EXHIBIT 4.1
PANOLAM INDUSTRIES INTERNATIONAL, INC.
(as Issuer)
PANOLAM GROUP, INC.
PII SECOND, INC.
PANOLAM INDUSTRIES, INC.
PIONEER PLASTICS CORPORATION
(each a Guarantor)
11 1/2% SENIOR SUBORDINATED NOTES DUE 2009
_____________
INDENTURE
DATED AS OF FEBRUARY 18, 1999
_____________
STATE STREET BANK AND TRUST COMPANY
(as Trustee)
TABLE OF CONTENTS [TO BE UPDATED]
PAGE
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ARTICLE I: DEFINITIONS AND INCORPORATION BY REFERENCE.........................1
SECTION 1.1 DEFINITIONS..............................................1
SECTION 1.2 OTHER DEFINITIONS.......................................27
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.......28
SECTION 1.4 RULES OF CONSTRUCTION...................................28
ARTICLE II: THE NOTES.........................................................29
SECTION 2.1 FORM AND DATING.........................................29
SECTION 2.2 EXECUTION AND AUTHENTICATION............................30
SECTION 2.3 REGISTRAR, PAYING AGENT AND DEPOSITARY..................30
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.....................31
SECTION 2.5 HOLDER LISTS............................................31
SECTION 2.6 TRANSFER AND EXCHANGE...................................31
SECTION 2.7 REPLACEMENT NOTES.......................................46
SECTION 2.8 OUTSTANDING NOTES.......................................47
SECTION 2.9 TREASURY NOTES..........................................47
SECTION 2.10 TEMPORARY NOTES.........................................47
SECTION 2.12 DEFAULTED INTEREST......................................48
SECTION 2.13 CUSIP NUMBERS...........................................49
ARTICLE III: REDEMPTION........................................................49
SECTION 3.1 NOTICES TO TRUSTEE......................................49
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION..........................51
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.............................51
SECTION 3.6 NOTES REDEEMED IN PART..................................52
SECTION 3.7 OPTIONAL REDEMPTION.....................................52
SECTION 3.8 NO MANDATORY REDEMPTION.................................53
ARTICLE IV: COVENANTS.........................................................53
SECTION 4.1 PAYMENT OF NOTES........................................53
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.........................54
SECTION 4.3 SEC REPORTS AND REPORTS TO HOLDERS......................54
SECTION 4.5 TAXES...................................................55
SECTION 4.6 STAY, EXTENSION AND USURY LAWS..........................56
SECTION 4.7 LIMITATION ON INCURRENCE OF ADDITIONAL
INDEBTEDNESS............................................56
SECTION 4.8 LIMITATION ON LIENS SECURING INDEBTEDNESS...............58
SECTION 4.9 LIMITATIONS ON RESTRICTED PAYMENTS......................59
SECTION 4.10 LIMITATION ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES.....................60
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SECTION 4.11 LIMITATION ON LINES OF BUSINESS......................61
SECTION 4.12 LIMITATION ON TRANSACTIONS WITH AFFILIATES...........62
SECTION 4.13 LIMITATION ON SALE OF ASSETS AND SUBSIDIARY STOCK....62
SECTION 4.14 REPURCHASE OF NOTES AT THE OPTION OF THE
HOLDER UPON A CHANGE OF CONTROL......................65
SECTION 4.15 LIMITATION ON LAYERING INDEBTEDNESS..................68
SECTION 4.16 SUBSIDIARY GUARANTORS................................68
SECTION 4.17 LIMITATION ON STATUS AS INVESTMENT COMPANY...........69
SECTION 4.18 MAINTENANCE OF PROPERTIES AND INSURANCE..............69
SECTION 4.19 CORPORATE EXISTENCE..................................69
ARTICLE V: SUCCESSORS.....................................................70
SECTION 5.1 MERGER, CONSOLIDATION OR SALE OF ASSETS..............70
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED....................70
ARTICLE VI: DEFAULTS AND REMEDIES..........................................71
SECTION 6.1 EVENTS OF DEFAULT....................................71
SECTION 6.2 ACCELERATION.........................................72
SECTION 6.3 OTHER REMEDIES.......................................74
SECTION 6.4 WAIVER OF PAST DEFAULTS..............................74
SECTION 6.5 CONTROL BY MAJORITY..................................75
SECTION 6.6 LIMITATION ON SUITS..................................75
SECTION 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT........76
SECTION 6.8 COLLECTION SUIT BY TRUSTEE...........................76
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.....................76
SECTION 6.10 PRIORITIES...........................................77
SECTION 6.11 UNDERTAKING FOR COSTS................................77
ARTICLE VII: TRUSTEE........................................................78
SECTION 7.1 DUTIES OF TRUSTEE....................................78
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.........................80
SECTION 7.4 TRUSTEE'S DISCLAIMER.................................81
SECTION 7.5 NOTICE OF DEFAULTS...................................81
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES...........81
SECTION 7.7 COMPENSATION AND INDEMNITY...........................81
SECTION 7.8 REPLACEMENT OF TRUSTEE...............................82
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.....................84
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION........................84
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY....84
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SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE...........................................84
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE.......................84
SECTION 8.3 COVENANT DEFEASANCE..................................85
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE...........86
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO
BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.....87
SECTION 8.6 REPAYMENT TO COMPANY.................................88
SECTION 8.7 REINSTATEMENT........................................88
ARTICLE IX: AMENDMENT, SUPPLEMENT AND WAIVER...............................89
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES..................89
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES.....................90
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT..................91
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS....................92
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES.....................92
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC......................92
ARTICLE X: GUARANTEES.....................................................93
SECTION 10.1 GUARANTEES...........................................93
SECTION 10.2 EXECUTION AND DELIVERY OF GUARANTEES.................95
SECTION 10.3 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN
TERMS................................................95
SECTION 10.4 RELEASE OF GUARANTORS................................96
SECTION 10.5 LIMITATION OF GUARANTOR'S LIABILITY; CERTAIN
BANKRUPTCY EVENTS....................................97
SECTION 10.6 APPLICATION OF CERTAIN TERMS AND PROVISIONS TO
THE GUARANTORS.......................................97
SECTION 10.7 SUBORDINATION OF GUARANTEES..........................98
ARTICLE XI: SUBORDINATION..................................................98
SECTION 11.2 NO PAYMENT ON NOTES IN CERTAIN CIRCUMSTANCES.........99
SECTION 11.3 NOTES SUBORDINATE TO PRIOR PAYMENT OF ALL SENIOR
DEBT ON DISSOLUTION, LIQUIDATION OR REORGANIZATION..101
SECTION 11.4 HOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS
OF SENIOR DEBT......................................101
SECTION 11.5 OBLIGATIONS OF THE COMPANY AND THE GUARANTORS
UNCONDITIONAL.......................................102
SECTION 11.6 TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT
PROHIBITED IN ABSENCE OF NOTICE.....................102
SECTION 11.7 APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT..103
SECTION 11.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR
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OMISSIONS OF THE COMPANY, THE GUARANTORS OR
HOLDERS OF SENIOR DEBT..............................103
SECTION 11.9 HOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF NOTES..............................104
SECTION 11.10 RIGHTS OF TRUSTEE TO HOLD SENIOR DEBT...............105
SECTION 11.11 ARTICLE XI NOT TO PREVENT EVENTS OF DEFAULT.........105
SECTION 11.12 NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF
SENIOR DEBT.........................................105
SECTION 11.13 NOTICE BY COMPANY...................................105
ARTICLE XII: MISCELLANEOUS............................................105
SECTION 12.1 TRUST INDENTURE ACT CONTROLS........................105
SECTION 12.2 NOTICES.............................................106
SECTION 12.3 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES....................................107
SECTION 12.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT..107
SECTION 12.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.......107
SECTION 12.6 RULES BY TRUSTEE AND AGENTS.........................108
SECTION 12.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS..........................108
SECTION 12.8 GOVERNING LAW.......................................108
SECTION 12.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.......108
SECTION 12.10 SUCCESSORS..........................................109
SECTION 12.11 SEVERABILITY........................................109
SECTION 12.12 COUNTERPART ORIGINALS...............................109
SECTION 12.13 TABLE OF CONTENTS, HEADINGS, ETC....................109
EXHIBIT BFORM OF CERTIFICATE OF TRANSFER................................B-1
EXHIBIT CFORM OF CERTIFICATE OF EXCHANGE................................C-1
EXHIBIT DFORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR................................................D-1
EXHIBIT EFORM OF SUPPLEMENTAL INDENTURE TO BE
DELIVERED BY SUBSEQUENT SUBSIDIARY GUARANTORS......................E-1
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CROSS-REFERENCE TABLE*
TIA SECTION INDENTURE SECTION
----------- -----------------
310(a)(1)...................................................................7.10
(a)(2)...................................................................7.10
(a)(3)...................................................................N.A.
(a)(4)...................................................................N.A.
(a)(5)..............................................................7.8; 7.10
(b)...........................................................7.8; 7.10; 12.2
(c)......................................................................N.A.
311(a)......................................................................7.11
(b)......................................................................7.11
(c)......................................................................N.A.
312(a).......................................................................2.5
(b)......................................................................12.3
(c)......................................................................12.3
313(a).......................................................................7.6
(b)(1)...................................................................N.A.
(b)(2)....................................................................7.6
(c).................................................................7.6; 12.2
(d).......................................................................7.6
314(a)............................................................4.3; 4.4; 12.2
(b)......................................................................N.A.
(c)(1)...................................................................12.4
(c)(2)...................................................................12.4
(c)(3)...................................................................N.A.
(d)......................................................................N.A.
(e)......................................................................12.5
(f)......................................................................N.A.
315(a)....................................................................7.1(b)
(b).................................................................7.5; 12.2
(c)....................................................................7.1(a)
(d)....................................................................7.1(c)
(e)......................................................................6.11
316(a)(last sentence)........................................................2.9
(a)(1)(A).................................................................6.5
(a)(1)(B).................................................................6.4
(a)(2)...................................................................N.A.
(b).......................................................................6.7
317(a)(1)....................................................................6.8
(a)(2)....................................................................6.9
(b).......................................................................2.4
318(a)......................................................................12.1
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(c).....................................................................12.1
______________________________
N.A. means not applicable
*This Cross-Reference table shall not, for any purpose, be deemed to be part of
the Indenture.
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INDENTURE, dated as of February 18, 1999, among Panolam
Industries International, Inc., a Delaware corporation (the "Company"), the
Guarantors (as defined), and State Street Bank and Trust Company, as trustee
(the "Trustee").
Each party agrees as follows for the benefit of each other and
for the equal and ratable benefit of the Holders of the 11 1/2% Series A Senior
Subordinated Notes due 2009 (the "Series A Notes") and the 11 1/2% Series B
Senior Subordinated Notes due 2009 (the "Series B Notes" and, together with the
Series A Notes, the "Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1 Definitions
"144A Global Note" means one or more Global Notes bearing the
Private Placement Legend, that will be issued in an aggregate amount of
denominations equal in total to the outstanding principal amount of the Notes
sold in reliance on Rule 144A.
"Accrued Bankruptcy Interest" means, with respect to any
Indebtedness, all interest accruing thereon after the filing of a petition by or
against the Company or any of its Subsidiaries or any Parent under any
Bankruptcy Law, in accordance with and at the rate (including any rate
applicable upon any default or event of default, to the extent lawful) specified
in the documents evidencing or governing such Indebtedness, whether or not the
claim for such interest is allowed as a claim after such filing in any
proceeding under such Bankruptcy Law.
"Acquired Indebtedness" means Indebtedness or Disqualified
Capital Stock of any Person existing at the time such Person becomes a
Subsidiary of the Company, including by designation, or is merged or
consolidated into or with the Company or one of its Subsidiaries.
"Acquisition" means the purchase or other acquisition of any
Person or all or substantially all the assets of any Person by any other Person,
whether by purchase, merger, consolidation, or other transfer, and whether or
not for consideration.
"Affiliate" means any Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company.
For purposes of this definition, the term "control" means the power to direct
the management and policies of a Person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by
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contract, or otherwise; provided that with respect to ownership interest in the
Company and its Subsidiaries, a Beneficial Owner of 10% or more of the total
voting power normally entitled to vote in the election of directors, managers or
trustees, as applicable, shall for such purposes be deemed to constitute
control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Cedel that apply to such transfer or
exchange at the relevant time.
"Average Life" means, as of the date of determination, with respect to
any security or instrument, the quotient obtained by dividing (i) the sum of the
products (a) of the number of years from the date of determination to the date
or dates of each successive scheduled principal (or redemption) payment of such
security or instrument and (b) the amount of each such respective principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
"Bankruptcy Code" means the United States Bankruptcy Code, codified at
11 U.S.C. (S)101-1330, as amended.
"Beneficial Owner" or "beneficial owner" for purposes of the
definition of Change of Control and Affiliate has the meaning attributed to it
in Rules 13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue
Date), whether or not applicable.
"Board of Directors" means, with respect to any Person, the board of
directors of such Person or any committee of the Board of Directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such Person.
"Broker-Dealer" means any broker-dealer that receives Exchange Notes
for its own account in the Exchange Offer in exchange for Notes that were
acquired by such broker-dealer as a result of market-making or other trading
activities.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
2
"Canadian Credit Agreement" means the credit agreement dated as of
February 18, 1999 by and among Panolam Canada, certain financial institutions
and DLJ Capital Funding, as Syndication Agent, Royal Bank of Canada, as
Documentation Agent and Credit Suisse First Boston Canada, as Canadian
Administrative Agent, providing for one or more term loan facilities and a
revolving credit facility, including any related notes, letters of credit,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, as such credit agreement and/or related documents may be
amended, restated, supplemented, renewed, replaced or otherwise modified from
time to time whether or not with the same agent, trustee, representative lenders
or holders, and, subject to the proviso to the next succeeding sentence,
irrespective of any changes in the terms and conditions thereof. Without
limiting the generality of the foregoing, the term "Canadian Credit Agreement"
shall include agreements in respect of Interest Swap and Hedging Obligations
with lenders party to the Canadian Credit Agreement and shall also include any
amendment, amendment and restatement, renewal, extension, restructuring,
supplement or modification to any Canadian Credit Agreement and all refundings,
refinancings and replacements of any Canadian Credit Agreement, including any
agreement (i) extending the maturity of any Indebtedness incurred thereunder or
contemplated thereby, (ii) adding or deleting borrowers or guarantors
thereunder, so long as such remaining borrowers or guarantors include one or
more of Panolam Canada and its Subsidiaries and their respective successors and
assigns, (iii) increasing the amount of Indebtedness incurred thereunder or
available to be borrowed thereunder; provided that on the date such Indebtedness
is incurred it would not be prohibited by Section 4.7 hereof or (iv) otherwise
altering the terms and conditions thereof in a manner not prohibited by the
terms of the Indenture.
"Canadian Subsidiary" means a Wholly Owned Subsidiary that is
domiciled and doing business principally in Canada.
"Capital Contribution" means any contribution to the equity of the
Company from a direct or indirect parent of the Company for which no
consideration is given other than the issuance of Qualified Capital Stock.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness that is not itself otherwise capital stock), warrants, options,
participations or other equivalents of or interests (however designated) in
stock issued by that corporation.
"Cash Equivalent" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided
3
that the full faith and credit of the United States of America is pledged in
support thereof) or (ii) time deposits and certificates of deposit and
commercial paper issued by the parent corporation of any domestic commercial
bank of recognized standing having capital and surplus in excess of $500,000,000
or (iii) commercial paper issued by others rated at least A-2 or the equivalent
thereof by S&P or at least P-2 or the equivalent thereof by Xxxxx'x, and in the
case of each of (i), (ii), and (iii) maturing within one year after the date of
acquisition, or (iv) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (i) and (ii)
above entered into with any financial institution meeting the qualifications
specified in clause (ii) above, or (v) investments in money market funds which
invest substantially all their assets in securities of the types described in
the foregoing clauses (i) through (iv).
"Cedel" means Cedel Bank, S.A., or its successors.
"Consolidation" means, with respect to the Company, the consolidation
of the accounts of the Subsidiaries with those of the Company, all in accordance
with GAAP; provided that "consolidation" will not include consolidation of the
accounts of any Unrestricted Subsidiary with the accounts of the Company. The
term "consolidated" has a correlative meaning to the foregoing.
"Consolidated Coverage Ratio" of any Person on any date of
determination (the "Transaction Date") means the ratio, on a pro forma basis,
of (a) the aggregate amount of Consolidated EBITDA of such Person attributable
to continuing operations and businesses (exclusive of amounts attributable to
operations and businesses recorded as permanently discontinued or disposed of)
for the Reference Period to (b) the aggregate Consolidated Fixed Charges of such
Person (exclusive of amounts attributable to operations and businesses recorded
as permanently discontinued or disposed of, but only to the extent that the
obligations giving rise to such Consolidated Fixed Charges would no longer be
obligations contributing to such Person's Consolidated Fixed Charges subsequent
to the Transaction Date) during the Reference Period; provided that for purposes
of such calculation, (i) Acquisitions which occurred during the Reference Period
or subsequent to the Reference Period and on or prior to the Transaction Date
shall be assumed to have occurred on the first day of the Reference Period
without regard to the effect of subsection (c) of the definition of
"Consolidated Net Income," (ii) transactions giving rise to the need to
calculate the Consolidated Coverage Ratio shall be assumed to have occurred on
the first day of the Reference Period without regard to the effect of subsection
(c) of the definition of "Consolidated Net Income," (iii) the incurrence of
any Indebtedness during the Reference Period or subsequent to the Reference
Period and on or prior to the Transaction Date (and the application of the
proceeds therefrom to the extent used to refinance or retire other Indebtedness)
shall be assumed to have occurred on the first day of the Reference Period, and
(iv) the Consolidated Fixed Charges of such Person attributable to interest on
any Indebtedness (or dividends on any Disqualified Capital Stock) bearing a
floating interest (or dividend) rate shall be computed on a pro forma basis as
if the average rate in effect from the beginning of the Reference Period to the
Transaction Date had been the applicable rate for the entire period,
4
unless such Person or any of its Subsidiaries is a party to an Interest Swap and
Hedging Obligation (which shall remain in effect for the 12-month period
immediately following the Transaction Date) that has the effect of fixing the
interest rate on the date of computation, in which case such rate (whether
higher or lower) shall be used.
"Consolidated EBITDA" means, with respect to any Person, for any
period, the Consolidated Net Income of such Person for such period adjusted to
add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, the sum of (i) Consolidated
income tax expense, (ii) Consolidated depreciation and amortization expense,
(iii) Consolidated Fixed Charges and (iv) all other non-recurring non-cash
charges of such Person and its Consolidated Subsidiaries, less the amount of all
cash payments made by such Person or any of its Subsidiaries during such period
to the extent such payments relate to non-recurring non-cash charges that were
added back in determining Consolidated EBITDA for such period or any prior
period; provided that Consolidated income tax expense and depreciation and
amortization of a Subsidiary that is a less than a Wholly-Owned Subsidiary shall
only be added to the extent of the equity interest of the Company in such
Subsidiary.
"Consolidated Fixed Charges" of any Person means, for any period, the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of (a) interest expensed or capitalized, paid, accrued, or scheduled
to be paid or accrued (including, in accordance with the following sentence,
interest attributable to Capitalized Lease Obligations) of such Person and its
Consolidated Subsidiaries during such period, including (i) original issue
discount and non-cash interest payments or accruals on any Indebtedness, (ii)
the interest portion of all deferred payment obligations and (iii) all
commissions, discounts and other fees and charges owed with respect to bankers'
acceptances and letters of credit financings and currency and Interest Swap and
Hedging Obligations, in each case to the extent attributable to such period, and
(b) the amount of dividends accrued or payable (or guaranteed) by such Person or
any of its Consolidated Subsidiaries in respect of Preferred Stock (other than
by Subsidiaries of such Person to such Person or such Person's Wholly-Owned
Subsidiaries). For purposes of this definition, (x) interest on a Capitalized
Lease Obligation shall be deemed to accrue at an interest rate reasonably
determined in good faith by the Company to be the rate of interest implicit in
such Capitalized Lease Obligation in accordance with GAAP and (y) interest
expense attributable to any Indebtedness represented by the guaranty by such
Person or a Subsidiary of such Person of an obligation of another Person shall
be deemed to be the interest expense attributable to the Indebtedness
guaranteed.
"Consolidated Net Income" means, with respect to any Person for any
period, the net income (or loss) of such Person and its Consolidated
Subsidiaries (determined on a Consolidated basis in accordance with GAAP) for
such period, adjusted to exclude (only to the extent included in computing such
net income (or loss) and without duplication): (a) all gains and losses which
are either extraordinary (as determined in accordance with GAAP) or are either
unusual or nonrecurring (including any gain or loss from the sale or other
disposition of assets outside the ordinary course of business or from the
issuance or sale of any capital stock), (b) the
5
net income, if positive, of any Person, other than a Consolidated Subsidiary, in
which such Person or any of its Consolidated Subsidiaries has an interest,
except to the extent of the amount of any dividends or distributions actually
paid in cash to such Person or a Consolidated Subsidiary of such Person during
such period, but in any case not in excess of such Person's pro rata share of
such Person's net income for such period, (c) the net income or loss of any
Person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition and (d) the net income, if positive, of any of such
Person's Consolidated Subsidiaries to the extent that the declaration or payment
of dividends or similar distributions is not at the time permitted by operation
of the terms of its charter or bylaws or any other agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
such Consolidated Subsidiary.
"Consolidated Subsidiary" means, for any Person, each Subsidiary of
such Person (whether now existing or hereafter created or acquired) the
financial statements of which are Consolidated for financial statement reporting
purposes with the financial statements of such Person in accordance with GAAP.
"Corporate Trust Office" shall be at the address of the Trustee
specified in Section 12.2 hereof or such other address as to which the Trustee
may give notice to the Company; provided that such address shall be in the
Borough of Manhattan, The City of New York. All notices by the Company sent to
the Trustee at its Corporate Trust Office in the Borough of Manhattan, The City
of New York shall also be sent to the Trustee at: State Street Bank and Trust
Company, Xxxxxxx Square, 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000,
attention: Corporate Trust Department.
"Credit Agreement" means the credit agreement dated as of February 18,
1999 by and among the Company, certain of its Subsidiaries, certain financial
institutions and DLJ Capital Funding, as Syndication Agent, Royal Bank of
Canada, as Documentation Agent, and Credit Suisse First Boston, New York branch,
as Administrative Agent, providing for one or more term loan facilities and a
revolving credit facility, including any related notes, letters of credit,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, as such credit agreement and/or related documents may be
amended, restated, supplemented, renewed, replaced or otherwise modified from
time to time whether or not with the same agent, trustee, representative lenders
or holders, and, subject to the proviso to the next succeeding sentence,
irrespective of any changes in the terms and conditions thereof. Without
limiting the generality of the foregoing, the term "Credit Agreement" shall
include agreements in respect of Interest Swap and Hedging Obligations with
lenders party to the Credit Agreement and shall also include any amendment,
amendment and restatement, renewal, extension, restructuring, supplement or
modification to any Credit Agreement and all refundings, refinancings and
replacements of any Credit Agreement, including any agreement (i) extending the
maturity of any Indebtedness incurred thereunder or contemplated thereby, (ii)
adding or deleting borrowers or guarantors thereunder, so long as such remaining
borrowers or guarantors include one or more of the Company and its Subsidiaries
and their respective successors and
6
assigns, (iii) increasing the amount of Indebtedness incurred thereunder or
available to be borrowed thereunder; provided that on the date such Indebtedness
is incurred it would not be prohibited by Section 4.7 hereof or (iv) otherwise
altering the terms and conditions thereof in a manner not prohibited by the
terms of the Indenture.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Note" means one or more certificated Notes registered in
the name of the Holder thereof and issued in accordance with Section 2.6 hereof,
in the form of Exhibit A hereto except that such Note shall not include the
information called for by footnotes 3, 4 and 8 thereof.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.3 hereof as
the Depositary with respect to the Notes, until a successor will have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" will mean or include such successor.
"Disqualified Capital Stock" means (a) except as set forth in (b),
with respect to any Person, Equity Interests of such Person that, by its terms
or by the terms of any security into which it is convertible, exercisable or
exchangeable, is, or upon the happening of an event (other than customary change
of control provisions) or the passage of time or both would be, required to be
redeemed or repurchased (including at the option of the holder thereof) by such
Person or any of its Subsidiaries, in whole or in part, other than solely for
Qualified Capital Stock of the Company, on or prior to 91 days following the
Stated Maturity of the Notes and (b) with respect to any Subsidiary of such
Person (including with respect to any Subsidiary of the Company), any Equity
Interests other than any common equity with no preference as to liquidation or
dividend payments, or redemption or repayment provisions.
"Distribution Compliance Period" means the 40-day restricted period as
defined in Regulation S.
"DLJ Capital Funding" means DLJ Capital Funding, Inc.
"Domtar Note" means that certain Promissory Note, dated June 12, 1996,
that Holdings issued to Domtar Industries, Inc., in the aggregate principal
amount of $8,000,000, plus any accrued interest thereon.
"Earn Out Payment" means a payment of additional consideration to
Rugby USA, Inc., a Georgia corporation, pursuant to section 2(e)(v) of the Stock
Purchase Agreement, in accordance with the terms thereof on the Issue Date.
7
"Engagement Agreement" means that certain Engagement Agreement dated
as of January 24, 1999 between Genstar Capital, LLC and the Company, providing
for the payment of transaction fees of $2,000,000 payable on the Issue Date and
an aggregate of $2,025,000 payable in twelve quarterly installments of $168,750
(or the pro rata amount thereof), commencing on March 31, 1999, in accordance
with the terms thereof on the Issue Date and without giving effect to any future
amendment or supplement thereto.
"Equity Interest" of any Person means any shares, interests,
participations or other equivalents (however designated) in such Person's
equity, and shall in any event include any Capital Stock issued by, or
partnership, participation or membership interests in, such Person.
"Euroclear" means Xxxxxx Guaranty Trust Company of New York, Brussels
office, or its successor, as operator of the Euroclear system.
"Event of Loss" means, with respect to any property or asset, any (i)
loss, destruction or damage of such property or asset or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC thereunder.
"Exchange Notes" means Series B Notes issued pursuant to an Exchange
Offer.
"Exchange Offer" means an offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Exchange Notes for
Series A Notes.
"Exchange Offer Registration Statement" shall have the meaning set
forth in the Registration Rights Agreement.
"Excluded Person" means Genstar Capital and all Related Persons of
such Person.
