Required in Certificate or Opinion.................83
SECTION 11.06. Form of Documents Delivered to Trustee........................84
SECTION 11.07. When Securities Disregarded...................................84
SECTION 11.08. Acts of Holders; Rules by Trustee, Paying Agent and Registrar.84
SECTION 11.09. Legal Holidays................................................85
SECTION 11.10. Governing Law.................................................85
SECTION 11.11. No Recourse Against Others....................................85
SECTION 11.12. Successors....................................................86
SECTION 11.13. Multiple Originals............................................86
SECTION 11.14. Table of Contents; Headings...................................86
SECTION 11.15. Separability..................................................86
SECTION 11.16. Benefits of Indenture.........................................86
Appendix A - Provisions Relating to Initial Securities, Private Exchange
Securities and Exchange Securities
iv
Exhibit A - Form of Initial Security
Exhibit B - Form of Exchange Security
Exhibit C - Form of Supplemental Indenture
Exhibit D - Form of Transferee Letter of Representation
v
CROSS-REFERENCE TABLE
TIA....................................................................Indenture
SECTION SECTION
310(a)(1)...................................................................7.10
(a)(2)......................................................................7.10
(a)(3)......................................................................N.A.
(a)(4)......................................................................N.A.
(b)...................................................................7.08; 7.10
(c).........................................................................N.A.
311(a)......................................................................7.11
(b).........................................................................7.11
(c).........................................................................N.A.
312(a)......................................................................2.05
(b)........................................................................11.03
(c)........................................................................11.03
313(a)......................................................................7.06
(b)(1)......................................................................N.A.
(b)(2)......................................................................7.06
(c)........................................................................11.02
(d).........................................................................7.06
314(a).........................................................4.02; 4.09; 11.02
(b).........................................................................N.A.
(c)(1).....................................................................11.04
(c)(2).....................................................................11.04
(c)(3)......................................................................N.A.
(d).........................................................................N.A.
(e)........................................................................11.05
(f).........................................................................4.09
315(a)......................................................................7.01
(b)..................................................................7.05; 11.02
(c).........................................................................7.01
(d).........................................................................7.01
(e).........................................................................6.11
316(a)(last sentence)......................................................11.07
(a)(1)(A)...................................................................6.05
(a)(1)(B)...................................................................6.04
(a)(2)......................................................................N.A.
(b).........................................................................6.07
317(a)(1)...................................................................6.08
(a)(2)......................................................................6.09
(b).........................................................................2.04
318(a).....................................................................11.01
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed
to be part of the Indenture.
INDENTURE dated as of June 21, 2001, among
RIVERWOOD INTERNATIONAL CORPORATION, a Delaware
corporation (together with its successors and
assigns, the "Company"), RIC HOLDING, INC., a
Delaware corporation and the Company's parent ("RIC
HOLDING"), RIVERWOOD HOLDING, INC., a Delaware
corporation and RIC Holding's parent ("Holding") and
STATE STREET BANK AND TRUST COMPANY, Massachusetts
bank and trust company (the "Trustee").
For good and valuable consideration, the receipt of which is
hereby acknowledged, each party covenants and agrees as follows for the benefit
of the other party and for the equal and ratable benefit of the Holders of (a)
the Company's 105/8% Senior Notes due 2007 (the "Initial Securities"), (b) if
and when issued as provided in the Registration Agreement (as defined in
Appendix A hereto (the "Appendix")), the Company's 105/8% Senior Notes due 2007
issued in the Registered Exchange Offer in exchange for any Initial Securities
(the "Exchange Securities") and (c) if and when issued as provided in the
Registration Agreement, the Private Exchange Securities (together with the
Initial Securities and any Exchange Securities issued hereunder, the
"Securities"). Except as otherwise provided herein, the Securities will be
limited to $250,000,000 in aggregate principal amount outstanding.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquisition Date" means March 27, 1996.
"Additional Assets" means (i) any property or assets (other
than Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or another Restricted Subsidiary; or (iii) Capital Stock of
any Person that at such time is a Restricted Subsidiary acquired from a third
party; PROVIDED, HOWEVER, that, in the case of clauses (ii) and (iii), such
Restricted Subsidiary is primarily engaged in a Related Business.
1
"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 the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Section 4.07 only, "Affiliate" shall also mean any Beneficial Owner
of shares representing 10% or more of the total voting power of the Voting Stock
(on a fully diluted basis) of the Company or of rights or warrants to purchase
such Voting Stock (whether or not currently exercisable) to the extent
conferring Beneficial Ownership of such Voting Stock, and any Person who would
be an Affiliate of any such Beneficial Owner pursuant to the first sentence
hereof.
"Annual Carryover Amount" means, for any fiscal year, the
amount (if any) by which (x) $5,000,000 plus the portion of the Management
Contribution Amount (if any) attributable to the immediately preceding fiscal
year, exceeds (y) the amount of loans, advances, dividends or distributions
pursuant to Section 4.04(b)(vii) (net of repayments of any such loans or
advances), which loans, advances, dividends, distributions or repayments were
made in the immediately preceding fiscal year.
"Applicable Premium" means, with respect to a Security, the
greater of (i) 1.0% of the then outstanding principal amount of such Security
and (ii) the excess of (A) the present value of all remaining required interest
and principal payments due on such Security, computed using a discount rate
equal to the Treasury Rate plus 75 basis points, over (B) the then outstanding
principal amount of such Security.
"Asset Disposition" means any sale, lease, transfer or other
disposition of shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares), property or other assets (each referred to for
the purposes of this definition as a "disposition") by the Company or any of its
Restricted Subsidiaries (including any disposition by means of a merger,
consolidation or similar transaction), other than (i) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Restricted Subsidiary, (ii) a disposition in the ordinary course
of business, (iii) dispositions with a fair market value of less than
$10,000,000 in the aggregate in any fiscal year, (iv) a disposition of Capital
Stock of a Restricted Subsidiary pursuant to an agreement or other obligation
with or to a Person (other than the Company or a Restricted Subsidiary) from
whom such Restricted Subsidiary was acquired, or from whom such Restricted
Subsidiary acquired its business and assets (having been newly formed in
connection with such acquisition), entered into in connection with such
acquisition, (v) a disposition of properties and assets that is governed by
Section 5.01, (vi) a disposition of not more than 5% of the outstanding Capital
Stock of a non-U.S. Restricted Subsidiary that has been approved by the Board of
Directors and (vii) for purposes of Section 4.06 only, a disposition subject to
Section 4.04.
2
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate assumed in making calculations in accordance with FAS 13) of the
total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of (a) the numbers of years from the date
of determination to the dates of each successive scheduled principal payment of
such Indebtedness or scheduled mandatory redemption or similar payment with
respect to such Preferred Stock multiplied by (b) the amount of such payment by
(ii) the sum of all such payments.
"Bank Indebtedness" means any and all amounts, whether
outstanding on the 1997 Notes Issue Date or thereafter incurred, payable under
or in respect of any of the Credit Agreements and any related notes, collateral
documents, letters of credit and guarantees, including principal, premium (if
any), interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company or any
Restricted Subsidiary whether or not a claim for post-filing interest is allowed
in such proceedings), fees, charges, expenses, reimbursement obligations,
guarantees and all other amounts payable thereunder or in respect thereof.
"Beneficial Owner" means a "beneficial owner" as defined in
Rules 13d-3 and 13d-5 under the Exchange Act.
"Beneficially Own" means "beneficially own" as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, and "Beneficial Ownership" has a
meaning correlative thereto.
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means a day other than a Saturday, Sunday or
other day on which banking institutions in New York State are authorized or
required by law to close.
"Capital Stock" of any Person means any and all shares of,
rights to purchase, warrants or options for, or participations or other
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is
required to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall
3
be the capitalized amount of such obligation determined in accordance with GAAP;
and the Stated Maturity thereof shall be the date of the last payment of rent or
any other amount due under such lease.
"Cash Equivalents" means (A) any security, maturing not more
than six months after the date of acquisition, issued by the United States of
America, or an instrumentality or agency thereof and guaranteed fully as to
principal, premium, if any, and interest by the United States of America, (B)
any certificate of deposit, time deposit or bankers' acceptance, maturing not
more than six months after the day of acquisition, issued by any commercial
banking institution that is a member of the Federal Reserve System or a
commercial banking institution organized and located in a country recognized by
the United States of America, in each case having combined capital and surplus
and undivided profits of not less than $500,000,000 (or the equivalent thereof),
whose short-term debt (other than short-term debt of a lender under the Credit
Agreement) has a rating, at the time as of which any investment therein is made,
of "P-1" (or higher) according to Moody's, or "A-1" (or higher) according to
S&P, (C) commercial paper maturing not more than three months after the date of
acquisition, issued by a corporation (other than an Affiliate or Subsidiary of
the Company) organized and existing under the laws of the United States of
America with a rating, at the time as of which any investment therein is made,
of "P-1" (or higher) according to Moody's or "A-1" (or higher) according to S&P,
(D) any money market deposit accounts issued or offered by a domestic commercial
bank having capital and surplus in excess of $500,000,000 (or the equivalent
thereof), (E) investments in money market funds complying with the risk limiting
conditions of Rule 2a-7 (or any successor rule) of the SEC under the Investment
Company Act of 1940, as amended, and (F) investments similar to any of the
foregoing denominated in foreign currencies approved by the Board of Directors.
"CD&R" means Xxxxxxx, Dubilier & Rice, Inc., a Delaware
corporation.
"CD&R Fund V" means Xxxxxxx, Dubilier & Rice Fund V Limited
Partnership, a Cayman Islands exempted limited partnership, and its successors
and assigns.
"Change of Control" means any of the following events:
(i) (A) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than one or more Permitted
Holders or Holding or RIC Holding, is or becomes (as a result of the
issuance of securities, by merger or otherwise) the Beneficial Owner,
directly or indirectly, of more than 35% of the total voting power of
the Voting Stock of the Company and (B) the Permitted Holders
Beneficially Own, directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the Voting Stock of the Company
than such other person and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a
majority of the Board of Directors (for the purposes of this clause
(i), such other person shall be deemed to Beneficially Own any Voting
Stock
4
of a specified corporation held by a parent corporation of which such
specified corporation is a Subsidiary, if such other person
Beneficially Owns, directly or indirectly, more than 35% of the voting
power of the Voting Stock of such parent corporation and the Permitted
Holders Beneficially Own, directly or indirectly, in the aggregate a
lesser percentage of the voting power of the Voting Stock of such
parent corporation and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a
majority of the board of directors of such parent corporation);
(ii) the merger or consolidation of Holding, RIC Holding or
the Company with or into another Person or the sale of all or
substantially all the assets of Holding, RIC Holding or the Company to
another Person (a "Transferee"), in each case, other than a Person that
is controlled by the Permitted Holders, and, in the case of any such
merger or consolidation, the securities of Holding, RIC Holding or the
Company, as the case may be, that are outstanding immediately prior to
such transaction and which represent 100% of the aggregate voting power
of the Voting Stock of Holding, RIC Holding or the Company, as the case
may be, are changed into or exchanged for cash, securities or property,
unless either (x) pursuant to such transaction such securities are
changed into or exchanged for, in addition to any other consideration,
(or following consummation of such transaction the Beneficial Owners of
such securities otherwise are Beneficial Owners of) securities of the
surviving corporation or Transferee (or another Person of which the
surviving corporation or Transferee is a Subsidiary) that represent
immediately after such transaction, at least a majority of the
aggregate voting power of the Voting Stock of the surviving corporation
or Transferee or such other Person, or (y) pursuant to any such
transaction (A) no "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes (as a result of the issuance of securities, by merger or
otherwise), the Beneficial Owner, directly or indirectly, of more than
35% of the total voting power of the Voting Stock of the surviving
corporation or Transferee, as the case may be, or (B) the Permitted
Holders Beneficially Own, directly or indirectly, in the aggregate an
equal or greater percentage of the total voting power of the Voting
Stock of the surviving corporation or Transferee, as the case may be,
than any such other person or have the right or ability by voting
power, contract or otherwise to elect or designate for election a
majority of the board of directors of the surviving corporation or
Transferee, as the case may be (for purposes of this clause (ii), such
other person shall be deemed to Beneficially Own any Voting Stock of a
specified corporation held by a parent corporation of which such
specified corporation is a Subsidiary, if such other person
Beneficially Owns, directly or indirectly, more than 35% of the voting
power of the Voting Stock of such parent corporation and the Permitted
Holders Beneficially Own, directly or indirectly, in the aggregate a
lesser percentage of the voting power of the Voting Stock of such
parent corporation and do not have the right or ability by voting
power, contract or otherwise
5
to elect or designate for election a majority of the board of directors
of such parent corporation); or
(iii) during any period of two consecutive years commencing
after the 1997 Notes Issue Date, individuals who at the beginning of
such period constituted the Board of Directors of the Company (together
with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of the Company was
approved by a vote of 662/3% of the directors of the Company then still
in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of Directors
of the Company then in office.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commodities Agreements" means one or more of the following
agreements entered into by a Person and one or more financial institutions:
commodity future contracts, forward contracts, options or other similar
agreements or arrangements designed to protect against fluctuations in the price
of, or the shortage of supply of, commodities from time to time.
"Company" means the party named as the Company in the first
paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture and thereafter means such successor.
"Consolidated Cost of Timber Harvested" means, for any period,
the cost of timber harvested of the Company and its Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination to (ii) Consolidated Interest Expense for such four
fiscal quarters; PROVIDED, HOWEVER, that:
(1) if the Company or any Restricted Subsidiary (x) has
Incurred any Indebtedness since the beginning of such period that
remains outstanding on such date of determination or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio is
an Incurrence of Indebtedness, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving effect on a pro forma
basis to such Indebtedness and the application of the proceeds thereof
as if such Indebtedness had been Incurred on the first day of such
period or (y) has repaid, repurchased, defeased or otherwise discharged
any Indebtedness since the beginning of the period that is no longer
outstanding on such date of determination, or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio
6
involves a discharge of Indebtedness, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving effect to such
discharge of such Indebtedness, including with the proceeds of such new
Indebtedness, as if such discharge had occurred on the first day of
such period (except that, in making such computation, the amount of
Indebtedness under any revolving credit facility shall be computed
based upon the average daily balance of such Indebtedness during such
four-quarter period);
(2) if since the beginning of such period the Company or any
Restricted Subsidiary shall have disposed of any company or any
business or any group of assets constituting an operating unit (a
"Disposal"), the EBITDA for such period shall be reduced by an amount
equal to the EBITDA (if positive) directly attributable to the assets
which are the subject of such Disposal for such period or increased by
an amount equal to the EBITDA (if negative) directly attributable
thereto for such period and Consolidated Interest Expense for such
period shall be reduced by an amount equal to the Consolidated Interest
Expense directly attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Disposal for such period (and, if
the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to
the Indebtedness of such Restricted Subsidiary to the extent the
Company and its continuing Restricted Subsidiaries are no longer liable
for such Indebtedness after such sale);
(3) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have acquired any
company or any business or any group of assets constituting an
operating unit (an "Acquisition"), EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma
effect thereto (including the Incurrence of any Indebtedness) as if
such Acquisition occurred on the first day of such period; and
(4) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into
the Company or any Restricted Subsidiary since the beginning of such
period) shall have made any Disposal or Acquisition that would have
required an adjustment pursuant to clause (2) or (3) above if made by
the Company or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto as if such Disposal or Acquisition
occurred on the first day of such period.
If any Indebtedness bears a floating rate of interest and is
being given pro forma effect, the interest expense on such Indebtedness shall be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking
7
into account any Interest Rate Agreement applicable to such Indebtedness to the
extent of the remaining term of such Interest Rate Agreement). If any
Indebtedness bears, at the option of the Company or a Restricted Subsidiary, a
fixed or floating rate of interest and is being given pro forma effect, the
interest expense on such Indebtedness shall be computed by applying, at the
option of the Company or such Restricted Subsidiary, either a fixed or floating
rate. If any Indebtedness which is being given pro forma effect was Incurred
under a revolving credit facility, the interest expense on such Indebtedness
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period.
"Consolidated Income Tax Expense" means for any period, as
applied to any Person, the provision for federal, state, local and foreign
income taxes of such Person and its Consolidated Subsidiaries for such period as
determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries, net of any interest income of the Company and its consolidated
Restricted Subsidiaries, as determined in accordance with GAAP, minus, to the
extent included in such interest expense, amortization of financing costs
associated with the Riverwood Acquisition and the financing thereof, plus, to
the extent Incurred by the Company and its Restricted Subsidiaries in such
period but not included in such interest expense, (i) interest expense
attributable to capital leases, (ii) amortization of debt discount, (iii) the
interest portion of any deferred payment obligation, (iv) net costs associated
with Interest Rate Agreements, (v) interest actually paid by the Company or any
Restricted Subsidiary on any Indebtedness of any other Person to the extent such
Indebtedness is Guaranteed by the Company or any Restricted Subsidiary, (vi) the
earned discount or yield with respect to the sale of receivables (without
duplication of amounts included in Consolidated Net Income) and (vii) for the
purposes of determining whether a Sale/Leaseback Transaction is permitted under
Section 4.14 only, obligations for the interest component of rental payments in
respect of any lease in a Sale/Leaseback Transaction (other than a capital
lease) determined as if such lease were a capital lease, all as determined in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the net
income (loss) of the Company and its consolidated Subsidiaries as determined in
accordance with GAAP; PROVIDED, HOWEVER, that there shall not be included in
such Consolidated Net Income:
(i) any net income of any Person if such Person is not a
Restricted Subsidiary, except that the Company's equity in the net
income of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution,
(ii) any net income (loss) of any Person acquired by the Company or a
Subsidiary in a pooling of interests transaction for any period prior to the
date of such acquisition,
8
(iii) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company (other than
restrictions in effect on the 1997 Notes Issue Date with respect to a
Restricted Subsidiary and other than restrictions that are, with
respect to such Restricted Subsidiary, taken as a whole, no less
favorable to the holders of the Securities than the restrictions in
effect with respect to such Restricted Subsidiary on the 1997 Notes
Issue Date), except that subject to the limitations contained in clause
(iv) below, the Company's equity in the net income of any such
Restricted Subsidiary for such period shall be included in such
Consolidated Net Income up to an amount equal to the aggregate amount
of cash that could have been distributed by such Restricted Subsidiary
during such period to the Company or another Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or
other distribution that could have been made to another Restricted
Subsidiary, to the limitation contained in this clause),
(iv) any gain or loss realized upon the sale or other
disposition of any asset of the Company or its consolidated
Subsidiaries (including pursuant to any Sale/Leaseback Transaction)
which is not sold or otherwise disposed of in the ordinary course of
business,
(v) any extraordinary gain or loss, and
(vi) the cumulative effect of a change in accounting
principles.
Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall
be excluded from Consolidated Net Income (x) any dividends, repayments of loans
or advances or other transfers of assets from Unrestricted Subsidiaries to the
Company or a Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the amount of Restricted Payments permitted under such
Section pursuant to clause (a)(3)(D) thereof, (y) any non-cash compensation
charge or expense relating to the deferred compensation referred to in clause
(iv) of the definition of "Consolidated Net Worth", and (z)(A) any non-cash
charges resulting from any write-up of assets of the Company or any of its
Subsidiaries in connection with the Riverwood Acquisition, less (B) any
9
tax benefit received from any such non-cash charge being deducted from the
taxable income of the Company or any of its Subsidiaries.
"Consolidated Net Worth" means the total of the amounts shown
on the balance sheet of the Company and the Restricted Subsidiaries, determined
on a Consolidated basis in accordance with GAAP, as of the end of the most
recent fiscal quarter of the Company ending at least 45 days prior to the taking
of any action for the purpose of which the determination is being made, as (i)
the par or stated value of all outstanding Capital Stock of the Company plus
(ii) paid-in capital or capital surplus relating to such Capital Stock plus
(iii) any retained earnings or earned surplus less (A) any accumulated deficit
and (B) any amounts attributable to Disqualified Stock, plus (iv) the aggregate
amount of deferred compensation owed by RIC Holding or any Subsidiary thereof to
any Management Investor that shall have been canceled, waived or exchanged in
connection with the grant to such Management Investor of the right to receive or
acquire shares of Holding Common Stock or stock units in respect thereof;
without giving effect to (x) any non-cash compensation charge or expense
relating to the deferred compensation referred to in the preceding clause (iv)
or (y) charges resulting from the write-up of inventory, the depreciation and
amortization of fixed assets and intangible assets and the cost of timber
harvested pertaining to, adjustments required or permitted by Accounting
Principles Board Opinion Nos. 16 and 17 in connection with the Riverwood
Acquisition.
"Consolidated Non-Cash Charges" of any Person means, for any
period, the aggregate depreciation, amortization, Consolidated Cost of Timber
Harvested and other non-cash charges of such Person and its Consolidated
Subsidiaries for such period, on a Consolidated basis, as determined in
accordance with GAAP (excluding any non-cash charge which requires an accrual or
reserve for cash charges for any future period, other than accruals for future
retiree medical and other obligations made pursuant to SFAS Xx. 00, Xx. 000 and
No. 112, as amended or modified), including any non-cash charges resulting from
any write-up of assets of such Person or any of its Consolidated Subsidiaries in
connection with the Riverwood Acquisition.
"Consolidation" means the consolidation of the accounts of
each of the Restricted Subsidiaries with those of the Company in accordance with
GAAP consistently applied; PROVIDED, HOWEVER, that "Consolidation" will not
include consolidation of the accounts of any Unrestricted Subsidiary, but the
interest of the Company or any Restricted Subsidiary in a Unrestricted
Subsidiary will be accounted for as an investment. The term "Consolidated" has a
correlative meaning.
"Consulting Agreement" means the Consulting Agreement, dated
as of the Acquisition Date, among Holding, RIC Holding, the Company and CD&R, as
in effect on the 1997 Notes Issue Date.
"Credit Agreements" means the Senior Secured Credit Agreement
and the Machinery Credit Agreement.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement (including
derivative agreements) as to which such Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
10
"Disqualified Stock" means, with respect to any Person, any
Capital Stock (other than Management Stock) which by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable or
exercisable) or upon the happening of any event (i) matures or is mandatorily
redeemable pursuant to a sinking fund obligation or otherwise, (ii) is
convertible or exchangeable for Indebtedness or Disqualified Stock or (iii) is
redeemable at the option of the holder thereof, in whole or in part, in each
case on or prior to ninety-one days after the Stated Maturity of the Securities.
"EBITDA" for any period means the sum of Consolidated Net
Income, Consolidated Interest Expense, Consolidated Income Tax Expense and
Consolidated Non-Cash Charges deducted in computing Consolidated Net Income
(Loss), without duplication, in each case for such period, of such Person and
its Consolidated Subsidiaries on a Consolidated basis, all determined in
accordance with GAAP.
"Equipment Subsidiary" means Riverwood International
Machinery, Inc., a Delaware corporation, or any other Subsidiary of the Company
engaged solely in the business of manufacturing, acquiring, owning, leasing and
financing and refinancing packaging machinery in connection with any Related
Business, and any business or activities incidental or related to such business.
"Equity Investors" means CD&R Fund V, FIMA Finance Management
Inc., S.A., The 1818 Fund II, L.P., HWH Investment Pte Ltd., Chase Equity
Associates, First Plaza Group Trust, Madison Dearborn Capital Partners, L.P. and
Xxxxxxxxxx-River LLC.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange and Registration Rights Agreement" means the
Exchange and Registration Rights Agreement dated as of the Issue Date by and
between the Initial Purchasers and the Company, as such agreement may be
amended, modified, or supplemented from time to time in accordance with the
terms thereof.
