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EXHIBIT 4.1
DRAFT
12/19/96
MAXXAM GROUP HOLDINGS INC.,
as Issuer,
MAXXAM INC.,
as Guarantor,
AND
First Bank National Association,
as Trustee,
__________________________________
INDENTURE
Dated as of December 23, 1996
__________________________________
$130,000,000 12% Senior Secured Notes due 2003
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TABLE OF CONTENTS
PAGE
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ARTICLE 1
Definitions and Incorporation by Reference
------------------------------------------
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitions . . . . . . . . . . . . . 26
SECTION 1.03. Incorporation by Reference of
Trust Indenture Act . . . . . . . . . . . . 28
SECTION 1.04. Rules of Construction . . . . . . . . . . . 29
ARTICLE 2
The Securities
--------------
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . 30
SECTION 2.02. Execution and Authentication . . . . . . . 31
SECTION 2.03. Registrar and Paying Agent . . . . . . . . 31
SECTION 2.04. Paying Agent to Hold Money in Trust . . . . 32
SECTION 2.05. Holder Lists . . . . . . . . . . . . . . . 32
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . 32
SECTION 2.07. Replacement Securities . . . . . . . . . . 41
SECTION 2.08. Outstanding Securities . . . . . . . . . . 41
SECTION 2.09. Treasury Securities . . . . . . . . . . . . 41
SECTION 2.10. Temporary Securities . . . . . . . . . . . 42
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . 42
SECTION 2.12. Defaulted Interest . . . . . . . . . . . . 42
SECTION 2.13. CUSIP Numbers . . . . . . . . . . . . . . . 43
ARTICLE 3
Redemption
----------
SECTION 3.01. Notices to Trustee . . . . . . . . . . . . 43
SECTION 3.02. Selection of Securities to be
Redeemed . . . . . . . . . . . . . . . . . 43
SECTION 3.03. Notice of Redemption . . . . . . . . . . . 44
SECTION 3.04. Effect of Notice of Redemption . . . . . . 45
SECTION 3.05. Deposit of Redemption Price . . . . . . . . 45
SECTION 3.06. Securities Redeemed in Part . . . . . . . . 45
SECTION 3.07. Cancellation of Redeemed Securities . . . . 45
SECTION 3.08. No Repurchase Restrictions . . . . . . . . 45
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ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities . . . . . . . . . . . 46
SECTION 4.02. SEC Reports . . . . . . . . . . . . . . . . 46
SECTION 4.03. Limitation on Indebtedness . . . . . . . . 46
SECTION 4.04. Limitation on Restricted Payments . . . . . 49
SECTION 4.05. Ownership of Capital Stock of
Subsidiaries and Kaiser Shares . . . . . . 53
SECTION 4.06. Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries . . . . 54
SECTION 4.07. Limitation on Asset Sales . . . . . . . . . 56
SECTION 4.08. Limitation on Transactions with
Affiliates . . . . . . . . . . . . . . . . 62
SECTION 4.09. Change of Control . . . . . . . . . . . . . 64
SECTION 4.10. Limitation on Liens . . . . . . . . . . . . 67
SECTION 4.11. Amendment of Scotia Pacific
Agreements or Intercompany Note . . . . . . 69
SECTION 4.12. Compliance Certificate . . . . . . . . . . 70
SECTION 4.13. Use of Proceeds . . . . . . . . . . . . . . 70
SECTION 4.14. Corporate Existence . . . . . . . . . . . . 70
SECTION 4.15. Limitation on Status as Investment
Company . . . . . . . . . . . . . . . . . . 70
SECTION 4.16. Limitation on Liens on Pledged
Shares and Intercompany Note . . . . . . . 70
SECTION 4.17. Declaration and Payment of Dividends
by MGI . . . . . . . . . . . . . . . . . . . . 71
SECTION 4.18. Releases from Lien of MGI Indenture . . . . 71
ARTICLE 5
Successor Company
-----------------
SECTION 5.01. When Company May Merge or Transfer
Assets . . . . . . . . . . . . . . . . . . 71
ARTICLE 6
Defaults and Remedies
---------------------
SECTION 6.01. Events of Default . . . . . . . . . . . . . 73
SECTION 6.02. Acceleration . . . . . . . . . . . . . . . 75
SECTION 6.03. Other Remedies . . . . . . . . . . . . . . 75
SECTION 6.04. Waiver of Past Defaults . . . . . . . . . . 75
SECTION 6.05. Control by Majority . . . . . . . . . . . . 76
SECTION 6.06. Limitation on Suits . . . . . . . . . . . . 76
SECTION 6.07. Rights of Holders to Receive Payment . . . 77
SECTION 6.08. Collection Suit by Trustee . . . . . . . . 77
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SECTION 6.09. Trustee May File Proofs of Claim . . . . . 77
SECTION 6.10. Priorities . . . . . . . . . . . . . . . . 77
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . 78
SECTION 6.12. Waiver of Stay or Extension Laws . . . . . 78
SECTION 6.13. Restoration of Rights and Remedies . . . . 78
ARTICLE 7
Trustee
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SECTION 7.01. Duties of Trustee . . . . . . . . . . . . . 79
SECTION 7.02. Rights of Trustee . . . . . . . . . . . . . 80
SECTION 7.03. Individual Rights of Trustee . . . . . . . 81
SECTION 7.04. Trustee's Disclaimer . . . . . . . . . . . 82
SECTION 7.05. Notice of Defaults . . . . . . . . . . . . 82
SECTION 7.06. Reports by Trustee to Holders . . . . . . . 82
SECTION 7.07. Compensation and Indemnity . . . . . . . . 82
SECTION 7.08. Replacement of Trustee . . . . . . . . . . 83
SECTION 7.09. Successor Trustee by Merger . . . . . . . . 84
SECTION 7.10. Eligibility; Disqualification . . . . . . . 85
SECTION 7.11. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . . 85
ARTICLE 8
Discharge of Indenture
----------------------
SECTION 8.01. Discharge of Liability on Securities;
Defeasance . . . . . . . . . . . . . . . . 85
SECTION 8.02. Conditions to Defeasance . . . . . . . . . 86
SECTION 8.03. Application of Trust Money . . . . . . . . 87
SECTION 8.04. Repayment to Company . . . . . . . . . . . 87
SECTION 8.05. Indemnity for Government Obligations . . . 87
SECTION 8.06. Reinstatement . . . . . . . . . . . . . . . 88
ARTICLE 9
Amendments
----------
SECTION 9.01. Without Consent of Holders . . . . . . . . 88
SECTION 9.02. With Consent of Holders . . . . . . . . . . 89
SECTION 9.03. Compliance with Trust Indenture Act . . . . 90
SECTION 9.04. Revocation and Effect of Consents and
Waivers . . . . . . . . . . . . . . . . . . 90
SECTION 9.05. Notation on or Exchange of
Securities . . . . . . . . . . . . . . . . 91
SECTION 9.06. Trustee to Sign Amendments . . . . . . . . 91
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ARTICLE 10
Security
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SECTION 10.01. Grants of Security Interests . . . . . . . 91
SECTION 10.02. Pledged Shares and Intercompany Notes . . . 94
SECTION 10.03. Collateral Accounts . . . . . . . . . . . . 97
SECTION 10.04. Further Assurances; Revisions of
Exhibit D . . . . . . . . . . . . . . . . . 103
SECTION 10.05. Release and Substitution of
Collateral . . . . . . . . . . . . . . . . 103
SECTION 10.06. Trustee Appointed Attorney-in-Fact . . . . 114
SECTION 10.07. Trustee May Perform . . . . . . . . . . . . 114
SECTION 10.08. Remedies Upon Event of Default . . . . . . 115
SECTION 10.09. Application of Proceeds . . . . . . . . . . 116
SECTION 10.10. Continuing Liens . . . . . . . . . . . . . 116
SECTION 10.11. Certificates and Opinions . . . . . . . . . 116
SECTION 10.12. Representations and Warranties . . . . . . 116
SECTION 10.13. Certain Mergers, Consolidations, etc.
Among the Company, MGI and
Restricted Subsidiaries . . . . . . . . . . 117
ARTICLE 11
Miscellaneous
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SECTION 11.01. Trust Indenture Act Controls . . . . . . . 118
SECTION 11.02. Notices . . . . . . . . . . . . . . . . . . 118
SECTION 11.03. Communication by Holders with Other
Holders . . . . . . . . . . . . . . . . . . 119
SECTION 11.04. Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . 119
SECTION 11.05. Statements Required in Certificate or
Opinion . . . . . . . . . . . . . . . . . . 120
SECTION 11.06. When Treasury Securities
Disregarded . . . . . . . . . . . . . . . . 120
SECTION 11.07. Rules by Trustee, Paying Agent and
Registrar . . . . . . . . . . . . . . . . . 121
SECTION 11.08. Legal Holidays . . . . . . . . . . . . . . 121
SECTION 11.09. Governing Law . . . . . . . . . . . . . . . 121
SECTION 11.10. No Recourse Against Others . . . . . . . . 121
SECTION 11.11. Successors . . . . . . . . . . . . . . . . 122
SECTION 11.12. Severability . . . . . . . . . . . . . . . 122
SECTION 11.13. Multiple Originals . . . . . . . . . . . . 122
SECTION 11.14. Table of Contents; Headings . . . . . . . . 122
SECTION 11.15. Benefits of Indenture . . . . . . . . . . . 122
SECTION 11.16. No Challenge . . . . . . . . . . . . . . . 122
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ARTICLE 12
MAXXAM Guarantee
----------------
SECTION 12.01 Senior Guarantee . . . . . . . . . . . . . . . 123
SECTION 12.02 When Guarantor May Merge, Etc. . . . . . . . . 125
Exhibit A - Form of Security . . . . . . . . . . . . . A-1
Exhibit B - Certificate of Transferor . . . . . . . . . B-1
Exhibit C - Salmon Creek Property Legal
Description . . . . . . . . . . . . . . . . C-1
Exhibit D - Description of Pledged Shares . . . . . . . D-1
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- ---------
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . N A
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . 7 10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; .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) . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.06; 1.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . 4.02; 4.12; 11.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 10.11
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.05;
. . . . . . 11.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a) (last sentence) . . . . . . . . . . . . . . . . . 11.06
(a)(l)(A) . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(l)(B) . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 9.04
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 part of
the Indenture.
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INDENTURE dated as of December 23, 1996, among MAXXAM Group Holdings
Inc., a Delaware corporation (the "Company"), MAXXAM Inc., a Delaware
corporation (the "Guarantor"), and First Bank National Association, a national
banking association, as trustee (the "Trustee").
Each party agrees as follows for the benefit of each other party and
for the equal and ratable benefit of the Holders of the Company's 12% Series A
Senior Secured Notes due 2003 (the "Series A Securities") and the 12% Series B
Senior Secured Notes due 2003 (the "Series B Securities" and, together with the
Series A Securities, the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"AFFILIATE" of any person means (i) any person who, directly or
indirectly, is in control of, is controlled by or is under common control with
such person and (ii) any person who is a director or officer (A) of such
person, (B) of any subsidiary of such person or (C) of any person described in
clause (i) above, and shall be deemed to include any joint venture, partnership
or other person (other than a Subsidiary of the Company) in which the Company
and/or its Subsidiaries have an equity ownership interest equal to or greater
than 5% and in which one or more Affiliates of the Company has a direct or an
indirect equity ownership interest in excess of 5% therein other than by virtue
of the direct or indirect equity ownership in such joint venture, partnership
or other person held (in the aggregate) by the Company and/or one or more of
its Subsidiaries; provided, however, that the term "Affiliate" shall not
include (i) the Company or (ii) any Subsidiary of the Company so long as no
Affiliate of the Company has a direct or indirect equity ownership interest
equal to or greater than 5% in such Subsidiary other than by virtue of the
direct or indirect equity ownership in such Subsidiary held (in the aggregate)
by the Company and/or one or more of its Subsidiaries. For purposes of this
definition, control of a person means the power, direct or indirect, to direct
or cause the direction of the management and policies of such person whether by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. The fact that an Affiliate of a person
is a partner of a law firm that renders services to such person or its
Affiliates does not mean that the law firm is an Affiliate of such person.
"AGENT" means any Registrar, Paying Agent or transfer agent.
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"ASSET SALE" means any sale, transfer or other disposition (including,
without limitation, dispositions pursuant to any Taking, merger, consolidation
or sale and lease back transactions), after the Issue Date, by the Company or
any of its Restricted Subsidiaries (other than Scotia Pacific so long as there
are any Timber Notes outstanding) to any person other than to the Company or
any of its Restricted Subsidiaries of (i) any Capital Stock or other ownership
interest of any of the Company's Restricted Subsidiaries (including sales,
transfers or other dispositions by such Restricted Subsidiary of its Capital
Stock or other ownership interest) or (ii) any other assets (other than any
Capital Stock or ownership interests in any Unrestricted Subsidiary) of the
Company or any of its Restricted Subsidiaries, other than sales, transfers or
other dispositions of assets in the ordinary course of business of the Company
and its Restricted Subsidiaries, taken as a whole; provided, however, that the
term Asset Sale shall not include (A) the sale, transfer or other disposition
of any assets or Capital Stock or other ownership interest by the Company or
its Restricted Subsidiaries if such transaction would have been an Asset Sale
in the absence of this clause (A) to the extent the gross proceeds thereof
(exclusive of indemnities) do not exceed, in aggregate amount with all other
such sales, transfers or other dispositions after the Issue Date, $25,000,000
from and after the Issue Date (such proceeds, to the extent non-cash, to be
determined in good faith by the Board of Directors), (B) the creation,
incurrence, assumption or existence of any Lien to the extent not prohibited by
Section 4.10, (C) any of the transactions governed by Section 5.01, (D) an
exchange of assets, provided, the assets received are to be used in the lines
of business of the Company or any of its Restricted Subsidiaries on the Issue
Date or reasonably related extensions of such lines and only to the extent such
exchange qualifies for non-recognition treatment under the Code, (E) any
transaction to the extent governed by Section 4.04 or Section 4.05, (F) the
sale, transfer or other disposition of Collateral under this Indenture,
collateral under the MGI Indenture or any assets referred to in clause (vi) of
Section 4.04(c) or the proceeds of such assets or (G) any Primary Share Sale by
MGI to the extent the Net Proceeds of such Primary Share Sale are distributed
on the Pledged MGI Shares.
"AVERAGE LIFE" means, as of the date of determination, with respect to
any Indebtedness, the quotient obtained by dividing (i) the sum of the products
of the numbers of years from the date of determination to the dates of each
successive scheduled principal payment of such Indebtedness multiplied by the
amount of such principal payment by (ii) the sum of all such principal
payments.
"BANK DEBT" means any and all amounts payable under or in respect of
the Credit Agreement, including principal, premium (if any), interest, fees,
charges, expenses, reimbursement obligations,
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guaranties, indemnities and all other amounts payable thereunder or in respect
thereof.
"BERING AGREEMENT" means the investment management agreement,
effective as of December 1, 1991, between Bering Holdings Inc. and each of
MAXXAM, the Company, MGI, MPI and Pacific Lumber, as the same has been or may
be amended, supplemented or otherwise modified from time to time in a manner
that is not materially adverse to the Holders.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"XXXXX" means Xxxxx Lumber Co., Inc., a California corporation, and
any successor corporation by way of merger, consolidation or purchase of all or
substantially all of its assets.
"BUSINESS DAY" means each day that is not a Legal Holiday.
"CALL PRICE" means, expressed as a percentage of principal amount,
110%.
"CAPITAL LEASE OBLIGATIONS" of any person means, as of any date of
determination, any obligation that is required to be classified and accounted
for as a capital lease on the face of a balance sheet of such person prepared
in accordance with GAAP as of such determination date (it being understood that
the Capital Lease Obligations of the Company shall not include any such
obligations attributable to any Unrestricted Subsidiary as of any determination
date); the amount of such obligation shall be the capitalized amount thereof,
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
prior to the first date upon which such lease may be terminated by the lessee
without payment of a penalty.
"CAPITAL STOCK" of any person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of
or interests in (however designated) corporate stock of such person, including
any Preferred Stock of such person but excluding any Redeemable Stock of such
person.
"CASH EQUIVALENTS" means (1) when used in respect of any Trust Moneys
(i) any evidence of any obligation issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States of
America is pledged in support thereof); (ii) demand or time deposits with, and
certificates of deposit or acceptances issued by, any bank or trust company
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organized under the laws of the United States of America or any State thereof
(including the Trustee) whose unsecured, unguaranteed, long-term debt
obligations are rated "A" by Standard & Poor's Corporation ("S&P") and "A2" by
Xxxxx'x Investors Service, Inc. ("Moody's") or higher, or whose unsecured,
unguaranteed commercial paper obligations are rated "A-2" by S&P and "P-2" by
Moody's or higher; (iii) repurchase agreements entered into with entities whose
unsecured, unguaranteed long-term debt obligations are rated "A" by S&P and
"A2" by Moody's or higher, or whose unsecured, unguaranteed commercial paper
obligations are rated "A-2" by S&P and "P-2" by Moody's or higher, pursuant to
a written agreement with respect to any obligation described in subclauses (i),
(ii) or (iv) of this clause (1); (iv) commercial paper (including both
noninterest-bearing discount obligations and interest-bearing obligations
payable on demand or on a specified date not later than 180 days from the date
of acquisition thereof) and having a rating of "A-2" by S&P and "P-2" by
Moody's or higher; (v) direct obligations of any money market fund or other
similar investment company all of whose investments consist primarily of
obligations described in the foregoing clauses of this definition and that is
rated "AAm" by S&P and "Aam" by Moody's or higher; (vi) adjustable rate
preferred stock that is rated "A" (or higher) by Moody's or S&P; (vii) taxable
or non-taxable auction rate securities which have interest rates reset on
periodic short term intervals (typically each 7, 14, 21, 28 or 49 days via a
Dutch auction process) and which at the time of purchase have been rated and
the ratings for which (A) for direct issues, must not be less than "P2" if
rated by Moody's and not less than "A2" if rated by S&P and (B) for
collateralized issues which follow the asset coverage tests set forth in the
Investment Company Act of 1940, as amended, must have long-term ratings of at
least "AAA" if rated by S&P and "Aaa" if rated by Moody's; or (viii) any
investments hereafter developed which are substantially comparable to those
described above in this clause (1); and (2) otherwise (i) any evidence of any
obligation issued or directly and fully guaranteed or insured by the United
States of America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in support
thereof); (ii) demand or time deposits with, and certificates of deposit or
acceptances issued by, any bank or trust company organized under the laws of
the United States of America or any state thereof (including the Trustee) whose
unsecured, unguaranteed long-term debt obligations are rated "A" by Standard &
Poor's Corporation ("S&P") and "A2" by Xxxxx'x Investors Service, Inc.
("Moody's") or higher, or whose unsecured, unguaranteed commercial paper
obligations are rated "A-2" by S&P and "P-2" by Moody's or higher; (iii)
repurchase agreements entered into with entities whose unsecured, unguaranteed
long-term debt obligations are rated "A" by S&P and "A2" by Moody's or higher,
or whose unsecured, unguaranteed commercial paper obligations are rated "A-2"
by S&P and "P-2" by Moody's or higher, pursuant to a written agreement with
respect to
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any obligation described in subclauses (i), (ii) or (iv) of this clause (2);
(iv) commercial paper (including both noninterest-bearing discount obligations
and interest-bearing obligations payable on demand or on a specified date not
later than 180 days from the date of acquisition thereof) and having a rating
of "A-2" by S&P and "P-2" by Moody's or higher; (v) direct obligations of any
money market fund or other similar investment company all of whose investments
consist primarily of obligations described in the foregoing clauses of this
definition and that is rated "AAm" by S&P and "Aam" by Moody's or higher; (vi)
taxable auction rate securities commonly known as "money market notes" that at
the time of purchase have been rated and the ratings for which (A) for direct
issues, must not be less than "P2" if rated by Moody's and not less than "A2"
if rated by S&P and (B) for collateralized issues which follow the asset
coverage tests set forth in the Investment Company Act of 1940, as amended,
must have long-term ratings of at least "AAA" if rated by S&P and "Aaa" if
rated by Moody's; or (vii) any investments hereafter developed which are
substantially comparable to those described above in this clause (2).
"CHANGE OF CONTROL" means the occurrence of any of the following
events: (i) MAXXAM, directly or indirectly, not having (other than by reason
of the existence of a Lien, but including by reason of the foreclosure of or
other realization upon a Lien) direct or indirect sole beneficial ownership (as
defined under Regulation 13d-3 of the Exchange Act as in effect on the date of
this Indenture) of at least 40% of the total common equity, on a fully diluted
basis, of the Company; provided, however, that such ownership by MAXXAM,
directly or indirectly, of 30% or greater, but less than 40% of the total
common equity, on a fully diluted basis, of the Company shall not be a Change
of Control if MAXXAM, through direct representation or through persons
nominated by it, controls a majority of the Board of Directors necessary to
effectuate any actions by the Board of Directors; and provided, further, that
the foregoing minimum percentages shall be deemed not satisfied if any person
or group shall, directly or indirectly, own more of the total voting power
entitled to vote generally in the election of directors of the Company than
MAXXAM; (ii) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole to any "person" (as such term is used
in Section 13(d)(3) of the Exchange Act) other than to a person that is a
Subsidiary of MAXXAM both immediately before and immediately after giving
effect to such transaction or to any of the Principals (as defined below) or to
a group of which one or more of the Principals is a member (provided that one
or more of the Principals beneficially owns Voting Stock representing at least
80% of the voting power in the election of a majority of the directors of
MAXXAM of the Voting Stock
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beneficially owned by such group); (iii) the approval by the stockholders of
the Company of a plan for the liquidation or dissolution of the Company other
than into MAXXAM or a Subsidiary of MAXXAM; (iv) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as defined above), other than any of the
Principals or a group of which one or more of the Principals is a member
(provided that one or more of the Principals beneficially owns Voting Stock
representing at least 80% of the voting power in the election of a majority of
the directors of MAXXAM of the Voting Stock beneficially owned by such group),
becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act), directly or indirectly, of Voting Stock
representing more than 35% of the voting power in the election of a majority of
the directors of MAXXAM represented by all outstanding Voting Stock of MAXXAM;
(v) the consummation of the first transaction (including, without limitation,
any merger or consolidation) the result of which is that any "person" (as
defined above) other than a group of which one or more of the Principals is a
member (provided that one or more of the Principals beneficially owns Voting
Stock representing at least 80% of the voting power in the election of a
majority of the directors of MAXXAM of the Voting Stock beneficially owned by
such group) becomes the "beneficial owner" (as defined above), directly or
indirectly, of Voting Stock representing more of the voting power in the
election of a majority of the directors of MAXXAM represented by all
outstanding Voting Stock of MAXXAM than is at the time represented by Voting
Stock "beneficially owned" (as defined above) by the Principals; or (vi) the
first day on which a majority of the members of the Board of Directors of
MAXXAM are not Continuing Directors. For purposes of this definition, any
transfer of an equity interest of an entity that was formed for the purpose of
acquiring Voting Stock of MAXXAM will be deemed to be a transfer of such
portion of such Voting Stock as corresponds to the portion of the equity of
such entity that has been so transferred. "Continuing Directors" means, as of
any date of determination, any member of the Board of Directors of MAXXAM who
(i) was a member of such Board of Directors on the date of this Indenture or
(ii) was nominated for election or elected to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of such
Board at the time of such nomination or election. "Principals" means Xxxxxxx
Xxxxxxx, his wife and lineal descendants, any trust for the benefit thereof,
and/or any entity in which any one or more of such persons hold an 80% or more
controlling interest.
"CODE" means the Internal Revenue Code of 1986, as amended (or any
successor statute thereto), and the regulations promulgated thereunder, all as
in effect from time to time.
"COLLATERAL" means, at any time of determination, all property upon
which a Lien exists at such time in favor of the Trustee for
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the benefit of Holders pursuant to Articles 5 and 10, including pursuant to
instruments executed and delivered in compliance with Sections 5.01(i),
10.01(b) or 10.13.
"COLLATERAL DEFAULT" means a Default consisting of the Company's
failure to comply with any provision contained in Article 10 of this Indenture
which (i) either (A) results in an impairment of the validity, perfection, or
priority of the Lien of this Indenture with respect to any portion of the
Collateral having a fair market value in excess of $1 million in the aggregate
or (B) would be materially adverse in any way to the Holders (any Default
consisting of the failure to make any offer required to be made pursuant to
Article 10 being deemed, without limitation, material for this purpose) and
(ii) would constitute an Event of Default unless cured within the applicable
cure or grace period set forth in Section 6.01(3).
"COMPANY" means MAXXAM Group Holdings Inc., a Delaware corporation,
and, subject to the provisions of Article 5 hereof, shall mean its successors
and assigns; provided, however, that, for purposes of any provision contained
herein which is required by the TIA, "Company" shall also mean each other
obligor (if any) on the indenture securities.
"CONSOLIDATED CASH FLOW COVERAGE RATIO" of the Company means, as of
the date of the transaction giving rise to the need to calculate the
Consolidated Cash Flow Coverage Ratio (the "Transaction Date"), the ratio of
(i) the aggregate amount of EBITDA for the immediately preceding four fiscal
quarters for which financial information in respect thereof is available
immediately prior to the Transaction Date to (ii) the aggregate Consolidated
Interest Expense for the fiscal quarter in which the Transaction Date occurs
and to be accrued during the three fiscal quarters immediately subsequent
thereto (based upon the pro forma amount of Indebtedness of the Company and its
Restricted Subsidiaries reasonably expected by the Company to be outstanding on
the Transaction Date and thereafter other than the Timber Notes), assuming for
the purposes of this measurement the continuation of market interest rates
prevailing on the Transaction Date and base interest rates in respect of
floating interest rate obligations equal to the base interest rates on such
obligations in effect as of the Transaction Date; provided that if the Company
or any of its Restricted Subsidiaries is a party to any Interest Rate
Protection Agreements which would have the effect of changing the interest rate
on any Indebtedness of the Company or any of its Restricted Subsidiaries for
such four quarter period (or a portion thereof), the resulting rate shall be
used for such four quarter period or portion thereof; and provided, further,
that any Consolidated Interest Expense with respect to Indebtedness Incurred or
retired by the Company or any of its Restricted Subsidiaries during the fiscal
quarter in which the Transaction Date occurs shall be
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calculated as if such Indebtedness was so Incurred or retired on the first day
of the fiscal quarter in which the Transaction Date occurs; and provided,
further, that if, during the four fiscal quarters referred to in clause (i) of
this definition, (A) the Company or any of its Restricted Subsidiaries shall
have engaged in any Asset Sale, EBITDA for such period shall be reduced by an
amount equal to the EBITDA (if positive), or increased by an amount equal to
the EBITDA (if negative), directly attributable to the assets which are the
subject of such Asset Sale calculated on a pro forma basis as if such Asset
Sale and any related retirement of Indebtedness had occurred on the first day
of such period or (B) the Company or any of its Restricted Subsidiaries shall
have acquired any material assets out of the ordinary course of business,
EBITDA shall be calculated on a pro forma basis as if such asset acquisition
and any related financing had occurred on the first day of such period.
"CONSOLIDATED INCOME TAX EXPENSE" of the Company means (without
duplication), for any period, the aggregate of the income tax expense (net of
applicable credits) of the Company and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP other than income
taxes (including credits) with respect to items of net income excluded from the
definition of Consolidated Net Income.
"CONSOLIDATED INTEREST EXPENSE" of the Company means, for any period
(without duplication), (i) the sum of (A) the interest expense of the Company
and its Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP, (B) all fees, commissions, discounts and other charges of
the Company and its Subsidiaries with respect to letters of credit and bankers'
acceptances and the costs (net of benefits) associated with Interest Rate
Protection Agreements for such period, determined on a consolidated basis in
accordance with GAAP, and (C) dividends declared on Redeemable Stock of the
Company or any Restricted Subsidiary held by persons other than the Company or
a Wholly Owned Restricted Subsidiary (other than dividends payable in Capital
Stock of the Company or pro rata dividends payable to all stockholders of such
class or series of Stock payable in Capital Stock of any such Restricted
Subsidiary), less (ii) the amortization or write-off of deferred financing
costs by the Company and its Subsidiaries during such period, determined on a
consolidated basis in accordance with GAAP (including, without limitation, the
amortization of any unamortized deferred financing costs in connection with any
refinancing of the Credit Agreement); in the case of clauses (i) and (ii) of
this definition, without giving effect to any such items and amounts
attributable to any Unrestricted Subsidiary, or to Scotia Pacific so long as
any Timber Notes are outstanding, during such period.
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"CONSOLIDATED NET INCOME" of the Company means, for any period, the
aggregate net income (or net loss, as the case may be) of the Company and its
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP ("GAAP Net Income"); provided that (without duplication) there shall
be excluded from GAAP Net Income (to the extent otherwise included therein) (i)
gains and losses (net of applicable taxes) from (A) Asset Sales or reserves
relating thereto, (B) any sale, transfer or other disposition of any Capital
Stock or ownership interests in (x) Salmon Creek or (y) any Unrestricted
Subsidiary to which non-cash proceeds received by the Company in respect of a
Salmon Creek Distribution have been contributed by the Company as contemplated
by Section 4.04(d), (C) the sale, transfer or other disposition by the Company
of any assets received by the Company in respect of a Salmon Creek Distribution
or (D) any sale, transfer or other disposition of Kaiser Shares; (ii) items
classified as extraordinary and gains and losses from discontinued operations;
(iii) the net income (or loss) of (A) any Unrestricted Subsidiary or (B) any
person that is not a Subsidiary of the Company or that is accounted for on the
equity method of accounting, provided that in each case the amount of dividends
or other distributions actually paid to the Company (other than Salmon Creek
Distributions) during such period shall be added to Consolidated Net Income (to
the extent, in the case of clause (A), that the Company elects to include such
distributions in the computation of Consolidated Net Income at the time of the
computation thereof) and the amount of dividends or other distributions
actually paid to a Restricted Subsidiary of the Company (other than Salmon
Creek Distributions) during such period shall be included in computing the net
income (or net loss, as the case may be) of such Restricted Subsidiary, subject
to clause (v) below (to the extent, in the case of clause (A), that the Company
elects to include such distributions in the computation of Consolidated Net
Income at the time of the computation thereof); (iv) except to the extent
includable pursuant to clause (iii) of this definition, the net income (or
loss) of any other person accrued or attributable to any period prior to the
date it becomes a Subsidiary of the Company or is merged into or consolidated
with the Company or any of its Subsidiaries or such other person's property (or
a portion thereof) is acquired by the Company or any of its Subsidiaries; (v)
the net income (or loss) of any Restricted Subsidiary during such period if and
to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary to the Company or any Restricted
Subsidiary of any such net income is not at the time permitted by operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or government regulation applicable to such Restricted
Subsidiary, provided that the amount of dividends or other distributions
actually paid to the Company by such Restricted Subsidiary (other than Salmon
Creek Distributions) shall be added to Consolidated Net Income during such
period and the amount of dividends or other
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17
distributions actually paid to a Restricted Subsidiary of the Company (the
"Recipient Restricted Subsidiary") by such Restricted Subsidiary (other than
Salmon Creek Distributions) shall be included in computing the net income (or
net loss, as the case may be) of such Recipient Restricted Subsidiary during
such period; and (vi) the transfer of the Kaiser Shares to the Company by
MAXXAM; provided that there shall be excluded from Consolidated Net Income, to
the extent otherwise included therein, the amount of dividends and
distributions made with the net proceeds of any Equity Offering by any
Subsidiary of the Company.
"CREDIT AGREEMENT" means the agreement dated November 10, 1995,
between Bank of America, National Trust and Savings Association and Pacific
Lumber, together with all related notes, letters of credit, collateral
documents and guarantees and any other related agreements and instruments
executed and delivered in connection therewith, in each case, as amended,
supplemented, restated, restructured, renewed, extended, refinanced or
otherwise modified, in whole or in part, from time to time.
"DEED OF TRUST" means the Deed of Trust, Security Agreement, Financing
Statement, Fixture Filing and Assignment of Proceeds, dated March 18, 1993,
from Scotia Pacific to the Deed of Trust Trustee named therein, for the benefit
of the Collateral Agent named therein, as the same has been or may be amended,
supplemented or otherwise modified from time to time.
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default as specified in Section 6.01.
"DEFINITIVE SECURITIES" means Securities that are in the form of the
Securities attached hereto as Exhibit A that do not include the paragraph or
schedule called for by footnotes 1 and 5 thereof.
"DEPOSITORY" means, with respect to the Global Securities, the person
specified in Section 2.03 as the Depository with respect to the Global
Securities, until a successor shall have been appointed and become such
pursuant to the applicable provision of this Indenture and, thereafter,
"Depository" shall mean or include such successor.
"EBITDA" of the Company means, for any period, the sum for such period
of Consolidated Net Income (excluding, to the extent included in Consolidated
Net Income for such period, any gains (net of applicable taxes) from any sale,
transfer or other disposition of any Capital Stock or ownership interests in
any Unrestricted Subsidiary to which non-cash proceeds received by a Restricted
Subsidiary in respect of a Salmon Creek Distribution have been contributed by a
Restricted Subsidiary as contemplated by Section 4.04(d)) plus, to the extent
reflected in the income statement for
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such period from which Consolidated Net Income is determined, without
duplication, (i) Consolidated Interest Expense, (ii) Consolidated Income Tax
Expense, (iii) depreciation and depletion expense, (iv) amortization expense
(including amortization of deferred financing costs), and (v) any charge
related to any premium or penalty paid in connection with redeeming or retiring
any Indebtedness prior to its stated maturity; (A) in the case of clauses
(iii), (iv) and (v) of this definition, of the Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP for such period, but
without giving effect to any such items and amounts attributable to any
Unrestricted Subsidiary during such period or to Scotia Pacific so long as any
Timber Notes are outstanding, and (B) in the case of clauses (iv) and (v) of
this definition, excluding the amounts thereof excluded from the definition of
"Consolidated Interest Expense" pursuant to clause (ii) of such definition.
"EQUITY OFFERING" means any sale, public or private, of equity
securities of any person.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
(or any successor statute thereto), and the rules and regulations promulgated
thereunder.
"EXCHANGE OFFER" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series A Securities
for Series B Securities.
"EXEMPT DISTRIBUTIONS" means any and all dividends, cash, instruments
and other property and proceeds received, receivable or otherwise distributed
on any of the Pledged Shares other than: (i) any liquidating dividend or other
liquidating distribution or other similar extraordinary dividend or
distribution; (ii) any dividend or other distribution on Pledged MGI Shares (or
on Stock of MGI's permitted successor pursuant to Section 10.13) if the amount
of all dividends and other distributions on the Stock of MGI made on or after
the Issue Date to and including the date of such dividend or other distribution
on such Pledged MGI Shares (other than dividends and distributions to the
extent that such dividends or distributions were previously paid or delivered
to the Trustee for inclusion in the Collateral, whether by deposit into an
Account or otherwise, and other than amounts referred to in clauses (iv), (v)
and (vi) below) exceeds 100% of the consolidated net income of MGI plus 100% of
the consolidated depletion expense of MGI, each determined in accordance with
GAAP, accrued on a cumulative basis subsequent to September 30, 1996; (iii) any
dividend or other distribution on any Pledged Kaiser Shares to the extent of
the amount, if any, by which all dividends and other distributions on such
Pledged Kaiser Shares during the 12-month period ending on and including the
date on which such dividend or distribution is paid (other than dividends and
distributions to the extent that such
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dividends or distributions were previously paid or delivered to the Trustee for
inclusion in the Collateral, whether by deposit into an Account or otherwise,
and other than amounts referred to in clauses (iv), (v) and (vi) below)
exceeds, on a per share basis, 7.5% of the average of the daily closing prices
(or average bid and asked prices if closing prices are not available) of such
Kaiser Shares over such consecutive 12-month period; (iv) any Salmon Creek
Distribution; (v) any dividend or other distribution consisting of proceeds of
any Primary Share Sale by MGI or Kaiser or proceeds of any Pledged Share Sale;
and (vi) any dividend or other distribution of proceeds of a transaction
effected pursuant to and in accordance with Sections 10.05(c)(2) or 10.13.
Notwithstanding the foregoing, any dividend or other distribution made on any
Pledged MGI Shares and received by the Company during any fiscal year shall be
an Exempt Distribution if such dividend or distribution, together with all
other dividends and other distributions previously so made during such fiscal
year (exclusive of amounts referred to in clauses (iv), (v) and (vi) above),
does not exceed 120% of the interest that has become payable or is to become
payable on the Securities during such year.
"EXTRAORDINARY DISTRIBUTION" means any and all dividends, cash,
instruments and other property and proceeds received, receivable or otherwise
distributed on any Pledged Shares other than: (i) an Exempt Distribution; (ii)
any Salmon Creek Distribution; (iii) any dividend or other distribution
consisting of proceeds of any Primary Share Sale by MGI or Kaiser or proceeds
of any Pledged Share Sale; and (iv) any dividend or other distribution of
proceeds of a transaction effected pursuant to and in accordance with Section
10.05(c)(2) or 10.13.
"GAAP" means, at any date, generally accepted accounting principles as
in effect on December 31, 1995, and used in the preparation of the Company's
consolidated balance sheet at such date and the Company's statements of
consolidated income and cash flows for the year then ended.
"GLOBAL SECURITY" means a Security that contains the paragraph
referred to in footnote 1 and the additional schedule referred to in footnote 5
to the form of the Security attached hereto as Exhibit A.
"GUARANTEE" means the guarantee of the Guarantor set forth in Article
12 hereof.
"GUARANTOR" See the definition of "MAXXAM".
"GUARANTOR'S OFFICERS' CERTIFICATE" means a certificate signed by two
Officers of the Guarantor.
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"HOLDER" OR "SECURITYHOLDER" means the person in whose name a Security
is registered on the Registrar's books.
"INDEBTEDNESS" of any person means, at any date, any of the following
(without duplication): (i) the principal amount of all obligations
(unconditional or contingent) of such person for borrowed money (whether or not
there is recourse to the whole of the assets of such person or only to a
portion thereof) and the principal amount of all obligations (unconditional or
contingent) of such person evidenced by debentures, notes or other similar
instruments (including, without limitation, reimbursement obligations with
respect to letters of credit (except to the extent collateralized by cash or
Cash Equivalents), performance bonds (except to the extent collateralized by
cash or Cash Equivalents) and bankers' acceptances (except to the extent
collateralized by cash or Cash Equivalents)); (ii) all obligations of such
person to pay the deferred purchase price of property or services, except (A)
accounts payable and other current liabilities arising in the ordinary course
of business and (B) compensation, pension obligations and other obligations
arising from employee benefits and employee arrangements; (iii) Capital Lease
Obligations of such person; (iv) all Indebtedness of others secured by a Lien
on any asset of such person (other than assets referred to in clause (vi) of
Section 4.04(c) and the proceeds of such assets) whether or not such
Indebtedness is assumed or guaranteed by such person; (v) all Indebtedness of
others guaranteed by such person; and (vi) all Redeemable Stock, valued at the
greater of its voluntary or involuntary maximum fixed repurchase price (or its
stated liquidation value in the case of Preferred Stock that is not by its
terms redeemable) exclusive of accrued and unpaid dividends; and the amounts
thereof shall be the outstanding balance of any such unconditional obligations
as described in clauses (i) through (v) (other than clause (iv)), and the
maximum liability of any such contingent obligations at such date as described
in clauses (i) through (v) (other than with respect to clause (iv)) and, in the
case of clause (iv), the lesser of the fair value (as determined by the Board
of Directors) at such date of any asset subject to any Lien securing the
Indebtedness of others and the principal amount of the Indebtedness secured;
provided that the Indebtedness of any person shall not include (x) obligations
of such person arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn against
insufficient funds in the ordinary course of business, provided that such
obligations are extinguished within two Business Days after their Incurrence
and (y) obligations of such person resulting from the endorsement of negotiable
instruments in the ordinary course of business. For purposes hereof, the
"maximum fixed repurchase price" of any Redeemable Stock which does not have a
fixed repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock as if such Redeemable Stock were
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purchased on any date on which Indebtedness is required to be determined
pursuant to this Indenture, and if such price is based upon, or measured by,
the fair market value of such Redeemable Stock, such fair market value shall be
determined in good faith by the board of directors of the issuer of such
Redeemable Stock.
"INDENTURE" means this Indenture as amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"INTERCOMPANY NOTE" means that certain intercompany note in an initial
principal amount of $125,000,000, dated as of the Issue Date, payable by
MAXXAM to the Company.
"INTEREST PAYMENT DEFAULT" means a default in the payment of interest
when due and payable on any of the Securities which would constitute an Event
of Default if such payment were not made within the applicable cure or grace
period pursuant to Section 6.01(1).
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, currency swap agreement or other
financial agreement or arrangement designed to protect the Company or any
Subsidiary of the Company against fluctuations in interest rates or currency
exchange rates, as in effect from time to time.
"INVESTMENT" means with respect to any person (such person being
referred to in this definition as the "Investor") (without duplication), (i)
any amount paid or any property transferred, in each case, directly or
indirectly, by the Investor for Capital Stock or Redeemable Stock, partnership
interests or other securities of, or as a contribution to the capital of any
other person, (ii) any direct or indirect loan or advance by the Investor to
any other person other than accounts receivable of the Investor relating to the
purchase and sale of property or services arising in the ordinary course of
business, and (iii) any direct or indirect guarantee by the Investor of any
Indebtedness of any other person.
"ISSUE DATE" means December 23, 1996.
"KAISER" means Xxxxxx Aluminum Corporation, a Delaware corporation,
and any successor pursuant to a transaction governed by and in accordance with
Section 10.05(c)(2) of this Indenture or Section 10.05(c)(2) of the MGI
Indenture, as in effect on the date hereof.
"KAISER SHARE CASH EQUIVALENTS" means (i) the amount of any Trust
Moneys constituting proceeds of any Primary Share Sale by Kaiser or a Pledged
Share Sale of Pledged Kaiser Shares or any Extraordinary Distribution on
Pledged Kaiser Shares (or the
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proceeds of any non-cash consideration received in any such transaction) that
are released from the Lien of the MGI Indenture and thereupon pledged under the
Indenture as a result of such Trust Moneys not having been utilized to purchase
MGI Notes pursuant to an offer by MGI to purchase MGI Notes at a price at least
equal to the respective Call Prices of the MGI Notes or as a result of payment
in full of the MGI Notes or defeasance of the MGI Notes pursuant to Article 8
of the MGI Indenture, divided by (ii) the greater of (A) the Net Proceeds per
share received by the Company with respect to Pledged Kaiser Shares released
from the Lien of the MGI Indenture in the transaction that resulted in the
deposit of such Trust Moneys thereunder and (B) $9.00 (as adjusted to reflect
any subdivision, combination or reclassification of Kaiser Shares). To the
extent that any of the Net Proceeds referred to in clause (ii)(A) of the
preceding sentence are other than cash, the amount of such non-cash Net
Proceeds attributable to each Pledged Kaiser Share released from the Lien of
the MGI Indenture for purposes of such clause (ii)(A) shall be determined by a
nationally recognized investment banking firm selected by the Company based on
the fair market value per share of such non-cash Net Proceeds received by the
Company in such transaction. As used in this definition, each of the terms
Primary Share Sale, Pledged Share Sale, Pledged Kaiser Shares, Extraordinary
Distribution, Trust Moneys, Call Prices and Net Proceeds has the meaning
ascribed to such term in the MGI Indenture (as in effect on the date hereof).
"KAISER SHARES" means, at any time, the 27,938,250 shares of common
stock, par value $.01 per share, of Kaiser owned by the Company, and, as of the
Issue Date, pledged under the MGI Indenture, as such shares are (and any number
thereof as utilized in this Indenture is) adjusted to reflect any subdivision,
combination or reclassification (in a merger or otherwise) of such Kaiser
Shares on or after the Issue Date, and any securities or property substituted
for such Kaiser Shares pursuant to any Kaiser Transaction (as such term is
defined in Section 10.05(c)(2) of the MGI Indenture as in effect on the date
hereof) under the MGI Indenture.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions are not required by applicable law to be open in the States of New
York, California, Minnesota and Texas.
"LIEN" means, with respect to any asset, any lien, mortgage, pledge,
security interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement and any lease in the nature thereof) in
respect of such asset.
"MAKE-WHOLE AMOUNT" with respect to any Security means an amount equal
to the excess, if any, of (i) the present value of the remaining interest,
premium and principal payments due on such Security if such Security were
redeemed on August 1, 2000, computed
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using a discount rate equal to the Treasury Rate plus 75 basis points, over
(ii) the outstanding principal amount of such Security. "Treasury Rate" is
defined as the yield to maturity at the time of the 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 of the redemption notice or, if such Statistical Release is no longer
published, any publicly available source of similar market data) most nearly
equal to the then remaining maturity of the Security assuming redemption of the
Security on August 1, 2000; provided, however, that if the Make-Whole Average
Life of such Security is not equal to the constant maturity of the United
States Treasury securities 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 Make-
Whole Average Life of such Security is less than one year, the weekly average
yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used.
"MAKE-WHOLE AVERAGE LIFE" means the number of years (calculated to the
nearest one-twelfth) between the date of redemption and August 1, 2000.
"MAKE-WHOLE PRICE" with respect to any Security means the greater of
(i) the sum of the outstanding principal amount and the Make-Whole Amount of
such Security, and (ii) 110% of the outstanding principal amount of such
Security.
"MAXXAM" OR THE "GUARANTOR" means MAXXAM Inc., a Delaware corporation,
and, subject to the provisions of Article 12 hereof, any successor corporation
by way of merger, consolidation or purchase of all or substantially all of its
assets.
"MONEY" or "U.S. LEGAL TENDER" means such coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
"MGI" means MAXXAM Group Inc., a Delaware corporation, and any
successor Restricted Subsidiary pursuant to a transaction governed by and in
accordance with Section 10.13.
"MGI INDENTURE" means the Indenture dated as of August 4, 1993,
between MGI and Fleet National Bank, as successor to Shawmut Bank, N.A., as
trustee, pursuant to which the MGI Notes were issued, as the same has been or
may be amended, supplemented or otherwise modified from time to time. A true
and correct copy of the MGI Indenture, as amended through the date hereof, has
been delivered to the Trustee.
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"MGI NOTES" means the debt securities outstanding pursuant to, and
whose terms are governed by, the MGI Indenture.
"MPI" means MAXXAM Properties Inc., a Delaware corporation, and any
successor corporation by way of merger, consolidation or purchase of all or
substantially all of its assets.
"MXM GUARANTY" means the Unconditional Guarantee of Payment and
Performance, dated June 17, 1991, to General Electric Capital Corp. by MAXXAM
and MGI, as amended by agreements dated as of June 17, 1992 and December 30,
1992, as amended, supplemented or otherwise modified from time to time in a
manner that is not materially adverse to Holders.
"NET CASH PROCEEDS" means cash payments received (but if received in a
currency other than United States dollars, such payments shall not be deemed
received until the earliest time at which such currency is converted into
United States dollars) by the Company and/or any of its Restricted Subsidiaries
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, or the cash
realization of any non-cash proceeds of any Asset Sale, but, in each case, only
as and when, and to the extent, received by the Company or any of its
Restricted Subsidiaries) from an Asset Sale, in each case and without
duplication, net of (i) fees, expenses and other expenditures in connection
with such Asset Sale (whether or not such fees, expenses or expenditures are
then due and payable or made, as the case may be), (ii) the amounts paid to
repurchase or repay any Indebtedness, or the amount of any Indebtedness
retained, in each case which Indebtedness is either (A) secured, directly or
indirectly, by Liens on the assets which are the subject of such Asset Sale or
(B) associated with such assets and due in connection with such Asset Sale, and
other fees, expenses and other expenditures, in each case, incurred in
connection with such Asset Sale or the repurchase, repayment or assumption of
such Indebtedness (whether or not such fees, expenses or expenditures are then
due and payable), (iii) all amounts deemed appropriate by the Company (as
evidenced by a signed certificate of the Treasurer or Assistant Treasurer of
the Company delivered to the Trustee) to be provided as a reserve, in
accordance with GAAP, against any liabilities associated with such assets which
are the subject of such Asset Sale, (iv) all foreign, federal, state and local
taxes payable (including taxes reasonably estimated to be payable) in
connection with or as a result of such Asset Sale, (v) with respect to any
Asset Sale by a Restricted Subsidiary of the Company or any Primary Share Sale,
the portion of such cash payments required to be paid to persons holding a
minority interest in such Restricted Subsidiary and (vi) if such Asset Sale is
a Primary Share Sale by MGI, any of the proceeds of such Primary Share Sale
that are distributed by the issuer in such Primary Share Sale to its
stockholders; provided, in each such case, such fees, expenses,
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expenditures and other amounts are not payable to an Affiliate of the Company.
"NET PROCEEDS" means any property, assets or other consideration of
any kind, whether tangible or intangible, received by the Company as a dividend
or distribution on any Pledged Shares of proceeds of any Primary Share Sale by,
or from any Pledged Share Sale of any of the Pledged Shares of, MGI or Kaiser,
in each case and without duplication, net of (i) fees, expenses and other
expenditures in connection with such Pledged Share Sale (whether or not such
fees, expenses or expenditures are then due and payable or made, as the case
may be), (ii) the amounts paid to repurchase or repay any Indebtedness, or the
amount of any Indebtedness assumed, in each case which Indebtedness is either
(A) secured, directly or indirectly, by Liens on the assets which are the
subject of such Pledged Share Sale or (B) associated with such assets and due
in connection with such Pledged Share Sale, and other fees, expenses and other
expenditures, in each case, incurred in connection with such Pledged Share Sale
or the repurchase, repayment or assumption of such Indebtedness (whether or not
such fees, expenses or expenditures are then due and payable), (iii) all
amounts deemed appropriate by the Company (as evidenced by a signed certificate
of the Treasurer or an Assistant Treasurer of the Company delivered to the
Trustee) to be provided as a reserve, in accordance with GAAP, against any
liabilities associated with such shares which are the subject of such Pledged
Share Sale and (iv) all foreign, federal, state and local taxes payable
(including taxes reasonably estimated to be payable) in connection with or as a
result of such dividend or distribution or Pledged Share Sale; provided, in
each such case, such fees, expenses, expenditures and other amounts are not
payable to an Affiliate of the Company; and provided, further, that, if other
than cash, Net Proceeds shall have as their value for purposes of this
Indenture their fair value as reasonably- determined by the Board of Directors.
"NOTICE OF ACCELERATION" means a written notice delivered during the
continuance of an Event of Default to the Company by the Trustee or by the
Holders of at least 25% in aggregate principal amount of the Securities then
outstanding, stating that an Event of Default has occurred and is continuing
and that the principal amount of and accrued and unpaid interest, if any, on
all of the Securities are due and payable; provided that a Notice of
Acceleration shall be deemed to have been delivered and to be effective for all
purposes under Article 10 of this Indenture upon the occurrence and during the
continuance of an event with respect to the Company specified in Section
6.01(5) or (6).
"OBLIGATIONS" means, with respect to the Company, any principal,
premium, interest, expenses, fees, indemnifications, reimbursements, damages
and other liabilities payable by the Company under the Securities or this
Indenture.
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"OFFERING MEMORANDUM" means the final offering memorandum, dated
December 17, 1996, relating to the offer and sale of the Securities.
"OFFICER" means the Chairman of the Board, the President, any Vice
President, the Chief Financial Officer, the Treasurer, an Assistant Treasurer,
the Secretary, an Assistant Secretary, the Controller or an Assistant
Controller of the Company or the Guarantor, as the case may be.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers of
the Company.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company, the Guarantor or the Trustee, as the case may be.
"PACIFIC LUMBER" means The Pacific Lumber Company, a Delaware
corporation, and any successor corporation by way of merger, consolidation or
purchase of all or substantially all of its assets.
"PACIFIC LUMBER INDENTURE" means the indenture, dated March 23, 0000,
xxxxxxx Xxxxxxx Xxxxxx and State Street Bank and Trust Company, as successor to
The First National Bank of Boston, as trustee, pursuant to which the Pacific
Lumber Senior Notes were issued, as amended, supplemented or otherwise
modified, or, in accordance with and subject to the provisions of Section
4.03(c), restated, restructured, renewed or refinanced in whole or in part from
time to time.
"PACIFIC LUMBER SENIOR NOTES" means the debt securities outstanding
pursuant to, and whose terms are governed by, the Pacific Lumber Indenture.
"PERSON" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"PLEDGED KAISER SHARES" means, at any time, any Kaiser Shares which
are included in the Collateral at such time, and any securities or other
property substituted for Pledged Kaiser Shares pursuant to Section 10.05(c)
included in the Collateral at such time.
"PLEDGED MGI SHARES" means, at any time, any shares of Stock of MGI
included in the Collateral at such time, and any securities or other property
substituted for Pledged MGI Shares pursuant to Section 10.13 included in the
Collateral at such time.
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"PLEDGED SHARE SALE" means a sale to any person of Pledged Shares
other than (i) a sale in connection with a transaction pursuant to and in
accordance with Section 10.13, (ii) a sale in connection with a transaction
pursuant to and in accordance with Section 10.05(c)(2) or (iii) a sale of
Pledged MGI Shares by the Company or one of its Subsidiaries to any of the
Company's Subsidiaries, in which the purchaser becomes a pledgor with respect
to such Pledged Shares pursuant to Article 10 hereof.
"PLEDGED SHARES" means the Pledged MGI Shares and the Pledged Kaiser
Shares.
"PREFERRED STOCK" as applied to the Capital Stock or Redeemable Stock
of any corporation, means Capital Stock or Redeemable 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 or
Redeemable Stock, as the case may be, of any other class of such corporation.
"PRIMARY SHARE SALE" means (i) any issuance and sale of Stock by MGI
other than to the Company or any of its Subsidiaries (provided, that no
issuance of Stock in connection with a transaction pursuant to and in
accordance with Section 10.13 shall constitute a Primary Share Sale) and (ii)
any issuance and sale of common stock by Kaiser (provided, that no issuance of
Stock in connection with a transaction pursuant to and in accordance with
Section 10.05(c)(2), or pursuant to or in accordance with Section 10.05(c)(2)
of the MGI Indenture as in effect on the date hereof, shall constitute a
Primary Share Sale).
"PUBLIC EQUITY OFFERING" means an underwritten public offering of
common stock of the Company or MGI (or the successor in a transaction with MGI
pursuant to Section 10.13) pursuant to an effective registration statement
filed pursuant to the Securities Act.
"REDEEMABLE STOCK" of any person means any equity security of such
person that by its terms is required to be redeemed prior to the final Stated
Maturity of all principal of the Securities, or is redeemable at the option of
the holder thereof at any time prior to the final Stated Maturity of all
principal of the Securities and shall also include, in the case of the Company,
all Preferred Stock of the Company's Restricted Subsidiaries.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date hereof, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time.
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"RELEASED KAISER SHARES" means (i) all or any portion of the Kaiser
Shares transferred to the Company by MAXXAM as of the Issue Date (as such
shares are (and any number thereof as utilized in this indenture is) adjusted
to reflect any subdivision, combination or reclassification (in a merger or
otherwise) of such Kaiser Shares on or after the Issue Date) that are released
after the Issue Date from the Lien of the MGI Indenture as a result of (a)
payment in full of the MGI Notes, (b) defeasance of the MGI Notes pursuant to
Article 8 of the MGI Indenture, or (c) early retirement of a portion of the MGI
Notes resulting in a release of some of the Kaiser Shares from the Lien of the
MGI Indenture pursuant to Section 10.05(c)(1) thereof (as in effect on the date
hereof); and (ii) all or any portion of any securities or other property
substituted for Kaiser Shares under the MGI Indenture pursuant to Section
10.05(c)(2) thereof (as in effect on the date hereof) that are released from
the Lien of the MGI Indenture as the result of an occurrence referred to in
clause (a), (b) or (c) of the preceding clause (i); provided, however, that
Kaiser Shares and other collateral released from the Lien of the MGI Indenture
pledged to secure Indebtedness that refinances the MGI Notes (as permitted by
Section 4.05(b)) shall not be deemed to be Released Kaiser Shares.
"RESTRICTED INVESTMENT" means any Investment in an Affiliate (other
than any Unrestricted Subsidiary referred to in Section 4.04(d)) of the
Company, except for (i) the Intercompany Note and (ii) the Company's ownership
of Kaiser Shares or any other asset that is included in the Collateral under
the Indenture or the collateral under the MGI Indenture.
"RESTRICTED SUBSIDIARY" means, as of any determination date, each of
the Subsidiaries of the Company which is not as of such determination date an
Unrestricted Subsidiary of the Company.
"SALMON CREEK" means Salmon Creek Corporation, a Delaware corporation,
or any successor corporation, by way of merger, consolidation, purchase of all
or substantially all of its assets, or otherwise, which holds the Salmon Creek
Property on the date of this Indenture but which may not acquire any other
assets (other than assets incidental to the operation, disposition, management
and maintenance of the Salmon Creek Property or assets received (i) in respect
of all or any part of the Stock of Salmon Creek, (ii) in respect of all or any
part of the real property constituting the Salmon Creek Property or (iii)
otherwise in connection with Salmon Creek or the Salmon Creek Property, except
in connection with the harvesting of timber located on the Salmon Creek
Property), except in exchange for or out of the proceeds of the sale or
disposition of the Salmon Creek Property.
"SALMON CREEK DISTRIBUTION" means a dividend or other distribution
identified as a "Salmon Creek Distribution" by the
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Company in writing to the Trustee at the time of such dividend or other
distribution.
"SALMON CREEK PROPERTY" means any of the property described on Exhibit
C to this Indenture or any assets or Stock, in each case, held by Salmon Creek.
"SCOTIA PACIFIC" means Scotia Pacific Holding Company, a Delaware
corporation, and any successor corporation, by way of merger, consolidation,
purchase of all or substantially all of its assets, or otherwise.
"SCOTIA PACIFIC AGREEMENTS" means any agreements between Scotia
Pacific and Pacific Lumber or any Subsidiary of Pacific Lumber as the same may
be amended after the date hereof in accordance with the terms thereof,
including, without limitation, the Master Purchase Agreement, dated as of March
23, 1993, between Scotia Pacific and Pacific Lumber, the Services Agreement,
dated as of March 23, 1993, between Scotia Pacific and Pacific Lumber, the
Additional Services Agreement, dated as of March 23, 1993, between Scotia
Pacific and Pacific Lumber, the Environmental Indemnification Agreement, dated
as of March 23, 1993, between Scotia Pacific and Pacific Lumber, and the
Reciprocal Rights Agreement, dated as of March 18, 1993, among Scotia Pacific,
Pacific Lumber and Salmon Creek.
"SEC" means the Securities and Exchange Commission or any successor
regulatory agency thereto.
"SECURITIES" means the Series A Securities and the Series B
Securities, issued, authenticated and delivered pursuant to this Indenture, as
amended, restated, restructured, renewed, extended, or otherwise modified, in
whole or in part, from time to time.
"SECURITIES ACT" means the Securities Act of 1933, as amended (or any
successor statute thereto), and the rules and regulations promulgated
thereunder.
"SECURITIES CUSTODIAN" means the Trustee, as custodian with respect to
the Global Securities, or any successor entity thereto.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary of the
Company which at the time of determination had, or any group of Restricted
Subsidiaries which, if merged into each other at the time of determination,
would at the time of determination have had, (i) assets which, as of the date
of the Company's most recent quarterly consolidated balance sheet, constituted
at least 10% of the Company's total assets on a consolidated basis as of such
date, (ii) revenues for the 12-month period ending on the date of the Company's
most recent quarterly consolidated statement of income which constituted at
least 10% of the Company's total revenues on
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a consolidated basis for such period, or (iii) EBITDA for the 12-month period
ending on the date of the Company's most recent quarterly consolidated
statement of income which constituted at least 10% of the Company's total
EBITDA on a consolidated basis for such period (it being understood that for
the purposes of clause (iii) of this definition, EBITDA of any Restricted
Subsidiary or group of Restricted Subsidiaries of the Company for any period
shall be that portion of the Company's total EBITDA attributable to such
Restricted Subsidiary or group of Restricted Subsidiaries during such period).
"STATED MATURITY", when used with respect to the payment of any
principal of, or accrued interest on, any Security, means the date specified in
such Security as the fixed date on which such principal of or accrued interest
on such Security is due and payable, as the case may be.
"STOCK" of any person means, collectively, the Capital Stock and the
Redeemable Stock of such person.
"SUBSIDIARY" means, with respect to any person, (i) any corporation of
which more than 50% of the outstanding Capital Stock and Redeemable Stock
having ordinary voting power to elect a majority of the board of directors of
the corporation (irrespective of whether at the time Capital Stock or
Redeemable Stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency) is at the time
owned, directly or indirectly, by such person, or by one or more other
Subsidiaries of such person, or by such person and one or more other
Subsidiaries of such person, or (ii) any other entity of which more than 50% of
the outstanding equity ownership interests are at the time owned, directly or
indirectly, by such person, or by one or more other Subsidiaries of such
person, or by such person and one or more other Subsidiaries of such person.
Notwithstanding the foregoing, neither Kaiser nor any Subsidiary of Kaiser
shall be deemed a Subsidiary of the Company for any purpose under this
Indenture unless ownership by the Company of more than 50% of the outstanding
Capital Stock of Kaiser resulted from the acquisition (other than in connection
with a Kaiser Transaction, a dividend or distribution on Capital Stock of
Kaiser, a reclassification of shares of Capital Stock of Kaiser or any other
transaction in which the Company or any Restricted Subsidiary of the Company
receives Capital Stock or other securities of Kaiser in exchange for or in
respect of other shares of Capital Stock or securities of Kaiser) by the
Company of Kaiser Capital Stock after the Issue Date.
"TAKING" means any sale, transfer or other disposition of all or any
part of the assets of the Company and its Restricted Subsidiaries that occurs
by reason of condemnation or eminent domain or other similar proceedings
exercised by, or by consensual transfer by the Company or its Restricted
Subsidiaries of assets
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to, the United States of America or any State, municipality, agency or other
governmental authority thereof.
"TAX SHARING AGREEMENTS" means (i) the tax allocation agreement, dated
May 21, 1988, by and among MAXXAM, Pacific Lumber and certain other
subsidiaries of MAXXAM and MGI, as amended by the tax allocation agreement,
dated as of March 23, 1993, by and among MAXXAM, Pacific Lumber, Scotia Pacific
and Salmon Creek, and as further amended by the tax allocation agreement, dated
as of August 4, 1993, by and between MAXXAM and MGI, (ii) the tax allocation
agreement, dated as of July 3, 1990, by and between MAXXAM and Xxxxx and (iii)
the tax allocation agreement, dated as of the Issue Date, by and between MAXXAM
and the Company; each as amended, supplemented or otherwise modified from time
to time.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa
through 77bbbb) as in effect on the date of this Indenture, except as otherwise
expressly provided herein.
"TIMBER NOTE INDENTURE" means the indenture, dated as of March 23,
1993, between Scotia Pacific and State Street Bank and Trust Company, as
successor to The First National Bank of Boston, as trustee, pursuant to which
the Timber Notes were issued, as amended, supplemented or otherwise modified
from time to time.
"TIMBER NOTES" means the 7.95% Timber Collateralized Notes due 2015,
issued by Scotia Pacific, as amended, supplemented or otherwise modified, in
whole or in part, from time to time in accordance with the terms of the Timber
Note Indenture.
"TRANSFER RESTRICTED SECURITIES" means securities that bear or are
required to bear the legend set forth in Section 2.06.
"TRUST OFFICER" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it in accordance with the terms of this Indenture and,
thereafter, means the successor.
"UNIFORM COMMERCIAL CODE" means the New York Uniform Commercial Code
as in effect from time to time, except with respect to matters concerning the
validity and perfection of security interests of the Trustee in favor of the
Holders in the Accounts, in which case such term shall mean the Minnesota
Uniform Commercial Code as in effect from time to time.
"UNRESTRICTED INVESTMENTS OUTSTANDING" means, at any time of
determination, in respect of any Unrestricted Subsidiary, the difference
between (i) the sum of all Unrestricted Investments theretofore made by the
Company or any Restricted Subsidiary in
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such Unrestricted Subsidiary after the date of this Indenture, minus (ii) the
amount of all dividends and distributions paid to the Company or a Restricted
Subsidiary (to the extent that the Company does not elect to include the amount
of such dividends and distributions in the computation of Consolidated Net
Income pursuant to the parenthetical of clause (iii) of the definition thereof
at the time of determination) and all repayments of the principal amount of
loans or advances by such Unrestricted Subsidiary to the Company or any of its
Restricted Subsidiaries during the period that such person was an Unrestricted
Subsidiary and any other reduction of Unrestricted Investments in such
Unrestricted Subsidiary during the period that such person was an Unrestricted
Subsidiary (the amount of any Unrestricted Investment returned or reduced, if
other than in cash or a sum certain guaranteed, to be the fair market value as
determined in good faith by the Board of Directors, whose determination shall
be evidenced by a resolution of the Board of Directors filed with the Trustee);
provided that the amount of Unrestricted Investments Outstanding in respect of
any Unrestricted Subsidiary shall at no time be a negative amount.
"UNRESTRICTED SUBSIDIARY" means (i) each of the Subsidiaries of the
Company so designated by a resolution adopted by the Company's Board of
Directors and whose creditors have no direct or indirect recourse (including,
but not limited to, recourse with respect to the payment of principal or
interest on Indebtedness of such Subsidiary) to the Company or a Restricted
Subsidiary (except to the extent such recourse arises (A) solely by operation
of law and not pursuant to a contractual or other consensual arrangement or (B)
pursuant to an Investment or a Restricted Investment permitted by this
Indenture), (ii) any joint venture, partnership or other person (other than a
Subsidiary of the Company, Kaiser or a Subsidiary of Kaiser) in which the
Company and/or its Subsidiaries have an equity ownership interest equal to or
greater than 5% and (except for any Unrestricted Subsidiary referred to in
Section 4.04(d)) in which no Affiliate of the Company has a direct or an
indirect equity ownership interest in excess of 5% therein other than by virtue
of the direct or indirect equity ownership interest in such joint venture,
partnership or other person held (in the aggregate) by the Company and/or one
or more of its Subsidiaries and (iii) Salmon Creek. The Board of Directors may
designate an Unrestricted Subsidiary to be a Restricted Subsidiary, provided,
that any such redesignation shall be deemed to be an Incurrence by the Company
and its Restricted Subsidiaries of the Indebtedness (if any) of such
redesignated Restricted Subsidiary for purposes of Section 4.03 as of the date
of such redesignation to the extent that such Indebtedness does not already
constitute Indebtedness of the Company or one or more of its Restricted
Subsidiaries. Subject to the foregoing, the Board of Directors of the Company
also may designate any Restricted Subsidiary (other than Scotia Pacific so long
as there are any Timber Notes outstand-
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ing) to be an Unrestricted Subsidiary, provided, that (x) the amount of any
outstanding Investments by the Company and its Restricted Subsidiaries in such
Restricted Subsidiary shall be deemed to be Unrestricted Investments
Outstanding at the time of such designation and (y) immediately after giving
effect to such designation and to the characterization of the Investments by
the Company and its Restricted Subsidiaries in such newly designated
Unrestricted Subsidiary, the Company and its remaining Restricted Subsidiaries
could make at least $1.00 of additional Restricted Payments or Unrestricted
Investments pursuant to Section 4.04.
"U.S. GOVERNMENTAL OBLIGATIONS" means any evidence of obligations
issued directly or fully guaranteed or insured by the United States of America
or 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 at the issuer's option.
"U.S. LEGAL TENDER" See the definition of "money."
"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 RESTRICTED SUBSIDIARY" means any Restricted Subsidiary
(i) which is a corporation of which all of the outstanding shares of Capital
Stock and Redeemable Stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether at the time
Capital Stock or Redeemable Stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) are owned at the time, directly or indirectly (through one or more
Wholly Owned Restricted Subsidiaries), by the Company (except for director's
qualifying shares), or (ii) which is any other entity of which all of the
outstanding equity ownership interests are owned at the time, directly or
indirectly (through one or more Wholly Owned Restricted Subsidiaries), by the
Company.
SECTION 1.02. OTHER DEFINITIONS.
"Accounts" . . . . . . . . . . . . . . . . . . . . . . . 10.03(a)
"Adjustment Period" . . . . . . . . . . . . . . . . . . . 4.08(b)
"Aggregate Redemption Price" . . . . . . . . . . . . . . 10.05(g)
"Asset Sale Offer" . . . . . . . . . . . . . . . . . . . 4.07(c)
"Asset Sale Offer Amount" . . . . . . . . . . . . . . . . 4.07(b)
"Asset Sale Offer Notice" . . . . . . . . . . . . . . . . 4.07(d)
"Asset Sale Purchase Date" . . . . . . . . . . . . . . . 4.07(d)
"Asset Sale Purchase Notice" . . . . . . . . . . . . . . 4.07(e)
"Asset Sale Purchase Price" . . . . . . . . . . . . . . . 4.07(c)
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . 6.01
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"Cash Collateral Account" . . . . . . . . . . . . . . . . 10.03(a)
"Cash Collateral Default Account" . . . . . . . . . . . . 10.03(a)
"Cash Collateral Offer Account" . . . . . . . . . . . . . 10.03(a)
"Cash Collateral Public Equity Offering Account" . . . . 10.03(a)
"Change of Control Offer Notice" . . . . . . . . . . . . 4.09(b)
"Change of Control Purchase Date" . . . . . . . . . . . . 4.09(a)
"Change of Control Purchase Notice" . . . . . . . . . . . 4.09(c)
"Change of Control Purchase Price" . . . . . . . . . . . 4.09(a)
"Collateralized Cash Proceeds Offer" . . . . . . . . . . 10.05(f)
"Collateralized Cash Proceeds Offer Amount" . . . . . . . 10.05(f)
"Collateralized Cash Proceeds Offer Notice" . . . . . . . 10.05(f)
"Collateralized Cash Proceeds Purchase Date" . . . . . . 10.05(f)
"Collateralized Cash Proceeds Purchase Notice" . . . . . 10.05(f)
"Collateralized Cash Proceeds Purchase Price" . . . . . . 10.05(f)
"Company Party" . . . . . . . . . . . . . . . . . . . . . 4.08(a)
"Continuing Directors" . . . . . . . . . . . . . . . . . 1.01 (within the
definition of
"Change of
Control")
"covenant defeasance option" . . . . . . . . . . . . . . 8.01(b)
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Dividend Encumbrances" . . . . . . . . . . . . . . . . . 4.17
"DTC" . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Event of Default" . . . . . . . . . . . . . . . . . . . 6.01
"GAAP Net Income" . . . . . . . . . . . . . . . . . . . . 1.01 (within the
definition of
"Consolidated Net
Income")
"Headwaters Joint Venture . . . . . . . . . . . . . . . . 4.08(b)
"Incur" (and the terms "Incurred" and "Incurrence"
have correlative meanings) . . . . . . . . . . . 4.03(a)
"Initial Salmon Creek Agreement . . . . . . . . . . . . . 4.08(b)
"Investor" . . . . . . . . . . . . . . . . . . . . . . . 1.01 (within the
definition of
"Investment")
"Kaiser Transaction" . . . . . . . . . . . . . . . . . . 10.05(c)
"legal defeasance option" . . . . . . . . . . . . . . . . 8.01(b)
"maximum fixed repurchase price" . . . . . . . . . . . . 1.01 (within the
definition of
"Indebtedness")
"MGI Asset Sale" . . . . . . . . . . . . . . . . . . . . 4.07(b)
"MGI Refinancing Indebtedness" . . . . . . . . . . . . . 4.05(b)
"Monetization" . . . . . . . . . . . . . . . . . . . . . 10.05(b)
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35
"Xxxxx'x" . . . . . . . . . . . . . . . . . . . . . . . . 1.01 (within
the definition of
"Cash
Equivalents")
"Non-Cash Amount . . . . . . . . . . . . . . . . . . . . "10.05(f)
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . 2.03
"PL Asset Sale" . . . . . . . . . . . . . . . . . . . . . 4.07(b)
"PPI Index" . . . . . . . . . . . . . . . . . . . . . . . 4.08(b)
"Principals" . . . . . . . . . . . . . . . . . . . . . . 1.01 (within
the definition of
"Change of
Control")
"Recipient Restricted Subsidiary" . . . . . . . . . . . . 1.01 (within
the definition of
"Consolidated Net
Income")
"refinance" (and the terms "refinancing" and
"refinanced" have correlative meanings) . . . . 4.03(c)
"Refinancing Indebtedness" . . . . . . . . . . . . . . . 4.03(c)
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Repurchase" . . . . . . . . . . . . . . . . . . . . . . 4.04(a)
"Restricted Payment" . . . . . . . . . . . . . . . . . . 4.04(a)
"S&P" . . . . . . . . . . . . . . . . . . . . . . . . 1.01 (within the
definition of
"Cash
Equivalents")
"Series A Securities" . . . . . . . . . . . . . . . . . . Introduction
"Series B Securities" . . . . . . . . . . . . . . . . . . Introduction
"Transaction Date" . . . . . . . . . . . . . . . . . . . 1.01 (within
the definition of
"Consolidated
Cash Flow Coverage
Ratio")
"Treasury Rate" . . . . . . . . . . . . . . . . . . . . . 1.01 (within
the definition of
"Make-Whole
Amount")
"Trust Moneys" . . . . . . . . . . . . . . . . . . . . . 10.03(a)
"Unrestricted Investment" . . . . . . . . . . . . . . . . 4.04(a)
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this
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Indenture. The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the SEC.
"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.
Except as expressly provided herein, all other terms used in this
Indenture that are defined by the TIA, or that are, by reference in the TIA,
defined in the Securities Act, shall have the meaning assigned to such terms in
the TIA and in the Securities Act, as the case may be, as they were in effect
as of the date of this Indenture.
SECTION 1.04. RULES OF CONSTRUCTION. For purposes of the Securities
and this Indenture (except as otherwise expressly provided herein or unless the
context otherwise requires):
a term has the meaning assigned to it;
(1) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(2) "or" is not exclusive;
(3) "including" means including, without limitation;
(4) words in the singular include the plural and words in the
plural include the singular;
(5) unsecured indebtedness shall not be deemed to rank
subordinate or junior in right or priority of payment to secured
indebtedness merely because it is unsecured indebtedness; and
(6) the principal amount of any noninterest bearing 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 and accretion of principal on such security shall
not be deemed to be the Incurrence of Indebtedness.
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ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING.
The Securities and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Securities shall
be issued in registered form and may have notations, legends or endorsements as
the Company may deem appropriate and as not inconsistent with the provisions of
this Indenture, or as may be required by law, stock exchange rule or usage.
Each Security shall be dated the date of its authentication. The Securities
shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Securities shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Securities issued in global form shall be substantially in the
form of Exhibit A attached hereto (including the text referred to in footnotes
1 and 3 thereto). Securities issued in definitive form shall be substantially
in the form of Exhibit A attached hereto (but without including the text
referred to in footnotes 1 and 3 thereto). Each Global Security shall
represent such of the outstanding Securities as shall be specified therein and
each shall provide that it shall represent the aggregate amount of outstanding
Securities from time to time endorsed thereon and that the aggregate amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Security to reflect the amount of any increase or
decrease in the amount of outstanding Securities represented thereby shall be
made by the Trustee or the Securities Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
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SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Securities for the Company by
manual or facsimile signature. Two Officers of MAXXAM shall sign the
Securities for the Guarantor by manual or facsimile signature.
If an Officer of the Company or MAXXAM whose signature is on a
Security no longer holds that office at the time a Security is authenticated,
the Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed
by two Officers, authenticate Securities for original issue up to the aggregate
principal amount stated in paragraph 4 of the Securities. The aggregate
principal amount of Securities outstanding at any time may not exceed such
amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities. 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 an Agent to deal with
the Company or an Affiliate or Subsidiary of the Company.
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
("Registrar") and an office or agency where Securities may be presented for
payment ("Paying Agent"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company shall notify the Trustee in writing
of the name and address of any Agent not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries
may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depository with respect to the Global Securities.
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The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Securities Custodian with respect to
the Global Securities.
The Trustee is authorized to enter into a letter of
representations with DTC in the form provided to the Trustee by the Company and
to act in accordance with such letter.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or interest on the Securities, and will notify
the Trustee of any default by the Company in making any such payment; provided,
however, that any money earned on funds invested by the Trustee or any Paying
Agent shall be remitted to the Company. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company) shall have no further liability for the money. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to
the Company, the Trustee shall serve as Paying Agent for the Securities.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a).
If the Trustee is not the Registrar, the Company shall furnish to the Trustee,
at least seven Business Days before each interest payment date and at such
other times as the Trustee may request in writing, a list in such form and as
of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Securities and the Company shall otherwise comply with TIA
Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Securities.
When Definitive Securities are presented by a Holder to the Registrar with a
request:
(x) to register the transfer of the Definitive
Securities; or
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(y) 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 requirements for such transactions are met; provided, however, that the
Definitive Securities presented or surrendered for register of transfer or
exchange:
(i) shall be duly endorsed or
accompanied by a written instruction
of transfer in form satisfactory to
the Registrar duly executed by such
Holder or by his attorney, duly
authorized in writing; and
(ii) in the case of a Definitive Security
that is a Transfer Restricted
Security, such request shall be
accompanied by the following
additional information and
documents, as applicable:
(A) if such Transfer Restricted
Security is being delivered
to the Registrar by a Holder
for registration in the name
of such Holder, without
transfer, a certification to
that effect from such Holder
(in substantially the form of
Exhibit B hereto); or
(B) if such Transfer Restricted
Security is being transferred
to a "qualified institutional
buyer" (as defined in Rule
144A under the Securities
Act) in accordance with Rule
144A under the Securities Act
or pursuant to an exemption
from registration in
accordance with Rule 144 or
Rule 904 under the Securities
Act or pursuant to an
effective registration
statement under the
Securities Act, a
certification to that effect
from such Holder (in
substantially the form of
Exhibit B hereto); or
(C) if such Transfer Restricted
Security is being transferred
in reliance on another
exemption from the
registration requirements of
the Securities Act, a
certification to that effect
from such Holder (in
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substantially the form of
Exhibit B hereto) and an
Opinion of Counsel from such
Holder or the transferee
reasonably acceptable to the
Company and to the Registrar
to the effect that such
transfer is in compliance
with the Securities Act.
(b) 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 Registrar of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with:
(i) if such Definitive Security is a Transfer Restricted
Security, a certification from the Holder thereof (in
substantially the form of Exhibit B hereto) to the
effect that such Definitive Security is being
transferred by such Holder to a "qualified
institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A
under the Securities Act; and
(ii) whether or not such Definitive Security is a Transfer
Restricted Security, written instructions from the
Holder thereof directing the Registrar to make, or to
direct the Securities Custodian to make, an
endorsement on the Global Security to reflect an
increase in the aggregate principal amount of the
Securities represented by the Global Security,
in which case the Registrar shall cancel such Definitive Security in accordance
with Section 2.11 hereof and cause, or direct the Securities Custodian to
cause, in accordance with the standing instructions and procedures existing
between the Depository and the Securities Custodian, the aggregate principal
amount of Securities represented by the Global Security to be increased
accordingly. If no Global Securities are then outstanding, the Company shall
issue and, upon receipt of an authentication order in accordance with Section
2.02 hereof, the Trustee shall authenticate a new Global Security in the
appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The
transfer and exchange of Global Securities or beneficial interests therein
shall be effected through the Depository, in accordance with this Indenture and
the procedures of the Depository therefor,
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which shall include restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global
Security for a Definitive Security.
(i) Any Person having a beneficial interest in a
Global Security may upon request exchange
such beneficial interest for a Definitive
Security. Upon receipt by the Registrar of
written instructions or such other form of
instructions as is customary for the
Depository, from the Depository or its
nominee on behalf of any person having a
beneficial interest in a Global Security,
and, in the case of a Transfer Restricted
Security, the following additional
information and documents (all of which may
be submitted by facsimile):
(A) if such beneficial interest is
being transferred to the
Person designated by the
Depository as being the
beneficial owner, a
certification to that effect
from such Person (in
substantially the form of
Exhibit B hereto); or
(B) if such beneficial interest is
being transferred to a
"qualified institutional
buyer" (as defined in Rule
144A under the Securities
Act) in accordance with Rule
144A under the Securities Act
or pursuant to an exemption
from registration in
accordance with Rule 144 or
Rule 904 under the Securities
Act or pursuant to an
effective registration
statement under the
Securities Act, a
certification to that effect
from the transferor (in
substantially the form of
Exhibit B hereto); or
(C) if such beneficial interest is
being transferred in reliance
on another exemption from the
registration requirements of
the Securities Act, a
certification to that effect
from the transferor (in
substantially the form of
Exhibit B hereto) and an
Opinion of Counsel from the
transferee or transferor
reasonably
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43
acceptable to the Company and
to the Registrar to the effect
that such transfer is in
compliance with the
Securities Act,
in which case the Trustee or the Securities
Custodian, at the direction of the Trustee,
shall, in accordance with the standing
instructions and procedures existing between
the Depository and the Securities Custodian,
cause the aggregate principal amount of
Global Securities to be reduced accordingly
and, following such reduction, the Company
shall execute and, upon receipt of an
authentication order in accordance with
Section 2.02 hereof, the Trustee shall
authenticate and deliver to the transferee a
Definitive Security in the appropriate
principal amount.
(ii) Definitive Securities issued in exchange for
a beneficial interest in a Global Security
pursuant to this Section 2.06(d) shall be
registered in such names and in such
authorized denominations as the Depository,
pursuant to instructions from its direct or
indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall
deliver such Definitive Securities to the
Persons in whose names such Securities are so
registered.
(e) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provision of this Indenture (other than
the provisions set forth in subsection (f) of this Section 2.06), a Global
Security may not be transferred as a whole except by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such nominee
to a successor Depository or a nominee of such successor Depository.
(f) Authentication of Definitive Securities in Absence of
Depository. If at any time:
(i) the Depository for the Securities notifies
the Company that the Depository is unwilling
or unable to continue as Depository for the
Global Securities and a successor Depository
for the Global Securities is not appointed by
the Company within 90 days after delivery of
such notice; or
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44
(ii) the Company, at its sole discretion, notifies
the Trustee in writing that it elects to
cause the issuance of Definitive Securities
under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Securities in an aggregate principal amount equal to the
principal amount of the Global Securities in exchange for such Global
Securities.
(g) Legends.
(i) Except as permitted by the following
paragraphs (ii) and (iii), each Security
certificate evidencing Global Securities or
Definitive Securities (and all Securities
issued in exchange therefor or substitution
thereof) shall bear a legend in substantially
the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED
HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX
XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF
THE ISSUER THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(i) (a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL IF
THE ISSUER SO REQUESTS),
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(ii) TO THE COMPANY OR (iii) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
(ii) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer
Restricted Security represented by a Global
Security) pursuant to Rule 144 under the
Securities Act or pursuant to an effective
registration statement under the Securities
Act:
(A) in the case of any Transfer
Restricted Security that is a
Definitive Security, the Registrar
shall permit the Holder thereof to
exchange such Transfer Restricted
Security for a Definitive Security
that does not bear the legend set
forth in (i) above and rescind any
restriction on the transfer of such
Transfer Restricted Security; and
(B) in the case of any Transfer
Restricted Security represented by a
Global Security, such Transfer
Restricted Security shall not be
required to bear the legend set
forth in (i) above, but shall
continue to be subject to the
provisions of Section 2.06(c)
hereof; provided, however, that with
respect to any request for an
exchange of a Transfer Restricted
Security that is represented by a
Global Security for a Definitive
Security that does not bear the
legend set forth in (i) above, which
request is made in reliance upon
Rule 144, the Holder thereof shall
certify in writing to the Registrar
that such request is being made
pursuant to Rule 144 (such
certification to be substantially in
the form of Exhibit B hereto).
(iii) Notwithstanding the foregoing, upon
consummation of the Exchange Offer, the
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46
Company shall issue and, upon receipt of an
authentication order in accordance with
Section 2.02 hereof, the Trustee shall
authenticate Series B Securities in exchange
for Series A Securities accepted for exchange
in the Exchange Offer, which Series B
Securities shall not bear the legend set
forth in (i) above, and the Registrar shall
rescind any restriction on the transfer of
such Securities, in each case unless the
Holder of such Series A Securities is either
(A) a broker-dealer, (B) a Person
participating in the distribution of the
Series A Securities or (C) a Person who is an
affiliate (as defined in Rule 144A) of the
Company.
(h) Cancellation and/or Adjustment of Global Securities.
At such time as all beneficial interests in Global Securities have been
exchanged for Definitive Securities, redeemed, repurchased or cancelled, all
Global Securities shall be returned to or retained and cancelled by the Trustee
in accordance with Section 2.11 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for
Definitive Securities, redeemed, repurchased or cancelled, the principal amount
of Securities represented by such Global Security shall be reduced accordingly
and an endorsement shall be made on such Global Security, by the Trustee or the
Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and
Exchanges.
(i) To permit registrations of
transfers and exchanges, the
Company shall execute and the
Trustee shall authenticate
Definitive Securities and Global
Securities at the Registrar's
request.
(ii) No service charge shall be made to
a Holder for any registration of
transfer or exchange, but the
Company may require payment of a
sum sufficient to cover any
transfer tax or similar
governmental charge payable in
connection therewith (other than
any such transfer taxes or similar
governmental charge payable upon
exchange or transfer pursuant to
Paragraph 7 of the Securities or
Section 4.07, 4.09, 10.05(f) and
9.05 hereof).
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(iii) All Definitive Securities and
Global Securities issued upon any
registration of transfer or
exchange of Definitive Securities
or Global Securities shall be the
valid obligations of the Company,
evidencing the same debt, and
entitled to the same benefits
under this Indenture, as the
Definitive Securities or Global
Securities surrendered upon such
registration of transfer or
exchange.
(iv) Neither the Company nor the
Registrar shall be required:
(A) to issue, to register the
transfer of or to exchange
Securities for a period of 15
days before the mailing of a
notice of redemption of
Securities selected for
redemption; or
(B) to register the transfer of
or to exchange any Security
selected for redemption in
whole or in part, except the
unredeemed portion of any
Security being redeemed in
part; or
(C) to register the transfer of
or to exchange a Security
between a record date and the
next succeeding interest
payment date.
(v) Prior to due presentment for the
registration of a transfer of any
Security, the Trustee, any Agent,
the Company and MAXXAM may deem
and treat the Person in whose name
any Security is registered as the
absolute owner of such Security
for the purpose of receiving
payment of principal of and
interest on such Securities, and
neither the Trustee, any Agent,
the Company nor MAXXAM shall be
affected by notice to the
contrary.
(vi) The Trustee shall authenticate
Definitive Securities and Global
Securities in accordance with the
provisions of Section 2.02 hereof.
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SECTION 2.07. REPLACEMENT SECURITIES.
If any mutilated Security is surrendered to the Trustee, or
the Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee, upon the written order of the Company signed by two Officers of the
Company, shall authenticate a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Security is
replaced. The Company may charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company (guaranteed by MAXXAM) and shall be entitled to all of the benefits of
this Indenture equally and proportionately with all other Securities duly
issued hereunder.
SECTION 2.08. OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Security
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.09 hereof, a 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 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest on it
ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date,
money sufficient to pay Securities payable on that date, then on and after that
date such Securities shall be deemed to be no longer outstanding and shall
cease to accrue interest.
SECTION 2.09. TREASURY SECURITIES.
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
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person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company, shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that a Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities
upon a written order of the Company signed by two Officers of the Company.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities and as shall be reasonably acceptable to the Trustee.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities.
Holders of temporary Securities shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and 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 all Securities surrendered
for registration of transfer, exchange, payment, replacement or cancellation
and shall destroy cancelled Securities (subject to the record retention
requirement of the Exchange Act). Certification of the destruction of all
cancelled Securities shall be delivered to the Company. The Company may not
issue new Securities to replace Securities that it has paid or that have been
delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted interest in any lawful manner plus, to
the extent lawful, interest payable on the defaulted interest, to the Persons
who are Holders on a subsequent special record date, in each case at the rate
provided in the Securities and in Section 4.01 hereof. The Company shall
notify the Trustee in writing of the amount of defaulted interest proposed to
be paid on each Security and the date of the proposed payment. The Company
shall fix or cause to be fixed each such special record date and payment date,
provided that no such special record date shall be less than 10 days prior to
the related payment date for
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such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders
a notice that states the special record date, the related payment date and the
amount of such interest to be paid.
SECTION 2.13. CUSIP NUMBERS. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use), and the Trustee shall use
CUSIP numbers in notices of redemption or exchange as a convenience to Holders
upon written order of the Company signed by two Officers; provided, that any
such notice shall state that neither the Trustee nor the Company makes any
representation as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of redemption or exchange and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption or exchange shall not be affected by any
defect in or omission of such numbers.
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 aggregate principal amount of
Securities to be redeemed. The Company shall give each notice to the Trustee
provided for in this Section 3.01 at least 45 days before the redemption date
(unless a shorter notice period shall be satisfactory to the Trustee). If less
than all the Securities are to be redeemed, the record date relating to such
redemption shall be selected by the Company and given to the Trustee.
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 such that the redemption is effected on a pro rata basis. The
Trustee shall make the selection from outstanding Securities not previously
called for redemption. The Trustee may select for redemption portions of the
principal amount of Securities that have denominations larger than $1,000.
Securities and portions of them the Trustee selects for redemption shall be in
denominations of $1,000 or an integral 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 in redeeming Securities may
use any method it considers fair and equitable to round up or down so that the
amount of any Securities redeemed shall be in denominations of $1,000 or
integral multiples thereof. If at the time of any such
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selection, the Trustee is not then the Registrar, the Trustee may direct the
Registrar to make the selection in accordance with this Section 3.02. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION. At least 15 days (or 30 days if
legally required by DTC) but not more than 60 days before a date fixed for
redemption of Securities, the Company shall mail a notice of redemption by
first-class mail to each Holder of Securities to be redeemed at such Holder's
last address as it shall appear upon the register of the Securities maintained
by the Company, but any defect therein or failure of the addressee to receive
such notice shall not affect the validity of the proceedings for the redemption
of any of the Securities. Any failure to give such notice to the Holder of any
Securities shall not affect the validity of the proceedings for the redemption
of any other Security.
The notice shall identify the Securities to be redeemed (including
CUSIP numbers if used) 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;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities called for redemption ceases to accrue
on and after the redemption date and the only remaining right of the
Holders is to receive payment of the redemption price and accrued and
unpaid interest thereon to (but not including) the redemption date, if
applicable, upon surrender to the Paying Agent of such Securities; and
(7) the paragraph of the Securities and the section of this
Indenture pursuant to which the Securities are to be redeemed.
At the Company's request, 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
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information required by clauses (1) through (3) at least 60 days prior to any
such redemption date (unless a shorter notice period shall be satisfactory to
the Trustee).
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 thereof stated in the
notice. Upon surrender to the Paying Agent, each such Security shall be paid
at the applicable redemption price thereof stated in the notice, plus accrued
and unpaid interest thereon, if any, to (but not including) the redemption
date. Unless the Company defaults in making the redemption payment, interest
on the Securities called for redemption ceases to accrue on and after the
redemption date (regardless of whether the Securities have been timely
surrendered), and the only remaining right of the Holders thereof shall be to
receive payment of the redemption price thereof, plus accrued and unpaid
interest thereon to (but not including) such redemption date, if applicable,
upon surrender to the Paying Agent of such Securities. If the date fixed for
redemption is an interest payment date, the redemption payment shall not
include accrued interest which shall be paid in the usual manner otherwise
provided for herein.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. On or prior to 11:00
A.M., New York City time, on 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 as provided in Section 2.04) money sufficient
to pay the redemption price of, and accrued interest, if any, on, all
Securities to be redeemed on that date other than Securities or portions
thereof called for redemption on that date which have been delivered by the
Company to the Trustee for cancellation. All money earned on funds held in
trust by the Trustee or any Paying Agent shall be remitted to the Company.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder thereof (at the Company's expense)
a new Security equal in principal amount at maturity in authorized
denominations to the unredeemed portion of the Security surrendered.
SECTION 3.07. CANCELLATION OF REDEEMED SECURITIES. All Securities
surrendered to the Trustee, upon redemption pursuant to the provisions of this
Article 3, shall be forthwith cancelled by it.
SECTION 3.08. NO REPURCHASE RESTRICTIONS. Except as expressly
provided in Article 10, nothing contained in this Indenture or in the
Securities shall be deemed to prohibit or in any way restrict the Company, any
Subsidiary or any Affiliate from
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purchasing or otherwise acquiring any Security or interest therein at any price
or for any consideration whether higher or lower than the redemption price, in
a transaction not effected pursuant to this Article 3.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly pay
the principal of and accrued interest, if any, on the Securities on the dates
and in the manner provided in the Securities and in this Indenture. The
principal of Securities and accrued interest, if any, shall be considered paid
on the date due to the extent that on such date the Trustee or the Paying Agent
holds in accordance with this Indenture money sufficient to pay the principal
of the Securities and accrued interest, if any, then due and the Trustee or the
Paying Agent, as the case may be, is not prohibited from paying such money to
the Securityholders on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal of the Securities
at the rate specified therefor in the Securities, and it shall pay interest on
overdue installments of interest to the extent permitted by applicable law
calculated at the same rate as the rate at which the interest that is in
default was calculated.
SECTION 4.02. SEC REPORTS. Whether or not the Company and MAXXAM are
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, each of the Company and MAXXAM shall file with the SEC (unless the SEC
will not accept the same for filing) and the Trustee within fifteen days after
it is or would have been required to file the same with the SEC, copies of such
annual reports and such information, documents and other reports as it is
required to file pursuant to, or would be required to file if it were subject
to the requirements of, Section 13 or 15(d) of the Exchange Act. In addition,
the Company and MAXXAM shall, for so long as any Securities are outstanding,
furnish to the Holders and to securities analysts and prospective investors,
upon request, the information required to be delivered pursuant to Rule 144
A(d)(4) under the Securities Act. The Company also shall comply with the
provisions of TIA Section 314(a).
SECTION 4.03. LIMITATION ON INDEBTEDNESS.
(a) The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or become liable with respect to, contingently or otherwise
(collectively, "INCUR"), any Indebtedness (including, without duplication,
guarantees of Indebtedness by the
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Company and/or its Restricted Subsidiaries), except that the Company and/or its
Restricted Subsidiaries (other than Scotia Pacific so long as there are any
Timber Notes outstanding) may Incur Indebtedness (including, without
duplication, guarantees of Indebtedness by the Company and/or its Restricted
Subsidiaries) if, immediately after giving effect thereto and the receipt and
application of the proceeds thereof, the Consolidated Cash Flow Coverage Ratio
of the Company would exceed 2.0 to 1.
(b) Notwithstanding the provisions of Section 4.03(a),
the Company and/or its Restricted Subsidiaries (other than, except in the case
of clauses (xi) and (xii) of Section 4.03(b), Scotia Pacific so long as there
are any Timber Notes outstanding) may Incur (without duplication) the
following:
(i) Indebtedness in respect of the Securities;
(ii) aggregate Indebtedness under the Credit
Agreement in an amount not to exceed at any time outstanding
$40,000,000;
(iii) Indebtedness outstanding on the Issue Date,
including the indebtedness outstanding pursuant to the MGI Indenture
or the Pacific Lumber Indenture (other than the Timber Notes which are
governed by clause (xi) of this Section 4.03(b));
(iv) Indebtedness in connection with one or more
letters of credit issued pursuant to (A) self-insurance obligations
(other than workmen's compensation obligations), the aggregate face or
stated amount of which, together with the aggregate amount of any
related reimbursement obligations (without duplication) does not
exceed $1,000,000 at any time outstanding, and (B) workmen's
compensation obligations;
(v) Indebtedness owed by the Company to a Restricted
Subsidiary or owed by a Restricted Subsidiary to the Company or to any
other Restricted Subsidiary of the Company;
(vi) Capital Lease Obligations (other than Capital
Lease Obligations permitted by clause (xii) of this Section 4.03(b))
not exceeding in the aggregate $10,000,000 at any time outstanding;
(vii) Indebtedness under any Interest Rate
Protection Agreement to the extent that such Interest Rate Protection
Agreement is related to payment obligations on Indebtedness otherwise
permitted under this Section 4.03;
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(viii) Indebtedness Incurred in connection with
Indebtedness the interest on which is exempt from Federal income tax
under the Code in an aggregate amount not exceeding $10,000,000 at any
time outstanding;
(ix) Indebtedness owed to or guaranteed by any
governmental agency, instrumentality or other authority Incurred to
provide relief from natural disasters or other similar assistance;
(x) Indebtedness Incurred after August 4, 1993 (in
addition to (and without duplication of) Indebtedness otherwise
permitted by this Section 4.03), in an aggregate principal amount not
exceeding $25,000,000 at any one time outstanding in the case of
Indebtedness Incurred by Pacific Lumber and its Subsidiaries that are
Restricted Subsidiaries, $15,000,000 at any one time outstanding in
the case of Indebtedness Incurred by MGI and its Restricted
Subsidiaries other than Pacific Lumber and its Subsidiaries that are
Restricted Subsidiaries, and $7,500,000 at any one time outstanding in
the case of Indebtedness Incurred by the Company;
(xi) Indebtedness of Scotia Pacific under the Timber
Notes or the Timber Note Indenture or in respect of the Scotia Pacific
Agreements or any other agreement entered into in connection with the
Timber Notes, as the same may be amended from time to time in
accordance with Section 4.11; and
(xii) Capital Lease Obligations of Scotia Pacific.
(c) Notwithstanding anything to the contrary in Section
4.03(a) or (b), the Company and its Restricted Subsidiaries (other than Scotia
Pacific so long as there are any Timber Notes outstanding) may Incur
Indebtedness all of the net proceeds of which (after premiums, reasonable fees,
expenses and costs related to the Incurrence of such Indebtedness) are applied
to renew, extend, restructure, restate, refund or otherwise refinance, in whole
or in part (collectively, "REFINANCE") the Indebtedness permitted by paragraphs
(a) or (b)(i) and (b)(iii) of this Section 4.03 or any one or more successive
refinancings thereof (collectively, "REFINANCING INDEBTEDNESS"), provided that:
(i) such Refinancing Indebtedness is in an aggregate amount not exceeding the
aggregate amount outstanding of the Indebtedness being so refinanced plus an
amount equal to the premiums, reasonable fees and expenses incurred in
connection with such refinancing; (ii) with respect to Refinancing Indebtedness
which refinances Indebtedness of the Company which ranks (pursuant to its
terms) subordinate in right and priority of payment to the Securities, (A) the
final stated maturity date of such Refinancing Indebtedness shall not be
earlier than the final stated maturity date of the
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Indebtedness being so refinanced, (B) in the case of such Refinancing
Indebtedness Incurred by the Company, such Refinancing Indebtedness is ranked
(pursuant to its terms) subordinate in right and priority of payment to the
Securities to the same extent as the Indebtedness being so refinanced, and (C)
such Refinancing Indebtedness has an Average Life at the time it is Incurred
which is not less than the remaining Average Life of the Indebtedness being so
refinanced; and (iii) no Restricted Subsidiary may Incur Refinancing
Indebtedness to refinance Indebtedness of the Company pursuant to this
paragraph (c) of Section 4.03 except to the extent that such Refinancing
Indebtedness constitutes a guarantee by such Restricted Subsidiary of
Indebtedness of the Company (it being understood that such Restricted
Subsidiary may incur Indebtedness to refinance Indebtedness of the Company to
the extent that the Incurrence of such Indebtedness is otherwise permitted by
paragraph (a) or (b) of this Section 4.03).
(d) Any revocation of the designation of an Unrestricted
Subsidiary shall be deemed for purposes of this Section 4.03 to be an
Incurrence of Indebtedness by the Company and its Restricted Subsidiaries of
the Indebtedness of such Unrestricted Subsidiary as of the time of such
revocation to the extent such Indebtedness does not already constitute
Indebtedness of the Company or one of its Restricted Subsidiaries.
(e) Notwithstanding anything to the contrary in Section
4.03(a), (b) or (c), so long as Xxxxx remains a Restricted Subsidiary, Xxxxx
may not Incur after the Issue Date Indebtedness (other than Indebtedness in
respect of the Securities, the MGI Notes and Indebtedness owed to the Company
or MGI and Refinancing Indebtedness in respect of the foregoing) in an
aggregate principal amount exceeding $5,000,000 at any time outstanding.
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS. (a) The Company
shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to:
(i)(x) declare or pay any dividend or make any distribution
on the Company's Capital Stock or the Company's Redeemable Stock
(other than (A) in either case, dividends or distributions payable in
Capital Stock that is not convertible or exchangeable into Redeemable
Stock or Indebtedness of the Company and (B) in the case of the
Company's Redeemable Stock, dividends and distributions in an amount
not exceeding (in addition to any dividends or distributions declared
or paid in accordance with clause (A) above) the amount stated to be
payable on such Redeemable Stock pursuant to the provisions thereof)
or (y) purchase, redeem or otherwise acquire or retire for value any
Capital Stock or Redeemable Stock of the Company (each of the
foregoing in clauses (x) and (y), a "RESTRICTED PAYMENT"),
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(ii) make any Restricted Investment,
(iii) make any Investment in an Unrestricted Subsidiary (an
"UNRESTRICTED INVESTMENT"), or
(iv) redeem, repurchase, defease or otherwise acquire or
retire for value (a "REPURCHASE"), prior to any scheduled maturity,
scheduled repayment or scheduled sinking fund payment, Indebtedness of
the Company which ranks (pursuant to its terms) subordinate in right
and priority of payment to the Securities and which was scheduled to
mature subsequent to the final Stated Maturity of all principal of the
Securities (other than acquisitions of such Indebtedness in
anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the
date of such acquisition),
if, at the time of such Restricted Payment, Restricted Investment, Unrestricted
Investment, or Repurchase:
(A) a Default shall have occurred and be continuing; or
(B) after giving effect to such Restricted Payment, Unrestricted
Investment, Repurchase or Restricted Investment by the Company or any
Restricted Subsidiary, the aggregate amount (i) expended for all such
Restricted Payments and Repurchases subsequent to the Issue Date, (ii)
of all Restricted Investments then outstanding (the amount expended
for such Restricted Payments, Repurchases and Restricted Investments
subsequent to the Issue Date, the amount of any Restricted Investments
outstanding at any time, and the amount of any Restricted Investments
returned or reduced, in each case, if other than in cash or a sum
certain guaranteed, to be the fair market value as determined in good
faith by the Board of Directors, whose determination shall be
evidenced by a resolution of the Board of Directors filed with the
Trustee), and (iii) of all Unrestricted Investments Outstanding, shall
exceed the sum of:
(1) 50% of the aggregate Consolidated Net Income of the
Company accrued on a cumulative basis subsequent to September
30, 1996 (or, in case such aggregate cumulative Consolidated
Net Income shall be a loss, minus 100% of such loss), and
(2) the aggregate net cash proceeds, received by the
Company as capital contributions to the Company subsequent to
September 30, 1996, or from the issue or sale (other than to a
Subsidiary of the Company) subsequent to September 30, 1996,
of Capital Stock (including Capital Stock issued upon the
conversion of,
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or in exchange for, Indebtedness or Redeemable Stock (other
than that issued pursuant to clause (ii) of Section 4.04(c)
below) and including upon exercise of warrants or options or
other rights to purchase such Capital Stock, issued subsequent
to September 30, 1996), or from the issue or sale, subsequent
to September 30, 1996, of any Indebtedness (other than that
issued pursuant to clause (ii) of Section 4.04(c) below) or,
without duplication, other security of the Company convertible
or exercisable into such Capital Stock that has been so
converted or exercised.
(b) Transactions and payments which are permitted
by Section 4.08(b) hereof shall not be considered Restricted Payments or
Restricted Investments.
(c) The foregoing provisions of Section 4.04(a)
shall not be violated by reason of: (i) the payment of any dividend or
distribution or the redemption of any securities within 60 days after the date
of declaration of such dividend or distribution or the giving of the formal
notice of such redemption, if at said date of declaration of such dividend or
distribution or the giving of the formal notice of such redemption, such
dividend, distribution or redemption would have complied with Section 4.04(a)
and so long as no Event of Default exists as of the payment date; (ii)
redemptions, repurchases, defeasances, acquisitions or retirements for value,
of indebtedness of the Company which ranks (pursuant to its terms) subordinate
in right and priority of payment to the Securities from the proceeds of
Refinancing Indebtedness permitted by Section 4.03(c); (iii) the acquisition,
redemption or retirement of any shares of the Company's Capital Stock or any
Indebtedness of the Company in exchange for, or in connection with a
substantially concurrent issuance of, Capital Stock of the Company (provided
such Capital Stock is not exchangeable for or convertible into Redeemable Stock
or Indebtedness of the Company or any of its Subsidiaries); (iv) the repurchase
of the Company's Capital Stock or Redeemable Stock with the proceeds of a
substantially concurrent issuance of the Company's Capital Stock that is not
convertible or exchangeable into Redeemable Stock or Indebtedness of the
Company; (v) the making by Pacific Lumber or its Restricted Subsidiaries of an
Unrestricted Investment to the extent the amount of Unrestricted Investments
Outstanding made pursuant to this clause (v) does not exceed $25 million,
provided that none of the funds used by Pacific Lumber or its Restricted
Subsidiaries to make any such Unrestricted Investment is obtained from the
Company or any Restricted Subsidiary (other than Pacific Lumber or a Restricted
Subsidiary of Pacific Lumber); (vi) dividends or distributions of (A) any
Kaiser Shares that are either (x) released from the Lien of this Indenture
pursuant to the provisions of Section 10.05(c)(1) or (y) Released Kaiser Shares
that are not required to be subjected to the Lien of
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this Indenture upon release from the Lien of the MGI Indenture or (B) cash,
securities or other property received by the Company upon the sale of any such
Kaiser Shares or (C) any proceeds of Kaiser Shares that are (x) released from
the Lien of this Indenture or (y) released from the Lien of the MGI Indenture
and not required to be subjected to the Lien of this Indenture upon such
release; or (vii) the payment of any dividends or distributions by the Company
with fifty percent (50%) of the fair market value (as determined in good faith
by the Board of Directors, whose determination shall be evidenced by a
resolution of the Board of Directors filed with the Trustee) of Salmon Creek
Distributions received by the Company (less 50% of any income taxes payable by
the Company in respect of the receipt by the Company of such Salmon Creek
Distributions, or in respect of the sale or other disposition by the Company of
any non-cash proceeds of such Salmon Creek Distributions (to the extent that
Salmon Creek Distributions dividended or distributed by the Company are the
proceeds of such sales or other dispositions)) provided that: (x) such
dividends or distributions (to the extent made in cash) shall not exceed 50% of
the amount of cash so received by the Company (including any cash realization
of any non-cash proceeds of any Salmon Creek Distribution, but, in each case,
only as, when, and to the extent, received by the Company) in respect of Salmon
Creek Distributions, and (y) such dividends or distributions (to the extent
made in kind with property received by the Company in a Salmon Creek
Distribution) shall be valued at fair market value (as determined in good faith
by the Board of Directors, whose determination shall be evidenced by a
resolution of the Board of Directors filed with the Trustee, except to the
extent the fair market value exceeds $10 million, in which case such
determination shall be made by an investment banking firm with capital of at
least $250 million or a nationally recognized appraiser or other expert
selected by the Company whose opinion shall be delivered, and shall be
acceptable, to the Trustee). No payment or other transfer made pursuant to
clauses (ii) through (vii) of this Section 4.04(c) shall reduce the amount
available for Restricted Payments, Restricted Investments, Unrestricted
Investments or Repurchases pursuant to Section 4.04(a) and the application of
proceeds from the issuance of Capital Stock applied pursuant to clause (iii) or
(iv) of this Section 4.04(c) shall not reduce the amount available for
Restricted Payments, Restricted Investments, Unrestricted Investments or
Repurchases pursuant to Section 4.04(a); provided, however, that the proceeds
from the issuance of Capital Stock pursuant to clauses (iii) and (iv) of this
Section 4.04(c) shall not increase the amount available for Restricted
Payments, Restricted Investments, Unrestricted Investments and Repurchases
under Section 4.04(a).
(d) Notwithstanding anything to the contrary
contained in this Indenture (but subject to the provisions of Section 4.08),
the Company or any of its Restricted Subsidiaries shall be permitted to
contribute any non-cash proceeds received in
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respect of a Salmon Creek Distribution to one or more Unrestricted Subsidiaries
and such contribution(s) shall not constitute an Unrestricted Investment under
this Indenture.
SECTION 4.05. OWNERSHIP OF CAPITAL STOCK OF SUBSIDIARIES AND KAISER
SHARES. (a) The Company will not, and will not permit any Restricted
Subsidiary to, issue, sell, assign, transfer or otherwise dispose of, directly
or indirectly, (i) any Capital Stock or Redeemable Stock of Scotia Pacific (it
being understood that no issue, sale, assignment, transfer or other disposition
of any Capital Stock or Redeemable Stock of any Restricted Subsidiary (other
than Scotia Pacific) shall be deemed to violate this clause (i) provided that
Pacific Lumber shall thereafter continue to own directly all outstanding Stock
of Scotia Pacific), (ii) any Capital Stock or Redeemable Stock of MGI, Pacific
Lumber, Xxxxx or MPI if immediately thereafter, or as a consequence thereof,
the Company shall beneficially own, directly or indirectly, less than a
majority of the Voting Stock and outstanding equity interests (on a fully
diluted basis) of any such company (other than in a transaction governed by and
in compliance with Section 10.13 of this Indenture or Section 10.13 of the MGI
Indenture (as in effect on the date hereof)), (iii) any assets of Scotia
Pacific for consideration consisting in whole or in part of Capital Stock or
Redeemable Stock of another person which is not a Wholly Owned Restricted
Subsidiary, (iv) any Capital Stock or Redeemable Stock of any Restricted
Subsidiary (other than Scotia Pacific, MGI, Pacific Lumber, Xxxxx or MPI)
(except to the Company or to one or more Restricted Subsidiaries) or any assets
of any Restricted Subsidiary (other than Scotia Pacific, MGI, Pacific Lumber,
Xxxxx or MPI) for consideration consisting in whole or in part of Capital Stock
or Redeemable Stock of another person which is not a Wholly Owned Restricted
Subsidiary unless, in the case of this clause (iv), immediately after giving
effect thereto and the receipt and application of the proceeds therefrom, the
Consolidated Cash Flow Coverage Ratio of the Company would be greater than 1.5
to 1; provided, however, that this Section 4.05(a) shall permit, assuming the
Company complies with the provisions of Article 5 and Sections 10.05 and 10.13,
in each case to the extent applicable, the disposition in a single transaction
or in a series of related transactions of all of the Capital Stock of any
Restricted Subsidiary then owned by the Company or its Restricted Subsidiaries
for a consideration consisting of cash or other property (other than Capital
Stock or Redeemable Stock of another person) which is at least equal to the
fair value (as reasonably determined by the Board of Directors of the Company)
of such Capital Stock; and provided, further, that any entity resulting from
any transaction or disposition permitted by clause (iv) of this Section 4.05(a)
shall be or become a Restricted Subsidiary.
(b) Until such time as the maximum number of
Kaiser Shares required to be pledged as Collateral pursuant to this
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Indenture are included in the Collateral, the Company shall not sell, transfer,
assign, pledge or otherwise dispose of any Kaiser Shares (i) to a Subsidiary of
the Company or to MAXXAM or (ii) in violation of any of the provisions of the
MGI Indenture. In addition, the Company shall not sell, transfer, assign,
pledge or otherwise dispose of any Pledged Shares except pursuant to Section
10.05(b)(1), 10.05(c), 10.13 or 5.01 and except for Liens permitted by Section
4.16. Anything in this Indenture to the contrary notwithstanding, the MGI
Notes may, at any time or from time to time, be refinanced pursuant to Section
4.03(c), in whole or in part, with the proceeds of Indebtedness and such
Indebtedness ("MGI Refinancing Indebtedness") may be secured by Liens on (i)
all or any part of the Kaiser Shares or other collateral subject to the Lien
of the MGI Indenture immediately prior to such refinancing and (ii) the
proceeds of such Kaiser Shares or other collateral; provided, however, that, in
the event that any MGI Refinancing Indebtedness is secured by any such Liens,
such Refinancing Indebtedness shall contain provisions for release of
collateral from the Lien thereunder that (except for the maturity date of such
MGI Refinancing Indebtedness) are no less favorable in any material respect
(taken as a whole) to the Holders than the release provisions of the MGI
Indenture.
SECTION 4.06. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES. (a) The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any consensual restriction or
encumbrance on the ability of any such Restricted Subsidiary to (i) pay
dividends or make any other distributions on its Capital Stock or Redeemable
Stock or any other interest or participation in, or measured by, its profits,
in each case, owned by the Company, or pay any Indebtedness owed to the Company
or any Restricted Subsidiary of the Company, (ii) make loans or advances to the
Company or any Restricted Subsidiary of the Company, or (iii) make any transfer
of any of its assets to the Company or a Restricted Subsidiary.
(b) The foregoing shall not prohibit encumbrances or
restrictions existing as of the date hereof or hereafter under or by reason of:
(i) this Indenture, the MGI Indenture or the
Pacific Lumber Indenture;
(ii) the Credit Agreement;
(iii) (A) customary provisions restricting
subletting or assignment of any lease of the Company or any Restricted
Subsidiary of the Company, or (B) customary restrictions imposed on
the transfer of copyrighted or
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patented materials or provisions in agreements that restrict the
assignment of such agreement or any rights thereunder;
(iv) any instrument governing Indebtedness or
other obligations of a person acquired (whether pursuant to a purchase
of stock or assets) by the Company or any Restricted Subsidiary or
applicable to any assets so acquired at the time such person became a
Subsidiary of the Company or such assets were acquired by the Company
or a Restricted Subsidiary (excluding instruments entered into by such
person in connection with, or in contemplation of, its becoming a
Subsidiary of the Company or its assets being acquired by the Company
or any Restricted Subsidiary, as the case may be), which encumbrance
or restriction is not applicable to any person, or the properties or
assets of any person, other than the person or the property or assets
of the person so acquired (including the Capital Stock or Redeemable
Stock thereof) or any entity formed to effect such acquisition, and,
in each case, the monetary proceeds thereof;
(v) Indebtedness or other obligations existing on
the Issue Date;
(vi) the subordination (pursuant to its terms) in
right and priority of payment to Indebtedness of the Company or any of
its Restricted Subsidiaries of any Indebtedness owed by the Company or
any Restricted Subsidiary of the Company to the Company or any of its
other Restricted Subsidiaries, provided, (A) the Indebtedness is
permitted under this Indenture and (B) the Board of Directors has
determined in good faith at the time of the creation of such
encumbrance or restriction that such encumbrance or restriction would
not singly or in the aggregate have a material adverse effect on the
Holders of the Securities;
(vii) restrictions imposed by covenants contained in
any refinancing of Indebtedness or other obligations described in
clauses (i), (ii), (iv), (v) and (ix) of this Section 4.06(b),
provided, that such restrictions are, in the good faith determination
of the Board of Directors, on the whole, not materially more
restrictive than such restrictions contained in such refinanced
Indebtedness;
(viii) restrictions imposed by applicable laws or
regulations or pursuant to condemnation or eminent domain proceedings;
(ix) restrictions on Scotia Pacific and/or any of
its Subsidiaries imposed by the Scotia Pacific Agreements, the Deed of
Trust, the Timber Note Indenture or any other agreements entered into
in connection with the Timber Notes,
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as the same may be amended in accordance with Section 4.11 of this
Indenture;
(x) an agreement which has been entered into for
the sale or disposition of all or substantially all of the Stock or
assets of a Restricted Subsidiary of the Company, provided, however,
that such encumbrances or restrictions are limited to the Stock or
assets being sold or disposed of;
(xi) applicable law and agreements with foreign
governments with respect to assets located in their respective
jurisdictions; or
(xii) customary provisions placing limitations on
the payment of dividends on shares of stock contained in the terms of
Preferred Stock instruments issued in compliance with this Indenture.
(c) The provisions of Section 4.06(a) shall not prohibit (i)
Liens not prohibited by Section 4.10 or (ii) restrictions on the sale or other
disposition of any property securing Indebtedness, provided, that such
Indebtedness is otherwise permitted by this Indenture.
SECTION 4.07. LIMITATION ON ASSET SALES. (a) The Company shall not,
and shall not permit any Restricted Subsidiary to, consummate any Asset Sale,
unless (except in the case of an Asset Sale which is a Taking) (i) the Company
or such Restricted Subsidiary receives consideration at the time of such Asset
Sale at least equal to the fair value of the assets subject to such Asset Sale
(as reasonably determined by the Board of Directors), including the value of
all non-cash consideration, and (ii) at least 75% of the aggregate
consideration (excluding indemnities) received therefor by the Company or such
Restricted Subsidiary is in the form of money or Cash Equivalents. The amount
of any liabilities of the Company or any Restricted Subsidiary of the Company
that is actually assumed by the transferee in such Asset Sale shall be deemed
to be money for purposes of determining the percentage of money and Cash
Equivalent consideration received by the Company and its Restricted
Subsidiaries.
(b) For the purposes of this Section 4.07, "ASSET SALE
OFFER AMOUNT" means the sum of the amount of Net Cash Proceeds from each Asset
Sale by the Company and its Restricted Subsidiaries (excluding the amount of
Net Cash Proceeds from such Asset Sales which have been subjected to a prior
Asset Sale Offer) which, on the 360th day following the consummation of such
Asset Sale (or the 540th day following the consummation of an Asset Sale to the
extent that such Asset Sale is by MGI and/or any Subsidiary of MGI that is a
Restricted Subsidiary (other than Pacific Lumber or any Subsidiary of Pacific
Lumber that is a Restricted Subsidiary) and
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is governed by the terms of the MGI Indenture (an "MGI Asset Sale") or the
590th day following the consummation of an Asset Sale to the extent that such
Asset Sale is by Pacific Lumber and/or any Subsidiary of Pacific Lumber that is
a Restricted Subsidiary, other than Scotia Pacific so long as any Timber Notes
are outstanding, and is governed by the terms of the Pacific Lumber Indenture
(a "PL Asset Sale")), the Company and/or its Restricted Subsidiaries have not
either (i) reinvested, or entered into binding obligations (subject to
customary closing and termination provisions) to reinvest, in additional assets
to be used in one or more lines of business (including capital expenditures) in
which the Company and its Restricted Subsidiaries are engaged as of the Issue
Date (or reasonably related extensions of such lines), or (ii) applied to make
repayments or purchases of the Securities, the MGI Notes or the Pacific Lumber
Senior Notes (or Indebtedness ranking pari passu in right and priority of
payment with the Securities, the MGI Notes or the Pacific Senior Lumber Notes),
provided, that (x) Net Cash Proceeds of any MGI Asset Sale, to the extent not
applied pursuant to the provisions described in clauses (i) and (ii) above,
shall be included in the Asset Sale Offer Amount only to the extent permitted
to be distributed or paid as a dividend pursuant to Section 4.04(a) of the MGI
Indenture as in effect on the date hereof and applicable law on the earlier of
(A) the 450th day following the consummation of such MGI Asset Sale and (B) the
consummation of any offer to purchase MGI Notes which MGI is required to make
with such Net Cash Proceeds pursuant to the MGI Indenture, (y) Net Cash
Proceeds of any PL Asset Sale, to the extent not applied pursuant to the
provisions described in clauses (i) and (ii) above, shall be included in the
Asset Sale Offer Amount only to the extent (A) permitted to be distributed or
paid as a dividend pursuant to Section 4.04(a) of the Pacific Lumber Indenture
and applicable law on the earlier of (1) the 450th day following the
consummation of such PL Asset Sale and (2) the consummation of any offer to
purchase Pacific Lumber Senior Notes which Pacific Lumber is required to make
with such Net Cash Proceeds pursuant to the Pacific Lumber Indenture and (B)
permitted to be distributed or paid as a dividend pursuant to Section 4.04(a)
of the MGI Indenture (as in effect on the date hereof) and applicable law on
the earlier of (1) the 590th day following the consummation of such PL Asset
Sale and (2) the consummation of any offer to purchase MGI Notes which MGI is
required to make with such Net Cash Proceeds pursuant to the MGI Indenture, and
(z) Net Cash Proceeds of any Primary Share Sale by MGI, to the extent not
applied pursuant to the provisions described in clauses (i) and (ii) above,
shall be included in the Asset Sale Offer Amount only to the extent permitted
to be distributed or paid as a dividend pursuant to Section 4.04(a) of the MGI
Indenture (as in effect on the date hereof) on the 270th day following the
consummation of such Primary Share Sale.
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(c) Each Holder shall have the right, at the Holder's
option, to require the Company to apply the Asset Sale Offer Amount to purchase
Securities tendered pursuant to an offer by the Company to purchase Securities
at a purchase price (the "ASSET SALE PURCHASE PRICE") equal to 100% of the
principal amount of the Securities purchased, plus accrued and unpaid interest,
if any, to (but not including) the date of purchase in accordance with the
procedures (including proration in the event of an oversubscription) set forth
in this Section 4.07 (an "ASSET SALE OFFER"); provided, that the Company shall
not be required to (but may in its discretion) make an Asset Sale Offer, unless
the Asset Sale Offer Amount exceeds $25,000,000. No Asset Sale Offer Amount
shall be required to be applied to purchase Securities pursuant to more than
one Asset Sale Offer. Pending application of any Net Cash Proceeds in
accordance with this Section 4.07, the Company or a Restricted Subsidiary, as
the case may be, may invest such Net Cash Proceeds in Cash Equivalents.
(d) Within 30 days following the date on which the Asset
Sale Offer Amount exceeds $25,000,000, the Company shall mail a written notice
of an Asset Sale Offer to the Trustee, the Paying Agent and each Holder (and to
beneficial owners as required by applicable law including, without limitation,
the Exchange Act and the rules and regulations promulgated pursuant thereto)
(the "ASSET SALE OFFER NOTICE"). The Asset Sale Offer Notice shall include a
form of Asset Sale Purchase Notice (as described below) to be completed by the
Holder and shall contain or state:
(1) the Asset Sale Offer Amount, a brief description of
the Asset Sale(s) which have generated Net Cash Proceeds and the
calculation of the Asset Sale Offer Amount;
(2) the date by which the Asset Sale Purchase Notice
pursuant to this Section 4.07 must be delivered to the Paying Agent;
(3) the scheduled date of purchase (the "Asset Sale
Purchase Date") (which shall be no earlier than 30 days and not later
than 60 days following the date on which such Asset Sale Offer Notice
is mailed, subject to compliance with applicable law);
(4) the Asset Sale Purchase Price;
(5) the name and address of the Trustee and the Paying
Agent;
(6) that the Securities must be surrendered to the Paying
Agent;
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(7) that the Asset Sale Purchase Price for any Security
as to which an Asset Sale Purchase Notice has been duly given and not
withdrawn will be paid promptly (subject to proration as described in
clause (d)(8) of this Section 4.07) following the later of the Asset
Sale Purchase Date and the time of surrender of such Security as
described in clause (d)(6) of this Section 4.07;
(8) that if Asset Sale Purchase Notices are given with
respect to Securities having an aggregate Asset Sale Purchase Price in
excess of the Asset Sale Offer Amount pursuant to the Asset Sale
Offer, the Company shall purchase Securities on a pro rata basis (with
such adjustments as may be deemed appropriate by the Company so that
only Securities in denominations of $1,000 or integral multiples
thereof shall be acquired);
(9) the procedures that the Holder must follow to
exercise rights under this Section 4.07 and a brief description of
those rights; and
(10) the procedures for withdrawing an Asset Sale Purchase
Notice.
The Trustee and the Paying Agent shall be under no obligation to ascertain the
occurrence of an Asset Sale. The Trustee and the Paying Agent may conclusively
assume, absent contrary notice from the Company, that no Asset Sale has
occurred.
(e) To accept the offer to purchase Securities described
in Section 4.07(c), a Holder must deliver a written notice of purchase (an
"ASSET SALE PURCHASE NOTICE") to the Paying Agent at any time prior to the
close of business on the third Business Day immediately preceding the Asset
Sale Purchase Date, stating:
(1) the name of the Holder, the principal amount and the
certificate number or numbers of the Security or Securities which the
Holder will deliver to be purchased, and a statement that the Asset
Sale Offer is being accepted with respect to such Securities;
(2) the portion of the principal amount of any Security
which the Holder will deliver to be purchased, which portion must be
$1,000 principal amount or an integral multiple thereof; and
(3) that such Security or Securities shall be purchased
on the Asset Sale Purchase Date pursuant to the terms and conditions
specified in the Securities and this Indenture.
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The delivery of a Security, by hand or by registered mail
prior to, on or after the Asset Sale Purchase Date (together with all necessary
endorsements), to the Paying Agent shall be a condition to the receipt by the
Holder of the Asset Sale Purchase Price therefor; provided, however, that such
Asset Sale Purchase Price shall be so paid pursuant to this Section 4.07 only
if the Security or Securities so delivered to the Paying Agent shall conform in
all respects to the description thereof set forth in the related Asset Sale
Purchase Notice; and provided, further, that the Company shall have no
obligation to purchase any Securities with respect to which an Asset Sale
Purchase Notice has not been received by the Paying Agent prior to the close of
business on the third Business Day immediately preceding the Asset Sale
Purchase Date.
In the event that the Asset Sale Offer described in this
Section 4.07 shall be accepted in accordance with the terms hereof with respect
to any portion of a Security, the Company shall purchase from the Holder
thereof (subject to proration pursuant to Section 4.07(f)), pursuant to this
Section 4.07, such portion of such Security if the principal amount of such
portion is $1,000 or an integral multiple of $1,000. In connection with a
Security purchased in part, the Company shall execute and the Trustee shall
authenticate for delivery to the Holder thereof, a new Security equal in
principal amount to that of the unpurchased portion of the Security
surrendered.
(f) Upon receipt by the Paying Agent of the Asset Sale
Purchase Notice as specified in Section 4.07(e), the Holder of the Security (or
portion thereof) in respect of which such Asset Sale Purchase Notice was given
shall (subject to proration pursuant to this Section 4.07(f) and unless such
Asset Sale Purchase Notice is withdrawn as specified in the following
paragraph) thereafter be entitled to receive the Asset Sale Purchase Price with
respect to such Security (or portion thereof). Such Asset Sale Purchase Price
shall be due and payable as of the Asset Sale Purchase Date and shall be paid
to such Holder promptly following the later of (i) the Asset Sale Purchase Date
(provided the conditions in Section 4.07(e), as applicable, have been
satisfied) and (ii) the date of delivery of such Security to the Paying Agent
by the Holder thereof in the manner required by Section 4.07(e).
An Asset Sale Purchase Notice may be withdrawn by means of a
written notice of withdrawal delivered to the Paying Agent at any time on or
prior to the close of business on the second Business Day preceding the Asset
Sale Purchase Date, specifying:
(1) the certificate number or numbers of the Security or
Securities in respect of which such notice of withdrawal is being
submitted;
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(2) the principal amount of the Security or Securities
with respect to which such notice of withdrawal is being submitted;
and
(3) the principal amount, if any, of such Security or
Securities which remains subject to the original Asset Sale Purchase
Notice, and which has been or will be delivered for purchase by the
Company.
If, at the close of business on the second Business Day
preceding the Asset Sale Purchase Date, the Asset Sale Purchase Price of all
Securities for which Asset Sale Purchase Notices have been given and not
withdrawn exceeds the Asset Sale Offer Amount, the Paying Agent shall select
the Securities to be purchased such that each properly tendering Holder shall
receive a portion of the Asset Sale Offer Amount on a pro rata basis (with such
adjustments as may be deemed appropriate by the Paying Agent so that only
Securities in denominations of $1,000 principal amount or integral multiples
thereof shall be purchased). The Paying Agent shall promptly return to the
Holder thereof any Securities surrendered which the Company shall not be
required to purchase pursuant to this Section 4.07.
(g) On or prior to the Asset Sale Purchase Date, the
Company shall deposit with the Paying Agent (which, for purposes of this
Section 4.07, may not be the Company or a Subsidiary or an Affiliate of either)
an amount of money (not exceeding the Asset Sale Offer Amount) in immediately
available funds sufficient to pay the aggregate Asset Sale Purchase Price of
the Securities (or portions thereof) which are to be purchased on the Asset
Sale Purchase Date. If money sufficient to pay the Asset Sale Purchase Price
of all Securities (or portions thereof) to be purchased on the Asset Sale
Purchase Date is deposited with the Paying Agent as of the Asset Sale Purchase
Date, interest shall cease to accrue, whether or not any such Security is
delivered to the Paying Agent, on such Securities (or portions thereof) on and
after the Asset Sale Purchase Date, and the Holders thereof shall have no other
rights as such, other than the right to receive the Asset Sale Purchase Price
(and, in the case of a Security purchased in part, a new Security equal in
principal amount to the unpurchased portion of the Security surrendered) upon
surrender of such Securities.
(h) In connection with any offer to purchase, or any
purchase of, Securities under this Section 4.07, the Company shall (i) comply
with the Exchange Act, if applicable, (ii) file any required Schedules of the
Exchange Act, if applicable, and (iii) otherwise comply with all Federal and
state securities laws regulating the purchase of the Securities.
(i) The Paying Agent shall return to the Company any
money, together with interest or dividends, if any, thereon held by
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it for the payment of the Asset Sale Purchase Price of the Securities that
remain unclaimed as provided in Section 8.04 hereof; provided, however, that to
the extent that the aggregate amount of money deposited by the Company pursuant
to Section 4.07(g) exceeds the aggregate Asset Sale Purchase Price of the
Securities or portions thereof to be purchased on the Asset Sale Purchase Date,
then promptly after the Asset Sale Purchase Date, the Paying Agent shall return
any such excess to the Company together with interest or dividends, if any,
thereon.
(j) Notwithstanding anything to the contrary contained in
this Section 4.07, this Section 4.07 shall not prohibit or otherwise apply to
(i) a consolidation or merger of the Company or a transfer, conveyance, sale or
lease of all or substantially all of the Company's assets, provided that any
such transaction complies with the provisions and the terms set forth in
Section 5.01 or (ii) any transaction permitted by Section 4.04.
SECTION 4.08. LIMITATION ON TRANSACTIONS WITH AFFILIATES. (a) The
Company shall not, and shall not permit any of its Restricted Subsidiaries or
Salmon Creek (or any successor to Salmon Creek or any transferee of
substantially all of the assets of Salmon Creek so long as such successor or
transferee is a Subsidiary of the Company) or any Unrestricted Subsidiary to
which the Company or any of its Restricted Subsidiaries makes a contribution of
non-cash proceeds received in respect of a Salmon Creek Distribution pursuant
to Section 4.04(d) (each, a "Company Party") to, enter into any transaction or
transactions with any Affiliate of the Company, unless: (i) the terms thereof
are not less favorable to the Company Party than those that could reasonably be
obtained in a comparable transaction at such time with a person who is not an
Affiliate of the Company; (ii) such transaction shall have been approved as
meeting such standard, in good faith, by a majority of the members of the Board
of Directors; and (iii) with respect to any transaction or series of related
transactions involving payments and consideration in excess of $10,000,000, the
Company shall have obtained and made available to the Trustee an opinion of a
nationally recognized investment banking firm stating that the terms of such
transaction or series of transactions are fair from a financial point of view
to the Company Party. The Company shall deliver to the Trustee, within 60 days
after the end of each fiscal quarter of the Company, an Officers' Certificate
which shall briefly describe and specify the aggregate dollar amount of
transactions (other than the transactions set forth in Section 4.08(b), except
clause (vii) thereof)) with Affiliates of the Company occurring during such
fiscal quarter.
(b) The provisions contained in Section 4.08(a) shall not
apply to: (i) any transaction permitted by Section 4.04(a) or Section
4.04(c)(i), (v), (vi) and (vii) of this Indenture; (ii) the
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execution and delivery of, the performance of, and the making of any payments
required by, the Tax Sharing Agreements; (iii) the execution and delivery of,
the performance of, and the making of any payments required by, the Bering
Agreement; (iv) the making of payments to MAXXAM for reimbursement for actual
services provided thereby to the Company and its Subsidiaries based on actual
costs and an allocable share of overhead expenses consistent with prior
practices; (v) compensation, indemnification and other benefits paid or made
available to officers, directors and employees of any Company Party for
services rendered in such person's capacity as an officer, director, or
employee (including reimbursement or advancement of reasonable out-of-pocket
expenses and directors' and officers' liability insurance); (vi) the execution
and delivery of, the performance of, and the making of any payments required
by, the MXM Guaranty; (vii) the execution, delivery and performance of, and the
making of any payments or the taking of any action required or contemplated by,
any agreements initially entered into by a Company Party with one or more
Affiliates, in which MAXXAM (and no other Affiliate) has an equity interest of
30% or less (each, a "Headwaters Joint Venture") relating to the ownership,
holding, development or disposition of any non-cash or non-Cash Equivalent
property (whether an individual property or a group of properties) received by
Pacific Lumber or any of its Subsidiaries as a Salmon Creek Distribution in
connection with or relating to the transactions referred to in or contemplated
by the information set forth in the Offering Memorandum under the caption
"Business of the Company--Headwaters Agreement" (each, an "Initial Salmon Creek
Agreement") provided that each Initial Salmon Creek Agreement satisfies the
provisions of Section 4.08(a) and that each subsequent agreement entered into
by a Company Party and any transaction between any Headwaters Joint Venture and
any Affiliate subsequent to the execution of an Initial Salmon Creek Agreement
that relate to the subject matter of such Initial Salmon Creek Agreement
satisfies the provisions of clauses (i) and (ii) of Section 4.08(a); provided,
further, that (a) each such subsequent agreement involving payments and other
consideration paid to or received by any Company Party, or involving payments
and other consideration paid to or received from any Headwaters Joint Venture
by any Affiliate, in excess of $10.0 million shall satisfy the requirements of
Section 4.08(a), and (b) any material amendment of any Initial Salmon Creek
Agreement or any such subsequent agreement shall be on terms (considered as a
whole) no less favorable to any Company Party, relative to MAXXAM, than the
terms of such Initial Salmon Creek Agreement; (viii) the execution, delivery
and performance of any agreements granting any Lien permitted by clause (xv) of
Section 4.10 or any amendment to any such agreement, to the extent that such
agreement or amendment thereto does not create or evidence Indebtedness of the
Company or any Restricted Subsidiary of the Company; and (ix) the making of the
loan evidenced by the Intercompany Note and any amendment to the Intercompany
Note to the extent such amendment does not materially adversely affect the
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Company's ability to pay its obligations on the Securities; in the case of
clauses (iii) and (iv) of this Section 4.08(b), to the extent the aggregate
amount of payments pursuant to such clauses does not exceed $5.0 million in any
calendar year, which amount shall be adjusted for each calendar year,
commencing with the calendar year beginning January 1, 1996 (each, an
"Adjustment Period"), by multiplying such amount by a fraction, the numerator
of which shall be the then most recent Producer Price Index (Lumber and Wood
Products Commodity Groups) (Standard Industrial Classification No. 2400), as
published by the United States Department of Labor, Bureau of Labor Statistics
(the "PPI Index"), in effect on the first day of such Adjustment Period, and
the denominator of which shall be the most recent PPI Index published as of
January 1, 1993.
SECTION 4.09. CHANGE OF CONTROL. (a) Upon the first Change of
Control to occur after the date of this Indenture (but not upon any subsequent
Change of Control), each Holder shall have the right, at the Holder's option,
to require that the Company purchase any or all of such Holder's Securities at
a purchase price (the "CHANGE OF CONTROL PURCHASE PRICE") in cash equal to 101%
of the principal amount of the Securities, plus accrued and unpaid interest, if
any, to (but not including) the scheduled date of purchase (the "CHANGE OF
CONTROL PURCHASE DATE"), in accordance with the procedures set forth in this
Section 4.09.
(b) Within 30 days following the first occurrence of a
Change of Control following the date of this Indenture, the Company shall mail
a written notice of Change of Control to the Trustee, the Paying Agent and each
Holder (and to beneficial owners as required by applicable law, including
without limitation, the rules and regulations promulgated under the Exchange
Act) (the "CHANGE OF CONTROL OFFER NOTICE"). The Change of Control Offer
Notice shall include a form of Change of Control Purchase Notice (as described
below) to be completed by the Holder and shall contain or state:
(1) a brief description of the Change of Control and the
date of such Change of Control;
(2) the date by which the Change of Control Purchase
Notice pursuant to this Section 4.09 must be delivered to the Paying
Agent;
(3) the Change of Control Purchase Date (which shall be
no earlier than 30 days and not later than 60 days following the date
on which such Change of Control Offer Notice is mailed, subject to
compliance with applicable law);
(4) the Change of Control Purchase Price;
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(5) the name and address of the Trustee and the Paying
Agent;
(6) that the Securities must be surrendered to the Paying
Agent;
(7) that the Change of Control Purchase Price for any
Security as to which such Change of Control Purchase Notice has been
duly given and not withdrawn will be paid promptly following the later
of the Change of Control Purchase Date and the time of surrender of
such Security as described in clause (b)(6) of this Section 4.09;
(8) the procedures that the Holder must follow to
exercise rights under this Section 4.09 and a brief description of
those rights; and
(9) the procedures for withdrawing such Change of Control
Purchase Notice.
The Trustee and the Paying Agent shall be under no obligation
to ascertain the occurrence of a Change of Control. The Trustee and the Paying
Agent may conclusively assume, absent contrary notice from the Company, that no
Change of Control has occurred.
(c) To accept the offer to purchase Securities
described in Section 4.09(a), a Holder must deliver a written notice of
purchase (a "CHANGE OF CONTROL PURCHASE NOTICE") to the Paying Agent at any
time prior to the close of business on the third Business Day immediately
preceding the Change of Control Purchase Date, stating:
(1) the name of the Holder, the principal amount and the
certificate number or numbers of the Security or Securities which the
Holder will deliver to be purchased, and a statement that the offer to
purchase is being accepted with respect to such Securities;
(2) the portion of the principal amount of any Security
which the Holder will deliver to be purchased, which portion must be
$1,000 principal amount or an integral multiple thereof; and
(3) that such Security or Securities shall be purchased
on the Change of Control Purchase Date pursuant to the terms and
conditions specified in the Securities and this Indenture.
The delivery of a Security, by hand or by registered mail
prior to, on or after the Change of Control Purchase Date (together with all
necessary endorsements), to the Paying Agent shall be a
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condition to the receipt by the Holder of the Change of Control Purchase Price
therefor; provided, however, that such Change of Control Purchase Price shall
be so paid pursuant to this Section 4.09 only if the Security or Securities so
delivered to the Paying Agent shall conform in all respects to the description
thereof set forth in the related Change of Control Purchase Notice; and
provided, further, that the Company shall have no obligation to purchase any
Securities with respect to which a Change of Control Purchase Notice has not
been received by the Paying Agent prior to the close of business on the third
Business Day immediately preceding the Change of Control Purchase Date.
In the event that the offer to purchase described in Section
4.09(a) shall be accepted in accordance with the terms hereof with respect to
any portion of a Security, the Company shall purchase from the Holder thereof,
pursuant to this Section 4.09, such portion of such Security if the principal
amount of such portion is $1,000 or an integral multiple of $1,000. In
connection with a Security purchased in part, the Company shall execute and the
Trustee shall authenticate for delivery to the Holder thereof, a new Security
equal in principal amount to the unpurchased portion of the Security
surrendered.
(d) Upon receipt by the Paying Agent of the Change
of Control Purchase Notice as specified in Section 4.09(c), the Holder of the
Security (or portion thereof) in respect of which such Change of Control
Purchase Notice was given shall (unless such Change of Control Purchase Notice
is withdrawn as specified in the following paragraph) thereafter be entitled to
receive the Change of Control Purchase Price with respect to such Security (or
portion thereof). Such Change of Control Purchase Price shall be due and
payable as of the Change of Control Purchase Date and shall be paid to such
Holder promptly following the later of (i) the Change of Control Purchase Date
(provided the conditions in Section 4.09(c), as applicable, have been
satisfied) and (ii) the date of delivery of such Security to the Paying Agent
by the Holder thereof in the manner required by Section 4.09(c).
A Change of Control Purchase Notice may be withdrawn by means
of a written notice of withdrawal delivered to the Paying Agent at any time on
or prior to the close of business on the Business Day next preceding the Change
of Control Purchase Date, specifying:
(1) the certificate number or numbers of the Security or
Securities in respect of which such notice of withdrawal is being
submitted;
(2) the principal amount of the Security or Securities
with respect to which such notice of withdrawal is being submitted;
and
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(3) the principal amount, if any, of such Security or
Securities which remains subject to the original Change of Control
Purchase Notice, and which has been or will be delivered for purchase
by the Company.
(e) On or prior to the Change of Control Purchase
Date, the Company shall deposit with the Paying Agent (or, if the Company or a
Subsidiary or an Affiliate of either of them is acting as Paying Agent, shall
segregate and hold in trust) an amount of cash in immediately available funds
sufficient to pay the aggregate Change of Control Purchase Price of all the
Securities (or portions thereof) which are to be purchased on the Change of
Control Purchase Date. If money sufficient to pay the Change of Control
Purchase Price of all Securities (or portions thereof) to be purchased on the
Change of Control Purchase Date is deposited with the Paying Agent as of the
Change of Control Purchase Date, interest shall cease to accrue, whether or not
such Security is delivered to the Paying Agent, on such securities (or portions
thereof) on and after the Change of Control Purchase Date, and the Holders
thereof shall have no other rights as such, other than the right to receive the
Change of Control Purchase Price (and, in the case of a Security purchased in
part, a new Security equal in principal amount to the unpurchased portion of
the Security surrendered) upon surrender of such Securities.
(f) In connection with any offer to purchase, or
any purchase of, Securities pursuant to this Section 4.09, the Company shall
(i) comply with the Exchange Act and the applicable rules and regulations of
the Exchange Act (or any successor provision thereof), if applicable, (ii) file
the Schedules required by the Exchange Act, if applicable, and (iii) otherwise
comply with all Federal and state securities laws regulating the purchase of
the Securities.
(g) The Paying Agent shall return to the Company
any money, together with interest or dividends, if any, thereon held by it for
the payment of the Change of Control Purchase Price of the Securities that
remain unclaimed as provided in Section 8.04 hereof; provided, however, that to
the extent that the aggregate amount of money deposited by the Company pursuant
to Section 4.09(e) exceeds the aggregate Change of Control Purchase Prices of
the Securities (or portions thereof) to be purchased on the Change of Control
Purchase Date, then promptly after the Change of Control Purchase Date, the
Paying Agent shall return any such excess to the Company together with interest
or dividends, if any, thereon.
SECTION 4.10. LIMITATION ON LIENS. The Company shall not, and shall
not permit any of its Restricted Subsidiaries to, incur, assume, suffer to
exist, create or otherwise cause to be effective Liens upon any of their
respective assets to secure Indebtedness, except for:
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(i) Liens in existence on the Issue Date;
(ii) Liens securing all or any Indebtedness outstanding
under the Credit Agreement;
(iii) Liens incurred or pledges and deposits in connection
with workers' compensation, unemployment insurance and other social
security benefits, leases, appeal bonds and other obligations of like
nature incurred by the Company or any Restricted Subsidiary in the
ordinary course of business;
(iv) Liens imposed by law, including, without limitation,
mechanics', carriers', warehousemen's, materialmen's, suppliers' and
vendors' Liens, incurred by the Company or any Restricted Subsidiary
in the ordinary course of business;
(v) zoning restrictions, easements, licenses, covenants,
reservations, restrictions on the use of real property or minor
irregularities of title incident thereto, which do not in the
aggregate have a material adverse effect on the operation of the
business of the Company or its Restricted Subsidiaries taken as a
whole;
(vi) Liens for ad valorem, income or property taxes or
assessments and similar charges either (A) not delinquent or (B)
contested in good faith by appropriate proceedings and as to which the
Company has set aside on its books reserves to the extent required by
GAAP;
(vii) Liens in respect of purchase money Indebtedness
incurred to acquire assets or Stock provided that such Liens are
limited to the assets or Stock acquired with the proceeds of such
Indebtedness (and the proceeds of such assets or Stock);
(viii) Liens securing Indebtedness permitted by Section
4.03(c) which refinances secured Indebtedness, so long as such Liens
are limited to the collateral which secures the Indebtedness being
refinanced and the proceeds of such collateral;
(ix) Liens on any assets or the Stock of any Subsidiary of
the Company which assets or Stock are acquired by the Company or a
Restricted Subsidiary subsequent to the date of this Indenture and
which Liens were in existence on or prior to the acquisition of such
assets or the Stock of such Subsidiary (to the extent that such Liens
were not created in contemplation of such acquisition); provided that
such Liens are limited to the assets so acquired or the Stock of such
acquired Subsidiary (or the entity organized to effect such
acquisition) and the proceeds thereof;
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(x) Liens securing Indebtedness permitted by clauses (vi),
(viii), (ix), or (xii) of Section 4.03(b), provided, in each such
case, that such Liens are limited to the assets financed with the
proceeds of the Indebtedness incurred pursuant to such provisions (and
the proceeds of such assets);
(xi) Liens securing Indebtedness under any Interest Rate
Protection Agreement permitted by Section 4.03(b)(vii), provided, that
such Liens are limited to the collateral which secures the
Indebtedness to which such Interest Rate Protection Agreement relates;
(xii) Liens imposed pursuant to condemnation or eminent
domain or substantially similar proceedings or in connection with
compliance with environmental laws or regulations;
(xiii) Liens granted pursuant to the Timber Notes, the Timber
Note Indenture or the Deed of Trust, in connection with the Timber
Notes or in connection with any of the Scotia Pacific Agreements, or
in connection with any other agreement entered into in connection with
the Timber Notes;
(xiv) other Liens securing Indebtedness not exceeding
$25,000,000 in aggregate principal amount;
(xv) Liens on assets referred to in clause (vi) of Section
4.04(c) and on the proceeds of such assets; and
(xvi) Liens in favor of the Trustee pursuant to this
Indenture, Liens in favor of the trustee under and pursuant to the MGI
Indenture and Liens in favor of the trustee under and pursuant to the
Pacific Lumber Indenture.
SECTION 4.11. AMENDMENT OF SCOTIA PACIFIC AGREEMENTS OR INTERCOMPANY
NOTE. The Company shall not permit Scotia Pacific to agree to amend the Timber
Note Indenture, the Deed of Trust, or any of the Scotia Pacific Agreements,
unless such amendment (i) is to cure any ambiguity, omission, defect or
inconsistency, or to add to the covenants of Scotia Pacific for the benefit of
the Company or the Holders or to surrender any right or power conferred in the
Master Purchase Agreement on Scotia Pacific, or (ii) does not materially
adversely affect the ability of the Company to pay principal or interest on the
Securities when due. The Company shall not agree to any amendment or
modification of the Intercompany Note unless such amendment (i) is to cure an
ambiguity, omission, defect or inconsistency, or to add to the covenants of
MAXXAM for the benefit of the Company or the Holders or (ii) does not
materially adversely affect the ability of the Company to pay principal or
interest on the Securities when due.
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SECTION 4.12. 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 whether or not the signers know of any Default
that occurred during such period. If they do, the Officers' Certificate shall
describe the Default and its status. Such Officers' Certificates shall comply
with TIA Section 314(a)(4).
SECTION 4.13. USE OF PROCEEDS. The Company shall use the net
proceeds from the offering and sale of the Securities as set forth in the
Offering Memorandum under the caption "Use of Proceeds." In addition, while
any Series A Securities remain outstanding that have not been transferred in a
transaction registered under the Securities Act, the Company shall not use any
proceeds from the sale of such Series A Securities for the purpose of buying or
carrying (within the meaning of the margin regulations (Regulations G and U)
issued by the Board of Governors of the Federal Reserve System) any margin
stock (within the meaning of such regulations).
SECTION 4.14. CORPORATE EXISTENCE. Subject to Article 5, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence, rights (charter and statutory) and
franchises; provided, however, that the Company shall not be required to
preserve any such right or franchise if its Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company.
SECTION 4.15. LIMITATION ON STATUS AS INVESTMENT COMPANY. Neither
the Company nor any of its Restricted Subsidiaries shall become an "investment
company" (as that term is defined in the Investment Company Act of 1940, as
amended).
SECTION 4.16. LIMITATION ON LIENS ON PLEDGED SHARES AND INTERCOMPANY
NOTE. The Company covenants that it will not, and will not permit any
Subsidiary of the Company to, directly or indirectly, create, incur, assume or
permit to exist, will defend such Pledged Shares and Intercompany Note against,
and will take such action as is necessary to remove, any Lien or claim on or in
respect of any Pledged Shares or the Intercompany Note, except (i) the Liens
created by this Indenture, (ii) Liens for taxes or assessments or other
governmental charges or levies not yet due or payable under law or being
contested in good faith by appropriate proceedings, (iii) Liens arising by
operation of law in the ordinary course of business and with respect to amounts
not overdue for a period of more than 90 days or being contested in good faith
by appropriate proceedings and (iv) judgment Liens and other similar Liens
arising in connection with court proceedings (provided, that the execution or
other enforcement thereof is effectively stayed within 60 days following entry
of judgment and
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the claims secured thereby are being actively contested in good faith and by
appropriate proceedings).
SECTION 4.17. DECLARATION AND PAYMENT OF DIVIDENDS BY MGI. The
Company shall cause MGI, to the extent that there exists any consensual
restriction or encumbrance on MGI's ability to pay dividends or make any other
distributions on its Capital Stock ("Dividend Encumbrances"), to declare and
pay dividends to its stockholders to the maximum extent permitted by the
instruments or other agreements containing such Dividend Encumbrances, unless
the Board of Directors of MGI determines in good faith (whose determination
shall be evidenced by a resolution of the Board of Directors filed with the
Trustee) that the declaration or payment of such dividend would be detrimental
to the capital and other operating needs of MGI.
SECTION 4.18. RELEASES FROM LIEN OF MGI INDENTURE. To the extent
that collateral released from the Lien of the MGI Indenture is required to be
pledged as Collateral pursuant to this Indenture, the Company shall seek the
release of such collateral from the Lien of the MGI Indenture promptly after it
becomes eligible for such release pursuant to the terms of the MGI Indenture.
Anything in this Indenture to the contrary notwithstanding, it is understood
and agreed that this Indenture does not create any Lien or claim on or in
respect of any collateral subject to the Lien of the MGI Indenture.
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. Except as
permitted by Section 10.13, the Company shall not consolidate with or merge
with or into, or convey, transfer or lease all or substantially all of its
assets to, any person or group of related persons in a single transaction or
series of related transactions, or permit any of its Restricted Subsidiaries to
enter into any such transaction or transactions if such transaction or
transactions in the aggregate would result in a transfer of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
on a consolidated basis to any person other than the Company, unless (except as
permitted by Article 10):
(i) the resulting, surviving or transferee person (if not
the Company) shall be organized and existing under the laws of the
United States of America or any State thereof or the District of
Columbia and such entity shall expressly assume, by supplemental
indenture hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee,
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all the obligations of the Company under the Securities and this
Indenture, and such entity and/or each other person that, upon
consummation of such transaction or transactions, obtains ownership of
any portion of the Collateral (to the extent such Collateral is not
released from the Lien of this Indenture in accordance with the terms
of this Indenture) shall grant a security interest (of like tenor to
the security interest granted on the Issue Date with respect to such
Collateral pursuant to Section 10.01(a) or to the security interest
granted subsequent to the Issue Date with respect to such Collateral
pursuant to any other provision of this Indenture, as applicable) in
such Collateral, and shall expressly assume, by supplemental indenture
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company with respect to such
Collateral set forth in Article 10;
(ii) immediately after giving effect to such transaction,
no Default shall have happened and be continuing;
(iii) except in the case of a merger, or transfer of all or
substantially all assets, of a Restricted Subsidiary into or to the
Company or into or to another Restricted Subsidiary, immediately after
giving effect to such transaction, the Consolidated Cash Flow Coverage
Ratio of the Company or the surviving entity shall exceed 2.0 to 1;
(iv) the Company shall have delivered to the Trustee an
Officers' Certificate to the foregoing effect and an Opinion of
Counsel, stating that such consolidation, merger or transfer,
conveyance or lease (other than the calculation of the Consolidated
Cash Flow Coverage Ratio as to which counsel need not opine) and such
supplemental indenture comply with this Indenture; and
(v) the Lien of this Indenture on the Collateral in favor
of the Trustee for the benefit of Holders of the Securities has not
been materially impaired in contravention of the provisions of this
Indenture as a result of such transaction or transactions; provided,
that MGI may merge or consolidate with or transfer substantially all
of its assets to a Restricted Subsidiary of the Company pursuant to a
transaction in compliance with the provisions of Section 10.13.
The resulting, surviving or transferee person (if other than the
Company which executed this Indenture) shall succeed to, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Company had been named as the Company herein and the Company
(except in the event of a lease of all or substantially all of the Company's
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assets) shall be relieved of its obligations under this Indenture and
the Securities. Each person that becomes a pledgor with respect to
any Collateral upon consummation of such transaction or transactions
shall succeed to, and may exercise every right and power of, the
Company with respect to such Collateral prior to such consummation
with the same effect as if such person had originally been a pledgor
with respect to such Collateral, and each person who ceases to be such
a pledgor upon such consummation shall be relieved of its obligations
as a pledgor in respect of such Collateral.
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 the same becomes due and payable 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 and payable at its Stated
Maturity, upon optional or special redemption, upon declaration or
otherwise, including any failure by the Company to redeem or
repurchase any of the Securities when required pursuant to Sections
4.07, 4.09 and 10.05(f) of this Indenture or paragraphs 5 or 7 of the
Securities;
(3) the Company defaults in the performance of, or
breaches, any covenant or agreement on the part of the Company
contained in this Indenture (other than a covenant or agreement on the
part of the Company a default in whose performance or breach is
specifically addressed elsewhere in this Section 6.01), and
continuance of such default or breach for a period of 60 days after
written notice thereof, which must specify the default or breach,
demand it be remedied and state that the notice is a "Notice of
Default," has been given to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding;
(4) there is a default under any bond, debenture, note or
other evidence of Indebtedness of the Company or any Restricted
Subsidiary, or under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness of the Company or any Restricted Subsidiary, whether such
Indebtedness now exists or is hereafter created, which default
involves the
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failure to pay principal on Indebtedness at the final maturity thereof
or which has resulted in such Indebtedness becoming or being declared
due and payable prior to its scheduled maturity in an aggregate amount
in excess of $10,000,000;
(5) the Company or any Significant 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 all or substantially all of its property, or
(D) makes a general assignment for the benefit of
its creditors;
(6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for all or substantially all of its
property, or
(C) orders the winding up or liquidation of the
Company or any Significant Subsidiary,
and in each case the order or decree remains unstayed and in effect
for a period of 60 consecutive days; or
(7) the entry by a court having jurisdiction in the
premises of one or more judgments or orders against the Company or any
Restricted Subsidiary for the payment of money in an aggregate amount
in excess of $10,000,000 (to the extent not covered by insurance)
which remain undischarged or unsatisfied for a period of 60
consecutive days after the judgments or orders become final and the
right to appeal them has expired.
The term "Bankruptcy Law" means Title 11 of the United States Code, or
any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
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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 which with the giving of notice and the lapse of time would become an
Event of Default under clauses (4) or (7). Such notice shall specify the
status of such event 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(5) or (6)) occurs and is continuing,
either the Trustee by written notice to the Company, or the Holders of at least
25% in aggregate principal amount of the Securities then outstanding by written
notice to the Company and the Trustee, may declare the principal amount of and
accrued interest, if any, on all the Securities to be due and payable. If an
Event of Default specified in Section 6.01(5) or (6) with respect to the
Company occurs and is continuing, the principal of and interest on all the
Securities then outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Securityholder. The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction and if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of acceleration. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
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 PAST DEFAULTS. Subject to Sections 6.07 and
9.02, the Holders of a majority in aggregate principal amount of outstanding
Securities by notice to the Trustee may waive an existing Default and its
consequences except (1) a Default or Event of Default in the payment of the
principal of or interest on a Security as specified in clauses (1) and (2) of
Section 6.01 or
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(2) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Securityholder affected. When a Default or
Event of Default is waived, it is deemed cured and ceases, but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in
aggregate principal amount of outstanding Securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or 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 reasonably satisfactory to it 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 Holders of at least 25% of the aggregate
principal amount of Securities then outstanding give to the Trustee
written notice stating that an Event of Default is continuing;
(2) the Holders of at least 25% of the aggregate
principal amount of the Securities then outstanding make a written
request to the Trustee to pursue the remedy;
(3) such Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense to be incurred in
complying with such request;
(4) the Trustee does not comply with the request within
60 days after receipt of the notice, request and offer of security or
indemnity and such Event of Default has not been cured or waived; and
(5) the Holders of a majority of the aggregate principal
amount of the Securities then outstanding do not give the Trustee a
direction inconsistent with the request during such 60-day period.
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A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
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; provided,
that no Holder shall have the right to institute any such suit, if and to the
extent that the institution or prosecution thereof or the entry of judgment
therein would, under applicable law, result in the surrender, impairment,
waiver or loss of the Lien on the Collateral created by this Indenture.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default in
payment of interest or principal 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 of principal and
interest remaining unpaid (together with interest on such 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 be entitled and empowered to collect
and receive any monies or other property payable or deliverable on any such
claims and to distribute the same, 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. Nothing herein contained shall be deemed to authorize or consent to or
accept or adopt on behalf of any Securityholder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights
of any Holder thereof, or to authorize the Trustee to vote in respect of the
claim of any Securityholder in any such proceeding.
SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant
to this Article 6 or, if a Notice of Acceleration has been delivered to the
Company and is in effect and Trust Monies are held
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in the Accounts, it shall pay out the money (or Trust Monies, as applicable) 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; and
THIRD: to the Company its successors and assigns.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 6.10. At least 15 days
before such record date, the Trustee shall mail to each Securityholder and the
Company a notice that states the record date, the payment date and the 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 6.11 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% of the aggregate principal amount of the then outstanding
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
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case, subject to any 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 Company, 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) The Trustee, prior to the
occurrence of an Event of Default and after the curing or waiving of all Events
of Default which may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture. If an Event of
Default 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. At all times, the
Trustee's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Uniform Commercial Code or otherwise, shall be to deal with it in the same
manner as the Trustee deals with similar property for its own account.
(b) Except during the continuance of an Event of
Default:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no covenants or
obligations shall be implied in this Indenture which are adverse to
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; provided, however, that the Trustee shall examine
the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Trustee may not be relieved from
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;
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(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.
(d) Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section.
(e) The Trustee shall agree in writing with the
Company to invest moneys deposited hereunder and the Company shall be entitled
to the income thereon.
(f) Funds held in trust by the Trustee need not
be segregated from other funds except to the extent required by this Indenture
and applicable 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.
SECTION 7.02. RIGHTS OF TRUSTEE. Subject to Section 7.01:
(a) The Trustee may rely and shall be protected
in acting or refraining from acting upon any written resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, Security or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) Whenever in the administration of this
Indenture the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate or an
Opinion of Counsel;
(c) 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 conferred upon it by this Indenture;
provided, however, that the Trustee's conduct does not constitute willful
misconduct, negligence or bad faith.
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(d) The Trustee may consult with counsel, and the
advice or Opinion of Counsel with respect 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 Counsel.
(e) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Securityholders pursuant to this Indenture,
unless such Securityholder shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might
be incurred by it in compliance with such requests or direction;
(f) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, Security or other paper or document but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry
or investigation, it shall be entitled to examine the relevant books, records
and premises of the Company, personally or by agent or attorney;
(g) The Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder;
(h) The Trustee shall have no duty to review
documents delivered to the Trustee pursuant to Section 4.02 for purposes of
determining compliance with any provisions of this Indenture;
(i) Except with respect to Sections 4.01 and 4.12,
the Trustee shall have no duty to inquire as to the performance of the
Company's covenants in Article 4. In addition, the Trustee shall not be deemed
to have knowledge of any Default or Event of Default except (i) any Default or
Event of Default occurring pursuant to Sections 6.01(1), 6.01(2), 4.01 or 4.12,
or (ii) any Default or Event of Default of which the Trustee shall have
received written notification or obtained actual knowledge.
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. Any Paying Agent or Registrar may do the
same with like
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rights. Notwithstanding the foregoing, 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 in this Indenture or the Securities other than its 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, in the manner and to the extent provided in TIA Section 315(b),
notice of the Default within 90 days after it occurs. Except in the case of a
Default in payment of principal of 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 interest 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 of such
year that complies with TIA Section 313(a). The Trustee also shall comply with
TIA Section 313(b)(1) and (2) and (c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange, if any, on which the
Securities are listed. The Company agrees to notify 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 relating
to the trustee of an express trust. The Company shall reimburse the Trustee
upon request for all reasonable out-of-pocket expenses incurred by it,
including reasonable expenses incurred in connection with exercise of any
remedy with respect to the Collateral, except any such expense as may arise
from the Trustee's negligence, bad faith or wilful misconduct. Such expenses
shall include the reasonable compensation and expenses of the Trustee's agents
and counsel. The Company shall indemnify the Trustee against any loss,
liability or expense (including reasonable attorneys' fees) incurred by it
without negligence or bad faith on its part in connection with the
administration of this trust and the performance of its duties hereunder. The
Trustee shall notify the Company promptly of any
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claim for which it may seek indemnity. The Company shall defend the claim and
the Trustee shall cooperate in the defense. The failure of the Trustee to so
notify the Company shall not relieve the Company of its obligations hereunder,
except to the extent the Company is prejudiced thereby. The Company need not
pay for any settlement made without its written consent. The Company need not
reimburse any expense or indemnify against any loss or liability incurred by
the Trustee through wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee in its capacity as Trustee, except that held in
trust to pay principal of or 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 an Event of Default specified in Section 6.01(5) or (6)
with respect to the Company, the expenses are intended to constitute expenses
of administration under the Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. A resignation or removal of
the Trustee and the appointment of a successor Trustee shall become effective
only upon the successor Trustee's acceptance of appointment as provided in this
Section 7.08. The Trustee may resign at any time by so notifying the Company
and the Holders in writing.
The Holders of a majority in aggregate principal amount of the Securities then
outstanding may remove the Trustee by so notifying the Trustee and the Company
in writing and may appoint a successor Trustee with the Company's consent. The
Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a Custodian, 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 or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
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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.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in aggregate principal amount of the Securities then
outstanding 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.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates or merges with 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; provided, that in the case of a
transfer of all or substantially all of its corporate trust business to another
corporation, the transferee corporation expressly assumes all the Trustee's
liabilities under the Indenture and the Securities.
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; provided, however,
that the right to adopt the certificate of authentication of any predecessor
trustee or authenticate Securities in the name of any predecessor trustee shall
only apply to its successors by merger, conversion or consolidation.
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SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a)(1) and (2). In addition,
without limiting the foregoing, the Trustee shall at all times be authorized to
conduct a corporate trust business in good standing, and be either (a) a bank
or trust company having, or (b) a wholly owned subsidiary of a bank or trust
company having, 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 Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
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 cancellation or (ii) all
outstanding Securities not delivered to the Trustee for cancellation have
become due and payable, will become due and payable at their stated maturity
within one year or may be called for redemption on a redemption date that is
within one year under arrangements satisfactory to the Trustee and the Company
irrevocably (i.e., without condition or right of withdrawal deposits with the
Trustee money or U.S. Governmental Obligations sufficient to pay at maturity
all outstanding Securities, including interest thereon (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) and 8.06, cease to be of further effect. Upon satisfaction
of the conditions set forth in this Section 8.01(a) and upon request of the
Company, accompanied by an Officers' Certificate and an Opinion of Counsel, and
at the expense of the Company, the Trustee shall acknowledge in writing the
discharge of the Company's obligations under the Securities and this Indenture
except for those surviving obligations specified herein.
(b) Subject to Sections 8.01(c), 8.02 and 8.06, 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, 4.08, 4.09, 4.10, 4.11, 4.12,
4.16, 4.17, 4.18 and 5.01(ii) (other than with respect to an Event of Default
specified in Sections 6.01(1) or 6.01(2)) and 5.01(iii) and the operation of
Sections
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6.01(3), 6.01(4) and 6.01(7) ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.
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(3), 6.01(4) and 6.01(7).
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, the
Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07, 7.08,
8.04, 8.05 and 8.06 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(i) the Company irrevocably deposits in trust with the
Trustee money or U.S. Governmental Obligations sufficient for the
payment of principal and interest on the Securities to maturity or
redemption, as the case may be;
(ii) the Company delivers to the Trustee an Officers'
Certificate 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 (but, in the case of the legal
defeasance option only, not more than 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;
(iii) 90 days pass after the deposit is made and during the
90-day period no Default specified in Section 6.01(5) or (6) with
respect to the Company occurs which is continuing at the end of the
period;
(iv) the deposit does not constitute a default under any
other agreement binding on the Company other than a default (a) with
respect to Indebtedness of the Company which is defeased, redeemed or
otherwise satisfied prior to or contemporaneously with such deposit,
or (b) which is consented
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to or waived by the relevant other party or parties to the agreement;
(v) the Company delivers to the Trustee an Opinion of
Counsel or a ruling received from the Internal Revenue Service to the
effect that holders will not recognize income, gain or loss for
Federal income tax purposes as a result of the exercise of such rights
and will be subject to Federal income tax in the same amount and in
the same manner and at the same time as would have been the case
otherwise; provided, that the Company is not required to deliver to
the Trustee such Opinion of Counsel upon the exercise of the Company's
legal defeasance option or covenant defeasance option within one year
of Stated Maturity or a date fixed for redemption pursuant to Article
3; and
(vi) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating 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
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 and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.04. REPAYMENT TO COMPANY. Subject to Section 8.01, the
Trustee and the Paying Agent shall promptly turn over to the Company any excess
money or securities held by them at any time, upon the written request of the
Company and upon the receipt by the Trustee of an Officers' Certificate in form
reasonably satisfactory to the Trustee, addressing the status of such money or
securities.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall promptly pay to the Company 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 general creditors, unless applicable law designates another person.
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.
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Government Obligations or the principal and interest received on such U.S.
Government Obligations.
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 to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the
Trustee may amend, supplement or otherwise modify this Indenture or the
Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsis-
tency;
(2) to comply with Article 5, Article 12, Section
10.01(b), Section 10.02(a), Section 10.04 or Section 10.13;
(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 make any change that does not adversely affect the
rights of any Securityholder;
(5) to add to the covenants of the Company for the
benefit of the Securityholders or to surrender any right or power
herein conferred upon the Company; or
(6) to comply with the TIA.
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After an amendment, supplement or other modification under this
Section becomes effective, the Company shall mail to Securityholders a notice
briefly describing such amendment, supplement or other modification. The
failure to give such notice to all Securityholders, or any defect therein,
shall not impair or affect the validity of an amendment, supplement or other
modification under this Section 9.01.
SECTION 9.02. WITH CONSENT OF HOLDERS. (a) Subject to Section 6.07,
the Company and the Trustee may amend, supplement or otherwise modify this
Indenture or the Securities without notice to any Securityholder but with the
written consent of the Holders of at least a majority of the aggregate
principal amount of the Securities then outstanding; provided, that (except for
changes permitted pursuant to Section 9.01) any change to Article 10 (or the
definitions relating thereto) shall require the written consent of the Holders
of at least 66 2/3% of the aggregate principal amount of Securities then
outstanding. Subject to Sections 6.04 and 6.07, the Holders of a majority in
aggregate principal amount of the Securities then outstanding may waive
compliance by the Company with any provision of this Indenture or the
Securities without notice to any Securityholder.
(b) Notwithstanding anything to the contrary
contained in Sections 9.01 or 9.02(a), without the consent of each
Securityholder affected, an amendment, supplement, other modification or waiver
may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment, supplement, other modification or waiver;
(2) reduce the rate of or extend the Stated Maturity of
any payment of interest on any Security;
(3) reduce the principal amount (at maturity or any other
time) of or extend the Stated Maturity of any payment of principal of
any Security, including upon redemption, or payment of the Asset Sale
Purchase Price or Change of Control Purchase Price;
(4) reduce the premium payable upon the redemption of any
Security, including upon redemption, or payment of the Asset Sale
Purchase Price or Change of Control Purchase Price; or
(5) make any Security payable in money other than that
stated in the Security.
(c) It shall not be necessary for the consent of
the Holders under this Section 9.02 to approve the particular form
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of any proposed amendment, but it shall be sufficient if such consent approves
the substance thereof.
(d) After an amendment, supplement, waiver or
other modification under this Section becomes effective, the Company shall mail
to Securityholders a notice briefly describing such amendment, supplement,
waiver or other modification. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the validity
of an amendment, supplement, waiver or other modification under this Section.
(e) Notwithstanding the foregoing, the provisions
of Section 11.16 hereof and this subsection (e) may not be amended without the
consent of the parties to the Credit Agreement.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment,
supplement or other modification to this Indenture or the Securities shall
comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A
consent to an amendment, supplement or other modification or a waiver under or
in connection with this Indenture or the Securities by a Holder of a Security
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, if such consent or waiver may be revoked, 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 amendment, supplement, waiver or other
modification becomes effective. After an amendment, supplement, waiver or other
modification becomes effective, it shall bind every Securityholder, unless it
makes a change described in any of clauses (1) through (5) of Section 9.02(b).
In that case, the amendment, supplement, waiver or other modification shall
bind each Holder of a Security who has consented to it and every subsequent
Holder of a Security or a portion of a Security that evidences the same debt as
the consenting Holder's Security.
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. 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.
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SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. If an
amendment, supplement, waiver or other modification 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 or the Trustee 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 such amendment, supplement, waiver or
other modification.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment, supplement, waiver or other modification authorized pursuant to this
Article 9 if the amendment, supplement, waiver or other modification 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,
supplement, waiver or other modification the Trustee shall be entitled to
receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment, supplement, waiver or other modification is authorized or permitted
by this Indenture.
ARTICLE 10
SECURITY
SECTION 10.01. GRANTS OF SECURITY INTERESTS.
(a) To secure the full and punctual payment of
principal and premium of and interest on the Securities and all other amounts
payable pursuant to this Indenture, the Company hereby grants to the Trustee,
for the benefit of the Holders and the Trustee, a first priority and (except
for Liens permitted under Section 4.16) exclusive security interest in all its
right, title and interest in and to the following, subject to the exclusion
specified in the last sentence of this Section 10.01(a):
(i) all of the outstanding shares of Stock of MGI, whether
now or hereafter owned or acquired by the Company;
(ii) all certificates whether now owned or hereafter acquired
representing any of the shares referred to in clause (i) of this
Section 10.01(a);
(iii) all dividends, cash, instruments and other property and
proceeds from time to time received, receivable or otherwise
distributed on or in exchange for any of the foregoing after the Issue
Date, including, without limitation,
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any stocks, bonds or other securities, options, warrants, or other
such rights, cash or other property payable or distributable on any of
the shares referred to in clause (i) of this Section 10.01(a) at any
time, including, without limitation, any distribution on any such
shares upon the dissolution or liquidation, in whole or in part, of
the issuer of such shares or the consolidation or merger of such
issuer with any other person or persons, or the reorganization of such
issuer, or any distribution on any such shares of the capital or
paid-in capital surplus or any part thereof of the issuer of such
shares, in any form, or any subdivision, combination, reclassification
or redemption of any such shares;
(iv) the Intercompany Note;
(v) all payments of interest on and principal of the
Intercompany Note; and
(vi) to the extent not included in clauses (i), (ii),
(iii), (iv) and (v) of this Section 10.01(a), all proceeds (as defined
in the Uniform Commercial Code as in effect on the date hereof) of any
and all of the foregoing (arising after the Issue Date).
Notwithstanding any other provision contained in this Indenture or in the
Securities, no security interest has been granted pursuant to this Indenture,
and the Trustee has not taken pursuant to this Indenture a security interest,
in (x) any Salmon Creek Distribution or (y) any proceeds of any Salmon Creek
Distribution. The Company shall not identify any dividend or distribution as a
"Salmon Creek Distribution" except for any dividends and other distributions on
Pledged MGI Shares or on shares of Stock of any other Restricted Subsidiary of
the Company of amounts or other consideration received by the Company or any of
its Subsidiaries from any person or entity (i) in respect of all or any part of
the Stock of Salmon Creek, (ii) in respect of all or any part of the real
property constituting the Salmon Creek Property or (iii) otherwise in
connection with Salmon Creek or the Salmon Creek Property, except in connection
with the harvesting of timber located on the Salmon Creek Property.
(b) Within ten (10) days after the release of any
Released Kaiser Shares from the Lien of the MGI Indenture, to secure the full
and punctual payment of principal and premium of and interest on the Securities
and all other amounts payable pursuant to this Indenture, the Company shall, by
supplemental indenture hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, grant to the Trustee, for the benefit of the
Holders and the Trustee, a first priority and (except for
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Liens permitted under Section 4.16) exclusive security interest in all its
right, title and interest in and to the following:
(i) such Released Kaiser Shares;
(ii) all certificates whether then owned or thereafter
acquired representing any of such Released Kaiser Shares;
(iii) all dividends, cash, instruments and other property
and proceeds from time to time received, receivable or otherwise
distributed on or in exchange for any of the foregoing after the date
of such supplemental indenture hereto, including, without limitation,
any stocks, bonds or other securities, options, warrants, or other
such rights, cash or other property payable or distributable on any of
such Released Kaiser Shares at any time after the date of such
supplemental indenture hereto, including, without limitation, any
distribution on any such shares upon the dissolution or liquidation,
in whole or in part, of the issuer of such shares or the consolidation
or merger of such issuer with any other person or persons, or the
reorganization of such issuer, or any distribution on any such shares
of the capital or paid-in capital surplus or any part thereof of the
issuer of such shares, in any form, or any subdivision, combination,
reclassification or redemption of any such shares; and
(iv) to the extent not included in clauses (i), (ii) and
(iii) of this Section 10.01(b), all proceeds (as defined in the
Uniform Commercial Code as in effect on the date hereof) of any and
all of the foregoing (arising after the date of such supplemental
indenture hereto.
Notwithstanding the foregoing provisions of this Section 10.01(b), the
aggregate number of Released Kaiser Shares required to be pledged pursuant to
this Section 10.01(b) through any date shall not exceed the sum of (1)
8,027,500 and (2) an amount equal to (x) 8,027,500 times (y) a fraction, the
numerator of which is the aggregate principal amount of the Securities
outstanding on such date, and the denominator of which is the aggregate
principal amount of Securities outstanding on the Issue Date. To the extent
that Released Kaiser Shares are comprised of securities or other property
substituted or adjusted for Kaiser Shares (as contemplated by clause (i) or
(ii) of the definition of Released Kaiser Shares), the kind and amount of
Released Kaiser Shares to be pledged shall be appropriately adjusted to take
account of the kind and amount of such securities or other property so
substituted for each Kaiser Share. Moreover, in no event shall the aggregate
of the number of Released Kaiser Shares required to be pledged pursuant to this
Section 10.01(b) through any date and the number of Kaiser Share Cash
Equivalents resulting from the pledge of released funds pursuant to Section
10.03(d)(6) through such date exceed the number
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of Released Kaiser Shares that would be required to be pledged through such
date if no such released funds were pledged through such date.
SECTION 10.02. PLEDGED SHARES AND INTERCOMPANY NOTE.
(a) Delivery of Certificates and Instruments.
Subject to the terms hereof, the Company agrees that the Intercompany Note and
all certificates or instruments representing or evidencing Pledged Shares or
any other Collateral shall be delivered to the Trustee, at such office in New
York City, New York as is designated by the Trustee from time to time in a
notice addressed to the Company, and shall be in suitable form for transfer by
delivery, and shall be accompanied by duly executed and undated instruments of
transfer or assignment or endorsement, as applicable, in blank (with signatures
appropriately guaranteed if requested by the Trustee), all in form and
substance satisfactory to the Trustee. If an issuer of Pledged Shares is
incorporated in a jurisdiction which does not permit the use of certificates to
evidence equity ownership or which permits or requires pledges of Capital Stock
to be perfected other than by delivery, then the Company shall, upon delivery
to the Company of the Trustee's written request, take such action as may be
necessary in such jurisdiction and reasonably requested by the Trustee to
perfect the Trustee's first priority and (except for Liens permitted under
Section 4.16) exclusive security interest in such Stock and other Collateral
and give the Trustee the other rights in the Pledged Shares granted under the
terms hereof; and the Company agrees to provide to the Trustee an Opinion of
Counsel, in form and substance reasonably satisfactory to it, confirming such
pledge. The Trustee shall have the right at any time at which a Notice of
Acceleration has been delivered and is in effect to exchange certificates or
instruments representing or evidencing the Pledged Shares for certificates or
instruments of smaller or larger denominations.
(b) Preservation of Corporate Existence of
Issuers of Pledged Shares. Subject to Article 5 and Sections 10.05 and 10.13,
the Trustee may do whatever in its reasonable judgment may be necessary, and
the Company shall take such action in connection therewith as may reasonably be
requested in writing by the Trustee, for the purpose of preserving or extending
the corporate existence of MGI and (except as permitted by Section 10.05 of the
MGI Indenture, as in effect on the date hereof) Kaiser.
(c) Change of Registration Upon Notice of
Acceleration. Any or all Pledged Shares held by the Trustee for the benefit of
the Holders of Securities may, if a Notice of Acceleration has been delivered
and is at the time in effect, without notice to the Company, be registered in
the name of the Trustee or its nominee.
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(d) Voting Rights; Dividends; etc.
(1) Unless a Notice of Acceleration has been delivered
and is at the time in effect, the Company shall be entitled to
exercise any and all voting and other corporate rights pertaining to
the Pledged Shares or any part thereof for any purpose not
inconsistent with the terms of this Indenture and the Securities;
provided, however, that no vote shall be cast or consent, waiver or
ratification given or action taken that would be inconsistent with or
violate any provision of this Indenture or the Securities. After a
Notice of Acceleration has been delivered and so long as it remains in
effect, upon written notice from the Trustee to the Company that it
has determined that it will exercise such rights, all rights of the
Company to exercise the voting and other consensual corporate rights
which it would otherwise be entitled to exercise pursuant to this
Section 10.02(d)(1) shall cease and all such rights shall become
vested in the Trustee, which shall thereupon have the sole right to
exercise such voting and other consensual corporate rights during the
continued effectiveness of such Notice of Acceleration (such rights to
include the exercise of any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to
any of the Pledged Shares, including, without limitation, the right to
exchange, at the Trustee's discretion, any and all of the Pledged
Shares upon the merger, consolidation, reorganization,
recapitalization or other readjustment of any issuer of any of such
Pledged Shares or upon the exercise by any such issuer or the Trustee
of any right, privilege or option pertaining to any of the Pledged
Shares and, in connection therewith, to deposit and deliver any and
all of the Pledged Shares with any committee, depositary, transfer
agent, registrar or other designated agency on such terms and
conditions as the Trustee may determine, all without liability except
to account for property actually received by it). The Trustee shall
have no duty to the Company to exercise any of the aforesaid rights,
privileges or options and shall not be responsible for any failure to
do so or delay in so doing. Upon rescission of such Notice of
Acceleration, such voting and consensual corporate rights shall revert
to the Company.
(2) So long as no Event of Default, Collateral Default or
Interest Payment Default shall have occurred and be continuing, the
Company shall be entitled to receive and retain any and all Exempt
Distributions made on any Pledged Shares.
(3) Upon the occurrence and during the continuance of an
Event of Default, Collateral Default or Interest Payment Default, all
rights of the Company to receive and retain
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Exempt Distributions on Pledged Shares pursuant to Section 10.02(d)(2)
shall cease, and the Trustee shall thereupon have the sole right to
receive any Exempt Distributions on any Pledged Shares made during the
continuance of such Event of Default, Collateral Default or Interest
Payment Default; provided, that the Company shall be entitled to
receive and retain any Salmon Creek Distributions. All such Exempt
Distributions shall be deposited in the Cash Collateral Default
Account in accordance with Section 10.03(f). All Exempt Distributions
on Pledged Shares received by the Company contrary to the provisions
of this Section 10.02(d)(3) shall be received in trust for the benefit
of the Trustee and the Holders, shall be segregated from other funds
of the Company, and shall be forthwith paid over to the Trustee in the
same form as received by the Company (duly endorsed to the Trustee, if
required), and the Trustee shall deposit such amounts in the Cash
Collateral Default Account in accordance with Section 10.03(f). If
any such Event of Default, Collateral Default or Interest Payment
Default shall have been cured or waived and no other Event of Default,
Collateral Default or Interest Payment Default shall be continuing,
the right of the Company to receive and retain any and all Exempt
Distributions on Pledged Shares shall be reinstated.
(4) In order to permit the Company and the Trustee to
exercise their respective voting and other corporate rights which they
are entitled to exercise pursuant to Section 10.02(d)(1) and Section
10.02(d)(5) and to receive the dividends, distributions and other
amounts which they are authorized to receive and retain pursuant to
Sections 10.02(d)(2) and 10.02(d)(3), (A) the Trustee shall, upon
written notice from the Company, from time to time execute and deliver
(or cause to be executed and delivered) to the Company, and (B) the
Company shall, upon written notice from the Trustee, from time to time
execute and deliver (or cause to be executed and delivered) to the
Trustee, all such proxies, dividend payment orders and other
instruments as the Company or the Trustee, as the case may be, may
reasonably request for such purposes as shall be specified in such
request.
(5) At any time with the consent of the Company, or
without the consent of the Company upon the delivery to the Company of
a Notice of Acceleration that is at the time in effect, the Trustee
may join in any plan of voluntary or involuntary reorganization or
readjustment or rearrangement in respect of any Pledged Shares and may
accept or authorize the acceptance of new securities issued in
exchange therefor under any such plan. Any new securities so issued
shall be delivered to the Trustee and pledged hereunder. If the
Trustee does not join in such plan of reorganization or
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readjustment or rearrangement, any money or Cash Equivalents accruing
on or apportioned to such Pledged Shares shall be delivered to the
Trustee for deposit into the Cash Collateral Account in accordance
with Section 10.03(g).
(e) Pledged Shares to Constitute Majority of Voting
Stock and Equity Interests; Delivery of After-Acquired Shares. The Company
shall cause the Pledged Shares that are subject to the Lien of this Indenture
at all times to include: (i) at least a majority of the Voting Stock and the
outstanding equity interests (on a fully diluted basis) of MGI until such time
as MGI merges or consolidates into, or transfers all of its assets to, either
(A) a Restricted Subsidiary or (B) the Company, in either case pursuant to and
in accordance with Section 10.13; and (ii) after any transaction described in
clause (i)(A) above, at least a majority of the Voting Stock and the
outstanding equity interests (on a fully diluted basis) of the Restricted
Subsidiary into which MGI merges or consolidates or to which it transfers all
or substantially all of its assets. The Company shall pledge and deposit with
the Trustee all outstanding shares of Stock of MGI that the Company acquires at
any time after the Issue Date, and to cause all such shares of Stock to be
subject to the Lien of this Indenture.
(f) Payments on Intercompany Note. The Company
shall deliver (or cause to be delivered) to the Trustee all payments of
interest received on the Intercompany Note. All such payments of interest
shall be deposited in the Cash Collateral Account in accordance with Section
10.03(g). The Company shall deliver or cause to be delivered to the Trustee
all payments of principal received on the Intercompany Note, except that the
Company shall be entitled to receive and retain all payments of principal of
the Intercompany Note that do not result in the outstanding principal amount of
the Intercompany Note being reduced below the outstanding principal amount of
the Securities. All payments of principal on the Intercompany Note delivered
to the Trustee pursuant to the preceding sentence shall be deposited in the
Cash Collateral Offer Account in accordance with Section 10.03(d).
SECTION 10.03. COLLATERAL ACCOUNTS.
(a) Establishment of Accounts; Deposit of Trust
Moneys.
(1) The Trustee shall establish from time to time as
required by this Section 10.03, and at all times thereafter until the
trust created by this Indenture has terminated shall maintain, at its
corporate offices in Minnesota, four (4) accounts: the Cash
Collateral Offer Account, the Cash Collateral Public Equity Offering
Account, the Cash Collateral
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Default Account and the Cash Collateral Account (collectively, the
"Accounts"). The Accounts shall be entitled the "MAXXAM GROUP
HOLDINGS INC. Cash Collateral Offer Account, [name of Trustee], as
trustee, secured party," "MAXXAM GROUP HOLDINGS INC. Cash Collateral
Public Equity Offering Account, [name of Trustee], as trustee, secured
party," "MAXXAM GROUP HOLDINGS INC. Cash Collateral Default Account,
[name of Trustee], as trustee, secured party" and "MAXXAM GROUP
HOLDINGS INC. Cash Collateral Account, [name of Trustee], as trustee,
secured party," respectively.
(2) All money and Cash Equivalents required to constitute
Collateral and to be delivered to the Trustee or received by the
Trustee or any agent or nominee of the Trustee in respect thereof,
whether pursuant to the terms of this Indenture, the Uniform
Commercial Code, other applicable law or otherwise ("Trust Moneys"),
shall be deposited in the appropriate Account, as specified in this
Section 10.03, and the Trustee shall thereafter invest, apply, deposit
into another Account or release, as the case may be, Trust Moneys in
accordance with the terms of this Indenture. All right, title and
interest in and to the Accounts shall vest in the Trustee, who shall
have sole dominion and control over the Accounts and only the Trustee
shall have any right of withdrawal therefrom.
(b) Accounts as Collateral. All Trust Moneys
deposited in any of the Accounts shall be held segregated in the Cash
Collateral Offer Account, the Cash Collateral Public Equity Offering Account,
the Cash Collateral Default Account or the Cash Collateral Account, as the case
may be, as provided in this Section 10.03, and shall be held by the Trustee, in
trust under this Indenture, as part of the Collateral.
(c) Investment of Trust Moneys. The Company shall have the right
to direct the Trustee in writing to, and the Trustee shall, except as otherwise
required herein, invest any Trust Moneys held in the Accounts in Cash
Equivalents and liquidate Cash Equivalents held in Accounts into money. The
Trustee shall not be liable or responsible for any loss resulting from such
investments and reinvestments or from any dispositions; provided, however, that
the Trustee shall be liable for its own negligent action, its own negligent
failure to act and its own willful misconduct in complying with this Article
10. The Accounts and all credits thereto and investments therein shall be
maintained in such a manner in accordance with applicable law and all items
shall be delivered to the Trustee and credited to the Accounts in accordance
with applicable law so that the Trustee shall at all times have (except for
Liens permitted under Section 4.16) an exclusive and a first priority perfected
security interest therein. The Company shall deliver to the Trustee and any
bank where any Accounts are
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maintained all such notices and other documents, and shall otherwise make such
filings and take such other actions as may be reasonably requested by the
Trustee, to create and maintain (except for Liens permitted under Section 4.16)
an exclusive and first priority perfected security interest in the Accounts and
all credits thereto and investments therein. Interest and other amounts earned
on an Account shall be held as part of the Collateral, shall be credited to the
Account in which the principal on which they are earned is deposited and shall
be transferred between Accounts together with and in the same manner as the
principal on which they are earned.
(d) Deposits into Cash Collateral Offer Account.
(1) Except as otherwise provided in Section 10.03(e)(1),
upon the receipt of any Net Proceeds of a Primary Share Sale by MGI or
by Kaiser, that were dividended or distributed on Pledged MGI Shares,
or on Pledged Kaiser Shares, as the case may be, the Company shall
deliver or cause to be delivered to the Trustee, for deposit into the
Cash Collateral Offer Account for application pursuant to Section
10.05(f), all such Net Proceeds so received that are money or Cash
Equivalents.
(2) Except as otherwise provided in Section 10.03(e)(2),
upon the release of any Pledged Shares pursuant to Section 10.05(b)(1)
and the receipt of any Net Proceeds of a Pledged Share Sale in respect
of such Pledged Shares, the Company shall deliver or cause to be
delivered to the Trustee, for deposit into the Cash Collateral Offer
Account for application pursuant to Section 10.05(f), all such Net
Proceeds so received that are money or Cash Equivalents.
(3) Upon receipt by the Company of an Extraordinary
Distribution on any Pledged Shares, the Company shall deliver or cause
to be delivered to the Trustee, for deposit into the Cash Collateral
Offer Account for application pursuant to Section 10.05(f), all
amounts so received that are money or Cash Equivalents.
(4) Except as otherwise provided in Section 10.03(e)(3),
if, following receipt by the Company of (A) Net Proceeds, other than
money or Cash Equivalents, of either (x) a Primary Share Sale by MGI
or by Kaiser, that were dividended or distributed on Pledged MGI
Shares, or on Pledged Kaiser Shares, as the case may be, or (y) a
Pledged Share Sale in respect of any Pledged Shares or of (B) an
Extraordinary Distribution on any Pledged Shares in a form other than
money or Cash Equivalents, all or any portion of such Net Proceeds or
Extraordinary Distributions at the time subject to the Lien of this
Indenture are disposed of for money or Cash Equivalents pursuant to
Section 10.05(b)(2), the Company shall deliver or
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cause to be delivered to the Trustee, for deposit into the Cash
Collateral Offer Account, all money or Cash Equivalents received in
consideration of such disposition.
(5) Upon the receipt of any payments of principal on the
Intercompany Note (other than any payments of principal that do no
result in the outstanding principal amount of the Intercompany Note
being reduced below the outstanding principal amount of the
Securities), the Company shall deliver or cause to be delivered to the
Trustee, for deposit into the Cash Collateral Offer Account, such
payments.
(6) If any Trust Moneys constituting proceeds of any
Primary Share Sale by Kaiser or a Pledged Share Sale of Pledged Kaiser
Shares or any Extraordinary Distribution on Pledged Kaiser Shares (or
the proceeds of any non-cash consideration received in any such
transaction) are released from the Lien of the MGI Indenture as a
result of such Trust Moneys not having been utilized to purchase MGI
Notes pursuant to an offer to purchase MGI Notes at a price at least
equal to the respective Call Prices of the MGI Notes or as a result of
payment in full of the MGI Notes or defeasance of the MGI Notes
pursuant to Article 8 of the MGI Indenture, the Company shall, upon
receipt of such released funds (but subject to the limitation set
forth in the last sentence of Section 10.01(b)), deliver or cause to
be delivered to the Trustee, for deposit into the Cash Collateral
Offer Account, such released funds. As used in this Section
10.03(d)(6), each of the terms Trust Moneys, Primary Share Sale,
Pledged Share Sale, Pledged Kaiser Shares, Extraordinary Distribution
and Call Prices has the meaning ascribed to such term in the MGI
Indenture (as in effect on the date hereof).
(e) Deposits into and Transfers from Cash
Collateral Public Equity Offering Account.
(1) Upon receipt of any Net Proceeds of a Primary Share
Sale by MGI or by Kaiser, that were dividended or distributed on
Pledged MGI Shares, or on Pledged Kaiser Shares, as the case may be,
if such Primary Share Sale is also a Public Equity Offering and such
receipt occurs prior to August 1, 2000, the Company shall deliver or
cause to be delivered to the Trustee, for deposit into the Cash
Collateral Public Equity Offering Account, all such Net Proceeds so
received that are money or Cash Equivalents.
(2) Upon the release of any Pledged Shares pursuant to
Section 10.05(b)(1) and the receipt of any Net Proceeds of a Pledged
Share Sale in respect of such Pledged Shares, if such Pledged Share
Sale is also a Public Equity Offering and such receipt occurs prior to
August 1, 2000, the Company shall
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deliver or cause to be delivered to the Trustee for deposit into the
Cash Collateral Public Equity Offering Account all such Net Proceeds
so received that are money or Cash Equivalents.
(3) If, following receipt by the Company of Net Proceeds,
other than money or Cash Equivalents, of (A) a Primary Share Sale that
is a Public Equity Offering that were distributed on Pledged Shares or
(B) a Pledged Share Sale that is a Public Equity Offering in respect
of any Pledged Shares, all or any portion of such Net Proceeds at the
time subject to the Lien of this Indenture are disposed of for money
or Cash Equivalents pursuant to Section 10.05(b)(2), the Company shall
deliver or cause to be delivered to the Trustee, for deposit into the
Cash Collateral Public Equity Offering Account, all money or Cash
Equivalents received (if such receipt occurs prior to August 1, 2000)
in consideration of such disposition.
(4) In the event the Company elects, pursuant to Section
10.05(g), optionally to redeem Securities with all or any portion of
any Net Proceeds described in Sections 10.03(e)(1), (2) or (3), such
Net Proceeds (or such portion thereof) shall remain in the Cash
Collateral Public Equity Offering Account for application pursuant to
Article 3 and Section 10.05(g) hereof and paragraph 5 of the
Securities. If no such election is made within the time period
specified in Section 10.05(g), all amounts in such Account shall, upon
expiration of the time period for such election (or upon earlier
written notice from the Company that no such election will be made),
be deposited in the Cash Collateral Offer Account.
(f) Deposits into Cash Collateral Default Account.
(1) Upon and during the continuance of an Event of
Default, Collateral Default or an Interest Payment Default, the
Company shall deliver or cause to be delivered to the Trustee for
deposit into the Cash Collateral Default Account all Exempt
Distributions made on any Pledged Shares during such continuance;
provided, that the Company shall be entitled to receive and retain any
Salmon Creek Distributions. Any Trust Moneys held in the Cash
Collateral Default Account shall be released from the Lien of this
Indenture and, as the Company directs in writing, applied by the
Trustee to cure any outstanding Interest Payment Defaults in respect
of the Securities and to pay the principal due on the Securities at
the final maturity thereof.
(2) If at any time following the deposit of Trust Moneys
into the Cash Collateral Default Account, no Event of Default,
Collateral Default or Interest Payment Default is continuing, any
amounts in the Cash Collateral Default Account shall be
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deposited into the Cash Collateral Offer Account for application
pursuant to Section 10.05(f).
(g) Deposits into Cash Collateral Account. The
Trustee shall deposit into the Cash Collateral Account any money or Cash
Equivalents (i) eligible for transfer out of the Cash Collateral Offer Account
pursuant to Section 10.05(f) upon their eligibility for such transfer, (ii)
delivered to the Trustee pursuant to Section 10.02(d)(5) or 10.02(f) or (iii)
constituting Trust Moneys whose disposition by the Trustee upon receipt thereof
is not otherwise provided for in this Section 10.03.
(h) Application of Trust Moneys to Pay Trustee's
Fees or upon a Notice of Acceleration.
(1) Notwithstanding any other provision contained in this
Article 10, but subject to the Company's continuing primary obligation
contained in Section 7.07, the Trustee may at any time apply Trust
Moneys in the Cash Collateral Account or in the Cash Collateral
Default Account to the payment of due and unpaid fees under Section
7.07 of this Indenture; provided, that funds are drawn, first, from
the Cash Collateral Account and, second, and only if there exist no
Trust Moneys in the Cash Collateral Account, from the Cash Collateral
Default Account.
(2) Notwithstanding any other provision contained in this
Article 10, if a Notice of Acceleration has been delivered to the
Company and is at the time in effect, the Trustee shall apply all
Trust Moneys held in the Accounts in accordance with Section 6.10;
provided, that, so long as a Notice of Acceleration is not in effect,
Trust Moneys shall be invested, applied, deposited in other Accounts
or released as otherwise provided in this Article 10.
(i) Grant of Security Interest in Accounts. As
security for the Company's obligations to pay the principal and premium of and
interest on the Securities and all other amounts and obligations under this
Indenture and the Securities when due, the Company hereby grants a security
interest to the Trustee, for the benefit of the Holders and the Trustee, in all
of its right, title and interest, whether now owned or hereafter acquired, in
the Accounts and all sums of money, funds, securities, investments or other
property held in or credited to the Accounts, from any source whatsoever, now
or hereafter transferred or credited to and comprising the Accounts, including,
without limitation, all proceeds derived from the Collateral credited to the
Accounts, and any and all interest and dividends or other distribution from any
such amounts, and all statements, certificates and instruments in or
representing the Accounts.
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(j) Release and Application of Trust Moneys in
Cash Collateral Account. The Company shall be entitled to a release, at any
time and from time to time, of any Trust Moneys held in the Cash Collateral
Account to be applied, as the Company directs the Trustee in writing, to pay
interest on the Securities (but only to the extent that the Trust Moneys so
applied were derived from payments of interest on the Intercompany Note), to
redeem Securities or to purchase Securities, in the open market or otherwise.
SECTION 10.04. FURTHER ASSURANCES; REVISIONS OF EXHIBIT D. The
Company shall, at any reasonable time and reasonably from time to time, at its
expense, execute and deliver all further instruments and documents and take all
reasonable further action that the Trustee may reasonably request in order to
perfect and protect any Lien granted or purported to be granted with respect to
any Collateral or to enable the Trustee to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
foregoing, the Company shall provide to the Trustee a revised Exhibit D to
reflect any changes in the composition of the Pledged Shares pledged by it
hereunder, and at such time the Company shall be deemed to make the
representations and warranties set forth in clauses (i) through (iv) of Section
10.12 with respect to Exhibit D as so revised.
SECTION 10.05. RELEASE AND SUBSTITUTION OF COLLATERAL.
(a) General. The Company shall be entitled from
time to time to the release by the Trustee of Pledged Shares and other
Collateral from the Lien of this Indenture, and to substitute other property
for Collateral, upon satisfaction of the requirements of this Section 10.05
and, to the extent applicable, Sections 5.01 and 10.13.
(b) Release of Pledged Shares and of Non-Cash Net
Proceeds and Extraordinary Distributions in Connection with a Collateralized
Cash Proceeds Offer or Optional Redemption.
(1) The Company shall be entitled to a release of Pledged
Shares from the Lien of this Indenture in order to effect a Pledged
Share Sale; provided, that (i) no Event of Default, Collateral Default
or Interest Payment Default has occurred and is continuing or would
result from such release, (ii) an Officers' Certificate is delivered
to the Trustee by the Company so stating and stating that such release
is otherwise permitted under this Section 10.05 and (iii) the Company
agrees to subject money in an amount equal to the amount of Net
Proceeds of such Pledged Share Sale received by the Company, including
all Trust Moneys in the Accounts to the extent required in this
Article 10, to an offer to purchase Securities in accordance with the
provisions of Section
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10.05(f) or, if such Pledged Share Sale is a Public Equity Offering
and the Company shall so elect pursuant to Section 10.05(g) with
respect to all or any portion of such Net Proceeds, to effect an
optional redemption of Securities pursuant to Article 3 of this
Indenture and paragraph 5 of the Securities.
(2) The Company shall be entitled to a release of (A) Net
Proceeds, other than money or Cash Equivalents, of either (x) a
Primary Share Sale by MGI or by Kaiser, that were distributed on
Pledged MGI Shares, or on Pledged Kaiser Shares, as the case may be,
or (y) a Pledged Share Sale in respect of any Pledged Shares or of (B)
Extraordinary Distributions on any Pledged Shares in a form other than
money or Cash Equivalents:
(i) if all or any portion of such Net Proceeds or
Extraordinary Distributions are disposed of in one or more
transactions (a "Monetization") for consideration consisting of money
or Cash Equivalents (but which may also include customary indemnities)
and the Company delivers or causes to be delivered to the Trustee, for
deposit into the Cash Collateral Offer Account or the Cash Collateral
Public Equity Offering Account, as applicable, all of the money or
Cash Equivalents received in such Monetization, in which case all or
such portion of such Net Proceeds or Extraordinary Distributions
shall, simultaneously with such Monetization, be released from the
Lien of this Indenture;
(ii) if, in connection with a Collateralized Cash Proceeds
Offer, the Company delivers to the Trustee for deposit into the Cash
Collateral Offer Account, pursuant to Section 10.05(f)(ix), money in
the amount specified in such section, in which case (a) all of such
Net Proceeds or Extraordinary Distributions shall be released from the
Lien of this Indenture, simultaneously with such deposit, if the Cash
Collateralized Proceeds Purchase Price for the Securities equals or
exceeds the Call Price therefor plus accrued and unpaid interest, if
any, thereon to (but not including) the Collateralized Cash Proceeds
Purchase Date and (b) if the preceding clause (a) is not applicable, a
portion of such Net Proceeds or Extraordinary Distributions,
designated by the Company, not greater in value (at the time it became
Collateral) than the amount of money so delivered by the Company
shall, simultaneously with such deposit, be released from the Lien of
this Indenture; and
(iii) if, in connection with an optional redemption using Net
Proceeds of a Public Equity Offering that are subject to the Lien of
this Indenture, the Company delivers to the Trustee for deposit into
the Cash Collateral Public Equity
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Offering Account, pursuant to Section 10.05(g), money in the amount
specified in such section, in which case there shall be released from
the Lien of this Indenture, simultaneously with such deposit, a
portion of such Net Proceeds, designated by the Company, not greater
in value (at the time it became Collateral) than the amount of money
so delivered by the Company.
(iv) If, in connection with an optional redemption referred to
in Section 10.05(f)(xiv), the Company delivers to the Trustee for
deposit into the Cash Collateral Offer Account, pursuant to Section
10.05(f)(xiv), money in the amount specified in such section, in which
case a portion of such Net Proceeds or Extraordinary Distributions,
designated by the Company, not greater in value (at the time it became
Collateral) than the amount of money so delivered by the Company
shall, simultaneously with such deposit, be released from the Lien of
this Indenture.
(c) Pledged Kaiser Share Release and Substitution.
(1) The Company shall be entitled to a release of any
Pledged Kaiser Shares from the Lien of this Indenture at any time and
from time to time if (i) no Event of Default, no Collateral Default
and no Interest Payment Default has occurred and is continuing or
would result from such release, (ii) an Officers' Certificate is
delivered to the Trustee by the Company so stating and stating that
such release is permitted under this Section 10.05(c) and (iii) there
shall remain as Collateral, immediately subsequent to any such
release, a number of Pledged Kaiser Shares equal to 16,055,000
multiplied by a fraction, the numerator of which is equal to the sum
of (x) the aggregate principal amount of Securities outstanding on the
date of such release, plus (y) one-half of the difference obtained by
subtracting the aggregate principal amount of Securities outstanding
on the date of such release from the aggregate principal amount of
Securities outstanding on the Issue Date, and the denominator of which
is the aggregate principal amount of Securities outstanding on the
Issue Date. To the extent that Pledged Kaiser Shares are comprised of
securities or other property substituted for Kaiser Shares (as
contemplated by the definition of Pledged Kaiser Shares), the kind and
amount of Pledged Kaiser Shares to be released shall be appropriately
adjusted to take account of the kind and amount of such securities or
other property so substituted for each Kaiser Share.
(2) The Company shall be entitled to a release of Pledged
Kaiser Shares from the Lien of this Indenture at any time and from
time to time in connection with, and MAXXAM and
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the Company may permit Kaiser to effect, a merger or consolidation of
Kaiser (or a successor thereto pursuant to this Section 10.05(c)(2))
into, or a sale or transfer of all or substantially all of the assets
of Kaiser in any transaction or series of related transactions to,
another person, or in connection with any other corporate
reorganization of Kaiser (other than a spin-off or other similar
distribution of Kaiser Shares to stockholders of MAXXAM or the
Company) (a "Kaiser Transaction") if (i) no Event of Default,
Collateral Default or Interest Payment Default has occurred and is
continuing or would result from such release, (ii) the Trustee
receives, as Collateral subject to the Lien of this Indenture, in
substitution for such Pledged Kaiser Shares, upon consummation of the
Kaiser Transaction, the consideration received in respect of such
Pledged Kaiser Shares pursuant to such Kaiser Transaction, (iii) all
holders of the common stock of Kaiser (or such successor) shall
(subject to proration, customary treatment of fractional amounts and
other similar adjustments) be entitled to receive substantially the
same consideration in respect of their shares of Kaiser common stock
pursuant to the terms of such Kaiser Transaction and (iv) any
non-money or non-Cash Equivalent consideration received in respect of
such Pledged Kaiser Shares pursuant to such Kaiser Transaction shall
have been registered under the Securities Act to the extent required
under the Federal securities laws.
(3) The Company shall be entitled to a release of any
Trust Moneys from the Lien of the Indenture at any time or from time
to time if (i) no Event of Default, no Collateral Default and no
Interest Payment Default has occurred and is continuing or would
result from such release, (ii) an Officers' Certificate is delivered
to the Trustee by the Company so stating and stating that such release
is permitted under this Section 10.05(c) and (iii) there remains as
Collateral immediately subsequent to any such release, an amount of
Trust Moneys equal to the greater of (x) the Make-Whole Price with
respect to the then outstanding principal amount of the Securities (if
such release occurs prior to August 1, 2000) and (y) 110% of the then
outstanding principal amount of the Securities. Any Trust Moneys to
be released pursuant to the provisions of this Section 10.05(c)(3) at
any time shall be released from the Accounts in the following order of
priority until an amount of Trust Moneys equal to the total amount to
be released at such time has been released: first, from the Cash
Collateral Account; second, from the Cash Collateral Default Account;
third, from the Cash Collateral Offer Account; and, fourth, from the
Cash Collateral Public Equity Offering Account.
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(d) Release Upon Defeasance. Notwithstanding
anything to the contrary in this Indenture, upon satisfaction by the Company of
the conditions set forth in Article 8 to its legal defeasance option, its
covenant defeasance option or to the discharge of this Indenture, the Lien of
this Indenture on all the Collateral shall terminate and all the Collateral
shall be released without any further action on the part of the Trustee or any
other Person.
(e) Further Assurances by Trustee Upon Release of
Collateral. Upon the release of any Collateral pursuant to this Article 10,
the Trustee shall execute and deliver an instrument or instruments
acknowledging the release of such Collateral from the Lien of this Indenture
and the discharge of the Lien on such Collateral created by this Article 10,
and shall duly assign, transfer and deliver to the Company or such other person
as may be entitled thereto (without recourse and without any representation or
warranty) such Collateral.
(f) Collateralized Cash Proceeds Offer Procedures.
(i) Each holder shall have the right, at such Holder's
option, to require the Company to apply Trust Moneys in the Cash
Collateral Offer Account, together with other money, if required, in
an aggregate amount equal to the Collateralized Cash Proceeds Offer
Amount, to purchase Securities tendered pursuant to an offer by the
Company to purchase, for U.S. Legal Tender pursuant to an
unconditional, irrevocable offer, subject to applicable law,
Securities at a purchase price (the "COLLATERALIZED CASH PROCEEDS
PURCHASE PRICE") equal to not less than the sum of (1) 101% of the
principal amount thereof plus (2) accrued and unpaid interest to but
not including the date of purchase, in accordance with the procedures
(including proration in the event of an oversubscription) set forth in
this Section 10.05(f) (a "COLLATERALIZED CASH PROCEEDS OFFER");
provided, that the Company shall not be required to (but may in its
discretion) make a Collateralized Cash Proceeds Offer if the sum of
(x) the amount of Trust Moneys deposited in the Cash Collateral Offer
Account, together with (y) the value, when it became Collateral, of
non-money and non-Cash Equivalent Net Proceeds, Extraordinary
Distributions and Exempt Distributions then required to constitute
Collateral, in each case that have not previously been (and are not
being) subjected to an offer pursuant to this Section 10.05(f) or (in
the case of Net Proceeds of a Public Equity Offering) applied to an
optional redemption pursuant to Section 10.05(g) (the amounts
specified in clause (y), above, to the extent not subjected or applied
(or being subjected or applied) as aforesaid, being hereafter referred
to collectively as the "NON-CASH AMOUNT"), do not in the aggregate
exceed $10,000,000. No Net Proceeds, Exempt
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Distributions, Extraordinary Distributions or other Trust Moneys shall
be required to be subjected to more than one Collateralized Cash
Proceeds Offer (or be subjected to any such offer to the extent they
have been applied to an optional redemption (or are being so applied)
in accordance with Section 10.05(f)(xiv)), and no Net Proceeds of a
Public Equity Offering that have been applied to an optional
redemption (or that are being so applied or that may be so applied
pursuant to an election by the Company pursuant to Section 10.05(g)
the time for which has not expired) in accordance with Section
10.05(g) shall be required to be subjected to a Collateralized Cash
Proceeds Offer. Pending application of any Trust Moneys in the Cash
Collateral Offer Account in accordance with this Section 10.05(f),
such moneys may be invested in accordance with Section 10.03(c).
(ii) Within 30 days following the date on which the Trust
Moneys in the Cash Collateral Offer Account, together with the
Non-Cash Amount, exceed $10,000,000 (the amount of such Trust Moneys
together with the Non-Cash Amount, as of the close of business on the
second Business Day prior to the mailing of the Collateralized Cash
Proceeds Offer Notice, described below, being hereinafter referred to
as the "COLLATERALIZED CASH PROCEEDS OFFER AMOUNT"), or earlier if it
shall so elect, the Company shall mail a written notice of a
Collateralized Cash Proceeds Offer to the Trustee, the Paying Agent
(which for purposes of this Article 10 shall not be the Company or any
of its Affiliates or Subsidiaries) and each Holder (and to beneficial
owners as required by applicable law including, without limitation,
the Exchange Act and the rules and regulations promulgated pursuant
thereto) (the "COLLATERALIZED CASH PROCEEDS OFFER NOTICE"). The
Collateralized Cash Proceeds Offer Notice shall include a form of
Collateralized Cash Proceeds Purchase Notice (as described below) to
be completed by the Holder, and shall contain or state:
(1) the Collateralized Cash Proceeds Offer Amount, a
brief description of the transactions which have generated such
amount, and the calculation of the Collateralized Cash Proceeds Offer
Amount;
(2) the date by which the Collateralized Cash Proceeds
Purchase Notice pursuant to this Section 10.05(f) must be delivered to
the Paying Agent;
(3) the scheduled date of purchase (the "Collateralized
Cash Proceeds Purchase Date"), which shall be no earlier than 30 days
and not later than 60 days following the date on which such
Collateralized Cash Proceeds Offer Notice is mailed, subject to
compliance with applicable law;
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(4) the applicable Collateralized Cash Proceeds Purchase
Price;
(5) the name and address of the Trustee and the Paying
Agent;
(6) that the Securities must be surrendered to the Paying
Agent;
(7) that the Collateralized Cash Proceeds Price for any
Security as to which a Collateralized Cash Proceeds Purchase Notice
has been duly given and not withdrawn shall be paid promptly (subject
to proration) following the later of the Collateralized Cash Proceeds
Purchase Date and the time of surrender of such Security as described
in this Section 10.05(f);
(8) that if Collateralized Cash Proceeds Purchase Notices
are given with respect to Securities having an aggregate
Collateralized Cash Proceeds Purchase Price in excess of the
Collateralized Cash Proceeds Offer Amount pursuant to the
Collateralized Cash Proceeds Offer, the Company shall purchase
Securities on a pro rata basis (with such adjustments as may be deemed
appropriate by the Paying Agent so that only Securities in
denominations of $1,000 or integral multiples thereof shall be
acquired)
(9) the procedures that the Holder must follow to
exercise rights under this Section 10.05(f) and a brief description of
those rights; and
(10) the procedures for withdrawing a Collateralized Cash
Proceeds Purchase Notice.
(iii) To accept the offer to purchase Securities described in
this Section 10.05(f), a Holder must deliver a written notice of
purchase (a "COLLATERALIZED CASH PROCEEDS PURCHASE NOTICE") to the
Paying Agent at any time prior to the close of business on the third
Business Day immediately preceding the Collateralized Cash Proceeds
Purchase Date, stating:
(1) the name of the Holder, the principal amount and the
certificate number or numbers of the Security or Securities which the
Holder will deliver to be purchased, and a statement that the
Collateralized Cash Proceeds Offer is being accepted with respect to
such Securities;
(2) the portion of the principal amount of any Security
which the Holder will deliver to be purchased, which portion must be
$1,000 or an integral multiple thereof; and
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(3) that such Security or Securities shall be purchased
on the Collateralized Cash Proceeds Purchase Date pursuant to the
terms and conditions specified in the Securities and this Indenture.
(iv) The delivery of a Security, by hand or by registered
mail prior to, on or after the Collateralized Cash Proceeds Purchase
Date (together with all necessary endorsements), to the Paying Agent
shall be a condition to the receipt by the Holder of the
Collateralized Cash Proceeds Purchase Price therefor; provided,
however, that such Collateralized Cash Proceeds Purchase Price shall
be so paid pursuant to this Section 10.05(f) only if the Security or
Securities so delivered to the Paying Agent shall conform in all
respects to the description thereof set forth in the related
Collateralized Cash Proceeds Purchase Notice and provided, further,
that the Company shall have no obligation to purchase any Securities
with respect to which a Collateralized Cash Proceeds Purchase Notice
has not been received by the Paying Agent prior to the close of
business on the third Business Day immediately preceding the
Collateralized Cash Proceeds Purchase Date.
(v) In the event that the Collateralized Cash Proceeds Offer
described in this Section 10.05(f) shall be accepted in accordance
with the terms thereof with respect to any portion of a Security, the
Company shall purchase from the holder thereof (subject to proration
pursuant to clause (viii) of this Section 10.05(f)), pursuant to this
Section 10.05(f), such portion of such Security if the principal
amount of such portion is $1,000 or an integral multiple of $1,000.
In connection with a Security purchased in part, the Company shall
execute and the Trustee shall authenticate for delivery to the Holder
thereof, a new Security equal in principal amount to that of the
unpurchased portion of the Security so surrendered.
(vi) Upon receipt by the Paying Agent of the
Collateralized Cash Proceeds Purchase Notice as specified in this
Section 10.05(f), the Holder of the Security (or portion thereof) in
respect of which such Collateralized Cash Proceeds Purchase Notice was
given shall (subject to proration pursuant to clause (viii) of this
Section 10.05(f)) and unless such Collateralized Cash Proceeds
Purchase Notice is withdrawn as specified in clause (vii) of this
Section 10.05(f)) thereafter be entitled to receive the applicable
Collateralized Cash Proceeds Purchase Price with respect to such
Security (or portion thereof). Such Collateralized Cash Proceeds
Purchase Price shall be due and payable as of the Collateralized Cash
Proceeds Purchase Date and shall be paid to such Holder promptly
following the later of (A) the Collateralized Cash
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Proceeds Purchase Date (provided, the conditions in clauses (iii) and
(iv) of this Section 10.05(f), as applicable, have been satisfied) and
(B) the date of delivery of such Security to the Paying Agent by the
Holder thereof in the manner required by such clauses (iii) and (iv).
(vii) A Collateralized Cash Proceeds Purchase Notice may be
withdrawn by means of a written notice of withdrawal delivered to the
Paying Agent at any time on or prior to the close of business on the
second Business Day preceding the Collateralized Cash Proceeds
Purchase Date specifying:
(1) the certificate number or numbers of the Security or
Securities in respect of which such notice of withdrawal is being
submitted;
(2) the principal amount of the Security or Securities
with respect to which such notice of withdrawal is being submitted;
and
(3) the principal amount, if any, of such Security or
Securities which remains subject to the original Collateralized Cash
Proceeds Purchase Notice, and which has been or will be delivered for
purchase by the Company.
(viii) If at the close of business on the second Business Day
preceding the Collateralized Cash Proceeds Purchase Date, the
Collateralized Cash Proceeds Purchase Price of all Securities for
which Collateralized Cash Proceeds Purchase Notices have been given
and not withdrawn exceeds the Collateralized Cash Proceeds Offer
Amount, the Paying Agent shall select the Securities to be purchased
such that each properly tendering Holder shall receive a portion of
the Collateralized Cash Proceeds Offer Amount on a pro rata basis
(with such adjustments as may be deemed appropriate by the Paying
Agent so that only Securities in denominations of $1,000 or integral
multiples thereof shall be purchased). The Paying Agent shall
promptly return to the Holder thereof any Securities surrendered which
the Company shall not be required to purchase pursuant to this Section
10.05(f).
(ix) Prior to noon, New York time, on the Collateralized
Cash Proceeds Purchase Date, the Company shall deliver to the Trustee,
for deposit into the Cash Collateral Offer Account, an amount of money
equal to the amount, if any, by which (A) the lesser of (x) the
aggregate Collateralized Cash Proceeds Purchase Price of all
Securities for which Collateralized Cash Proceeds Purchase Notices
have been given and not withdrawn and (y) the Collateralized Cash
Proceeds Offer Amount exceeds (B) the amount of money on deposit in
the Cash Collateral Offer Account. Following such delivery, if any,
but in any
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event on or prior to noon, New York time, on the Collateralized Cash
Proceeds Purchase Date, the Trustee shall release from the Lien of
this Indenture and deliver to the Paying Agent an amount of money from
the Cash Collateral Offer Account equal to the amount specified in
clause (A) above.
(x) Any Trust Moneys remaining in the Cash Collateral
Offer Account following release and delivery by the Trustee pursuant
to Section 10.05(f)(ix) shall be (A) deposited in the Cash Collateral
Account if the Collateralized Cash Proceeds Purchase Price for the
Securities does not equal or exceed the Call Price therefor plus
accrued and unpaid interest, if any, thereon to (but not including)
the Collateralized Cash Proceeds Purchase Date, in which case such
Trust Moneys shall remain subject to the Lien of this Indenture, or
(B) delivered to the Company, if the preceding clause (A) is not
applicable, in which case such moneys shall be released from the Lien
of this Indenture without the need for any further action from the
Trustee.
(xi) If money sufficient to pay the Collateralized Cash
Proceeds Purchase Price of all Securities (or portions thereof) to be
purchased on the Collateralized Cash Proceeds Purchase Date is
deposited with the Paying Agent as of the Collateralized Cash Proceeds
Purchase Date, interest shall cease to accrue on all such Securities
(or portions thereof) on and after the Collateralized Cash Proceeds
Purchase Date, whether or not any such Security is delivered to the
Paying Agent, and the holders thereof shall have no other rights as
such, other than the right to receive the Collateralized Cash Proceeds
Purchase Price (and, in the case of a Security purchased in part, a
new Security equal in principal amount to the unpurchased portion of
the Security surrendered) upon surrender of such Securities.
(xii) In connection with any offer to purchase, or any
purchase of, Securities under this Section 10.05(f), the Company shall
(i) comply with the Exchange Act, if applicable, (ii) file any
required Schedules of the Exchange Act, if applicable, and (iii)
otherwise comply with all Federal and state securities laws regulating
the purchase of the Securities.
(xiii) The Paying Agent shall return to the Company any
money, together with interest or dividends, if any, thereon held by it
for the payment of the Collateralized Cash Proceeds Purchase Price of
the Securities that remain unclaimed as provided in Section 8.04
hereof; provided, however, that to the extent that the aggregate
amount of money deposited by the Company pursuant to Section
10.05(f)(ix) (together with Trust Moneys at the time in the Cash
Collateral Offer Account)
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exceeds the aggregate Collateralized Cash Proceeds Purchase Price of
the Securities or portions thereof to be purchased on the
Collateralized Cash Proceeds Purchase Date, then promptly after the
Collateralized Cash Proceeds Purchase Date, the Paying Agent shall
return any such excess to the Company together with interest or
dividends, if any, thereon.
(xiv) Notwithstanding the foregoing provisions of this
Section 10.05(f), the Company shall not be required to make a
Collateralized Cash Proceeds Offer if and to the extent that, prior to
the time when the Company would have been required to make such
Collateralized Cash Proceeds Offer, the Company shall have, by written
notice to the Trustee, (1) elected to apply all or any portion of the
Collateral Cash Proceeds Offer Amount (such Collateralized Cash
Proceeds Offer Amount to be computed as if the date of delivery of
such written notice to the Trustee were the date of mailing of a
Collateralized Cash Proceeds Offer Notice) to a then permitted
optional redemption of the Securities, in whole or in part, at a
redemption price equal to not less than 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to (but not
including) the redemption date and (2) notified the Trustee of the
redemption date and the aggregate principal amount of Securities to be
redeemed. Following the giving of such written notice, the Company
shall, prior to 11:00 A.M., New York time, on the date set by the
Company for such redemption of Securities in accordance with Article
3, deliver to the Trustee, for deposit into the Cash Collateral Offer
Account, an amount of money equal to the amount, if any, by which the
aggregate redemption price of all Securities called for redemption,
including accrued and unpaid interest, if any, thereon to (but not
including) the date of redemption exceeds the amount of money on
deposit in the Cash Collateral Offer Account. Following such
delivery, if any, but in any event on or prior to 11:00 A.M., New York
time, on the date set by the Company for such redemption of Securities
in accordance with Article 3, the Trustee shall release from the Lien
of this Indenture and deliver to the Paying Agent an amount of money
from the Cash Collateral Offer Account equal to the aggregate
redemption price of all Securities called for redemption, including
accrued and unpaid interest, if any, thereon to (but not including)
the date of redemption.
(g) Release Upon Election Optionally to Redeem. If the
Company receives Net Proceeds from a sale of Pledged Shares or from a
Primary Share Sale that becomes subject to the Lien of this Indenture,
and if such sale constitutes a Public Equity Offering and the Company
is entitled at such time to effect an optional redemption in part of
Securities pursuant to Article 3 of this Indenture and paragraph 5 of
the Securities with
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such Net Proceeds, then the Company may elect, by written notice to
the Trustee delivered within 30 days after it receives such Net
Proceeds, to apply all or any portion of such Net Proceeds to such an
optional redemption. Following the giving of such written notice, the
Company shall, prior to 11:00 A.M., New York time, on the date set by
the Company for such redemption of Securities in accordance with
Article 3, deliver to the Trustee, for deposit into the Cash
Collateral Public Equity Offering Account, an amount of money equal to
the amount, if any, by which the aggregate redemption price of all
Securities called for redemption, including accrued and unpaid
interest, if any, to (but not including) the date of redemption (the
"AGGREGATE REDEMPTION PRICE"), exceeds the amount of money on deposit
in the Cash Collateral Public Equity Offering Account. Following such
delivery, if any, but in any event on or prior to 11:00 A.M., New York
time, on the date set by the Company for such redemption of Securities
in accordance with Article 3, the Trustee shall release from the Lien
of this Indenture and deliver to the Paying Agent an amount of money
from the Cash Collateral Public Equity Offering Account equal to the
Aggregate Redemption Price. Pending application of any Trust Moneys
in the Cash Collateral Public Equity Offering Account in accordance
with this Section 10.05(g), such moneys may be invested in accordance
with Section 10.03(c).
SECTION 10.06. TRUSTEE APPOINTED ATTORNEY-IN-FACT. The Company
hereby appoints the Trustee as its attorney-in-fact, with power of substitution
and with full authority in its place and stead and in its name or the Trustee's
own name, from time to time, in the Trustee's discretion subject to the
provisions of this Article 10, to take any action and to execute any instrument
which the Trustee may deem necessary or advisable in order to accomplish the
purposes of this Article 10, including to receive, endorse and collect all
instruments made payable to it representing any dividend, interest payment or
other distribution in respect of the Collateral or any part thereof and to give
full discharge for the same. This power, being coupled with an interest, is
irrevocable.
SECTION 10.07. TRUSTEE MAY PERFORM. If the Company fails in any
material respect to perform any agreement contained in this Article 10, or
fails to take any action required to be taken by it, to perfect or maintain the
perfection and priority of the Trustee's Lien on any applicable Collateral, the
Trustee may itself perform, or cause performance of, such agreement, and the
expenses of the Trustee incurred in connection therewith shall be payable by
the Company under Section 7.07. Without limiting the foregoing, the Trustee is
authorized to file financing statements without the signature of the grantor of
a security interest in any Collateral in order to perfect any Lien on such
Collateral.
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SECTION 10.08. REMEDIES UPON EVENT OF DEFAULT. If any Notice of
Acceleration shall have been delivered and is at the time in effect, the
Trustee may exercise in respect of the Collateral, in addition to other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies provided a secured party upon the default of a debtor under the
Uniform Commercial Code at that time. Without limiting the foregoing, the
Trustee may, without notice, except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of the Trustee's offices or elsewhere, for
cash, on credit or for future delivery, upon such terms as the Trustee may
determine to be commercially reasonable, and the Trustee or any securityholder
may be the purchaser of any or all of the Collateral so sold and thereafter
hold the same, absolutely, free from any right or claim of whatsoever kind.
The Company agrees that, to the extent notice of sale shall be required by law,
at least 10 days' notice to the Company of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Trustee shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. The Trustee may
adjourn any public or private sale from time to time by announcement at the
time and place fixed there for, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. The Trustee shall
incur no liability to the Company as a result of the sale of the Collateral, or
any part thereof, at any private sale conducted in a commercially reasonable
manner. The Company hereby waives any claim against the Trustee arising by
reason of the fact that the price at which any Collateral pledged by it
hereunder may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if the Trustee accepts
the first offer received and does not offer such Collateral to more than one
offeree.
The Company recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, the
Trustee may be compelled, with respect to any sale of all or any part of the
Collateral, to limit purchasers to those who will agree, among other things, to
acquire such securities for their own account, for investment and not with a
view to the distribution or resale thereof. The Company acknowledges and
agrees that any such sale may result in prices and other terms less favorable
to the seller than if such sale were a public sale without such restrictions
and, notwithstanding such circumstances, agrees that any such sale of any
Collateral pledged by it hereunder shall be deemed to have been made in a
commercially reasonable manner. The Trustee shall be under no obligation to
delay the sale of any of the Pledged Shares for the period of time necessary to
permit the Company to register such securities for public sale
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under the Securities Act or under applicable state securities laws, even if the
Company would agree to do so.
If a Notice of Acceleration has been delivered and is at the time in
effect, the Trustee may, upon written notice, require the Company to use its
best efforts to cause to be registered as soon as possible pursuant to the
Securities Act and relevant state securities laws the Pledged Shares and to
keep such registration effective for at least 360 consecutive days, and to
enter into customary arrangements with the Trustee and the holders concerning
indemnification and reimbursement of expenses.
SECTION 10.09. APPLICATION OF PROCEEDS. If a Notice of Acceleration
has been delivered and is at the time in effect, any Trust Moneys held by the
Trustee as Collateral, and all proceeds received by the Trustee in respect of
any sale of, collection from or other realization upon, all or any part of the
Collateral, shall be applied by the Trustee in the manner specified in Section
6.10.
SECTION 10.10. CONTINUING LIENS. Except as provided in Article 5 and
this Article 10, the Company represents that this Indenture shall create a
continuing Lien on the Collateral with respect to which a security interest is
granted pursuant to Section 10.01(a), and on any Released Kaiser Shares in
which a security interest may hereafter be granted by the Company pursuant to
Section 10.01(b), that shall (i) remain in full force and effect until payment
in full of the Securities, (ii) be binding upon the Company and its successors
and assigns and (iii) enure to the benefit of the Trustee and its successors,
transferees and assigns.
SECTION 10.11. CERTIFICATES AND OPINIONS. The Company shall comply
with (a) TIA Section 314(b) relating to Opinions of Counsel regarding the Lien
of this Indenture and (b) TIA Section 314(d) relating to the release and
substitution of Collateral from the Lien of this Indenture and Officers'
Certificates or other documents regarding fair value of the Collateral, to the
extent such provisions are applicable. The release of any collateral, in whole
or in part, from the Lien of this Indenture shall be deemed not to impair in
contravention of this Indenture, any of the Liens relating to the Collateral,
or otherwise contravene the provisions of this Indenture, if and to the extent
such Collateral is released pursuant to and in compliance with the terms of
this Indenture. Any certificate or opinion required by TIA Section 314(d) may
be executed and delivered by an Officer of the Company to the extent permitted
by TIA Section 314(d).
SECTION 10.12. REPRESENTATIONS AND WARRANTIES. The Company hereby
represents and warrants as follows:
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(i) The Company is the record and beneficial owner of the
Pledged Shares described on Exhibit D, free and clear of any Lien,
except for the Lien created by this Indenture.
(ii) The Company has full corporate power, authority and
legal right to pledge all the Pledged Shares described on Exhibit D
and all other Collateral pledged by the Company.
(iii) The Pledged Shares described on Exhibit D have been
duly authorized and are validly issued, fully paid and non-assessable.
(iv) The pledge in accordance with the terms of this
Indenture of the Pledged Shares described on Exhibit D (assuming no
failure by the Trustee to perform acts customarily required of a
secured party in such circumstances) creates an (except for Liens
permitted under Section 4.16) exclusive and a valid and perfected
first priority Lien on such Collateral, securing payment of principal
and premium of and interest on the Securities by the Company.
(v) Exhibit D hereto sets forth a description of all the
Pledged Shares owned by the Company as of the Issue Date.
(vi) There are no existing options, warrants, calls or
similar commitments relating to any authorized and unissued Stock of
MGI.
SECTION 10.13. CERTAIN MERGERS, CONSOLIDATIONS, ETC. AMONG THE
COMPANY, MGI AND RESTRICTED SUBSIDIARIES. Notwithstanding any other provision
of this Indenture, the Company may at any time and from time to time permit MGI
to merge or consolidate into, or sell or transfer all or substantially all its
assets in any transaction or series of transactions to, any Restricted
Subsidiary if:
(i) the Trustee receives, as Collateral subject to the
Lien of this Indenture, the consideration distributed to the Company
on the Pledged MGI Shares in such transaction or transactions;
(ii) after giving effect to such transaction or
transactions, the Collateral includes at least a majority of the
Voting Stock and outstanding equity interests (on a fully diluted
basis) of the person surviving such merger or consolidation or to whom
such transfer is made, in a proportion at least equal to that in which
the Voting Stock and outstanding equity interests of MGI were included
in the Collateral immediately prior to such transaction or
transactions;
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(iii) no Default exists or would exist immediately following
such transaction or transactions after giving effect thereto on a pro
forma basis; and
(iv) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel stating that clause
(iii) above is satisfied and stating that such transaction or
transactions are otherwise permitted by this Section 10.13.
Upon satisfaction of the requirements of this Section 10.13, the Trustee shall,
if requested, release the Pledged MGI Shares from the Lien of this Indenture to
the extent necessary to effect any transaction or transactions permitted under
this Section 10.13; provided, that any person surviving such merger or
consolidation, or to whom such sale or transfer is made, pursuant to the
foregoing provisions of this Section 10.13 shall be deemed to be, for all
purposes of this Indenture, MGI, such person shall be a Restricted Subsidiary
and any owner of shares of Stock of such person that is either the Company or a
Subsidiary of the Company shall grant a security interest (of like tenor to the
security interest granted on the Issue Date pursuant to Section 10.01(a)) in
such shares of Stock and shall expressly assume, by supplemental indenture
hereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations with respect to such shares applicable to the
Company with respect thereto under this Article 10. Notwithstanding any other
provision of this Indenture, MGI may, at any time and from time to time, merge
or consolidate into, or transfer all or substantially all its assets in any
transaction or series of transactions to, the Company.
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.
SECTION 11.02. NOTICES. Any notice or communication shall be in
writing and delivered in person, transmitted by facsimile (confirmed in writing
by mail) or mailed by first-class mail addressed as follows:
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If to the Company:
MAXXAM Group Holdings, Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopy Number: (000) 000-0000
with copies to:
Xxxxxx X. Xxxxx, Esq.
c/o Kramer, Levin, Naftalis & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy Number: (000) 000-0000
and
if to the Trustee:
First Bank National Association
Corporate Trust Department
000 Xxxx 0xx Xxxxxx
Xxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopy Number: (000) 000-0000
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
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.
Notwithstanding anything to the contrary in this Section 11.02, notices to the
Company or the Trustee shall only be deemed given when received by the Company
or the Trustee, as the case may be.
SECTION 11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Security
holders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities and the Trustee shall comply with TIA
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Section 312(b). The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA Section 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 any
action under this Indenture, the Company shall furnish to the Trustee upon the
Trustee's request:
(i) an Officers' Certificate stating 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 (or
will have been complied with upon the execution and delivery of
designated instruments); and
(ii) an Opinion of Counsel stating that, in the opinion of
such counsel, as to legal matters, all such conditions precedent have
been complied with (or will have been complied with upon the execution
and delivery of designated instruments);
except that in the case of any application or request as to which the
furnishing of such documents is specifically required by any provisions 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 with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the person making such certificate
or rendering such 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;
(3) a statement that, in the opinion of such person, he
or she has made such examination or investigation as is necessary to
enable him or her 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 person, such covenant or condition has been complied with.
SECTION 11.06. WHEN TREASURY 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
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indirectly controlling or controlled by or under direct or indirect common
control with the Company shall be disregarded and deemed not to be outstanding,
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 11.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 11.08. LEGAL HOLIDAYS. 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 11.09. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK
SHALL GOVERN THIS INDENTURE AND THE SECURITIES, 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, EXCEPT THAT THE
LAWS OF THE STATE OF MINNESOTA SHALL GOVERN MATTERS CONCERNING THE VALIDITY AND
PERFECTION OF SECURITY INTERESTS OF THE TRUSTEE IN FAVOR OF THE HOLDERS IN THE
ACCOUNTS, 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. THE COMPANY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW
YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF
NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
JURISDICTION OF THE AFORESAID COURTS. THE COMPANY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
TRUSTEE OR ANY SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY
IN ANY OTHER JURISDICTION.
SECTION 11.10. NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Company, the Guarantor or the Trustee
shall not have any liability for any
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obligations of the Company, the Guarantor or the Trustee under the Securities
or this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, 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 11.11. 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 11.12. SEVERABILITY. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions thereof shall not in
any way be affected or impaired thereby.
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. This Indenture may be executed in two or more counterparts,
each of which shall be an original, but all of them together constitute the
same agreement.
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, restrict or
otherwise affect the meaning or interpretation of any of the terms or
provisions hereof.
SECTION 11.15. BENEFITS OF INDENTURE. Nothing in this Indenture or
the Securities, express 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.
SECTION 11.16. NO CHALLENGE. (a) The Trustee agrees, and each
Holder of a Security by its acceptance thereof agrees, that neither the Trustee
nor any such Holder shall take any action to challenge or to contest, in any
bankruptcy or insolvency proceeding or otherwise, or vote in any way so as to
authorize or participate, directly or indirectly, in any such challenge or
contest of, or file any claim in any bankruptcy or insolvency proceeding or
otherwise inconsistent with: (i) the validity, priority or enforceability of
the Liens and security interests granted to secure payment of the Bank Debt,
whether outstanding at the date hereof or hereafter, (ii) the rights of the
holders of the Bank Debt, or any agent for such holders, set forth in any
security
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agreement, mortgage or other collateral document with respect to such Liens and
security interests, or (iii) the validity or enforceability of any provision of
this Section 11.16. For purposes of this Indenture, the Liens and security
interests granted in connection with the Bank Debt shall be deemed to have been
given in exchange for reasonably equivalent or fair value received by the
Company.
(b) Except as expressly stated in this Section 11.16, the
Trustee and the Holders of the Securities retain their rights to vote their
claims and otherwise to act on their own behalf in any proceeding under the
Bankruptcy Law.
(c) The Trustee acknowledges, on behalf of itself and the
Holders of the Securities, that the holders of the Bank Debt have entered or
will enter into the Credit Agreement and have extended or will extend credit
pursuant thereto in reliance upon this Section 11.16. This Section 11.16 shall
inure to the benefit of and be enforceable by the holders of the Bank Debt and
any agent for such holders.
ARTICLE 12
MAXXAM GUARANTEE
SECTION 12.01 SENIOR GUARANTEE.
Subject to the provisions of this Article 12, the Guarantor
hereby unconditionally guarantees to each Securityholder of Securities
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Securities or the Obligations of the Company to the
Securityholders or the Trustee hereunder or under the Securities, that: (a)
the principal of, and premium, if any, and interest on the Securities will be
duly and punctually paid in full when due, whether at maturity, by acceleration
or otherwise, and interest on overdue principal, and premium, if any, and (to
the extent permitted by law) interest on any interest, if any, on the
Securities and all other amounts and Obligations of the Company to the
Securityholders or the Trustee hereunder or under the Securities will be
promptly paid in full or performed, all in accordance with the terms hereof and
thereof; and (b) in case of any extension of time of payment or renewal of any
Securities or any of such other Obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or failing performance of any
other Obligation of the Company to the Securityholders, for whatever reason,
the Guarantor
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will be obligated to pay, or to perform or to cause the performance of, the
same immediately.
The Guarantor hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action
to enforce the same, any waiver or consent by any Securityholder with respect
to any provision hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of the
Guarantor. The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, protest, notice and all demands whatsoever and covenants that
its Guarantee will not be discharged except by payment in full of the principal
of, premium, if any, and interest on the Securities or as provided in Section
12.02 or Section 8.01 (subject, in the case of Section 8.01, to reinstatement
pursuant to Section 8.06). If any Securityholder or the Trustee is required by
any court or otherwise to return to the Company or any Custodian, trustee,
liquidator or other similar official acting in relation to the Company any
amount paid by any such entity to the Trustee or such Securityholder, this
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
The Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Securityholders in respect of any
Obligations guaranteed hereby until payment in full of the principal of,
premium, if any, and interest on the Securities or satisfaction of the
conditions set forth in Section 8.01(a) or 8.02; provided, however, that,
anything in this Indenture or in the Intercompany Note to the contrary
notwithstanding, any payment made by the Guarantor pursuant to this Article 12
shall automatically reduce the outstanding principal amount of the Intercompany
Note by an amount equal to the amount of such payment, provided that such
obligation under the Intercompany Note shall be reinstated to the extent that
any Securityholder or the Trustee is required by any court or otherwise to
return to the Guarantor or any Custodian, trustee, liquidator or other similar
official acting in relation to the Guarantor any amount paid by any such entity
to the Trustee or such Securityholder. The Guarantor agrees that, as between
it, on the one hand, and the Securityholders and the Trustee, on the other
hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated
as provided in Article 6 hereof for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any acceleration of such Obligations as provided in Article 6 hereof,
such Obligations (whether or not due and payable) shall forthwith
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become due and payable by the Guarantor for the purpose of this Guarantee.
SECTION 12.02 WHEN GUARANTOR MAY MERGE, ETC.
The Guarantor shall not consolidate or merge with or into
(whether or not the Guarantor is the surviving person), or sell or transfer all
or substantially all of its assets to, another corporation, person or entity
whether or not affiliated with the Guarantor unless:
(i) the person formed by or surviving any such consolidation
or merger (if other than the Guarantor) or that acquires such assets assumes
all obligations of the Guarantor under this Indenture and the Securities
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee; and
(ii) immediately after giving effect to such transaction, no
Default or Event of Default exist.
The resulting, surviving or transferee person (if other than
the Guarantor which executed this Indenture) shall succeed to, and may exercise
every right and power of, the Guarantor under this Indenture with the same
effect as if such successor Guarantor had been named as the Guarantor herein
and the Guarantor (except in the event of a lease of all or substantially all
of the Guarantor's assets) shall be relieved of its obligations under this
Indenture and the Securities. The Guarantor shall deliver to the Trustee prior
to the consummation of the proposed transaction a Guarantor's Officers'
Certificate and an Opinion of Counsel (to such counsel's knowledge) to the
effect set forth in clause (ii) and stating that the proposed transaction and
such supplemental indenture (if required) comply with this Indenture.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
MAXXAM GROUP HOLDINGS INC.
Attest:
By: /s/ XXXXXXX X. XXXXXX By: /s/ XXXXX X. XXXX
------------------------ ----------------------------
Assistant Secretary Name: Xxxxx X. Xxxx
Title: Vice President
MAXXAM INC. hereby confirms its agreements set
forth in Article 12 of this Indenture.
Attest:
By: /s/ XXXXXXX X. XXXXXX By: /s/ XXXXXX X. REMAN
------------------------ ----------------------------
Assistant Secretary Name: Xxxxxx X. Reman
Title: Vice President - Taxes
FIRST BANK NATIONAL ASSOCIATION
Attest:
By: /s/ XXXXXXX X. XXXXXX By: /s/ XXXXXXX PROKASCH
------------------------ -----------------------------
Assistant Secretary Name: Xxxxxxx Prokasch
Title: Trust Officer
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EXHIBIT A
(FORM OF FACE OF SECURITY)
No.
$
12% [Series A] [Series B] Senior Secured
Notes due 2003
MAXXAM Group Holdings Inc., a Delaware corporation, promises to pay to
_____________________, or registered assigns, the principal sum of
_____________ ______ DOLLARS on August 1, 2003.
Interest Payment Dates: February 1 and August 1, commencing February
1, 1997.
Record Dates: January 15 and July 15.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated: MAXXAM GROUP HOLDINGS INC.
By_________________________
By_________________________
MAXXAM INC., as Guarantor in
accordance with the Indenture
By_________________________
By_________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
FIRST BANK NATIONAL ASSOCIATION
as Trustee [Seal]
certifies that this is one
of the Series [A][B]
Securities referred to in
the Indenture.
By__________________________________
Authorized Signatory
A-1
135
[Unless and until it is exchanged in whole or in part for Securities
in definitive form, this Security may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx) ("XXX"), to the issuer 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 may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.]*
---------------
* This paragraph should be included only if the Security is issued in global
form.
A-2
136
[THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX
XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i) (a) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN
PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE ISSUER SO REQUESTS), (ii) TO THE ISSUER OR (iii) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.]*
---------------
* This paragraph should be included only if the Security is a Transfer
Restricted Security.
A-3
137
[FORM OF REVERSE SIDE OF SECURITY]
12% [Series A] [Series B] Senior Secured Notes due 2003
1. Interest
MAXXAM Group Holdings Inc., a Delaware corporation (such corporation,
and its successors and assigns under the Indenture (as hereinafter defined),
being herein called the "Company"), promises to pay interest on the principal
amount of this Security at the rate per annum shown above from December 23,
1996, until payment of such principal amount has been made or duly provided for
[and shall pay any Additional Interest payable pursuant to Section 2(e) of the
Registration Rights Agreement referred to below]. The Company shall pay
interest [and Additional Interest, if any,] semiannually on February 1 and
August 1 of each year, commencing on February 1, 1997. Interest on this
Security will accrue from the most recent interest payment date next preceding
the date hereof to which interest has been paid, unless the date hereof is an
interest payment date to which such interest has been paid, in which case from
the date hereof, or unless the date hereof is prior to February 1, 1997, in
which case from December 23, 1996; except that if the date hereof is prior to
an interest payment date and after the next preceding interest payment record
date and if there be no default in payment of interest on the Securities on
such interest payment date, then this Security shall bear interest from such
interest payment date, and if there be such a default then this Security shall
bear interest from the next preceding interest payment date to which interest
has been paid or duly provided for or, in the case of a default in the first
payment of interest, from December 23, 1996. 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 per annum shown above, and it shall
pay interest on overdue installments of interest [and Additional Interest, if
any,] at the same rate at which interest was paid prior to default, to the
extent lawful.*
2. Method of Payment
The Company will pay interest [and Additional Interest, if any,] on
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 an interest
payment date even if Securities are canceled after the record date and on or
before
---------------
* Bracketed language should be included in this paragraph only if the Security
is a Transfer Restricted Security.
A-4
138
such interest payment date (except defaulted interest, which will be paid to
the persons who are registered holders of Securities at the close of business
on a special record date established for payment of such defaulted interest,
which date shall be at least ten days prior to the interest payment date).
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest [and Additional
Interest, if any,] 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 may
pay principal and interest by check payable in such money. It may mail an
interest check to a Holder's registered address.*
3. Paying Agent and Registrar
Initially, First Bank National Association (the "Trustee") will act as
Paying Agent and Registrar. The Company may appoint and change any Paying
Agent or Registrar without notice, except as provided in the Indenture. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar except
as provided in the Indenture.
4. Indenture
This Security is one of a duly authorized issue of Securities of the
Company, designated as its 12% Senior Secured Notes due 2003 (herein called the
" Securities"), all issued under an Indenture, dated as of December 23, 1996
(the "Indenture"), among the Company, MAXXAM Inc., a Delaware corporation (such
corporation and its successors and assigns under the Indenture being herein
called "MAXXAM"), and the Trustee. The terms of the Securities include those
of the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. Sections 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 the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Securities issued pursuant to the Indenture. Capitalized terms used and not
otherwise defined herein have the meanings given to such terms in the
Indenture.
The Securities are general secured obligations of the Company limited
to $130,000,000 aggregate principal amount, subject to Section 2.07 of the
Indenture. The Indenture imposes certain limitations on the Company and its
Restricted
---------------
* Bracketed language should be included in this paragraph only if the Security
is a Transfer Restricted Security.
A-5
139
Subsidiaries with respect to the issuance of Indebtedness, the payment of
dividends and certain other distributions by the Company, the sale or transfer
of assets, transactions with Affiliates and the creation of certain Liens. in
addition, the Indenture limits the ability of the Company and its Subsidiaries
to restrict dividends from Restricted Subsidiaries and certain other payments
to the Company.
5. Optional Redemption
At any time prior to August 1, 2000, the Company may, at its option,
on not less than 15 days (or 30 days if legally required by The Depository
Trust Company) nor more than 60 days notice to each Holder of the Securities to
be redeemed, redeem all or any portion of the Securities at the Make-Whole
Price (as defined in the Indenture) plus accrued and unpaid interest to (but
not including) the date of redemption. In addition, at any time prior to
August 1, 2000, the Securities may be redeemed at the option of the Company, in
part, on not less than 15 days (or 30 days if legally required by The
Depository Trust Company) nor more than 60 days notice to each Holder of the
Securities to be redeemed, with the net proceeds of a Public Equity Offering
(as defined in the Indenture), at 110% of the principal amount thereof, plus
accrued and unpaid interest, if any, to (but not including) the date of
redemption; provided, however, that at least 65% of the aggregate principal
amount of the Securities outstanding on the Issue Date (as defined in the
Indenture) shall remain outstanding after any such redemption pursuant to this
sentence.
On and after August 1, 2000, the Securities may be redeemed at the
option of the Company, in whole or in part, on not less than 15 days (or 30
days if legally required by The Depository Trust Company) nor more than 60 days
notice to each Holder of the Securities to be redeemed, at the following
redemption prices (expressed as a percentage of principal amount), plus accrued
and unpaid interest, if any, to (but not including) the date of redemption:
If redeemed during the 12-month period commencing August 1 of the
following years:
Year Price
---------------------------------------------------------------------
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.00%
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.00%
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00%
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6. Notice of Redemption
Notice of redemption will be mailed at least 15 days (or 30 days if
legally required by The Depository Trust Company) but not more than 60 days
before the redemption date to each Holder of Securities to be redeemed at his
or her registered address. Securities in denominations larger than $1,000 may
be redeemed in part, but only in multiples of $1,000. If money sufficient to
pay the redemption price, including 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 the redemption date interest shall
cease to accrue on Securities or portions of them called for redemption
(whether or not the Securities have been timely surrendered) and the only
remaining right of the Holders thereof shall be to receive payment of the
redemption price thereof, including accrued and unpaid interest, if any, to
(but not including) the redemption date, if applicable, upon surrender to the
Paying Agent of such Securities.
7. Change of Control, Certain Collateral Dispositions and Asset Sales
Upon the first Change of Control (as defined in the Indenture) after
the date of the Indenture, a Holder of Securities will have the right to cause
the Company to purchase 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
purchased, plus accrued and unpaid interest, if any, to (but not including) the
date of purchase, subject to the terms of the Indenture.
Upon certain Asset Sales (as defined in the Indenture), a Holder of
Securities will have the right to cause the Company to purchase Securities of
such Holder at a purchase price equal to 100% of the principal amount of the
Securities to be purchased, plus accrued and unpaid interest, if any, to (but
not including) the date of purchase, subject to the terms of the Indenture. If
less than all Securities are so purchased, such purchase shall be made on a pro
rata basis.
Upon receipt by the Company of certain proceeds of the Collateral (as
defined in the Indenture), a Holder of Securities will have the right to cause
the Company to purchase Securities of such Holder at a purchase price equal to
not less than 101% of the principal amount of the Securities to be purchased,
plus accrued and unpaid interest, if any, to (but not including) the purchase
date, subject to the terms of the Indenture. If less than all Securities are
so purchased, such purchase shall be made on a pro rata basis.
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8. Security
To secure the full and punctual payment of the principal amount and
premium of and interest on the Securities and all other amounts payable under
the Indenture and the Securities when and as the same shall be due and payable,
the Company has granted a security interest in all of the outstanding shares of
Stock of MAXXAM Group Inc. ("MGI"), a wholly owned Subsidiary of the Company.
Subject to the terms of the Indenture, if and only if any Released Kaiser
Shares are released from the Lien of the MGI Indenture by reason of early
retirement of the MGI Notes (other than by reason of a refinancing of the MGI
Notes), the Company will pledge up to 16,055,000 of such shares as security for
the Securities. The Collateral (as defined in the Indenture) is subject to
substitution and release from the Lien of the Indenture to the extent provided
therein.
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. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer 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), any Securities for a period of 15
days before the mailing of a notice of redemption of Securities selected for
redemption or any Securities after an interest payment record date and before
the next succeeding 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 any portion of such money
must look only to the Company, and not to the Trustee or Paying Agent, for
payment as general creditors, or, as applicable law designates, another person.
X-0
000
00. 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 aggregate principal amount outstanding of the
Securities and (ii) any nonpayment default or noncompliance with any provision
may be waived with the written consent of the Holders of a majority in
aggregate principal amount outstanding of the Securities. Subject to certain
exceptions set forth in the Indenture, without the consent of any Holder of any
Security, the Company and the Trustee may amend the Indenture or the Securities
to cure any ambiguity, omission, defect or inconsistency, to comply with
Articles 5 or 12 and Sections 10.01(b), 10.02(a), 10.04 or 10.13 of the
Indenture (relating to successor corporations and subsequent pledges of
Collateral), to provide for uncertificated Securities in addition to or in
place of certificated Securities, to add to the covenants of the Company for
the benefit of the Holders, to surrender any right or power conferred upon the
Company, to comply with the Trust Indenture Act of 1939 or to make any change
that does not adversely affect the rights of any Holder of any Security.
Without the consent of each Holder of an outstanding Security affected
thereby, no amendment may (i) reduce the aggregate amount of Securities whose
holders must consent to an amendment to the Indenture, (ii) reduce the rate of
or extend the stated maturity of any payment of interest on the Securities,
(iii) reduce the principal (at maturity or any other time) of or extend the
Stated Maturity of any payment of principal of any Security, including upon
redemption or payment of the Asset Sale Purchase Price or Change of Control
Purchase Price, (iv) reduce the premium payable upon the redemption of any
Security or (v) make any Security payable in money other than that stated in
the Security. Notwithstanding any other provision of the Indenture, the right
of any Holder of Securities to receive payment of principal of and interest on
the Securities held by such Holder, on or after the respective due dates
expressed therein, 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; provided, that no Holder shall have the right to
institute any such suit, if and to the extent that the institution or
prosecution thereof or the entry of judgment therein would, under applicable
law, result in the surrender, impairment, waiver or loss of the Lien on the
Collateral created by the Indenture. Changes to Article 10 of the Indenture or
the definitions relating thereto (except for changes permitted without the
consent of Holders of Securities) may be made only with the consent of Holders
of 66-2/3% of the aggregate principal amount of outstanding Securities.
X-0
000
00. 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 the
principal amount of the Securities at maturity, upon redemption or required
repurchase pursuant to paragraph 5 or 7 of the Securities, upon declaration or
otherwise; (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 defaults with respect to other Indebtedness of the Company
or its Subsidiaries if the amount of such Indebtedness exceeds $10,000,000; (v)
certain events of bankruptcy or insolvency; and (vi) certain judgments or
decrees for the payment of money in excess of $10,000,000 that are not
discharged, waived or stayed within 60 days after notice. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Securities may declare the principal amount
of all the Securities to be due and payable in the manner and with the effect
provided in the Indenture. Certain events of bankruptcy or insolvency with
respect to the Company are Events of Default that will result in the principal
amount of the Securities being due and payable immediately upon the occurrence
and during the continuance of such Events of Default.
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 aggregate 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 or interest) if it determines that
withholding notice is in their interest.
14. 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 and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
15. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company, MAXXAM or the Trustee shall not have any
A-10
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liability for any obligations of the Company, MAXXAM or the Trustee under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. 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.
16. 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.
17. Discharge
Subject to certain conditions, the Company may terminate some or all
of its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Governmental obligations for the
payment of principal and interest, if any, on the Securities, to redemption or
maturity, as the case may be.
18. 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).
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP 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 a copy of the Indenture which has in it the text of this
Security in large type. Requests may be made to:
MAXXAM Group Holdings Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
X-00
000
Xxxxxxx, Xxxxx 00000
Attention: Investor Relations Coordinator
20. Guarantee
This Security is initially entitled to the benefits of the Guarantee
of MAXXAM. Upon the terms and subject to the conditions set forth in the
Indenture, MAXXAM has unconditionally guaranteed that the principal of, and
premium, if any, and interest on the Securities will be duly and punctually
paid in full when due, whether at maturity, by acceleration or otherwise, and
interest on overdue principal, and premium, if any, and (to the extent
permitted by law) interest on any interest, if any, on the Securities and all
other amounts and Obligations of the Company to the Securityholders or the
Trustee under the Indenture or the Securities will be promptly paid in full or
performed.
A-12
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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:
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
A-13
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.07 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.07 of the Indenture, state the amount and
check the box:
[ ]
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.09 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.09 of the Indenture, state the amount and
check the box:
$__________
[ ]
If you want to elect to have this Security purchased by the Company
pursuant to Section 10.05(f) of the Indenture, check the box:
[ ]
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If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 10.05(f) of the indenture, state the amount and
check the box:
[ ]
Date:________________________ Your
Signature:________________________
(sign exactly as your name appears on
the other side of this Security)
Signature Guarantee:_____________________
A-15
149
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES(1)
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
Amount of Amount of Principal Signature of
decrease in increase in Amount of this authorized
Principal Principal Global Security officer of
Amount of Amount of following such Trustee or
Date of this Global this Global decrease Securities
Exchange Security Security (or increase) Custodian
-------- -------- -------- ----------------- ---------
---------------
(1) This schedule should be included only if the Security is issued in global
form.
A-16
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
SECURITIES
Re: 12% Senior Secured Notes due 2003 of MAXXAM Group Holdings Inc.
This Certificate relates to $_____ principal amount of Securities held in *
________ book-entry or *_______ definitive form by ________________ (the
"Transferor").
The Transferor*:
[ ] has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Security held by the Depository a
Security or Securities in definitive, registered form of authorized
denominations in an aggregate principal amount equal to its beneficial interest
in such Global Security (or the portion thereof indicated above); or
[ ] has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with such request and in respect of each such Security, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above captioned Securities and as provided in Section 2.06 of
such Indenture, the transfer of this Security does not require registration
under the Securities Act (as defined below) because:*
[ ] Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section
2.06(d)(i)(A) of the Indenture).
[ ] Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")) in reliance on Rule 144A (in accordance with and in
satisfaction of Section 2.06(a)(ii)(B), Section 2.06(b)(i) or Section
2.06(d)(i) (B) of the Indenture) or pursuant to an exemption from registration
in accordance with Rule 904 under the Securities Act (in satisfaction of
Section 2.06(a)(ii)(B) or Section 2.06(d)(i)(B) of the Indenture.)
---------------
*Check applicable box.
B-1
151
[ ] Such Security is being transferred pursuant to an exemption from
registration in accordance with Rule 144 under the Securities Act, or pursuant
to an effective registration statement under the Securities Act (in
satisfaction of Section 2.06(a)(ii)(B) or Section 2.06(d)(i)(B) of the
Indenture).
[ ] Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act,
other than Rule 144A, Rule 144 or Rule 904 under the Securities Act. An
Opinion of Counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 2.06(a)(ii)(C) or Section 2.06(d)(i)(C) of the
Indenture).
---------------------------------------
[INSERT NAME OF TRANSFEROR]
By:------------------------------------
Date:--------------------------------
---------------
*Check applicable box.
B-2
000
XXXXXXX X
XXXXXX XXXXX
DESCRIPTION:
All that certain real property situated in the State of California, County of
Humboldt, and is described as follows:
XXXXXXXX 0 XXXXX, XXXXX 0 XXXX, XXXXXXXX MERIDIAN:
Section 8:
The West Half of the Southwest Quarter, the Southeast Quarter of the
Southwest Quarter, and the Southwest Quarter of the Southeast
Quarter.
Section 15:
The Southwest Quarter.
EXCEPTING THEREFROM all oil, gas and minerals, with appurtenant
rights, as excepted in deed from the Regents of the University of
California recorded March 25, 1950 in Book 125 of Official Records,
page 24.
Section 16:
Entire Section.
EXCEPTING THEREFROM all oil, gas and minerals, with appurtenant
rights, as excepted in deed from the Regents of the University of
California recorded March 25, 1950 in Book 125 of Official Records,
page 24.
Section 17:
The Northeast Quarter.
Section 17:
The West Half and the Southeast Quarter.
EXCEPTING THEREFROM one-half of all oil, gas and minerals with
appurtenant rights, as reserved in the deed recorded February 29,
1944 in Book 265 of Deeds, page 256.
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153
Section 18:
The Southeast Quarter.
EXCEPTING THEREFROM one-half of all oil, gas and minerals with
appurtenant rights, as reserved in the deed recorded February 29,
1944 in Book 265 of Deeds, page 256.
Section 19:
The Northeast Quarter, and the North Half of the Southeast Quarter.
EXCEPTING THEREFROM one-half of all oil, gas and minerals with
appurtenant rights, as reserved in the deed recorded February 29,
1944 in Book 265 of Deeds, page 256.
Section 20:
The North Half, the North Half of the Southeast Quarter and the North
Half of the Southwest Quarter.
EXCEPTING THEREFROM one-half of all oil, gas and minerals with
appurtenant rights, as reserved in the deed recorded February 29,
1944 in Book 265 of Deeds, page 256.
The South Half of the Southeast Quarter.
Section 21:
Entire Section.
Section 22:
The South Half, and the South Half of the Northwest Quarter.
Section 23:
The East Half of the Southeast Quarter, the Northwest Quarter of the
Southeast Quarter and the Northeast Quarter of the Southwest Quarter.
EXCEPTING FROM the lands in Section 21, 22 and 23 above described
one-half of all oil, gas and minerals, with appurtenant rights, as
reserved in the deed recorded February 29, 1944 in Book 265 of Deeds,
page 256.
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154
Section 22:
The Northeast Quarter, and the North Half of the Northwest Quarter.
Section 23:
The South Half of the Northwest Quarter, the West Half of the
Southwest Quarter, the Southeast Quarter of the Southwest Quarter,
and the Southwest Quarter of the Southeast Quarter.
EXCEPTING FROM the lands in Section 22 and 23 last above described
all oil, gas and minerals, with appurtenant rights as excepted in the
deed from the Regents of the University of California recorded March
22, 1950 in Book 125 of Official Records, page 24.
Section 26:
The Northwest Quarter, the North Half of the Southwest Quarter, the
Southwest Quarter of the Southwest Quarter and the Southwest Quarter
of the Northeast Quarter.
EXCEPTING THEREFROM one-half of all oil, gas and minerals, with
appurtenant rights, as reserved in the deeds recorded February 29,
1944 in Book 265 of Deeds, page 255 and 256.
Section 27:
The West Half, the Northeast Quarter, the North Half of the Southeast
Quarter and the Southeast Quarter of the Southeast Quarter.
Section 28:
The East Half of the Southeast Quarter, the Northeast Quarter of the
Northwest Quarter, and the Northeast Quarter.
EXCEPTING THEREFROM and from the land in Section 27 last above
described one-half of all oil, gas and minerals, with appurtenant
rights, as reserved in the deed recorded February 29, 1944 in Book
265 of Deeds, page 256.
The West Half of the Northwest Quarter, the Southeast Quarter of the
Northwest Quarter, the West Half of the Southeast Quarter, the North
Half of the Southwest
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Quarter and the Southeast Quarter of the Southwest Quarter.
Section 29:
The North Half of the Northeast Quarter.
Section 33:
The Northeast Quarter.
Section 35:
The Northwest Quarter of the Northwest Quarter.
EXCEPTING THEREFROM, one-half of all oil, gas and minerals, with
appurtenant rights as reserved in the deeds recorded February 29,
1944 in Book 265 of Deeds, page 255 and 256.
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EXHIBIT D TO INDENTURE
Company Type of Stock Certificate No. No. of Shares
------------ ----------------- ----------------- ---------------
MAXXAM Group Common 2 100
Inc.
D-1