"Exempted Affiliate Transaction" means (a) customary employee
compensation arrangements approved by a majority of independent (as to such
transactions) members of the Board of Directors of the Company, (b) dividends
permitted under the terms of Section 4.9 and payable, in form and amount, on a
pro rata basis to all holders of common stock of the Company, (c) transactions
solely between the Company and any of its Consolidated Subsidiaries or solely
among Consolidated Subsidiaries of the Company, (d) Permitted Investments, (e)
any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
stock options and stock ownership plans approved by a majority of members of the
Board of Directors of the Company
8
and, if any, a majority of the independent members of such Board consistent with
industry practice, (f) the grant of stock options or similar rights to employees
and directors of the Company and its Subsidiaries pursuant to plans approved by
a majority of members of the Board of Directors of the Company and, if any, a
majority of the independent members of such Board, (g) loans or advances to
employees in the ordinary course of business in accordance with the past
practices of the Company or its Subsidiaries, but in any event not to exceed
$1,500,000 in the aggregate outstanding at any one time, (h) the payment of
reasonable fees and indemnities to directors of the Company and its Subsidiaries
who are not employees of the Company or its Subsidiaries, (i) the issuance or
sale of any Capital Stock (other than Disqualified Capital Stock) of the Company
if approved by a majority of the members of the Board of Directors and, if any,
a majority of the independent members of such Board and (j) transactions
pursuant to the Management Services Agreement and the Engagement Agreement, both
in accordance with the terms thereof on the Issue Date and without giving effect
to any future amendment or supplement thereto.
"Existing Indebtedness" means the Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement and the
Canadian Credit Agreement) in existence on the Issue Date, until such amounts
are repaid.
"fair market value" means the price that would be paid in an arm's-
length transaction between an informed and willing seller under no compulsion to
sell and an informed and willing buyer under no compulsion to buy, as determined
in good faith by the Company.
"Foreign Subsidiary" means any Subsidiary of the Company which (i) is
not organized under the laws of the United States, any state thereof or the
District of Columbia and (ii) conducts substantially all of its business
operations outside the United States of America.
"GAAP" means United States generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession in the United States applied on a consistent basis and as
in effect from time to time.
"Genstar Capital" means Genstar Capital Corporation and its
Affiliates and stockholders.
"Global Notes" means one or more Notes in the form of Exhibit A hereto
that includes the information referred to in footnotes 3, 4 and 8 to the form of
Note, attached hereto as Exhibit A, issued under this Indenture, that is
deposited with or on behalf of and registered in the name of the Depositary or
its nominee.
9
"Global Note Legend" means the legend set forth in Section 2.6(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness. When used with respect to the Notes, a "Guarantee" means a
guarantee by the Guarantors of all or any part of the Notes, in accordance with
Article X hereof.
"Guarantors" means the Subsidiary Guarantors and the Parent
Guarantors.
"Holder" means a Person in whose name a Note is registered on the
Registrar's books.
"Holdings" means Panolam Industries Holdings, Inc., a Delaware
corporation, so long as Panolam Industries Holdings, Inc. is the direct or
indirect parent of the Company.
"Indebtedness" of any Person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of any such Person, to the
extent such liabilities and obligations would appear as a liability upon the
Consolidated balance sheet of such Person in accordance with GAAP, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any property or services,
except (other than accounts payable or other obligations to trade creditors
which have remained unpaid for greater than 60 days past their original due
date) those incurred in the ordinary course of its business that would
constitute ordinarily a trade payable to trade creditors; (b) all liabilities
and obligations, contingent or otherwise, of such Person (i) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks, (ii)
relating to any Capitalized Lease Obligation or (iii) evidenced by a letter of
credit or a reimbursement obligation of such Person with respect to any letter
of credit; (c) all net obligations of such Person under Interest Swap and
Hedging Obligations; (d) all liabilities and obligations of others of the kind
described in the preceding clause (a), (b) or (c) that such Person has
guaranteed or that is otherwise its legal liability or which are secured by any
assets or property of such Person; (e) any and all deferrals, renewals,
extensions, refinancing and refundings (whether direct or indirect) of, or
amendments, modifications or supplements to, any liability of the kind described
in any of the preceding clauses (a), (b), (c) or (d), or this clause (e),
whether or not between or among the same parties; and (f) all Disqualified
Capital Stock of such Person (measured at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued and unpaid dividends).
For purposes hereof, the ''maximum fixed repurchase price'' of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be
10
determined pursuant to the Indenture, and if such price is based upon, or
measured by, the Fair Market Value of such Disqualified Capital Stock, such Fair
Market Value to be determined in good faith by the Board of Directors of the
Company (or managing general partner of the Company) of such Disqualified
Capital Stock. The amount of any Indebtedness issued with original issue
discount outstanding as of any date shall be the accreted value thereof, but the
accretion of original issue discount in accordance with the original terms of
Indebtedness issued with an original issue discount will not be deemed to be an
incurrence.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Indirect Participant" means an entity that, with respect to DTC,
clears through or maintains a direct or indirect, custodial relationship with a
Participant.
"Initial Public Equity Offering" means an initial Public Equity
Offering following which the common stock of the Company, the Parent Guarantors
or Holdings, as the case may be, is listed on a national securities exchange or
quoted on the national market system of the Nasdaq stock market.
"Initial Purchasers" mean the initial purchasers of the Series A Notes
under the Purchase Agreement, dated February 10, 1999, with respect to the
Series A Notes.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who is not also a QIB.
"Interest Payment Date" means the stated due date of an installment of
interest on the Notes.
"Interest Swap and Hedging Obligation" means any obligation of any
Person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values, including,
without limitation, any arrangement whereby, directly or indirectly, such Person
is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional amount
in exchange for periodic payments made by such Person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Investment" by any Person in any other Person means, without
duplication, (a) the acquisition (whether by purchase, merger, consolidation or
otherwise) by such Person (whether for cash, property, services, securities or
otherwise) of capital stock, bonds, notes, debentures, partnership or other
ownership interests or other securities, including any options or
11
warrants, of such other Person or any agreement to make any such acquisition;
(b) the making by such Person of any deposit with, or advance, loan or other
extension of credit to, such other Person (including the purchase of property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such other Person) or any commitment to
make any such advance, loan or extension (but excluding accounts receivable,
endorsements for collection or deposits arising in the ordinary course of
business); (c) other than guarantees of Indebtedness of the Company or any
Subsidiary Guarantor to the extent permitted by Section 4.7, the entering into
by such Person of any guarantee of, or other credit support or contingent
obligation with respect to, Indebtedness or other liability of such other
Person; (d) the making of any capital contribution by such Person to such other
Person; and (e) the designation by the Board of Directors of the Company of any
Person to be an Unrestricted Subsidiary. The Company shall be deemed to make an
Investment in an amount equal to the fair market value of the net assets of any
subsidiary (or, if neither the Company nor any of its Subsidiaries has
theretofore made an Investment in such subsidiary, in an amount equal to the
Investments being made), at the time that such subsidiary is designated an
Unrestricted Subsidiary, and any property transferred to an Unrestricted
Subsidiary from the Company or a Subsidiary of the Company shall be deemed an
Investment valued at its fair market value at the time of such transfer. If the
Company or any of its Subsidiaries sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary such that, after giving effect to
any such sale or disposition, such Person is no longer a Subsidiary of the
Company or such Subsidiary, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Person not sold or disposed of in an
amount determined as provided in the final paragraph of Section 4.9.
"Issue Date" means the date of first issuance of the Notes under the
Indenture.
"Junior Security" means any Qualified Capital Stock and any
Indebtedness of the Company or a Subsidiary Guarantor, as applicable, that is
subordinated in right of payment to Senior Debt at least to the same extent as
the Notes or the Guarantees, as applicable, and has no scheduled installment of
principal due, by redemption, sinking fund payment or otherwise, on or prior to
the Stated Maturity of the Notes; provided, that in case of subordination in
respect of Senior Debt under the credit facilities of the Credit Agreement and
the New Credit Agreement, ''Junior Security'' shall mean any Qualified Capital
Stock and any Indebtedness of the Company or Subsidiary Guarantor, as
applicable, that is issued to a Holder on account of the Notes pursuant to an
order or decree of a court of competent jurisdiction in a reorganization
proceeding under any applicable bankruptcy or reorganization law, which
Qualified Capital Stock or Indebtedness (i) has a maturity, mandatory redemption
obligation or put right, if any, longer than, or occurring after the final
maturity date of, all Senior Debt outstanding under the New Credit Facilities on
the date of issuance of such Qualified Capital Stock or Indebtedness (and to any
securities issued in exchange for any such Senior Debt), (ii) is unsecured,
(iii) has an Average Life longer than the security for which such Qualified
Capital Stock or Indebtedness is being exchanged, (iv) does not provide for
terms, conditions or covenants more onerous than those provided in the Notes and
(v) by its terms or by law is subordinated to Senior Debt outstanding
12
under the New Credit Facilities on the date of issuance of such Qualified
Capital Stock or Indebtedness (and to any securities in exchange for any such
Senior Debt) at least to the same extent as the Notes.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, or the city in which the principal
corporate trust office of the Trustee is located, or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"Liquidated Damages" means all Liquidated Damages, if any, then owing
pursuant to the Registration Rights Agreement.
"Management Services Agreement" means that certain Amended and
Restated Management Advisory and Consulting Agreement dated as of January 24,
1999, between the Company, Panolam Industries, Ltd. and Genstar Capital, LLC, in
accordance with the terms thereof on the Issue Date, and without giving effect
to any future amendment or supplement thereto; provided, that the consulting fee
payable thereunder may not increase to $1,391,000 pursuant to the terms thereof
before the last to occur of (i) the cancellation of, and the payment of all
amounts owing under, the Domtar Note, (ii) the termination of, and the payment
of all amounts owing under, the Engagement Agreement, and (iii) the third
anniversary date of the Issue Date.
"Material Facility" means the manufacturing facilities owned by the
Company, the Subsidiary Guarantors or the Canadian Subsidiary located in
Huntsville, Ontario and Auburn, Maine or any replacement facility thereof.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"New Credit Facilities" means the revolving credit facilities and the
term loan facilities under the Credit Agreement and the Canadian Credit
Agreement.
"Net Cash Proceeds" means the aggregate amount of cash or Cash
Equivalents received by the Company in the case of a sale, or Capital
Contribution in respect, of Qualified
13
Capital Stock and by the Company and its Subsidiaries in respect of an Asset
Sale plus, in the case of an issuance of Qualified Capital Stock upon any
exercise, exchange or conversion of securities (including options, warrants,
rights and convertible or exchangeable debt) of the Company that were issued for
cash on or after the Issue Date, the amount of cash originally received by the
Company upon the issuance of such securities (including options, warrants,
rights and convertible or exchangeable debt) less, in each case, the sum of all
payments, fees, commissions and (in the case of Asset Sales, reasonable and
customary) expenses (including, without limitation, the fees and expenses of
legal counsel and investment banking fees and expenses) incurred in connection
with such Asset Sale or sale of Qualified Capital Stock, and, in the case of an
Asset Sale only, less the amount (estimated reasonably and in good faith by the
Company) of income, franchise, sales and other applicable taxes required to be
paid by the Company or any of its respective Subsidiaries in connection with
such Asset Sale in the taxable year that such sale is consummated or in the
immediately succeeding taxable year, the computation of which shall take into
account the reduction in tax liability resulting from any available operating
losses and net operating loss carryovers, tax credits and tax credit
carryforwards, and similar tax attributes.
"Non-Recourse Indebtedness" means Indebtedness (a) as to which
neither the Company nor any of its Subsidiaries nor any Guarantor (i) provides
credit support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness), (ii) is directly or indirectly liable (as a
guarantor or otherwise) or (iii) constitutes the lender, and (b) no default with
respect to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"Notes Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Obligation" means any principal, premium or interest payment, or
monetary penalty, or damages, due by the Company or any Guarantor under the
terms of the Notes or the Guarantees or the Indenture, including any Liquidated
Damages, if any, due pursuant to the terms of the Registration Rights Agreement.
"Offering Memorandum" means the final Offering Memorandum, dated
February 10, 1999, relating to the offer and sale of the Series A Notes.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary, any Assistant Secretary or any Vice President of such
Person.
14
"Officers' Certificate" means a certificate signed on behalf of the
Company or any Guarantor by two Officers of the Company or such Guarantor, one
of whom must be the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of the Company or
such Guarantor, that meets the requirements of Sections 12.4 and 12.5 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Sections
12.4 and 12.5 hereof. The counsel may be an employee of or counsel to the
Company or any Subsidiary of the Company.
"Panolam Canada" means Panolam Industries Ltd., a Canadian
corporation, so long as Panolam Industries Ltd. is a direct or indirect
subsidiary of the Company.
"Panolam Group" means Panolam Group, Inc., a Delaware corporation, so
long as Panolam Group, Inc. is a direct or indirect parent of the Company.
"Parent Guarantors" means Panolam Group and PII Second, Inc., a
Delaware corporation, so long as they are direct or indirect parents of the
Company, and their respective successors and assigns, each of which shall
execute a Guarantee in accordance with the provisions of this Indenture.
"Participant" means, with respect to the Depositary, Euroclear or
Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to The Depository Trust Company, shall include
Euroclear and Cedel).
"Permitted Indebtedness" means that:
(1) the Company may incur Indebtedness evidenced by the Notes and the
Exchange Notes and represented by the Indenture and the Subsidiary Guarantors
may incur the Subsidiary Guarantees up to the amounts being issued on the
original Issue Date;
(2) the Company and the Subsidiary Guarantors, as applicable, may
incur Refinancing Indebtedness with respect to any Existing Indebtedness, any
Indebtedness or Disqualified Capital Stock, as applicable, described in clause
(a) of this definition, incurred under the Debt Incurrence Ratio test of Section
4.7 or pursuant to this clause (b);
(3) the Company and its Subsidiaries may incur Indebtedness solely in
respect of bankers acceptances, letters of credit, surety and appeal bonds, and
performance bonds (to the extent that such incurrence does not result in the
incurrence
15
of any obligation to repay any obligation relating to borrowed money of others),
all in the ordinary course of business in accordance with customary industry
practices, in amounts and for the purpose of purchasing or acquiring, or
securing the purchase or acquisition of, goods and services as is customary in
the Company's industry; provided that the aggregate principal amount outstanding
of such Indebtedness (including any Refinancing Indebtedness and any other
Indebtedness issued to retire, refinance, refund, defease or replace such
Indebtedness) shall at no time exceed $2,500,000.
(4) the Company may incur Indebtedness to any Subsidiary Guarantor or
Canadian Subsidiary and any Subsidiary Guarantor or Canadian Subsidiary may
incur Indebtedness to any other Subsidiary Guarantor or Canadian Subsidiary or
to the Company; provided that in the case of Indebtedness of the Company (except
for loans to the Company from any Canadian Subsidiary made with borrowings under
the Canadian Credit Agreement), such obligations shall be unsecured and
subordinated in all respects to the Company's obligations pursuant to the Notes
and any event that causes any such obligee to no longer be a Subsidiary
Guarantor or Canadian Subsidiary, as applicable, shall be deemed to be a new
incurrence subject to the Indenture at such time;
(5) any Foreign Subsidiary may incur Indebtedness owed to any other
Foreign Subsidiary; provided that any event that causes any such obligee to no
longer be a Subsidiary shall be deemed a new incurrence of Indebtedness subject
to the Indenture at such time;
(6) the incurrence by the Company or any of its subsidiaries of
Interest Swap and Hedging Obligations that are incurred for the purpose of
fixing or hedging (a) interest rate risk with respect to any floating rate
Indebtedness that is permitted by the Indenture to be incurred or (b) currency
risk (to the extent incurred in the ordinary course of business as is customary
practice in the Company's industry and not for purposes of speculation), but
only to the extent that such incurrence does not result in a net increase in the
notional amount of Indebtedness of the Company outstanding on a consolidated
basis; and
(7) Indebtedness 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.
"Permitted Investment" means Investments in (a) any of the Notes; (b)
Cash Equivalents; (c) intercompany notes to the extent permitted under clauses
(d) or (e) of the definition of ''Permitted Indebtedness''; (d) Investments by
the Company or any
16
Subsidiary Guarantor in a Person in a Related Business if as a result of such
Investment such Person immediately becomes a Wholly Owned Subsidiary Guarantor
or such Person is immediately merged with or into the Company or a Wholly Owned
Subsidiary Guarantor; (e) loans and advances to employees and officers of the
Company and its Subsidiaries in the ordinary course of business for a bona fide
business purpose not in excess of $1,500,000 at any one time outstanding; (f)
Interest Swap and Hedging Obligations entered into in the ordinary course of the
Company's or its Subsidiaries' business and otherwise in compliance with the
Indenture; (g) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers; (h) Investments
by the Company or any Subsidiary Guarantor in a Canadian Subsidiary or a
Subsidiary of a Canadian Subsidiary; (i) any Investment in the Company or in a
Wholly Owned Subsidiary Guarantor; and (j) Investments made by the Company or
its Subsidiaries as a result of consideration received in connection with an
Asset Sale made in compliance with Section 4.13.
"Permitted Lien" means (a) Liens existing on the Issue Date; (b) Liens
imposed by governmental authorities for taxes, assessments or other charges not
yet subject to penalty or which are being contested in good faith and by
appropriate proceedings, if adequate reserves with respect thereto are
maintained on the books of the Company in accordance with GAAP; (c) statutory
liens of carriers, warehousemen, mechanics, material men, landlords, repairmen
or other like Liens arising by operation of law in the ordinary course of
business; provided that (i) the underlying obligations are not overdue for a
period of more than 30 days, or (ii) such Liens are being contested in good
faith and by appropriate proceedings and adequate reserves with respect thereto
are maintained on the books of the Company in accordance with GAAP; (d) Liens
securing the performance of bids, trade contracts (other than borrowed money),
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of business;
(e) easements, rights-of-way, zoning, similar restrictions and other similar
encumbrances or title defects which, singly or in the aggregate, do not in any
case materially detract from the value of the property subject thereto (as such
property is used by the Company or any of its Subsidiaries) or interfere with
the ordinary conduct of the business of the Company or any of its Subsidiaries;
(f) Liens arising by operation of law in connection with judgments, only to the
extent, for an amount and for a period not resulting in an Event of Default with
respect thereto; (g) pledges or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security legislation; (h) Liens securing the Notes; (i) Liens securing
Indebtedness of a Person existing at the time such Person becomes a Subsidiary
or is merged with or
17
into the Company or a Subsidiary or Liens securing Indebtedness incurred in
connection with an Acquisition; provided that such Liens were in existence prior
to the date of such acquisition, merger or consolidation, were not incurred in
anticipation thereof, and do not extend to any other assets; (j) Liens arising
from Purchase Money Indebtedness permitted to be incurred pursuant to clause (a)
of Section 4.7; provided that such Liens relate solely to the property which is
subject to such Purchase Money Indebtedness; (k) leases or subleases granted to
other Persons in the ordinary course of business not materially interfering with
the conduct of the business of the Company or any of its Subsidiaries or
materially detracting from the value of the relative assets of the Company or
any Subsidiary; (l) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into by the
Company or any of its Subsidiaries in the ordinary course of business; (m) Liens
securing Refinancing Indebtedness incurred to refinance any Indebtedness that
was previously so secured in a manner no more adverse to the Holders of the
Notes than the terms of the Liens securing such refinanced Indebtedness;
provided that the Indebtedness secured is not increased and the lien is not
extended to any additional assets or property that would not have been security
for the Indebtedness refinanced; and (n) Liens securing Indebtedness incurred
under the Credit Agreement, the Canadian Credit Agreement or any of the
guarantees pursuant to either of them, all in accordance with the terms of the
Indenture.
"Permitted Payments to Holdings" means without duplication as to
amount, (a) payments to Holdings (or to any Parent Guarantor for immediate
payment to Holdings) in an amount sufficient to permit Holdings to pay
reasonable and necessary operating expenses and other general corporate expenses
to the extent such expenses relate or are fairly allocable to the Company and
its Subsidiaries including any reasonable professional fees and expenses, but
not in excess of $50,000 in the aggregate during any consecutive 12-month
period, and (b) payments to Holdings (or to any Parent Guarantor for immediate
payment to Holdings) to enable Holdings to pay foreign, federal, state or local
tax liabilities ("Tax Payments"), not to exceed the amount of any tax
liabilities that would be otherwise payable by the Company and its United States
Subsidiaries to the appropriate taxing authorities if they filed separate tax
returns, to the extent that Holdings has an obligation to pay such tax
liabilities relating to the operations, assets or capital of the Company or its
United States Subsidiaries; provided that (i), notwithstanding the foregoing, in
the case of determining the amount of a Tax Payment that is permitted to be paid
by the Company and any of its United States Subsidiaries in respect of their
Federal income tax liability, such payment shall be determined assuming that the
Company is the parent company of an affiliated group (the "Company Affiliated
Group") filing a consolidated Federal income tax return and that
18
Holdings and each such United States Subsidiary is a member of the Company
Affiliated Group and (ii) any Tax Payments shall, within 90 days of Holdings'
receipt of such payment, either be (a) used by Holdings to pay such tax
liabilities or (b) refunded to the payor.
"Person" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Pioneer" means Pioneer Plastics Corporation, a Delaware corporation,
so long as it is a direct or indirect Subsidiary of the Company.
"Pro Forma" or "pro forma" shall have the meaning set forth in
Regulation S-X of the Securities Act of 1933, as amended, unless otherwise
specifically stated herein.
"preferred stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference stock,
whether outstanding on the Issue Date or issued thereafter, including, without
limitation, all series and classes of such stock with any preference as to
dividends, liquidation payments, redemption or repayment.
"Private Placement Legend" means the legend set forth in Section
2.6(g)(i) to be placed on all Notes issued under this Indenture except where
specifically stated otherwise by the provisions of this Indenture.
"Public Equity Offering" means an underwritten public offering
pursuant to a registration statement filed with the Commission in accordance
with the Securities Act of 1933, as amended, of (i) Qualified Capital Stock of
the Company or (ii) Qualified Capital Stock of any Parent Guarantor or Holdings,
to the extent that the cash proceeds therefrom are used as a Capital
Contribution to the Company.
"Purchase Money Indebtedness" of any Person means any Indebtedness of
such Person to any seller or other Person incurred solely to finance the
acquisition (including in the case of a Capitalized Lease Obligation, the
lease), construction, installation, or improvement of any after acquired real or
personal tangible property which, in the reasonable good faith judgment of the
Board of Directors of the Company, is directly related to a Related Business of
the Company and which is incurred within
19
180 days of such acquisition, installation, construction or improvement and is
secured only by the assets so financed and is without recourse to the Company or
any Guarantor other than the Person which owns the related assets.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Capital Stock" means any Capital Stock of the Company, and
for purposes of the definition of "Public Equity Offering" only, any Parent
Guarantor or Holdings, that is not Disqualified Capital Stock.
"Qualified Exchange" means (i) any legal defeasance, redemption,
retirement, repurchase or other acquisition of Capital Stock or Indebtedness of
the Company issued on or after the Issue Date with the Net Cash Proceeds
received by the Company from the substantially concurrent sale of Qualified
Capital Stock or, to the extent used to retire Indebtedness of the Company
issued on or after the Issue Date, Subordinated Indebtedness of the Company or
(ii) any exchange of Qualified Capital Stock for any Capital Stock or
Indebtedness of the Company issued on or after the Issue Date or (iii) any
exchange of Subordinated Indebtedness of the Company for Subordinated
Indebtedness of the Company issued after the Issue Date.
"Record Date" means a Record Date specified in the Notes, whether or
not such date is a Business Day.
"Reference Period" with regard to any Person means the four full
fiscal quarters (or such lesser period during which such Person has been in
existence) ended immediately preceding any date upon which any determination is
to be made pursuant to the terms of the Notes or the Indenture.
"Refinancing Indebtedness" means Indebtedness or Disqualified Capital
Stock (a) issued in exchange for, or the proceeds from the issuance and sale of
which are used substantially concurrently to repay, redeem, defease, refund,
refinance, discharge or otherwise retire for value, in whole or in part, or (b)
constituting an amendment, modification or supplement to, or a deferral or
renewal of ((a) and (b) above are, collectively, a "Refinancing"), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, not to exceed (after
deduction of reasonable and customary fees and expenses incurred in connection
with the Refinancing plus the amount of any premium paid in connection with such
Refinancing in accordance with the terms of the documents governing the
Indebtedness refinanced without giving effect to any modification thereof
20
made in connection with or in contemplation of such refinancing) the lesser of
(i) the principal amount or, in the case of Disqualified Capital Stock,
liquidation preference, of the Indebtedness or Disqualified Capital Stock so
Refinanced and (ii) if such Indebtedness being Refinanced was issued with an
original issue discount, the accreted value thereof (as determined in accordance
with GAAP) at the time of such Refinancing; provided that (A) such Refinancing
Indebtedness shall only be used to Refinance outstanding Indebtedness or
Disqualified Capital Stock of such Person issuing such Refinancing Indebtedness,
(B) such Refinancing Indebted ness shall (x) not have an Average Life shorter
than the Indebtedness or Disqualified Capital Stock to be so refinanced at the
time of such Refinancing and (y) in all respects, be no less subordinated or
junior, if applicable, to the rights of Holders of the Notes than was the
Indebtedness or Disqualified Capital Stock to be refinanced, (C) such
Refinancing Indebtedness shall have a final stated maturity or redemption date,
as applicable, no earlier than the final stated maturity or redemption date, as
applicable, of the Indebtedness or Disqualified Capital Stock to be so
refinanced, and (D) such Refinancing Indebtedness shall be secured (if secured)
in a manner no more adverse to the Holders of the Notes than the terms of the
Liens (if any) securing such refinanced Indebtedness, including, without
limitation, the amount of Indebtedness secured shall not be increased.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company, the Guarantors
and the Initial Purchasers, as such agreement may be amended, modified or
supplemented from time to time.
"Reg S Permanent Global Note" means one or more permanent Global Notes
bearing the Private Placement Legend, that will be issued in an aggregate amount
of denominations equal in total to the outstanding principal amount of the Reg S
Temporary Global Note upon expiration of the Distribution Compliance Period.
"Reg S Temporary Global Note" means one or more temporary Global Notes
bearing the Private Placement Legend and the Reg S Temporary Global Note Legend,
issued in an aggregate amount of denominations equal in total to the outstanding
principal amount of the Notes initially sold in reliance on Rule 903 of
Regulation S.
"Reg S Temporary Global Note Legend" means the legend set forth in
Section 2.6(g)(iii), which is required to be placed on all Reg S Temporary
Global Notes issued under this Indenture.
21
"Regulation S" means Regulation S promulgated under the Securities
Act, as it may be amended from time to time, and any successor provision
thereto.
"Regulation S Global Note" means a Reg S Temporary Global Note or a
Reg S Permanent Global Note, as the case may be.
"Related Business" means the business conducted (or proposed to be
conducted) by the Company and its Subsidiaries as of the Issue Date and any and
all businesses that in the good faith judgment of the Board of Directors of the
Company are materially related businesses.
"Related Person" means any Person who controls, is controlled by or is
under common control with an Excluded Person; provided that for purposes of this
definition ''control'' means the beneficial ownership of more than 50% of the
total voting power of a Person normally entitled to vote in the election of
directors, managers or trustees, as applicable of a Person.
"Representative" means the indenture trustee or other trustee, agent
or representative for any Senior Debt.
"Restricted Definitive Note" means one or more Definitive Notes
bearing the Private Placement Legend, issued under this Indenture.
"Restricted Global Note" means one or more Global Notes bearing the
Private Placement Legend, issued under this Indenture; provided, that in no case
shall an Exchange Note issued in accordance with this Indenture and the terms of
the Registration Rights Agreement be a Restricted Global Note.