"Exchange Securities" means Securities that are substantially
in the form of Exhibit B attached hereto.
"Existing Notes" means any outstanding (i) 10 3/4% Senior
Notes Due 2000 of RIC Holding, (ii) 11-1/4% Senior Subordinated Notes Due 2002
of RIC Holding, (iii) 10-3/8% Senior Subordinated Notes Due 2004 of RIC Holding,
and (iv) 6 3/4% Convertible Subordinated Notes due 2003 of RIC Holding, (v)
Existing Senior Notes and (vi) Existing Senior Subordinated Notes.
"Existing Senior Notes" means the Company's 10 1/4% Senior
Notes due 2006.
11
"Existing Senior Subordinated Notes" means the Company's
107/8% Senior Subordinated Notes due 2008.
"Financing Disposition" means any sale, transfer, conveyance
or other disposition of property or assets by the Company or any Subsidiary to
any Receivables Subsidiary, or by any Receivables Subsidiary, in each case in
connection with the Incurrence by a Receivables Subsidiary of Indebtedness, or
obligations to make payments to the obligor on Indebtedness, secured by any Lien
in respect of such property or assets.
"Fiskeby Transaction" means any sale, lease, transfer,
conveyance or other disposition of Capital Stock, property or assets of Fiskeby
Board AB or any of its Swedish subsidiaries or affiliates (including any
disposition by means of a merger, consolidation or similar transaction or
pursuant to a joint venture arrangement).
"GAAP" means generally accepted accounting principles in the
United States of America as in effect on the Acquisition Date, including those
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 approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
this Indenture shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any other
Person, including any such obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by agreement to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement conditions or
otherwise) or (ii) entered into for purposes of assuring in any other manner the
obligee of such Indebtedness or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement, Currency Agreement or
Commodities Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Holding" means the party named as Holding in the first
paragraph of the Indenture, any corporation succeeding to its ownership of RIC
Holding, and any successor thereto.
12
"Holding Common Stock" means the common stock, par value $0.01
per share, of Holding.
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of
a Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred
by such Person at the time it becomes a Subsidiary.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication),
(i) the principal of indebtedness of such Person for
borrowed money,
(ii) the principal of obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including reimbursement
obligations with respect thereto),
(iv) all obligations of such Person to pay the
deferred and unpaid purchase price of property or services (except
Trade Payables), which purchase price is due more than one year after
the date of placing such property in service or taking delivery and
title thereto or the completion of such services,
(v) all Capitalized Lease Obligations of such Person,
(vi) the amount of all obligations of such Person
with respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary of the Company,
any Preferred Stock (but excluding, in each case, any accrued
dividends);
(vii) all Indebtedness of other Persons secured by a
Lien on any asset of such Person, whether or not such Indebtedness is
assumed by such Person; PROVIDED, HOWEVER, that the amount of
Indebtedness of such Person shall be the lesser of (A) the fair market
value of such asset at such date of determination and (B) the amount of
such Indebtedness of such other Persons,
(viii) all Indebtedness of other Persons to the
extent Guaranteed by such Person, and
13
(ix) to the extent not otherwise included in this
definition, Hedging Obligations of such Person.
With respect to any Indebtedness denominated in a foreign currency, for the
purposes of determining compliance with any U.S. dollar denominated restriction
on the Incurrence of such Indebtedness under Section 4.03, the amount of such
Indebtedness shall be calculated based on the currency exchange rate in effect
on the date that such Indebtedness was incurred, in the case of term debt, or
first committed, in the case of revolving debt; PROVIDED that any such
Indebtedness outstanding on the Acquisition Date shall be calculated based on
the currency exchange rate in effect on the Acquisition Date.
"Indemnification Agreement" means the Indemnification
Agreement, dated as of the Acquisition Date, among Holding, RIC Holding, the
Company, CD&R, CD&R Fund V, and CD&R Investment Associates, Inc., a Delaware
corporation, as in effect on the 1997 Notes Issue Date.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement (including derivative agreements) or arrangement as to
which such Person is party or a beneficiary.
"Inventory" means goods held for sale or lease by a Person in
the ordinary course of business (and shall in no event include goods, the title
to which is held by a lessee); in calculating the amount of Inventory for all
purposes hereunder, there shall be deducted a reserve for goods which have been
segregated by such Person to be returned to the applicable vendor for credit, as
determined in accordance with U.S. generally accepted accounting principles.
"Investment" in any Person means any direct or indirect
advance, loan or other extensions of credit (other than advances and other
extensions of credit to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, Indebtedness or other similar
instruments issued by such Person, in each case calculated net of any return on
such Investment, whether by dividend, interest, distribution, return of capital,
repayment or otherwise. For purposes of the definition of "Unrestricted
Subsidiary" and Section 4.04 only, (i) "Investment" shall include the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
14
market value of the net assets of any Subsidiary of the Company at the time that
such Subsidiary is designated an Unrestricted Subsidiary; PROVIDED, HOWEVER,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the
Company shall be deemed to continue to have an "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (x) the Company's "Investment" in
such Subsidiary at the time of such redesignation less (y) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time of such
redesignation; 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, in each case as determined in good faith by the Board of Directors.
For the purposes of clause (a)(3)(F) of Section 4.04 only, "Investments" shall
not be calculated net of any return as described above.
"Issue Date" means June 21, 2001, the date on which the
Initial Securities are originally issued.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).
"Machinery Credit Agreement" means the Credit Agreement, dated
as of March 20, 1996, among Riverwood International Machinery, Inc., a Delaware
corporation, the other borrowers party thereto from time to time, The Chase
Manhattan Bank as administrative agent, and the other lenders party thereto from
time to time, as amended through the 1997 Notes Issue Date, and as such
agreement may be amended, supplemented or otherwise modified from time to time
or refunded, refinanced, restructured, replaced, renewed, repaid or extended
from time to time (whether with the original administrative agent and lenders or
other agents and lenders or otherwise, and whether provided under the original
Machinery Credit Agreement or other credit agreements or otherwise).
"Management Contribution Amount" means an amount equal to (x)
the Net Cash Proceeds received by the Company as a capital contribution out of
the proceeds of the sale to Management Investors of Holding Common Stock or
options, warrants or rights to purchase in respect thereof, plus (y) the
aggregate amount of deferred compensation owed by RIC Holding or any Subsidiary
thereof to any Management Investor that is or has been canceled, waived or
exchanged in connection with the grant to such Management Investor of the right
to receive or acquire shares of Holding Common Stock or stock units in respect
thereof.
"Management Investors" means the officers, directors,
employees and other members of the management of Holding, RIC Holding, the
Company or a Subsidiary of any thereof, or family members or relatives thereof
or trusts for the benefit of any of the foregoing, who at any particular date
shall Beneficially Own or have the right to acquire, directly or indirectly,
Holding Common Stock.
15
"Management Stock" means Holding Common Stock, or options,
warrants or rights to purchase or acquire Holding Common Stock, held by any of
the Management Investors.
"Moody's" means Xxxxx'x Investors Service, Inc. or any
successor rating agency.
"Net Available Cash" from an Asset Disposition means cash or
Cash Equivalents received (including any cash payments received by way of
deferred payment of principal pursuant to a note or receivable or otherwise, but
only as and when received, but excluding any other consideration received in the
form of assumption by the acquiring person of Indebtedness or other obligations
relating to the properties or assets that are the subject of such Asset
Disposition or received in any other non-cash form) therefrom, in each case net
of (i) all legal, title and recording tax expenses, commissions and other fees
and expenses (including fees and expenses of counsel and investment bankers)
incurred, and all Federal, state, provincial, foreign and local taxes required
to be paid or accrued as a liability under generally accepted accounting
principles, as a consequence of such Asset Disposition, (ii) all payments made
on, and all installment payments required to be made to retire, any Indebtedness
which is secured by any assets subject to such Asset Disposition, in accordance
with the terms of any Lien upon such assets, or which must by its terms, or in
order to obtain a necessary consent to such Asset Disposition, or by applicable
law, be repaid out of the proceeds from such Asset Disposition, (iii) all
distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Disposition,
or to any other Person (other than the Company or any Restricted Subsidiary
thereof) owning a beneficial interest in the assets disposed of in such Asset
Disposition, and (iv) appropriate amounts to be provided by the Company or any
Restricted Subsidiary as a reserve, in accordance with generally accepted
accounting principles, against any liabilities associated with the assets
disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of
Capital Stock, means the proceeds of such issuance or sale in the form of cash
or Cash Equivalents, including payments in respect of deferred payment
obligations when received in the form of, or stock or other assets when disposed
for, cash or Cash Equivalents, net of attorneys' fees, accountants' fees,
underwriters' or placement agents' fees, discounts or commissions and brokerage,
consultant and other fees and expenses actually incurred in connection with such
issuance or sale and net of taxes paid or payable as a result thereof.
16
"1997 Net Available Cash" means "Net Available Cash" as that
term is defined in the 1997 Notes Indenture.
"1997 Notes" means the $250,000,000 aggregate principal
amount of the Company's 10 5/8% Senior Notes due 2007 issued under the 1997
Notes Indenture and any of the Company's 10 5/8% Senior Notes exchanged
therefor.
"1997 Notes Indenture" means the indenture dated as of the
1997 Notes Issue Date, among the Company, Holding, RIC Holding and State Street
Bank and Trust Company, as trustee, as amended, under which the 1997 Notes were
issued.
"1997 Notes Issue Date" means July 28, 1997, the date of
issuance of the 1997 Notes.
"1997 Notes Offer" means the "Note Offer" as that term is
defined in the 1997 Notes Indenture.
"Note Guarantee" means the Guarantee of the Securities by
Holding and RIC Holding on the terms of Article 10 hereof, and Guarantees on the
terms of Article 10 hereof which may from time to time be executed and delivered
pursuant to the terms of this Indenture. Each such Note Guarantee shall be in
the form prescribed in this Indenture.
"Note Guarantor" means any Person that has issued a Note
Guarantee.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers.
"Opinion of Counsel" means a written opinion in form and
substance reasonably satisfactory to the Trustee from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Parent" means Holding and/or RIC Holding, as applicable, and
any successor corporations and any corporation succeeding to the direct or
indirect ownership of the Company.
"Permitted Holder" means any of (i) CD&R, CD&R Fund V or any
other investment fund or vehicle managed, sponsored or advised by CD&R, or any
Affiliate of or successor to CD&R, CD&R Fund V or any such other investment fund
or vehicle, (ii) any other Equity Investor, other than Xxxxxxxxxx-River LLC, or
any Affiliate thereof or successor thereto, or (iii) any Management Investor.
17
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in (i) a Restricted Subsidiary or Receivables
Subsidiary or a Person which will, upon the making of such Investment, become a
Restricted Subsidiary or Receivables Subsidiary; (ii) another Person if as a
result of such Investment such other Person is merged or consolidated with or
into, or transfers or conveys all or substantially all its assets to, the
Company or a Restricted Subsidiary; (iii) Temporary Cash Investments; (iv)
receivables owing to the Company or any Restricted Subsidiary, if created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; PROVIDED, HOWEVER, that such trade terms
may include such concessionary trade terms as the Company or any such Restricted
Subsidiary deems reasonable under the circumstances; (v) payroll, travel and
similar advances to cover matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting purposes and that are made
in the ordinary course of business; (vi) loans or advances to officers or
employees of Holding, RIC Holding, the Company or any Restricted Subsidiary
referred to in clause (x) of Section 4.07(b); (vii) stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments; (viii) non-cash consideration acquired by the Company
or any Restricted Subsidiary in connection with an Asset Disposition permitted
under Section 4.06, or any disposition of property or other assets not
constituting an Asset Disposition; (ix) Investments in existence or made
pursuant to legally binding written commitments as in existence on the 1997
Notes Issue Date; (x) evidences of Indebtedness, securities or other property
received from another Person by the Company or any Restricted Subsidiary in
connection with any bankruptcy proceeding or other reorganization of such other
Person, or as a result of foreclosure, perfection or enforcement of any Lien in
exchange for evidences of Indebtedness, securities or other property of such
other Person held by the Company or any Restricted Subsidiary in accordance with
the terms of this Indenture; (xi) (A) Currency Agreements designed to protect
the Company or any Restricted Subsidiary against fluctuations in foreign
currency rates in respect of foreign exchange exposures incurred by the Company
or any Restricted Subsidiary in the ordinary course of its business, (B)
Commodities Agreements designed to protect the Company or any Restricted
Subsidiary against fluctuations in the price of, or the shortage or supply of,
commodities entered into in the ordinary course of business and (C) Interest
Rate Agreements designed to protect the Company or any Restricted Subsidiary
against fluctuations in interest rates in respect of Indebtedness of the Company
or any Restricted Subsidiary; (xii) deposits with respect to leases or utilities
provided to third parties in the ordinary course of business, or deposits
otherwise described in clause (a) of the definition of "Permitted Liens"; (xiii)
any joint venture or similar arrangement established in connection with any
Fiskeby Transaction; (xiv) Indebtedness of the Company to any Restricted
Subsidiary; (xv) 1997 Notes, the Securities or the Existing Notes; (xvi) bonds
secured by assets leased to and operated by the Company or any Restricted
Subsidiary that were issued in connection with the financing of such assets so
long as the Company or any Restricted Subsidiary may obtain title to such assets
at any time by paying a nominal fee, canceling such bonds and terminating the
transaction; (xvii)
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promissory notes of any Management Investor acquired in connection with the
issuance of Holding Common Stock to such Management Investor; (xviii) in the
case of a Receivables Subsidiary, (A) Investments in connection with a Financing
Disposition by or to such Receivables Subsidiary, including Investments of funds
held in accounts permitted or required by the arrangements governing such
Financing Disposition or any related Indebtedness, or (B) any promissory note
issued by RIC Holding or Holding, provided that if RIC Holding or Holding, as
applicable, receives cash from such Receivables Subsidiary in exchange for such
note, an equal cash amount is contributed by RIC Holding to the Company; and
(xix) other Investments in an amount not to exceed $50,000,000 in the aggregate
outstanding at any one time.
"Permitted Liens" means, with respect to any Person:
(a) pledges or deposits made or other Liens granted (1) under
worker's compensation laws, unemployment insurance laws, social
security laws or similar legislation, (2) in connection with bids,
tenders, contracts (other than for the payment of borrowed money) or
leases to which such Person is a party, (3) to secure public or
statutory obligations, including but not limited to as security for
contested taxes, assessments or import duties, (4) as security for the
payment of insurance-related or worker's compensation-related
obligations (including, but not limited to, in respect of deductibles,
self-insured retention amounts and premiums and adjustments thereto) or
(5) for the payment of rent or utilities, in each case Incurred in the
ordinary course of business;
(b) Liens imposed by law, such as carriers', warehousemen's,
landlords', materialmen's, employees', laborers', employers',
suppliers', banks', mechanics', repairmen's and other like Liens, in
each case for sums not yet due or being contested in good faith by
appropriate proceedings or other Liens arising by reason of any
judgment, award, decree, order of any court or other governmental
authority against such Person with respect to which such Person shall
then be taking appropriate legal proceedings or other proceedings for
review or the period within which such proceedings may be instituted
shall not have expired;
(c) Liens for taxes, assessments and similar charges not yet
due or payable or not yet subject to penalties for non-payment or which
are being contested in good faith by appropriate proceedings;
(d) Liens in favor of issuers of surety, performance,
judgment, appeal and other like bonds or letters of credit issued
pursuant to the request of and for the account of such Person in the
ordinary course of its business;
(e) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-way,
sewers, electric lines, telegraph and
19
telephone lines and other similar purposes, or zoning provisions,
covenants, conditions, waivers or other restrictions as to the use of
real properties or minor irregularities of title (and with respect to
leasehold interests, mortgages, obligations, liens and other
encumbrances Incurred, created, assumed or permitted to exist and
arising by, through or under a landlord or owner of the leased
property, with or without consent of the lessee) or Liens incidental to
the conduct of the business of such Person or to the ownership of its
properties which were not Incurred by such Person in connection with
Indebtedness and which do not in the aggregate materially adversely
affect the value of said properties or materially impair their use in
the operation of the business of such Person;
(f) Liens securing Indebtedness Incurred to finance the
construction, purchase or lease of, or repairs, improvements or
additions to, property or assets, and obligations relating to such
Indebtedness; PROVIDED, HOWEVER, that the Lien may not extend to any
other property or assets owned by the Company or any Restricted
Subsidiary at the time the Lien is Incurred, and the Indebtedness
secured by the Lien may not be Incurred more than 365 days after the
later of the acquisition, completion of construction, repair,
improvement, addition or commencement of full operation of the property
or assets subject to the Lien;
(g) Liens existing, or provided for under written arrangements
existing, as of the 1997 Notes Issue Date;
(h) Liens on property, assets or shares of stock of a Person
at the time such Person becomes a Subsidiary; PROVIDED, HOWEVER, such
Liens are not created, Incurred or assumed by such Person in connection
with, or in contemplation of, such other Person becoming such a
Subsidiary; PROVIDED FURTHER, HOWEVER, that such Liens may not extend
to any other property owned by the Company or any Restricted Subsidiary
(other than improvements, accessions, proceeds or dividends or
distributions in respect thereof);
(i) Liens on property or assets at the time the Company or a
Restricted Subsidiary acquired the property or assets, including any
acquisition by means of a merger or consolidation with or into the
Company or any Restricted Subsidiary; PROVIDED, HOWEVER, that such
Liens are not created in connection with, or in contemplation of, such
acquisition; PROVIDED FURTHER, HOWEVER, that the Liens may not extend
to any other property owned by the Company or any Restricted Subsidiary
(other than improvements, accessions, proceeds or dividends or
distributions in respect thereof);
(j) Liens securing Indebtedness or other obligations of a
Restricted Subsidiary owing to the Company or a Restricted Subsidiary;
20
(k) Liens securing Hedging Obligations; PROVIDED, HOWEVER,
that if such Hedging Obligations are obligations relating to an
Interest Rate Agreement the related Indebtedness is, and is permitted
to be under this Indenture, secured by a Lien on the same property
securing such Hedging Obligations;
(l) Liens in respect of Indebtedness permitted by clause (ii),
(ix)(1) or (x) of Section 4.03(b);
(m) Liens to secure Indebtedness or other obligations of any
Receivables Subsidiary or Equipment Subsidiary;
(n) Liens securing Bank Indebtedness;
(o) Liens granted to secure the Securities under Section 4.11;
(p) Liens granted to secure up to $15,000,000 of Indebtedness
or other obligations;
(q) any Lien on stock or other securities of an Unrestricted
Subsidiary that secures Indebtedness or other obligations of such
Subsidiary;
(r) any encumbrance or restriction (including, but not limited
to, put and call agreements) with respect to the Capital Stock of any
joint venture or similar arrangement pursuant to any joint venture or
similar agreement; and
(s) Liens to secure any refinancing, refunding, extension,
renewal or replacement (or successive refinancings, refundings,
extensions, renewals or replacements) as a whole, or in part, of any
Indebtedness or other obligation secured by any Lien referred to in
clauses (f), (g), (h), (i), (k), (l), (m), (n), (o), (p) and (s);
PROVIDED, HOWEVER, that (x) such new Lien shall be limited to all or
part of the same property or assets that secured the original Lien
(plus improvements, accessions, proceeds or dividends or distributions
in respect thereof) and (y) if such Lien secures Indebtedness, the
Indebtedness secured by such Lien at such time is not increased to any
amount greater than the sum of (A) the outstanding principal amount or,
if greater, committed amount of the Indebtedness described under
clauses (f), (g), (h), (i), (k), (l), (m), (n), (o), (p) and (s) at the
time the original Lien became a Permitted Lien under the Indenture and
(B) an amount necessary to pay any fees and expenses, including
premiums, related to such refinancing, refunding, extension, renewal or
replacement.
"Permitted Sale/Leaseback Transaction" means any
Sale/Leaseback Transaction relating to the financing of packaging machinery.
21
"Permitted Subsidiary Indebtedness" means Indebtedness of any
Restricted Subsidiary that is (a) Incurred as permitted under Section 4.03(b) or
(b) Incurred as permitted under Section 4.03(a) and not exceeding $200,000,000
plus (if positive) 5% of the Company's Consolidated Net Worth in an aggregate
principal amount outstanding at any given time.
"Permitted Subsidiary Preferred Stock" means, with respect to
any Subsidiary, any Preferred Stock of such Subsidiary that (a) is Disqualified
Stock and such Subsidiary would be entitled to Incur Indebtedness permitted by
this Indenture in an aggregate principal amount equal to the aggregate
involuntary maximum fixed repurchase price of such Preferred Stock or (b) is not
Disqualified Stock and no dividends or distributions thereon are paid (to any
Person other than the Company or any Wholly Owned Subsidiary) other than in
accordance with Section 4.04.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Receivable" means a right to receive payment arising from a
sale or lease of goods or services by a Person pursuant to an arrangement with
another Person pursuant to which such other Person is obligated to pay for goods
or services under terms that permit the purchase of such goods and services on
credit, as determined in accordance with U.S. generally accepted accounting
principles.
"Receivables Financing" means any financing by any Receivables
Subsidiary of Receivables of the Company that have been transferred to such
Receivables Subsidiary in a Financing Disposition.
"Receivables Subsidiary" means a Subsidiary of the Company
that (a) is engaged solely in the business of acquiring, selling, collecting,
financing or refinancing Receivables, accounts (as defined in the Uniform
Commercial Code) and other accounts and receivables (including any thereof
constituting or evidenced by chattel paper, instruments or general intangibles),
all proceeds thereof and all rights (contractual and other), collateral and
other assets relating thereto, and any business or activities incidental or
related to such business, and (b) is designated as a "Receivables Subsidiary" by
the Board of Directors.
22
"Refinancing Indebtedness" means Indebtedness that is Incurred
to refund, refinance, restructure, replace, renew, repay or extend (including
pursuant to any defeasance or discharge mechanism) (collectively, "refinances,"
and "refinanced" shall have a correlative meaning) any Indebtedness existing on
the 1997 Notes Issue Date or Incurred in compliance with the 1997 Notes
Indenture (if Incurred prior to the Issue Date) or, on and after the Issue Date,
this Indenture (including Indebtedness of the Company that refinances
Indebtedness of any Restricted Subsidiary (to the extent permitted in the 1997
Notes Indenture (if Incurred prior to the Issue Date) or, on and after the Issue
Date, this Indenture) and Indebtedness of any Restricted Subsidiary that
refinances Indebtedness of another Restricted Subsidiary) including Indebtedness
that refinances Refinancing Indebtedness; PROVIDED, HOWEVER, that (i) the
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being refinanced, (ii) the Refinancing Indebtedness
has an Average Life at the time such Refinancing Indebtedness is Incurred that
is equal to or greater than the Average Life of the Indebtedness being
refinanced and (iii) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue discount, an aggregate issue
price) that is equal to or less than (x) the aggregate principal amount (or if
issued with original issue discount, the aggregate accreted value) then
outstanding of the Indebtedness being refinanced plus (y) the amount of premium
or other amounts paid and fees and expenses incurred in connection with such
refinancing; PROVIDED FURTHER, HOWEVER, that Refinancing Indebtedness shall not
include (x) Indebtedness of a Restricted Subsidiary that refinances Indebtedness
of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary
that refinances Indebtedness of an Unrestricted Subsidiary.
"Registered Exchange Offer" shall have the meaning set forth
in the Exchange and Registration Rights Agreement.
"Registration and Participation Agreement" means the agreement
dated the Acquisition Date among Holding and the purchasers of Holding Common
Stock providing among other things for certain registration rights in respect of
Holding Common Stock, as in effect on the 1997 Notes Issue Date.
