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EXHIBIT 4.07
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CARAUSTAR INDUSTRIES, INC.,
as Issuer,
THE SUBSIDIARY GUARANTORS NAMED HEREIN,
and
THE BANK OF NEW YORK,
as Trustee
SECOND SUPPLEMENTAL INDENTURE
Dated as of March 29, 2001
$200,000,000 7 3/8% NOTES DUE 2009
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SECOND SUPPLEMENTAL INDENTURE
SECOND SUPPLEMENTAL INDENTURE, dated as of March 29, 2001, among
CARAUSTAR INDUSTRIES, INC., a North Carolina corporation (the "Company"), having
its principal office at 0000 Xxx Xxxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxx, 00000, the
Subsidiary Guarantors (as hereinafter defined) named herein, and THE BANK OF NEW
YORK, as Trustee hereunder (the "Trustee"), having its Corporate Trust Office at
000 Xxxxxxx Xxxxxx, 00X, Xxxxxxxxx Trust Administration, Xxx Xxxx, XX 00000.
Terms used herein which are defined in the Indenture (as hereinafter defined)
shall have the respective meanings assigned to them in the Indenture.
RECITALS
WHEREAS, the Company and the Trustee entered into an Indenture, dated
as of June 1, 1999 (the "Indenture"), providing for the issuance of debt
securities in series; and
WHEREAS, pursuant to the Indenture, the Company and the Trustee entered
into a First Supplemental Indenture, dated as of June 1, 1999 (the "First
Supplemental Indenture"), pursuant to which the Company issued $200,000,000 in
aggregate principal amount of its 7 3/8% Notes due 2009 (the "Notes"); and
WHEREAS, Section 901 of the Indenture provides that the Company and the
Trustee may supplement the Indenture in order to add certain provisions in
respect of any series of Securities that do not adversely affect the rights of
the Holders thereof; and
WHEREAS, the Company desires to cause certain of its Subsidiaries to
guarantee the payment and performance of the Company's obligations with respect
to the Notes, and in order to provide the terms and conditions of such
guarantees and certain related changes to the terms of the Notes, the Company
and the Subsidiary Guarantors named herein have duly authorized the execution
and delivery of this Second Supplemental Indenture; and
WHEREAS, all acts and things prescribed by the Indenture, by law and by
the certificate of incorporation and bylaws of the Company, each Subsidiary
Guarantor and the Trustee necessary to make this Second Supplemental Indenture a
valid instrument legally binding on the Company, the Subsidiary Guarantors and
the Trustee, in accordance with its terms, have been done and performed;
NOW, THEREFORE, in order to declare the terms and conditions of the
guarantees of the Notes by the Subsidiary Guarantors, and in consideration of
the premises and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders from time to time
of the Notes, as follows:
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ARTICLE I
SUBSIDIARY GUARANTEES
Section 101. Guarantees. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Notes when due, whether at
maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Company under the Indenture and the Notes and (b) the full
and punctual performance within applicable grace periods of all other
obligations of the Company under the Indenture and the Notes (all the foregoing
being hereinafter collectively called the "Obligations"). Each Subsidiary
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice or further assent from such Subsidiary
Guarantor and that such Subsidiary Guarantor will remain bound under this
Article notwithstanding any extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Obligations and also waives notice
of protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default under the Notes or the Obligations. The obligations of each Subsidiary
Guarantor hereunder shall not be affected 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 the Indenture, the Notes 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 the Indenture, the Notes 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 the Trustee to exercise any right or
remedy against any other guarantor of the Obligations; or (f) except as set
forth in Section 106 of this Article, any change in the ownership of such
Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Obligations.
Except as expressly set forth in Sections 102 and 106 of this Article,
the obligations of each Subsidiary Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and 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 Subsidiary Guarantor herein shall not 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 the Indenture, the
Notes 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
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act or thing which may or might in any manner or to any extent vary the risk of
such Subsidiary Guarantor or would otherwise operate as a discharge of such
Subsidiary Guarantor as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its 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
Subsidiary 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 Subsidiary 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 (1) the unpaid amount of such Obligations, (2) accrued and unpaid
interest on such Obligations (but only to the extent not prohibited by law) and
(3) all other monetary Obligations of the Company to the Holders and the
Trustee.
Each Subsidiary Guarantor agrees that it shall not be entitled to any
right of subrogation in respect of any Obligations guaranteed hereby until
payment in full of all Obligations. Each Subsidiary Guarantor further agrees
that, as between it, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article Five of the Indenture for the purposes of
such Subsidiary Guarantor's Subsidiary 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 Five of the Indenture,
such Obligations (whether or not due and payable) shall forthwith become due and
payable by such Subsidiary Guarantor for the purposes of this Section.
Each Subsidiary 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 102. Limitation on Liability. Each Subsidiary Guarantor and by
its acceptance hereof each Holder hereby confirms that it is the intention of
all such parties that the Subsidiary Guarantee by such Guarantor pursuant hereto
not constitute a fraudulent transfer or conveyance for purposes of Title 11,
U.S. Code or any similar federal or state law for the relief of debtors, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal or state law. To effectuate the foregoing intention, the Holders
and each such Subsidiary Guarantor hereby irrevocably agree that the Obligations
of such Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Subsidiary Guarantor (including, without limitation,
any Obligations under or with respect to the Credit Agreement) and after giving
effect to any collections from or payments made by or on behalf of any other
Subsidiary Guarantor in respect
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of the obligations of such other Subsidiary Guarantor under its Subsidiary
Guarantee or pursuant to Section 107 of this Article, result in the Obligations
of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting
such fraudulent transfer or conveyance.
Section 103. Successors and Assigns. This Article shall be binding upon
each Subsidiary Guarantor and its successors and assigns and shall inure 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 the Indenture and in the
Notes shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of the Indenture.
Section 104. 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 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 at law, in
equity, by statute or otherwise.
Section 105. Modification. No modification, amendment or waiver of any
provision of this Article, nor the consent to any departure by any Subsidiary
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Subsidiary Guarantor in any case shall entitle such
Subsidiary Guarantor to any other or further notice or demand in the same,
similar or other circumstances.
Section 106. Release of Subsidiary Guarantor. Upon the sale or other
disposition (including by way of consolidation or merger) of a Subsidiary
Guarantor or upon the sale or disposition of all or substantially all the assets
of such Subsidiary Guarantor (in each case other than a sale or disposition to
the Company or an Affiliate of the Company), such Subsidiary Guarantor shall be
released from all obligations under this Article and its Subsidiary Guarantee
without any further action required on the part of the Trustee or any Holder. In
addition to the foregoing, if the Company exercises its Defeasance option
pursuant to Article Fourteen of the Indenture, each Subsidiary Guarantor shall
be released from all obligations under this Article and its Subsidiary
Guarantee. If for any reason a Subsidiary Guarantor ceases to be a guarantor of
the Credit Agreement, such Subsidiary Guarantor shall also be released from all
obligations under this Article and its Subsidiary Guarantee without any further
action required on the part of the Trustee or any Holder. At the request of the
Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such release.
Section 107. Contribution. In order to provide for just and equitable
contribution among the Subsidiary Guarantors, the Subsidiary Guarantors agree,
inter se, that in the event any payment or distribution is made by any
Subsidiary Guarantor (a "Funding Guarantor") under its Subsidiary Guarantee,
such Funding Guarantor shall be entitled to a contribution from all other
Subsidiary Guarantors in a pro rata amount based on the Adjusted Net Assets (as
hereinafter defined) of each Subsidiary Guarantor (including the Funding
Guarantor) for all payments,
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damages and expenses incurred by that Funding Guarantor in discharging the
Company's obligations with respect to the Notes or any other Subsidiary
Guarantor's Obligations with respect to its Subsidiary Guarantee. As used
herein, "Adjusted Net Assets" means, with respect to any Subsidiary Guarantor at
any date, the lesser of the amount by which (a) the fair value of the property
of such Subsidiary Guarantor exceeds the total amount of liabilities, including,
without limitation, contingent liabilities (after giving effect to all other
fixed and contingent liabilities incurred or assumed on such date), but
excluding liabilities under the Subsidiary Guarantee of such Subsidiary
Guarantor at such date and (b) the present fair salable value of the assets of
such Subsidiary Guarantor at such date, exceeds the amount that will be required
to pay the probable liability of such Subsidiary Guarantor on its debts (after
giving effect to all other fixed and contingent liabilities incurred or assumed
on such date and after giving effect to any collection from any Subsidiary of
such Subsidiary Guarantor in respect of the obligations of such Subsidiary under
its Subsidiary Guarantee), excluding debt in respect of its Subsidiary
Guarantee, as they become absolute and matured.
ARTICLE II
SPECIAL PROVISIONS APPLICABLE TO SERIES
In addition to the terms set forth in the First Supplemental Indenture,
the following terms shall be applicable to all of the Notes, whether now
Outstanding or hereafter authenticated, executed and delivered:
Section 201. Defined Terms.
(a) "Credit Agreement" means the Credit Agreement, to be dated on or
about March 29, 2001, among the Company, as borrower, certain Subsidiaries of
the Company from time to time a party thereto, as guarantors, the lenders party
thereto, and Bank of America, N.A., as administrative agent, including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time.
(b) "Foreign Subsidiary" means any Subsidiary not created or organized
in the United States, any state thereof or the District of Columbia and that
conducts substantially all of its operations outside of the United States.
(b) "Obligations" has the meaning specified in Section 101 of this
Second Supplemental Indenture.
(c) "Subsidiary Guarantor" means (i) each of the Company's Subsidiaries
providing guarantees under the Credit Agreement on the date of closing thereof
(other than Paragon Plastics, Inc.) and (ii) any Person that becomes a
Subsidiary of the Company and provides a guarantee under the Credit Agreement
that, pursuant to the terms of the Indenture or otherwise in the future,
executes a supplemental indenture or other instrument in which such Subsidiary
unconditionally guarantees the Company's obligations under the Notes and the
Indenture;
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provided that any Person constituting a Subsidiary Guarantor as described above
shall cease to constitute a Subsidiary Guarantor when its respective Subsidiary
Guarantee is released in accordance with the terms of the Indenture.
(d) "Subsidiary Guarantee" means a guarantee by a Subsidiary Guarantor
of the Company's obligations under the Notes and the Indenture.
Section 202. Future Subsidiary Guarantors. If the Company or any of its
Subsidiaries shall acquire or create any Subsidiary (other than a Foreign
Subsidiary) after the date hereof, then such newly acquired or created
Subsidiary shall, substantially concurrently with (and in any event within 10
Business Days after) providing such guarantee, become a Subsidiary Guarantor by
executing a supplemental indenture containing a Subsidiary Guarantee and
otherwise in form and substance satisfactory to the Trustee.
Section 203. Event of Default. In addition to the Events of Default set
forth in Section 501 of the Indenture, it shall be an Event of Default with
respect to the Notes if (a) any Subsidiary Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect (other than in accordance with its terms or as
permitted by the Indenture) or (b) any Subsidiary Guarantor, or any Person
acting on behalf of any Subsidiary Guarantor, shall deny or disaffirm its
obligations under its Subsidiary Guarantee.
ARTICLE III
MISCELLANEOUS
Section 301. This Second Supplemental Indenture is supplemental to the
Indenture and does and shall be deemed to form a part of, and shall be construed
in connection with and as part of, the Indenture for any and all purposes.
Except as specifically modified herein, the Indenture and the Notes are in all
respects ratified and confirmed (mutatis mutandis) and shall remain in full
force and effect in accordance with their terms.
Section 302. This Second Supplemental Indenture shall become effective
upon execution and delivery by each of the Company, the Subsidiary Guarantors
named herein, and the Trustee.
Section 303. Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed, by the Trustee by reason of this Second Supplemental Indenture. This
Second Supplemental Indenture is executed and accepted by the Trustee subject to
all the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee with respect hereto.
Section 304. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND
BE USED TO CONSTRUE THIS SECOND SUPPLEMENTAL INDENTURE, THE NOTES AND THE
SUBSIDIARY GUARANTEES.
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Section 305. The parties may sign any number of copies of this Second
Supplemental Indenture. Each signed copy shall be an original, but all of such
executed copies together shall represent the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed as of the day and year first above
written.
CARAUSTAR INDUSTRIES, INC.
By: /s/ H. Xxx Xxxxxx, III
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Name: H. Xxx Xxxxxx, III
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Title: Vice President
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Attest:
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
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Title: Secretary
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THE BANK OF NEW YORK, Trustee
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx
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Title: Assistant Vice President
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SUBSIDIARY GUARANTORS:
AUSTELL BOX BOARD CORPORATION
AUSTELL HOLDING COMPANY, LLC
BUFFALO PAPERBOARD CORPORATION
CAMDEN PAPERBOARD CORPORATION
CARAUSTAR CUSTOM PACKAGING GROUP, INC.
CARAUSTAR CUSTOM PACKAGING GROUP (MARYLAND),
INC.
CARAUSTAR INDUSTRIAL & CONSUMER PRODUCTS
GROUP, INC.
CARAUSTAR PAPERBOARD CORPORATION
CARAUSTAR RECOVERED FIBER GROUP, INC.
CAROLINA COMPONENT CONCEPTS, INC.
CAROLINA CONVERTING INCORPORATED
CAROLINA PAPER BOARD CORPORATION
CAROTELL PAPER BOARD CORPORATION
CHATTANOOGA PAPERBOARD CORPORATION
CHICAGO PAPERBOARD CORPORATION
(signatures continued)
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CINCINNATI PAPERBOARD CORPORATION
COLUMBUS RECYCLING, INC.
FEDERAL TRANSPORT, INC.
GYPSUM MGC, INC.
HALIFAX PAPER BOARD COMPANY, INC.
XXXXXXXXX GYPSUM COMPANY
XXXXXXXX GYPSUM COMPANY, LLC
NEW AUSTELL BOX BOARD COMPANY
PAPER RECYCLING, INC.
PBL INC.
READING PAPERBOARD CORPORATION
RICHMOND PAPERBOARD CORPORATION
XXXXXXX PAPERBOARD, INC.
SWEETWATER PAPER BOARD COMPANY, INC.
By: /s/ H. Xxx Xxxxxx, III
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Name: H. Xxx Xxxxxx, III
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Title: Vice President
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CARAUSTAR, G.P.
By: Caraustar Industries, Inc., its general
partner
By: /s/ H. Xxx Xxxxxx, III
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Name: H. Xxx Xxxxxx, III
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Title: Vice President
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By: Caraustar Industrial & Consumer
Products Group, Inc., its general
partner
By: /s/ H. Xxx Xxxxxx, III
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Name: H. Xxx Xxxxxx, III
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Title: Vice President
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Attest:
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
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Title: Assistant Secretary
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