"Restricted Investment" means, in one or a series or related
transactions, any Investment, other than Permitted Investments.
"Restricted Payment" means, with respect to any Person, (a) the
declaration or payment of any dividend or other distribution in respect of
Equity Interests of such Person or any parent or Subsidiary of such Person, (b)
any payment on account of the purchase, redemption or other acquisition or
retirement for value of Equity Interests of such Person or any Subsidiary or
parent of such Person, (c) other than with the proceeds from the substantially
concurrent sale of, or in exchange for, Refinancing Indebtedness any purchase,
redemption, or other acquisition or retirement for value of, any payment in
respect of any amendment of the terms of or any defeasance of, any Subordinated
Indebtedness, directly or indirectly, by such Person or a parent or Subsidiary
of such Person prior to the scheduled maturity, any scheduled repayment of
principal, or scheduled sinking fund payment, as the case may be, of such
Indebtedness and (d) any Restricted Investment by such Person; provided that the
term "Restricted Payment" does not include (i) any
22
dividend, distribution or other payment on or with respect to Equity Interests
of an issuer to the extent payable solely in shares of Qualified Capital Stock
of such issuer; (ii) any dividend, distribution or other payment to the Company,
or to any of its Subsidiary Guarantors, by the Company or any of its
Subsidiaries; or (iii) Earn Out Payments made pursuant to the Stock Purchase
Agreement.
"Rule 144A" means Rule 144A promulgated under the Securities Act, as
it may be amended from time to time, and any successor provision thereto.
"SEC" means the United States Securities and Exchange Commission, or
any successor agency.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder.
"Senior Debt" of the Company or any Guarantor means (i) all
Indebtedness (including any monetary obligation in respect of the Credit
Agreement or the Canadian Credit Agreement, and interest, whether or not
allowable, accruing on Indebtedness incurred pursuant to the Credit Agreement or
the Canadian Credit Agreement after the filing of a petition initiating any
proceeding under any bankruptcy, insolvency or similar law) outstanding under
the Credit Agreement and the Canadian Credit Agreement, including any guarantees
thereof and all Interest Swap and Hedging Obligations with respect thereto, (ii)
any other Indebtedness permitted to be incurred by the Company or such Guarantor
under the terms of the Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Notes, and (iii) all Obligations with
respect to the foregoing. Notwithstanding anything to the contrary in the
foregoing, Senior Debt will not include (w) any liability for federal, state,
local or other taxes owed or owing by the Company, (x) any Indebtedness of the
Company or any Guarantor to any of its Subsidiaries or other Affiliates, (y) any
trade payables or (z) any Indebtedness that is incurred in violation of the
Indenture.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" shall have the meaning provided under
Regulation S-X of the Securities Act, as in effect from time to time.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, and its successors.
"Special Record Date" means, for payment of any Defaulted Interest, a
date fixed by the Paying Agent pursuant to Section 2.12.
"Stated Maturity" or "stated maturity" means, (i) with respect to any
debt security, the date specified in such debt security as the fixed date on
which the final installment
23
of principal of such debt security is due and payable (which shall mean February
15, 2009 with respect to the Notes) and (ii) with respect to any scheduled
installment of principal of or interest on any debt security, the date specified
in such debt security as the fixed date on which such installment is due and
payable.
"Stock Purchase Agreement" means that certain Stock Purchase
Agreement, dated as of July 17, 1998, as amended as of September 11, 1998,
October 16, 1998 and November 30, 1998, by and between Rugby USA, Inc., a
Georgia corporation, and the Company, as in effect on the Issue Date.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Guarantor that is subordinated in right of payment by its terms or the terms of
any document or instrument or instrument relating thereto to the Notes or the
Guarantees, as applicable, in any respect or when used in the definition of
Restricted Payment has a final stated maturity on (except for the Notes) or
after the Stated Maturity of the Notes, and shall include all Indebtedness under
the Engagement Agreement.
"Subsidiary" with respect to any Person, means (i) any corporation a
majority of whose Equity Interests with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such Person, by such Person and one or more Subsidiaries of such Person or by
one or more Subsidiaries of such Person, (ii) any other Person (other than a
corporation) in which such Person, one or more Subsidiaries of such Person, or
such Person and one or more Subsidiaries of such Person, directly or indirectly,
at the date of determination thereof has at least majority ownership interest
and (iii) any partnership in which such Person or a Subsidiary of such Person
is, at the time, a general partner and in which such Person, directly or
indirectly, at the date of determination thereof has at least a majority
ownership interest. Notwithstanding the foregoing, an Unrestricted Subsidiary
shall not be a Subsidiary of the Company or of any Subsidiary of the Company.
Unless the context requires otherwise, Subsidiary means each direct and indirect
Subsidiary of the Company.
"Subsidiary Guarantors" means any Subsidiary that executes a Guarantee
in accordance with the provisions of this Indenture, and their respective
successors and assigns, until such Subsidiary is released from its obligations
as a Guarantor in accordance with the terms of this Indenture.
"Term Facilities" means an aggregate of $105,000,000 of term loan
facilities under the Credit Agreement and the Canadian Credit Agreement.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under the
TIA.
"Transactions" means all of the following transactions which will
occur on the date hereof: (i) the Company will purchase all of the equity
securities of Pioneer pursuant to the
24
terms of the Stock Purchase Agreement, after which Pioneer will become a wholly
owned direct Subsidiary of the Company and a Subsidiary Guarantor hereunder (the
"Pioneer Acquisition"); (ii) the shareholders of Holdings in existence on the
date hereof will purchase shares of Class A Common Stock, par value $0.01 per
share, of Holdings, for an aggregate purchase price of $5,000,000, the proceeds
of which shall be contributed to the Qualified Capital Stock of the Company on
the Closing Date (the "Capital Contribution"); (iii) the Company and the
guarantors thereunder will enter into the Credit Agreement and Panolam Canada
and the guarantors thereunder will enter into the Canadian Credit Agreement;
(iv) the Company and the Canadian Subsidiary will borrow the full amount under
the Term Facilities (the "Initial Borrowings"); (v) the Company will issue the
Notes; and (vi) the Company will apply the net proceeds of the offering of the
Notes, the Initial Borrowings and the Capital Contribution in the manner
indicated in the Offering Memorandum under the caption "The Transactions", all
substantially on the terms described in the documentation for the Transactions
on the date of the Offering Memorandum (without regard to any amendment,
supplement or waiver thereto that is (a) entered into after the date of the
Offering Memorandum and (b) not contemplated in the Offering Memorandum);
provided , that for purposes of clause (s) of the second paragraph of Section
4.9, the Transactions shall not include any amounts owing or paid under the
Engagement Agreement and; provided, further, that the Company may pay the fees
and expenses described in the Offering Memorandum in connection with the
Transactions prior to, on or after the date hereof.
"Transfer Restricted Notes" means Global Notes and Definitive Notes
that bear or are required to bear the Private Placement Legend, issued under
this Indenture.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means such successor serving hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend, issued
under this Indenture.
"Unrestricted Global Note" means one or more permanent Global Notes
representing a series of Notes that does not bear and is not required to bear
the Private Placement Legend, issued under this Indenture.
"Unrestricted Subsidiary" means any subsidiary of the Company that
does not own any Capital Stock of, or own or hold any Lien on any property of,
the Company or any other Subsidiary of the Company and that, at the time of
determination, shall be an Unrestricted Subsidiary (as designated by the Board
of Directors of the Company); provided that at the time of designation such
Subsidiary: (a) has no Indebtedness other than Non-Recourse Indebtedness; (b) is
not party to any agreement, contract, arrangement or understanding with the
Company or any Subsidiary of the Company unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Company or
such Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Company; (c) is a Person with
25
respect to which neither the Company nor any of its Subsidiaries has any direct
or indirect obligation (x) to subscribe for additional Equity Interests or (y)
to maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results; and (d) has not
guaranteed or otherwise directly or indirectly provided credit support for any
Indebtedness of the Company or any of its Subsidiaries. The Board of Directors
of the Company may designate any Unrestricted Subsidiary to be a Subsidiary;
provided that (i) no Default or Event of Default is existing or will occur as a
consequence thereof and (ii) immediately after giving effect to such
designation, on a pro forma basis, the Company could incur at least $1.00 of
Indebtedness pursuant to the Debt Incurrence Ratio test of Section 4.7. Each
such designation shall be evidenced by filing with the Trustee a certified copy
of the resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions. The
Company has designated two of its indirect, inactive subsidiaries, The Melamine
Group, Inc. and Melamine Decorative Laminate, Inc. as Unrestricted Subsidiaries.
Neither of such Unrestricted Subsidiaries has any material assets or liabilities
or conducts any operations.
"U.S. Government Obligations" means direct non-callable obligations
of, or noncallable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Equity Interests" means Equity Interests which at the time are
entitled to vote in the election of, as applicable, directors, members or
partners generally.
"Wholly Owned Subsidiary" means a Subsidiary all the Equity Interests
of which are owned by the Company or one or more Wholly-Owned Subsidiaries of
the Company.
Section 1.2 Other Definitions
Term Defined in Section
----- ------------------
"Affiliate Transaction" 4.12
"Asset Sale" 4.13
"Asset Sale Offer" 4.13
"Asset Sale Offer Amount" 4.13
"Asset Sale Offer Period" 4.13
"Asset Sale Offer Price" 4.13
"Authentication Order" 2.2
26
"Bankruptcy Law" 6.1
"Benefitted Party" 10.1
"Change of Control" 4.14
"Change of Control Offer" 4.14
"Change of Control Offer Period" 4.14
"Change of Control Purchase Date" 4.14
"Change of Control Purchase Price" 4.14
"Covenant Defeasance" 8.3
"Custodian" 6.1
"Debt Incurrence Ratio" 4.7
"Defaulted Interest" 2.12
"DTC" 2.3
"Excess Proceeds" 4.13
"Guarantee Obligations" 10.1
"Incur" or "Incurrence" 4.7
"Incurrence Date" 4.7
"Legal Defeasance" 8.2
"Nonpayment Default" 11.3
"Paying Agent" 2.3
"Payment Blockage Notice" 11.3
"Payment Default" 11.3
"Registrar" 2.3
"Restricted Payments" 4.9
Section 1.3 Incorporation by Reference of Trust Indenture Act
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the Securities and Exchange Commission;
"indenture securities" means the Notes;
27
"indenture security Holder" means a Holder of a Note;
`"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, each Guarantor and any
successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
Section 1.4 Rules of Construction
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(7) references to sections of or rules under the Securities Act
and the Exchange Act shall be deemed to include substitute, replacement of
successor sections or rules adopted by the SEC from time to time.
ARTICLE II
THE NOTES
28
Section 2.1 Form and Dating
(1) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(2) Global Notes. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be substantially
in the form of Exhibit A attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Notes Custodian, at the direction of the Trustee, in accordance
with instructions given by the Holder thereof as required by Section 2.6 hereof.
(3) Euroclear and Cedel Procedures Applicable. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank in effect at the relevant time shall be
applicable to transfers of beneficial interests in the Regulation S Global Notes
that are held by Participants through Euroclear or Cedel Bank.
Section 2.2 Execution and Authentication
29
Two officers shall sign the Notes for the Company by manual or
facsimile signature. In the case of Definitive Notes, such signatures may be
imprinted or otherwise reproduced on such Notes. If an Officer whose signature
is on a Note no longer holds that office at the time a Note is authenticated,
the Note shall nevertheless be valid. A Note shall not be valid until
authenticated by the manual signature of the Trustee. The signature shall be
conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by an Officer (an
"Authentication Order"), authenticate Notes for issuance up to the aggregate
principal amount stated in such Authentication Order; provided that Notes
authenticated for issuance on the Issue Date shall not exceed $135,000,000 in
aggregate principal amount. The aggregate principal amount of Notes outstanding
at any time may not exceed $135,000,000, except in accordance with Section 2.8.
The Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Notes. An authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
Section 2.3 Registrar, Paying Agent and depositary
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Notes may be presented for registration
of transfer or for exchange ("Registrar") and an office or agency where Notes
may be presented for payment ("Paying Agent"). The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company may
appoint one or more co-registrars and one or more additional paying agents. The
term "Registrar" includes any co-registrar and the term "Paying Agent" includes
any additional paying agent. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company shall notify the Trustee in
writing of the name and address of any Agent not a party to this Indenture. If
the Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries
may act as Paying Agent or Registrar. The Company initially appoints The
Depository Trust Company ("DTC") to act as Depositary with respect to the Global
Notes. The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Notes Custodian with respect to the Global Notes.
Section 2.4 Paying Agent to Hold Money in Trust
30
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.
Section 2.5 Holder Lists
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company shall furnish, or shall cause the Registrar (if
other than the Company) to furnish, to the Trustee at least seven Business Days
before each Interest Payment Date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of Notes and the
Company shall otherwise comply with TIA (S) 312(a).
Section 2.6 Transfer and Exchange
(1) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged
by the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that (x) the Depositary is unwilling or unable to
continue to act as Depositary for the Global Notes and the Company thereupon
fails to appoint a successor Depositary within 90 days or (y) the Depositary is
no longer a clearing agency registered under the Exchange Act, (ii) the Company
in its sole discretion determines that the Global Notes (in whole but not in
part) should be exchanged for Definitive Notes and delivers a written notice to
such effect to the Trustee or (iii) upon request of the Trustee or Holders
31
of a majority of the aggregate principal amount of outstanding Notes if there
shall have occurred and be continuing a Default or Event of Default with respect
to the Notes; provided that in no event shall the Reg S Temporary Global Note be
exchanged by the Company for Definitive Notes prior to (x) the expiration of the
Distribution Compliance Period and (y) the receipt by the Registrar of any
certificate identified by the Company and its counsel to be required pursuant to
Rule 903 or Rule 904 under the Securities Act. Upon the occurrence of any of the
preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued
in such names as the Depositary shall instruct the Trustee. Global Notes also
may be exchanged or replaced, in whole or in part, as provided in Sections 2.7
and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in
lieu of, a Global Note or any portion thereof, pursuant to this Section 2.6 or
Section 2.7 or 2.10 hereof, shall be authenticated and delivered in the form of,
and shall be, a Global Note. A Global Note may not be exchanged for another Note
other than as provided in this Section 2.6(a), however, beneficial interests in
a Global Note may be transferred and exchanged as provided in Section 2.6(b),
(c) or (f) hereof.
(2) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in the same
Restricted Global Note in accordance with the transfer restrictions set forth in
the Private Placement Legend; provided, however, that prior to the expiration of
the Distribution Compliance Period, transfers of beneficial interests in the Reg
S Temporary Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Note. No written orders or instructions shall be required to be delivered to
the Registrar to effect the transfers described in this Section 2.6(b)(i).
(2) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of beneficial
interests
32
that are not subject to Section 2.6(b)(i) above, the transferor of such
beneficial interest must deliver to the Registrar either (A) (1) an order from a
Participant or an Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions given in
accordance with the Applicable Procedures containing information regarding the
Participant account to be credited with such increase or (B) (1) an order from a
Participant or an Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be transferred
or exchanged and (2) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such Definitive Note
shall be registered to effect the transfer or exchange referred to in (B)(1)
above; provided, that in no event shall Definitive Notes be issued upon the
transfer or exchange of beneficial interests in the Reg S Temporary Global Note
prior to (x) the expiration of the Distribution Compliance Period and (y) the
receipt by the Registrar of any certificates identified by the Company or its
counsel to be required pursuant to Rule 903 and Rule 904 under the Securities
Act. Upon consummation of an Exchange Offer by the Company in accordance with
Section 2.6(f) hereof, the requirements of this Section 2.6(b)(ii) shall be
deemed to have been satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by the Holder of such
beneficial interests in the Restricted Global Notes. Upon satisfaction of all of
the requirements for transfer or exchange of beneficial interests in Global
Notes contained in this Indenture and the Notes or otherwise applicable under
the Securities Act, the Trustee shall adjust the principal amount of the
relevant Global Note(s) pursuant to Section 2.6(h) hereof.
(3) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be transferred to
a Person who takes delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the transfer complies with the requirements of
Section 2.6(b)(ii) above and the Registrar receives the following:
(1) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must deliver
a certificate in the form of Exhibit B hereto, including the certifications in
item (1) thereof; and
(2) if the transferee will take delivery in the form of a
beneficial interest in the Reg S Temporary Global Note or the Reg S Permanent
33
Global Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof.
(4) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any holder
thereof for a beneficial interest in an Unrestricted Global Note or transferred
to a Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note if the exchange or transfer complies with the
requirements of Section 2.6(b)(ii) above and:
(1) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and
Section 2.6(f) hereof, and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is not (1)
a Broker-Dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(2) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights Agreement;
(3) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(4) the Registrar receives the following: (1) if the holder of
such beneficial interest in a Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an Unrestricted Global Note,
a certificate from such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or (2) if the holder of such beneficial
interest in a Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a certificate from such
holder in the form of Exhibit B hereto, including the certifications in item
(4) thereof; and, in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form, and from legal counsel, reasonably acceptable to
the Registrar and the Company to the effect that such exchange or transfer is
in compliance with the Securities Act and that the restrictions
34
on transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.2 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above. Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(3) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Restricted Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Restricted Definitive Note, then, upon receipt by the
Registrar of the following documentation:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (2)(a) thereof;
(2) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item (1)
thereof;
(3) if such beneficial interest is being transferred to a Non-
U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(4) if such beneficial interest is being transferred pursuant
to an exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item (3)(a)
thereof;
35
(5) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set forth in
Exhibit B hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable;
(6) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(7) if such beneficial interest is being transferred pursuant
to an effective registration statement under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Note to be reduced accordingly pursuant to Section 2.6(h)
hereof, and the Company shall execute and, upon receipt of an Authentication
Order pursuant to Section 2.2, the Trustee shall authenticate and deliver to the
Person designated in the instructions a Restricted Definitive Note in the
appropriate principal amount. Any Restricted Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this Section
2.6(c) shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such Restricted
Definitive Notes to the Persons in whose names such Notes are so registered.
Any Restricted Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.6(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer contained
therein.
(2) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted
Global Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes delivery
thereof in the form of an Unrestricted Definitive Note only if:
36
(1) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and
Section 2.6(f) hereof, and the holder of such beneficial interest, in the case
of an exchange, or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a
Person participating in the distribution of the Exchange Notes or (3) a Person
who is an affiliate (as defined in Rule 144) of the Company;
(2) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights Agreement;
(3) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(4) the Registrar receives the following: (1) if the holder of
such beneficial interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(b) thereof; or (2) if the
holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery thereof
in the form of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and, in each such case set
forth in this subparagraph (D), an Opinion of Counsel in form, and from legal
counsel, reasonably acceptable to the Registrar and the Company to the effect
that such exchange or transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance with
the Securities Act.
(3) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for an
Unrestricted Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of an Unrestricted Definitive Note, then,
upon satisfaction of the conditions set forth in Section 2.6(b)(ii) hereof, the
Trustee shall cause the aggregate principal amount of the applicable
Unrestricted Global Note to be reduced accordingly pursuant to Section 2.6(h)
hereof, and the Company shall execute and, upon receipt of an Authentication
Order pursuant to Section 2.2, the Trustee shall authenticate and deliver to the
Person
37
designated in the instructions an Unrestricted Definitive Note in the
appropriate principal amount. Any Unrestricted Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.6(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Unrestricted Definitive
Notes to the Persons in whose names such Notes are so registered. Any
Unrestricted Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.6(c)(iii) shall not bear the Private Placement
Legend.
(4) Transfer or Exchange of Reg S Temporary Global Notes.
Notwithstanding the other provisions of this Section 2.6, a beneficial interest
in the Reg S Temporary Global Note may not be (A) exchanged for a Definitive
Note prior to (x) the expiration of the Distribution Compliance Period (unless
such exchange is effected by the Company, does not require an investment
decision on the part of the holder thereof and does not violate the provisions
of Regulation S) and (y) the receipt by the Registrar of any certificates
identified by the Company or its counsel to be required pursuant to Rule
903(c)(3)(B) under the Securities Act or (B) transferred to a Person who takes
delivery thereof in the form of a Definitive Note prior to the events set forth
in clause (A) above or unless the transfer is pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 903 or Rule 904.
(4) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(1) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Restricted Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note, then,
upon receipt by the Registrar of the following documentation:
(1) if the Holder of such Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto, including the
certifications in item (2)(b) thereof;
38
(2) if such Restricted Definitive Note is being transferred to
a QIB in accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications in item
(1) thereof; or
(3) if such Restricted Definitive Note is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
144A Global Note, and in the case of clause (C) above, the Regulation S Global
Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note only if:
(1) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and
Section 2.6(f) hereof, and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in
the distribution of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(2) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights Agreement;
(3) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(4) the Registrar receives the following: (1) if the Holder of
such Restricted Definitive Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications in item
(1)(c) thereof; or
39
(2) if the Holder of such Restricted Definitive Notes proposes to transfer
such Notes to a Person who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note, a certificate from such
Holder in the form of Exhibit B hereto, including the certifications in item
(4) thereof; and, in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form, and from legal counsel, reasonably acceptable to
the Registrar and the Company to the effect that such exchange or transfer is
in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act. Upon satisfaction of the
conditions of any of the subparagraphs in this Section 2.6(d)(ii), the Trustee
shall cancel the Restricted Definitive Notes so transferred or exchanged and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note at any time. Upon
receipt of a request for such an exchange or transfer, the Trustee shall cancel
the applicable Unrestricted Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the Unrestricted Global
Notes. If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) of this
Section 2.6(d) at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.2 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(5) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.6(e), the Registrar shall register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.6(e).
40
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name of
Persons who take delivery thereof in the form of a Restricted Definitive Note if
the Registrar receives the following:
(1) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1) thereof;
(2) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(3) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(1) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and
Section 2.6(f) hereof, and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in
the distribution of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(2) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights Agreement;
(3) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
41
(4) the Registrar receives the following: (1) if the Holder of
such Restricted Definitive Notes proposes to exchange such Notes for an
Unrestricted Definitive Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(d) thereof; or (2)
if the Holder of such Restricted Definitive Notes proposes to transfer such
Notes to a Person who shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof; and, in
each such case set forth in this subparagraph (D), an Opinion of Counsel in
form, and from legal counsel, reasonably acceptable to the Registrar and the
Company to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A
Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who
takes delivery thereof in the form of an Unrestricted Definitive Note. Upon
receipt of a request to register such a transfer, the Registrar shall register
the Unrestricted Definitive Notes pursuant to the instructions from the Holder
thereof.
(6) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.2 and an
Opinion of Counsel for the Company as to certain matters discussed in this
Section 2.6(f), the Trustee shall authenticate (i) one or more Unrestricted
Global Notes in an aggregate principal amount equal to the sum of (A) the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that (x) they are not Broker-Dealers, (y) they are not participating
in a distribution of the Exchange Notes and (z) they are not affiliates (as
defined in Rule 144) of the Company, and accepted for exchange in the Exchange
Offer and (B) the principal amount of Definitive Notes exchanged or transferred
for beneficial interests in Unrestricted Global Notes in connection with the
Exchange Offer pursuant to Section 2.6(d)(ii) and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer (other than
Definitive Notes described in clause (i)(B) immediately above). Concurrently
with the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and, upon receipt of an Authentication Order pursuant
to Section 2.2, the Trustee shall authenticate and deliver to the Persons
42
designated by the Holders of Definitive Notes so accepted Definitive Notes in
the appropriate principal amount.
The Opinion of Counsel for the Company referenced above shall state
that:
(1) the issuance and sale of the Exchange Notes by the Company have been
duly authorized and, when executed and authenticated in accordance with the
provisions of this Indenture and delivered in exchange for Series A Notes in
accordance with this Indenture and the Exchange Offer, will be entitled to the
benefits of this Indenture and will be valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms except
as the enforceability thereof may be limited by (x) bankruptcy, fraudulent
transfer, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and (y) equitable principles of general
applicability (regardless of whether enforceability is considered at equity or
in law); and
(2) when the Exchange Notes are executed and authenticated in accordance
with the provisions of this Indenture and delivered in exchange for Series A
Notes in accordance with this Indenture and the Exchange Offer, the Guarantees
by the Guarantors endorsed thereon will be entitled to the benefits of this
Indenture and will be valid and binding obligations of the Guarantors,
enforceable against the Guarantors in accordance with their terms except as
the enforceability thereof may be limited by (x) bankruptcy, fraudulent
transfer, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and (y) equitable principles of general
applicability (regardless of whether enforceability is considered at equity or
in law).
(7) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(1) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the following
form:
43
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET
FORTH BELOW. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
(1) REPRESENTS THAT, IN CONNECTION WITH EXEMPT RESALES OF THE NOTES BY
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION AND CREDIT SUISSE FIRST
BOSTON CORPORATION (THE "INITIAL PURCHASERS"), (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A
"QIB") OR (B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT;
(2) AGREES THAT, IN CONNECTION WITH RESALES AND TRANSFERS OF THE NOTES OTHER
THAN EXEMPT RESALES OF THE NOTES BY THE INITIAL PURCHASERS, IT WILL NOT
RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUER OR ANY
GUARANTOR OR ANY OF THEIR RESPECTIVE SUBSIDIARIES, (B) TO A PERSON WHOM THE
SELLER REASON ABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904
OF REGULATION S UNDER THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
44
ACCEPTABLE TO THE ISSUER), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST XXXXXX IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "U.S. PERSON" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
(2) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii),
(d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.6 (and all Notes issued
in exchange therefor or substitution thereof) shall not bear the Private
Placement Legend.
(2) Global Note Legend. To the extent required by the Depositary,
each Global Note shall bear legends in substantially the following forms:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.6 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a) OF
THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY."
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED
45
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (00
XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("DTC"), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS 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."
(3) Reg S Temporary Global Note Legend. To the extent required
by the Depositary, each Reg S Temporary Global Note shall bear a legend in
substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS
THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THIS NOTE."
(8) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note 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
Note is exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another
46
Global Note or for Definitive Notes, the principal amount of Notes represented
by such Global Note shall be reduced accordingly and an endorsement may be made
on such Global Note by the Trustee or by the Depositary at the direction of the
Trustee to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note, such other Global Note
shall be increased accordingly and an endorsement may be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to
reflect such increase.
(9) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order.
(2) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections 2.10,
3.6, 4.13 and 4.14 hereof).
(3) The Registrar shall not be required to register the transfer
of or exchange any Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes shall
be the valid obligations of the Company, evidencing the same Indebtedness, and
entitled to the same benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of transfer or exchange.
(5) The Company shall not be required (A) to issue, to register
the transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.2 hereof and ending at the close of business on the
day of selection, (B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part or (C) to
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register the transfer of or to exchange a Note between a Record Date and the
next succeeding Interest Payment Date.
(6) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such Note
for the purpose of receiving payment of principal of and interest on such Notes
and for all other purposes, and none of the Trustee, any Agent or the Company
shall be affected by notice to the contrary.
(7) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.2 hereof.
(8) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.6 to effect
a registration of transfer or exchange may be submitted by facsimile.