"Related Business" means the businesses of the Company and the
Restricted Subsidiaries as conducted on the 1997 Notes Issue Date, and any
business related, ancillary or complementary to such businesses.
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"RIC Holding" means the party named as RIC Holding in the
first paragraph of this Indenture, any corporation succeeding to its ownership
of the Company, and any successor thereto.
23
"Riverwood Acquisition" means the acquisition on March 27,
1996, of the Company by RIC Holding and the mergers related thereto.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired by the Company or a Restricted
Subsidiary, whereby the Company or a Restricted Subsidiary transfers such
property to a Person and the Company or a Restricted Subsidiary leases it from
such Person, other than leases between the Company and a Restricted Subsidiary
or between Restricted Subsidiaries.
"S&P" means Standard and Poor's Rating Group (a division of
McGraw Hill Inc.) or any successor rating agency.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company
secured by a Lien.
"Securities" means the securities issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means (i) the Bank Indebtedness and the
Securities and (ii) all Indebtedness of the Company, including interest thereon
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or any Restricted
Subsidiary whether or not a claim for post-filing interest is allowed in such
proceedings), whether outstanding on the 1997 Notes Issue Date or thereafter
Incurred, unless in the instrument creating or evidencing the same or pursuant
to which the same is outstanding it is expressly provided that such obligations
are not superior in right of payment to the Existing Senior Subordinated Notes;
PROVIDED, HOWEVER, that Senior Indebtedness shall not include (1) any obligation
of the Company to any Subsidiary, (2) any liability for Federal, state, local or
other taxes owed or owing by the Company, (3) any accounts payable or other
liability to trade creditors arising in the ordinary course of business
(including Guarantees thereof or instruments evidencing such liabilities), (4)
any Indebtedness of the Company which is expressly subordinate in right of
payment to any other Indebtedness of the Company, including any Senior
Subordinated Indebtedness and any Subordinated Obligations, (5) any obligations
with respect to any Capital Stock, or (6) any Indebtedness Incurred in violation
of this Indenture.
"Senior Secured Credit Agreement" means the Credit Agreement,
dated as of March 20, 1996, among the Company, the other borrowers party thereto
from time to time, The Chase Manhattan Bank as administrative agent, and the
lenders party thereto from time to time, as amended to the 1997 Notes Issue
Date, and as such agreement may be amended, supplemented or otherwise modified
from time to time or refunded, refinanced, restructured,
24
replaced, renewed, repaid or extended from time to time (whether with the
original administrative agent and lenders or other agents and lenders or
otherwise, and whether provided under the original Senior Secured Credit
Agreement or other credit agreements or otherwise).
"Senior Subordinated Indebtedness" means the Existing Senior
Subordinated Notes and any other Indebtedness of the Company that specifically
provides that such Indebtedness is to rank PARI PASSU with such notes and is not
by its express terms subordinate in right of payment to any Indebtedness of the
Company which is not Senior Indebtedness.
"Significant Subsidiary" means any Restricted Subsidiary of
the Company that would be a "significant subsidiary" of the Company as defined
in Rule 1-02 of Regulation S-X under the Securities Act and the Exchange Act.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
purchase of such security at the option of the holder thereof upon the happening
of any contingency beyond the control of the issuer unless such contingency has
occurred).
"Stockholders Agreement" means the Stockholders Agreement,
dated as of the Acquisition Date, among Holding and the Equity Investors, as in
effect on the 1997 Notes Issue Date.
"Subordinated Obligation" means any Indebtedness of the
Company (whether outstanding on the 1997 Notes Issue Date or thereafter
Incurred) which is expressly subordinate in right of payment to the Securities
pursuant to a written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership, limited liability company or other business entity of which more
than 50% of the total voting power of shares of Capital Stock or other equity
interests (including partnership interests) generally entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by (i) such Person or (ii) one or more Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following: (i)
any investment in direct obligations (x) of the United States of America or any
agency thereof or obligations Guaranteed by the United States of America or any
agency thereof, or (y) of any foreign country recognized by the United States of
America rated at least "A" by S&P or "A-1" by Moody's, (ii) investments in time
deposit accounts, certificates of deposit and money market deposits maturing
within 365 days of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States of America, any
25
state thereof or any foreign country recognized by the United States of America
having capital, surplus and undivided profits aggregating in excess of
$250,000,000 (or the foreign currency equivalent thereof) and whose long-term
debt is rated "A" (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule 436
under the Securities Act), (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described in clause
(ii) above, (iv) investments in commercial paper, maturing not more than 180
days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United States
of America with a rating at the time as of which any investment therein is made
of "P-1" (or higher) according to Moody's or "A-1" (or higher) according to S&P,
(v) investments in securities with maturities of six months or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision or
taxing authority thereof, and rated at least "A" by S&P or "A-1" by Moody's,
(vi) any money market deposit accounts issued or offered by a domestic
commercial bank or a commercial bank organized and located in a country
recognized by the United States, in each case, having capital and surplus in
excess of $500,000,000, or investments in money market funds complying with the
risk limiting conditions of Rule 2a-7 (or any successor rule) of the SEC under
the Investment Company Act of 1940, as amended, and (vii) similar investments
approved by the Board of Directors in the ordinary course of business.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date of this Indenture, except as provided in
Section 9.03.
"Trade Payables" means, with respect to any Person, any
accounts payable or any indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person arising in the ordinary course of
business in connection with the acquisition of goods or services.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled by, and published in, the most recent Federal Reserve Statistical
Release H.15 (519) which has become publicly available at least two business
days prior to the date fixed for redemption of the Securities following a Change
of Control (or, if such Statistical Release is no longer published, any publicly
available source of similar market data)) most nearly equal to the then
remaining Average Life to Stated Maturity of the Securities; PROVIDED, HOWEVER,
that if the Average Life to Stated Maturity of the Securities is not equal to
the constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the Average Life to Stated Maturity of the Securities is
less than one year, the
26
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of,
or owns or holds any Lien on any property of, the Company or any other
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; PROVIDED, HOWEVER, that either (A) such designation is made at or
prior to the 1997 Notes Issue Date, (B) the Subsidiary to be so designated has
total consolidated assets of $1,000 or less or (C) if such Subsidiary has
consolidated assets greater than $1,000, then such designation would be
permitted under Section 4.04. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that
immediately after giving effect to such designation (x) the Company could Incur
$1.00 of additional Indebtedness under Section 4.03(a) and (y) no Default shall
have occurred and be continuing.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital
Stock of such corporation then outstanding and normally entitled to vote in the
election of directors.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the
Company all the Capital Stock of which (other than directors' qualifying shares)
is owned by the Company or another Wholly Owned Subsidiary.
27
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Agent Members"..................................... Appendix A
"Affiliate Transaction"............................. 4.07
"Authorized Project"................................ 4.06
"Bankruptcy Law".................................... 6.01
"covenant defeasance option"........................ 8.01(b)
"Custodian"......................................... 6.01
"Definitive Security"............................... Appendix A
"Depositary"........................................ 2.03
"Event of Default".................................. 6.01
"Global Security.................................... Appendix A
"IAI"............................................... Appendix A
"Initial Agreement"................................. 4.05
"Initial Lien"...................................... 4.11
"Initial Purchasers"................................ Appendix A
"Initial Securities"................................ Preamble
"legal defeasance option"........................... 8.01(b)
"Legal Holiday"..................................... 11.09
"Note Offer"........................................ 4.06
"Notice of Default"................................. 6.01
"Obligations"....................................... 10.01
"Offer Amount"...................................... 4.06
"Offer Period"...................................... 4.06
"Paying Agent"...................................... 2.03
"Private Exchange Securities"....................... Appendix A
"Purchase Date"..................................... 4.06
"QIBs".............................................. Appendix A
"Refinancing Agreement"............................. 4.05
"Registrar"......................................... 2.03
"Restricted Payment"................................ 4.04
"restricted period"................................. Appendix A
28
"Rule 144A"......................................... Appendix A
"Subsidiary Guarantor".............................. 10.05
"Successor Company"................................. 5.01
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE
ACT. This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company and
any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04. 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 generally accepted accounting
principles as in effect from time to time unless reference to GAAP is
made with respect to any specific accounting term;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness of the Company or a Note
Guarantor, as the case may be,
29
merely by virtue of its nature as unsecured Indebtedness, and
Indebtedness that is not guaranteed by a particular Person is not
deemed to be subordinate or junior to Indebtedness that is so
guaranteed merely because it is not so guaranteed; and
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. Provisions relating to the
Initial Securities, the Private Exchange Securities and the Exchange Securities
are set forth in the Appendix, which is hereby incorporated in and expressly
made a part of this Indenture, and as otherwise provided in this Article 2. The
Initial Securities, the Private Exchange Securities and the Trustee's
certificate of authentication shall be substantially in the form thereof set
forth in Exhibit A, which is hereby incorporated in and expressly made a part of
this Indenture, and as otherwise provided in this Article 2. The Exchange
Securities and the Trustee's certificate of authentication shall be
substantially in the form thereof set forth in Exhibit B, which is incorporated
in and expressly made a part of this Indenture, and as otherwise provided in
this Article 2. The Securities may have notations, legends or endorsements
required by law, stock exchange or Depositary rule, agreements to which the
Company or any Note Guarantor is subject, if any, or usage (PROVIDED that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Security shall be dated the date of its authentication. The terms of the
Securities set forth in Exhibits A and B are part of the terms of this
Indenture. The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and integral multiples thereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION. One Officer shall
sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities (except with respect to Global Securities) and may be in facsimile
form. If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate and deliver Securities as set
forth in the Appendix.
30
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate the Securities. Any such appointment shall be
evidenced by an instrument signed by an authorized officer of the Trustee, a
copy of which shall be promptly furnished to the Company. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
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 any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange (the
"Register"). The ownership of the Securities shall be proved by such Register.
The Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent and the
term "Registrar" includes any co-registrars.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The 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, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
The Company initially appoints The Depository Trust Company to
act as depositary ("Depositary") with respect to the Global Securities.
The Company may remove any Registrar or Paying Agent upon
written notice to such Registrar or Paying Agent and to the Trustee; PROVIDED
that no such removal shall become effective until (1) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Company and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (2) notification to the Trustee that the Trustee
shall serve as Registrar or Paying Agent until the appointment of a successor in
accordance with clause (1) above. The Registrar or Paying Agent may resign at
any time upon written notice; PROVIDED, HOWEVER, that the Trustee may resign as
Paying Agent or Registrar only if the Trustee also resigns as Trustee in
accordance with Section 7.08.
31
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. On or prior
to each due date of the principal and interest on any Security, the Company
shall deposit with the Paying Agent (or if the Company or a Subsidiary is acting
as Paying Agent, segregate and hold in trust for the benefit of the Persons
entitled thereto) a sum sufficient to pay such principal and interest when so
becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed by the Paying Agent. Upon complying with this Section,
the Paying Agent shall have no further liability for the money delivered to the
Trustee.
Any money deposited with any Paying Agent, or then held by the
Company or a Subsidiary, in trust for the payment of principal or interest on
any Security and remaining unclaimed for two years after such principal and
interest has become due and payable shall be paid to the Company at its request,
or, if then held by the Company or a Subsidiary, shall be discharged from such
trust; and the Securityholders shall thereafter, as unsecured general creditors,
look only to the Company for payment thereof, and all liability of the Paying
Agent with respect to such money, and all liability of the Company or such
Subsidiary as trustee thereof, shall thereupon cease.
SECTION 2.05. SECURITYHOLDER 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 Securityholders. If the Trustee is not the
Registrar, the Company shall furnish, or cause the Registrar to furnish, to the
Trustee, in writing at least five 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 Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE. The Securities shall be
issued in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer and in compliance with the Appendix. When
a Security is presented to the Registrar or a co-registrar with a request to
register a transfer, the Registrar shall register the transfer as requested if
(x) the requirements of Section 8-401(l) of the Uniform Commercial Code and any
other applicable provisions of law are met and (y) such transfer complies with
the provisions of the Appendix to this Indenture, if applicable. Definitive
Securities surrendered for transfer shall be duly endorsed or accompanied by a
written instrument of transfer in form and substance reasonably satisfactory to
the Company and the Registrar or co-registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.
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When Securities are presented to the Registrar or a co-registrar with a request
to exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the same
requirements as for a transfer thereof are met. To permit registration of
transfers and exchanges, the Company shall execute and the Trustee shall
authenticate Securities at the Registrar's or co-registrar's request. The
Company may require payment of a sum sufficient to pay all taxes, assessments or
other governmental charges in connection with any transfer or exchange pursuant
to this Section 2.06. The Company shall not be required to make and the
Registrar need not register transfers or exchanges of Securities selected for
redemption (except, in the case of Securities to be redeemed in part, the
portion thereof not to be redeemed) or any Securities for a period of 15 days
before a selection of Securities to be redeemed or 15 days before an interest
payment date.
Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the Person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest, if any, on such Security and for all other
purposes whatsoever, whether or not such Security is overdue, and none of the
Company, the Trustee, the Paying-Agent, the Registrar or any co-registrar shall
be affected by notice to the contrary.
Any Holder of any Global Security shall, by acceptance of such
Global Security, agree that transfers of beneficial interest in such Global
Security may be effected only through a book-entry system maintained by the
Holder of such Global Security (or its agent), and that ownership of a
beneficial interest in such Global Security shall be required to be reflected in
a book entry.
All Securities issued upon any transfer or exchange pursuant
to this Section 2.06 will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.07. REPLACEMENT SECURITIES. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code and any other applicable provisions
of law are met, and if the Holder (i) satisfies the Company and the Trustee
within a reasonable time after such Holder has notice of such loss, destruction
or wrongful taking and the Registrar does not register a transfer prior to
receiving such notification, (ii) makes such request to the Company or the
Trustee prior to the Security being acquired by a bona fide purchaser and (iii)
satisfies any other reasonable requirements of the Company and the Trustee. Any
such request shall either be accompanied by evidence satisfactory to the Company
and the Trustee that any such issuance of a replacement Security will not
involve a transfer or exchange of any Security, or shall
33
comply with the requirements of Section 2.06. If required by the Trustee or the
Company, such Holder shall furnish an indemnity bond sufficient in the judgment
of the Company and the Trustee to protect the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss that any of them may
suffer if a Security is replaced. Upon the issuance of any new Security under
this Section 2.07, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Registrar
and the Trustee) connected therewith. In the event any such mutilated, lost,
destroyed or wrongfully taken Security has become or is about to become due and
payable, the Company in its discretion may pay such Security instead of issuing
a new Security in replacement thereof.
Every replacement Security is an additional obligation of the
Company.
The provisions of this Section 2.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, lost, destroyed or wrongfully taken
Securities.
SECTION 2.08. OUTSTANDING SECURITIES. Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancelation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, then on and after that date such Securities (or portions thereof) cease
to be outstanding and interest on them ceases to accrue.
SECTION 2.09. TEMPORARY SECURITIES. Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate definitive Securities
and deliver them in exchange for temporary Securities upon surrender of such
temporary Securities at the office or agency of the Company, without charge to
the Holder.
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SECTION 2.10. CANCELATION. The Company at any time may deliver
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancelation unless the Company directs the Trustee to deliver canceled
Securities to the Company. The Company may not issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for cancelation.
The Trustee shall not authenticate Securities in place of canceled Securities
other than pursuant to the terms of this Indenture.
SECTION 2.11. DEFAULTED INTEREST. If the Company defaults in a
payment of interest on the Securities, the Company shall pay the defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any
lawful manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail or cause to be
mailed to each Securityholder a notice that states the special record date, the
payment date and the amount of defaulted interest to be paid.
The Company may make payment of any defaulted interest in any
other lawful manner not inconsistent with the requirements (if applicable) of
any securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this paragraph, such
manner of payment shall be deemed practicable by the Trustee.
SECTION 2.12. CUSIP AND ISIN NUMBERS. The Company in issuing
the Securities may use "CUSIP" and ISIN numbers (if then generally in use) and,
if so, the Trustee shall use "CUSIP" and ISIN 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 Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
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ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date and the principal amount of Securities
to be redeemed.
The Company shall give each notice to the Trustee provided for
in this Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate from the Company to the effect that such redemption will comply with
the conditions herein.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee considers fair and appropriate and in accordance with methods generally
used at the time of selection by fiduciaries in similar circumstances. The
Trustee shall make the selection from outstanding Securities not previously
called for redemption. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than $1,000. Securities
and portions of them the Trustee selects shall be in amounts of $1,000 or a
whole multiple of $1,000. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company in writing promptly of the
Securities or portions of Securities to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not
more than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular Securities
to be redeemed;
36
(6) that, unless the Company defaults in making such
redemption payment, interest on Securities (or portion thereof) called for
redemption ceases to accrue on and after the redemption date; and
(7) that no representation is made as to the correctness or
accuracy of the CUSIP or ISIN number, if any, listed in such notice or printed
on the Securities.
At the Company's written request at least 5 days before the
date of mailing, the Trustee shall give the notice of redemption in the
Company's name and at the Company's expense. In such event, the Company shall
provide the Trustee with the information required by this Section.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date.
Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. On or prior to, the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to the
Trustee for cancelation, and from and after such date (unless the Company
defaults in making such redemption payment) interest on such Securities (or
portions thereof) shall cease to accrue.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part (with, if the Company or the Trustee so
reasonably require, due endorsement by, or a written instrument of transfer in
form reasonably satisfactory to the Company and the Trustee duly executed by the
Holder thereof or his attorney duly authorized in writing), the Company shall
execute and the Trustee shall authenticate for the Holder (at the Company's
expense) a new Security equal in principal amount to the unredeemed portion of
the Security surrendered.
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ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.
The Company shall pay interest on overdue principal at the
same rate borne by the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC REPORTS. Notwithstanding that the Company
may not be required to remain subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act, to the extent permitted by the Exchange Act the
Company will file with the SEC and provide, within 15 days after the Company is
required to file the same with the SEC, the Trustees and Holders and prospective
Holders (upon request) with the annual reports and the information, documents
and other reports which are specified in Sections 13 and 15(d) of the Exchange
Act. In the event that the Company is not permitted to file such reports,
documents and information with the SEC, the Company will provide substantially
similar information to the Trustee, the Holders, and prospective Holders (upon
request) as if the Company was subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act. The Company will be deemed to have satisfied
such requirements if Holding or RIC Holding files and provides reports,
documents and information of the types otherwise so required, in each case
within the applicable time periods, and the Company is not required to file such
reports, documents and information separately under the applicable rules and
regulations of the SEC (after giving effect to any exemptive relief) because of
the filings by Holding or RIC Holding. The Company also will comply with the
other provisions of TIA Section 314(a).
SECTION 4.03. LIMITATION ON INDEBTEDNESS. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, Incur any
Indebtedness (other than pursuant to Section 4.03(b)) unless (x) on the date
thereof the Consolidated Coverage Ratio would be greater than 2.25:1.00 and (y)
in the case of any such Indebtedness Incurred by a Restricted Subsidiary, such
Indebtedness is Permitted Subsidiary Indebtedness.
(b) Notwithstanding Section 4.03(a), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness:
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(i) Indebtedness under the Senior Secured Credit Agreement of
the Company, in an aggregate principal amount at any time outstanding
not to exceed an amount equal to $1,045,000,000 minus (without
duplication) the following amounts:
(A) the aggregate amount of all scheduled repayments
of principal actually made thereunder since the 1997 Notes
Issue Date and all mandatory repayments of principal actually
made thereunder since the 1997 Notes Issue Date with the Net
Available Cash from Asset Dispositions other than Financing
Dispositions (to the extent, in the case of repayments of
revolving credit indebtedness, that the corresponding
commitments have been permanently reduced), and
(B) at any date of determination, an amount equal to
(x) the amount then outstanding (I.E., advanced, and received
by, and available for use by, the Company) under any
Receivables Financing (as set forth in the books and records
of the Company and confirmed by the agent, trustee or other
representative of the institution or group providing such
Receivables Financing) that has been entered into by any
Receivables Subsidiary since the 1997 Notes Issue Date and
that, as of such date of determination, has not expired or
otherwise terminated, minus (y) the sum (without duplication)
of (1) the aggregate borrowing commitment amount under the
Senior Secured Credit Agreement that at the time can be used
only for the purpose of funding any liabilities or obligations
arising in connection with any such Receivables Financing, or
funding any refinancing, refunding, repayment or replacement
in respect of any such Receivables Financing, plus (2) the
aggregate face amount of letters of credit issued or to be
issued under or pursuant to the Senior Secured Credit
Agreement to support any such liabilities or obligations, or
any such refinancing, refunding, repayment or replacement,
which letters of credit at the time are undrawn and
outstanding or have been drawn; PROVIDED that such reduction
shall be effective on the business day next following the date
of receipt of such confirmation in writing by the Company and
shall no longer be effective on the business day next
preceding the date of such expiration or other termination;
(ii) Indebtedness of the Company or any Subsidiary of
the Company under the Machinery Credit Agreement or otherwise Incurred
to finance or refinance packaging machinery (including the development,
manufacture or acquisition thereof) in connection with any Related
Business, in an aggregate principal amount outstanding at any time not
to exceed the then aggregate book value of the packaging machinery that
is thereby financed or refinanced or that was otherwise owned by the
Company or any of its Subsidiaries on the 1997 Notes Issue Date (or, if
greater, to the extent that any such machinery shall be appraised by an
independent appraiser, the appraised value of such machinery);
39
(iii) Indebtedness of the Company owing to and held
by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary
owing to and held by the Company or any Restricted Subsidiary;
PROVIDED, HOWEVER, that any subsequent issuance or transfer of any
Capital Stock or any other event which results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent
transfer of any such Indebtedness (except to the Company or a
Restricted Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the issuer thereof;
(iv) Indebtedness represented by the 1997 Notes and
the Securities, any Indebtedness (other than the Indebtedness described
in clauses (i)-(iii) above) outstanding, or Incurred pursuant to
commitments outstanding, on the 1997 Notes Issue Date (including,
without limitation, the Existing Notes), any Indebtedness incurred
pursuant to Section 4.03(a) of the 1997 Notes Indenture prior to the
Issue Date and any Refinancing Indebtedness Incurred in respect of any
Indebtedness described in this clause (iv) or Section 4.03(a);
(v) (A) (x) Indebtedness of a Restricted Subsidiary Incurred
and outstanding on or prior to the date on which such Restricted
Subsidiary was acquired by the Company and (y) Indebtedness of a Person
assumed by the Company or a Restricted Subsidiary in connection with
the acquisition of assets from such Person provided that at the time
such assets were owned by such other Person such Indebtedness was
either secured by such assets or related to the acquisition, ownership,
improvement or use of such assets by such other Person (in each case
other than Indebtedness Incurred as consideration in, in contemplation
of, or to provide all or any portion of the funds or credit support
utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a
Subsidiary or such assets were acquired by the Company or a Restricted
Subsidiary, as applicable); PROVIDED, HOWEVER, that at the time such
Restricted Subsidiary is acquired by the Company or such assets are
acquired by the Company or a Restricted Subsidiary, as applicable, the
Company would have been able to Incur $1.00 of additional Indebtedness
pursuant to Section 4.03(a) after giving effect to the Incurrence of
such Indebtedness pursuant to this clause (v) and (B) Refinancing
Indebtedness Incurred by the Company or a Restricted Subsidiary, as
applicable, in respect of Indebtedness Incurred by the Company or such
Restricted Subsidiary, as applicable, pursuant to this clause (v);
(vi) Indebtedness (A) in respect of judgment, appeal,
surety, performance and other like bonds provided by the Company and
its Restricted Subsidiaries in the ordinary course of their business
and which do not secure other Indebtedness (other than any involved in
any judgment, appeal or similar proceeding to which any such bond
relates), (B) of the Company or any Restricted Subsidiary with respect
to letters of credit or bankers' acceptances incurred in the ordinary
course of business, (C)
40
consisting of accommodation guarantees for the benefit of trade
creditors of the Company or any of its Restricted Subsidiaries, or
represented by Guarantees consisting of contracts for the purchase of
wood chips in the ordinary course of business, (D) under (x) Currency
Agreements designed to protect the Company or any Restricted Subsidiary
against fluctuations in foreign currency exchange rates in respect of
foreign exchange exposures incurred by the Company or any Restricted
Subsidiary in the ordinary course of its business, (y) Interest Rate
Agreements entered into in the ordinary course of business and designed
to protect the Company against fluctuations in interest rates in
respect of Indebtedness of the Company or any Restricted Subsidiary
permitted to be Incurred under this Indenture, and (z) Commodities
Agreements designed to protect the Company or any Restricted Subsidiary
against fluctuations in the price of, or the shortage or supply of,
commodities entered into in the ordinary course of business, (E) in
respect of the financing of insurance premiums in the ordinary course
of business, (F) of the Company or any Restricted Subsidiary arising
from the honoring of a check, draft or similar instrument drawn against
insufficient funds; provided that such Indebtedness is extinguished
within two business days of its incurrence, and (G) of a Receivables
Subsidiary secured by a Lien on all or part of the assets disposed of
in, or otherwise Incurred in connection with, a Financing Disposition;
(vii) Indebtedness represented by the Note
Guarantees, Guarantees by the Company or any Restricted Subsidiary of
Indebtedness Incurred by any Restricted Subsidiary, and Guarantees of
Indebtedness Incurred pursuant to clause (i), (ii) or (iv) hereof;
(viii) Indebtedness of the Company or any Restricted
Subsidiary consisting of guarantees, indemnities, or obligations in
respect of purchase price adjustments, in connection with the
acquisition or disposition of assets permitted under this Indenture;
(ix) Indebtedness (1) of the Company consisting of
guarantees of up to an aggregate principal amount of $30,000,000 of
borrowings by Management Investors in connection with the purchase of
Management Stock by such Management Investors or (2) of the Company or
any Restricted Subsidiary consisting of guarantees in respect of loans
or advances made to officers or employees of Holding, RIC Holding, the
Company or any Restricted Subsidiary, or guarantees otherwise made on
their behalf, (A) in respect of travel, entertainment and
moving-related expenses incurred in the ordinary course of business,
(B) in respect of moving-related expenses incurred in connection with
any closing or consolidation of any facility or (C) in the ordinary
course of business not exceeding $2,500,000 in the aggregate
outstanding at any time;
41
(x) Bank Indebtedness or working capital Indebtedness
of non-U.S. Restricted Subsidiaries not exceeding an aggregate
principal amount of the sum (determined as of the end of the most
recent fiscal quarter ending at least 45 days prior to the date of
determination) of (A) 90% of Receivables of all non-U.S. Restricted
Subsidiaries, and (B) 75% of Inventory of all non-U.S. Restricted
Subsidiaries; and
(xi) Indebtedness of the Company or any Restricted
Subsidiary (other than Indebtedness permitted to be Incurred pursuant
to Section 4.03(a) or any other clause of this Section 4.03(b)) in an
aggregate principal amount not exceeding $100,000,000.