Notwithstanding anything herein to the contrary, as to any
certifications and certificates delivered to the Registrar pursuant to this
Section 2.6, the Registrar's duties shall be limited to confirming that any such
certifications and certificates delivered to it are in the form of Exhibits A,
B, C and D attached hereto. The Registrar shall not be responsible for
confirming the truth or accuracy of representations made in any such
certifications or certificates.
Section 2.7 Replacement Notes
If any mutilated Note is surrendered to the Trustee or the
Company and the Trustee and the Company receive evidence (which evidence may be
from the Trustee) to their satisfaction of the destruction, loss or theft of any
Note, the Company shall issue and the Trustee, upon receipt of an Authentication
Order, shall authenticate a replacement Note if the Trustee's requirements are
met. If required by the Trustee or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and the
Company to protect the Company, the Trustee, any Agent and any authenticating
agent from any loss that any of them may suffer if a Note is replaced. The
Company may charge for its expenses in replacing a Note. Every replacement Note
is an additional obligation of the Company and shall be entitled to all of the
benefits of this Indenture equally and proportionately with all other Notes duly
issued hereunder.
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Section 2.8 Outstanding Notes
The Notes outstanding at any time are all the Notes authenticated
by the Trustee (including any Note represented by a Global Note) except for
those cancelled by it or at its direction, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.9 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note. If a Note is replaced pursuant to Section 2.7 hereof,
such Note, together with the Guarantee of that particular Note endorsed thereon,
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser. If the principal amount
of any Note is considered paid under Section 4.1 hereof, it ceases to be
outstanding and interest on it ceases to accrue. If the Paying Agent (other than
the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption
date or the maturity date, money sufficient to pay Notes payable on that date,
then on and after that date such Notes shall be deemed to be no longer
outstanding and shall cease to accrue interest.
Section 2.9 Treasury Notes
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
Section 2.10 Temporary Notes
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of Definitive Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate Definitive Notes in exchange for temporary Notes. Holders of
temporary Notes shall be entitled to all of the benefits of this Indenture.
49
Section 2.11 Cancellation
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent (other than the Company or an Affiliate of the Company), and no one else
shall cancel all Notes surrendered for registration of transfer, exchange,
payment, replacement or cancellation and shall destroy cancelled Notes (subject
to the record retention requirement of the Exchange Act). Certification of the
destruction of all cancelled Notes shall be delivered to the Company. The
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest
Any interest on any Note which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date plus, to the extent
lawful, any interest payable on the defaulted interest at the rate and in the
manner provided in Section 4.1 hereof and in the Note (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee and the Paying Agent in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date
of the proposed payment, and at the same time the Company shall deposit
with the Paying Agent an amount of cash equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements reasonably satisfactory to the Paying Agent for such deposit
prior to the date of the proposed payment, such cash when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as provided in this clause (1). Thereupon the Paying Agent shall
fix a "Special Record Date" for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Paying Agent of the notice of the proposed payment. The Paying Agent
shall
50
promptly notify the Company and the Trustee of such Special Record Date
and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at its
address as it appears in the Note register maintained by the Registrar not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the persons in whose names the Notes (or their respective
predecessor Notes) are registered on such Special Record Date and shall no
longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Company
to the Trustee and the Paying Agent of the proposed payment pursuant to
this clause, such manner shall be deemed practicable by the Trustee and the
Paying Agent.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
Section 2.13 CUSIP NUMBERS
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE III
REDEMPTION
Section 3.1 Notices to Trustee
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If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof, it shall furnish to the Trustee, at
least 45 days (unless a shorter period is acceptable to the Trustee) but not
more than 60 days (unless a longer period is acceptable to the Trustee) before a
redemption date, an Officers' Certificate setting forth (i) the clause of this
Indenture pursuant to which the redemption shall occur, (ii) the redemption
date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption
price.
Section 3.2 Selection of Notes to Be Redeemed
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate. In the event of partial redemption by lot, the
particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes in denominations of larger than $1,000 selected shall be in amounts of
$1,000 or integral multiples of $1,000; except that if all of the Notes of a
Holder are to be redeemed, the entire outstanding amount of Notes held by such
Holder, even if not an integral multiple of $1,000, shall be redeemed. Except as
provided in the preceding sentence, provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption.
Section 3.3 Notice of Redemption
Subject to the provisions of Section 3.7 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company shall mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
52
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(7) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.4 Effect of Notice of Redemption
Once notice of redemption is mailed in accordance with Section
3.3 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.5 Deposit of Redemption Price
53
On the Business Day immediately prior to the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent immediately
available funds sufficient to pay the redemption price of and accrued and unpaid
interest (and Liquidated Damages, if any) on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued and unpaid
interest (and Liquidated Damages, if any) on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest Record Date but on or prior to the related Interest
Payment Date, then any accrued and unpaid interest (and Liquidated Damages, if
any) shall be paid to the Person in whose name such Note was registered at the
close of business on such Record Date. If any Note called for redemption shall
not be so paid upon surrender for redemption because of the failure of the
Company to comply with the preceding paragraph, interest shall be paid on the
unpaid principal, from the redemption date until such principal is paid, and to
the extent lawful on any interest not paid on such unpaid principal, in each
case at the rate provided in the Notes and in Section 4.1 hereof.
Section 3.6 Notes Redeemed in Part
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon receipt of an Authentication Order, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
Section 3.7 Optional Redemption
(a) Except as set forth in clause (b) of this Section 3.7, the
Company shall not have the option to redeem the Notes pursuant to this Section
3.7 prior to February 15, 2004. The Notes will be redeemable for cash at the
option of the Company, in whole or in part, at any time on or after February 15,
2004, upon not less than 30 days nor more than 60 days prior notice mailed by
first class mail to each Holder at its last registered address, at the following
redemption prices (expressed as percentages of the principal amount) if redeemed
during the 12-month period commencing February 15 of the years indicated below,
in each case (subject to the right of Holders of record on a Record Date to
receive the corresponding interest due (and the
54
corresponding Liquidated Damages, if any) on the corresponding Interest Payment
Date that is on or prior to such redemption date) together with accrued and
unpaid interest and Liquidated Damages, if any, thereon to the redemption date:
YEAR PERCENTAGE
---- ----------
2004...................105.750%
2005...................103.833%
2006...................101.917%
2007 and thereafter....100.000%
(b) Notwithstanding the provisions of clause (a) of this Section 3.7,
at any time or from time to time until February 15, 2002, up to 35% of the
aggregate principal amount of the Notes originally issued under this Indenture
may be redeemed at the option of the Company within 90 days of a Public Equity
Offering, on not less than 30 days, but not more than 60 days, prior notice to
each Holder of the Notes to be redeemed, with cash from the Net Cash Proceeds of
such Public Equity Offering, at a redemption price equal to 111.50% of the
principal amount thereof (subject to the right of Holders of record on a Record
Date to receive the corresponding interest (and the corresponding Liquidated
Damages, if any) due on the Interest Payment Date that is on or prior to such
redemption date) together with accrued and unpaid interest and Liquidated
Damages, if any, thereon to the redemption date; provided that immediately
following such redemption not less than 65% of the aggregate principal amount of
the Notes originally issued pursuant to this Indenture remain outstanding.
(c) Any redemption pursuant to this Section 3.7 shall be made pursuant
to the provisions of Sections 3.1 through 3.6 hereof.
Section 3.8 No Mandatory Redemption
The Company shall not be required to make mandatory redemption
payments with respect to the Notes (however, the Company is required to offer to
repurchase Notes in accordance with the provisions of Sections 4.13 and 4.14
below). The Notes shall not have the benefit of any sinking fund.
ARTICLE IV
COVENANTS
55
Section 4.1 Payment of Notes
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 12:00 noon Eastern time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due. The
Company shall pay all Liquidated Damages, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement and
herein.
The Company shall pay interest (including Accrued Bankruptcy
Interest in any proceeding under any Bankruptcy Law) on overdue principal at the
then applicable interest rate on the Notes to the extent lawful; it shall pay
interest (including Accrued Bankruptcy Interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if
any, (without regard to any applicable grace period) at the same rate to the
extent lawful.
Section 4.2 Maintenance of Office or Agency
The Company and the Guarantors shall maintain in the Borough of
Manhattan, The City of New York, an office or agency (which may be an office of
the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where
Notes may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Company and the Guarantors in respect of the
Notes and this Indenture may be served. The Company and the Guarantors shall
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company and the
Guarantors shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office.
The Company and the Guarantors may also from time to time
designate one or more other offices or agencies where the Notes may be presented
or surrendered for any or all such purposes and may from time to time rescind
such additional designations; provided that no such designation or recission
shall in any manner relieve the Company and the Guarantors of their obligation
to maintain an office or agency in the Borough of Manhattan, The City of New
York. The Company and the Guarantors
56
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office as one such
office or agency of the Company in accordance with Section 2.3 hereof.
Section 4.3 SEC Reports and Reports to Holders
(a) Whether or not the Company or any direct or indirect parent
of the Company is subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Company shall deliver to the Trustee and to each Holder
and to prospective purchasers of Notes identified to the Company by an Initial
Purchaser, within 15 days after it is or would have been (if it were subject to
such reporting obligations) required to file such documents with the Commission,
annual and quarterly financial statements substantially equivalent to financial
statements that would have been included in reports filed with the Commission if
the Company were subject to the requirements of Section 13 or 15(d) of the
Exchange Act, including, with respect to annual information only, a report
thereon by the Company's certified independent public accountants as such would
be required in such reports to the Commission, and, in each case, together with
a management's discussion and analysis of financial condition and results of
operations which would be so required and, unless the Commission will not accept
such reports, file with the Commission the annual, quarterly and other reports
which it is or would have been required to file with the Commission. In lieu of
filing and providing reports as set forth above, the Company may, so long as any
direct or indirect parent of the Company owns 100% of the Capital Stock of the
Company and if permitted by the Commission, include in the reports filed and
provided by such direct or indirect parent of the Company such financial
information and narrative disclosure regarding the Company and the Subsidiary
Guarantors as required by the Commission in lieu of filing such reports by the
Company.
(b) For so long as any Transfer Restricted Notes remain
outstanding, the Company shall make available (which shall include filings by
XXXXX) to all Holders and to securities analysts and prospective investors, upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
Section 4.5 Compliance Certificate
57
(1) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company and its Subsidiaries have kept, observed,
performed and fulfilled their obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company and its Subsidiaries are not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred and be
continuing, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action the Company is taking or proposes to take
with respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Notes is prohibited or if such event
has occurred, a description of the event and what action the Company is taking
or proposes to take with respect thereto. The Company shall provide the Trustee
with timely written notice of any change in its fiscal year end, which is
currently December 31.
(b) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, within five Business Days of any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
Section 4.6 Taxes
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment would not have a material adverse
effect on the ability of the Company and the Guarantors to satisfy their
obligations under the Notes, the Guarantees and this Indenture.
Section 4.7 Stay, Extension and Usury Laws
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this
58
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.8 Limitation on Incurrence Of Additional Indebtedness
Except as set forth in this Section 4.7, the Company and the
Subsidiary Guarantors shall not, and shall not permit any of their Subsidiaries
to, directly or indirectly, issue, assume, guaranty, incur, become directly or
indirectly liable with respect to (including as a result of an Acquisition), or
otherwise become responsible for, contingently or otherwise (individually and
collectively, to "incur" or, as appropriate, an "incurrence"), any Indebtedness
(including Acquired Indebtedness), other than Permitted Indebtedness.
Notwithstanding the foregoing if (i) no Default or Event of Default shall have
occurred and be continuing at the time of, or would occur after giving effect on
a pro forma basis to, such incurrence of Indebtedness (including Acquired
Indebtedness) and (ii) on the date of such incurrence (the "Incurrence Date"),
the Consolidated Coverage Ratio of the Company for the Reference Period
immediately preceding the Incurrence Date, after giving effect on a pro forma
basis to such incurrence of such Indebtedness and, to the extent set forth in
the definition of Consolidated Coverage Ratio, the use of proceeds thereof,
would be at least 2.0 to 1.0 (the "Debt Incurrence Ratio"), then the Company and
the Subsidiary Guarantors may incur such Indebtedness (including Acquired
Indebtedness).
In addition, the foregoing limitations will not apply to:
(1) the incurrence by the Company or any Subsidiary Guarantor or
Foreign Subsidiary of Purchase Money Indebtedness; provided that (i) the
aggregate amount of such Indebtedness incurred and outstanding at any time
pursuant to this paragraph (a) (plus any Refinancing Indebtedness incurred to
retire, defease, refinance, replace or refund such Indebtedness) shall not
exceed $10,000,000 (or the equivalent thereof, at the time of incurrence, in the
applicable foreign currencies), and (ii) in each case, such Indebtedness shall
not constitute more than 100% of the cost (determined in accordance with GAAP in
good faith by the Board of Directors of the Company) to the Company or such
Subsidiary Guarantor or Foreign Subsidiary, as applicable, of the property so
acquired, constructed or improved;
59
(2) (i) the incurrence by the Company or any Subsidiary Guarantor of
Indebtedness (including Acquired Indebtedness) in an aggregate amount incurred
and outstanding at any time pursuant to this clause (b)(i) (plus any Refinancing
Indebtedness incurred to retire, defease, refinance, replace or refund such
Indebtedness) of up to $45,000,000 (or the equivalent thereof, at the time of
incurrence, in the applicable foreign currencies) less the aggregate amount of
Indebtedness incurred pursuant to clause (b)(ii) of this Section 4.8, and (ii)
the incurrence by any Canadian Subsidiary of Indebtedness (including Acquired
Indebtedness) in an aggregate amount incurred and outstanding at any time
pursuant to this clause (b)(ii) (plus any Refinancing Indebtedness incurred to
retire, defease, refinance, replace or refund such Indebtedness) of up to
$20,000,000 (or the equivalent thereof, at the time of incurrence, in the
applicable foreign currencies) less the aggregate amount of Indebtedness in
excess of $25,000,000 incurred pursuant to clause b(i) of this Section 4.7;
provided, that the aggregate amount of Indebtedness incurred pursuant to clauses
b(i) and b(ii) of this Section 4.8 shall in no event exceed $45,000,000 (or the
equivalent thereof, at the time of incurrence, in the applicable foreign
currencies);
(3) the incurrence by the Company or any Subsidiary Guarantor of
Indebtedness pursuant to the Term Facilities of the Credit Agreement and the
Canadian Credit Agreement in an aggregate amount incurred and outstanding at any
time pursuant to this paragraph (c) (plus any Refinancing Indebtedness incurred
to retire, defease, refinance, replace or refund such Indebtedness) of up to
$105,000,000 (or the equivalent thereof, at the time of incurrence, in the
applicable foreign currencies) less the aggregate amount of Indebtedness
incurred pursuant to paragraph (d) of this Section 4.7, minus the amount of any
such Indebtedness (i) retired with the Net Cash Proceeds from any Asset Sale
applied to permanently reduce the outstanding amounts or the commitments with
respect to such Indebtedness pursuant to clause (1)(b)(ii) of the first
paragraph of Section 4.13 or (ii) assumed by a transferee in an Asset Sale;
provided, that the aggregate amount of Indebtedness incurred pursuant to this
paragraph (c) and paragraph (d) of this Section 4.7 shall in no event exceed
$105,000,000 (or the equivalent thereof, at the time of incurrence, in the
applicable foreign currencies); and
(4) the incurrence by any Canadian Subsidiary, and the guarantee
thereof by the Company or any other Subsidiary, of Indebtedness pursuant to the
Term Facilities of the Canadian Credit Agreement in an aggregate amount incurred
and outstanding at any time pursuant to this paragraph (d) (plus any Refinancing
Indebtedness incurred to retire, defease, refinance, replace or refund such
Indebtedness) of up to $50,000,000 (or the equivalent thereof, at the time of
incurrence, in the applicable foreign currencies) less the aggregate amount of
Indebtedness in excess of
60
$55,000,000 incurred pursuant to paragraph (c) of this Section 4.7 minus the
amount of any such Indebtedness (i) retired with the Net Cash Proceeds from any
Asset Sale applied to permanently reduce the outstanding amounts or the
commitments with respect to such Indebtedness pursuant to clause (1)(b)(ii) of
the first paragraph of Section 4.13 or (ii) assumed by a transferee in an Asset
Sale; provided, that the aggregate amount of Indebtedness incurred pursuant to
paragraph (c) of this Section 4.7 and this paragraph (d) shall in no event
exceed $105,000,000 (or the equivalent thereof, at the time of incurrence, in
the applicable foreign currencies).
Indebtedness of any Person which is outstanding at the time such Person
becomes a Subsidiary of the Company (including upon designation of any
subsidiary or other Person as a Subsidiary) or is merged with or into or
consolidated with the Company or a Subsidiary of the Company shall be deemed to
have been incurred at the time such Person becomes such a Subsidiary of the
Company or is merged with or into or consolidated with the Company or a
Subsidiary of the Company, as applicable.
Notwithstanding any other provision of this Section 4.7, and to avoid
duplication only, a guarantee of Indebtedness of the Company or a Subsidiary
Guarantor or a Canadian Subsidiary, incurred in accordance with the terms of
this Indenture issued at the time such Indebtedness was incurred or at the time
the guarantor thereof became a Subsidiary of the Company, will not constitute a
separate incurrence, or amount outstanding, of Indebtedness. Upon each
incurrence, the Company may designate the provision of this Section 4.7 pursuant
to which such Indebtedness is being incurred and such Indebtedness shall not be
deemed to have been incurred or outstanding under any other provision of this
Section 4.7, except as stated otherwise in the foregoing provisions.
Section 4.9 Limitation on Liens Securing Indebtedness
The Company and the Guarantors shall not, and shall not permit
any of the Company's Subsidiaries to, create, incur, assume or suffer to exist
any Lien of any kind, other than Permitted Liens, upon any of their respective
assets now owned or acquired on or after the date of this Indenture or upon any
income or profits therefrom securing any Indebtedness of the Company or any
Guarantor, unless the applicable Guarantor and the Company provide, and cause
their Subsidiaries (that are Subsidiaries of the Company) to provide,
concurrently therewith, that the Notes and the applicable Guarantees are equally
and ratably so secured; provided that if such Indebtedness is Subordinated
Indebtedness, the Lien securing such Subordinated Indebtedness shall be
61
subordinate and junior to the Lien securing the Notes with the same relative
priority as such Subordinated Indebtedness shall have with respect to the Notes.
Section 4.10 Limitations on Restricted Payments
The Company and the Subsidiary Guarantors shall not, and shall
not permit any of their Subsidiaries to, directly or indirectly, make any
Restricted Payment if, after giving effect to such Restricted Payment on a pro
forma basis, (1) a Default or an Event of Default shall have occurred and be
continuing, (2) the Company is not permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Debt Incurrence Ratio in Section 4.7, or
(3) the aggregate amount of all Restricted Payments made by the Company and its
Subsidiaries, including after giving effect to such proposed Restricted Payment,
from and after the Issue Date, would exceed, without duplication of any credits
in this paragraph, the following paragraph or the definition of Permitted
Indebtedness, the sum of (a) 50% of the aggregate Consolidated Net Income of the
Company for the period (taken as one accounting period), commencing on the first
day of the first full fiscal quarter commencing after the Issue Date, to and
including the last day of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the time of such
calculation (or, in the event Consolidated Net Income for such period is a
deficit, then minus 100% of such deficit), plus (b) the aggregate Net Cash
Proceeds received by the Company from a Capital Contribution or from the sale of
its Qualified Capital Stock (other than (i) to a Subsidiary of the Company or
(ii) to the extent applied in connection with a Qualified Exchange), after the
Issue Date, plus (c) other than amounts credited pursuant to clause (t) of the
next following paragraph or permitted pursuant to the definition of Permitted
Investments, the net amount of any Restricted Investments (not to exceed the
original amount of such Investment) made after the Issue Date (other than
pursuant to clause (t) of the next following paragraph or permitted pursuant to
the definition of Permitted Investments) that are returned to the Company or the
Subsidiary that made such prior Restricted Investment, without restriction, in
cash or Cash Equivalents on or prior to the date of any such calculation and the
Company's direct and indirect proportionate interest in the fair market value of
an Unrestricted Subsidiary which is redesignated to be a Subsidiary, at the time
of such redesignation.
The foregoing clause (3) of the immediately preceding paragraph, however,
will not prohibit (r) Restricted Payments in addition to those set forth in the
immediately preceding paragraph after the Issue Date not in excess of
$15,189,000 in the aggregate which may be used only to repay or settle amounts
owing to Domtar, Inc. or its Affiliates with respect to the Domtar Note
(including dividends to any Parent Guarantor
62
or Holdings for such purpose); in addition the foregoing clauses (2) and (3) of
the immediately preceding paragraph, however, will not prohibit (s) the
Transactions (including dividends to any Parent Guarantor or Holdings for the
purpose of payments pursuant to the Transactions), (t) Restricted Investments;
provided that after giving pro forma effect to such Restricted Investment, the
aggregate amount of all such Restricted Investments made on or after the Issue
Date that are outstanding (after giving effect to any such Restricted
Investments that are returned to the Company or the Subsidiary that made such
prior Restricted Investment, without restriction, in cash on or prior to the
date of any such calculation, but not to exceed the original amount of such
Restricted Investment) at any time does not exceed $5,000,000 (each such
Restricted Investment being measured at the time made or returned, as
applicable), and (u) repurchases of Capital Stock of Holdings from employees of
Holdings, any Parent Guarantor, the Company or its Subsidiaries upon the death,
disability or termination of employment in an aggregate amount to all such
employees not to exceed the sum of (A) $1,000,000 per year or $2,500,000 in the
aggregate on and after the Issue Date (including dividends to any Parent
Guarantor or Holdings for the purpose of such payment) plus (B) the aggregate
amount of proceeds of Qualified Capital Stock issued to employees of Holdings,
such Parent Guarantor, the Company or such Subsidiary in the same year and Net
Cash Proceeds from life insurance payments in the same year, and the provisions
of the immediately preceding paragraph will not prohibit (v) any dividend,
distribution or other payments by any Subsidiary of the Company on its Equity
Interests that is paid pro rata to all holders of such Equity Interests, (w) a
Qualified Exchange, (x) the payment of any dividend on Qualified Capital Stock
within 60 days after the date of its declaration if such dividend could have
been made on the date of such declaration in compliance with the foregoing
provisions, (y) to the extent deemed a Restricted Payment, payment of amounts to
Genstar Capital in accordance with the terms of the Management Services
Agreement and the Engagement Agreement, both in accordance with the terms
thereof on the Issue Date (including dividends to any Parent Guarantor or
Holdings for the purpose of such payment), and (z) Permitted Payments to
Holdings. The full amount of any Restricted Payment made pursuant to the
foregoing clauses (t), (u), (v) and (x) (but not pursuant to clauses (r), (s),
(w), (y) or (z)) of the immediately preceding sentence, however, will be
deducted in the calculation of the aggregate amount of Restricted Payments
available to be made referred to in clause (3) of the immediately preceding
paragraph.
The amount of any Restricted Payment made or returned, if other than in
cash, shall be the fair market value thereof, as determined in the good faith
reasonable judgment of the Board of Directors of the Company. Additionally,
concurrently with each Restricted Payment, the Company shall deliver an
Officers' Certificate to the
63
Trustee describing in reasonable detail the nature of such Restricted Payment,
stating the amount of such Restricted Payment, stating in reasonable detail the
provisions of this Indenture pursuant to which such Restricted Payment was made
and certifying that such Restricted Payment was made in compliance with the
terms of this Indenture.
Section 4.11 Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries
The Company and the Subsidiary Guarantors shall not, and shall
not permit any of their Subsidiaries to, directly or indirectly, create, assume
or suffer to exist any consensual restriction on the ability of any Subsidiary
of the Company to pay dividends or make other distributions to or on behalf of,
or to pay any obligation to or on behalf of, or otherwise to transfer assets or
property to or on behalf of, or make or pay loans or advances to or on behalf
of, the Company or any Subsidiary of the Company, except (a) restrictions
imposed by the Notes or this Indenture or by other indebtedness of the Company
(which may also be guaranteed by the Subsidiary Guarantors) ranking senior or
pari passu with the Notes or the Guarantee(s), as applicable; provided that such
restrictions are no more restrictive taken as a whole than those imposed by this
Indenture and the Notes, (b) restrictions imposed by applicable law, (c)
existing restrictions under Existing Indebtedness, (d) restrictions under any
Acquired Indebtedness not incurred in violation of this Indenture or any
agreement relating to any property, asset, or business acquired by the Company
or any of its Subsidiaries, which restrictions in each case existed at the time
of Acquisition, were not put in place in connection with or in anticipation of
such Acquisition and are not applicable to any Person, other than the Person
acquired, or to any property, asset or business, other than the property, assets
and business so acquired, (e) any such restriction or requirement imposed by
Indebtedness incurred under the Credit Agreement or the Canadian Credit
Agreement or any guarantee thereof in accordance with Section 4.7; provided that
such restriction or requirement is no more restrictive taken as a whole than
that imposed by the Credit Agreement or the Canadian Credit Agreement or any
such guarantee as of the Issue Date, (f) restrictions with respect solely to a
Subsidiary of the Company imposed pursuant to a binding agreement which has been
entered into for the sale or disposition of all or substantially all of the
Equity Interests or assets of such Subsidiary; provided that such restrictions
apply solely to the Equity Interests or assets of such Subsidiary which are
being sold, (g) restrictions on transfer contained in Purchase Money
Indebtedness incurred pursuant to paragraph (a) of Section 4.7 provided that
such restrictions relate only to the transfer of the property acquired with the
proceeds of such Purchase Money Indebtedness and (h) in connection with and
pursuant to permitted Refinancings, replacements of restrictions imposed
pursuant to clauses (a), (c), (d), (e)
64
or (g) of this Section 4.10 that are not more restrictive taken as a whole than
those being replaced and do not apply to any other Person or assets than those
that would have been covered by the restrictions in the Indebtedness so
refinanced.
Notwithstanding the foregoing, (a) customary provisions
restricting subletting or assignment of any lease entered into in the ordinary
course of business, consistent with industry practice shall not in and of
themselves be considered a restriction on the ability of the applicable
Subsidiary to transfer such agreement or assets, as the case may be and (b) any
asset subject to a Lien which is not prohibited to exist with respect to such
asset may be subject to restrictions on the transfer or disposition thereof
pursuant to such Lien.
Section 4.12 Limitation on Lines of Business
Neither the Company nor any of its Subsidiaries shall directly or
indirectly engage to any substantial extent in any line or lines of business
activity other than that which, in the reasonable good faith judgment of the
Board of Directors of the Company, is a Related Business.
Section 4.13 Limitation on Transactions with Affiliates
Neither the Company nor any of its Subsidiaries will be permitted
on or after the Issue Date to enter into or suffer to exist any contract,
agreement, arrangement or transaction with any Affiliate (an "Affiliate
Transaction"), or any series of related Affiliate Transactions, (other than
Exempted Affiliate Transactions), (i) unless it is determined that the terms of
such Affiliate Transaction are fair and reasonable to the Company, and no less
favorable to the Company, than could have been obtained in an arm's length
transaction with a non-Affiliate, and (ii) if involving consideration to either
party in excess of $1,000,000 unless such Affiliate Transaction(s) is evidenced
by an Officers' Certificate addressed and delivered to the Trustee certifying
that such Affiliate Transaction (or Transactions) has been approved by a
majority of the members of the Board of Directors of the Company that are
disinterested in such transaction, if any, and (iii) if involving consideration
to either party in excess of $5,000,000 unless in addition the Company, prior to
the consummation thereof, obtains a written favorable opinion as to the fairness
of such transaction to the Company from a financial point of view from an
independent investment banking firm of national reputation or, if pertaining to
a matter for which such investment banking firms do not customarily render such
opinions, an appraisal or valuation firm of national reputation.
Section 4.14 Limitation on Sale Of Assets And Subsidiary Stock
65
The Company and the Subsidiary Guarantors shall not, and shall
not permit any of their Subsidiaries to, in one or a series of related
transactions, convey, sell, transfer, assign or otherwise dispose of, directly
or indirectly, any of its property, business or assets, including by merger or
consolidation (in the case of a Subsidiary Guarantor or a Subsidiary of the
Company), and including any sale or other transfer or issuance of any Equity
Interests of any Subsidiary of the Company (other than directors' qualifying
shares or shares required by applicable law to be held by a Person other than
the Company or a Subsidiary), whether by the Company or a Subsidiary or through
the issuance, sale or transfer of Equity Interests by a Subsidiary of the
Company, and including any sale and leaseback transaction (any of the foregoing,
an "Asset Sale"), unless (l)(a) the Net Cash Proceeds therefrom (the "Asset Sale
Offer Amount") are applied (i) within 180 days after the date of such Asset Sale
to the optional redemption of the Notes in accordance with the terms of this
Indenture and other Indebtedness of the Company ranking on a parity with the
Notes and with similar provisions requiring the Company to redeem such
Indebtedness with the proceeds for asset sales, pro rata in proportion to the
respective principal amounts (or accreted values in the case of Indebtedness
issued with an original issue discount) of the Notes and such other Indebtedness
then outstanding or (ii) within 210 days after the date of such Asset Sale to
the repurchase of the Notes and such other Indebtedness on a parity with the
Notes and with similar provisions requiring the Company to make an offer to
purchase such Indebtedness with the proceeds for asset sales pursuant to a cash
offer (subject only to conditions required by applicable law, if any) (pro rata
in proportion to the respective principal amounts (or accreted values in the
case of Indebtedness issued with an original issue discount) of the Notes and
such other Indebtedness properly tendered) (the "Asset Sale Offer") at a
purchase price of 100% of principal amount (or accreted value in the case of
Indebtedness issued with an original issue discount) (the "Asset Sale Offer
Price") together with accrued and unpaid interest and Liquidated Damages, if
any, to the date of payment, made within 180 days of such Asset Sale or (b)
within 180 days following such Asset Sale, the Asset Sale Offer Amount is (i)
invested (or committed, pursuant to a binding commitment subject only to
reasonable, customary closing conditions, to be invested, and in fact is so
invested, within an additional 90 days) in assets and property (except in
connection with the acquisition of a Wholly Owned Subsidiary in a Related
Business, other than notes, bonds, obligation and securities) which in the good
faith reasonable judgment of the Board of Directors of the Company will
immediately constitute or be a part of a Related Business of the Company or such
Subsidiary (if it continues to be a Subsidiary) immediately following such
transaction or in Restricted Investments permitted by Section 4.9; provided that
proceeds from Asset Sales effected by a Subsidiary Guarantor or a Canadian
Subsidiary may not be reinvested in a Foreign Subsidiary which is not a Canadian
Subsidiary or (ii) used to retire Purchase Money Indebtedness or Senior Debt and
to permanently reduce (in the case of Senior Debt that is not Purchase Money
Indebtedness) the amount of such Indebtedness outstanding on the Issue Date or
permitted pursuant to paragraph (b) (but only to the extent that such paragraph
66
(b) relates to revolving credit borrowings under the Credit Agreement and the
Canadian Credit Agreement), (c) or (d), as applicable, of Section 4.7 (including
that in the case of a revolver or similar arrangement that makes credit
available, such commitment is so permanently reduced by such amount); provided
that any proceeds from Asset Sales effected by a Subsidiary Guarantor or a
Canadian Subsidiary may not be used to retire Indebtedness of or make an
Investment in any Foreign Subsidiary which is not a Canadian Subsidiary, except
to the extent allowable pursuant to clause (h) of the definition of Permitted
Investment, (2) at least 75% of the total consideration for such Asset Sale or
series of related Asset Sales consists of cash or Cash Equivalents, (3) no
Default or Event of Default shall have occurred and be continuing at the time
of, or would occur after giving effect, on a pro forma basis, to, such Asset
Sale, and (4) the Board of Directors of the Company determines in good faith
that the Company or such Subsidiary, as applicable, receives the fair market
value for such Asset Sale.
An acquisition of Notes pursuant to an Asset Sale Offer may be deferred
until the accumulated Net Cash Proceeds from Asset Sales not applied to the uses
and in the time periods set forth in 1(a)(i) or 1(b) above (the "Excess
Proceeds") exceeds $10,000,000 and that each Asset Sale Offer shall remain open
for 20 Business Days following its commencement (the "Asset Sale Offer Period").
Pending application of the Net Cash Proceeds pursuant to this Section 4.13, such
Net Cash Proceeds shall be invested in Permitted Investments (other than
pursuant to clause (a), (e) or (h) of the definition thereof) or used to reduce
outstanding loans under any working capital facility. Upon expiration of the
Asset Sale Offer Period, the Company shall apply the Asset Sale Offer Amount
plus an amount equal to accrued and unpaid interest and Liquidated Damages, if
any, to the purchase of all Indebtedness properly tendered (on a pro rata basis
if the Asset Sale Offer Amount is insufficient to purchase all Indebtedness so
tendered) at the Asset Sale Offer Price (together with accrued interest and
Liquidated Damages, if any). To the extent that the aggregate amount of Notes
and such other pari passu Indebtedness tendered pursuant to an Asset Sale Offer
is less than the Asset Sale Offer Amount, the Company may use any remaining Net
Cash Proceeds for general corporate purposes as otherwise permitted by this
Indenture and following each Asset Sale Offer the Excess Proceeds amount shall
be reset to zero. For purposes of (2) in the preceding paragraph, total
consideration received means the total consideration received for such Asset
Sales minus the amount of (a) Purchase Money Indebtedness secured solely by the
assets sold and assumed by a transferee and Senior Debt assumed by the
transferee, provided in each case that the Company, the Guarantors and their
Subsidiaries are released from all obligations in connection therewith and (b)
property that within 30 days of such Asset Sale is converted into cash or Cash
Equivalents; provided that such cash and Cash Equivalents shall be treated as
Net Cash Proceeds attributable to the original Asset Sale for which such
property was received.
Notwithstanding, and without complying with, the provisions of this Section
(1) the Company and its Subsidiaries may, in the ordinary course of
business, (1) convey, sell, transfer, assign or otherwise dispose of inventory
and other
67
assets acquired and held for resale in the ordinary course of business and (2)
liquidate Cash Equivalents;
(2) the Company and its Subsidiaries may convey, sell, transfer, assign or
otherwise dispose of assets pursuant to and in accordance with Article V;
(3) the Company and its Subsidiaries may sell or dispose of damaged, worn
out or other obsolete personal property in the ordinary course of business so
long as such property is no longer necessary for the proper conduct of the
business of the Company or such Subsidiary, as applicable;
(4) the Company and the Subsidiary Guarantors may convey, sell, transfer,
assign or otherwise dispose of assets to the Company, any of its Subsidiary
Guarantors or any Canadian Subsidiary;
(5) the Company and its Subsidiaries, in the ordinary course of business,
may convey, sell transfer, assign, or otherwise dispose of assets (or related
assets in related transactions) with a fair market value of less than $500,000;
(6) the Company and each of its Subsidiaries may surrender or waive
contract rights or settle, release or surrender contract, tort or other claims
of any kind or grant Liens (and permit foreclosure thereon) not prohibited by
this Indenture; and
(7) Foreign Subsidiaries may convey, sell, transfer, assign or otherwise
dispose of assets to the Company, any of the Subsidiary Guarantors, or any other
Foreign Subsidiary.
All Net Cash Proceeds from an Event of Loss relating to a Material Facility
(other than the proceeds of any business interruption insurance) shall be
reinvested, used for prepayment of Senior Debt, or used to repurchase Notes and
pari passu Indebtedness on a pro rata basis, all within the period and as
otherwise provided above in clauses 1(a) or 1(b) of the first paragraph of this
Section 4.13.
Any Asset Sale Offer shall be made in compliance with all applicable laws,
rules, and regulations, including, if applicable, Regulation 14E of the Exchange
Act and the rules and regulations thereunder and all other applicable Federal
and state securities laws. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this Section 4.13,
compliance by the Company or any of its
68
Subsidiaries with such laws and regulations shall not in and of itself cause a
breach of its obligations under this Section 4.13.
If the payment date in connection with an Asset Sale Offer hereunder is on
or after an interest payment Record Date and on or before the associated
Interest Payment Date, any accrued and unpaid interest (and Liquidated Damages,
if any, due on such Interest Payment Date) will be paid to the Person in whose
name a Note is registered at the close of business on such Record Date, and such
interest (or Liquidated Damages, if applicable) will not be payable to Holders
who tender Notes pursuant to such Asset Sale Offer.
Section 4.15 Repurchase of Notes At The Option Of The Holder upon a Change of
Control
In the event that a Change of Control has occurred, each Holder
of Notes will have the right, at such Holder's option, pursuant to an offer
(subject only to conditions required by applicable law, if any) by the Company
(the "Change of Control Offer"), to require the Company to repurchase all or any
part of such Holder's Notes (provided that the principal amount of such Notes
must be $1,000 or an integral multiple thereof) on a date (the "Change of
Control Purchase Date") that is no later than 35 Business Days after the
occurrence of such Change of Control, at a cash price equal to 101% of the
principal amount thereof (the "Change of Control Purchase Price"), together with
accrued and unpaid interest and Liquidated Damages, if any, to the Change of
Control Purchase Date. The Change of Control Offer shall be made within 10
Business Days following a Change of Control and shall remain open for 20
Business Days following its commencement (the "Change of Control Offer Period").
Upon expiration of the Change of Control Offer Period, the Company promptly
shall purchase all Notes properly tendered in response to the Change of Control
Offer.
As used herein, a "Change of Control" means (i) prior to
consummation of an Initial Public Equity Offering, the Excluded Person shall
cease beneficially to own, directly or indirectly, at least 51% of the voting
power of the Voting Equity Interests of the Company or (ii) following the
consummation of an Initial Public Equity Offering, (A) any merger or
consolidation of the Company with or into any Person or any sale, transfer or
other conveyance, whether direct or indirect, of all or substantially all of the
assets of the Company, on a consolidated basis, in one transaction or a series
of related transactions occurs, if, immediately after giving effect to such
transaction(s), (x) any "person" or "group" (as such terms are used for purposes
of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable)
(other than the Excluded Person and
69
Xxxxxx X. Xxxxxx, Xx.) is or becomes the "beneficial owner," directly or
indirectly, of more than 35% of the total voting power in the aggregate normally
entitled to vote in the election of directors, managers, or trustees, as
applicable, of the transferee(s) or surviving entity or entities and (y) the
Excluded Person and Xxxxxx X. Xxxxxx, Xx. "beneficially own," directly or
indirectly, in the aggregate a lesser percentage of such voting power than such
other person or group, (B) any Schedule 13D, Form 13F or Schedule 13G under the
Exchange Act, or any amendment to such Schedule or Form, is received by the
Company which indicates that, or the Company otherwise becomes aware that, (x)
any "person" or "group" (as such terms are used for purposes of Sections 13(d)
and 14(d) of the Exchange Act, whether or not applicable) (other than the
Excluded Person and Xxxxxx X. Xxxxxx, Xx.) is or becomes the "beneficial owner,"
directly or indirectly, of more than 35% of the total voting power in the
aggregate of all classes of Capital Stock of the Company then outstanding
normally entitled to vote in elections of directors, managers, or trustees, as
applicable, of the transferee(s) or surviving entity or entities and (y) the
Excluded Person and Xxxxxx X. Xxxxxx, Xx. "beneficially own," directly or
indirectly, in the aggregate a lesser percentage of such voting power than such
other person or group; provided, however, that a Person shall not be deemed the
"beneficial owner" of shares tendered pursuant to a tender or exchange offer
made by such Person or any Affiliate of such Person until the tendered shares
are accepted for purchase or exchange, (C) during any period of 12 consecutive
months after the Issue Date, individuals who at the beginning of any such 12-
month period constituted the Board of Directors of the Company (together with
any new directors whose election by such Board of Directors or whose nomination
for election by the shareholders of the Company was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved, including new directors designated in or provided for in
an agreement regarding the merger, consolidation or sale, transfer or other
conveyance, of all or substantially all of the assets of the Company or any
Parent Guarantor or Holdings, if such agreement was approved by a vote of such
majority of directors) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office or (D) the Company adopts a
plan of liquidation.
Notwithstanding the foregoing, the Company will not be required to make a
Change of Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance
with the requirements set forth herein applicable to a Change of Control Offer
made by the Company, including any requirements to repay in full all
Indebtedness under the Credit Agreement and the Canadian Credit Agreement, any
Senior Debt of the Company or
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Senior Debt of any Subsidiary Guarantor or obtain the consents of such lenders
to such Change of Control Offer as set forth in the following paragraph, and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
Prior to the commencement of a Change of Control Offer, but in any event
within 30 days following any Change of Control, the Company shall (i)(a) repay
in full and terminate all commitments under Indebtedness under the Credit
Agreement and the Canadian Credit Agreement or (b) offer to repay in full and
terminate all commitments under all Indebtedness under the Credit Agreement and
the Canadian Credit Agreement and repay in full the Indebtedness owed to each
such lender which has accepted such offer or (ii) obtain the requisite consents
under the Credit Agreement and the Canadian Credit Agreement to permit the
repurchase of the Notes as provided herein. The Company's failure to comply with
the preceding sentence shall constitute an Event of Default described in clause
(d) and not in clause (b) of Section 6.1 below.
On or before the Change of Control Purchase Date, the Company shall, to the
extent lawful, (i) accept for payment Notes or portions thereof properly
tendered and not validly withdrawn pursuant to the Change of Control Offer, (ii)
deposit with the Paying Agent an amount in cash sufficient to pay the Change of
Control Purchase Price (together with accrued and unpaid interest and Liquidated
Damages, if any), of all Notes so tendered and (iii) deliver or cause to be
delivered to the Trustee the Notes so accepted together with an Officers'
Certificate listing the Notes or portions thereof being purchased by the
Company. The Paying Agent promptly will pay the Holders of Notes so accepted an
amount equal to the Change of Control Purchase Price (together with accrued and
unpaid interest and Liquidated Damages, if any), and the Trustee promptly will
authenticate and deliver to such Holders a new Note equal in principal amount to
any unpurchased portion of the Note surrendered. Any Notes not so accepted will
be delivered promptly by the Company to the Holder thereof. The Company publicly
will announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Purchase Date.
Any Change of Control Offer shall be made in compliance with all applicable
laws, rules and regulations, including, if applicable, Regulation 14E under the
Exchange Act and the rules thereunder and all other applicable Federal and state
securities laws. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.14, compliance by the
Company or any of the Guarantors with such laws and regulations shall not in and
of itself cause a breach of its obligations under this Section 4.14.
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If the Change of Control Purchase Date hereunder is on or after an interest
payment Record Date and on or before the associated Interest Payment Date, any
accrued and unpaid interest (and Liquidated Damages, if any) due on such
Interest Payment Date will be paid to the Person in whose name a Note is
registered at the close of business on such Record Date, and such interest (and
Liquidated Damages, if applicable) will not be payable to Holders who tender the
Notes pursuant to the Change of Control Offer.
Section 4.16 Limitation on Layering Indebtedness
The Company and the Guarantors shall not, and shall not permit
any of the Company's Subsidiaries to, directly or indirectly, incur, or suffer
to exist any Indebtedness that is subordinate in right of payment to any other
Indebtedness of the Company or a Guarantor unless, by its terms, such
Indebtedness is subordinate in right of payment to, or ranks pari passu with,
the Notes or the Guarantees, as applicable, provided that this limitation will
not apply to Acquired Indebtedness (other than Acquired Indebtedness incurred in
connection with or in contemplation of a merger of the Company, any Guarantor or
any of their Subsidiaries, or in connection with another transaction pursuant to
which a Person becomes a Subsidiary of the Company or any Guarantor); provided,
further that this limitation will not apply to guarantees by the Company or any
Guarantor of Indebtedness incurred pursuant to the Canadian Credit Agreement.
Section 4.17 Subsidiary Guarantors
All present and future Subsidiaries of the Company other than
Foreign Subsidiaries shall jointly and severally guaranty irrevocably and
unconditionally all principal, premium, if any, and interest on the Notes on a
senior subordinated basis and shall execute a Guarantee substantially in the
form included in Exhibit A hereto (in the case of present and future
Subsidiaries of the Company) and in the form of Exhibit E hereto (in the case of
future Subsidiaries of the Company) and deliver an Opinion of Counsel in form
and substance reasonably satisfactory to the Trustee regarding the due
authorization, execution and delivery of the Guarantee.
Notwithstanding anything herein to the contrary, if any
Subsidiary (including Foreign Subsidiaries) of the Company that is not a
Subsidiary Guarantor guarantees any other Indebtedness of the Company or any
Subsidiary Guarantor (other than any guarantee by a Foreign Subsidiary of
Indebtedness of any other Foreign Subsidiary of the Company), or the Company or
a Subsidiary of the Company,
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individually or collectively, pledges more than 65% of the Equity Interests of
any such Subsidiary to a United States lender, then such Subsidiary must become
a Subsidiary Guarantor and shall execute a Guarantee substantially in the form
of Exhibit E hereto and deliver an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee regarding the due authorization,
execution and delivery of the Guarantee.
Section 4.18 Limitation On Status As Investment Company
The Company and its Subsidiaries shall be prohibited from being
required to register as an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act")), or
from otherwise becoming subject to registration or regulation under the
Investment Company Act.
Section 4.19 maintenance of properties and insurance
The Company and the Subsidiary Guarantors shall cause all
material properties used or useful to the conduct of their business and the
business of each of their Subsidiaries to be maintained and kept in good
condition, repair and working order (reasonable wear and tear excepted) and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
their reasonable judgment may be necessary, so that the business carried on in
connection therewith may be properly conducted at all times; provided, however,
that nothing in this Section 4.18 shall prevent the Company or any Subsidiary
Guarantor from discontinuing any operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is
(a) (i) in the judgment of the Board of Directors of the Company, desirable in
the conduct of the business of such entity and (ii) would not have a material
adverse effect on the ability of the Company and the Guarantors to satisfy their
obligations under the Notes, the Guarantees and this Indenture, or (b) otherwise
permitted under Section 4.13.
The Company and Subsidiary Guarantors shall provide, or cause to
be provided, for themselves and each of their Subsidiaries, insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in the
reasonable, good faith opinion of the Board of Directors of the Company is
adequate and appropriate for the conduct of the business of the Company, the
Subsidiary Guarantors and such Subsidiaries.
Section 4.20 corporate existence
Subject to Article V hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the
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respective organizational documents (as the same may be amended from time to
time) of the Company or any such Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof
would not have a material adverse effect on the ability of the Company and the
Guarantors to satisfy their obligations under the Notes, the Guarantees and this
Indenture.
ARTICLE V
SUCCESSORS
Section 5.1 Merger, Consolidation or Sale of Assets
The Company shall not consolidate with or merge with or into
another Person or, directly or indirectly, sell, lease, convey or transfer all
or substantially all of its assets (computed on a consolidated basis), whether
in a single transaction or a series of related transactions, to another Person
or group of affiliated Persons, unless (i) either (a) the Company is the
continuing entity or (b) the resulting, surviving or transferee entity is a
corporation organized under the laws of the United States, any state thereof or
the District of Columbia and expressly assumes by supplemental indenture all of
the obligations of the Company in connection with the Notes and this Indenture;
(ii) no Default or Event of Default shall exist or shall occur immediately after
giving effect on a pro forma basis to such transaction; and (iii) immediately
after giving effect to such transaction on a pro forma basis, the consolidated
resulting, surviving or transferee entity would immediately thereafter be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Debt Incurrence Ratio set forth in Section 4.7.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise) of all or substantially all of the properties and
assets of one or more Subsidiaries, the Company's interest in which constitutes
all or substantially all of the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.
Section 5.2 Successor Corporation Substituted
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.1
hereof, the successor corporation formed by such consolidation or into which the
Company is merged or to
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which such transfer is made shall (except in the case of a lease) succeed to and
be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named therein as the Company, and (except in the case of a lease) the Company
shall be released from the obligations under the Notes and this Indenture except
with respect to any obligations that arise from, or are related to, such
transaction.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default
"Event of Default," wherever used herein, means any one of the
following events:
(1) the failure by the Company to pay any installment of interest
(or Liquidated Damages, if any) on the Notes as and when the same becomes due
and payable and the continuance of any such failure for 30 days;
(2) the failure by the Company or any Subsidiary of the Company
to pay all or any part of the principal, or premium, if any, on the Notes when
and as the same becomes due and payable at maturity, redemption, by acceleration
or otherwise, including, without limitation, payment of the Change of Control
Purchase Price or the Asset Sale Offer Price, or otherwise on Notes validly
tendered and not properly withdrawn pursuant to a Change of Control Offer or
Asset Sale Offer, as applicable (as set forth in Sections 4.14 and 4.13);
(3) failure by the Company or any Subsidiary of the Company for
30 days after notice from the Trustee or Holders of at least 25% in principal
amount of the Notes then outstanding to comply with the provisions described in
Sections 4.7 and 4.9;
(4) failure by the Company or any Subsidiary of the Company for
60 days after notice from the Trustee or the Holders of at least 25% in
principal amount of the Notes then outstanding to comply with any of their
respective other agreements in this Indenture or the Notes (other than with
respect to (a), (b) and (c) above);
(5) the failure to pay at final stated maturity (giving effect to
any applicable grace periods) the principal amount of any Indebtedness of the
Company or any Subsidiary of the Company or the acceleration of the final stated
maturity of any Indebtedness if the aggregate principal amount of such
Indebtedness, together with the
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principal amount of any such Indebtedness in default for failure to pay
principal at final maturity or which has been accelerated, aggregates $5,000,000
or more at any one time;
(6) final unsatisfied judgments not covered by insurance for the
payment of money, or the issuance of any warrant of attachment against any
portion of the property or assets of the Company or any of its Subsidiaries,
aggregating in excess of $5,000,000, at any one time shall be rendered against
the Company or any of its Subsidiaries and not be stayed, bonded or discharged
for a period of 60 days;
(7) except as otherwise permitted in this Indenture, any of the
Guarantees shall be held in a judicial proceeding to be unenforceable or invalid
or shall cease for any reason to be in full force and effect or the respective
Guarantor, or any Person acting on behalf of such Guarantor, shall deny or
disaffirm its obligations under its Guarantee;
(8) a court having jurisdiction in the premises enters a decree
or order for (A) relief in respect of the Company or any Significant Subsidiary
in an involuntary case under any applicable Bankruptcy Law now or hereafter in
effect, (B) appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) the winding up or liquidation of the affairs of
the Company or any Significant Subsidiary and, in each case, such decree or
order shall remain unstayed and in effect for a period of 60 consecutive days;
or
(9) the Company or any Significant Subsidiary (A) commences a
voluntary case under any applicable Bankruptcy Law now or hereafter in effect,
or consents to the entry of an order for relief in an involuntary case under any
such law, (B) consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Company or any Significant Subsidiary or for all or substantially all of the
property and assets of the Company or any Significant Subsidiary or (C) effects
any general assignment for the benefit of creditors.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Section 6.2 Acceleration
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If an Event of Default (other than an Event of Default specified
in clause (h) or (i) of Section 6.1 that occurs with respect to the Company)
occurs and is continuing under this Indenture, then in every such case, unless
the principal of all of the Notes shall have already become due and payable,
either the Trustee or the Holders of at least 25% in aggregate principal amount
of the Notes, then outstanding, by written notice to the Company (and to the
Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the principal of, premium, if any, and
accrued interest (and Liquidated Damages, if any) on the Notes to be immediately
due and payable. Upon a declaration of acceleration, such principal of, premium,
if any, and accrued interest (and Liquidated Damages, if any) shall be
immediately due and payable; provided that if any Senior Debt is outstanding
pursuant to the Credit Agreement or the Canadian Credit Agreement, any such
declaration of acceleration shall not become effective until the earlier of (A)
the fifth Business Days after the sending to the Company and the Representative
under the Credit Agreement and the Canadian Credit Agreement of such written
notice, unless such Event of Default is cured or waived prior to such date and
(B) the date of acceleration of any Senior Debt under the Credit Agreement or
the Canadian Credit Agreement, as applicable. In the event a declaration of
acceleration resulting solely from an Event of Default described in clause (e)
above has occurred and is continuing, such declaration of acceleration shall be
automatically annulled if such default is cured or waived or the holders of the
Indebtedness which is the subject of such default have rescinded their
declaration of acceleration in respect of such Indebtedness within five days
thereof and the Trustee has received written notice of such cure, waiver or
rescission and no other Event of Default described in clause (e) above has
occurred that has not been cured or waived within five days of the declaration
of such acceleration in respect of such Indebtedness. If an Event of Default
specified in clauses (h) and (i) above, relating to the Company, occurs, all
principal and accrued interest (and Liquidated Damages, if any) thereon will be
immediately due and payable on all outstanding Notes without any declaration or
other act on the part of the Trustee or the Holders. As of the Issue Date, the
Representative under the Credit Agreement is Credit Suisse First Boston, as
Administrative Agent, with an address of 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, attention: Syndication Agency, and the Representative under the Canadian
Credit Agreement is Credit Suisse First Boston Canada, as Administrative Agent,
with an address of Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, X.X. Box 301, Toronto,
Ontario, M5X 1C9, attention: Syndications Administration, and the Company shall
provide the Trustee with timely written notice of any change in the name or
address of the Representatives under the Credit Agreement or the Canadian Credit
Agreement.
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At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of not less
than a majority in aggregate principal amount of then outstanding Notes, by
written notice to the Company and the Trustee, may rescind, on behalf of all
Holders, any such declaration of acceleration if:
(1) the Company has paid or deposited with the Trustee cash
sufficient to pay: (a) all overdue interest and Liquidated
Damages, if any, on all Notes; (b) the principal of (and premium,
if any, applicable to) any Notes which would become due other
than by reason of such declaration of acceleration, and interest
thereon at the rate borne by the Notes; (c) to the extent that
payment of such interest is lawful, interest upon overdue
interest at the rate borne by the Notes; (d) all sums paid or
advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee
and its agents and counsel, and all other amounts due the Trustee
under Section 7.7; and
(2)
all Events of Default, other than the non-payment of the
principal of, premium, if any, and interest (and Liquidated
Damages, if any) on the Notes which have become due solely by
such declaration of acceleration, have been cured or waived as
provided in Section 6.4.