(c) For purposes of determining the outstanding principal
amount of any particular Indebtedness Incurred pursuant to this Section 4.03,
(1) Indebtedness permitted by this Section 4.03 need not be permitted solely by
reference to one provision permitting such Indebtedness but may be permitted in
part by one such provision and in part by one or more other provisions of this
Section 4.03 permitting such Indebtedness and (2) in the event that Indebtedness
or any portion thereof meets the criteria of more than one of the types of
Indebtedness described in this Section 4.03, the Company, in its sole
discretion, shall classify such Indebtedness and only be required to include the
amount of such Indebtedness in one of such clauses.
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS AND
INVESTMENTS. (a) The Company shall not, and shall not permit any Restricted
Subsidiary, directly or indirectly, to:
(i) declare or pay any dividend or make any
distribution on or in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving the
Company) except (x) dividends or distributions payable or made solely
in its Capital Stock (other than Disqualified Stock), (y) dividends or
distributions payable or made to the Company or another Restricted
Subsidiary, and (z) in the case of a Restricted Subsidiary that is not
a Wholly Owned Subsidiary, dividends or distributions payable or made
to the holders of such Capital Stock on a pro rata basis (measured by
value), or on a basis that results in the receipt by the Company or a
Restricted Subsidiary of dividends or distributions of equal or greater
value,
(ii) purchase, redeem, retire or otherwise acquire
for value any Capital Stock of the Company held by Persons other than
the Company or another Restricted Subsidiary,
(iii) purchase, repurchase, redeem, defease or
otherwise acquire or retire for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment any Subordinated
Obligations (other than (x) the purchase, repurchase or other
acquisition of Subordinated Obligations so acquired in anticipation of
satisfying
42
a sinking fund obligation, principal installment or final maturity, in
each case due within one year of the date of acquisition or (y) any
purchase, repurchase, redemption, defeasance, or other acquisition or
retirement of any Existing Notes other than the Existing Senior
Subordinated Notes), or
(iv) make any Investment (other than a Permitted
Investment) in any Person, (any such dividend, distribution, purchase,
redemption, repurchase, defeasance, other acquisition, retirement or
Investment being herein referred to as a "Restricted Payment") if at
the time the Company or such Restricted Subsidiary makes such
Restricted Payment:
(1) a Default shall have occurred and be continuing
(or would result therefrom);
(2) the Company could not Incur at least $1.00 of
additional Indebtedness under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment
and all other Restricted Payments (the amount so expended, if
other than in cash, to be determined in good faith by the
Board of Directors, whose determination shall be conclusive
and evidenced by a resolution of the Board of Directors)
declared or made subsequent to the 1997 Notes Issue Date would
exceed the sum of:
(A) 50% of the Consolidated Net Income
accrued during the period (treated as one accounting
period) from June 30, 1997, to the end of the most
recent fiscal quarter ending at least 45 days prior
to the date of such Restricted Payment (or, in case
such Consolidated Net Income shall be a deficit,
minus 100% of such deficit), excluding any amounts
included pursuant to clause (F) below;
(B) the aggregate Net Cash Proceeds received
by the Company from the issue or sale of the Capital
Stock (other than Disqualified Stock) of Parent or
the Company subsequent to the 1997 Notes Issue Date
(other than an issuance or sale to a Restricted
Subsidiary of the Company); PROVIDED, HOWEVER, that
the Net Cash Proceeds determined in accordance with
this clause (B) shall not include any portion of such
Net Cash Proceeds that at the time of such
determination is included in any amount that is
excluded from the calculation of the amount of
Restricted Payments pursuant to the proviso to
Section 4.04(b)(vii);
43
(C) the aggregate Net Cash Proceeds received
by the Company from the issue or sale of its Capital
Stock (other than Disqualified Stock) to an employee
stock ownership plan or similar trust established by
the Company or any of its Restricted Subsidiaries
subsequent to the 1997 Notes Issue Date; PROVIDED,
HOWEVER, that if such plan or trust Incurs any
Indebtedness to or Guaranteed by the Company to
finance the acquisition of such Capital Stock, such
aggregate amount shall be limited to (x) to the
extent such Indebtedness is owed to the Company, any
increase in the Consolidated Net Worth of the Company
resulting from principal repayments made by such plan
or trust with respect to such Indebtedness and (y) to
the extent such Indebtedness is Guaranteed by the
Company, the aggregate amount of principal payments
made by such plan or trust with respect to such
Indebtedness;
(D) without duplication of any Net Cash
Proceeds included pursuant to clause (B) above, the
aggregate Net Cash Proceeds received subsequent to
the 1997 Notes Issue Date as capital contributions to
the Company;
(E) the amount by which Indebtedness of the
Company or any of its Restricted Subsidiaries is
reduced on the Company's balance sheet upon the
conversion or exchange (other than by a Restricted
Subsidiary) subsequent to the 1997 Notes Issue Date
of any Indebtedness of the Company or its Restricted
Subsidiaries convertible or exchangeable for Capital
Stock (other than Disqualified Stock) of Parent or
the Company (less the amount of any cash or other
property (other than Capital Stock) distributed by
the Company or any Restricted Subsidiary upon such
conversion or exchange plus the amount of any cash or
other property received by the Company or any
Restricted Subsidiary upon such conversion or
exchange); and
(F) the amount equal to the net reduction in
Investments in Unrestricted Subsidiaries since the
1997 Notes Issue Date resulting from (i) payments of
dividends or interest, repayments of the principal of
loans or advances or other transfers of assets to the
Company or any Restricted Subsidiary from
Unrestricted Subsidiaries or (ii) the redesignation
of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the
definition of "Investment") or the receipt of
proceeds from the sale or other disposition of any
portion of any Investment in an Unrestricted
Subsidiary not to exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments
previously made by the Company or any Restricted
Subsidiary in such
44
Unrestricted Subsidiary, which amount was included in
the calculation of the amount of Restricted Payments.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) any purchase, repurchase, defeasance, redemption,
retirement or other acquisition of Capital Stock of the Company or
Subordinated Obligations made by exchange for (including any such
exchange pursuant to the exercise of a conversion right or privilege in
connection with which cash is paid in lieu of the issuance of
fractional shares or scrip), or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company (other
than Disqualified Stock and other than Capital Stock issued or sold to
a Subsidiary of the Company or an employee stock ownership plan or
other trust established by the Company or any of its Subsidiaries) or
Capital Stock of Parent; PROVIDED, HOWEVER, that (A) such purchase,
repurchase, defeasance, redemption, retirement or other acquisition
shall be excluded in the calculation of the amount of Restricted
Payments and (B) to the extent so applied to such purchase, repurchase,
defeasance, redemption, retirement or other acquisition, the Net Cash
Proceeds from such sale shall be excluded from clause (3)(B) of Section
4.04(a);
(ii) any purchase, repurchase, defeasance, retirement,
redemption or other acquisition of Subordinated Obligations made by
exchange for, or out of the proceeds of the substantially concurrent
sale of, Indebtedness of the Company which is permitted to be Incurred
pursuant to Section 4.03; PROVIDED, HOWEVER, that such purchase,
defeasance, retirement, redemption or other acquisition shall be
excluded in the calculation of the amount of Restricted Payments;
(iii) any purchase, repurchase, defeasance, retirement,
redemption or other acquisition of Subordinated Obligations from Net
Available Cash to the extent permitted by Section 4.06; PROVIDED,
HOWEVER, that such purchase, defeasance, retirement, redemption or
other acquisition shall be excluded in the calculation of the amount of
Restricted Payments;
(iv) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with Section 4.04(a); PROVIDED, HOWEVER, that such
dividend shall be included in the calculation of the amount of
Restricted Payments;
(v) the repurchase of Securities pursuant to Section 4.08 and
Section 4.06; PROVIDED, HOWEVER, that such repurchases shall be
excluded in the calculation of the amounts of Restricted Payments;
45
(vi) (A) loans, advances, dividends or distributions by the
Company or any Restricted Subsidiary to RIC Holding or Holding not to
exceed an amount necessary to permit each of RIC Holding and Holding to
pay (1) its costs (including all professional fees and expenses)
incurred to comply with its reporting obligations under Federal or
state laws or under the 1997 Notes Indenture, this Indenture or the
indentures relating to the Existing Senior Notes and Existing Senior
Subordinated Notes, including Section 4.02, or in connection with
reporting or other obligations under the Credit Agreements or any
related collateral documents or guarantees, (2) its expenses incurred
in connection with any public offering of equity securities or of
Indebtedness permitted by this Indenture which has been terminated by
the board of directors of the Company, a Restricted Subsidiary, RIC
Holding or Holding, as applicable, in each case, (x) the net proceeds
of which were specifically intended to be received by or contributed or
loaned to the Company or a Restricted Subsidiary or (y) in a prorated
amount of such expenses in proportion to the amount of such net
proceeds specifically intended to be so received, contributed or
loaned, (3) in the case of RIC Holding, its expenses incurred in
connection with the acquisition, development, maintenance, ownership,
prosecution, protection and defense of its intellectual property and
associated rights (including but not limited to trademarks, service
marks, trade names, trade dress, patents, copyrights and similar
rights, including registrations and registration or renewal
applications in respect thereof; inventions; processes, designs,
formulae, trade secrets, know-how, confidential information, computer
software, data and documentation, and any other intellectual property
rights; and licenses of any of the foregoing) to the extent such
intellectual property and associated rights relate to the business of
the Company or any of its Subsidiaries, and (4) its other operational
expenses (other than taxes) incurred in the ordinary course of business
and not exceeding $1,000,000 in any fiscal year and (B) loans or
advances by the Company or any Restricted Subsidiary to RIC Holding or
Holding not to exceed an amount necessary to permit each of RIC Holding
and Holding to pay its interim expenses incurred in connection with any
public offering of equity securities or of Indebtedness permitted by
this Indenture, the net proceeds of which are specifically intended to
be received by or contributed or loaned to the Company or a Restricted
Subsidiary, or a prorated amount of such interim expenses in proportion
to the amount of such net proceeds specifically intended to be so
received, contributed or loaned, which loans and advances shall be
repaid to the Company or the relevant Restricted Subsidiary promptly
out of the proceeds of such offering, unless such offering shall be of
Indebtedness of the Company or a Restricted Subsidiary or shall have
been terminated by the board of directors of the Company, RIC Holding
or Holding, as applicable; PROVIDED, HOWEVER, that such loans,
advances, dividends or distributions pursuant to this clause (vi) shall
be excluded in the calculation of the amount of Restricted Payments;
(vii) loans, advances, dividends or distributions by the
Company or any Restricted Subsidiary to RIC Holding or Holding in order
for Holding to repurchase
46
or otherwise acquire or settle shares of Holding Common Stock or
options, warrants or other rights in respect thereof, or the repurchase
or other acquisition or settlement by the Company or any Subsidiary of
shares of Holding Common Stock or options, warrants or other rights in
respect thereof, in each case from the Management Investors not to
exceed an aggregate amount (net of repayments of any such loans or
advances) equal to (A) $25,000,000, plus (B) $5,000,000 multiplied by
the number of calendar years that have commenced since the 1997 Notes
Issue Date, plus (C) the Management Contribution Amount (if any),
PROVIDED, HOWEVER, that if (x) the amount of such loans, advances,
dividends or distributions made in any fiscal year (net of repayments
of any such loans or advances whenever made, which repayments are made
in such year) exceeds $5,000,000 plus the portion of the Management
Contribution Amount (if any) attributable to such fiscal year, plus the
Annual Carryover Amount for such fiscal year, or (y) the amount of such
loans, advances, dividends or distributions made after the 1997 Notes
Issue Date (net of repayments of any such loans or advances) exceeds
$25,000,000 plus the Management Contribution Amount (if any), the
amount of any such excess will be included in the calculation of the
amount of Restricted Payments (in each case, without duplication of any
portion of any such excess amount otherwise included in such
calculation);
(viii) payments by the Company or any Restricted Subsidiary to
RIC Holding to pay (A) without duplication of amounts payable pursuant
to subclause (B) of this clause (viii), any taxes, charges or
assessments, including but not limited to, sales, use, transfer,
rental, ad valorem, value-added, stamp, property, consumption,
franchise, license, capital, net worth, gross receipts, excise,
occupancy, intangibles or similar taxes, charges or assessments (other
than Federal, state or local taxes measured by income and Federal,
state or local withholding imposed on payments made by RIC Holding)
required to be paid by RIC Holding by virtue of its being incorporated
or having capital stock outstanding (but not by virtue of owning stock
of any corporation other than the Company), or being a holding company
parent of the Company or receiving dividends from or other
distributions in respect of the stock of the Company, or having
guaranteed any obligations of the Company or any Subsidiary thereof, or
having made any payment in respect to any of the items for which the
Company is permitted to make payments to Holding pursuant to clauses
(vi), (vii), (viii), (ix), (x) or (xi) hereof, or acquiring,
developing, maintaining, owning, prosecuting, protecting or defending
its intellectual property and associated rights (including but not
limited to receiving or paying royalties for the use thereof) relating
to the business or businesses of the Company and any Subsidiary thereof
or (B) any other Federal, state or local taxes measured by income for
which RIC Holding is liable up to an amount not to exceed with respect
to such Federal taxes the amount of any such taxes which the Company
would have been required to pay on a separate company basis or on a
consolidated basis if the Company had filed a consolidated return on
behalf of an affiliated group (as defined in Section 1504 of the Code
or an analogous provision of state, local or foreign law) of which it
were the
47
common parent, or with respect to state and local taxes, on a combined
basis if the Company had filed a combined return on behalf of an
affiliated group consisting only of the Company and its Subsidiaries;
PROVIDED, HOWEVER, that such payments shall be excluded in the
calculation of the amount of Restricted Payments;
(ix) payments by the Company or any Restricted Subsidiary to
Holding, or to RIC Holding in order for RIC Holding to make payments to
Holding, to pay (A) without duplication of amounts payable pursuant to
subclause (B) of this clause (ix), any taxes, charges or assessments,
including but not limited to, sales, use, transfer, rental, ad valorem,
value-added, stamp, property, consumption, franchise, license, capital,
net worth, gross receipts, excise, occupancy, intangibles or similar
taxes, charges or assessments (other than Federal, state or local taxes
measured by income and Federal, state or local withholding imposed on
payments made by Holding) required to be paid by Holding by virtue of
its being incorporated or having capital stock outstanding (but not by
virtue of owning stock of any corporation other than RIC Holding or the
Company, or through any such other corporation, stock of any other
corporation), or being a holding company parent of RIC Holding or the
Company or receiving dividends from or other distributions in respect
of the stock of RIC Holding (to the extent attributable to its
intellectual property and associated rights, relating to the business
or businesses of the Company and any Subsidiary thereof, including but
not limited to receiving royalties for the use thereof, or to the stock
of the Company) or the Company, or having guaranteed any obligations of
RIC Holding (to the extent attributable to RIC Holding's intellectual
property and associated rights relating to the business or businesses
of the Company and any Subsidiary thereof or obligations of the
Company), the Company or any Subsidiary thereof, or having made any
payment in respect to any of the items for which the Company is
permitted to make payments to RIC Holding or Holding pursuant to
clauses (vi), (vii), (viii), (ix), (x) or (xi) hereof, or (B) without
duplication of amounts payable pursuant to clause (viii) hereof, any
other Federal, state or local taxes measured by income for which
Holding is liable up to an amount not to exceed with respect to such
Federal taxes the amount of any such taxes which the Company would have
been required to pay on a separate company basis or on a consolidated
basis if the Company had filed a consolidated return on behalf of an
affiliated group (as defined in Section 1504 of the Code or an
analogous provision of state, local or foreign law) of which it were
the common parent, or with respect to state and local taxes, on a
combined basis if the Company had filed a combined return on behalf of
an affiliated group consisting only of the Company and its
Subsidiaries; PROVIDED, HOWEVER, that such payments shall be excluded
in the calculation of the amount of the Restricted Payments;
(x) loans, advances, dividends or distributions by the Company
or any Restricted Subsidiary to RIC Holding or Holding to pay dividends
on the Holding Common Stock following an initial public offering of the
Holding Common Stock, in
48
an amount not to exceed in any fiscal year 6% of the aggregate gross
proceeds (before underwriting commissions and other expenses) received
by Holding in such public offering or any additional public offerings
(or if the Company and Holding have merged, payment of such dividends
by the Company), PROVIDED, HOWEVER, that such loans, advances,
dividends or distributions shall be included in the calculation of the
amount of Restricted Payments;
(xi) payments by the Company or any Restricted Subsidiary to
RIC Holding or Holding not to exceed an amount necessary to permit each
of RIC Holding and Holding to (A) make payments in respect of its
indemnification obligations owing to directors, officers or other
Persons under its charter or by-laws or pursuant to written agreements
with any such Person; PROVIDED that such payments relate to the Company
or any of its Subsidiaries, (B) satisfy its obligations under the
Registration and Participation Agreement, the Stockholders Agreement,
the Consulting Agreement and the Indemnification Agreement or (C) make
payments in respect of indemnification obligations of Holding in
connection with any offering of Holding Common Stock the net proceeds
of which are specifically intended to be received by or contributed or
loaned to the Company or a Restricted Subsidiary, or in respect of a
prorated amount of such indemnification obligations in proportion to
the amount of such net proceeds specifically intended to be so
received, contributed or loaned; PROVIDED, HOWEVER, that such payments
shall be excluded in the calculation of the amount of Restricted
Payments; or
(xii) payments by the Company or any Restricted Subsidiary to
RIC Holding to pay principal of, and premium, if any, and interest on,
any Existing Notes (other than the Existing Senior Subordinated Notes)
that are outstanding on or after the Issue Date (whether by way of
scheduled payment, or by purchase, repurchase, redemption, defeasance
or other acquisition or retirement); PROVIDED, HOWEVER, that such
payments shall be excluded in the calculation of the amount of
Restricted Payments.
SECTION 4.05. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions on
its Capital Stock, or pay any Indebtedness owed, to the Company, (ii) make any
loans or advances to the Company or (iii) transfer any of its property or assets
to the Company, except:
(1) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the 1997 Notes Issue Date, including
without limitation, each of the Credit Agreements and any related
collateral documents and guarantees;
49
(2) any encumbrance or restriction with respect to a
Restricted Subsidiary (x) pursuant to an agreement relating to any
Indebtedness (A) Incurred by such Restricted Subsidiary prior to the
date on which such Restricted Subsidiary was acquired by the Company or
(B) of a Person assumed by the Company or a Restricted Subsidiary in
connection with the acquisition of assets from such Person provided
that at the time such assets were owned by such other Person such
Indebtedness was either secured by such assets or related to the
acquisition, ownership, improvement or use of such assets (in each case
other than Indebtedness Incurred as consideration in, in contemplation
of, or to provide all or any portion of the funds or credit support
utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or such assets were acquired by the Company or a
Restricted Subsidiary, as applicable) or (y) that is not pursuant to an
agreement relating to Indebtedness, and is in existence at the time
that such Person becomes a Subsidiary of the Company and not incurred
in connection with, or in contemplation of, such Person becoming such a
Subsidiary;
(3) any encumbrance or restriction pursuant to an agreement (a
"Refinancing Agreement") that extends, renews, refinances or replaces
an agreement referred to in clause (1) or (2) of this Section or this
clause (3) (an "Initial Agreement") or contained in any amendment to an
Initial Agreement; PROVIDED, HOWEVER, that the encumbrances and
restrictions contained in any such Refinancing Agreement or amendment
are not materially less favorable to the Securityholders than
encumbrances and restrictions contained in the Initial Agreement or
Initial Agreements to which such Refinancing Agreement or amendment
relates (as determined in good faith by the Company);
(4) any encumbrance or restriction (A) that restricts in a
customary manner (x) the subletting, assignment or transfer of any
property or asset that is subject to a lease, license or similar
contract, or (y) the assignment or transfer of any lease, license or
other contract, or (B) contained in security agreements or mortgages
securing Indebtedness of a Restricted Subsidiary to the extent such
encumbrance or restriction restricts the transfer of the property or
asset subject to such security agreements or mortgages;
(5) any restriction with respect to a Restricted Subsidiary,
or any property or assets of any Restricted Subsidiary, imposed
pursuant to an agreement entered into for the sale or disposition of
all or substantially all the Capital Stock or assets of such Restricted
Subsidiary, or the sale or disposition of the property or assets that
are subject to such restriction, pending the closing of such sale or
disposition;
(6) customary provisions restricting dispositions of real
property interests set forth in any reciprocal easement agreements of
the Company or any Restricted Subsidiary;
50
(7) any encumbrance or restriction pursuant to an agreement
relating to any foreign Indebtedness incurred by any non-U.S.