Notwithstanding the previous sentence of this Section 6.2, no waiver
shall be effective against any Holder for any Event of Default or event which
with notice or lapse of time or both would be an Event of Default with respect
to (i) any covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Note affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event and (ii) any provision or covenant requiring supermajority approval to
amend, unless such default has been waived by such a supermajority. No such
waiver shall cure or waive any subsequent default or impair any right consequent
thereon.
If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify each Representative of Senior Debt of the
acceleration.
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Section 6.3 Other Remedies
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.4 Waiver of Past Defaults
Subject to Section 6.7, the Holders of at least a majority in
principal amount of the outstanding Notes by written notice to the Company and
to the Trustee, may, on behalf of all Holders, waive any existing or past
Default or Event of Default hereunder and its consequences under this Indenture,
except a default:
(1) in the payment of principal of, premium, if any, or interest on
any Note not yet cured as specified in clauses (a) and (b) of
Section 6.1 hereof;
(2) in respect of a covenant or provision hereof which, under Article
IX, cannot be modified or amended without the consent of the
Holder of each outstanding Note affected, unless all such affected
Holders agree, in writing, to waive such default;
(3) any provision or covenant requiring supermajority approval to
amend, unless such default has been waived by such a
supermajority; or
(4) the rescission of which would conflict with any judgment or decree
of a court of competent jurisdiction.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right arising therefrom.
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Section 6.5 Control by Majority
Holders of at least a majority in aggregate principal amount of
the then outstanding Notes may direct the time, method and place of conducting
any proceeding for exercising any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture, that the Trustee
determines in good faith may be unduly prejudicial to the rights of other
Holders of Notes not joining in the giving of such direction or that may involve
the Trustee in personal liability and the Trustee may take any other action it
deems proper that is not inconsistent with any such direction received from
Holders of the Notes.
Section 6.6 Limitation on Suits
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(1) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of
the then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any costs, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
Section 6.7 Rights of Holders of Notes to Receive Payment
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Notwithstanding any other provision of this Indenture, except as
permitted by Section 9.2, the right of any Holder of a Note to receive payment
of the principal of, premium and Liquidated Damages, if any, and interest on the
Note, on or after the respective due dates expressed in the Note (including in
connection with an offer to purchase) or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
Section 6.8 Collection Suit by Trustee
If an Event of Default specified in Section 6.1 occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.9 Trustee May File Proofs of Claim
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.7 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities
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and other properties that the Holders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise; provided that nothing stated herein shall modify the
rights as between the Holders of the Notes and the holders of Senior Debt or
Senior Debt of the Guarantors, as applicable, as set forth in Article XI.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding; provided, however that the Trustee
may, on behalf of the Holders, vote for the election of a trustee in bankruptcy
or similar official and may be a member of the creditor's committee.
Section 6.10 Priorities
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.7 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection (including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel);
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal and Liquidated Damages, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for principal, premium and Liquidated Damages, if any, and interest,
respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a Record Date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit
82
of an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys' fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant. This Section does not apply
to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.7
hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.
ARTICLE VII
TRUSTEE
Section 7.1 Duties of Trustee
(1) If an Event of Default of which the Trustee has knowledge has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in its exercise, as a prudent man would exercise or use under the circumstances
in the conduct of its own affairs.
(2) Except during the continuance of an Event of Default of which the
Trustee has knowledge:
(1) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(3) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of paragraph
(b) of this Section;
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(2) the Trustee shall not be liable for any error of judgment
made in good faith by an 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 6.5 hereof.
(4) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to Sections 7.1
and 7.2.
(5) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(6) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.2 Rights of Trustee
(1) In connection with the Trustee's rights and duties under
this Indenture, the Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting under this
Indenture, it may require an Officers' Certificate or an Opinion of Counsel or
both. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officers' Certificate or Opinion of Counsel.
The Trustee may consult with counsel and the written advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and protection
from liability in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
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(3) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(4) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(5) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(6) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
(7) Except with respect to Section 4.1 hereof, the Trustee shall have
no duty to inquire as to the performance of the Company's covenants in Article
IV hereof. In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring pursuant
to Sections 6.1(a), 6.1(b) and 4.1 or (ii) any Default or Event of Default of
which the Trustee shall have received written notification in the manner set
forth in this Indenture or an officer in the corporate trust administration of
the Trustee shall have obtained actual knowledge.
(8) 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, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Trustee
may, in its discretion, make such further inquiry or investigation into such
facts or matters as it may see fit.
Section 7.3 Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as defined in the TIA) it must
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eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.4 Trustee's Disclaimer
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.5 Notice of Defaults
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice in the
manner and to the extent provided by Section 313(c) of the TIA of the Default or
Event of Default within 90 days after it occurs. Except in the case of a Default
or Event of Default in payment of principal of, premium, if any, or interest on
any Note, the Trustee may withhold the notice if and so long as a committee of
its Officers in good faith determines that withholding the notice is in the
interests of the Holders of the Notes.
Section 7.6 Reports by Trustee to Holders of the Notes
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA (S) 313(a) (but if no event described in
TIA (S) 313(a) has occurred within the 12 months preceding the reporting date,
no report need be transmitted). The Trustee also shall comply with TIA (S)
313(b)(2). The Trustee shall also transmit by mail all reports as required by
XXX (S) 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA (S) 313(d). The
Company shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
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Section 7.7 Compensation and Indemnity
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred
or made by it in addition to the compensation for its services. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses (including reasonable attorneys' fees) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.7) and defending itself
against any claim (whether asserted by the Company or any Holder or any other
Person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence, bad faith or willful misconduct.
The Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of such counsel. The
Company need not pay for any settlement made without its consent, which consent
shall not be unreasonably withheld.
The obligations of the Company under this Section 7.7 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes; provided that nothing stated herein shall modify
the rights as between the Holders of the Notes and the holders of the Senior
Debt or Senior Debt of the Guarantors, as applicable, as set forth in Article XI
hereof. Such Lien shall survive the satisfaction and discharge of this
Indenture.
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When the Trustee incurs expenses or renders services after an
Event of Default specified in Sections 6.1(h) or 6.1(i) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2)
to the extent applicable.
Section 7.8 Replacement of Trustee
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of Notes
of a majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(3) a Custodian or public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Xxxxxxx does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders
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of Notes of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee; provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.8, the Company's obligations under Section 7.7 hereof shall
continue for the benefit of the retiring Trustee.
Section 7.9 Successor Trustee by Xxxxxx, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10 Eligibility; Disqualification
There shall at all times be a Trustee hereunder that is a
corporation or trust company (or a member of a bank holding company) organized
and doing business under the laws of the United States of America or of any
state thereof that is authorized under such laws to exercise corporate trustee
power, that is subject to supervision or examination by federal or state
authorities and that has (or the bank holding company of which it is a member
has) a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA
(S) 310(b).
Section 7.11 Preferential Collection of Claims Against Company
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The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1 Option to Effect Legal Defeasance or Covenant Defeasance
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.2 or 8.3 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article VIII.
Section 8.2 Legal Defeasance and Discharge
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, each of the Company and the Guarantors, as
applicable, shall, subject to the satisfaction of the applicable conditions set
forth in Section 8.4 hereof, be deemed to have been discharged from its
obligations with respect to all outstanding Notes and Guarantees, as applicable,
on the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes and the Guarantors shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Guarantees, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.5
hereof and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all its other obligations under such Notes, such
Guarantees and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.4 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest and Liquidated Damages, if any, on such Notes when such
payments are due, (b) the Company's obligations with respect to such Notes under
Article II and Section 4.2 hereof, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company's obligations in connection
therewith and (d) this Article VIII. Subject to
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compliance with this Article VIII, the Company may exercise its option under
this Section 8.2 notwithstanding the prior exercise of its option under Section
8.3 hereof.
Section 8.3 Covenant Defeasance
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, subject to the satisfaction of the applicable
conditions set forth in Section 8.04 hereof, the Company and the Guarantors
shall be released from their respective obligations under Sections 4.3, 4.4,
4.5, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16 and 4.18 hereof and
the Guarantors shall be released from their obligations under Section 10.3(b)
hereof, in each case on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes and the Guarantees
shall thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.1 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.1 hereof of the option applicable to this Section 8.3 hereof, subject to the
satisfaction of the applicable conditions set forth in Section 8.4 hereof, (x)
Sections 6.1(c) through 6.1(g) hereof shall not constitute Events of Default and
(y) Sections 6.1(h) and 6.1(i) shall not constitute Events of Default as of the
91st day following the occurrence of the Company's exercise of Covenant
Defeasance; provided, however that for all other purposes as set forth herein,
such Covenant Defeasance provisions shall be effective.
Section 8.4 Conditions to Legal or Covenant Defeasance
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
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(1) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States legal tender, U.S.
Government Obligations, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and Liquidated Damages,
if any, and interest on the outstanding Notes on the stated date for payment
thereof or on the applicable redemption date, as the case may be, and the
Company must specify whether the Notes are being defeased to maturity or to a
particular redemption date and the Holders must have a valid, perfected
exclusive security interest in such trust;
(2) in the case of an election under Section 8.2 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(3) in the case of an election under Section 8.3 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which are used to defease the Notes pursuant to this Article VIII
concurrently with such incurrence);
(5) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under this Indenture, any other
material agreement or instrument to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries is bound;
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(6) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(7) the Company shall have delivered to the Trustee (i) an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for, in the case of the Officers' Certificate, (a)
through (f) and, in the case of the Opinion of Counsel, clause (a) (with respect
to the validity and perfection of the security interest), (b), (c) and (e) of
this Section 8.4 have been complied with (except, in each case, that condition
(b) thereof shall not be applicable to Covenant Defeasance and condition (c)
thereof shall not be applicable to Legal Defeasance), and (ii) the opinion of a
nationally recognized firm of independent public accountants referred to in
Section 8.4(a).
Legal Defeasance and Covenant Defeasance shall be deemed to occur
on the date of the deposit required under Section 8.4(a), so long as all of the
other conditions set forth in Section 8.4 are satisfied as of such date.
Section 8.5 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions
Subject to Section 8.6 hereof, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.5, the
"Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest (and
Liquidated Damages, if any), but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or U.S. Government
Obligations deposited pursuant to Section 8.4 hereof or the principal and
interest received in respect thereof, other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
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Anything in this Article VIII to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or U.S. Government Obligations held by it as
provided in Section 8.4 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.4(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 8.6 Repayment to Company
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, Liquidated Damages, if any, or interest on any Note and remaining unclaimed
for two years after such principal, and premium, if any, Liquidated Damages, if
any, or interest has become due and payable shall be paid to the Company on its
written request or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Note shall thereafter, as a creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
Section 8.7 Reinstatement
If the Trustee or Paying Agent is unable to apply any United
States legal tender or U.S. Government Obligations in accordance with Section
8.2 or 8.3 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.2 or 8.3 hereof,
as the case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to
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the rights of the Holders of such Notes to receive such payment from the money
held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.1 Without Consent of Holders of Notes
Notwithstanding Section 9.2 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Notes or
any Guarantee, without the consent of any Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(3) to provide for the assumption of the Company's obligations to
the Holders of the Notes in the case of a merger or consolidation pursuant to
Article V hereof;
(4) to provide for additional Guarantors as set forth in Section
4.16 or for the release or assumption of a Guarantee in compliance with this
Indenture;
(5) to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not adversely affect the
rights hereunder of any Holder of the Note;
(6) to comply with the provisions of the Depositary, Euroclear or
Cedel or the Trustee with respect to the provisions of this Indenture or the
Notes relating to transfers and exchanges of Notes or beneficial interests
therein; or
(7) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 9.6 hereof, the Trustee shall join with the Company in the
execution of any amended or
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supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that adversely affects its own rights, duties
or immunities under this Indenture or otherwise.
Section 9.2 With Consent of Holders of Notes
Except as expressly stated otherwise in this Section 9.2, and
subject to Sections 6.4 and 6.7 hereof, the Company, the Guarantors and the
Trustee may amend or supplement this Indenture, the Notes and the Guarantees,
with the consent of the Holders of a majority in aggregate principal amount of
the Notes then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, the
Notes), and, subject to Sections 6.4 and 6.7 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of this Indenture or the Notes may be waived with the consent
of the Holders of a majority in aggregate principal amount of the then
outstanding Notes (including consents obtained in connection with a purchase of,
or tender offer or exchange offer for, the Notes); provided, that, except as
expressly stated otherwise in paragraphs (a), (b) and (c) of this Section 9.2,
no such modification may, without the consent of Holders of at least 66% in
aggregate principal amount of Notes at the time outstanding, modify the
provisions (including the defined terms used therein) of Section 4.14 in a
manner adverse to the Holders.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 9.6
hereof, the Trustee shall join with the Company in the execution of such amended
or supplemental Indenture unless such amended or supplemental Indenture
adversely affects the Trustee's own rights, duties or immunities
96
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.2 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.4 and 6.7 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes; provided, that no such modification may, without the
consent of Holders of at least 66% in aggregate principal amount of Notes at
the time outstanding, modify the provisions (including the defined terms used
therein) of Section 4.14 in a manner adverse to the Holders. However, without
the consent of each Holder affected (it being understood that, except as
expressly stated otherwise in paragraphs (a), (b) and (c) below, Sections 4.13
and 4.14 may be amended, waived or modified in accordance with the first
paragraph of this Section 9.2), an amendment or waiver may not (with respect to
any Notes held by a non-consenting Holder):
(a) change the final Stated Maturity on any Note, or reduce the principal
amount thereof or the rate (or extend the time for payment) of interest thereon
or any premium payable upon the redemption thereof pursuant to Article III
hereof, or change the place of payment where, or the coin or currency in which,
any Note or any premium or the interest thereon (and Liquidated Damages, if any)
is payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or in the case of
redemption pursuant to Article III hereof, on or after the redemption date), or,
after the applicable Change of Control or Asset Sale occurs, reduce the
corresponding Change of Control Purchase Price or the Asset Sale Offer Price or
alter the provisions (including the defined terms used herein) of Article III of
this Indenture in a manner adverse to the Holders; or
(b) reduce the percentage in principal amount of the outstanding Notes,
the consent of whose Holders is required for any such amendment, supplemental
indenture or waiver provided for in this Indenture; or
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(c) modify any of the waiver provisions, except to increase any
required percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each
outstanding Note affected thereby.
Section 9.3 Compliance with Trust Indenture Act
Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or supplemental Indenture that complies with
the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents
Until an amendment, supplement or waiver becomes effective (as
determined by the Company and which may be prior to any such amendment,
supplement or waiver becoming operative), a consent to it by a Holder of a Note
is a continuing consent by the Holder of a Note and every subsequent Holder of a
Note or portion of a Note that evidences the same Indebtedness as the consenting
Holder's Note, even if notation of the consent is not made on any Note.
However, any such Holder of a Note or subsequent Holder of a Note may revoke the
consent as to its Note if the Trustee receives written notice of revocation
before the date the waiver, supplement or amendment becomes effective (as
determined by the Company).
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder unless it makes a change described in any of clauses (a)
through (c) of Section 9.2 hereof, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; provided, that any such waiver shall not impair or
affect the right of any Holder to receive payment of principal and premium of
and interest (and Liquidated Damages, if any) on a Note, on or after the
respective dates set for such
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amounts to become due and payable expressed in such Note, or to bring suit for
the enforcement of any such payment on or after such respective dates.
Section 9.5 Notation on or Exchange of Notes
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.6 Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article IX if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive indemnity reasonably satisfactory to it
and to receive and (subject to Section 7.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or permitted
by this Indenture.
ARTICLE X
GUARANTEES
Section 10.1 Guarantees
Subject to the provisions of this Article X, and in consideration
of good and valuable consideration, the receipt of and sufficiency of which are
hereby acknowledged, each Guarantor, jointly and severally, hereby
unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, that: (a) the
principal of, and premium and interest and Liquidated Damages, if any, on the
Notes shall be duly and punctually paid in full when due, whether at maturity,
by acceleration, call for redemption, upon a Change of Control Offer, upon an
Asset Sale Offer 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
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the Notes and all other obligations of the Company to the Holders or the
Trustee hereunder or under the Notes (including fees, expenses or other) shall
be promptly paid in full or performed, all in accordance with the terms hereof;
and (b) in case of any extension of time of payment or renewal of any Notes or
any of such other obligations, the same shall be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration, call for redemption, upon a Change of
Control, upon an Asset Sale Offer or otherwise (collectively, the "Guarantee
Obligations"). Failing payment when due of any Guarantee Obligation or failing
performance of any other obligation of the Company to the Holders, for whatever
reason, each Guarantor shall be obligated to pay, or to perform or to cause the
performance of, the same immediately and before the failure to so pay becomes an
Event of Default. An Event of Default under this Indenture or the Notes shall
constitute an event of default under this Guarantee, and shall entitle the
Trustee or the Holders of Notes to accelerate the Guarantee Obligations of each
Guarantor hereunder in the same manner and to the same extent as the Obligations
of the Company.
Each Guarantor hereby agrees that its Guarantee Obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any thereof, the entry 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 a Guarantor. Each Guarantor hereby
waives and relinquishes: (a) any right to require the Trustee, the Holders or
the Company (each, a "Benefitted Party") to proceed against the Company, the
Subsidiaries or any other Person or to proceed against or exhaust any security
held by a Benefitted Party at any time or to pursue any other remedy in any
secured party's power before proceeding against the Guarantors; (b) any defense
that may arise by reason of the incapacity, lack of authority, death or
disability of any other Person or Persons or the failure of a Benefitted Party
to file or enforce a claim against the estate (in administration, bankruptcy or
any other proceeding) of any other Person or Persons; (c) demand, protest and
notice of any kind (except as expressly required by this Indenture), including
but not limited to notice of the existence, creation or incurring of any new or
additional Indebtedness or obligation or of any action or non-action on the part
of the Guarantors, the Company, the Subsidiaries, any Benefitted Party, any
creditor of the Guarantors, the Company or the Subsidiaries or on the part of
any other Person whomsoever in connection with any obligations the performance
of which are hereby guaranteed; (d) any defense based upon an election of
remedies by a Benefitted Party, including but not limited to an election to
proceed against the Guarantors for
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reimbursement; (e) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal; (f) any defense
arising because of a Benefitted Party's election, in any proceeding instituted
under the Bankruptcy Law, of the application of Section 1111(b)(2) of the
Bankruptcy Code; and (g) any defense based on any borrowing or grant of a
security interest under Section 364 of the Bankruptcy Code. The Guarantors
hereby covenant that, except as otherwise provided therein, the Guarantees shall
not be discharged except by payment in full of all Guarantee Obligations,
including the principal, premium, if any, and interest on the Notes and all
other costs provided for under this Indenture or as provided in Section 8.1.
If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or the Guarantors, or any trustee or
similar official acting in relation to either the Company or the Guarantors, any
amount paid by the Company or the Guarantors to the Trustee or such Holder, the
Guarantees, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each of the Guarantors agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any Guarantee
Obligations hereby until payment in full of all such obligations guaranteed
hereby. Each Guarantor agrees that, as between it, on the one hand, and the
Holders of Notes and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article VI
hereof for the purposes hereof, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Guarantee
Obligations, and (y) in the event of any acceleration of such obligations as
provided in Article VI hereof, such Guarantee Obligations (whether or not due
and payable) shall forthwith become due and payable by such Guarantor for the
purpose of the Guarantee.
Section 10.2 Execution and Delivery of Guarantees
To evidence the Guarantees set forth in Section 10.1 hereof, each
of the Guarantors agrees that a notation of the Guarantees substantially in the
form included in Exhibit A hereto shall be endorsed on each Note authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of each of the Guarantors by an Officer of each of the Guarantors.
Each of the Guarantors agree that the Guarantees set forth in
this Article X shall remain in full force and effect and apply to all the Notes
notwithstanding any failure to endorse on each Note a notation of the
Guarantees.
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If an Officer whose facsimile signature is on a Note or a
notation of Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which the Guarantees are endorsed, the Guarantees
shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantees set forth in
this Indenture on behalf of the Guarantors.
Section 10.3 Guarantors May Consolidate, etc., on Certain Terms
(1) Nothing contained in this Indenture or in the Notes shall
prevent any consolidation or merger of any Guarantor with or into each other or
with or into the Company. Upon any such consolidation or merger, the Subsidiary
Guarantee of the Subsidiary Guarantor that does not survive the consolidation or
merger shall no longer be of any force or effect.
(2) Except as set forth in Article IV and for a merger or
consolidation in which a Guarantor is sold and its Guarantee is released in
compliance with the provisions of Section 10.4, no Guarantor shall consolidate
or merge with or into (whether or not such Guarantor is the surviving Person)
another Person unless, subject to the provisions of the following paragraph and
certain other provisions of this Indenture, (i) the Person formed by or
surviving any such consolidation or merger (if other than such Guarantor)
assumes all the obligations of such Guarantor pursuant to a supplemental
indenture in form reasonably satisfactory to the Trustee, pursuant to which such
person shall unconditionally guarantee, on a senior subordinated basis, all of
such Guarantor's obligations under such Guarantor's Guarantee and this Indenture
on the terms set forth in this Indenture; and (ii) immediately before and
immediately after giving effect to such transaction on a pro forma basis, no
Default or Event of Default shall have occurred or be continuing. In case of
any such consolidation or merger and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and reasonably satisfactory in form to the Trustee, of the Guarantees endorsed
upon the Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by such Guarantor, such successor
corporation shall succeed to and be substituted for such Guarantor with the same
effect as if it had been named herein as a Guarantor. Such successor
corporation thereupon may cause to be signed any or all of the Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the
Guarantees so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Guarantees theretofore
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and thereafter issued in accordance with the terms of this Indenture as though
all of such Guarantees had been issued at the date of the execution hereof.
(c) The Trustee, subject to the provisions of Section 12.4
hereof, shall be entitled to receive an Officers' Certificate as conclusive
evidence that any such consolidation or merger, and any such assumption of
Guarantee Obligations, comply with the provisions of this Section 10.3. Such
Officers' Certificate shall comply with the provisions of Section 12.5.
Section 10.4 Release of guarantors
Notwithstanding Section 10.3(b), upon the sale or disposition
(whether by merger, stock purchase, asset sale or otherwise) of a Subsidiary
Guarantor (or all of its assets) to an entity which is not a Subsidiary
Guarantor, or the designation of a Subsidiary to become an Unrestricted
Subsidiary, which transaction is otherwise in compliance with this Indenture
(including, without limitation, the provisions of Section 4.13), such Subsidiary
Guarantor shall be deemed released from its obligations under its Guarantee of
the Notes; provided that any such termination shall occur only to the extent
that all obligations of such Subsidiary Guarantor under all of its guarantees of
any Indebtedness of the Company or any other Subsidiary of the Company shall
terminate upon such release, sale or transfer.
Upon delivery by the Company to the Trustee of an Officer's
Certificate, to the effect that such sale or other disposition or that such
designation was made by the Company in accordance with the provisions of this
Indenture, and the Trustee shall execute any documents reasonably required in
order to evidence the release of any such Subsidiary Guarantor from its
Guarantee Obligations under its Subsidiary Guarantee. Except as provided in
Section 10.3(a), any Subsidiary Guarantor not released from its Guarantee
Obligations under its Subsidiary Guarantee shall remain liable for the full
amount of principal of and interest on the Notes and for the other obligations
of any Subsidiary Guarantor under this Indenture as provided in this Article X.
Notwithstanding the foregoing provisions of this Article X, (i)
any Guarantor whose Guarantee would otherwise be released pursuant to the
provisions of this Section 10.4 may elect, at its sole discretion, by written
notice to the Trustee, to maintain such Guarantee in effect notwithstanding the
event or events that otherwise would cause the release of such Guarantee (which
election to maintain such Guarantee in effect may be conditional or for a
limited period of time), and (ii) any Subsidiary of the Company which is not a
Guarantor may elect, at its sole discretion, by written notice
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to the Trustee, to become a Guarantor (which election may be conditional or for
a limited period of time).
Section 10.5 Limitation of Guarantor's Liability; certain bankruptcy events
(a) Each Guarantor, and by its acceptance hereof each Holder,
hereby confirms that it is the intention of all such parties that the Guarantee
Obligation of such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal or state law. To effectuate the foregoing intention, the Holders
and such Guarantor hereby irrevocably agree that the Guarantee Obligations of
such Guarantor under this Article X shall be limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Guarantor in respect of the Guarantee Obligations of such
other Guarantor under this Article X, result in the Guarantee Obligations of
such Guarantor under the Guarantee of such Guarantor not constituting a
fraudulent transfer or conveyance.
(b) Each Guarantor hereby covenants and agrees, to the fullest extent
that it may do so under applicable law, that in the event of the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company, such
Guarantor shall not file (or join in any filing of), or otherwise seek to
participate in the filing of, any motion or request seeking to stay or to
prohibit (even temporarily) execution on the Guarantee and hereby waives and
agrees not to take the benefit of any such stay of execution, whether under
Section 362 or 105 of the Bankruptcy Law or otherwise.
Section 10.6 Application of Certain Terms and Provisions to the Guarantors
(1) For purposes of any provision of this Indenture which
provides for the delivery by any Guarantor of an Officers' Certificate and/or an
Opinion of Counsel, the definitions of such terms in Section 1.1 shall apply to
such Guarantor as if references therein to the Company were references to such
Guarantor.
(2) Any request, direction, order or demand which by any
provision of this Indenture is to be made by any Guarantor, shall be sufficient
if evidenced as described in Section 12.2 as if references therein to the
Company were references to such Guarantor.
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(c) Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the holders
of Notes to or on any Guarantor may be given or served as described in Section
12.2 as if references therein to the Company were references to such Guarantor.
(d) Upon any demand, request or application by any Guarantor to
the Trustee to take any action under this Indenture, such Guarantor shall
furnish to the Trustee such certificates and opinions as are required in Section
12.4 hereof as if all references therein to the Company were references to such
Guarantor.
Section 10.7 Subordination of Guarantees
The obligations of each Guarantor under its Guarantee pursuant to
this Article X is subordinated in right of payment to the prior payment in full
in cash of all Senior Debt of such Guarantor on the same basis as the Notes are
subordinated to Senior Debt of the Company. For the purposes of the foregoing
sentence, the Trustee and the Holders shall have the right to receive and/or
retain payments by any of the Guarantors only at such times as they may receive
and/or retain payments in respect of Notes pursuant to this Indenture, including
Article XI hereof. In the event that the Trustee receives any Guarantor payment
at a time when an officer of the corporate trust administration of the Trustee
has actual knowledge that such payment is prohibited by the foregoing sentence,
such Guarantor payment shall be paid over and delivered to the holders of the
Senior Debt of such Guarantor remaining unpaid, to the extent necessary to pay
in full all such Senior Debt. In the event that a Holder receives any Guarantor
payment at a time when such payment is prohibited by the foregoing sentence,
such Guarantor payment shall be paid over and delivered to the holders of the
Senior Debt of such Guarantor remaining unpaid, to the extent necessary to pay
in full all such Senior Debt.
Each Holder of a Note by its acceptance thereof (a) agrees to and
shall be bound by the provisions of this Section 10.7, (b) authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary and appropriate to effectuate the subordination so provided, and (c)
appoints the Trustee as the Holder's attorney-in-fact for any and all such
purposes.
ARTICLE XI
SUBORDINATION
Section 11.1 Notes Subordinate to Senior Debt.
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The Company, the Guarantors and each Holder, by its acceptance of
the Notes, agree that (a) the payment of the principal of and interest on the
Notes and (b) any other payment in respect of the Notes, including on account of
the acquisition or redemption of the Notes by the Company and the Guarantors
(including, without limitation, pursuant to Sections 4.13 and 4.14 and Article
X) is subordinated, to the extent and in the manner provided in this Article XI,
to the prior payment in full in cash or Cash Equivalents of all Senior Debt of
the Company and the Guarantors and that these subordination provisions are for
the benefit of the holders of Senior Debt. References herein to payment in full
of Senior Debt shall in any event be construed to require cash collateralization
on terms satisfactory to the representative under the Credit Agreement and the
Canadian Credit Agreement of any letters of credit outstanding thereunder or
pursuant to such other arrangements as are satisfactory to the representative
under the Credit Agreement and the Canadian Credit Agreement.
This Article XI shall constitute a continuing offer to all
Persons who, in reliance upon such provisions, become holders of, or continue to
hold, Senior Debt, and such provisions are made for the benefit of the holders
of Senior Debt and such holders are made obligees hereunder and any one or more
of them may enforce such provisions.
Section 11.2 No Payment On Notes In Certain Circumstances.
No payment (by set-off or otherwise) shall be made by or on
behalf of the Company or the Guarantors, as applicable, on account of the
principal of, premium, if any, or interest or Liquidated Damages, if any, on the
Notes (including any repurchases of Notes), or on account of any other
obligation for the payment of money due in respect of the Notes, or on account
of the redemption provisions of the Notes, for cash or property (other than
Junior Securities), (i) upon the maturity of any Senior Debt of the Company or
such Guarantor by lapse of time, acceleration (unless waived) or otherwise,
unless and until all principal of, premium, if any, and the interest on or other
amounts owing in respect of such Senior Debt are first paid in full in cash or
Cash Equivalents (or, such payment is duly provided for in accordance with the
terms thereof) or otherwise to the extent holders accept satisfaction of amounts
due by settlement in other than cash or Cash Equivalents, or (ii) in the event
of default in the payment of any principal of, premium, if any, or interest on,
or any other amount owing in respect of, Senior Debt of the Company or such
Guarantor when it becomes due and payable, whether at maturity, a scheduled
payment date, or at a date fixed for prepayment or by declaration of
acceleration or otherwise (a "Payment Default"), unless and until such Payment
Default has been cured or waived or otherwise has ceased to exist.
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Upon (i) the happening of an event of default other than a Payment
Default that permits the holders of Senior Debt or any representative thereof to
declare such Senior Debt to be due and payable and (ii) written notice of such
event of default specifically referring to this Section 11.2 given to the
Company and the Trustee by the Representative under the Credit Agreement or the
Canadian Credit Agreement or the holders of an aggregate of at least $5,000,000
principal amount outstanding of any other Senior Debt or their representative (a
"Payment Notice"), then, unless and until such event of default has been cured
or waived or otherwise has ceased to exist, no payment (by set-off or otherwise)
may be made by or on behalf of the Company or any Guarantor, as applicable,
which is an obligor under such Senior Debt on account of any Obligation in
respect of the Notes, including the principal of, premium, if any, or interest
on the Notes (including any repurchases of any of the Notes), or on account of
the redemption provisions of the Notes (or Liquidated Damages, if any pursuant
to the Registration Rights Agreement), in any such case, other than payments
made with Junior Securities. Notwithstanding the foregoing, unless the Senior
Debt in respect of which such event of default exists has been declared due and
payable in its entirety within 179 days after the Payment Notice is delivered as
set forth above (the "Payment Blockage Period") (and such declaration has not
been rescinded or waived), at the end of the Payment Blockage Period, the
Company and the Guarantors shall be required to pay all sums not paid to the
Holders of the Notes during the Payment Blockage Period due to the foregoing
prohibitions and to resume all other payments as and when due on the Notes,
subject to the provisions of the preceding paragraph. Any number of Payment
Notices may be given; provided, that (i) not more than one Payment Notice shall
be given within a period of any 360 consecutive days, and (ii) no default that
existed upon the date of such Payment Notice or the commencement of such Payment
Blockage Period (whether or not such event of default is on the same issue of
Senior Debt) shall be made the basis for the commencement of any other Payment
Blockage Period unless such default shall have been cured or waived for a
period of not less than 90 days (it being acknowledged that any subsequent
action, or any subsequent breach of any financial covenant for a period
commencing after the expiration of such Payment Blockage Period that, in either
case, would give rise to a new event of default, even though it is an event that
would also have been a separate breach pursuant to any provision under which a
prior event of default previously existed, shall constitute a new event of
default for this purpose).
In furtherance of the provisions of Section 11.1, in the event that,
notwithstanding the foregoing provisions of this Section 11.2, any payment or
distribution of assets of the Company or any Guarantor (other than Junior Notes)
shall
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be received by the Trustee or the Holders at a time when the Trustee or such
Holder, as applicable, has actual knowledge that such payment or distribution is
prohibited by the foregoing provisions of this Section 11.2, such payment or
distribution shall be held in trust for the benefit of the holders of such
Senior Debt, and shall be paid or delivered by the Trustee or such Holders, as
the case may be, to the holders of such Senior Debt remaining unpaid or
unprovided for or to their representative or representatives, or to the trustee
or trustees under any indenture pursuant to which any instruments evidencing any
of such Senior Debt may have been issued, ratably according to the aggregate
principal amounts remaining unpaid on account of such Senior Debt held or
represented by each, for application to the payment of all such Senior Debt
remaining unpaid, to the extent necessary to pay or to provide for the payment
of all such Senior Debt in full in cash or Cash Equivalents or otherwise to the
extent holders accept satisfaction of amounts by settlement in other than cash
or Cash Equivalents after giving effect to any concurrent payment or
distribution to the holders of such Senior Debt.
Section 11.3 Notes Subordinate To Prior Payment Of All Senior Debt On
Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of the Company or any Guarantor
upon any dissolution, winding up, total or partial liquidation or reorganization
of the Company or a Guarantor, whether voluntary or involuntary, in bankruptcy,
insolvency, receivership or a similar proceeding or upon assignment for the
benefit of creditors or any marshalling of assets or liabilities:
(i) the holders of all Senior Debt of the Company or such
Guarantor, as applicable, shall first be entitled to receive payment in full in
cash or Cash Equivalents (or have such payment duly provided for in accordance
with the terms thereof) or otherwise to the extent holders accept satisfaction
of amounts due by settlement in other than cash or Cash Equivalents before the
Holders are entitled to receive any payment on account of any Obligation in
respect of the Notes, including the principal of, premium, if any, and interest
on the Notes or Liquidated Damages, if any, pursuant to the Registration Rights
Agreement (other than Junior Securities); and
(ii) any payment or distribution of assets of the Company or such
Guarantor of any kind or character from any source, whether in cash, property or
securities (other than Junior Securities) to which the Holders or the Trustee on
behalf of the Holders would be entitled (by set-off or otherwise), except for
the subordination provisions contained in this Indenture, shall be paid by the
liquidating trustee or agent or other person making such a payment or
distribution directly to the holders of such Senior Debt or their representative
to the extent necessary to make payment in full (or
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have such payment duly provided for) on all such Senior Debt remaining unpaid,
after giving effect to any concurrent payment or distribution to the holders of
such Senior Debt.
Section 11.4 Holders To Be Subrogated To Rights OF Holders Of Senior Debt.
Subject to the payment in full in cash or Cash Equivalents of all
Senior Debt of the Company or any Guarantor as provided herein, the Holders of
Notes shall be subrogated to the rights of the holders of such Senior Debt to
receive payments or distributions of assets of the Company and any Guarantor
applicable to the Senior Debt until all amounts owing on the Notes shall be paid
in full, and for the purpose of such subrogation no such payments or
distributions to the holders of such Senior Debt by or on behalf of the Company
or any Guarantor, or by or on behalf of the Holders by virtue of this Article
XI, which otherwise would have been made to the Holders shall, as between the
Company or any Guarantor and the Holders, be deemed to be payment by the Company
or any Guarantor or on account of such Senior Debt, it being understood that the
provisions of this Article XI are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
such Senior Debt, on the other hand.
Section 11.5 Obligations Of The Company And The Guarantors Unconditional.
Nothing contained in this Article XI or elsewhere in this
Indenture or in the Notes is intended to or shall impair, as between the Company
and any Guarantors and the Holders, the obligation of each such Person, which is
absolute and unconditional, to pay to the Holders the principal of, premium, if
any, and interest on (or, if applicable, Liquidated Damages, if any) the Notes
as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the Holders and
creditors of the Company and the Guarantors other than the holders of the Senior
Debt, nor shall anything herein or therein prevent the Trustee or any Holder
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article XI, of
the holders of Senior Debt, including, without limitation, their right to
receive any cash, property or Notes of the Company and the Guarantors received
upon the exercise of any such remedy. Notwithstanding anything to the contrary
in this Article XI or elsewhere in this Indenture or in the Notes, upon any
distribution of assets of the Company and the Guarantors referred to in this
Article XI, the Trustee, subject to the provisions of Sections 7.1 and 7.2, and
the Holders shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which such dissolution,
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winding up, liquidation or reorganization proceedings are pending, or a
certificate of the liquidating trustee or agent or other Person making any
distribution to the Trustee or to the Holders for the purpose of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Debt and other Indebtedness of the Company or any Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XI so long as such
court has been apprised of the provisions of, or the order, decree or
certificate makes reference to, the provisions of this Article XI. Nothing in
this Article XI shall apply to the claims of, or payments to, the Trustee under
or pursuant to Section 7.7.
Section 11.6 Trustee Entitled To Assume Payments Not Prohibited In Absence Of
Notice
The Trustee shall not at any time be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee unless and until a corporate trust officer of the Trustee or any
Paying Agent shall have received at the addresses for notices set forth in
Section 12.2, no later than two Business Days prior to such payment written
notice thereof specifically referring to this Article XI from the Company or
from one or more holders of Senior Debt or from any representative therefor and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Sections 7.1 and 7.2, shall be entitled in all respects
conclusively to assume that no such fact exists.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior Debt
(or a representative on behalf of such holder) to establish that such notice has
been given by a holder of Senior Debt or a representative on behalf of such
holder. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person who is a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article XI, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article XI, and if such evidence is not furnished the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment or until such time as the Trustee
shall be otherwise satisfied as to the right of such Person to receive such
payment.
Section 11.7 Application By Trustee Of Assets Deposited With It.
110
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article VIII shall be for the sole benefit of Holders and, to
the extent (i) the making of such deposit by the Company shall not be in
contravention of any term or provision of the Credit Agreement or the Canadian
Credit Agreement or other Senior Debt and (ii) allocated for the payment of
Notes, shall not be subject to the subordination provisions of this Article XI.
Otherwise, any deposit of assets with the Trustee or the Agent (whether or not
in trust) for the payment of principal of or interest on any Notes shall be
subject to the provisions of Sections 11.1, 11.2, 11.3 and 11.4; provided that,
if prior to one Business Day preceding the date on which by the terms of this
Indenture any such assets may become distributable for any purpose (including
without limitation, the payment of either principal of or interest on any
Security) the Trustee or such Paying Agent shall not have received with respect
to such assets the written notice provided for in Section 11.6, then the Trustee
or such Paying Agent shall have full power and authority to receive such assets
and to apply the same to the purpose for which they were received, and shall not
be affected by any notice to the contrary which may be received by it on or
after such date.
Section 11.8 Subordination Rights Not Impaired By Acts Or Omissions Of The
Company, The Guarantors or Holders Of Senior Debt.
No right of any present or future holders of any Senior Debt to
enforce subordination provisions contained in this Article XI shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Company or any Guarantor or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Company or any Guarantor with
the terms of this Indenture, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of Senior Debt may
extend, renew, modify or amend the terms of the Senior Debt or any security
therefor and release, sell or exchange such security and otherwise deal freely
with the Company and the Guarantors, all without affecting the liabilities and
obligations of the parties to this Indenture or the Holders. The subordination
provisions contained in this Indenture are for the benefit of the holders from
time to time of Senior Debt and may not be rescinded, cancelled, amended or
modified in any way other than any amendment or modification that would not
adversely affect the rights of any holder of Senior Debt or any amendment or
modification that is consented to by each holder of Senior Debt that would be
adversely affected thereby. The subordination provisions hereof shall continue
to be effective or be reinstated, as the case may be, if at any time any payment
of any of the Senior Debt is rescinded or must otherwise be returned by any
holder of the Senior Debt upon the
111
insolvency, bankruptcy, or reorganization of the Company or any Guarantor, or
otherwise, all as though such payment has not been made.
Section 11.9 Holders Authorize Trustee To Effectuate Subordination Of Notes.
Each Holder of the Notes by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article XI and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company or any Guarantor (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Company or
any Guarantor), the immediate filing of a claim for the unpaid balance of his
Notes in the form required in said proceedings and cause said claim to be
approved. In the event of any liquidation or reorganization of the Company or
any Guarantor in bankruptcy, insolvency, receivership or similar proceeding, if
the Holders of the Notes (or the Trustee on their behalf) have not filed any
claim, proof of claim, or other instrument of similar character necessary to
enforce the obligations of the Company or any Guarantor in respect of the Notes
at least thirty (30) days before the expiration of the time to file the same,
then in such event, but only in such event, the representatives under the Credit
Agreement or the Canadian Credit Agreement or the holders of an aggregate of at
least $5,000,000 principal amount outstanding of any other Senior Debt or a
representative on their behalf may, as an attorney-in-fact for such Holders,
file any claim, proof of claim, or other instrument of similar character on
behalf of such Holders. Nothing herein contained shall be deemed to authorize
the Trustee or the holders of Senior Debt or their representative to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee or the holders of
Senior Debt or their representative to vote in respect of the claim of any
Holder in any such proceeding. As a condition to taking any action by the
Trustee pursuant to this Section 11.9, the Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred thereby.
Section 11.10 Rights Of Trustee To Hold Senior Debt.
The Trustee shall be entitled to all of the rights set forth in
this Article XI in respect of any Senior Debt at any time held by it to the same
extent as any other holder of Senior Debt, and nothing in this Indenture shall
be construed to deprive the Trustee of any of its rights as such holder.
112
Section 11.12 Article XI Not To Prevent Events Of Default.
The failure to make a payment on account of principal of,
premium, if any, or interest (or Liquidated Damages, if any) on the Notes by
reason of any provision of this Article XI shall not be construed as preventing
the occurrence of a Default or an Event of Default under Section 6.1 or in any
way limit the rights of the Trustee or any Holder to pursue any other rights or
remedies with respect to the Notes.
Section 11.13 No Fiduciary Duty Of Trustee To Holders Of Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders (other than
for its willful misconduct or negligence) if it shall in good faith mistakenly
pay over or distribute to the Holders of Notes or the Company, any Guarantor or
any other Person, cash, property or Notes to which any holders of Senior Debt
shall be entitled by virtue of this Article XI or otherwise. Nothing in this
Section 11.12 shall affect the obligation of any other such Person to hold such
payment for the benefit of, and to pay such payment over to, the holders of
Senior Debt or their representative. In the event of any conflict between the
fiduciary duty of the Trustee to the Holders of Notes and any duty to the
holders of Senior Debt, the Trustee is expressly authorized to resolve such
conflict in favor of the Holders.
Section 11.14 Notice by company.
The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of any
Obligations with respect to the Notes to violate this Article XI, but failure to
give such notice shall not affect the subordination of the Notes to the Senior
Debt as provided in this Article XI.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Trust Indenture Act Controls
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by the TIA, the imposed duties shall control.
Section 12.2 Notices
113
Any notice or communication by the Company or the Trustee to the
others is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company:
Panolam Industries International, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
If to the Trustee:
State Street bank and Trust Company
Xxxxxxx Square, 000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Department
with a copy to:
State Street Bank and Trust Company
00 Xxxxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications;
provided, that until such time, all notices under this Indenture to the Trustee
shall be sent to both of the Trustee's addresses set forth above.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day
114
delivery to its address shown on the register kept by the Registrar. Any notice
or communication shall also be so mailed to any Person described in TIA (S)
313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 12.3 Communication by Holders of Notes with Other Holders of Notes
Holders may communicate pursuant to TIA (S) 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA (S) 312(c).
Section 1.105 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:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.5 hereof) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been satisfied; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.5 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
Section 12.4 Statements Required in Certificate or Opinion
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA (S) 314(a)(4)) shall comply with the provisions of TIA
(S) 314(e) and shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
115
(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 to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied; provided, however, that
with respect to matters of fact, an Opinion of Counsel may rely on an Officers'
Certificate or certificate of public officials.
Section 12.5 Rules by Trustee and Agents
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 12.6 No Personal Liability of Directors, Officers, Employees and
Stockholders
No past, present or future director, officer, employee,
incorporator or stockholder (direct or indirect) of the Company or the
Guarantors (or any such successor entity), as such, shall have any liability for
any Obligations of the Company or the Guarantors under the Notes, the Guarantees
or this Indenture or for any claim based on, in respect of, or by reason of,
such Obligations or their creation, except in their capacity as an obligor or
Guarantor of the Notes in accordance with this Indenture. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
Section 12.7 Governing Law
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTEES, INCLUDING,
WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
Section 12.8 No Adverse Interpretation of Other Agreements
116
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
Section 12.9 Successors
All agreements of the Company and the Guarantors in this
Indenture and the Notes shall bind their successors. All agreements of the
Trustee in this Indenture shall bind its successors.
Section 12.13 Severability
In case any one or more of the provisions of this Indenture or in
the Notes or in the Guarantees shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
Section 12.14 Counterpart Originals
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 12.15 Table of Contents, Headings, Etc.
The Table of Contents and headings of the Articles and Sections
of this Indenture have been inserted for convenience of reference only, are not
to be considered a part of this Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.
[Signatures on following page]
117
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this Indenture as of
the date first written above.
THE COMPANY:
PANOLAM INDUSTRIES INTERNATIONAL, INC.
By: __________________________________
Name:
Title:
THE GUARANTORS:
PANOLAM GROUP, INC.
By: __________________________________
Name:
Title:
PII SECOND, INC.
By: __________________________________
Name:
Title:
PANOLAM INDUSTRIES, INC.
By: __________________________________
Name:
Title:
PIONEER PLASTICS CORPORATION
By: __________________________________
Name:
Title:
THE TRUSTEE:
STATE STREET BANK AND TRUST COMPANY
By: _______________________________
Name:
Title:
Exhibit A
[FORM OF NOTE]
PANOLAM INDUSTRIES INTERNATIONAL, INC.
11 1/2% [SERIES A] [SERIES B]/1/ SENIOR SUBORDINATED NOTE
DUE 2009
CUSIP: __________
No. $_________________
Panolam Industries International, Inc., a Delaware corporation (hereinafter
called the "Company" which term includes any successors under this Indenture
hereinafter referred to), for value received, hereby promises to pay to
__________, or registered assigns, the principal sum of __________ Dollars, on
February 18, 2009.
Interest Payment Dates: February 15 and August 15; commencing August 15,
1999.
Record Dates: February 1 and August 1.
Reference is made to the further provisions of this Note on the reverse
side, which will, for all purposes, have the same effect as if set forth at this
place.
_________________________________
/1/ Series A should be replaced with Series B in the Exchange Notes.
A-1
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PANOLAM INDUSTRIES INTERNATIONAL, INC.
a Delaware corporation
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY
By: ____________________________
Authorized Signatory
Dated: February , 1999
(Back of Note)
11 1/2% [Series A] [Series B]/2/ Senior Subordinated Notes due 2009
[THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.6 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.]/3/
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (00 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS 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
/2/ To be included only on Global Notes deposited with DTC as Depositary.
/3/ To be included only on Global Notes deposited with DTC as Depositary.
A-3
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]/4/
___________________________
/4/ To be included only on Global Notes deposited with DTC as Depositary.
A-4
[THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS
THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THIS NOTE.]/5/
[THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH
BELOW. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT, IN CONNECTION WITH EXEMPT RESALES OF THE NOTES BY
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION AND CREDIT SUISSE FIRST
BOSTON CORPORATION (THE "INITIAL PURCHASERS"), (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A
"QIB") OR (B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT;
(2) AGREES THAT, IN CONNECTION WITH RESALES AND TRANSFERS OF THE NOTES OTHER
THAN EXEMPT RESALES OF THE NOTES BY THE INITIAL PURCHASERS, IT WILL NOT RESELL
OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUER OR ANY GUARANTOR OR ANY
OF THEIR RESPECTIVE SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S UNDER
THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN
______________________
/5/ To be included only on Reg S Temporary Global Notes.
A-5
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM
OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT
OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF
COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE ISSUER), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
XXXXXX IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "U.S. PERSON" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.]/6/
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. Panolam Industries International, Inc., a Delaware
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at 11 1/2% per annum from February 18, 1999 until maturity and shall
pay the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company will pay interest
and Liquidated Damages, if any, semi-annually on February 15 and August 15 of
each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the Issue Date; provided that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a Record Date (defined below) referred to on the face hereof and the
next succeeding
________________________
/6/ To be included only on Transfer Restricted Notes.
A-6
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
August 15, 1999. The Company shall pay interest (including Accrued Bankruptcy
Interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at the rate then in effect; it
shall pay interest (including Accrued Bankruptcy Interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest and Liquidated
Damages, if any, (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages, if any, to the Persons who are
registered Holders of Notes at the close of business on the February 1 or August
1 next preceding the Interest Payment Date (each a "Record Date"), even if such
Notes are cancelled after such Record Date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture (as defined
below) with respect to defaulted interest. The Notes will be payable as to
principal, premium, interest and Liquidated Damages, if any, at the office or
agency of the Company maintained within the City and State of New York for such
purpose, or, at the option of the Company, payment of interest and Liquidated
Damages, if any, may be made by check mailed to the Holders at their addresses
set forth in the register of Holders, and provided that payment by wire transfer
of immediately available funds to an account within the United States will be
required with respect to principal of and interest, premium and Liquidated
Damages, if any, on all Global Notes. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as
of February 18, 1999 ("Indenture") among the Company, the Guarantors party
thereto and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code (S)(S) 77aaa-77bbbb). The Notes
are subject to all such terms, and Holders
A-7
are referred to the Indenture and such Act for a statement of such terms. The
Notes will be limited in aggregate principal amount to $135,000,000.
5. Optional Redemption.
(a) Except as set forth in clause (b) of this Section, the Company
shall not have the option to redeem the Notes pursuant to this Section 5 prior
to February 15, 2004. The Notes will be redeemable for cash at the option of the
Company, in whole or in part, at any time on or after February 15, 2004, upon
not less than 30 days nor more than 60 days prior notice mailed by first class
mail to each Holder at its last registered address, at the following redemption
prices (expressed as percentages of the principal amount) if redeemed during the
12-month period commencing February 15 of the years indicated below, in each
case (subject to the right of Holders of record on a Record Date to receive the
corresponding interest due (and the corresponding Liquidated Damages, if any) on
the corresponding Interest Payment Date that is on or prior to such redemption
date) together with accrued and unpaid interest and Liquidated Damages, if any,
thereon to the redemption date:
YEAR PERCENTAGE
---- ----------
2004................................. 105.750%
2005................................. 103.833%
2006................................. 101.917%
2007 and thereafter.................. 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section, at
any time or from time to time until February 15, 2002, up to 35% of the
aggregate principal amount of the Notes originally issued under the Indenture
may be redeemed at the option of the Company within 90 days of a Public Equity
Offering, on not less than 30 days, but not more than 60 days, prior notice to
each Holder of the Notes to be redeemed, with cash from the Net Cash Proceeds of
such Public Equity Offering, at a redemption price equal to 111.50% of the
principal amount thereof (subject to the right of Holders of record on a Record
Date to receive the corresponding interest (and the corresponding Liquidated
Damages, if any) due on the Interest Payment Date that is on or prior to such
redemption date) together with accrued and unpaid interest and Liquidated
Damages, if any, thereon to the redemption date; provided that immediately
following such redemption not less than 65% of the aggregate principal amount of
the Notes originally issued pursuant to the Indenture remain outstanding.
(c) Notice of redemption will be mailed by first class mail at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed
A-8
in part but only in integral multiples of $1,000, unless all of the Notes held
by a Holder are to be redeemed. On and after the redemption date interest ceases
to accrue on Notes or portions thereof called for redemption unless the Company
defaults in such payments due on the redemption date.
6. Mandatory Redemption. The Company shall not be required to make
mandatory redemption payments with respect to the Notes. The Notes shall not
have the benefit of any sinking fund.
7. Offers to Purchase.
(2) Change of Control. In the event that a Change of Control has
occurred, each Holder of Notes will have the right, at such Holder's option,
pursuant to an offer (subject only to conditions required by applicable law, if
any) by the Company (the "Change of Control Offer"), to require the Company to
repurchase all or any part of such Holder's Notes (provided that the principal
amount of such Notes must be $1,000 or an integral multiple thereof) on a date
(the "Change of Control Purchase Date") that is no later than 35 Business Days
after the occurrence of such Change of Control, at a cash price equal to 101% of
the principal amount thereof (the "Change of Control Purchase Price"), together
with accrued and unpaid interest and Liquidated Damages, if any, to the Change
of Control Purchase Date. The Change of Control Offer shall be made within 10
Business Days following a Change of Control and shall remain open for 20
Business Days following its commencement (the "Change of Control Offer
Period"). Upon expiration of the Change of Control Offer Period, the Company
promptly shall purchase all Notes properly tendered in response to the Change of
Control Offer.
Prior to the commencement of a Change of Control Offer, but in
any event within 30 days following any Change of Control, the Company shall
(i)(a) repay in full and terminate all commitments under Indebtedness under the
Credit Agreement and the Canadian Credit Agreement or (b) offer to repay in full
and terminate all commitments under all Indebtedness under the Credit Agreement
and the Canadian Credit Agreement and repay in full the Indebtedness owed to
each such lender which has accepted such offer or (ii) obtain the requisite
consents under the Credit Agreement and the Canadian Credit Agreement to permit
the repurchase of the Notes as provided herein. The Company's failure to comply
with the preceding sentence shall constitute an Event of Default described in
clause (d) and not in clause _(b) of Section 6.1 of the Indenture.