Restricted Subsidiary;
(8) any encumbrance or restriction required by any regulatory
authority having jurisdiction over the Company or any Restricted
Subsidiary or any of their businesses;
(9) any encumbrance or restriction pursuant to an agreement
relating to Indebtedness of or a Financing Disposition to or by any
Receivables Subsidiary or Equipment Subsidiary; and
(10) any encumbrance or restriction pursuant to a joint
venture or similar agreement or arrangement entered into in connection
with a Fiskeby Transaction.
SECTION 4.06. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY
STOCK. (a) The Company shall not, and shall not permit any Restricted Subsidiary
to, make any Asset Disposition unless (i) either (x) in the case of any Asset
Disposition, the Company or such Restricted Subsidiary receives consideration
(including by way of relief from, or by any other Person assuming responsibility
for, any liabilities, contingent or otherwise) at the time of such Asset
Disposition at least equal to the fair market value, as may be determined (and
shall be determined, to the extent an Asset Disposition involves a fair market
value greater than $10,000,000) in good faith by the Board of Directors, whose
determination will be conclusive and evidenced by a resolution of the Board of
Directors (including as to the value of all non-cash consideration), of the
shares and assets subject to such Asset Disposition, or (y) in the case of a
Financing Disposition, the Board of Directors shall have determined in good
faith, which determination will be conclusive and evidenced by a resolution of
the Board of Directors, that such Financing Disposition is economically fair and
reasonable to the Company or such Restricted Subsidiary, as the case may be, and
in the best interest of the Company or such Restricted Subsidiary and its
respective creditors, (ii) in the case of any Asset Disposition having a fair
market value of $10,000,000 or more, at least 75% of the consideration thereof
received by the Company or such Restricted Subsidiary is in the form of cash or
Cash Equivalents (other than with respect to an Asset Disposition consisting of
an exchange of equipment for use in related lines of business, a Financing
Disposition or a Fiskeby Transaction), and (iii) an amount equal to 100% of the
Net Available Cash from such Asset Disposition (other than any Financing
Disposition relating to any Receivables Financing) is applied by the Company (or
such Restricted Subsidiary, as the case may be) as follows: (A) First, to the
extent the Company elects (or is required by the terms of any Senior
Indebtedness (other than the 1997 Notes or the Securities) or Indebtedness
(other than Preferred Stock) of a Restricted Subsidiary), to prepay, repay or
purchase Senior Indebtedness (other than the 1997 Notes or the Securities) or
such Indebtedness (in each case other than Indebtedness owed to the Company or a
Restricted Subsidiary) within 365 days
51
after an Asset Disposition; (B) Second, to the extent of the balance of Net
Available Cash after application in accordance with clause (A), to the extent
the Company or such Restricted Subsidiary elects, to reinvest in Additional
Assets (including by means of an Investment in Additional Assets by a Restricted
Subsidiary with Net Available Cash received by the Company or another Restricted
Subsidiary) within 365 days after an Asset Disposition or, if such reinvestment
in Additional Assets is a project authorized by the Board of Directors of the
Company or a Restricted Subsidiary, as the case may be, that will take longer
than such 365 days to complete (an "Authorized Project"), the period of time
necessary to complete the Authorized Project; and (C) THIRD, to the extent of
the balance of such Net Available Cash after application in accordance with
clauses (A) and (B), (x) to make a Note Offer (as defined below) to purchase
Securities pursuant to and subject to the conditions of Section 4.06(b) within
365 days after an Asset Disposition or, in the event that the Company or a
Restricted Subsidiary shall have undertaken an Authorized Project, within 20
days after completion of such Authorized Project or (y) (1) to make a Note Offer
pursuant to and subject to the conditions set forth in Sections 4.06(b) and
4.06(c), and (2) otherwise in accordance with Section 4.06 of the 1997 Notes
Indenture; PROVIDED, HOWEVER that in connection with any prepayment, repayment
or purchase of Indebtedness pursuant to clause (A) or (C) above, the Company or
such Restricted Subsidiary shall retire such Indebtedness and shall cause the
related loan commitment (if any) to be permanently reduced in an amount equal to
the principal amount so prepaid, repaid or purchased. Notwithstanding the
foregoing provisions of this Section, the Company and the Restricted
Subsidiaries shall not be required to apply any Net Available Cash in accordance
with this Section except to the extent that the aggregate Net Available Cash
from all Asset Dispositions which is not applied in accordance with this Section
(less the aggregate amount of Net Available Cash from Asset Dispositions applied
in accordance with Section 4.06 of the 1997 Notes Indenture prior to the Issue
Date) exceeds $25,000,000 since the 1997 Notes Issue Date.
For the purposes of clause (ii) of this Section 4.06(a), the
following are deemed to be cash: (w) the assumption of Indebtedness of the
Company (other than Disqualified Stock of the Company) or any Restricted
Subsidiary and the release of the Company or such Restricted Subsidiary from all
liability on such Indebtedness in connection with such Asset Disposition, (x)
Indebtedness of any Restricted Subsidiary that is no longer a Restricted
Subsidiary as a result of such Asset Disposition, to the extent that the Company
and each other Restricted Subsidiary is released from any Guarantee of such
Indebtedness in connection with such Asset Disposition, (y) securities received
by the Company or any Restricted Subsidiary from the transferee that are
promptly converted by the Company or such Restricted Subsidiary into cash or
Cash Equivalents, and (z) consideration consisting of Indebtedness of the
Company or any Restricted Subsidiary.
(b) In the event of an Asset Disposition that requires the
purchase of Securities pursuant to Section 4.06(a)(iii)(C), the Company will
first be required to purchase Securities tendered pursuant to an offer by the
Company for the Securities (the "Note Offer") at a purchase price equal to 100%
of their principal amount plus accrued and unpaid interest
52
to the Purchase Date in accordance with the procedures (including prorating in
the event of oversubscription) set forth in Section 4.06(d). If the aggregate
purchase price of Securities tendered pursuant to the Note Offer is less than
the Net Available Cash allotted to the purchase of the Securities, the Company
may apply the remaining Net Available Cash in any manner. After repayment of all
the Securities tendered pursuant to the Note Offer, the remaining amount of Net
Available Cash, if any, shall be reset at zero. The Company shall not be
required to make a Note Offer for Securities pursuant to this Section if the Net
Available Cash available therefor (after application of the proceeds as provided
in clauses (A) and (B) of Section 4.06(a)(iii)) is less than $25,000,000 (which
lesser amount shall be carried forward for purposes of determining whether a
Note Offer is required with respect to the Net Available Cash from any
subsequent Asset Disposition).
(c) In the event that the Company determines that it will be
required to make a 1997 Notes Offer to purchase any 1997 Notes pursuant to
Section 4.06(a)(iii)(C) of the 1997 Notes Indenture, the Company shall also be
required to make a Note Offer and purchase Securities tendered pursuant to such
Note Offer, as contemplated by Section 4.06(a)(iii)(A) of the 1997 Notes
Indenture, in accordance with the procedures (including prorating in the event
of oversubscription) set forth in Section 4.06(d) of this Indenture. The Board
of Directors shall in good faith determine whether or not the Company will be so
required to make a 1997 Notes Offer, and the related Pro Rata Amount, prior to
the date that is 305 days after the relevant Asset Disposition, taking into
account the then expected application of then outstanding amounts of 1997 Net
Available Cash (which determination shall be conclusive). Such Note Offer and
purchase of Securities shall be for their total outstanding principal amount
(or, if less, the Pro Rata Amount) plus accrued and unpaid interest to the date
of purchase. The Company shall make such Note Offer prior to, and purchase the
Securities tendered pursuant thereto on or prior to, the date that is 365 days
after the relevant Asset Disposition to the extent necessary to comply with the
provisions of Section 4.06 of the 1997 Notes Indenture.
The term "Pro Rata Amount" means the amount equal to (1) the
amount of 1997 Net Available Cash that would be required to be applied to such
1997 Notes Offer, calculated excluding any amount required under this Section
4.06(c) to be applied to purchase Securities pursuant to such Note Offer,
multiplied by (2) the fraction equal to (x) the aggregate principal amount of
Securities then outstanding divided by (y) the sum of the aggregate principal
amount of Securities then outstanding and the aggregate principal amount of 1997
Notes then outstanding.
(d) (1) Promptly, and in any event within 20 days after the
Company becomes obligated to make a Note Offer, the Company shall be obligated
to deliver to the Trustee and send, by first-class mail to each Holder, a
written notice stating that the Holder may elect to have his Securities
purchased by the Company either in whole or in part (subject to prorating as
hereinafter described in the event the Note Offer is oversubscribed) in integral
multiples of $1,000 of principal amount, at the applicable purchase price. The
notice shall specify a
53
purchase date not less than 30 days nor more than 60 days after the date of such
notice (the "Purchase Date"), and shall contain such information concerning the
business of the Company which the Company in good faith believes will enable
such Holders to make an informed decision (which at a minimum will include (i)
the most recently filed Annual Report on Form 10-K (including audited
consolidated financial statements) of the Company, the most recent subsequently
filed Quarterly Report on Form 10-Q and any Current Report on Form 8-K of the
Company filed subsequent to such Quarterly Report, other than Current Reports
describing Asset Dispositions otherwise described in the offering materials (or
corresponding successor reports), (ii) a description of material developments in
the Company's business subsequent to the date of the latest of such Reports, and
(iii) if material, appropriate pro forma financial information) and all
instructions and materials necessary to tender Securities pursuant to the Note
Offer, together with the information contained in clause (3).
(2) Not later than the date upon which written notice of a
Note Offer is delivered to the Trustee as provided above, the Company shall
deliver to the Trustee an Officers' Certificate as to (i) the amount of the Note
Offer (the "Offer Amount"), (ii) the allocation of the Net Available Cash from
the Asset Dispositions pursuant to which such Note Offer is being made and (iii)
the compliance of such allocation with the provisions of Section 4.06(a). On or
prior to the Purchase Date, the Company shall also irrevocably deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own paying
agent, segregate and hold in trust) in Temporary Cash Investments an amount
equal to the Offer Amount to be held for payment in accordance with the
provisions of this Section. Upon the expiration of the period for which the Note
Offer remains open (the "Offer Period"), the Company shall deliver to the
Trustee for cancelation the Securities or portions thereof which have been
properly tendered to and are to be accepted by the Company. The Trustee shall,
on the Purchase Date, mail or deliver payment to each tendering Holder in the
amount of the purchase price. In the event that the aggregate purchase price of
the Securities delivered by the Company to the Trustee is less than the Offer
Amount, the Trustee shall deliver the excess to the Company immediately after
the expiration of the Offer Period for application in accordance with this
Section.
(3) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders will be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the Purchase Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased. If at the expiration
of the Offer Period the aggregate principal amount of Securities surrendered by
Holders exceeds the Offer Amount, the Company shall select the Securities to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Securities in
54
denominations of $1,000, or integral multiples thereof, shall be purchased).
Holders whose Securities are purchased only in part will be issued new
Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company will also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section. A Security
shall be deemed to have been accepted for purchase at the time the Trustee,
directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
(e) 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 the repurchase of Securities pursuant to
this Section. To the extent that the provisions of any securities laws or
regulations conflict or are inconsistent 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 thereof.
SECTION 4.07. LIMITATION ON TRANSACTIONS WITH AFFILIATES. (a)
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, enter into or conduct any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of the Company (an "Affiliate Transaction") on terms
(i) that are less favorable to the Company or such Restricted Subsidiary, as the
case may be, than those that could be obtained at the time of such transaction
in arm's-length dealings with a Person who is not such an Affiliate and (ii)
that, in the event such Affiliate Transaction involves an aggregate amount in
excess of $10,000,000, have not been approved by a majority of the members of
the Board of Directors having no material direct or indirect financial interest
in or with respect to such Affiliate Transaction. For purposes of this
paragraph, any transaction or series of related transactions with any Affiliate
shall be deemed to have satisfied the requirements set forth in this paragraph
if (x) such transaction or series of related transactions is approved by a
majority of the members of the Board of Directors having no material direct or
indirect financial interest in or with respect to such Affiliate Transaction, or
(y) in the event there are no such directors without any such interest, a
fairness opinion is provided by a nationally recognized appraisal or investment
banking firm with respect to such transaction or series of related transactions.
(b) The provisions of Section 4.07(a) shall not apply to: (i)
any Restricted Payment permitted pursuant to, or any other payment or
transaction permitted by, Section 4.04 or any Indebtedness permitted to be
Incurred pursuant to Section 4.03(b)(ix), or any payments in respect thereof,
(ii) 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,
55
(iii) the payment of reasonable fees to directors of the Company and its
Subsidiaries who are not employees of the Company or its Subsidiaries, (iv) any
transaction between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries, (v) any transaction with an officer or member of the
board of directors of the Company, RIC Holding or Holding not covered by clause
(ii) above entered into in the ordinary course of business (x) involving
compensation or employee benefit arrangements or (y) not involving more than
$100,000 in any one case, (vi) any transaction arising out of agreements as in
existence on the 1997 Notes Issue Date, including but not limited to the
Indemnification Agreement and any payments made pursuant thereto, (vii) payment
to CD&R or any Affiliate of CD&R of fees in an aggregate amount not to exceed
$1,000,000 in any fiscal year plus all reasonable out-of-pocket expense incurred
by CD&R or any such Affiliate in connection with its performance of management
consulting, monitoring and financial advisory services with respect to Holding,
RIC Holding, the Company and its Restricted Subsidiaries, and (viii) loans and
advances (or guarantees in respect thereof and payments thereunder) made to
officers or employees of Holding, RIC Holding, the Company or any Restricted
Subsidiary, or guarantees made on their behalf (and payments thereunder), (A) in
respect of travel, entertainment and moving-related expenses incurred in the
ordinary course of business, (B) in respect of moving-related expenses incurred
in connection with any closing or consolidation of any facility and (C) in the
ordinary course of business not exceeding $2,500,000 in the aggregate
outstanding at any time.
SECTION 4.08. CHANGE OF CONTROL. (a) Upon the occurrence of a
Change of Control, each Holder shall have the right to require the Company to
purchase all or any part of such Holder's Securities at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
if any, to the date of purchase (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant interest
payment date), in accordance with the terms contemplated in Section 4.08(b);
PROVIDED, HOWEVER, that notwithstanding the occurrence of a Change of Control,
the Company shall not be obligated to purchase the Securities pursuant to this
Section 4.08 in the event that it has exercised its rights to redeem all of the
Securities under paragraph 5 of the Securities. In the event that at the time of
such Change of Control the terms of the Bank Indebtedness restrict or prohibit
the repurchase of Securities pursuant to this Section 4.08, then prior to the
mailing of the notice to Holders provided for in Section 4.08(b) below but in
any event within 30 days following any Change of Control, the Company shall (i)
repay in full all Bank Indebtedness or offer to repay in full all Bank
Indebtedness and repay the Bank Indebtedness of each lender who has accepted
such offer or (ii) obtain the requisite consent under the agreements governing
the Bank Indebtedness to permit the repurchase of the Securities as provided for
in Section 4.08(b).
(b) Within 30 days following any Change of Control (except as
provided for in the proviso to the first sentence of Section 4.08(a)), the
Company shall mail a notice to each Holder at its registered address with a copy
to the Trustee stating:
56
(1) that a Change of Control has occurred and that such Holder
has the right to require the Company to purchase such Holder's
Securities at a purchase price in cash equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
repurchase (subject to the right of Holders of record on a record date
to receive interest on the relevant interest payment date);
(2) the circumstances and relevant facts and financial
information regarding such Change of Control;
(3) the repurchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed, and in
any event earlier than the repurchase date for the Senior Subordinated
Notes); and
(4) the instructions determined by the Company, consistent
with this Section, that a Holder must follow in order to have its
Securities purchased.
(c) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the purchase date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the
Company under this Section shall be delivered by the Trustee for cancelation,
and the Company shall pay the purchase price plus accrued and unpaid interest,
if any, to the Holders entitled thereto.
(e) 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 the repurchase of Securities pursuant to
this Section. To the extent that the provisions of any securities laws or
regulations conflict or are inconsistent 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 4.08 by
virtue thereof.
SECTION 4.09. COMPLIANCE CERTIFICATE. The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company an Officers' Certificate stating that in the course of the performance
by the signers of their duties as Officers of the Company they would normally
have knowledge of any Default and whether or not the signers know of any Default
that occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or
57
proposes to take with respect thereto. One of the persons signing the Officers'
Certificate given pursuant to this Section 4.09 shall be the principal
executive, financial or accounting officer of the Company, in compliance with
TIA ss. 314(a)(4).
SECTION 4.10. FURTHER INSTRUMENTS AND ACTS. Upon request of
the Trustee, the Company shall execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.11. LIMITATION ON LIENS. (a) The Company shall not,
and shall not permit any Restricted Subsidiary to, directly or indirectly,
create or permit to exist any Lien (the "Initial Lien"), other than any
Permitted Lien, on any of its property or assets (including any Capital Stock
owned by it), whether owned on the 1997 Notes Issue Date or thereafter acquired,
securing any obligation unless contemporaneously therewith effective provision
is made to secure the Securities equally and ratably with (or on a senior basis
to, in the case of Indebtedness expressly subordinated in right of payment to
the Securities) such obligation for so long as such obligation is so secured.
The preceding sentence shall not require the Company or any Restricted
Subsidiary to secure the Securities if the Initial Lien consists of one or more
Permitted Liens.
(b) Any Lien created for the benefit of the Holders of the
Securities pursuant to Section 4.11(a) shall be automatically and
unconditionally released and discharged upon the earliest to occur of (i) the
purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value of all of the then outstanding Securities, or the payment in full of
the principal amount of, and all premium and interest then due and payable on,
the then outstanding Securities, (ii) the release and discharge of the Initial
Lien, and (iii) any sale, exchange or transfer to any Person not an Affiliate of
the Company of the property or assets (including Capital Stock) subject to the
Initial Lien, provided that after giving effect to such sale, exchange or
transfer such property or assets (including Capital Stock) remain subject to the
Initial Lien.
SECTION 4.12. LIMITATION ON THE SALE OR ISSUANCE OF PREFERRED
STOCK OF RESTRICTED SUBSIDIARIES. The Company shall not sell, and shall not
permit any Restricted Subsidiary, directly or indirectly, to issue or sell any
shares of Preferred Stock of any Restricted Subsidiary except (i) to the Company
or a Wholly Owned Subsidiary, (ii) if, immediately after giving effect to such
issuance or sale, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary or (iii) Permitted Subsidiary Preferred Stock.
SECTION 4.13. FUTURE NOTE GUARANTORS. The Company shall cause
each Significant Subsidiary which Guarantees the Bank Indebtedness to execute
and deliver to the Trustee a supplemental indenture in substantially the form of
Exhibit C hereto pursuant to which such Subsidiary will Guarantee payment of the
Securities.
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SECTION 4.14. LIMITATION ON SALE/LEASEBACK TRANSACTIONS. The
Company shall not, and shall not permit any Restricted Subsidiary to, enter into
any Sale/Leaseback Transaction (other than a Permitted Sale/Leaseback
Transaction) with respect to any property unless (i) the Company or such
Subsidiary would be entitled to Incur Indebtedness in an amount equal to the
Attributable Debt with respect to such Sale/Leaseback Transaction pursuant to
Section 4.03, (ii) the consideration received by the Company or any Restricted
Subsidiary in connection with such Sale/Leaseback Transaction is at least equal
to the fair value of such property, as may be determined (and in the case of a
Sale/Leaseback Transaction involving a fair value in excess of $10,000,000,
shall be determined) in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a resolution of the Board of
Directors, and (iii) the transfer of such property is permitted by, and (to the
extent required by Section 4.06) the Company applies the proceeds of such
transaction in compliance with, Section 4.06.
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. The
Company shall not consolidate with or merge with or into, or convey, transfer or
lease all or substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a corporation, limited liability company,
limited partnership or business trust organized and existing under the
laws of the United States of America, any State thereof or the District
of Columbia and the Successor Company (if not the Company) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the
Trustee, all the obligations of the Company under the Securities and
this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Restricted Subsidiary as a result of such transaction as
having been Incurred by the Successor Company or such Restricted
Subsidiary at the time of such transaction), no Default shall have
occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a); and
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(iv) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture.
The Successor Company shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same effect
as if the Successor Company had been named as the Company herein, and thereafter
the predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities, except that the predecessor Company in the
case of a conveyance, transfer or lease of all or substantially all its assets
shall not be released from the obligation to pay the principal of and interest
on the Securities.
Notwithstanding the foregoing clauses (ii) and (iii) of this Section 5.01, any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs
if:
(1) the Company defaults in any payment of interest on any
Security when due and such default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of
any Security when the same becomes due at its Stated Maturity, upon
optional redemption, upon required purchase, upon declaration of
acceleration or otherwise;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04,
4.05, 4.06, 4.07, 4.08, 4.11, 4.12, 4.13 or 4.14 (other than a failure
to purchase Securities when required under Section 4.06 or 4.08) and
such failure continues for 30 days after the notice specified in the
penultimate paragraph of this Section 6.01;
(5) the Company fails to comply with any of its agreements in
the Securities or this Indenture (other than those referred to in (1),
(2), (3) or (4) above) and such failure continues for 60 days after the
notice specified in the penultimate paragraph of this Section 6.01;
(6) the Company or any Restricted Subsidiary fails to pay any
Indebtedness within any applicable grace period after final maturity or
the acceleration of any such
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Indebtedness by the holders thereof because of a default if the total
amount of such Indebtedness unpaid or accelerated exceeds $20,000,000
or its foreign currency equivalent at the time;
(7) the Company or any Restricted Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Restricted Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Restricted Subsidiary or for any substantial part of its
property; or
(C) orders the winding up or liquidation of the
Company or any Restricted Subsidiary;
and the order or decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess
of $15,000,000 or its foreign currency equivalent at the time (net of
amounts paid within 30 days of any such judgment or decree under any
insurance, indemnity, bond, surety or similar instrument) is entered
against the Company or any Restricted Subsidiary by a court or other
adjudicatory authority of competent jurisdiction for which the Company
or the Restricted Subsidiary, as applicable, is not insured by a third
Person and (A) an enforcement proceeding thereon is commenced or (B)
such judgment or decree remains outstanding at the later of (I) the day
which is the sixtieth day after the judgment is rendered and (II) the
day on which any right to appeal expires; or
(10) any Note Guarantee ceases to be in full force and effect
(except as contemplated by the terms thereof or of this Indenture) or
any Note Guarantor denies
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or disaffirms in writing its obligations under this Indenture or any
Note Guarantee and such Default continues for 10 days.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Xxxxx 00, XXXXXX XXXXXX CODE,
or any similar Federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (4) or (5) is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
Securities notify the Company (and the Trustee in the case of a notice by
Holders) of the Default and the Company does not cure such Default within the
time specified therein after receipt of such notice. Such notice must specify
the Default, demand that it be remedied and state that such notice is a "Notice
of Default". When a Default or an Event of Default is cured, it ceases.
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default under clause (6) and any event which with the giving of
notice or the lapse of time would become an Event of Default under clause (4),
(5) or (9), its status and what action the Company is taking or proposes to take
with respect thereto.
SECTION 6.02. ACCELERATION. If an Event of Default (other than
an Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the Securities by notice to the
Company and the Trustee, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.01(7) or (8) with respect to the Company occurs
and is continuing, the principal of and interest on all the Securities shall
IPSO FACTO become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Securityholders. The Holders of a
majority in principal amount of the Securities by notice to the Company and the
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except non-payment of principal or interest that has
become due solely because of such acceleration. No such rescission shall affect
any subsequent Default or impair any right consequent thereto.
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SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder 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. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. WAIVER OF DEFAULTS. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive on behalf
of the Holders of all Securities an existing or past Default and its
consequences except (i) a Default in the payment of the principal of or interest
on a Security or (ii) a Default in respect of a provision that under Section
9.02 cannot be amended without the consent of each Securityholder affected. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture, but no such waiver shall extend to any subsequent or other Default or
impair any consequent right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority
in principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; PROVIDED, HOWEVER, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
SECTION 6.06. LIMITATION ON SUITS. A Securityholder may not
pursue any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
Securities make a written request to the Trustee to pursue the remedy;
63
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in principal amount of the
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to affect, disturb
or prejudice the rights of another Securityholder, to obtain a preference or
priority over another Securityholder or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all Holders.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of
Default specified in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee
may 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 and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make 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 it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.
No provision of this Indenture 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 Securities or the rights of any Holder
64
thereof 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 or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively, in accordance with
Article 2; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Company shall mail to each Securityholder and the Trustee
a notice that states the record date, the payment date and amount to be paid.
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 Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in principal amount of the Securities.
SECTION 6.12. WAIVER OF STAY OR EXTENSION LAWS. The Company
(to the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not 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 had been enacted.
SECTION 6.13. RESTORATION OF RIGHTS AND REMEDIES. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any
65
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE. (a) If a Default or an Event
of Default actually known to the Trustee has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such Person's
own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) 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, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture but need not verify the contents thereof.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
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(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (h) of this Section
7.01.
(e) 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.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(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 and to the provisions of the TIA.
SECTION 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may rely on
any document believed by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee.
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Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same
with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in the Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within the earlier of 90 days after it
occurs or 30 days after it is known to a Trust Officer or written notice of it
is received by the Trustee. Except in the case of a Default in payment of
principal of, premium (if any) or interest on any Security, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of
Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed by the Trustee with the SEC and each stock
exchange (if any) on which the Securities are listed. The Company agrees to
notify promptly the Trustee whenever the Securities become listed on any stock
exchange and of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall
pay to the Trustee from time to time reasonable compensation for its services.
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 upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including reasonable attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder. 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 may have separate counsel and the Company shall
pay the reasonable fees and expenses of such counsel. The Company need
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not reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own wilful misconduct, negligence
or bad faith. The Company need not pay for any settlement made without its
consent.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(7) or (8) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. The Trustee may resign
at any time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and
the Company and may appoint a successor Trustee with the Company's consent
(which shall not be unreasonably withheld). The Company shall remove the Trustee
if it has knowledge of any of the following:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall use its best efforts to
promptly appoint 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 Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
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If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07 shall continue
for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have
a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY. The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
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ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES;
DEFEASANCE. (a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07) for
cancelation or (ii) all outstanding Securities have become due and payable,
whether at maturity or as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof and the Company irrevocably deposits with the
Trustee funds sufficient to pay at maturity or upon redemption all outstanding
Securities, including interest thereon to maturity or such redemption date
(other than Securities replaced pursuant to Section 2.07), and if in either case
the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Sections 8.01(c), cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under Sections
4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.11, 4.12, 4.13, and 4.14 and the operation
of Sections 6.01(6), 6.01(7), 6.01(8) and 6.01(9) and the limitation set forth
in Section 5.01(iii) ("covenant defeasance option"). The Company may exercise
its legal defeasance option notwithstanding its prior exercise of its covenant
defeasance option. The Company may exercise its legal defeasance option or
covenant defeasance option with respect to any Security to any redemption date
or to maturity.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Sections 6.01(4),
6.01(6), 6.01(7) (but only with respect to a Restricted Subsidiary), 6.01(8)
(but only with respect to a Restricted Subsidiary) or 6.01(9) or because of the
failure of the Company to comply with clause (iii) of Section 5.01. If the
Company exercises its legal defeasance option or its covenant defeasance option,
each Note Guarantor will be released from all of its obligations with respect to
its Note Guarantee.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, Sections 2.03,
2.04, 2.05, 2.06, 2.07, 2.08, 2.10, 7.07, 7.08, 8.04, 8.05 and 8.06 shall
survive until the Securities have been paid in full. Thereafter, Sections 7.07,
8.04 and 8.05 shall survive.
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SECTION 8.02. CONDITIONS TO DEFEASANCE. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal of,
premium (if any) and interest on the Securities to maturity or
redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants or a nationally
recognized investment banking firm expressing their opinion to the
effect that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and
in such amounts as will be sufficient to pay principal and interest
when due on all the Securities to maturity or redemption, as the case
may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Section 6.01(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
(5) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall be to the effect that such opinion confirms that, the
Securityholders will not recognize income, gain or loss for Federal
income tax purposes as a result of such 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 defeasance had not
occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders 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; and
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(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each to the effect that all
conditions precedent to the defeasance and discharge of the Securities
as contemplated by this Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
reasonably satisfactory to the Trustee for the redemption of Securities at a
future date in accordance with Article 3.
SECTION 8.03. APPLICATION OF TRUST MONEY. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
this Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent (including the Company acting as
its own Paying Agent) and in accordance with this Indenture to the payment of
principal of and interest on the Securities.
SECTION 8.04. REPAYMENT TO COMPANY. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall promptly pay to the Company upon request any money
held by them for the payment of principal or interest that remains unclaimed for
two years, and, thereafter, Securityholders entitled to the money must look to
the Company for payment as unsecured general creditors, and all liability of the
Trustee or the Paying Agent with respect to such trust money shall thereupon
cease.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations other
than any tax, fee or other charge which by law is for the account of the Holders
of the Securities.
SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; PROVIDED, HOWEVER, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities
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to receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company, the
Note Guarantors and the Trustee at any time and from time to time may amend this
Indenture or the Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities; PROVIDED, HOWEVER, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Securities or to
secure the Securities;
(5) to confirm and evidence the release and discharge of any
Lien created for the benefit of Holders pursuant to Section 4.11;
(6) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company or any Note Guarantor;
(7) to comply with any requirements of the SEC in connection
with qualifying this Indenture under the TIA or otherwise; or
(8) to make any change that does not adversely affect the
rights of any Securityholder.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
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SECTION 9.02. WITH CONSENT OF HOLDERS. The Company, the Note
Guarantors and the Trustee may amend this Indenture or the Securities, for the
purpose of adding any provision to this Indenture or of modifying in any manner
the rights of Holders under this Indenture, the Securities or any Note Guarantee
or to evidence any waiver of (or waiver of compliance with) any provision of
this Indenture (as hereinafter provided), without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities. The Holders of a majority in principal amount of the
Securities may waive compliance by the Company or any Note Guarantor with any
provision or covenant of this Indenture or the Securities. However, without the
consent of each Securityholder affected thereby, an amendment or waiver may not:
(1) reduce the amount of Securities whose Holders must consent
to an amendment or waiver;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal amount of or extend the Stated
Maturity of any Security;
(4) reduce the premium payable upon the redemption of any
Security or change the time at which any Security may be redeemed in
accordance with Article 3;
(5) make any Security payable in money other than that stated
in the Security;
(6) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Securities on or after the
due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Securities;
(7) make any change in clause (i) or (ii) of the first
sentence of Section 6.04 or Section 6.07 or the third sentence of this
Section; or
(8) modify the terms of the Note Guarantees contained in
Article 10 (except as contemplated by the terms thereof or of this
Indenture) in any manner adverse to the Holders.
It shall not be necessary for the consent of the Holders under
this Section 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 or waiver under this Section becomes
effective, the Company shall mail to Securityholders a notice briefly describing
such amendment or
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waiver. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment or waiver under
this Section.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.04. EFFECT OF AMENDMENTS; REVOCATION AND EFFECT OF
CONSENTS AND WAIVERS. Upon the execution of any amendment under this Article 9,
this Indenture shall be modified in accordance therewith, and such amendment
shall form a part of this Indenture for all purposes. A consent to an amendment
or a waiver by a Holder of a Security is a continuing consent and shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the instrument providing for the amendment or waiver
is signed by the parties thereto. After an amendment or waiver becomes
effective, it shall bind every Securityholder.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders 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. No such consent shall be valid or
effective for more than 120 days after such record date (except as to any
supplemental indenture, agreement or instrument or waiver entered into, or any
other action taken in respect of such consent, prior to the expiration of such
120 day period).
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company so determines, the Company in exchange for
the Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms. Failure to make the appropriate notation or to issue
a new Security shall not affect the validity of any amendment or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive, and (subject
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to Section 7.01) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel to the effect that such amendment is
authorized or permitted by this Indenture.
SECTION 9.07. PAYMENT FOR CONSENT. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame and subject to the terms and conditions set forth in solicitation
documents relating to such consent, waiver or agreement.
ARTICLE 10
NOTE GUARANTEES
SECTION 10.01. NOTE GUARANTEES. Each Note Guarantor hereby
jointly and severally unconditionally and irrevocably guarantees, as a primary
obligor and not merely as a surety, on a senior basis to each Holder and to the
Trustee and its successors and assigns (a) the full and punctual payment of
principal of, premium (if any) and interest on the Securities when due, whether
at maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Company under this Indenture (including obligations to the
Trustee) and the Securities and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under this
Indenture and the Securities (all the foregoing being hereinafter collectively
called the "Obligations"). Each Note Guarantor further agrees (to the extent
permitted by law) that the Obligations may be extended or renewed, in whole or
in part, without notice or further assent from each such Note Guarantor, and
that each such Note Guarantor shall remain bound under this Article 10
notwithstanding any extension or renewal of any Obligation.
Each Note Guarantor waives (to the extent permitted by law)
presentation to, demand of, payment from and protest to the Company of any of
the Obligations and also waives notice of protest for non-payment. Each Note
Guarantor waives (to the extent permitted by law) notice of any default under
the Securities or the Obligations. The obligations of each Note Guarantor
hereunder shall not be affected (to the extent permitted by law) by (a) the
failure of any Holder or the Trustee to assert any claim or demand or to enforce
any right or remedy against the Company or any other Person under this
Indenture, the Securities or any other agreement or otherwise; (b) any extension
or renewal of any thereof; (c) any rescission, waiver, amendment or modification
of any of the terms or provisions of this Indenture, the Securities or any other
agreement; (d) the release of any security held by any Holder or the Trustee for
the Obligations or any of them; (e) the failure of any Holder or Trustee to
exercise any right or remedy against any other guarantor of the
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Obligations; or (f) any change in the ownership of such Note Guarantor, except
as provided in Section 10.02(b).
Each Note Guarantor further agrees that its Note Guarantee
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives (to the extent permitted by law)
any right to require that any resort be had by any Holder or the Trustee to any
security held for payment of the Obligations.
The obligations of each Note Guarantor hereunder shall not (to
the extent permitted by law) be subject to any reduction, limitation, impairment
or termination for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and (to the extent permitted by law) shall
not be subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Note Guarantor herein shall not (to the extent permitted by
law) be discharged or impaired or otherwise affected by the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any remedy
under this Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of any Note Guarantor or would otherwise
operate as a discharge of any Note Guarantor as a matter of law or equity.
Each Note Guarantor further agrees (to the extent permitted by
law) that its Note Guarantee herein shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
principal of or interest on any Obligation is rescinded or must otherwise be
restored by any Holder or the Trustee upon the bankruptcy or reorganization of
the Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Note Guarantor by virtue hereof, upon the failure of the Company to pay the
principal of or interest on any Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Obligation, each Note Guarantor hereby promises
to and shall, upon receipt of written demand by the Trustee, forthwith pay, or
cause to be paid, in cash, to the Holders or the Trustee an amount equal to the
sum of (i) the unpaid principal amount of such Obligations, (ii) accrued and
unpaid interest on such Obligations (but only to the extent not prohibited by
law) and (iii) all other monetary Obligations of the Company to the Holders and
the Trustee.
Each Note Guarantor agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
Obligations guaranteed hereby until payment in full of all Obligations. Each
Note Guarantor further agrees that, as between it, on
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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 any Note Guarantee herein, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6, such Obligations
(whether or not due and payable) shall forthwith become due and payable by such
Note Guarantor for the purposes of this Section.
Each Note Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the
Trustee or any Holder in enforcing any rights under this Section.
SECTION 10.02. LIMITATION ON LIABILITY. (a) Any term or
provision of this Indenture to the contrary notwithstanding, the maximum
aggregate amount of the obligations guaranteed hereunder by any Note Guarantor
shall not exceed the maximum amount that can be hereby guaranteed without
rendering this Indenture, as it relates to any Note Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally. In the event that the
obligations of any Note Guarantor under such Note Guarantor's guarantee of the
Bank Indebtedness are limited under applicable law relating to fraudulent
conveyance or fraudulent transfer, the obligations of such Note Guarantor
hereunder shall not be deemed to have been incurred to the extent necessary to
assure that the obligations of such Note Guarantor under such Note Guarantor's
guarantee of the Bank Indebtedness are at least equal to the value of the assets
and property securing such Note Guarantor's obligations under such guarantee.
(b) This Note Guarantee as to any Note Guarantor other than
Holding or RIC Holding shall terminate and be of no further force or effect upon
the sale or other transfer (i) by such Note Guarantor of all or substantially
all of its assets or (ii) by the parent company of such Note Guarantor of all of
its stock or other equity interests in such Note Guarantor, to a Person that is
not an Affiliate of the Company. The Note Guarantee of RIC Holding shall
terminate and be of no further force or effect upon RIC Holding's consolidation
with or merger with or into Holding or the Company.
SECTION 10.03. SUCCESSORS AND ASSIGNS. This Article 10 shall
be binding upon each Note Guarantor and its successors, transferees and assigns
and shall enure to the benefit of the successors and assigns of the Trustee and
the Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges conferred upon that party in
this Indenture and in the Securities shall automatically extend to and be vested
in such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 10.04. NO WAIVER. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article
79
10 shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any right, power or privilege.
The rights, remedies and benefits of the Trustee and the Holders herein
expressly specified are cumulative and not exclusive of any other rights,
remedies or benefits which either may have under this Article 10 at law, in
equity, by statute or otherwise.
SECTION 10.05. INITIAL NOTE GUARANTORS; EXECUTION OF
SUPPLEMENTAL INDENTURE FOR FUTURE NOTE GUARANTORS. (a) Upon execution hereof,
Holding and RIC Holding will be the only Note Guarantors.
(b) Each Subsidiary which is required to become a Note
Guarantor pursuant to Section 4.13 (a "Subsidiary Guarantor") shall promptly
execute and deliver to the Trustee a supplemental indenture in substantially the
form of Exhibit C hereto pursuant to which such Subsidiary shall become a Note
Guarantor under this Article 10 and shall guarantee the Obligations.
Concurrently with the execution and delivery of such supplemental indenture, the
Company shall deliver to the Trustee an Opinion of Counsel or an Officers'
Certificate substantially to the effect that such supplemental indenture has
been duly authorized, executed and delivered by such Subsidiary and that,
subject to the application of bankruptcy, insolvency, moratorium, fraudulent
conveyance or transfer and other similar laws relating to creditors' rights
generally and to the principles of equity, whether considered in a proceeding at
law or in equity, the Note Guarantee of such Note Guarantor is a legal, valid
and binding obligation of such Note Guarantor, enforceable against such Note
Guarantor in accordance with its terms.
SECTION 10.06. RELEASE OF NOTE GUARANTEE. Each Note Guarantee
is a continuing guarantee and shall remain in full force and effect, except as
otherwise provided herein, until payment in full of all principal of or interest
on the Securities, and all other Obligations then due and payable, or in the
case of a Subsidiary Guarantor, upon the earlier release or termination of its
Guarantees of the Bank Indebtedness, or upon such Subsidiary Guarantor no longer
being a Restricted Subsidiary.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS. If any provision
of this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
80
SECTION 11.02. NOTICES. Any notice or communication shall be
in writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Riverwood International Corporation
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Treasurer
with copies to:
Xxxxxxx, Dubilier & Rice, Inc.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx
if to the Trustee:
State Street Bank and Trust Company
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Trust Administration
All such notices and communications shall be deemed to be duly
given at the time delivered by hand, if personally delivered, or 5 Business Days
after being deposited in the mail, if mailed.
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
81
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice.
SECTION 11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee to the effect that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee to the effect that, in the opinion of such
counsel, all such conditions precedent have been complied with;
except that, in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion of counsel with respect to compliance with a
covenant or condition provided for in this Indenture (other than pursuant to
Section 4.09) shall include:
(1) a statement to the effect that the individual making such
certificate or opinion has read such covenant or condition;
(2) 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;
82
(3) a statement to the effect that, in the opinion of such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 11.06. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 11.07. WHEN SECURITIES DISREGARDED. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded, except
that, for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which the
Trustee knows are so owned shall be so disregarded. Also, subject to the
foregoing, only Securities outstanding at the time shall be considered in any
such determination.
SECTION 11.08. ACTS OF HOLDERS; RULES BY TRUSTEE, PAYING AGENT
AND REGISTRAR. (a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by a specified percentage in principal
83
amount of the Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such specified percentage
of Holders in person or by agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 7.01) conclusive in favor of
the Trustee and the Company, if made in the manner provided herein. The fact and
date of the execution by any Person of any such instrument or writing may be
proved in any reasonable manner which the Trustee deems sufficient.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture of the Holder of any
Security shall bind every future Holder of the same Security and the Holder of
every Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(c) The Trustee may make reasonable rules for action by or a
meeting of Securityholders not inconsistent with the foregoing. The Registrar
and the Paying Agent may make reasonable rules for their functions.
SECTION 11.09. LEGAL HOLIDAYS. A "Legal Holiday" is a
Saturday, a Sunday or a day on which banking institutions are not required to be
open in the State of New York. If a payment date is a Legal Holiday, payment
shall be made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If a regular record date is a
Legal Holiday, the record date shall not be affected.
SECTION 11.10. GOVERNING LAW. THIS INDENTURE AND THE
SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 11.11. NO RECOURSE AGAINST OTHERS. A director,
officer, employee, agent, partner or stockholder, as such, of the Company or a
Note Guarantor, or of any stockholder of the Company or a Note Guarantor, shall
not have any liability for any obligations of the Company or any Note Guarantor,
either directly or through the Company or any Note Guarantor, as the case may
be, under the Securities or this Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation, whether by virtue of any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise. By accepting a
Security,
84
each Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 11.12. SUCCESSORS. All agreements of the Company in
this Indenture and the Securities shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 11.13. MULTIPLE 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. One signed copy is enough to
prove this Indenture.
SECTION 11.14. TABLE OF CONTENTS; HEADINGS. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
SECTION 11.15. SEPARABILITY. In case any provision of this
Indenture, the Securities or the Note 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.
SECTION 11.16. BENEFITS OF INDENTURE. Nothing in this
Indenture, the Securities or the Note Guarantees, expressed or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
85
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
RIC HOLDING, INC.,
by
/s/Xxxxxx X. Xxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Corporate Counsel and Secretary
RIVERWOOD HOLDING, INC.,
by
/s/Xxxxxx X. Xxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Corporate Counsel and Secretary
RIVERWOOD INTERNATIONAL
CORPORATION,
by
/s/Xxxxxx X. Xxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Corporate Counsel and Secretary
STATE STREET BANK AND
TRUST COMPANY, as trustee
by
/s/ Xxxxxx X. Xxxx, Xx.
-----------------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Vice President
86
APPENDIX A
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. DEFINITIONS.
1.1 DEFINITIONS.
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Regulation S Global Security or beneficial interest
therein, the rules and procedures of the Depositary for such Global Security,
Euroclear and Clearstream, in each case to the extent applicable to such
transaction and as in effect from time to time.
"Clearstream" means Clearstream Banking, societe anonyme, or
any successor securities clearing agency.
"Definitive Security" means a certificated Initial Security,
Private Exchange Security or Exchange Security (bearing the Restricted
Securities Legend if the transfer of such Security is restricted by applicable
law) that does not include the Global Securities Legend.
"Depositary" means The Depository Trust Company, its nominees
and their respective successors.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear Clearance System or any successor securities clearing agency.
"Global Securities Legend" means the legend set forth under
that caption in Exhibit A to this Indenture.
"IAI" means an institutional "accredited investor" as
described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means X.X. Xxxxxx Securities Inc.,
Deutsche Banc Alex. Xxxxx Inc., First Union Securities, Inc. and NatCity
Investments, Inc.
"Private Exchange" means an offer by the Company, pursuant to
the Registration Agreement, to issue and deliver to certain purchasers, in
exchange for the Initial Securities held by such purchasers as part of their
initial distribution, a like aggregate principal amount of Private Exchange
Securities.
"Private Exchange Securities" means the Securities of the
Company issued in exchange for Initial Securities pursuant to this Indenture in
connection with the Private Exchange pursuant to the Registration Agreement.
"Purchase Agreement" means the Purchase Agreement dated June
7, 2001, between the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to the Registration Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for their Initial
Securities, a like aggregate principal amount of Exchange Securities registered
under the Securities Act.
"Registration Agreement" means the Exchange and Registration
Rights Agreement dated June 21, 2001, between the Company and the Initial
Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Securities" means all Initial Securities offered
and sold outside the United States in reliance on Regulation S.
"Restricted Period", with respect to any Securities, means the
period of 40 consecutive days beginning on and including the later of (a) the
day on which such Securities are first offered to persons other than
distributors (as defined in Regulation S under the Securities Act) in reliance
on Regulation S, notice of which day shall be promptly given by the Company to
the Trustee, and (b) the Issue Date with respect to such Securities.
"Restricted Securities Legend" means the legend set forth in
Section 2.3(e)(i) herein.
"Rule 501" means Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Securities" means all Initial Securities offered
and sold to QIBs in reliance on Rule 144A.
2
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depositary) or any successor person
thereto, who shall initially be the Trustee.
"Shelf Registration Statement" means a registration statement
filed by the Company in connection with the offer and sale of Initial Securities
pursuant to the Registration Agreement.
"Transfer Restricted Securities" means Definitive Securities
and any other Securities that bear or are required to bear the Restricted
Securities Legend.
1.2 OTHER DEFINITIONS.
TERM: DEFINED IN SECTION:
"Agent Members"........................................................2.1(c)
"IAI Global Security"..................................................2.1(b)
"Global Security"......................................................2.1(b)
"Regulation S Global Security".........................................2.1(b)
"Rule 144A Global Security"............................................2.1(b)
1.3 SECTION REFERENCES.
All section references are to sections of this Appendix unless
otherwise indicated.
2. THE SECURITIES.
2.1 FORM AND DATING.
(a) The Initial Securities issued on the date hereof will be
(i) offered and sold by the Company pursuant to the Purchase Agreement and (ii)
resold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons
other than U.S. Persons (as defined in Regulation S) in reliance on Regulation
S. Such Initial Securities may thereafter be transferred to, among others, QIBs,
purchasers in reliance on Regulation S and, except as set forth below, IAIs in
accordance with Rule 501. The restrictions on transfer are set forth in the
legends set forth in Section 2.3(e)(i).
(b) GLOBAL SECURITIES. Rule 144A Securities shall be issued
initially in the form of one or more permanent global Securities in definitive,
fully registered form (collectively, the "Rule 144A Global Security") and
Regulation S Securities shall be issued initially in the form of one or more
global Securities (collectively, the "Regulation S Global Security"), in each
case
3
without interest coupons and bearing the Global Securities Legend and Restricted
Securities Legend, which shall be deposited on behalf of the purchasers of the
Securities represented thereby with the Securities Custodian, and registered in
the name of the Depositary or a nominee of the Depositary, duly executed by the
Company and authenticated by the Trustee as provided in this Indenture. One or
more global securities in definitive, fully registered form without interest
coupons and bearing the Global Securities Legend and the Restricted Securities
Legend (collectively, the "IAI Global Security") shall also be issued on the
Closing Date, deposited with the Securities Custodian, and registered in the
name of the Depositary or a nominee of the Depositary, duly executed by the
Company and authenticated by the Trustee as provided in this Indenture to
accommodate transfers of beneficial interests in the Securities to IAIs
subsequent to the initial distribution. Beneficial ownership interests in the
Regulation S Global Security shall not be exchangeable for interests in the Rule
144A Global Security, the IAI Global Security or any other Security without a
Restricted Securities Legend until the expiration of the Restricted Period. The
Rule 144A Global Security, the IAI Global Security and the Regulation S Global
Security are each referred to herein as a "Global Security" and are collectively
referred to herein as "Global Securities", PROVIDED, that the term "Global
Security" when used in Sections 2.1(b), 2.1(c), 2.3(g)(i), 2.3(h)(i) and 2.4
shall also include any Security in global form issued in connection with a
Registered Exchange Offer or Private Exchange. The aggregate principal amount of
each Global Security may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its nominee
and on the schedules thereto as hereinafter provided; PROVIDED, HOWEVER, the
aggregate principal amount of Securities outstanding at any time may not exceed
$250,000,000 except as provided in Sections 2.07 and 2.08 of this Indenture.
(c) BOOK-ENTRY PROVISIONS. This Section 2.1(c) shall apply
only to a Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(c) and Section 2.2 and pursuant to an order of the Company
signed by one Officer, authenticate and deliver initially one or more Global
Securities that (i) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (ii)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions or held by the Trustee as Securities Custodian.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary or by the Trustee as Securities
Custodian or under such Global Security, and the Depositary or its nominee, as
Holder, may be treated by the Company, the Trustee and any agent of the Company
or the Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or its nominee, as Holder, or impair, solely as between the
Depositary and its Agent Members, the operation of customary
4
practices of such Depositary governing the exercise of the rights of a holder of
a beneficial interest in any Global Security.
(d) DEFINITIVE SECURITIES. Except as provided in Section 2.3
or 2.4, owners of beneficial interests in Global Securities will not be entitled
to receive physical delivery of certificated Securities.
2.2 AUTHENTICATION. The Trustee shall authenticate and make available
for delivery upon a written order of the Company signed by one Officer (a)
Initial Securities for original issue on the date hereof in an aggregate
principal amount of $250,000,000 (b) the (i) Exchange Securities for issue only
in a Registered Exchange Offer and (ii) Private Exchange Securities for issue
only in the Private Exchange, in the case of each of (i) and (ii) pursuant to
the Registration Agreement and for a like principal amount of Initial Securities
exchanged pursuant thereto. Such order shall specify the amount of the
Securities to be authenticated, the date on which the original issue of
Securities is to be authenticated and whether the Securities are to be Initial
Securities, Exchange Securities or Private Exchange Securities. The aggregate
principal amount of Securities outstanding at any time may not exceed
$250,000,000 except as provided in Sections 2.07 and 2.08 of this Indenture.
2.3 TRANSFER AND EXCHANGE. (a) TRANSFER AND EXCHANGE OF DEFINITIVE
SECURITIES. When Definitive Securities are presented to the Registrar with a
request:
(i) to register the transfer of such Definitive Securities; or
(ii) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested if its and the
Company's reasonable requirements for such transaction are met; PROVIDED,
HOWEVER, that the Definitive Securities surrendered for transfer or exchange:
(1) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Registrar or co-registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(2) in the case of Transfer Restricted Securities, are
accompanied by the following additional information and documents, as
applicable:
(A) if such Definitive Securities are being delivered
to the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect (in the form set forth on the reverse
side of the Initial Security); or
5
(B) if such Definitive Securities are being
transferred to the Company, a certification to that effect (in
the form set forth on the reverse side of the Initial
Security); or
(C) if such Definitive Securities are being
transferred pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act or in
reliance upon another exemption from the registration
requirements of the Securities Act, (x) a certification to
that effect (in the form set forth on the reverse side of the
Initial Security) and (y) if the Company so requests, an
opinion of counsel or other evidence satisfactory to it as to
the compliance with the restrictions set forth in the legend
set forth in Section 2.3(e)(i).
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Security, duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar,
together with:
(i) certification (in the form set forth on the reverse side
of the Initial Security) that such Definitive Security is being
transferred (1) to a QIB in accordance with Rule 144A, (2) to an IAI
that has furnished to the Trustee a signed letter substantially in the
form of Exhibit D or (3) outside the United States in an offshore
transaction within the meaning of Regulation S and in compliance with
Rule 904 under the Securities Act; and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books and
records with respect to such Global Security to reflect an increase in
the aggregate principal amount of the Securities represented by the
Global Security, such instructions to contain information regarding the
Depositary account to be credited with such increase, then the Trustee
shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Securities Custodian, the aggregate principal amount of Securities
represented by the Global Security to be increased by the aggregate
principal amount of the Definitive Security to be exchanged and shall
credit or cause to be credited to the account of the Person specified
in such instructions a beneficial interest in the Global Security equal
to the principal amount of the Definitive Security so canceled. If no
Global Securities are then outstanding and the Global Security has not
been previously exchanged for certificated securities pursuant to
Section 2.4, the Company shall issue and the Trustee shall
authenticate, upon written order of the Company in the form of an
Officers' Certificate, a new Global Security in the appropriate
principal amount.
6
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. (i) The
transfer and exchange of Global Securities or beneficial interests therein shall
be effected through the Depositary, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depositary therefor. A transferor of a beneficial interest in a Global
Security shall deliver a written order given in accordance with the Depositary's
procedures containing information regarding the participant account of the
Depositary to be credited with a beneficial interest in such Global Security or
another Global Security and such account shall be credited in accordance with
such order with a beneficial interest in the applicable Global Security and the
account of the Person making the transfer shall be debited by an amount equal to
the beneficial interest in the Global Security being transferred. Transfers by
an owner of a beneficial interest in the Rule 144A Global Security or the IAI
Global Security to a transferee who takes delivery of such interest through the
Regulation S Global Security, whether before or after the expiration of the
Restricted Period, shall be made only upon receipt by the Trustee of a
certification in the form provided on the reverse of the Initial Securities from
the transferor to the effect that such transfer is being made in accordance with
Regulation S or (if available) Rule 144 under the Securities Act and that, if
such transfer is being made prior to the expiration of the Restricted Period,
the interest transferred shall be held immediately thereafter through Euroclear
or Clearstream and, if required by the Trustee or the Company, the opinion of
counsel and other information referred to in the legend set forth in Section
2.3(e)(i). In the case of a transfer of a beneficial interest in either the
Regulation S Global Security or the Rule 144A Global Security for an interest in
the IAI Global Security, the transferee must furnish a signed letter
substantially in the form of Exhibit D to the Trustee.
(ii) If the proposed transfer is a transfer of a beneficial interest in
one Global Security to a beneficial interest in another Global Security, the
Registrar shall reflect on its books and records the date and an increase in the
principal amount of the Global Security to which such interest is being
transferred in an amount equal to the principal amount of the interest to be so
transferred, and the Registrar shall reflect on its books and records the date
and a corresponding decrease in the principal amount of Global Security from
which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix (other than
the provisions set forth in Section 2.4), a Global Security 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.
(iv) In the event that a Global Security is exchanged for Definitive
Securities pursuant to Section 2.4 prior to the consummation of the Registered
Exchange Offer or the effectiveness of the Shelf Registration Statement with
respect to such Securities, such Securities may be exchanged only in accordance
with such procedures as are substantially consistent with the provisions of this
Section 2.3 (including the certification requirements set forth on the reverse
of the Initial Securities intended to ensure that such transfers comply with
Rule 144A, Regulation S or such
7
other applicable exemption from registration under the Securities Act, as the
case may be) and such other procedures as may from time to time be adopted by
the Company.
(d) RESTRICTIONS ON TRANSFER OF REGULATION S GLOBAL SECURITY.
(i) Prior to the expiration of the Restricted Period, interests in the
Regulation S Global Security may only be held through Euroclear or Clearstream.
During the Restricted Period, beneficial ownership interests in the Regulation S
Global Security may only be sold, pledged or transferred through Euroclear or
Clearstream in accordance with the Applicable Procedures and only (1) to the
Company, (2) so long as such security is eligible for resale pursuant to Rule
144A, to a person whom the selling holder reasonably believes is a QIB that
purchases for its own account or for the account of a QIB to whom notice is
given that the resale, pledge or transfer is being made in reliance on Rule
144A, (3) in an offshore transaction in accordance with Regulation S, (4)
pursuant to an exemption from registration under the Securities Act provided by
Rule 144 (if applicable) under the Securities Act, (5) to an IAI purchasing for
its own account, or for the account of such an IAI, in a minimum principal
amount of Securities of $250,000 or (6) pursuant to an effective registration
statement under the Securities Act, in each case in accordance with any
applicable securities laws of any state of the United States. Prior to the
expiration of the Restricted Period, transfers by an owner of a beneficial
interest in the Regulation S Global Security to a transferee who takes delivery
of such interest through the Rule 144A Global Security or the IAI Global
Security shall be made only in accordance with Applicable Procedures and upon
receipt by the Trustee of a written certification from the transferor of the
beneficial interest in the form provided on the reverse of the Initial Security
to the effect that such transfer is being made to (1) a QIB within the meaning
of Rule 144A in a transaction meeting the requirements of Rule 144A or (2) an
IAI purchasing for its own account, or for the account of such an IAI, in a
minimum principal amount of the Securities of $250,000. Such written
certification shall no longer be required after the expiration of the Restricted
Period. In the case of a transfer of a beneficial interest in the Regulation S
Global Security for an interest in the IAI Global Security, the transferee must
furnish a signed letter substantially in the form of Exhibit D to the Trustee
and, if required by the Trustee or the Company, the Opinion of Counsel and other
information referred to in the legend set forth in Section 2.3(e)(i).
(ii) Upon the expiration of the Restricted Period, beneficial ownership
interests in the Regulation S Global Security shall be transferable in
accordance with applicable law and the other terms of this Indenture.
(e) LEGEND.
(i) Except as permitted by the following paragraphs (ii), (iii) or
(iv), each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the following form
(each defined term in the legend being defined as such for purposes of the
legend only):
8
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED
INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F)
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND
9
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE."
Each Definitive Security shall bear the following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT OR THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM
THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
Each Global Security shall bear the Global Securities Legend.
(ii) Upon any sale or transfer of a Transfer Restricted Security that
is a Definitive Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Security that does
not bear the legends set forth above and rescind any restriction on the transfer
of such Transfer Restricted Security if the Holder (x) certifies in writing to
the Registrar that its request for such exchange was made in reliance on Rule
144(k) (such certification to be in the form set forth on the reverse of the
Initial Security) and (y) if the Company so requests, delivers an opinion of
counsel or other evidence satisfactory to it as to the compliance with the
requirements of Rule 144(k).
(iii) After a transfer of any Initial Securities or Private Exchange
Securities during the period of the effectiveness of, and pursuant to, a Shelf
Registration Statement with respect to such Initial Securities or Private
Exchange Securities, as the case may be, all requirements pertaining to the
Restricted Securities Legend on such Initial Securities or such Private Exchange
Securities shall cease to apply and the requirements that any such Initial
Securities or such Private Exchange Securities be issued in global form shall
continue to apply.
(iv) Upon the consummation of a Registered Exchange Offer with respect
to the Initial Securities pursuant to which Holders of such Initial Securities
are offered Exchange Securities in exchange for their Initial Securities, all
requirements pertaining to Initial Securities that Initial Securities be issued
in global form shall continue to apply, and Exchange Securities in global form
without the Restricted Securities Legend shall be available to Holders that
exchange such Initial Securities in such Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Securities pursuant to which Holders of such Initial Securities are
offered Private Exchange Securities in exchange for their Initial Securities,
all requirements pertaining to such Initial Securities that Initial Securities
be issued in global form shall continue to apply, and Private Exchange
Securities in global form with the Restricted Securities Legend shall be
available to Holders that exchange such Initial Securities in such Private
Exchange.
10
(vi) Upon a sale or transfer after the expiration of the Restricted
Period of any Initial Security acquired pursuant to Regulation S, all
requirements that such Initial Security bear the Restricted Securities Legend
shall cease to apply and the requirements requiring any such Initial Security be
issued in global form shall continue to apply.
(f) CANCELATION OR ADJUSTMENT OF GLOBAL SECURITY. At such time
as all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, transferred, redeemed, repurchased or canceled, such
Global Security shall be returned by the Depositary to the Trustee for
cancelation or retained and canceled by the Trustee. At any time prior to such
cancelation, if any beneficial interest in a Global Security is exchanged for
Definitive Securities, transferred in exchange for an interest in another Global
Security, redeemed, repurchased or canceled, the principal amount of Securities
represented by such Global Security shall be reduced and an adjustment shall be
made on the books and records of the Trustee with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such reduction.
(g) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
SECURITIES.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate, Definitive Securities and
Global Securities at the Registrar's request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any transfer tax, assessments, or similar governmental charge payable in
connection therewith (other than any such transfer taxes, assessments or similar
governmental charge payable upon exchanges pursuant to Sections 2.07, 3.06,
4.06, 4.08 and 9.05 of this Indenture).
(iii) Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent or the Registrar may deem
and treat the person in whose name a Security is registered as the absolute
owner of such Security for the purpose of receiving payment of principal of and
interest on such Security and for all other purposes whatsoever, whether or not
such Security is overdue, and none of the Company, the Trustee, the Paying Agent
or the Registrar shall be affected by notice to the contrary.
(iv) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be entitled
to the same benefits under this Indenture as the Securities surrendered upon
such transfer or exchange.
(h) NO OBLIGATION OF THE TRUSTEE OR THE COMPANY.
(i) The Trustee and the Company shall have no responsibility or
obligation to any beneficial owner of a Global Security, a member of or a
participant in the Depositary, or any other Person, with respect to the accuracy
of the records of the Depositary or its nominee or of any participant or member
thereof, with respect to any ownership interest in the Securities or
11
with respect to the delivery to any participant, member, beneficial owner or
other Person (other than the Depositary or its nominee, as Holder) of any notice
(including any notice of redemption or repurchase) or the payment of any amount,
under or with respect to such Securities. All notices and communications to be
given to the Holders and all payments to be made to Holders under the Securities
shall be given or made only to the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only through the
Depositary subject to the applicable rules and procedures of the Depositary. The
Trustee and the Company may rely and shall be fully protected in relying upon
information furnished by the Depositary with respect to its members,
participants and any beneficial owners.
(ii) 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 Security (including any transfers between or among Depositary
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
2.4 DEFINITIVE SECURITIES.
(a) A Global Security deposited with the Depositary or with
the Trustee as Securities Custodian pursuant to Section 2.1 or issued in
connection with a Registered Exchange Offer or Private Exchange shall be
transferred to the beneficial owners thereof in the form of Definitive
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and Section 2.06 of the Indenture and (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security or if at any time the Depositary ceases to
be a "clearing agency" registered under the Exchange Act, and a successor
depositary is not appointed by the Company within 90 days of such notice or
after the Company becomes aware of such cessation, or (ii) an Event of Default
has occurred and is continuing and the Registrar has received a request from the
Depositary to issue the form of certificated Securities in registered form in
substantially the form set forth in Exhibit A or (iii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depositary to the Trustee, to be so transferred, in whole or from time to time
in part, without charge except pursuant to 2.3(g)(i), and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Security, an equal aggregate principal amount of Definitive Securities in
denominations of $1,000 and any integral multiple thereof. Definitive Securities
representing any portion of a
12
Global Security transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 and any integral
multiple thereof and registered in such names as the Depositary shall direct.
Any certificated Initial Security in the form of a Definitive Security delivered
in exchange for an interest in the Global Security shall, except as otherwise
provided by Section 2.3(e), bear the Restricted Securities Legend.
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
The Company or the Trustee, in the discretion of either of
them, may treat as the act of a Holder any instrument or writing of any Person
that is identified by the Depositary as the owner of a beneficial interest in a
Global Security, provided that the fact and date of the execution of such
instrument or writing is proved in accordance with Section 11.08 of this
Indenture.
(d) In the event of the occurrence of any of the events
specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make
available to the Trustee a reasonable supply of Definitive Securities in fully
registered form without interest coupons.
2.5 GENERAL PROVISIONS.
By its acceptance of any Security bearing the Restricted
Securities Legend, the Global Securities Legend or the Definitive Securities
Legend, each Holder of such a Security acknowledges the restrictions on transfer
of such Security set forth in this Indenture and in the Restricted Securities
Legend, the Global Securities Legend and the Definitive Securities Legend, as
applicable, and agrees that it will transfer such Security only as provided in
this Indenture.
In connection with any transfer of Securities, the Trustee,
the Registrar and the Company shall be entitled to receive, shall be under no
duty to inquire into, may conclusively presume the correctness of, and shall be
fully protected in relying upon the certificate, opinions and other information
referred to herein (or in the forms provided herein, attached hereto or to the
Securities, or otherwise) received from any Holder and any transferee of any
Security regarding the validity, legality and due authorization of any such
transfer, the eligibility of the transferee to receive such Security and any
other facts and circumstances related to such transfer.
13
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT
1
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
Each Definitive Security shall bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT OR
THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
2
RIVERWOOD INTERNATIONAL CORPORATION
10 5/8% SENIOR NOTE DUE 2007
No. # CUSIP No.
$[ ]
RIVERWOOD INTERNATIONAL CORPORATION, a Delaware corporation,
promises to pay to Cede & Co., or its registered assigns, the principal sum of
$[ ] [listed on the Schedule of Increases or Decreases in Global Security
attached hereto] on August 1, 2007.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
1
Additional provisions of this Security are set forth on the
other side of this Security.
Dated: June 21, 2001
RIVERWOOD INTERNATIONAL
CORPORATION,
by
-------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
STATE STREET BANK AND
TRUST COMPANY
as Trustee, certifies [Seal]
that this is one of
the Securities referred
to in the Indenture,
by
---------------------------
Authorized Signatory
2
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
10 5/8% Senior Note due 2007
1. INTEREST
Riverwood International Corporation, a Delaware corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"), promises to pay
interest on the principal amount of this Security at the rate per annum shown
above.
Pursuant to the Exchange and Registration Rights Agreement,
the Company has agreed to use its reasonable best efforts to have the Exchange
Offer Registration Statement (as defined in the Exchange and Registration Rights
Agreement) declared effective by the Commission within 135 days after the Issue
Date. If (i) the Exchange Offer Registration Statement is not filed with the
Commission on or prior to 75 days after the Issue Date, (ii) (A) the Exchange
Offer Registration Statement is not declared effective within 135 days after the
Issue Date, or (B) the Shelf Registration Statement (as defined in the Exchange
and Registration Rights Agreement), if required to be filed under the terms of
the Exchange and Registration Rights Agreement, is not filed within 135 days
after the Issue Date (or in the case of a Shelf Registration Statement required
to be filed in response to a change in law or the applicable interpretations of
the SEC's staff, if later, within 30 days after publication of the change in law
or interpretation), (iii) the Registered Exchange Offer is not consummated on or
prior to 165 days after the Issue Date, (iv) the Shelf Registration Statement is
not declared effective within 195 days after the Issue Date (or in the case of a
Shelf Registration Statement required to be filed in response to a change in law
or the applicable interpretations of the SEC's staff, if later, within 90 days
after publication of the change in law or interpretation); or (v) the Shelf
Registration Statement is declared effective within 195 days after the Issue
Date (or in the case of a Shelf Registration Statement required to be filed in
response to a change in law or the applicable interpretations of the SEC's
staff, if later, within 90 days after publication of the change in law or
interpretation) but shall thereafter cease to be effective (at any time that the
Company is obligated to maintain the effectiveness thereof) without being
succeeded within 30 days by an additional Registration Statement filed and
declared effective (each such event referred to in clauses (i) through (v), a
"Registration Default"), the Company will pay liquidated damages to each holder
of Transfer Restricted Securities (as defined), during the period of one or more
such Registration Default, in an amount equal to $0.096 per week per $1,000
principal amount of the Securities constituting Transfer Restricted Securities
held by such holder until the applicable Registration Statement is filed or
declared effective, the Registered Exchange Offer is consummated or the Shelf
Registration Statement again becomes effective, as the case may be, PROVIDED,
that, except with respect to Securities purchased by the Initial Purchasers on
the Issue Date that were ineligible to be exchanged by them for Exchange
Securities in the Registered Exchange Offer, if any, the Company's obligations
to pay liquidated damages will terminate upon the consummation of the Registered
Exchange Offer. All accrued liquidated damages shall
3
be paid to holders in the same manner as interest payments on the Securities on
semi-annual payment dates which correspond to interest payment dates for the
Securities. Following the cure of all Registration Defaults, the accrual of
liquidated damages will cease. The Trustee shall have no responsibility with
respect to the determination of the amount of any such liquidated damages. For
purposes of the foregoing, "Transfer Restricted Securities" means each Initial
Security until (i) the date on which such Initial Security has been exchanged
for a freely transferable Exchange Security in the Exchange Offer, (ii) the date
on which such Initial Security has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement or (iii) the date on which such Initial Security is distributed to the
public pursuant to Rule 144 under the Securities Act or is saleable pursuant to
Rule 144(k) under the Securities Act.
The Company will pay interest and liquidated damages, if any,
semiannually on February 1 and August 1 of each year, commencing on August 1,
2001. Interest on the Securities will accrue from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for, from June 21, 2001. Interest will be computed on the basis of
a 360-day year of twelve 30-day months. The Company shall pay interest on
overdue principal at the rate borne by the Securities, and it shall pay interest
on overdue installments of interest at the same rate to the extent lawful.
2. METHOD OF PAYMENT
The Company will pay interest (except defaulted interest) on
and liquidated damages, if any, in respect of the Securities to the Persons who
are registered holders of Securities at the close of business on the January 15
or July 15 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company, at its option, may pay principal and
interest by check payable in such money or by wire transfer of federal funds.
3. PAYING AGENT AND REGISTRAR
Initially, STATE STREET BANK AND TRUST COMPANY, a
Massachusetts bank and trust company (the "Trustee"), will act as Paying Agent
and Registrar. The Company may appoint and change any Paying Agent, Registrar or
co-registrar without notice. The Company or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4
4. INDENTURE
The Company issued the Securities under an Indenture dated as
of June 21, 2001 (the "Indenture"), among the Company, the Note Guarantors and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture
(the "Act"). The Securities are subject to all such terms, and Securityholders
are referred to the Indenture and the Act for a statement of those terms. With
respect to paragraph 1 hereof, the Securities are also subject to the terms of
the Exchange and Registration Rights Agreement, and Securityholders are referred
to such agreement for a statement of those terms. Terms defined in the Indenture
and not defined herein have the meanings ascribed thereto in the Indenture. Each
Holder by accepting a Security, agrees to be bound by all of the terms and
provisions of the Indenture, as the same may be amended or supplemented from
time to time.
The Securities are general unsecured obligations of the
Company limited to $250,000,000 aggregate principal amount at any one time
outstanding (subject to Sections 2.07 and 2.08 of the Indenture). This Security
is one of the Initial Securities referred to in the Indenture. The Securities
include the Initial Securities and any Private Exchange Securities or Exchange
Securities issued in exchange for the Initial Securities pursuant to the
Indenture. The Initial Securities, the Private Exchange Securities and the
Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the Incurrence of
Indebtedness by the Company and its Restricted Subsidiaries; the payment of
dividends on, and redemption of, Capital Stock of the Company, the payment of
dividends on Capital Stock of Restricted Subsidiaries and the redemption of
certain Subordinated Obligations of the Company and its Restricted Subsidiaries;
Investments; sales of assets and Restricted Subsidiary Capital Stock; certain
transactions with Affiliates of the Company; the sale or issuance of Preferred
Stock of the Restricted Subsidiaries; the creation of Liens; Sale/Leaseback
Transactions, and consolidations, mergers and transfers of all or substantially
all of the Company's assets. In addition, the Indenture prohibits certain
restrictions on distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal of,
and premium (if any) and interest on, the Securities and all other amounts
payable by the Company under the Indenture and the Securities when and as the
same shall be due and payable, whether at maturity, by acceleration or
otherwise, according to the terms of the Securities and the Indenture, the Note
Guarantors have guaranteed the Company's obligations under the Indenture on a
senior basis pursuant to the terms of the Indenture.
5
5. OPTIONAL REDEMPTION
Except as set forth in the following paragraph, the Securities
may not be redeemed at the Company's option prior to August 1, 2002. On and
after that date, the Company may redeem the Securities in whole at any time or
in part from time to time, upon at least 30 but not more than 60 days notice by
first-class mail to each Holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest, if any, to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date):
If redeemed during the 12-month period beginning on August 1
of the years set forth below:
Redemption
Period Price
2002................................................................ 105.313%
2003................................................................ 103.542%
2004................................................................ 101.771%
2005 and thereafter................................................. 100.000%
At any time prior to August 1, 2002, the Securities may be
redeemed, in whole or in part, at the option of the Company within 180 days
after a Change of Control, at a redemption price equal to the sum of (i) the
principal amount thereof plus (ii) accrued and unpaid interest, if any, to the
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date) plus
(iii) the Applicable Premium.
6. SINKING FUND
The Securities are not subject to any sinking fund.
7. NOTICE OF REDEMPTION
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at such Holder's registered address.
Securities in denominations larger than $1,000 may be redeemed in part but only
in whole multiples of $1,000. If money sufficient to pay the redemption price of
and accrued and unpaid interest on all Securities (or portions thereof) to be
redeemed on the redemption date is deposited with the Paying Agent on or before
the redemption date and certain other conditions are satisfied, on and after
such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
6
8. PUT PROVISIONS
Upon a Change of Control, unless the Company has elected to
redeem the Securities pursuant to paragraph 5 hereof, any Holder of Securities
will have the right, subject to certain conditions specified in the Indenture,
to cause the Company to repurchase all or any part of the Securities of such
Holder at a purchase price equal to 101% of the principal amount of the
Securities to be repurchased, plus accrued and unpaid interest, if any, to the
date of repurchase (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date) as
provided in, and subject to the terms of, the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection of Securities to be redeemed or 15 days
before an interest payment date.
10. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the
owner of it for all purposes.
11. UNCLAIMED MONEY
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
12. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and the Indenture
if the Company deposits with the Trustee
7
money or U.S. Government Obligations for the payment of principal of, and
premium (if any) and interest on, the Securities to redemption or maturity, as
the case may be.
13. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount then
outstanding of the Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the Securities or
to secure the Securities, or to confirm and evidence the release and discharge
of any Lien created for the benefit of Securityholders pursuant to Section 4.11
of the Indenture, or to add additional covenants or surrender rights and powers
conferred on the Company, or to comply with any request of the SEC in connection
with qualifying the Indenture under the Act, or to make any other change that
does not adversely affect the rights of any Securityholder.
14. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on any Security at its Stated Maturity, upon redemption pursuant to
paragraph 5 of the Securities, or failure by the Company to redeem or purchase,
upon declaration or acceleration or otherwise, Securities when required; (iii)
failure by the Company to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (iv) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company or any Restricted Subsidiary if
the amount accelerated (or so unpaid) exceeds $20,000,000 or its foreign
currency equivalent; (v) certain events of bankruptcy, insolvency or
reorganization with respect to the Company and its Restricted Subsidiaries; (vi)
certain judgments or decrees not covered by insurance for the payment of money
in excess of $15,000,000 or its foreign currency equivalent against the Company
or a Restricted Subsidiary; and (vii) a Note Guarantee ceasing to be in full
force and effect (other than in accordance with its terms) or any Note Guarantor
denies or disaffirms its obligations under the Indenture or any Note Guarantee
and such Default continues for 10 days. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Securities may declare all the Securities to be due and payable immediately.
Certain events of bankruptcy or insolvency are Events of Default which will
result in the Securities being due and payable immediately upon the occurrence
of such Events of Default.
8
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default (except a Default in payment of principal, premium, if any, or interest)
if and so long as a committee of its Trust Officers in good faith determines
that withholding notice is in the interest of the Holders.
15. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS
A director, officer, employee, agent, partner or stockholder,
as such, of the Company or any Note Guarantor, or of any stockholder of the
Company or a Note Guarantor, shall not have any liability for any obligations of
the Company or a Note Guarantor, either directly or through the Company or any
Note Guarantor, as the case may be, under the Securities or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation, whether by virtue of any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding, or otherwise. By accepting a Security, each Securityholder waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
17. GOVERNING LAW
THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
18. AUTHENTICATION
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
9
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with rights of
survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A
( = Uniform Gift to Minors Act).
20. CUSIP AND ISIN NUMBERS
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP and ISIN
numbers to be printed on the Securities and has directed the Trustee to use
CUSIP and ISIN numbers in notices of redemption as a convenience to
Securityholders. No representation is made as to the accuracy of such numbers
either as printed on the Securities or as contained in any notice of redemption
and reliance may be placed only on the other identification numbers placed
thereon.**
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture.
Requests may be made to:
Riverwood International Corporation
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention of Treasurer
--------
(1) To be included on any Security that has a CUSIP or ISIN number.
10
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
------------------------------------------------------------
Date: ________________ Your Signature: _____________________
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
11
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER RESTRICTED SECURITIES
This certificate relates to $_________ principal amount of Securities held in
(check applicable space) ____ book-entry or _____ definitive form by the
undersigned.
The undersigned (check one box below):
o has requested the Trustee, by written order, to deliver in exchange for
its beneficial interest in the Global Security held by the Depository a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in the Global Security (or the portion thereof indicated
above);
o has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
12
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW:
(1) // to the Company; or
(2) // to the Registrar for registration in the
name of the Holder, without transfer; or
(3) // pursuant to an effective registration
statement under the Securities Act of 1933;
or
(4) // inside the United States to a "qualified
institutional buyer" (as defined in Rule
144A under the Securities Act of 1933) that
purchases for its own account or for the
account of a qualified institutional buyer
to whom notice is given that such transfer
is being made in reliance on Rule 144A, in
each case pursuant to and in compliance with
Rule 144A under the Securities Act of 1933;
or
(5) // outside the United States in an offshore
transaction within the meaning of Regulation
S under the Securities Act in compliance
with Rule 904 under the Securities Act of
1933 and such Security shall be held
immediately after the transfer through
Euroclear or Clearstream until the
expiration of the Restricted Period (as
defined in the Indenture); or
(6) // inside the United States to an institutional
"Accredited Investor" as defined in Rule 501
(a)(1), (2), (3) or (7) under the Securities
Act of 1933, that is purchasing for its own
account or for the account of such an
institutional "Accredited Investor", in each
case in a minimum principal amount of
Securities of $250,000.
(7) // pursuant to another available exemption from
registration provided by Rule 144 under the
Securities Act of 1933.
13
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, HOWEVER,
that if box (4), (5) or (6) is checked, the Company or the Trustee may
require, prior to registering any such transfer of the Securities, such
written legal opinions, certifications and other information as the
Company, the Trustee or the Registrar has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of
the Securities Act of 1933, as amended, such as the exemption provided
by Rule 144 under such Act.
If none of the foregoing boxes are checked, the Trustee or Registrar
shall not be obligated to register this Security in the name of any
person other than the Holder hereof unless and until the conditions to
any such transfer of registration set forth herein and in Article 2 of
the Indenture shall have been satisfied.
------------------------
Signature
Signature Guarantee:
---------------------------- ------------------------
Signature must be guaranteed Signature
------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:
------------------ --------------------------------
NOTICE: To be executed by
an executive officer
14
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is
$[ ]. The following increases or decreases in this Global Security
have been made:
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal Amount in Principal Amount this Global Security authorized officer
of this Global of this Global following such of Trustee or
Security Security decrease or increase) Securities Custodian
15
OPTION OF HOLDER TO ELECT
PURCHASE
If you want to elect to have this Security purchased
by the Company pursuant to Section 4.06 (Asset Disposition) or 4.08 (Change of
Control) of the Indenture, check the box:
Asset Disposition /_/ Change of Control /_/
If you want to elect to have only part of this
Security purchased by the Company pursuant to Section 4.06 or 4.08 of the
Indenture, state the amount: $
Date: __________________ Your Signature: __________________________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH I N THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.***
RIVERWOOD INTERNATIONAL CORPORATION
10-5/8% SENIOR NOTE DUE 2007
No. Cusip No.
$[ ]
RIVERWOOD INTERNATIONAL CORPORATION, a Delaware corporation,
promises to pay to Cede & Co., or its registered assigns, the principal sum of
$_______ [listed on the Schedule of Increases or Decreases in Global Security
attached hereto] on August 1, 2007.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
----------
(2) This paragraph should only be added if the Security is issued in global
form.
1
Additional provisions of this Security are set forth on the
other side of this Security.
Dated:
RIVERWOOD INTERNATIONAL CORPORATION,
by
----------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
STATE STREET BANK AND
TRUST COMPANY
as Trustee, certifies [Seal]
that this is one of
the Securities referred
to in the Indenture,
by
-----------------------------
Authorized Signatory
2
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
10 5/8% Senior Note due 2007
1. INTEREST
RIVERWOOD INTERNATIONAL CORPORATION, a Delaware corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"), promises to pay
interest on the principal amount of this Security at the rate per annum shown
above. The Company will pay interest, semiannually on February 1 and August 1
(each an "Interest Payment Date") of each year. Interest on the Securities will
accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for, from June
21, 2001. Interest will be computed on the basis of a 360-day year of twelve
30-day months. The Company shall pay interest on overdue principal at the rate
borne by the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful. Notwithstanding the foregoing,
(i) to the extent interest has been paid or duly provided for with respect to
any Initial Security (as defined in the Indenture referred to below) exchanged
for this Security, interest on this Security shall accrue from the most recent
Interest Payment Date to which such interest on such Initial Security had been
paid or duly provided for, and (ii) to the extent that liquidated damages, if
any, payable in respect of such Initial Security as provided therein have been
paid or duly provided for with respect to such Initial Security such liquidated
damages shall accrue from the most recent Interest Payment Date to which such
liquidated damages on such Initial Security had been paid or duly provided for
and until the date it is no longer payable as provided for in the Registration
Rights Agreement. All accrued liquidated damages shall be paid to
Securityholders in the same manner as interest payments on the Securities on
semiannual payment dates which correspond to interest payment dates for the
Securities.
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the January 15 or July 15 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company, at its option, may
pay principal and interest by check payable in such money or by wire transfer of
federal funds.
1
3. PAYING AGENT AND REGISTRAR
Initially, STATE STREET BANK AND TRUST COMPANY, a
Massachusetts bank and trust company (the "Trustee"), will act as Paying Agent
and Registrar. The Company may appoint and change any Paying Agent, Registrar or
co-registrar without notice. The Company or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as
of June 21, 2001 (the "Indenture"), among the Company, the Note Guarantors and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture
(the "Act"). The Securities are subject to all such terms, and Securityholders
are referred to the Indenture and the Act for a statement of those terms. With
respect to paragraph 1 hereof, the Securities are also subject to the terms of
the Exchange and Registration Rights Agreement, and Securityholders are referred
to such agreement for a statement of those terms. Terms defined in the Indenture
and not defined herein have the meanings ascribed thereto in the Indenture. Each
Holder by accepting a Security, agrees to be bound by all of the terms and
provisions of the Indenture, as the same may be amended or supplemented from
time to time.
The Securities are general unsecured obligations of the
Company limited to $250,000,000 aggregate principal amount at any one time
outstanding (subject to Sections 2.07 and 2.08 of the Indenture). This Security
is one of the Exchange Securities referred to in the Indenture. The Securities
include the Initial Securities and any Private Exchange Securities or Exchange
Securities issued in exchange for the Initial Securities pursuant to the
Indenture. The Initial Securities, the Private Exchange Securities and the
Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the Incurrence of
Indebtedness by the Company and its Restricted Subsidiaries; the payment of
dividends on, and redemption of, Capital Stock of the Company, the payment of
dividends on the Capital Stock of Restricted Subsidiaries and the redemption of
certain Subordinated Obligations of the Company and its Restricted Subsidiaries;
Investments; sales of assets and Restricted Subsidiary Capital Stock; certain
transactions with Affiliates of the Company; the sale or issuance of Preferred
Stock of the Restricted Subsidiaries; the creation of Liens; Sale/Leaseback
Transactions, and consolidations, mergers and transfers of all or substantially
all of the Company's assets. In addition, the Indenture prohibits certain
restrictions on distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal of,
and premium (if any) and interest on the Securities and all other amounts
payable by the Company under the Indenture and the Securities when and as the
same shall be due and payable, whether at maturity, by acceleration or
otherwise, according to the terms of the Securities and the Indenture, the Note
2
Guarantors have guaranteed the Company's obligations under the Indenture on a
senior basis pursuant to the terms of the Indenture.
5. OPTIONAL REDEMPTION
Except as set forth in the following paragraph, the Securities
may not be redeemed, at the Company's option, prior to August 1, 2002. On and
after that date, the Company may redeem the Securities in whole at any time or
in part from time to time, upon at least 30 but not more than 60 days notice by
first-class mail to each Holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest, if any, to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date):
If redeemed during the 12-month period beginning on August 1
of the years set forth below:
Redemption
Period Price
2002................................................................ 105.313%
2003................................................................ 103.542%
2004................................................................ 101.771%
2005 and thereafter................................................. 100.000%
At any time prior to August 1, 2002, the Securities may be
redeemed, in whole or in part, at the option of the Company within 180 days
after a Change of Control, at a redemption price equal to the sum of (i) the
principal amount thereof plus (ii) accrued and unpaid interest, if any, to the
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date) plus
(iii) the Applicable Premium.
6. SINKING FUND
The Securities are not subject to any Sinking Fund.
7. NOTICE OF REDEMPTION
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued and unpaid interest on all Securities (or portions thereof) to be
redeemed on the redemption date is deposited with the Paying Agent on or before
the redemption date and certain
3
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
8. PUT PROVISIONS
Upon a Change of Control, unless the Company has elected to
redeem the Securities pursuant to paragraph 5 hereof, any Holder of Securities
will have the right, subject to certain conditions specified in the Indenture,
to cause the Company to purchase all or any part of the Securities of such
Holder at a repurchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued and unpaid interest, if any, to the
date of repurchase (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date) as
provided in, and subject to the terms of, the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection of Securities to be redeemed or 15 days
before an interest payment date.
10. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the
owner of it for all purposes.
11. UNCLAIMED MONEY
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
12. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and the Indenture
if the Company deposits with the Trustee
4
money or U.S. Government Obligations for the payment of principal of, and
premium (if any) and interest on the Securities to redemption or maturity, as
the case may be.
13. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount then
outstanding of the Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the Securities or
to secure the Securities, or to confirm and evidence the release and discharge
of any Lien created for the benefit of Securityholders pursuant to Section 4.11
of the Indenture or to add additional covenants or surrender rights and powers
conferred on the Company or the Note Guarantors, or to comply with any request
of the SEC in connection with qualifying the Indenture under the Act, or to make
certain changes in the subordination provisions, or to make any change that does
not adversely affect the rights of any Securityholder.
14. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on any Security at its Stated Maturity, upon redemption pursuant to
paragraph 5 of the Securities, or failure by the Company to redeem or purchase,
upon declaration, acceleration or otherwise, Securities when required; (iii)
failure by the Company or any Note Guarantor to comply with other agreements in
the Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company or any
Restricted Subsidiary if the amount accelerated (or so unpaid) exceeds
$20,000,000 or its foreign currency equivalent; (v) certain events of
bankruptcy, insolvency or reorganization with respect to the Company and its
Restricted Subsidiaries; (vi) certain judgments or decrees not covered by
insurance for the payment of money in excess of $15,000,000 or its foreign
currency equivalent against the Company or a Restricted Subsidiary; and (vii) a
Note Guarantee ceasing to be in full force and effect (other than in accordance
with its terms) or any Note Guarantor denies or disaffirms its obligations under
the Indenture or any Note Guarantee and such Default continues for 10 days. If
an Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Securities may declare all the Securities
to be due and payable immediately. Certain events of bankruptcy or insolvency
are Events of Default which will result in the Securities being due and payable
immediately upon the occurrence of such Events of Default.
5
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default (except a Default in payment of principal, premium, if any, or interest)
if and so long as a committee of its Trust Officers in good faith determines
that withholding notice is in the interest of the Holders.
15. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS
A director, officer, employee, agent, partner or stockholder,
as such, of the Company or any Note Guarantor, or of any stockholder of the
Company or a Note Guarantor, shall not have any liability for any obligations of
the Company or a Note Guarantor, either directly or through the Company or any
Note Guarantor, as the case may be, under the Securities or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation whether by virtue of any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise. By accepting a Security, each Securityholder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
17. GOVERNING LAW
THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
18. AUTHENTICATION
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
6
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with rights of
survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A
(= Uniform Gift to Minors Act).
20. CUSIP AND ISIN NUMBERS
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP and ISIN
numbers to be printed on the Securities and has directed the Trustee to use
CUSIP and ISIN numbers in notices of redemption as a convenience to
Securityholders. No representation is made as to the accuracy of such numbers
either as printed on the Securities or as contained in any notice of redemption
and reliance may be placed only on the other identification numbers placed
thereon.
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture.
Requests may be made to:
RIVERWOOD INTERNATIONAL CORPORATION
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention of Treasurer
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
------------------------------------------------------------
Date: ________________ Your Signature: _________________________
Signature Guarantee:___________________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is
$[ ]. The following increases or decreases in this Global Security
have been made:
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal Amount in Principal Amount this Global Security authorized officer
of this Global of this Global following such of Trustee or
Security Security decrease or increase) Securities Custodian
OPTION OF HOLDER TO ELECT
PURCHASE
If you want to elect to have this Security purchased
by the Company pursuant to Section 4.06 (Asset Disposition) or 4.08 (Change of
Control) of the Indenture, check the box:
Asset Disposition /_/ Change of Control /_/
If you want to elect to have only part of this
Security purchased by the Company pursuant to Section 4.06 or 4.08 of the
Indenture, state the amount: $
Date: __________________ Your Signature: _____________________________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental
Indenture"), dated as of [ ], among [NEW NOTE
GUARANTOR] (the "New Note Guarantor"), a subsidiary
of RIVERWOOD INTERNATIONAL CORPORATION (or its
successor), a Delaware corporation (the "Company"),
THE COMPANY, on behalf of itself and the Note
Guarantors (the "Existing Note Guarantors") under the
Indenture referred to below, and STATE STREET BANK
AND TRUST COMPANY, a Massachusetts bank and trust
company, as trustee under the indenture referred to
below (the "Trustee").
W I T N E S S E T H :
WHEREAS the Company and the Existing Note Guarantors have
heretofore executed and delivered to the Trustee an indenture (the "Indenture"),
dated as of June 21, 2001, providing for the issuance of an aggregate principal
amount of $250,000,000 of 105/8% Senior Notes due 2007 (the "Securities").
WHEREAS Section 4.13 of the Indenture provides that under
certain circumstances the Company is required to cause the New Note Guarantor to
execute and deliver to the Trustee a supplemental indenture pursuant to which
the New Note Guarantor shall unconditionally guarantee all of the Company's
obligations under the Securities pursuant to a Note Guarantee on the terms and
conditions set forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the
Trustee, the Company and Existing Note Guarantors are authorized to execute and
deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the New Note Guarantor,
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the Company, the Existing Note Guarantors and the Trustee mutually covenant and
agree for the equal and ratable benefit of the holders of the Securities as
follows:
1. DEFINITIONS. (a) Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
(b) For all purposes of this Supplemental Indenture, except as
otherwise herein expressly provided or unless the context otherwise requires:
(i) the terms and expressions used herein shall have the same meanings as
corresponding terms and expressions used in the Indenture; and (ii) the words
"herein," "hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
2. AGREEMENT TO GUARANTEE. The New Note Guarantor hereby
agrees, jointly and severally with all other Note Guarantors, to Guarantee the
Company's obligations under the Securities on the term and subject to the
conditions set forth in Article 10 of the Indenture and to be bound by all other
applicable provisions of the Indenture.
3. RATIFICATION OF INDENTURE; SUPPLEMENTAL INDENTURES PART OF
INDENTURE. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby.
4. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
5. TRUSTEE MAKES NO REPRESENTATION. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
6. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
7. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not effect the construction thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.
[NEW NOTE GUARANTOR],
by
------------------------------------
Name:
Title:
RIVERWOOD INTERNATIONAL CORPORATION,
on behalf of itself and the Existing
Note Guarantors,
by
------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
as Trustee,
by
------------------------------------
Name:
Title:
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EXHIBIT D
Form of
Transferee Letter of Representation
Riverwood International Corporation
In care of
State Street Bank and Trust Company
Xxxxxxx Square
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Trust Administration
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $________
principal amount of the 105/8% Senior Notes due 2007 (the "Securities") of
Riverwood International Corporation (the "Company").
Upon transfer, the Securities would be registered in the name of the
new beneficial owner as follows:
Name:________________________
Address:_____________________
Taxpayer ID Number:__________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for
1
offer or sale in connection with, any distribution in violation of the
Securities Act. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our investment in
the Securities, and we invest in or purchase securities similar to the
Securities in the normal course of our business. We, and any accounts for which
we are acting, are each able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Securities to offer, sell or otherwise
transfer such Securities prior to the date that is two years after the later of
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Securities (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registration statement that has been declared effective under
the Securities Act, (c) in a transaction complying with the requirements of Rule
144A under the Securities Act ("Rule 144A"), to a person we reasonably believe
is a qualified institutional buyer under Rule 144A (a "QIB") that is purchasing
for its own account or for the account of a QIB and to whom notice is given that
the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Securities Act, (e) to an institutional "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is
purchasing for its own account or for the account of such an institutional
"accredited investor," in each case in a minimum principal amount of Securities
of $250,000, or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Securities
is proposed to be made pursuant to clause (e) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Company and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and that it is acquiring such Securities for
investment purposes and not for distribution in violation of the Securities Act.
Each purchaser acknowledges that the Company and the Trustee reserve the right
prior to the offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clause (d), (e) or (f) above to
require the delivery of an opinion of counsel, certifications or other
information satisfactory to the Company and the Trustee.
TRANSFEREE:_________________,
by:___________________________
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