A-9
On or before the Change of Control Purchase Date, the Company
shall, to the extent lawful, (i) accept for payment Notes or portions thereof
properly tendered and not validly withdrawn pursuant to the Change of Control
Offer, (ii) deposit with the Paying Agent an amount in cash sufficient to pay
the Change of Control Purchase Price (together with accrued and unpaid interest
and Liquidated Damages, if any), of all Notes so tendered and (iii) deliver or
cause to be delivered to the Trustee the Notes so accepted together with an
Officers' Certificate listing the Notes or portions thereof being purchased by
the Company. The Paying Agent promptly will pay the Holders of Notes so accepted
an amount equal to the Change of Control Purchase Price (together with accrued
and unpaid interest and Liquidated Damages, if any), and the Trustee promptly
will authenticate and deliver to such Holders a new Note equal in principal
amount to any unpurchased portion of the Note surrendered. Any Notes not so
accepted will be delivered promptly by the Company to the Holder thereof. The
Company publicly will announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Purchase Date.
(3) Asset Sale. The Company and the Subsidiary Guarantors shall not,
and shall not permit any of their Subsidiaries to, in one or a series of related
transactions, convey, sell, transfer, assign or otherwise dispose of, directly
or indirectly, any of its property, business or assets, including by merger or
consolidation (in the case of a Subsidiary Guarantor or a Subsidiary of the
Company), and including any sale or other transfer or issuance of any Equity
Interests of any Subsidiary of the Company (other than directors' qualifying
shares or shares required by applicable law to be held by a Person other than
the Company or a Subsidiary), whether by the Company or a Subsidiary or through
the issuance, sale or transfer of Equity Interests by a Subsidiary of the
Company, and including any sale and leaseback transaction (any of the foregoing,
an "Asset Sale"), unless (l)(a) the Net Cash Proceeds therefrom (the "Asset
Sale Offer Amount") are applied (i) within 180 days after the date of such
Asset Sale to the optional redemption of the Notes in accordance with the terms
of this Indenture and other Indebtedness of the Company ranking on a parity with
the Notes and with similar provisions requiring the Company to redeem such
Indebtedness with the proceeds for asset sales, pro rata in proportion to the
respective principal amounts (or accreted values in the case of Indebtedness
issued with an original issue discount) of the Notes and such other Indebtedness
then outstanding or (ii) within 210 days after the date of such Asset Sale to
the repurchase of the Notes and such other Indebtedness on a parity with the
Notes and with similar provisions requiring the Company to make an offer to
purchase such Indebtedness with the proceeds for asset sales pursuant to a cash
offer (subject only to conditions required by applicable law, if any) (pro rata
in proportion to the respective principal amounts (or accreted
A-10
values in the case of Indebtedness issued with an original issue discount) of
the Notes and such other Indebtedness properly tendered) (the "Asset Sale
Offer") at a purchase price of 100% of principal amount (or accreted value in
the case of Indebtedness issued with an original issue discount) (the "Asset
Sale Offer Price") together with accrued and unpaid interest and Liquidated
Damages, if any, to the date of payment, made within 180 days of such Asset Sale
or (b) within 180 days following such Asset Sale, the Asset Sale Offer Amount is
(i) invested (or committed, pursuant to a binding commitment subject only to
reasonable, customary closing conditions, to be invested, and in fact is so
invested, within an additional 90 days) in assets and property (except in
connection with the acquisition of a Wholly Owned Subsidiary in a Related
Business, other than notes, bonds, obligation and securities) which in the good
faith reasonable judgment of the Board of Directors of the Company will
immediately constitute or be a part of a Related Business of the Company or such
Subsidiary (if it continues to be a Subsidiary) immediately following such
transaction or in Restricted Investments permitted by Section 4.9 of the
Indenture; provided that proceeds from Asset Sales effected by a Subsidiary
Guarantor or a Canadian Subsidiary may not be reinvested in a Foreign Subsidiary
which is not a Canadian Subsidiary or (ii) used to retire Purchase Money
Indebtedness or Senior Debt and to permanently reduce (in the case of Senior
Debt that is not Purchase Money Indebtedness) the amount of such Indebtedness
outstanding on the Issue Date or permitted pursuant to paragraph (b) (but only
to the extent that such paragraph (b) relates to revolving credit borrowings
under the Credit Agreement and the Canadian Credit Agreement), (c) or (d), as
applicable, of Section 4.7 of the Indenture (including that in the case of a
revolver or similar arrangement that makes credit available, such commitment is
so permanently reduced by such amount); provided that any proceeds from Asset
Sales effected by a Subsidiary Guarantor or a Canadian Subsidiary may not be
used to retire Indebtedness of or make an Investment in any Foreign Subsidiary
which is not a Canadian Subsidiary, except to the extent allowable pursuant to
clause (h) of the definition of Permitted Investment, (2) at least 75% of the
total consideration for such Asset Sale or series of related Asset Sales
consists of cash or Cash Equivalents, (3) no Default or Event of Default shall
have occurred and be continuing at the time of, or would occur after giving
effect, on a pro forma basis, to, such Asset Sale, and (4) the Board of
Directors of the Company determines in good faith that the Company or such
Subsidiary, as applicable, receives the fair market value for such Asset Sale.
An acquisition of Notes pursuant to an Asset Sale Offer may be deferred
until the accumulated Net Cash Proceeds from Asset Sales not applied to the uses
and in the time periods set forth in 1(a)(i) or 1(b) above (the "Excess
Proceeds") exceeds $10,000,000 and that each Asset Sale Offer shall remain open
for 20 Business Days following its commencement (the "Asset Sale Offer Period").
Pending application of the Net Cash Proceeds pursuant to Section 4.13 of the
Indenture, such Net Cash Proceeds shall be invested in Permitted Investments
(other than pursuant to clause (a), (e) or (h) of the definition thereof) or
used to reduce outstanding loans under any working capital facility. Upon
expiration of the Asset Sale Offer Period, the Company shall apply the Asset
Sale Offer Amount plus an amount equal to accrued and unpaid
A-11
interest and Liquidated Damages, if any, to the purchase of all Indebtedness
properly tendered (on a pro rata basis if the Asset Sale Offer Amount is
insufficient to purchase all Indebtedness so tendered) at the Asset Sale Offer
Price (together with accrued interest and Liquidated Damages, if any). To the
extent that the aggregate amount of Notes and such other pari passu Indebtedness
tendered pursuant to an Asset Sale Offer is less than the Asset Sale Offer
Amount, the Company may use any remaining Net Cash Proceeds for general
corporate purposes as otherwise permitted by this Indenture and following each
Asset Sale Offer the Excess Proceeds amount shall be reset to zero. For purposes
of (2) in the preceding paragraph, total consideration received means the total
consideration received for such Asset Sales minus the amount of (a) Purchase
Money Indebtedness secured solely by the assets sold and assumed by a transferee
and Senior Debt assumed by the transferee, provided in each case that the
Company, the Guarantors and their Subsidiaries are released from all obligations
in connection therewith and (b) property that within 30 days of such Asset Sale
is converted into cash or Cash Equivalents; provided that such cash and Cash
Equivalents shall be treated as Net Cash Proceeds attributable to the original
Asset Sale for which such property was received.
1. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a Record Date and
the corresponding Interest Payment Date.
2. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
3. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture, the Notes or the Guarantees may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes, and any existing Default or compliance with any provision of
the Indenture, the Notes or the Guarantees may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes;
provided, that no such modification may, without the consent of Holders of at
least 66_% in aggregate principal amount of Notes at the time outstanding,
modify the provisions (including the defined terms used
A-12
therein) of Section 4.14 of the Indenture in a manner adverse to the Holders.
Without the consent of any Holder of a Note, the Indenture, the Notes or the
Guarantees may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of the Company's obligations
to Holders of the Notes in case of a merger or consolidation, to provide for
additional Guarantees as set forth in the Indenture or for the release or
assumption of Guarantees in compliance with the Indenture, to make any change
that would provide any additional rights or benefits to the Holders of the Notes
(including the addition of any Guarantor) or that does not adversely affect the
rights under the Indenture of any such Holder, to comply with the provisions of
the Depositary, Euroclear or Cedel or the Trustee with respect to the provisions
of the Indenture or the Notes relating to transfers and exchanges of Notes or
beneficial interests therein, or to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the TIA.
4. Defaults and Remedies. The Indenture provides that each of the
following constitutes an Event of Default: (a) the failure by the Company to pay
any installment of interest (or Liquidated Damages, if any) on the Notes as and
when the same becomes due and payable and the continuance of any such failure
for 30 days; (b) the failure by the Company or any Subsidiary of the Company to
pay all or any part of the principal, or premium, if any, on the Notes when and
as the same becomes due and payable at maturity, redemption, by acceleration or
otherwise, including, without limitation, payment of the Change of Control
Purchase Price or the Asset Sale Offer Price, or otherwise on Notes validly
tendered and not properly withdrawn pursuant to a Change of Control Offer or
Asset Sale Offer, as applicable (as set forth in Sections 4.14 and 4.13 of the
Indenture); (c) failure by the Company or any Subsidiary of the Company for 30
days after notice from the Trustee or Holders of at least 25% in principal
amount of the Notes then outstanding to comply with the provisions described in
Sections 4.7 and 4.9 of the Indenture; (d) failure by the Company or any
Subsidiary of the Company for 60 days after notice from the Trustee or the
Holders of at least 25% in principal amount of the Notes then outstanding to
comply with any of their respective other agreements in this Indenture or the
Notes (other than with respect to (a), (b) and (c) above); (e) the failure to
pay at final stated maturity (giving effect to any applicable grace periods) the
principal amount of any Indebtedness of the Company or any Subsidiary of the
Company or the acceleration of the final stated maturity of any Indebtedness if
the aggregate principal amount of such Indebtedness, together with the principal
amount of any such Indebtedness in default for failure to pay principal at final
maturity or which has been accelerated, aggregates $5,000,000 or more at any
time; (f) final unsatisfied judgments not covered by insurance for the payment
of money, or the issuance of any warrant of attachment against any portion of
the property or assets of the
A-13
Company or any of its Subsidiaries, aggregating in excess of $5,000,000, at any
one time shall be rendered against the Company or any of its Subsidiaries and
not be stayed, bonded or discharged for a period of 60 days; (g) except as
otherwise permitted in this Indenture, any of the Guarantees shall be held in a
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or the respective Guarantor, or any Person acting
on behalf of such Guarantor, shall deny or disaffirm its obligations under its
Guarantee; (h) court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Company or any Significant Subsidiary in
an involuntary case under any applicable Bankruptcy Law now or hereafter in
effect, (B) appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) the winding up or liquidation of the affairs of
the Company or any Significant Subsidiary and, in each case, such decree or
order shall remain unstayed and in effect for a period of 60 consecutive days;
or (i) the Company or any Significant Subsidiary (A) commences a voluntary case
under any applicable Bankruptcy Law now or hereafter in effect, or consents to
the entry of an order for relief in an involuntary case under any such law, (B)
consents to the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Company or
any Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any general
assignment for the benefit of creditors.
5. Subordination. The Notes and the Guarantees are subordinated in right
of payment, to the extent and in the manner provided in Article XI and Section
10.7 of the Indenture, to the prior payment in full of all Senior Debt. The
Company agrees, and each Holder by accepting a Note consents and agrees, to the
subordination provided in the Indenture and authorizes the Trustee to give it
effect.
6. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
7. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator or stockholder (direct or indirect) of the
Company or the Guarantors (or any such successor entity), as such, shall have
any liability for any Obligations of the Company or the Guarantors under the
Notes, the Guarantees or this
A-14
Indenture or for any claim based on, in respect of, or by reason of, such
Obligations or their creation, except in their capacity as an obligor or
Guarantor of the Notes in accordance with this Indenture. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
8. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
9. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
10. Additional Rights of Holders of Transfer Restricted Notes/7/. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transferred Restricted Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of the date of the Indenture, among the
Company, the Guarantors and the Initial Purchasers (the "Registration Rights
Agreement").
11. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon, and any such redemption shall not
be affected by any defect in or omission of such numbers.
12. Notation of Guarantee. As more fully set forth in the Indenture, each
of the Guarantors from time to time, in accordance with the provisions of the
Indenture, unconditionally and jointly and severally guarantee, in accordance
with Section 10.1 of the Indenture, to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
that: (a) the principal of, and premium, if
_________________________
/7/ To be included only on Transfer Restricted Notes.
A-15
any, Liquidated Damages, if any, and interest on the Notes will be duly and
punctually paid in full when due, whether at maturity, by acceleration, call for
redemption, upon a Change of Control Offer, upon an Asset Sale Offer or
otherwise, and interest on overdue principal of, and premium, if any, Liquidated
Damages, if any and (to the extent permitted by law) interest on any interest,
if any, on the Notes and all other obligations of the Company to the Holders or
the Trustee hereunder or under the Notes (including fees, expenses or other)
will be promptly paid in full or performed, all in accordance with the terms
hereof; and (b) in case of any extension of time of payment or renewal of any
Notes 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, call for redemption, upon a Change
of Control Offer, upon an Asset Sale Offer or otherwise. Such Guarantees are
subordinated in right of payment to the prior payment in full of all Obligations
in respect of Senior Debt of the Guarantors as set forth in Article XI of the
Indenture and shall cease to apply, and shall be null and void, with respect to
any Guarantor who, pursuant to Article X of the Indenture, is released from its
Guarantee or whose Guarantee otherwise ceases to be applicable pursuant to the
terms of the Indenture.
When a successor assumes all the obligations of its predecessor under the
Notes and the Indenture, the predecessor will be released from those
obligations.
20. Governing Law. THE INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING,
WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Panolam Industries International, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
A-16
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
________________________________________________________________________________
Date:___________________________
Your Signature:____________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*
________________________________________________________________________________
A-17
*NOTICE: The Signature must be guaranteed by an Institution which is a member
of one of the following recognized signature Guarantee Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock
Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program
(SEMP); or (iv) in such other guarantee program acceptable to the Trustee.
A-18
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.13 or 4.14 of the Indenture, check the box below:
Section 4.13 Section 4.14
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.13 or Section 4.14 of the Indenture, state the amount you
elect to have purchased (in denominations of $1,000 only, except if you have
elected to have all of your Notes purchased): $___________
Date:_____________________ Your Signature:________________________________
(Sign exactly as your name appears on the Note)
Tax Identification No.:______________
Signature Guarantee*
________________________________________________________________________________
*NOTICE: The Signature must be guaranteed by an Institution which is a member
of one of the following recognized signature Guarantee Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock
Exchange Medallion Program (MNSP); (iii) The Stock Exchange
A-19
Medallion Program (SEMP); or (iv) in such other guarantee program acceptable to
the Trustee.
A-20
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE/8/
The following exchanges of a part of this Global Note for an interest in
another Global Notes or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Date of Exchange Amount of decrease Amount of increase Principal Amount ofthis Signature of authorized
---------------- inPrincipal Amount inPrincipal Amount Global Notefollowing officer of Trustee or
ofthis Global Note ofthis Global Note such decrease(or increase) NoteCustodian
----------- ---------------- ----------- ---------
_____________________
/8/ This should be included only if the Note is issued in global form
A-21
GUARANTEE
The Guarantors listed below (hereinafter referred to as the
"Guarantors," which term includes any successors or assigns under the Indenture,
dated the date hereof, among the Guarantors, the Company (defined below) and
State Street Bank and Trust Company, as trustee (the "Indenture") and any
additional Guarantors), have irrevocably and unconditionally guaranteed the
Guarantee Obligations, (as defined in Section 10.1 of the Indenture) which
include (i) the due and punctual payment of the principal of, premium, if any,
and interest and Liquidated Damages, if any, on the 11 1/2% Senior Subordinated
Notes due 2009 (the "Notes") of Panolam Industries, International, Inc., a
Delaware corporation (the "Company"), whether at maturity, by acceleration, call
for redemption, upon a Change of Control Offer, upon an Asset Sale Offer or
otherwise, the due and punctual payment of interest on the overdue principal and
premium, if any, and (to the extent permitted by law) interest on any interest
on the Notes, and the due and punctual performance of all other obligations of
the Company, to the Holders or the Trustee all in accordance with the terms set
forth in Article X of the Indenture (ii) in case of any extension of time of
payment or renewal of any Notes or any such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at stated maturity, by acceleration, call
for redemption, upon a Change of Control Offer, upon an Asset Sale Offer or
otherwise and (iii) the payment of any and all costs and expenses (including
reasonable attorneys' fees) incurred by the Trustee in enforcing any rights
under this Guarantee.
The obligations of each Guarantor to the Holders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
X of the Indenture and reference is hereby made to such Indenture for the
precise terms of this Guarantee.
The obligations of each Guarantor to the Holders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly subordinated to
Senior Debt of the Guarantor as set forth in Section 10.7 of the Indenture and
reference is hereby made to such Section for the precise terms of such
subordination.
No past, present or future director, officer, employee, incorporator
or stockholder (direct or indirect) of the Guarantors (or any such successor
entity), as such, shall have any liability for any Obligations of the Guarantors
under the Guarantees or the Indenture or for any claim based on, in respect of,
or by reason of, such Obligations or their creation, except in their capacity as
an obligor or Guarantor of the Notes in accordance with the Indenture.
This is a continuing Guarantee and shall remain in full force and
effect and shall be binding upon each Guarantor and its successors and assigns
until full and final payment of all of the Company's obligations under the Notes
and Indenture or until released or legally defeased in accordance with the
Indenture and shall inure to the benefit of the successors and assigns of
A-22
the Trustee and the Holders, and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a Guarantee
of payment and not of collectibility.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Note upon which this Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
The Obligations of each Guarantor under its Guarantee shall be limited
to the extent necessary to insure that it does not constitute a fraudulent
conveyance under applicable law.
THE TERMS OF ARTICLES X AND XI OF THE INDENTURE ARE INCORPORATED
HEREIN BY REFERENCE.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
A-23
IN WITNESS WHEREOF, each of the Guarantors has caused this instrument
to be duly executed.
Dated: February ____, 1999
PANOLAM GROUP, INC.
By: __________________________
Name:
Title:
PII SECOND, INC.
By: __________________________
Name:
Title:
PANOLAM INDUSTRIES, INC.
By: __________________________
Name:
Title:
PIONEER PLASTICS CORPORATION
By: __________________________
Name:
Title:
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Panolam Industries International, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Chief Financial Officer
State Street Bank and Trust Company
Xxxxxxx Square, 000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxxxxxxxx 00000
Attention: Corporate Trust Group
Re: 11 1/2% Senior Subordinated Notes due 2009
Dear Sirs:
Reference is hereby made to the Indenture, dated as of February 18, 1999
(the "Indenture"), among Panolam Industries International, Inc., as issuer (the
"Company"), the Guarantors party thereto and State Street Bank and Trust
Company, as trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture. ______________, (the "Transferor")
owns and proposes to transfer the Note[s] or interest in such Note[s] specified
in Annex A hereto, in the principal amount of $___________ in such Note[s] or
interests (the "Transfer"), to __________ (the "Transferee"), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:
[CHECK ALL THAT APPLY]
1. CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any State of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
B-1
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act, (iii) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act and (iv) if the
proposed transfer is being made prior to the expiration of the Distribution
Compliance Period, the transfer is not being made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser) and the
interest transferred will be held immediately thereafter through Euroclear or
Cedel. Upon consummation of the proposed transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on Transfer enumerated in the Private Placement
Legend printed on the Regulation S Global Note and/or the Definitive Note and in
the Indenture and the Securities Act.
3. CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT
OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in
compliance with the transfer restrictions applicable to beneficial interests in
Restricted Global Notes and Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any State of the United States, and accordingly the Transferor hereby further
certifies that (check one):
(a) Such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act; or
(b) Such Transfer is being effected to the Company or a
subsidiary thereof; or
B-2
(c) Such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance
with the prospectus delivery requirements of the Securities Act; or
(d) such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule
144A, Rule 144 or Rule 904, and the Transferor hereby further
certifies that it has not engaged in any general solicitation within
the meaning of Regulation D under the Securities Act and the
Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Note or Restricted
Definitive Notes and the requirements of the exemption claimed,
which certification is supported by (1) a certificate executed by
the Transferee in a form of Exhibit D to the Indenture and (2) if
such Transfer is in respect of a principal amount of Notes at the
time of transfer of less than $250,000, an Opinion of Counsel
provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification and provided to the
Company, which has confirmed its acceptability), to the effect that
such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms
of the Indenture, the Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the Definitive Notes and in the Indenture and the
Securities Act.
4. CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture and the Securities
Act.
(b) CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
State of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order
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to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture
and the Securities Act.
(c) CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any State of
the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
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This certificate and the statements contained herein are made for your benefit
and the benefit of the Company.
_______________________________ Dated: ____________________________
[Insert Name of Transferor]
By: ___________________________
Name:
Title:
B-5
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) a beneficial interest in the:
(i) 144A Global Note (CUSIP _______), or
(ii) Regulation S Global Note (CUSIP _________), or
(b) a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) a beneficial interest in the:
(i) 144A Global Note (CUSIP ________), or
(ii) Regulation S Global Note (CUSIP ________), or
(iii) Unrestricted Global Note (CUSIP ________); or
(b) a Restricted Definitive Note; or
(c) an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-6
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Panolam Industries International, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Chief Financial Officer
State Street Bank and Trust Company
Xxxxxxx Square, 000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxxxxxxxx 00000
Attention: Corporate Trust Group
Re: 11 1/2% Senior Subordinated Notes due 2009
Dear Sirs:
Reference is hereby made to the Indenture, dated as of February 18,
1999 (the "Indenture"), between Panolam Industries International, Inc., as
issuer (the "Company"), the Guarantors party thereto and State Street Bank and
Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
____________, (the "Owner") owns and proposes to exchange the Note[s]
or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN AN UNRESTRICTED GLOBAL NOTE.
(a) CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an
C-1
Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any State of the United States.
(b) CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being
acquired in compliance with any applicable blue sky securities laws of any State
of the United States.
(c) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any State
of the United States.
(d) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any State of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
C-2
(a) CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
(b) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the:
[CHECK ONE] 144A Global Note or Regulation S Global Note with an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, and in compliance with any applicable blue sky securities laws of any State
of the United States. Upon consummation of the proposed Exchange in accordance
with the terms of the Indenture, the beneficial interest issued will be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the relevant Restricted Global Note and in the Indenture and the
Securities Act.
C-3
This certificate and the statements contained herein are made for your benefit
and the benefit of the Company.
__________________________
[Insert Name of Owner]
By:_______________________
Name:
Title:
Dated:________________
C-4
EXHIBIT D
FORM OF CERTIFICATE FROM ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR
Panolam Industries International, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Chief Financial Officer
State Street Bank and Trust Company
Xxxxxxx Square, 000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxxxxxxxx 00000
Attention: Corporate Trust Group
Re: 11 1/2% Senior Subordinated Notes due 2009
Dear Sirs:
Reference is hereby made to the Indenture, dated as of February 18,
1999 (the "Indenture"), between Panolam Industries International, Inc., as
issuer (the "Company"), the Guarantors party thereto and State Street Bank and
Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of: (a) a beneficial interest in a Global Note, or (b) a
Definitive Note, we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any Guarantor or any of their
respective subsidiaries, (B) in accordance with Rule 144A under the Securities
Act to a "qualified institutional buyer" (as defined therein), (C) to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its
D-1
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if the proposed transfer is in
respect of an aggregate principal amount of Notes of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144 under the Securities Act, (F) in
accordance with another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel acceptable to the Company)
or (G) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing the Definitive Note
from us in a transaction meeting the requirements of clauses (A) through (F) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by
us will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or beneficial interest therein acquired
by us must be effected through one of the Initial Purchasers.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
D-2
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
_____________________________________ Dated: __________________, ____
[Insert Name of Accredited Investor]
By:_______________________________
Name:
Title:
D-3
EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURETO BE
DELIVERED BY SUBSEQUENTSUBSIDIARY GUARANTORS
Supplemental Indenture (this "Supplemental Indenture"), dated as of
____, among _____ (the "Guaranteeing Subsidiary"), a subsidiary of Panolam
Industries International, Inc. (or its permitted successor), a Delaware
corporation (the "Company"), the Company, the Guarantors (as defined in the
Indenture referred to herein) party thereto and State Street Bank and Trust
Company, as trustee under the Indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of February 18, 1999 providing
for the issuance of 11 1/2% Senior Subordinated Notes due 2009 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which newly-acquired or created Subsidiary Guarantors
shall unconditionally guarantee all of the Company's obligations under the Notes
and the Indenture on the terms and conditions set forth herein (the "Subsidiary
Guarantee"); and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guaranteeing Subsidiary irrevocably
and unconditionally guarantees the Guarantee Obligations, which include (i) the
due and punctual payment of the principal of, premium, if any, and interest and
Liquidated Damages, if any, on the Notes, whether at maturity, by acceleration,
call for redemption, upon a Change of Control Offer, upon an Asset Sale Offer or
otherwise, the due and punctual payment of interest on the overdue principal and
premium, if any, and (to the extent permitted by law)
E-1
interest on any interest on the Notes, and payment of expenses, and the due and
punctual performance of all other obligations of the Company, to the Holders or
the Trustee all in accordance with the terms set forth in Article X of the
Indenture, (ii) in case of any extension of time of payment or renewal of any
Notes or any such other obligations, that the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration, call for redemption, upon a Change
of Control Offer, upon an Asset Sale Offer or otherwise, and (iii) the payment
of any and all costs and expenses (including reasonable attorneys' fees)
incurred by the Trustee in enforcing any rights under this Guarantee.
The obligations of Guaranteeing Subsidiary to the Holders and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article X of the Indenture and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guarantee.
No past, present or future director, officer, employee, incorporator
or stockholder (direct or indirect) of the Guarantors (or any such successor
entity), as such, shall have any liability for any Obligations of the Guarantors
under this Subsidiary Guarantees or the Indenture or for any claim based on, in
respect of, or by reason of, such Obligations or their creation, except in their
capacity as an obligor or Guarantor of the Notes in accordance with the
Indenture.
This is a continuing Guarantee and shall remain in full force and
effect and shall be binding upon the Guaranteeing Subsidiary and its successors
and assigns until full and final payment of all of the Company's obligations
under the Notes and Indenture or until released in accordance with the Indenture
and shall inure to the benefit of the successors and assigns of the Trustee and
the Holders, and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges herein conferred upon that
party shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. This is a Guarantee
of payment and not of collectibility.
The Obligations of the Guaranteeing Subsidiary under its Subsidiary
Guarantee shall be limited to the extent necessary to insure that it does not
constitute a fraudulent conveyance under applicable law.
THE TERMS OF ARTICLE X OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
3. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS
E-2
SUPPLEMENTAL INDENTURE, INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW.
4. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
5. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
THE COMPANY:
PANOLAM INDUSTRIES INTERNATIONAL, INC.
By: _______________________________
Name:
Title:
THE GUARANTORS:
PANOLAM GROUP, INC.
By: _______________________________
Name:
Title:
PII SECOND, INC.
By: _______________________________
Name:
Title:
PANOLAM INDUSTRIES, INC.
By: _______________________________
Name:
Title:
PIONEER PLASTICS CORPORATION
By: _______________________________
Name:
Title:
[ADDITIONAL GUARANTOR]
By: _______________________________
Name:
Title:
TRUSTEE:
STATE STREET BANK AND TRUST COMPANY
By: _______________________________
Name:
Title:
