Exhibit 2.8
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CORPORACION DURANGO, S.A. DE C.V.,
as Issuer
and
JPMORGAN CHASE BANK
as Trustee
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INDENTURE
Dated as of June 24, 2002
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13-3/4% Senior Notes Due 2009
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TABLE OF CONTENTS
Page
Parties........................................................................l
Recitals of the Company........................................................l
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions....................................................1
SECTION 102. Compliance Certificates.......................................31
SECTION 103. Form of Documents Delivered to Trustee........................31
SECTION 104. Acts of Holders; Record Dates.................................32
SECTION 105. Notices, Etc., to Trustee and Company.........................33
SECTION 106. Notice to Holders; Waiver ....................................33
SECTION 107. Conflict with Trust Indenture Act.............................34
SECTION 108. Effect of Headings and Table of Contents......................34
SECTION 109. Successors and Assigns........................................34
SECTION 110. Separability Clause...........................................34
SECTION 111. Benefits of Indenture.........................................34
SECTION 112. Governing Law.................................................34
SECTION 113. Legal Holidays................................................34
SECTION 114. Consent to Service; Jurisdiction..............................35
SECTION 115. Language of Notices, Etc......................................35
ARTICLE TWO
SECURITY FORMS
SECTION 201. Form..........................................................35
SECTION 202. Restrictive Legends...........................................37
SECTION 203. Authenticating Agent and Denominations........................38
SECTION 204. Registrar and Paying Agent....................................38
SECTION 205. Paying Agent to Hold Money in Trust...........................39
SECTION 206. Book-Entry Provisions for Global Securities...................40
SECTION 207. Special Transfer Provisions...................................41
SECTION 208. Outstanding Securities........................................44
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms...............................................44
SECTION 302. Execution, Authentication, Delivery and Dating................45
SECTION 303. Temporary Securities..........................................46
SECTION 304. Transfer and Exchange.........................................46
SECTION 305. Mutilated, Destroyed, Lost and Stolen Securities..............47
SECTION 306. Payment of Interest; Interest Rights Preserved................48
SECTION 307. Persons Deemed Owners.........................................49
SECTION 308. Cancellation..................................................49
SECTION 309. Computation of Interest.......................................49
SECTION 310. CUSIP Numbers.................................................49
SECTION 311. Issuance of Additional Securities.............................50
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.......................50
SECTION 402. Application of Trust Money....................................51
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.............................................51
SECTION 502. Acceleration of Maturity; Rescission and Annulment............52
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.......................................................53
SECTION 504. Trustee May File Proofs of Claim..............................54
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities....................................................54
SECTION 506. Application of Money Collected................................54
SECTION 507. Limitation on Suits...........................................55
SECTION 508. Unconditional Right of Holders to Receive
Principal and Interest........................................55
SECTION 509. Restoration of Rights and Remedies............................55
SECTION 510. Rights and Remedies Cumulative................................56
SECTION 511. Delay or Omission Not Waiver..................................56
SECTION 512. Control by Holders............................................56
SECTION 513. Waiver of Past Defaults.......................................56
SECTION 514. Undertaking for Costs.........................................57
SECTION 515. Waiver of Stay or Extension Laws..............................57
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities...........................57
SECTION 602. Notice of Defaults............................................58
SECTION 603. Certain Rights of Trustee.....................................58
SECTION 604. Not Responsible for Recitals or Issuance of
Securities....................................................59
SECTION 605. May Hold Securities...........................................59
SECTION 606. Money Held in Trust...........................................59
SECTION 607. Compensation and Reimbursement................................59
SECTION 608. Disqualification; Conflicting Interests.......................60
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SECTION 609. Corporate Trustee Required; Eligibility.......................60
SECTION 610. Resignation and Removal; Appointment of
Successor.....................................................60
SECTION 611. Acceptance of Appointment by Successor........................61
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business......................................................62
SECTION 613. Preferential Collection of Claims Against
Company.......................................................62
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.......................................................62
SECTION 702. Preservation of Information; Communications to
Holders.......................................................63
SECTION 703. Reports by Trustee............................................63
SECTION 704. Reports by Company............................................63
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms.........................................................64
SECTION 802. Successor Substituted.........................................65
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of
Holders.......................................................65
SECTION 902. Supplemental Indentures with Consent of
Holders.......................................................66
SECTION 903. Execution of Supplemental Indentures..........................67
SECTION 904. Effect of Supplemental Indentures.............................67
SECTION 905. Conformity with Trust Indenture Act...........................67
SECTION 906. Reference in Securities to Supplemental
Indentures....................................................67
SECTION 907. Notice of Supplemental Indentures.............................67
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest.............................68
SECTION 1002. Maintenance of Office or Agency...............................68
SECTION 1003. Money for Security Payments to Be Held in Trust...............68
SECTION 1004. Statement by Officers as to Default...........................69
SECTION 1005. Existence ....................................................69
SECTION 1006. Maintenance of Properties.....................................70
SECTION 1007. Payment of Taxes and Other Claims.............................70
SECTION 1008. Limitation on Indebtedness....................................70
SECTION 1009. Limitation on Restricted Payments.............................72
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SECTION 1010. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries................75
SECTION 1011. Limitation on the Issuance and Sale of Capital
Stock of Restricted Subsidiaries..............................76
SECTION 1012. Limitation on Issuances of Guarantees by Restricted
Subsidiaries..................................................76
SECTION 1013. Limitation on Transactions with Shareholders and
Affiliates....................................................77
SECTION 1014. Limitation on Liens...........................................78
SECTION 1015. Limitation on Sale-Leaseback Transactions.....................79
SECTION 1016. Limitation on Asset Sales.....................................79
SECTION 1017. Change of Control.............................................80
SECTION 1018. Indemnification of Judgment Currency..........................80
SECTION 1019. Payment of Additional Amounts.................................81
SECTION 1020. Provision of Financial Information............................83
SECTION 1021. Waiver of Certain Covenants...................................84
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption...........................................84
SECTION 1102. Election to Redeem; Notice to Trustee.........................85
SECTION 1103. Notice of Redemption..........................................85
SECTION 1104. Deposit of Redemption Price...................................86
SECTION 1105. Securities Payable on Redemption Date.........................87
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 120l. Defeasance and Discharge of the Indenture.....................87
SECTION 1202. Covenant Defeasance...........................................89
SECTION 1203. Deposited Money and Government Securities
to Be Held in Trust; Other Miscellaneous
Provisions....................................................90
SECTION 1204. Reinstatement.................................................90
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INDENTURE, dated as of June 24, 2002 between CORPORACION DURANGO, S.A.
de C.V., a variable capital company (sociedad anonima de capital variable)
organized under the laws of the United Mexican States (herein called the
"Company"), having its principal office at Tone Corporativa Durango, Potasio
150, Ciudad Industrial, Durango, Durango, United Mexican States 34220, and
JPMORGAN CHASE BANK, a banking corporation duly organized and existing under the
laws of New York, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the initial issuance of US$175,000,000 aggregate
principal amount of the Company's 13-3/4% Senior Notes due 2009 (herein called
the "Securities") issuable as provided in this Indenture.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
Concurrently with the execution of this Indenture, the Trustee, the
Company and certain of its subsidiaries are entering into a supplemental
indenture pursuant to which, among other things, such subsidiaries are
guaranteeing certain obligations of the Company under the Securities.
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act of 1939, as amended, that are required to be a part
of and to govern indentures qualified under the Trust Indenture Act.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
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(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in Mexico, and, except as otherwise herein expressly provided,
the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted in Mexico and consistently applied by
the Company at the date of such computation; and
(d) the words "herein", "hereof' and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"ACM" means Administradora Corporativa y Mercantil S.A. de C. V., a
Mexican corporation wholly owned by the Existing Shareholders, whose only asset
is its 16% equity interest in the Company.
"ACM Merger" means the merger of ACM with and into the Company, with
the Company as the surviving corporation.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition by a Restricted Subsidiary and not Incurred in connection
with, or in anticipation of, such Person becoming a Restricted Subsidiary or
such Asset Acquisition.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Additional Amounts" shall have the meaning assigned to such term in
Section 1019.
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of the Company and the Restricted Subsidiaries
for such period determined in conformity with Mexican GAAP; provided that the
following items shall be excluded in computing Adjusted Consolidated Net Income
(without duplication):
(a) the net income (or loss) of any Person that is not a Restricted
Subsidiary, except to the extent of the amount of dividends or other
distributions actually paid to the Company or any of the Subsidiaries or
all or substantially all of the property and assets of such Person are
acquired by the Company or any of the Restricted Subsidiaries;
(b) solely for the purposes of calculating the amount of Restricted
Payments that may be made pursuant to subclause (d)(iii) of the first
paragraph of Section 1009 (and in such case, except to the extent
includable pursuant to subclause (a) of this definition), the net income
(or loss) of any Person accrued prior to the date it becomes a Restricted
Subsidiary or is merged into or consolidated with the Company or any of the
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Subsidiaries or all or substantially all of the property and assets of such
Person are acquired by the Company or any of the Subsidiaries;
(c) the net income of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of such net income is not at the time permitted by
the operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary, except to the extent of the
amount of dividends or other distributions actually paid by the Company or
any of the Restricted Subsidiaries;
(d) any gains or losses (on an after-tax basis) attributable to sales
of assets of the Company and the Restricted Subsidiaries; and
(e) all extraordinary gains and extraordinary losses.
"Adjusted Consolidated Net Tangible Assets" means the total amount of
assets of the Company and the Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), after deducting
therefrom:
(a) all current liabilities of the Company and the Restricted
Subsidiaries (excluding intercompany items) and
(b) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles,
all as set forth on the most recent quarterly or annual consolidated balance
sheet of the Company and the Restricted Subsidiaries, prepared in conformity
with Mexican GAAP and filed with the Commission or provided to the Trustee.
"Adjusted Treasury Rate" means, with respect to any Redemption Date,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue,
expressed as a percentage of its principal amount, equal to the Comparable
Treasury Price for the Redemption Date, plus 0.50%.
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Paying Agent, co-Registrar,
authenticating agent or agent for service of notices and demands.
"Agent Members" shall have the meaning specified in Section 206.
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"Asset Acquisition" means:
(a) an investment by the Company or any of the Restricted Subsidiaries
in any other Person pursuant to which such Person shall become a Restricted
Subsidiary or shall be merged into or consolidated with the Company or any
of the Restricted Subsidiaries; provided that such Person's primary
business is related, ancillary or complementary to the Pulp and Paper
Business, or
(b) an acquisition by the Company or any of the Restricted
Subsidiaries of the property and assets of any Person other than the
Company or any of the Restricted Subsidiaries that constitute substantially
all of a division or line of business of such Person; provided that the
property and assets acquired are related, ancillary or complementary to the
Pulp and Paper Business.
"Asset Disposition" means the sale or other disposition by the Company
or any of the Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) of:
(a) all or substantially all of the Capital Stock of any Restricted
Subsidiary or
(b) all or substantially all of the assets that constitute a division
or line of business of the Company or any of the Restricted Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by the Company or any of the
Restricted Subsidiaries to any Person other than the Company or any of the
Restricted Subsidiaries of:
(a) all or any of the Capital Stock of any Restricted Subsidiary,
other than directors' qualifying shares or shares required by applicable
law to be held by a Person other than the Company or a Restricted
Subsidiary or de minimis shares of a Restricted Subsidiary required to be
owned by another Person under applicable law in order to maintain the
corporate status of such Restricted Subsidiary,
(b) all or substantially all of the property and assets of an
operating unit or business of the Company or any of the Restricted
Subsidiaries or
(c) any other property and assets (other than the Capital Stock or
other Investment in an Unrestricted Subsidiary) of the Company or any of
the Restricted Subsidiaries outside the ordinary course of business of the
Company or such Restricted Subsidiary, and
in each case, that is not governed by the provisions of this Indenture
applicable to mergers, consolidations and sales of assets of the Company;
provided that "Asset Sale" shall not include:
(i) sales or other dispositions of inventory, receivables and other current
assets,
(ii) sales, transfers or other dispositions of assets constituting a
Permitted Investment or Restricted Payment permitted to be made under Section
1009,
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(iii) sales, transfers or other dispositions of assets with a fair market
value not in excess of $10 million in any transaction or series of related
transactions,
(iv) the sale or other disposition of cash of Temporary Cash Investments,
(v) any sale, transfer, assignment or other disposition of any property
equipment that has become damaged, worn out, obsolete or otherwise unsuitable
for use in connection with the business of the Company or the Restricted
Subsidiaries, or
(vi) the sale, conveyance or other transfer of accounts receivable and
related assets customarily transferred in an asset securitization transaction
involving accounts receivable to a Receivables Subsidiary, in connection with a
Qualified Receivables Transaction.
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing:
(a) the sum of the products of
(i) the number of years from such date of determination to the dates
of each successive scheduled principal payment of such debt security and
(ii) the amount of each such principal payment by
(b) the sum of all such principal payments.
"Board of Directors" means the Board of Directors of the Company or
any committee of such Board of Directors duly authorized to act under this
Indenture.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the Corporate
Trust Office of the Trustee, are authorized by law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with Mexican
GAAP, is required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of
the rental obligations under a Capitalized Lease.
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"Change of Control" means such time as:
(a) (i) a Person or any Persons acting together which would constitute
a "group" (a "Group") for purposes of Sections 13(d) and 14(d)(2) of the
Exchange Act, or any successor provision thereto, together with any
Affiliates or Related Persons thereof (other than any Person or Group
controlled by the Existing Shareholders together with any Affiliates or
Related Persons thereof), has become the beneficial owner, by way of
purchase, merger, consolidation or otherwise, of 35% or more of Voting
Stock of the Company and (ii) such Person or Group (together with any
Affiliates or Related Persons thereof) has become the beneficial owner, by
way of purchase, merger, consolidation or otherwise of a greater percentage
of Voting Stock of the Company than that held by the Existing Shareholders
(together with Affiliates or Related Persons thereof); or
(b) at any time during any consecutive two-year period individuals who
at the beginning of such period were members of the Board of Directors
(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 directors then still in office who
either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office.
"Closing Date" means the date on which Securities are originally
issued under this Indenture.
"Commission" means the Securities and Exchange Commission.
"Commodity Agreement" means any forward commodity contract, commodity
swap agreement, commodity option agreement or other similar agreement or
arrangement.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding-up
of such Person, to shares of Capital Stock of any other class of such Person.
"Company" has the meaning specified in the Preamble of this Indenture.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company (a) by the Chairman of the Board, a Vice
Chairman of the Board, the President or a Vice President and (b) by the Chief
Financial Officer, the Comptroller, the Treasurer or an Assistant Treasurer, the
Secretary or an assistant Secretary, and delivered to the Trustee; provided,
however, that such written request or order may be signed by any two of the
officers or directors listed in clause (a) above in lieu of being signed by one
of such officers or directors listed in such clause (a) and one of the officers
listed in clause (b) above.
"Comparable Treasury Issue" means the United States Treasury Security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Securities being redeemed that would be utilized, at
the time of selection and in accordance
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with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of the Securities.
"Comparable Treasury Price" means, with respect to any redemption
date:
(1) the average of the bid and asked prices for the Comparable
Treasury Issue, expressed in each case as a percentage of its principal
amount, on the third Business Day preceding the Redemption Date, as set
forth in the daily statistical release or any successor release published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or
(2) if the release or any successor release is not published or does
not contain such prices on such Business Day:
(A) the Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest of such Reference Treasury
Dealer Quotations, or
(B) if the trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income:
(a) Consolidated Interest Expense,
(b) income and asset taxes,
(c) depreciation expense,
(d) amortization expense and
(e) all other non-cash items reducing Adjusted Consolidated Net Income
(other than items that will require cash payments and for which an
accrual or reserve is, or is required by Mexican GAAP to be, made),
less all non-cash items increasing Adjusted Consolidated Net Income,
all as determined on a consolidated basis for the Company and the
Restricted Subsidiaries in conformity with Mexican GAAP.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and interest
paid by the Company or any of the Restricted Subsidiaries with respect to
Indebtedness that is Guaranteed or secured by the Company or any of the
Restricted Subsidiaries to the extent not recovered from the underlying obligor)
and the component of rentals allocable to interest in
7
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company and the Restricted Subsidiaries during such
period; excluding, however:
(a) any amount of such interest of any Restricted Subsidiary if the
net income of such Restricted Subsidiary is excluded in the calculation of
Adjusted Consolidated Net Income pursuant to clause (c) of the definition
thereof (but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Adjusted
Consolidated Net Income pursuant to clause (c) of the definition thereof),
and
(b) any premiums, fees and expenses (and any amortization thereof)
payable in connection with the offering of the Securities and other
Indebtedness, all as determined on a consolidated basis (without taking
into account Unrestricted Subsidiaries) in conformity with Mexican GAAP.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and the Restricted Subsidiaries
(which shall be as of a date not more than 30 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
plus, to the extent not included, any Preferred Stock of the Company, less any
amounts attributable to Disqualified Stock or any equity security convertible
into or exchangeable for Indebtedness, the cost of treasury stock and the
principal amount of any promissory notes receivable from the sale of the
Company's Capital Stock or the Capital Stock of any of its Restricted
Subsidiaries, each item to be determined in conformity with Mexican GAAP.
"Consolidated Senior Indebtedness" means, without duplication, (a)
Indebtedness of the Restricted Subsidiaries, except for Indebtedness owed to the
Company or any other Restricted Subsidiary, (b) any Indebtedness of the Company
guaranteed by any of its Restricted Subsidiaries, and (c) any Indebtedness of
the Company secured by a Lien.
"Consolidated Senior Indebtedness Interest Coverage Ratio" means, on
any Transaction Date, the ratio of:
(a) the aggregate amount of Consolidated EBITDA for the Four Quarter
Period prior to such Transaction Date to
(b) the aggregate Consolidated Senior Indebtedness Interest Expense
during such Four Quarter Period.
In making the foregoing calculation,
(i) pro forma effect shall be given to any Consolidated Senior
Indebtedness Incurred or repaid, repurchased, defeased or otherwise
discharged during the Reference Period (other than Consolidated Senior
Indebtedness Incurred or repaid under a revolving credit or similar
arrangement to the extent of the commitment thereunder (or under any
predecessor revolving credit or similar arrangement) in effect on the
last day of such Four Quarter Period unless any portion of such
Consolidated Senior Indebtedness is projected, in the reasonable
judgment of the
8
senior management, to remain outstanding for a period in excess of 12
months from the date of the Incurrence thereof), in each case as if
such Consolidated Senior Indebtedness had been Incurred or repaid,
repurchased, defeased or otherwise discharged on the first day of such
Reference Period;
(ii) Consolidated Senior Indebtedness Interest Expense attributable to
interest on any Consolidated Senior Indebtedness (whether existing or
being Incurred) computed on a pro forma basis and bearing a floating
interest rate shall be computed as if the rate in effect on the
Transaction Date (taking into account any Interest Rate Agreement
applicable to such Consolidated Senior Indebtedness if such Interest
Rate Agreement has a remaining term in excess of 12 months or, if
shorter, at least equal to the remaining term of such Indebtedness)
had been the applicable rate for the entire period;
(iii) pro forma effect shall be given to Asset Dispositions and Asset
Acquisitions (including giving pro forma effect to the application of
proceeds of any Asset Disposition) that occur during such Reference
Period as if they had occurred and such proceeds had been applied on
the first day of such Reference Period; and
(iv) pro forma effect shall be given to asset dispositions and asset
acquisitions (including giving pro forma effect to the application of
proceeds of any asset disposition) that have been made by any Person
that has become a Restricted Subsidiary or has been merged with or
into the Company or any Restricted Subsidiary during such Reference
Period and that would have constituted Asset Dispositions or Asset
Acquisitions had such transactions occurred when such Person was a
Restricted Subsidiary as if such asset dispositions or asset
acquisitions were Asset Dispositions or Asset Acquisitions that
occurred on the first day of such Reference Period;
provided that to the extent that subclauses (iii) or (iv) of this definition
requires that pro forma effect be given to an Asset Acquisition or Asset
Disposition, such pro forma calculation shall be based upon the four full fiscal
quarters immediately preceding the Transaction Date of the Person, or division
or line of business of the Person, that is acquired or disposed for which
financial information is available.
"Consolidated Senior Indebtedness Interest Expense" means, for any
period, the aggregate amount of interest in respect of Consolidated Senior
Indebtedness (including, without limitation, amortization of original issue
discount on any Consolidated Senior Indebtedness and the interest portion of any
deferred payment obligation); all commissions, discounts and other fees and
charges owed with respect to Consolidated Senior Indebtedness; interest paid (by
the Company or any of the Restricted Subsidiaries with respect to Consolidated
Senior Indebtedness that is Guaranteed or secured by the Company or any of the
Restricted Subsidiaries to the extent not recovered from the underlying
obligor); and the component of rentals allocable to interest in respect of
Capitalized Lease Obligations paid, accrued or scheduled to be paid or to be
accrued by the Company and the Restricted Subsidiaries during such period but
only to the extent that such Capitalized Lease Obligations are Consolidated
Senior Indebtedness; excluding, however
9
any amount of such interest of any Restricted Subsidiary if the net income of
such Restricted Subsidiary is excluded in the calculation of Adjusted
Consolidated Net Income pursuant to clause (c) of the definition thereof (but
only in the same proportion as the net income of such Restricted Subsidiary is
excluded from the calculation of Adjusted Consolidated Net Income pursuant to
clause (c) of the definition thereof).
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000-0000.
"Covenant Defeasance" shall have the meaning specified in Section
1203.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, currency option or other similar agreement or arrangement.
"Default' means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest' has the meaning specified in Section 306.
"Depositary" means The Depository Trust Company, New York, New York.
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is:
(a) required to be redeemed prior to the Stated Maturity of the
Securities,
(b) redeemable at the option of the holder of such class or series of
Capital Stock at any time prior to the Stated Maturity of the Securities or
(c) convertible into or exchangeable for Capital Stock referred to in
clause (a) or (b) above or Indebtedness having a scheduled maturity prior
to the Stated Maturity of the Securities;
provided that any Capital Stock that would not constitute Disqualified Stock but
for provisions thereof giving holders thereof the right to require such Person
to repurchase or redeem such Capital Stock upon the occurrence of an "asset
sale" or "change of control" occurring prior to the Stated Maturity of the
Securities shall not constitute Disqualified Stock if the "asset sale" or
"change of control" provisions applicable to such Capital Stock are no more
favorable to the holders of such Capital Stock than the provisions of Section
1016 and Section 1017 and such Capital Stock specifically provides that such
Person will not repurchase or redeem any such stock pursuant to such provision
prior to the Company's repurchase of such Securities as are required to be
repurchased pursuant to Section 1016 and Section 1017.
"Event of Default" shall have the meaning specified in Section 501.
"Excess Proceeds" shall have the meaning specified in Section 1016.
10
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Stockholders" means (a) Ing. Xxxxxx Xxxxxx, Xx. Xxxx Xxxxxx
and Sr. Xxxxx Xxxxxx and members of their immediate families and their estates
and heirs and (b) any trust established for the benefit of, or any company or
other entity controlled by, one or more of those Persons, and any Successor or
Affiliate thereof.
"fair market value" means the price that would be paid in an
arm's-length transaction between a willing seller under no compulsion to sell
and a willing buyer under no compulsion to buy, as determined in good faith by
the Board of Directors, whose determination shall be conclusive if evidenced by
a Board Resolution.
"Four Quarter Period" means the then most recent four fiscal quarters.
"Global Securities" shall have the meaning specified in Section 201.
"Group" has the meaning specified in the definition of Change of
Control provided in this Section 101.
"Government Securities" means direct obligations of, obligations fully
guaranteed by, or participants in pools consisting solely of obligations of or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the option of the
issuer thereof.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing (whether pursuant to a guaranty, a
fianza, an aval or otherwise) any Indebtedness of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person:
(a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness of such other Person (whether arising by
virtue of partnership arrangements, or by agreements to keep-well, to
purchase assets, goods, securities or services (unless such purchase
arrangements are on arm's-length terms and are entered into in the ordinary
course of business), to take-or-pay, or to maintain financial statement
conditions or otherwise) or
(b) entered into for purposes of assuring in any other manner the
obligee of such indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
provided that the term "Guarantee" shall not include endorsements for collection
or deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"Guaranteed Indebtedness" shall have the meaning specified in Section
1012.
11
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Acquired Indebtedness; provided that
neither the accrual of interest nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication):
(a) all indebtedness of such Person for borrowed money;
(b) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(c) all obligations of such Person in respect of letters of credit or
other similar instruments (including reimbursement obligations with respect
thereto, but excluding obligations with respect to letters of credit
(including trade letters of credit) securing obligations (other than
obligations described in (a) or (b) above or (e), (f) or (g) below) entered
into in the ordinary course of business of such Person to the extent such
letters of credit are not drawn upon or, if drawn upon, to the extent such
drawing is reimbursed no later than the third business day following
receipt by such Person of a demand for reimbursement);
(d) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, which purchase price is due more
than six months after the date of placing such property in service or
taking delivery and title thereto or the completion of such services,
excluding Trade Payables;
(e) all Capitalized Lease Obligations;
(f) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such
Person; provided that the amount of such Indebtedness shall be the
lesser of:
(i) the fair market value of such asset at such date of determination
and
(ii) the amount of such Indebtedness;
(g) all Indebtedness of other Persons Guaranteed by such Person to the
extent such Indebtedness is Guaranteed by such Person; and
(h) to the extent not otherwise included in this definition,
obligations under Commodity Agreements, Currency Agreements and Interest
Rate Agreements (other than Commodity Agreements, Currency Agreements and
Interest Rate Agreements designed solely to protect the Company or the
Restricted Subsidiaries against fluctuations in
12
commodity prices, foreign currency exchange rates or interest rates and
that do not increase the Indebtedness of the obligor outstanding at any
time other than as a result of fluctuations in commodity prices, foreign
currency exchange rates or interest rates or by reason of fees, indemnities
and compensation payable thereunder).
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation, provided:
(i) that the amount outstanding at any time of any Indebtedness issued
with original issue discount is the face amount of such Indebtedness less
the remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with Mexican GAAP,
(ii) that money borrowed and set aside at the time of the Incurrence
of any Indebtedness in order to prefund the payment of the interest on such
Indebtedness shall not be deemed to be "Indebtedness" so long as such money
is held to secure the payment of such interest and
(iii) that Indebtedness shall not include:
(A) any liability for federal, state, local or other taxes of any
jurisdiction,
(B) performance, surety or appeal bonds provided in the ordinary
course of business or
(C) agreements providing for indemnification, adjustment of purchase
price or similar obligations, or Guarantees or letters of credit,
surety bonds or performance bonds securing any obligations of the
Company or any of the Restricted Subsidiaries pursuant to such
agreements, in any case Incurred in connection with the disposition of
any business, assets or a Restricted Subsidiary (other than Guarantees
of Indebtedness Incurred by any Person acquiring all or any portion of
such business, assets or Restricted Subsidiary for the purpose of
financing such acquisition), so long as the principal amount does not
to exceed the gross proceeds actually received by the Company or any
Restricted Subsidiary in connection with such disposition.
For the purposes of computing the amount of Indebtedness of any Person
outstanding at any time, all such items shall be excluded to the extent that
they would be eliminated as intercompany items for purposes of such Persons
consolidated financial statements.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto which were entered into pursuant to the applicable
provisions hereof.
"Independent Investment Banker" means any Reference Treasury Dealer
appointed by the Trustee after consultation with the Company.
13
"Initial Subsidiary Guarantors" means Empaques de Carton Titan, S.A.
de C.V., Compania Papelera de Atenquique, S.A. de C.V., Ponderosa Industrial de
Mexico, S.A. de C.V. and Industrias Centauro, S.A. de C.V., excluding their
subsidiaries, if any.
"Interest Coverage Ratio" means, on any Transaction Date, the ratio
of:
(a) the aggregate amount of Consolidated EBITDA for the Four
Quarter Period prior to such Transaction Date to
(b) the aggregate Consolidated Interest Expense during such Four
Quarter Period.
In making the foregoing calculation,
(i) pro forma effect shall be given to any Indebtedness Incurred or
repaid, repurchased, defeased or otherwise discharged during the Reference
Period (other than Indebtedness under a revolving credit or similar
arrangement to the extent of the commitment thereunder (or under any
predecessor revolving credit or similar arrangement) in effect on the last
day of such Four Quarter Period unless any portion of such Indebtedness is
projected, in the reasonable judgment of the senior management, to remain
outstanding for a period in excess of 12 months from the date of the
Incurrence thereof), in each case as if such Indebtedness had been Incurred
or repaid, defeased or otherwise discharged on the first day of such
Reference Period;
(ii) Consolidated Interest Expense attributable to interest on any
Indebtedness (whether existing or being Incurred) computed on a pro forma
basis and bearing a floating interest rate shall be computed as if the rate
in effect on the Transaction Date (taking into account any Interest Rate
Agreement applicable to such Indebtedness if such Interest Rate Agreement
has a remaining term in excess of 12 months or, if shorter, at least equal
to the remaining term of such Indebtedness) had been the applicable rate
for the entire period;
(iii) pro forma effect shall be given to Asset Dispositions and Asset
Acquisitions (including giving pro forma effect to the application of
proceeds of any Asset Disposition) that occur during such Reference Period
as if they had occurred and such proceeds had been applied on the first day
of such Reference Period; and
(iv) pro forma effect shall be given to asset dispositions and asset
acquisitions (including giving pro forma effect to the application of
proceeds of any asset disposition) that have been made by any Person that
has become a Restricted Subsidiary or has been merged with or into the
Company or any Restricted Subsidiary during such Reference Period and that
would have constituted Asset Dispositions or Asset Acquisitions had such
transactions occurred when such Person was a Restricted Subsidiary as if
such asset dispositions or asset acquisitions were Asset Dispositions or
Asset Acquisitions that occurred on the first day of such Reference Period;
provided that to the extent that clause (iii) or (iv) of this definition
requires that pro forma effect be given to an Asset Acquisition or Asset
Disposition, such pro forma calculation shall be based
14
upon the four full fiscal quarters immediately preceding the Transaction Date of
the Person, or division or line of business of the Person, that is acquired or
disposed for which financial information is available.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement, option or future contract or other
similar agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan
or other extension of credit (including, without limitation, by way of
Guarantee; but excluding Guarantees of Indebtedness that are permitted under
Section 1008 and advances to customers or suppliers in the ordinary course of
business that are recorded as accounts receivable, prepaid expenses or deposits
on the balance sheet of the Company or the Restricted Subsidiaries and
endorsements for collection or deposit arising in the ordinary course of
business) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other similar instruments issued by, such Person and shall
include:
(1) the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary and
(2) the retention of the Capital Stock (or any other Investment) by
the Company or any of the Restricted Subsidiaries, of (or in) any Person
that has ceased to be a Restricted Subsidiary, including without
limitation, by reason of any transaction permitted by subclause (c) of
Section 1011.
For purposes of the definition of "Unrestricted Subsidiary" and Section 1009:
(a) the amount of or a reduction in an Investment shall be equal to
the fair market value thereof at the time such Investment is made or
reduced and
(b) in the event the Company or a Restricted Subsidiary makes an
Investment by transferring assets to any Person and as part of such
transaction receives Net Cash Proceeds, the amount of such investment shall
be the fair market value of the assets less the amount of Net Cash Proceeds
so received, provided that the Net Cash Proceeds are applied in accordance
with subclauses (a)(i) and (a)(ii) in the second paragraph of Section 1016.
"Judgment Currency" has the meaning specified in Section 1018.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereof or any
agreement to give any security interest).
15
"Maturity," when used with respect to any Securities, means the date
on which the principal (or portion thereof) of such Securities becomes due and
payable as therein or therein provided, whether at Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Mexican GAAP" is defined to mean accounting principles generally
accepted in Mexico, including accounting principles which account for the
effects of inflation as provided for under Bulletin B-10 "Recognition of the
Effects of Inflation on the Financial Information," as amended, issued by the
Mexican Institute of Public Accountants.
"Mexican Withholding Taxes" shall have the meaning assigned to such
term in Section 1019.
"Mexico" means xxx Xxxxxxx Xxxxxx Xxxxxxxxx (xxx Xxxxxx Xxxxxxx
Xxxxxx) and any branch of power, ministry, department, authority or statutory
corporation or other entity (including a trust), owned or controlled directly or
indirectly by the Estados Unidos Mexicanos or any of the foregoing or created by
law as a public entity.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Cash Proceeds" means;
(a) with respect to any Asset Sale, the proceeds of such Asset Sale in
the form of cash or cash equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the principal,
but not interest, component thereof) when received in the form of cash or
cash equivalents and proceeds from the conversion of other property
received when converted to cash or cash equivalents, net of
(i) brokerage commissions and other fees and expenses (including fees
and expenses of counsel and investment bankers) related to such Asset Sale;
(ii) provisions for all taxes (whether or not such taxes will actually
be paid or are payable) as a result of such Asset Sale without regard to
the consolidated results of operations of the Company and the Restricted
Subsidiaries, taken as a whole;
(iii) payments made, or required to be made, to repay Indebtedness or
any other obligation outstanding at the time of such Asset Sale that either
(A) is secured by a Lien on the property or assets sold or (B) is required
to be paid as a result of such sale; and
(iv) appropriate amounts to be provided by the Company or any
Restricted Subsidiary as a reserve against any liabilities associated with
such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated
with such Asset Sale, whether or not required by Mexican GAAP; and
(b) with respect to any issuance or sale of Capital Stock, the
proceeds of such issuance or sale in the form of cash or cash equivalents,
including payments in respect of
16
deferred payment obligations (to the extent corresponding to the principal,
but not interest, component thereof) when received in the form of cash or
cash equivalents and proceeds from the conversion of other property
received when converted to cash or cash equivalents, net of attorney's
fees, accountants' fees, underwriters' or placement agents' fees, discounts
or commissions and brokerage, consultant and other fees incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Non-U.S. Person" means a Person who is not a U.S. person, as defined
in Regulation S.
"Offer to Purchase" means an offer to purchase Securities by the
Company from the Holders commenced by mailing a notice to the Trustee and each
Holder stating:
(a) the covenant pursuant to which the offer is being made and that
all Securities validly tendered will be accepted for payment on a pro rata
basis;
(b) the purchase price and the date of purchase (which shall be a
Business Day no earlier than 30 days nor later than 60 days from the date
such notice is mailed) (the "Payment Date");
(c) that any Security not tendered will continue to accrue interest
pursuant to its terms;
(d) that, unless the Company defaults in the payment of the purchase
price, any Security accepted for payment pursuant to the Offer to Purchase
shall cease to accrue interest on and after the Payment Date;
(e) that Holders electing to have a Security purchased pursuant to the
Offer to Purchase will be required to surrender the Security, together with
the form entitled "Option of the Holder to Elect Purchase" on the reverse
side of the Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Business Day
immediately preceding the Payment Date;
(f) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a telegram, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Securities delivered for purchase and a statement that such
Holder is withdrawing his election to have such Securities purchased; and
(g) that Holders whose Securities are being purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; provided that each Security
purchased and each new Security issued shall be in a principal amount of
$1,000 or integral multiples of $1,000.
17
On the Payment Date, the Company shall:
(i) accept for payment on a pro rata basis Securities or portions thereof
tendered pursuant to an Offer to Purchase;
(ii) deposit with the Paying Agent money sufficient to pay the purchase
price of all Securities or portions thereof so accepted; and
(iii) deliver, or cause to be delivered, to the Trustee all Securities or
portions thereof so accepted together with an Officers' Certificate
specifying the Securities or portions thereof accepted for payment by the
Company.
The Paying Agent shall promptly mail to the Holders of Securities so accepted
payment in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail to such Holders a new Security equal in principal amount
to any unpurchased portion of the Security surrendered; provided that each
Security purchased and each new Security issued shall be in a principal amount
of $1,000 or integral multiples of $1,000. The Company will publicly announce
the results of an Offer to Purchase as soon as practicable after the Payment
Date. The Trustee shall act as the Paying Agent for an Offer to Purchase. The
Company will comply with Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder, to the extent such laws and
regulations are applicable, in the event that the Company is required to
repurchase Securities pursuant to an Offer to Purchase. If the provisions of
such securities laws conflict with Section 1016 or 1017, as applicable, the
Company will comply with such securities laws and will not be deemed to have
breached the obligations under the covenant by virtue thereof.
"Officer's Certificate" means a certificate signed by the chairman of
the Board of Directors, or Vice Chairman of the Board of Directors, the
President, or any Vice President, and the Treasurer, the Secretary or any
Assistant Treasurer or Assistant Secretary, of the Company and delivered to the
Trustee.
"Offshore Global Securities" shall have the meaning specified in
Section 201.
"Offshore Physical Securities" shall have the meaning specified in
Section 201.
"Opinion of Mexican Counsel" means a written opinion of Mexican
counsel admitted to practice in Mexico who shall be acceptable to the Trustee;
provided that such counsel may rely, as to any matters of U.S. law, on an
Opinion of U.S. Counsel.
"Opinion of U.S. Counsel" means a written opinion of independent U.S.
counsel admitted to practice in the State of New York who shall be acceptable to
the Trustee; provided that such counsel may rely, as to any matters of Mexican
law, on an Opinion of Mexican Counsel.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
18
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
and
(c) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee actually knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"Overnight Bank Deposits" means overnight or time deposits having
maturities of seven days or less with any financial institution organized under
the laws of the United States, any state thereof or Mexico which would not
otherwise qualify as a Temporary Cash Investment, provided that such financial
institution is not under intervention, receivership, or any similar arrangement
at the time of making such overnight on time deposit.
"Pari-Passu Indebtedness" has the meaning specified in Section 1016.
"Paying Agent" shall have the meaning specified in Section 204.
"Payment Date" has the meaning specified in the definition of "Offer
to Purchase".
"Permanent Offshore Global Securities" shall have the meaning
specified in Section 201.
"Permitted Investment" means:
19
(a) an Investment in the Company or a Restricted Subsidiary or a
Person which will, upon the making of such Investment, become a Restricted
Subsidiary or be merged or consolidated with or into or transfer or convey
all or substantially all its assets to, the Company or a Restricted
Subsidiary; provided that such Person's primary business is related,
ancillary or complementary to the businesses of the Company and the
Restricted Subsidiaries on the date of such Investment;
(b) Temporary Cash Investments and Overnight Bank Deposits;
(c) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
for accounting purposes;
(d) stock, obligations or securities received in satisfaction of
judgments or in settlement or obligations owing to the Company or a
Restricted Subsidiary or upon the perfection, foreclosure or enforcement of
a Lien in favor of the Company or a Restricted Subsidiary;
(e) Commodity Agreements, Interest Rate Agreements and Currency
Agreements designed solely to protect the Company or the Restricted
Subsidiaries against fluctuations in commodity prices, interest rates or
foreign currency exchange rates;
(f) loans or advances made to employees of the Company or a Restricted
Subsidiary in the ordinary course of business consisting with past
practices of the Company or such Restricted Subsidiary, provided that such
loans in the aggregate to all employees do not exceed $2.5 million per year
and $5.0 million prior to the Stated Maturity of the Securities;
(g) extensions of credit in the nature of accounts receivable or
Securities receivable arising from the sale or lease of goods and services
in the ordinary course of business;
(h) pledges or deposits required in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security;
(i) pledges or deposits in connection with (i) the non-delinquent
performance of bids, trade contracts (other than for borrowed money),
leases or statutory obligations, (ii) continued obligations on surety or
appeal bonds and (iii) other non-delinquent obligations of a like nature,
in each case incurred in the ordinary course of business;
(j) advances, loans or extensions of credit to suppliers in the
ordinary course of business by the Company or any Restricted Subsidiary;
(k) Investments consisting of non-cash consideration received in
connection with an Asset Sale permitted by Section 1016;
20
(l) customary Investments required by the terms of any Qualified
Receivables Transaction to the extent such Investments are made in the
ordinary course of business; and
(m) in addition to the foregoing Investments, Investments in an
aggregate amount not to exceed US$5.0 million at any time outstanding.
"Permitted Liens" means:
(a) Liens for taxes, assessments, governmental charges or claims that
are being contested in good faith by appropriate legal proceedings promptly
instituted and diligently conducted and for which a reserve or other
appropriate provision, if any, as shall be required in conformity with
Mexican GAAP shall have been made;
(b) statutory and common law Liens of landlords and carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen or other similar
Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate
legal proceedings promptly instituted and diligently conducted and for
which a reserve or other appropriate provision, if any, as shall be
required in conformity with Mexican GAAP shall have been made;
(c) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security;
(d) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory or regulatory obligations, bankers'
acceptances, surety and appeal bonds, government contracts, performance and
return-of-money bonds and other obligations of a similar nature incurred in
the ordinary course of business (exclusive of obligations for the payment
of borrowed money);
(e) easements, rights-of-way, municipal and zoning ordinances and
similar charges, encumbrances, title defects or other irregularities that
do not materially interfere with the ordinary course of business of the
Company and the Restricted Subsidiaries taken as a whole;
(f) Liens (including extensions and renewals thereof) upon real or
personal property acquired after the Closing Date; provided that (i) such
Lien is created solely for the purpose of securing Indebtedness Incurred,
in accordance with Section 1008, to finance the cost (including the cost of
improvement or construction) of the item of property or assets subject
thereto and such Lien is created prior to, at the time of or within six
months after the later of the acquisition, the completion of construction
or the commencement of full operation of such property, (ii) the principal
amount of the Indebtedness secured by such Lien does not exceed 100% of
such cost and (iii) any such Lien shall not extend to or cover any property
or assets other than such item of property or assets and any improvements
on such item;
21
(g) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the Company and the
Restricted Subsidiaries, taken as a whole;
(h) Liens encumbering property or assets under construction arising
from progress or partial payments by a customer of the Company or the
Restricted Subsidiaries relating to such property or assets;
(i) any interest or title of a lessor in the property subject to any
Capitalized Lease or operating lease;
(j) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(k) Liens on property of, or on shares of Capital Stock or
Indebtedness of, any Person existing at the time such Person becomes, or
becomes a part of, any Restricted Subsidiary; provided that such Liens do
not extend to or cover any property or assets of the Company or any
Restricted Subsidiary other than the property or assets acquired;
(l) Liens in favor of the Company or any Restricted Subsidiary;
(m) Liens arising from the rendering of a final judgment or order
against the Company or any Restricted Subsidiary that does not give rise to
an Event of Default;
(n) Liens securing reimbursement obligations with respect to letters
of credit that encumber documents and other property relating to such
letters of credit and the products and proceeds thereof;
(o) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(p) Liens encumbering customary initial deposits and margin deposits,
and other Liens, in each case, securing Indebtedness under Commodity
Agreements, Interest Rate Agreements and Currency Agreements designed
solely to protect the Company or any of the Restricted Subsidiaries from
fluctuations in interest rates, currencies or the price of commodities;
22
(q) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Company or any of the Restricted Subsidiaries in the ordinary course of
business in accordance with the past practices of the Company and the
Restricted Subsidiaries prior to the Closing Date;
(r) Liens on any assets acquired by the Company or any Restricted
Subsidiary after the Closing Date, which Liens were in existence prior to
the acquisition of such assets (to the extent that such Liens were not
created in contemplation of or in connection with such acquisition),
provided that such Liens are limited to the assets so acquired and the
proceeds thereof;
(s) Liens Incurred in accordance with the Indenture in favor of this
Trustee under this Indenture;
(t) Liens arising by virtue of any statutory, regulatory, contractual
or warranty requirements of the Company or any Restricted Subsidiary,
including, without limitation, provisions relating to rights of offset and
set-off bankers' liens or similar rights and remedies; and
(u) Liens upon specific items of inventory or other goods and proceeds
of any Person securing such Person's obligations in respect of banker's
acceptance issued or created for the account of such Person to facilitate
the purchase, shipment or storage of such inventory or other goods.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof or any other entity.
"Physical Securities" shall have the meaning specified in Section 201.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 305 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen security.
"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 equity,
whether now outstanding or issued after the Closing Date, including, without
limitation, all series and classes of such preferred stock or preference stock.
"Private Placement Legend" has the meaning specified in Section 202.
"Public Equity Offering" means an underwritten primary public offering
of Common Stock of the Company pursuant to an effective registration statement
under the Securities Act.
23
A "Public Market" shall be deemed to exist if:
(a) a Public Equity Offering has been consummated and
(b) at least 15% of the total issued and outstanding Common Stock of
the Company has been distributed by means of an effective registration
statement under the Securities Act or sales pursuant to Rule 144 under the
Securities Act.
"Pulp and Paper Business" means the manufacture of pulp, paper and
packaging products and businesses related, ancillary or complementary thereto,
including, without limitation, (a) ownership and operation of forestry
businesses, (b) the production of raw materials such as wood, wood chips,
kaolin, caustic soda and precipitated calcium carbonate, (c) the manufacture of
primary products such as hardwood pulp, softwood pulp, coated or uncoated
freesheet, containerboard, linerboard, corrugating medium and boxboard, (d) the
manufacture of converted products such as newsprint, notebooks, stationary,
corrugated shipping containers, folding carton boxes, multiwall sacks and bags
and molded pulp products, (e) the performance of marketing and other operations
supporting such businesses and (f) the ownership and operating of assets used in
connection with any of the foregoing businesses, such as chemical, water
treatment and power generation assets.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Company or a Restricted Subsidiary
pursuant to which the Company or a Restricted Subsidiary may sell convey or
otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by
the Company or any Restricted Subsidiary) and (b) any other person (in the case
of a transfer by a Receivables Subsidiary), or may grant a security interest in,
any accounts receivable (whether now existing or arising in the future) of the
Company or any Restricted Subsidiary and any asset related thereto, including
without limitation, all collateral securing the accounts receivable, all
contracts and all guarantees or other obligations in respect of the accounts
receivable, proceeds of the accounts receivable and other assets which are
customarily transferred, or in respect of which security interests are
customarily granted, in connection with asset securitization transactions
involving accounts receivable.
"Receivables Subsidiary" means a Wholly Owned Subsidiary of the
Company which engages in no activities other than in connection with the
financing of accounts receivables and which is designated by the Board of
Directors (as provided below) as a Receivables Subsidiary:
(a) No portion of the Indebtedness or any other obligations
(contingent or otherwise) of which:
(i) is guaranteed by the Company or any other Restricted
Subsidiary (excluding guarantees of obligations (other than the
principal of, and interest on, Indebtedness) pursuant to Standard
Securitization Undertakings,
24
(ii) is recourse to or obligates the Company or any other
Restricted Subsidiary in any way other than pursuant to Standard
Securitization Undertakings, or
(iii) subjects any property or asset of the Company or any other
Restricted Subsidiary, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings;
(b) with which neither the Company nor any other Restricted Subsidiary
has any material contract, agreement or arrangement or understanding
(except in connection with a Qualified Receivables Transaction) other than
on terms no less favorable to the Company or such other Restricted
Subsidiary than those that might be obtained at the time from Persons that
are not Affiliates of the Company, other than fees payable in the ordinary
course of business in connection with servicing accounts receivable; and
(c) to which neither the Company nor any Restricted Subsidiary has any
obligation to maintain or preserve such entity's financial condition or
cause such entity to achieve certain levels of operating results.
Any designation of a Subsidiary of the Company as a Receivables
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the board resolution giving effect to such designation and an
Officers' Certificate certifying that the designation complied with the
preceding conditions and was permitted by this Indenture.
"Redemption Date," when used with respect to any Security to be
redeemed in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price (exclusive of accrued interest, if any) at which it is
to be redeemed pursuant to this Indenture.
"Reference Period" means the period commencing on the first day of the
Four Quarter Period and ending on the Transaction Date.
"Reference Treasury Dealer" means Xxxxxx Xxxxxxx & Co. Incorporated
and X.X. Xxxxxx Securities Inc., and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary U.S.
government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average as determined by
the Trustee, of the bid and asked prices of the Comparable Treasury Issue,
expressed in each case as a percentage of its principal amount, quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such Redemption Date.
"Refinancing Condition" means the first date on which the Company's
Consolidated Senior Indebtedness is equal to or less than 15% of the Company's
total consolidated Indebtedness.
25
"Registered Global Securities" shall have the meaning set forth in
Section 201.
"Registered Physical Securities" shall have the meaning set forth in
Section 201.
"Registrar" shall have the meaning specified in Section 204.
"Registration Rights Agreement" means Registration Rights Agreement
dated June 18, 2002, among the Company, Xxxxxx Xxxxxxx & Co. Incorporated and
Banc of America Securities LLC.
"Registration Statement" shall mean any registration statement of the
Company that covers any Securities and all amendments and supplements to any
such Registration Statement, including post-effective amendments, in each case
including the prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the January 1 or July 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Regulation S" shall have the meaning set forth in Section 201.
"Related Person" of any Person means any other Person that owns, or
any controlling Affiliate of any other Person that owns:
(a) 5% or more of the outstanding Common Stock of such Person or
(b) 5% or more of the Voting Stock of such Person.
"Released Indebtedness" means, with respect to any Asset Sale,
Indebtedness:
(a) which is owed by the Company or any Restricted Subsidiary (the
"Obligors") prior to such Asset Sale,
(b) which is assumed by the purchaser or any affiliate thereof or
forgiven or cancelled in connection with such Asset Sale and
(c) with respect to which the Obligors receive written unconditional
releases from each creditor no later than the closing date of such Asset
Sale.
"Remaining Scheduled Payments" means, with respect to each Security to
be redeemed, the remaining scheduled payments of the principal and interest that
would be due after the related Redemption Date but for such redemption;
provided, however, that if such Redemption Date is not an Interest Payment Date
with respect to such Security, the amount of the next succeeding scheduled
interest payment thereon will be reduced by the amount of interest accrued and
unpaid thereon to such Redemption Date.
"Replacement Assets" means, on any date, property or assets (other
than current assets) of a nature or type or that are used in a business (or an
Investment in a company having
26
property or assets of a nature or type, or engaged in a business) similar or
related to the nature or type of the property and assets of, or the business of,
the Company and the Restricted Subsidiaries existing on such date.
"Restricted Payments" shall have the meaning provided in Section 1009.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Rule 144A" shall have the meaning set forth in Section 201.
"S&P" means Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, and its successors.
"Securities" means any of the securities, as defined in the first
paragraph of the recitals hereof, that are authenticated and delivered under
this Indenture. For all purposes of this Indenture, the term "Securities" shall
include the Securities initially issued on the Closing Date and any other
Securities issued after the Closing Date under this Indenture. For purposes of
this Indenture, all Securities shall vote together as one series of Securities
under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Security Register" shall have the meaning specified in Section 204.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries,
(a) for the most recent fiscal year of the Company, accounted for more
than 10% of the consolidated revenues of the Company and the Restricted
Subsidiaries or
(b) as of the end of such fiscal year, was the owner of more than 10%
of the consolidated assets of the Company and the Restricted Subsidiaries,
all as set forth on the most recently available consolidated financial
statements of the Company for such fiscal year.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 306.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or any
Restricted Subsidiary which are reasonably customary in an accounts receivable
securitization transaction.
27
"Stated Maturity" means:
(a) with respect to any debt security, the date specified in such debt
security as the fixed date on which the final installment of principal of
such debt security is due and payable, and
(b) 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.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" shall have the meaning specified in Section
1012.
"Temporary Cash Investment" means any of the following:
(a) direct obligations of the United States of America or any agency
thereof or obligations fully and unconditionally guaranteed by the United
States of America or any agency thereof;
(b) time deposit accounts, certificates of deposit and money market
deposits maturing within 365 days of the date of acquisition thereof issued
by a bank or trust company which is organized under the laws of the United
States of America, any state thereof or any foreign country recognized by
the United States of America, and which bank or trust company has capital,
surplus and undivided profits aggregating in excess of $200 million (or the
foreign currency equivalent thereof) and has outstanding debt which is
rated "A" (or such similar equivalent rating) or higher by S&P or Moody's
or any money market fund sponsored by a registered broker dealer or mutual
fund distributor;
(c) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (a) above or clause
(f) below entered into with a bank or trust company meeting the
qualifications described in clause (b) above or clause (i) below;
(d) commercial paper maturing not more than 90 days after the date of
acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-l" (or higher) according to Moody's or "A-1" (or
higher) according to S & P;
(e) securities with maturities of six months or less from the date of
acquisition issued or fully and unconditionally guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by S&P or Moody's;
28
(f) Certificados de la Tesoreria de La Federacion (Cetes) or Bonos de
Desarrollo del Gobierno Federal (Bondes) issued by the Mexican government
and maturing not more than 365 days after the acquisition thereof;
(g) Investments in money market finds substantially all of whose
assets are comprised of securities of the types described in clauses (a)
through (f) above and clause (i) below, including, without limitation, the
JPMorgan Money Market Funds or any other mutual find for which the Trustee
or an Affiliate of the Trustee serves as investment manager, administrator,
shareholder or servicing agent, and/or custodian or subcustodian,
notwithstanding that (i) the Trustee or an affiliate of the Trustee
receives fees from such funds for services rendered, (ii) the Trustee
charges and collects fees for services rendered pursuant to this Indenture,
which fees are separate from the fees received by such finds, and (iii)
services performed for such funds and pursuant to this Indenture may at
times duplicate those provided to such funds by the Trustee or its
affiliate;
(h) demand deposit accounts with U.S. banks (or Mexican banks
specified in clause (i) of this definition) maintained in the ordinary
course of business; and
(i) certificates of deposit, bank promissory notes and bankers'
acceptances denominated in Pesos, maturing not more than 365 days after the
acquisition thereof and issued or Guaranteed by any one of the four largest
banks (based on assets as of the immediately preceding December 31)
organized under the laws of Mexico and which are not under intervention or
controlled by the Instituto para la Proteccion al Ahorro or any successor
thereto or any banking subsidiary of a foreign bank which has capital,
surplus and undivided profits aggregating in excess of $200 million (or the
foreign currency equivalent thereof) and has outstanding debt which is
rated "A" (or such similar equivalent rating) or higher by S&P or Moody's.
"Temporary Offshore Global Securities" shall have the meaning
specified in Section 201.
"Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries arising
in the ordinary course of business in connection with the acquisition of goods
or services.
"Transaction Date" means, with respect to the Incurrence of any
indebtedness, the date such Indebtedness is to be Incurred and, with respect to
any Restricted Payment, the date such Restricted Payment is to be made.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
29
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors in
the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Restricted Subsidiary (including any
newly acquired or newly formed Subsidiary of the Company) to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, the Company or any Restricted Subsidiary; provided
that:
(A) any Guarantee by the Company or any Restricted Subsidiary of any
Indebtedness of the Subsidiary being so designated shall be deemed an
"Incurrence" of such Indebtedness and an "Investment" by the Company or
such Restricted Subsidiary (or both, if applicable) at the time of such
designation;
(B) either
(i) the Subsidiary to be so designated has total assets of $1,000
or less or
(ii) if such Subsidiary has assets greater than $1,000, such
designation would be permitted under Section 1009; and
(C) if applicable, the Incurrence of Indebtedness and the Investment
referred to in subclause (A) of this definition would be permitted under
Section 1008 and Section 1009.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such designation and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately after such designation would, if Incurred at such
time, have been permitted to be Incurred (and shall be deemed to have been
Incurred) for all purposes of this Indenture.
Any such designation by the Board of Directors shall be evidenced to the Trustee
by promptly filing with the Trustee a copy of the Board Resolution giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing provisions.
30
"U.S. Physical Securities" shall have the meaning specified in Section
201.
"U.S. Global Securities" shall have the meaning specified in Section
201.
"Voting Stock' means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person,
the ownership of at least 97% of the outstanding Capital Stock of such
Subsidiary (other than any director's qualifying shares or Investments by
foreign nationals mandated by applicable law or de minimis shares required to be
owned by another Person under applicable law in order to maintain the corporate
status of such Subsidiary) by such Person or one or more Wholly Owned
Subsidiaries of such Person.
SECTION 102. Compliance Certificates.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Mexican Counsel or an Opinion of U.S. Counsel, as the case may be, if
to be given by counsel, and shall comply with the requirements of the Trust
Indenture Act and any other requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of. any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters
31
and one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than such Person's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such Person's authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any date as the record date for the purpose of determining
the Holders entitled to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action, or to vote on any action,
authorized or permitted to be given or taken by Holders. If not set by the
Company prior to the first solicitation of a Holder made by any Person in
respect of any such
32
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 701)
prior to such first solicitation or vote, as the case may be. With regard to any
record date, only the Holders on such date (or their duly designated proxies)
shall be entitled to give or take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
SECTION 105. Notices. Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration, or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
instrument or at any other address furnished in writing to the Trustee by the
Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at the address of the Holder as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be
33
made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with (a)
another provision hereof which is required to be included in this Indenture by
any of the provisions of the Trust Indenture Act, or (b) any provision of the
Trust Indenture Act that is required under such Act to be a part of and govern
this Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Payment
Date or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
the Interest Payment Date or Redemption Date, Payment Date or at the
34
Stated Maturity, provided that no interest shall accrue for the period from and
after such Interest Payment Date, Redemption Date, Payment Date or Stated
Maturity, as the case may be.
SECTION 114. Consent to Service; Jurisdiction.
Each party hereto irrevocably agrees that any legal suit, action or
proceeding arising out of or relating to this Indenture or the Securities may be
instituted in any federal or state court in the Borough of Manhattan, The City
of New York, waives any objection which it may now or hereafter have to the
laying of the venue of any such legal suit, action or proceeding, waives any
immunity from jurisdiction or to service of process in respect of any such suit,
action or proceeding, waives any right to which it may be entitled on account of
place of residence or domicile, and irrevocably submits to the jurisdiction of
any such court in any such suit, action or proceeding. The Company agrees that a
final judgment in any such suit, action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law in accordance with applicable law. The Company hereby
irrevocably waives any right to invoke jurisdiction it may have to any court by
virtue of Mexican law. The Company hereby appoints Durango Paper Company, 0000
Xxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxxxx Xxxxxxxx, as its
authorized agent upon which process may be served in any legal suit, action or
proceeding arising out of or relating to this Indenture or the Securities which
may be instituted in any federal or state court in the Borough of Manhattan, The
City of New York, and agrees that service of process upon such agent, and
written notice of said service to the Company by the person serving the same,
shall be deemed in every respect effective service of process upon the Company
in any such suit, action or proceeding and further designates its domicile, the
domicile of Durango Paper Company specified above and any domicile Durango Paper
Company may have in the future as its domicile to receive any notice hereunder
(including service of process). If for any reason Durango Paper Company (or any
successor agent for this purpose) shall cease to act as agent for service of
process as provided above, the Company will promptly appoint a successor agent
for this purpose reasonably acceptable to the Trustee. The Company agrees to
take any and all actions as may be necessary to maintain such designation and
appointment of such agent in full force and effect.
SECTION 115. Language of Notices, Etc.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Form.
The Securities and the Trustee's certificate of authentication shall
be substantially in the form annexed hereto as Exhibit A, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange agreements to
35
which the Company is subject or usage. The Company shall approve the form of the
Securities and any notation, legend or endorsement on the Securities.
The terms and provisions contained in the form of the Securities
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Indenture. To the extent applicable, the Company and the Trustee,
by their execution and delivery of this indenture, expressly agree to such terms
and provisions and to be bound thereby.
Securities offered and sold in reliance on Rule 144A under the
Securities Act ("Rule 144A") shall be issued initially in the form of one or
more permanent global Securities in registered form, substantially in the form
set forth in Exhibit A (the "U. S. Global Securities"), registered in the name
of the nominee of the Depositary, deposited with the Trustee, as custodian for
the Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the U.S. Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depositary, or its nominee,
in accordance with the instructions given by the Holder thereof, as hereinafter
provided.
Securities offered and sold in offshore transactions in reliance on
Regulation S under the Securities Act ("Regulation S") shall be issued initially
in the form of one or more temporary global Securities in registered form
substantially in the form set forth in Exhibit A (the "Temporary Offshore Global
Securities"), registered in the name of the nominee of the Depositary, deposited
with the Trustee, as custodian for the Depositary, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. At any time on or
after the date hereof, upon receipt by the Trustee and the Company of a
certificate substantially in the form of Exhibit B hereto, one or more permanent
global Securities in registered form substantially in the form set forth in
Exhibit A hereto (the "Permanent Offshore Global Securities"; and together with
the Temporary Offshore Global Securities, the "Offshore Global Securities"),
duly executed by the Company and authenticated by the Trustee as hereinafter
provided shall be deposited with the Trustee, as custodian for the Depositary,
or its nominee, and the Registrar shall reflect on its books and records the
date and a decrease in the principal amount of the Temporary Offshore Global
Securities in an amount equal to the principal amount of the beneficial interest
in the Temporary Offshore Global Securities transferred.
Securities issued and sold pursuant to a Registration Statement shall
be issued initially in the form of one or more permanent global Securities in
registered form, substantially in the form set forth in Exhibit A (the
"Registered Global Securities"), registered in the name of the nominee of the
Depositary, deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided.
Securities issued pursuant to Sections 206(b) in exchange for
interests in the U.S. Global Securities, the Offshore Global Securities or the
Registered Global Securities shall be in the form of permanent certificated
Securities in registered form substantially in the form set forth in Exhibit A
hereto (the "U.S. Physical Securities", the "Offshore Physical Securities" and
the "Registered Physical Securities", respectively).
36
The Offshore Physical Securities, U.S. Physical Securities and the
Registered Physical Securities are sometimes collectively herein referred to as
the "Physical Securities." The U.S. Global Securities, the Offshore Global
Securities and the Registered Global Securities are sometimes referred to herein
as the "Global Securities."
The definitive Securities shall be typed, printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
SECTION 202. Restrictive Legends.
Unless and until a Security is sold in connection with an effective
Registration Statement, (i) the U.S. Global Securities and U.S. Physical
Securities shall bear the legend set forth below (the "Private Placement
Legend") on the face thereof and (ii) the Offshore Physical Securities, until at
least the 41st day after the Closing Date and receipt by the Company and the
Trustee of a certificate substantially in the form of Exhibit B hereto, and the
Temporary Offshore Global Securities shall bear the legend set forth below on
the face thereof.
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITiES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR
(B)IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2)
AGREES THAT IT WiLL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT
(A) TO THE COMPANY OR ANY AFFILIATE THEREOF, (B) WITHIN THE UNITED STATES,
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER IN VIOLATION OF THE FOREGOING
RESTRICTIONS."
Each Global Security, shall also bear the following legend on the face
thereof:
37
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY 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 iN SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS iN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LiMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 206 OF THE INDENTURE."
SECTION 203. Authenticating Agent and Denominations.
The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such authenticating agent. An authenticating
agent has the same rights as an Agent to deal with the Company or an Affiliate
of the Company.
The Securities shall be issuable only in fully registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 204. Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (the "Registrar"), an
office or agency where Securities may be presented for payment (the "Paying
Agent") and an office or agency where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served, which shall be in
the Borough of Manhattan, The City of New York. The Company shall cause the
Registrar to keep a register of the Securities and of their transfer and
exchange (the "Security Register"). The Security Register shall be in written
form or any other form capable of being converted into written form within a
reasonable time. The Company may have one or more co-Registrars and one or more
additional Paying Agents.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name
38
and address of any such Agent and any change in the address of such Agent. If
the Company fails to maintain a Registrar, Paying Agent and/or agent for service
of notices and demands, the Trustee shall act as such Registrar, Paying Agent
and/or agent for service of notices and demands. The Company may remove any
Agent upon written notice to such Agent and the Trustee; provided that no such
removal shall become effective until (i) the acceptance of an appointment by a
successor Agent to such Agent as evidenced by an appropriate agency agreement
entered into by the Company and such successor Agent and delivered to the
Trustee or (ii) notification to the Trustee that the Trustee shall serve as such
Agent until the appointment of a successor Agent in accordance with clause (i)
of this proviso. The Company, any Subsidiary of the Company, or any Affiliate of
any of them may act as Paying Agent, Registrar or co-Registrar, and/or agent for
service of notice and demands.
The Company initially appoints the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands. 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 Holders and shall otherwise
comply with Trust Indenture Act ss. 312(a). If the Trustee is not the Registrar,
the Company shall furnish to the Trustee as of each Regular Record Date and at
such other times as the Trustee may reasonably request the names and addresses
of Holders as they appear in the Security Register, including the aggregate
principal amount of Securities held by each Holder.
SECTION 205. Paying Agent to Hold Money in Trust.
Not later than 11:00 a.m. (New York City time) on the day prior to
each due date of the principal, premium, if any, and interest on any Securities,
the Company shall deposit with the Paying Agent money in immediately available
funds sufficient to pay such principal, premium, if any, and interest so
becoming due. The Company shall require each Paying Agent other than the Trustee
to agree in writing that such Paying Agent shall hold in trust for the benefit
of the Holders or the Trustee all money held by the Paying Agent for the payment
of principal of, premium, if any, and interest on the Securities (whether such
money has been paid to it by the Company or any other obligor on the
Securities), and such Paying Agent shall promptly notify the Trustee of any
default by the Company (or any other obligor on the Securities) in making any
such payment. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee and account for any funds disbursed, and the
Trustee may at any time during the continuance of any payment default, upon
written request to a Paying Agent, require such Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed. Upon doing so,
the Paying Agent shall have no further liability for the money so paid over to
the Trustee. If the Company or any Subsidiary of the Company acts as Paying
Agent, it will, on or before each due date of any principal of, premium, if any,
or interest on the Securities, segregate and hold in a separate trust fund for
the benefit of the Holders a sum of money sufficient to pay such principal,
premium, if any, or interest so becoming due until such sum of money shall be
paid to such Holders or otherwise disposed of as provided in this Indenture, and
will promptly notify the Trustee of its action or failure to act.
39
SECTION 206. Book-Entry Provisions for Global Securities.
(a) The U.S. Global Securities, Offshore Global Securities and the
Registered Global Securities initially shall (i) be registered in the name of
the Depositary for such Global Securities or the nominee of such Depositary,
(ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear
legends as set forth in Section 202.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under such
Global Security, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Security.
(b) Transfers of a Global Security shall be limited to transfers of
such Global Security in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in
Global Securities may be transferred in accordance with the rules and procedures
of the Depositary and the provisions of Section 207. In addition, U.S. Physical
Securities, Offshore Physical Securities and Registered Physical Securities
shall be transferred to all beneficial owners in exchange for their beneficial
interests in the U.S. Global Securities, the Offshore Global Securities or the
Registered Physical Securities, as the case may be, if (i) the Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for the U.S. Global Securities, the Offshore Global Securities or the Registered
Global Securities, as the case may be, and a successor depositary is not
appointed by the Company within 90 days of such notice, (ii) an Event of Default
has occurred and is continuing and the Registrar has received a request from the
Depositary or (iii) in accordance with the rules and procedures of the
Depositary and the provisions of Section 207.
(c) Any beneficial interest in one of the Global Securities that is
transferred to a Person who takes delivery in the form of an interest in another
Global Security will, upon transfer, cease to be an interest in such Global
Security and become an interest in such other Global Security and, accordingly,
will thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Security for
as long as it remains such an interest.
(d) In connection with any transfer of a portion of the beneficial
interests in a Global Security to beneficial owners pursuant to paragraph (b) of
this Section 206, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of such Global Security in an amount
equal to the principal amount of the beneficial interest in such Global Security
to be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more U.S. Physical Securities, Offshore
Physical Securities or Registered Physical Securities, as the case may be, of
like tenor and amount.
40
(e) In connection with the transfer of the U.S. Global Securities, the
Offshore Global Securities or the Registered Global Securities, in whole, to
beneficial owners pursuant to paragraph (b) of this Section 206, the U.S. Global
Securities, Offshore Global Securities or the Registered Global Securities, as
the case may be, shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in the U.S. Global Securities, Offshore Global
Securities or Registered Global Securities, as the case may be, an equal
aggregate principal amount of U.S. Physical Securities, Offshore Physical
Securities or Registered Physical Securities, as the case may be, of authorized
denominations.
(f) Any U.S. Physical Security delivered in exchange for an interest
in the U.S. Global Securities pursuant to paragraph (b), (d) or (e) of this
Section 206 shall, except as otherwise provided by paragraph (f) of Section 207,
bear the legend regarding transfer restrictions applicable to the U.S. Physical
Security set forth in Section 202.
(g) Any Offshore Physical Security delivered in exchange for an
interest in the Offshore Global Securities pursuant to paragraph (b), (d) or (e)
of this Section 206 shall, except as otherwise provided by paragraph (f) of
Section 207, bear the legend regarding transfer restrictions applicable to the
Offshore Physical Security set forth in Section 202.
(h) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 207. Special Transfer Provisions.
Unless and until a Security is sold in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, the
following provisions shall apply:
(a) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security (other than
an Registered Security) to a QIB (excluding Non-U.S. Persons):
(i) If the Security to be transferred consists of (x) either Offshore
Physical Securities prior to the removal of the Private Placement Legend or
U.S. Physical Securities, the Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has checked the box
provided for on the form of Security stating, or has otherwise advised the
Company and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has signed
the certification provided for on the form of Security stating, or has
otherwise advised the Company and the Registrar in writing, that it is
purchasing the Security for its own account or an account with respect to
which it exercises sole investment discretion, that it and any such account
is a QIB and is aware that the sale to it is being made in reliance on Rule
144A, that it acknowledges that it has received such information regarding
the Company as it has requested pursuant to Rule 144A or has determined not
41
to request such information, and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the exemption
from registration provided by Rule 144A or (y) an interest in the U.S.
Global Securities, the transfer of such interest may be effected only
through the book entry system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the Security
to be transferred consists of either Offshore Physical Securities prior to
removal of the Private Placement Legend or U.S. Physical Securities, upon
receipt by the Registrar of the documents referred to in paragraph (i)
above and instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of U.S. Global
Securities in an amount equal to the principal amount of the Offshore
Physical Securities or U.S. Physical Securities to be transferred, and the
Trustee shall cancel the Offshore Physical Securities or U.S. Physical
Securities so transferred.
(b) Transfers of Interests in the Temporary Offshore Global
Securities. The following provisions shall apply with respect to registration of
any proposed transfer of an interest in a Temporary Offshore Global Securities:
(i) The Registrar shall register the transfer of any Security (x) if
the proposed transferee is a Non-U.S. Person and the proposed transferor
has delivered to the Registrar a certificate substantially in the form of
Exhibit C hereto or (y) if the proposed transferee is a QIB and the
proposed transferor has checked the box provided for on the form of
Security stating, or has otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance with the provisions of
Rule 144A to a transferee who has signed the certification provided for on
the form of Security stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the Security for its own
account or an account with respect to which it exercises sole investment
discretion, that it and any such account is a QIB and is aware that the
sale to it is being made in reliance on Rule 144A, that it acknowledges
that it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information, and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member, upon receipt by
the Registrar of the documents referred to in clause (i) above and
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the U.S. Global Securities in an
amount equal to the principal amount of the Temporary Offshore Global
Securities to be transferred, and the Trustee shall decrease the amount of
the Temporary Offshore Global Securities.
(c) Transfers of Interests in the Permanent Offshore Global Securities
or Unlegended Offshore Physical Securities. The following provisions shall apply
with respect to any transfer of interests in Permanent Offshore Global
Securities or unlegended Offshore
42
Physical Securities. The Registrar shall register the transfer of any such
Security without requiring any additional certification.
(d) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of a Security (other than a
Registered Security) to a Non-U.S. Person:
(i) Prior to August 3, 2002 the Registrar shall register any proposed
transfer of a Security to a Non-U.S. Person upon receipt of a certificate
substantially in the form of Exhibit C hereto from the proposed transferor.
(ii) On and after August 3, 2002 the Registrar shall register any
proposed transfer of a Security to any Non-U.S. Person if the Security to
be transferred is a U.S. Physical Security or an interest in U.S. Global
Securities, upon receipt of a certificate substantially in the form of
Exhibit C hereto from the proposed transferor.
(iii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Securities, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (ii) and (y)
instructions in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the U.S. Global Securities in an
amount equal to the principal amount of the beneficial interest in the U.S.
Global Securities to be transferred, and (b) if the proposed transferee is
an Agent Member, upon receipt by the Registrar of instructions given in
accordance with the Depositary's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase
in the principal amount of the Offshore Global Securities in an amount
equal to the principal amount of the U.S. Physical Securities or the U.S.
Global Securities, as the case may be, to be transferred, and the Trustee
shall cancel the Physical Security, if any, so transferred or decrease the
amount of the U.S. Global Securities.
(e) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless (i) the Private Placement Legend is no
longer required by Section 202, or (ii) there is delivered to the Registrar an
Opinion of U.S. Counsel reasonably satisfactory to the Company and the Trustee
to the effect that neither such legend nor the related restrictions on transfer
are required in order to maintain compliance with the provisions of the
Securities Act.
(f) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture. The Registrar shall not register a transfer of any Security
unless such transfer complies with the restrictions on transfer of such Security
set forth in this Indenture. In connection with any transfer of Securities, each
Holder
43
agrees by its acceptance of the Securities to furnish the Registrar or the
Company such certifications, legal opinions or other information as either of
them may reasonably require to confirm that such transfer is being made pursuant
to an exemption from, or a transaction not subject to, the registration
requirements of the Securities Act; provided that the Registrar shall not be
required to determine (but may rely on a determination made by the Company with
respect to) the sufficiency of any such certifications, legal opinions or other
information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 206 or this Section 207. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
SECTION 208. Outstanding Securities
Securities outstanding at any time are all Securities that have been
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation and those described in this Section 208 as not
outstanding.
If a Security is replaced pursuant to Section 305, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a bona fide
purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on the maturity date money sufficient to pay Securities payable
on that date, then on and after that date such Securities cease to be
outstanding and interest on them shall cease to accrue.
A Security does not cease to be outstanding because the Company or one
of its Affiliates holds such Security; provided, however, that in determining
whether the Holders of the requisite principal amount of the outstanding
Securities have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee has actual knowledge to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
The Company has initially authorized the execution and delivery of
US$175,000,000 of Securities under this Indenture. The Securities shall be known
and designated as the "13 3/4% Senior Notes due 2009" of the Company. Their
Stated Maturity shall be July 15, 2009, and they shall bear interest at the rate
of 13-3/4% per annum, from the Closing
44
Date, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, as the case may be, payable semiannually on January
15 and July 15, commencing January 15, 2003, until the principal thereof is paid
or made available for payment.
The principal of and interest on the Securities shall be payable at
the office or agency of the Company in The City of New York maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
The Company shall pay Additional Amounts, and the Securities shall be
subject to redemption by the Company, as provided in Sections 1019 and 1101.
The Securities shall be subject to repurchase by the Company pursuant
to an Offer to Purchase as provided in Sections 1016 and 1017.
The Securities shall be subject to Defeasance at the option of the
Company as provided in Article Twelve.
SECTION 302. Execution, Authentication, Delivery and Dating.
Subject to Article Ten and applicable law, the aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited. The Securities shall be executed on behalf of the
Company by its Chairman of the Board of Directors, its Vice Chairman of the
Board of Directors, its President or one of its Vice Presidents. The signature
of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; provided that the Trustee shall
be entitled to receive an Officers' Certificate and an Opinion of U.S. Counsel
of the Company in connection with the authentication and delivery of such
Securities. Such Company Order shall specify the amount of Securities to be
authenticated and the date on which the original issue of Securities is to be
authenticated and, in the case of an issuance of Securities pursuant to Section
311, shall certify that such issuance is in compliance with Article Ten. Upon
receipt of such documents, the Trustee in accordance with such Company Order
shall authenticate and make such Securities available for delivery.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and
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such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
SECTION 303. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 1002, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 304. Transfer and Exchange.
A Holder may transfer a Security only by written application to the
Registrar stating the name of the proposed transferee and otherwise complying
with the terms of this Indenture. No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Registrar in the Security
Register. Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee, and any agent of the Company shall treat the
person in whose name the Security is registered as the owner thereof for all
purposes whether or not the Security shall be overdue, and neither the Company,
the Trustee, nor any such agent shall be affected by notice to the contrary.
Furthermore, any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interests in such Global Security
may be effected only through a book entry system maintained by the Holder of
such Global Security (or its agent) and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the
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Securities to be exchanged at such office or agency. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and to the Security Registrar duly executed, by the
Holder thereof or an attorney for such Holder duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 305 or 906 or in accordance with any Offer to
Purchase pursuant to Section 1016 or 1017.
The Company shall not be required to issue, register the transfer of
or exchange any Security (i) for a period of 15 prior to any Interest Payment
Date or (ii) called or being called for redemption under Section 1101.
SECTION 305. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
tberefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (b) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
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Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 306. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable and is punctually paid or
duly provided for on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) 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 in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause (a) provided. Thereupon the Trustee
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 ten days prior to the date of
the proposed payment and not less than ten days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify the
Company 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 the address of such Holder as it appears in the Security
Register, 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 so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Securities (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (b).
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(b) 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 Securities may be listed, and upon such notice as may be
required by such exchange, if after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause (b), such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 307. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 306) interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 308. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any Offer to Purchase pursuant to
Section 1016 or 1017 shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of as directed by a Company Order.
SECTION 309. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
SECTION 310. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" or "ISIN"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" or
"ISIN" 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 Securities or as contained
in any notice of a redemption, and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in, or omission of, such numbers.
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SECTION 311. Issuance of Additional Securities,
The Company may, subject to Article Ten and applicable law, issue
additional Securities under this Indenture. The Securities issued on the Closing
Date and any additional Securities subsequently issued shall be treated as a
single class for all purposes under this Indenture.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:
(a) either
(i) all Securities theretofore authenticated and delivered (other than
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306) have been delivered to the Trustee
for cancellation and the Company has paid all sums payable by it thereunder; or
(ii) all such Securities not theretofore delivered to the Trustee for
cancellation have become due and payable or will become due and payable at their
Stated Maturity within one year or will be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company, and
the Company has deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire Indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal of, premium, if any, and interest to the date of such deposit (in the
case of Securities which have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be (in the case of Securities which will
become due and payable at their Stated Maturity within one year or which will be
called for redemption within one year);
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate,
an Opinion of Mexican Counsel and an Opinion of U.S. Counsel, each stating that
all conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with and that such satisfaction
and discharge will not result in a breach or violation of, or constitute a
default hereunder or under any other material agreement or instrument (which, in
the case of the Opinion of Mexican Counsel and the Opinion of U.S. Counsel,
would be any other material agreement or instrument identified to such counsel
by the
50
Company) to which the Company or any of its Restricted Subsidiaries is a party
or by which the Company or any of its Restricted Subsidiaries is bound.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of
this Section 401, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee; but such money
need not be segregated from other funds except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) default in the payment of principal of (or premium, if any, on)
any Security when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise;
(b) default in the payment of interest on any Security when the same
becomes due and payable, and such default continues for a period of 30
consecutive days;
(c) default in the performance or breach of the provisions of Section
801 hereof or the failure by the Company to make or consummate an Offer to
Purchase in accordance with Sections 1016 or 1017;
(d) the Company defaults in the performance of or breaches any other
covenant or agreement in this Indenture or under the Securities (other than
a default specified in clause (a), (b) or (c) above) and such default or
breach continues for a period of 30 consecutive days after written notice
by the Trustee or the Holders of 25% or more in aggregate principal amount
of the Securities;
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(e) there occurs with respect to any issue or issues of Indebtedness
of the Company or any Significant Subsidiary having an outstanding
principal amount of $25 million or more in the aggregate for all such
issues of all such Persons, whether such Indebtedness now exists or shall
hereafter be created, (i) an event of default that has caused the holder
thereof to declare such Indebtedness to be due and payable prior to its
Stated Maturity and such Indebtedness has not been discharged in full or
such acceleration has not been rescinded or annulled within 30 consecutive
days of such acceleration and/or (ii) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such
defaulted payment shall not have been made, waived or extended within 30
days of such payment default;
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $25 million in the aggregate for all such
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company or any Significant Subsidiary and shall not be
paid or discharged, and there shall be any period of 60 consecutive days
following entry of the final judgment or order that causes the aggregate
amount for all such final judgments or orders outstanding and not paid or
discharged against all such Persons to exceed $25 million during which a
stay of enforcement of such final judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree or
order for: (i) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy, concurso
mercantil, insolvency or other similar law now or hereafter in effect, (ii)
appointment of a receiver, liquidator, assignee, sindico, conciliador,
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 (iii) 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
(h) the Company or any Significant Subsidiary (i) commences a
voluntary case under any applicable bankruptcy, concurso mercantil,
insolvency or other similar law now or hereafter in effect, or consents to
the entry of an order for relief in an involuntary case under any such law,
(ii) consents to the appointment of or taking possession by a receiver,
liquidator, assignee, sindico, conciliador, 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, (iii) effects any general
assignment for the benefit of creditors.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 501 that occurs with respect to the Company) occurs
and is continuing under this Indenture, the Trustee or the Holders of at least
25% in aggregate principal amount of the then Outstanding Securities, 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
52
principal of premium, if any, and accrued interest on such Securities to be
immediately due and payable. Upon a declaration of acceleration, such principal
of, premium, if any, and accrued interest shall be immediately due and payable.
In the event of a declaration of acceleration because an Event of Default set
forth in clause (e) of Section 501 has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if the
event triggering such Event of Default pursuant to clause (e) of Section 501
shall be remedied or cured by the Company or the relevant Significant Subsidiary
or waived by the holders of the relevant Indebtedness within consecutive 60 days
after the declaration of acceleration with respect thereto. If an Event of
Default specified in clause (g) or (h) of Section 501 occurs with respect to the
Company, the principal of, premium, if any, and accrued interest on the then
Outstanding Securities shall automatically become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(a) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 consecutive days, or
(b) default is made in the payment of the principal of any Security at
the Maturity thereof or, with respect to any Security required to have been
purchased pursuant to an Offer to Purchase made by the Company, at the Payment
Date thereof;
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest, and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and on
any overdue interest, at the rate borne by the Securities, and, in addition
thereto, 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.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as Trustee of an express trust, may institute
judicial proceedings for the collection of the sums so due and unpaid, and may
prosecute such proceedings to judgment or final decree, and may enforce the same
against the Company and collect the moneys adjudged or decreed to be payable in
the manner provided by law out of the property of the Company, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
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SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official 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 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 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or interest,
upon presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively.
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SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee indemnity
satisfactory to the Trustee against the costs, liabilities and expenses to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, premium, if any, and (subject to Section
306) interest on such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date or in the
case of an Offer to Purchase made by the Company and required to be accepted as
to such Security, on the Payment Date) and to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all
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rights and remedies of the Trustee and the Holders shall continue as though no
such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 305, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
The Holders of at least majority in aggregate principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee; provided that the
Trustee shall have the right to refuse to follow any direction that:
(a) conflicts with any rule of law or with this Indenture, or
(b) might involve it in personal liability or that the Trustee
determines in good faith be unjustly prejudicial to the Holders not taking part
in such action; and
the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of at least a majority in aggregate principal amount of
the Outstanding Securities, by written notice to the Company and the Trustee,
may waive all past defaults hereunder and rescind and annul a declaration of
acceleration and its consequences if:
(a) all existing Events of Default, other than the nonpayment of the
principal of, premium, if any, and interest on the Securities that have
become due solely by such declaration of acceleration, have been cured or
waived; and
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(b) the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction.
Upon any such waiver, such defaults 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 consequent thereon.
SECTION 514. 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, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs,
including attorneys fees, against any such party litigant, in the manner and to
the extent provided in the Trust Indenture Act; provided that neither this
Section 514 nor the Trust Indenture Act shall be deemed to authorize any court
to require such an undertaking or to make such an assessment in any suit
instituted by any Holder or group of Holders holding more than 10% in aggregate
principal amount of the Outstanding Securities or the Trustee.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of; any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 601.
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SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default hereunder as
and to the extent provided by the Trust Indenture Act; provided, however, that
in the case of any default of the character specified in clause (d) of Section
501 no such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the
written advice of such counsel, any Opinion of Mexican Counsel or any
Opinion of U.S. Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
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(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Indenture.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTiON 605. May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Sections 608 and 613, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Trustee from time to time such compensation as shall
be agreed in writing between the Company and the Trustee for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(c) to indemnify each of the Trustee and any predecessor trustee for,
and to hold it harmniess against, any and all loss, liability, damage, claim or
expense, including taxes (other than taxes based on the income of the Trustee),
incurred without negligence or bad faith
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on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company
under Section 607, the Trustee shall have a lien prior to the Securities as to
all property and funds held by it hereunder for any amount owing to it or any
predecessor Trustee pursuant to this Section 607, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section clauses (g) or (h) of Section 501,
the expenses (including the reasonable charges and expenses of its counsel) and
the compensation for its services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Disqualification: Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required: Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and its Corporate
Trust Office in The City of New York. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of a federal
or state supervising or examining authority, then, for the purposes of this
Section, the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 609, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal: Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in aggregate principal amount of the Outstanding Securities, delivered
to the Trustee and to the Company.
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(d) If at any time (i) the Trustee shall fail to comply with Section
608 after written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months, or, (ii) the Trustee
shall cease to be eligible under Section 609 and shall fail to resign after
written request therefor by the Company or by any such Holder, or (iii) the
Trustee shall become incapable of acting or shall be adjudged bankrupt or
insolvent or a receiver of the Trustee or of its property shall be appointed or
any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (A) the Company by a Board Resolution may
remove the Trustee, or (B) subject to Section 514, any Holder who has been a
bona fide Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
(e) If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of notice of
resignation or removal, the Trustee resigning or being removed may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(f) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Trustee and supersede the successor Trustee appointed by
the Company. If no successor Trustee shall have been so appointed by the Company
or the Holders and accepted appointment in the manner hereinafter provided, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee.
(g) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 106. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
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the Company shall execute any and all instruments for more fully and certainty
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided that
such corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
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SECTION 702. Preservation of 1nformation; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act,
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto. If
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
60 days after each April 15 following the date of this Indenture, deliver to
Holders a brief report, dated as of such April 15, which complies with the
provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee when the Securities are listed on any stock
exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).
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ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company will not consolidate with, merge with or into, or sell,
convey, transfer, lease or otherwise dispose of all or substantially all of its
property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person or permit any
Person to merge with or into it unless:
(a) it shall be the continuing Person, or the Person (if other than
it) formed by such consolidation or into which it is merged or that acquired or
leased such property and assets of it shall be a corporation organized and
validly existing under the laws of Mexico, the United States of America or any
jurisdiction thereof and shall expressly assume, by a supplemental indenture to
this Indenture, executed and delivered to the Trustee, all of the Company's
obligations hereunder and under the Securities;
(b) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing;
(c) immediately after giving effect to such transaction on a pro forma
basis, the Company or any Person becoming the successor obligor of the
Securities, as the case may be, shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately prior to such
transaction;
(d) immediately after giving effect to such transaction on a pro forma
basis the Company, or any Person becoming the successor obligor of the
Securities, as the case may be, could Incur at least $1.00 of Indebtedness under
the first paragraph of clause (a) of Section 1008; provided that this clause (d)
shall not apply to a consolidation or merger with, or into a Wholly Owned
Subsidiary with a positive net worth; provided further that, in connection with
any such merger or consolidation, no consideration (other than Common Stock in
the surviving Person or the Company) shall be issued or distributed to the
stockholders; and
(e) the Company delivers to the Trustee an Officers' Certificate
(attaching the arithmetic computations to demonstrate compliance with clauses
(c) and (d)) and Opinion of U.S. Counsel, in each case stating that such
consolidation, merger or transfer and such supplemental indenture complies with
this provision and that all conditions precedent provided for herein relating to
such transaction have been complied with; provided, however, that (i) clauses
(c) and (d) above do not apply if, in the good faith determination of the
Company's Board of Directors, whose determination shall be evidenced by a Board
Resolution, the principal purpose of such transaction is to change the
jurisdiction of incorporation of the Company or to incorporate the Company in
the United States, (ii) any Restricted Subsidiary may consolidate with, merge
into or transfer all or part of its properties and assets to the Company. Until
the Refinancing Condition has occurred, the Company and the Restricted
Subsidiaries will not be permitted to consummate the ACM Merger. Once the
Refinancing Condition has occurred, the ACM Merger may be consummated, so long
as the Company complies with clause (d) of Section
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1008 and so long as ACM's Indebtedness at the time of the merger does not exceed
ACM's total Indebtedness on the Closing Date.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(a) provide for the Guarantees of the Securities by the Initial
Subsidiary Guarantors;
(b) to cure any ambiguity, defect or inconsistency in this Indenture,
provided that such action pursuant to this clause (b) shall not adversely affect
the interests of the Holders in any material respect;
(c) to comply with the provisions of Section 801 or Section 1012;
(d) comply with any requirements of the Commission in connection with
the qualification of this Indenture under the Trust Indenture Act;
(e) evidence and provide for the acceptance of appointment by a
successor Trustee; or
(f) make any change that, in the good faith opinion of the Company's
Board of Directors, does not materially and adversely affect the rights of any
Holder.
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SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Security;
(b) reduce the principal amount of, or premium, if any, or interest
on, any Security;
(c) change the optional redemption dates or optional redemption prices
of the Securities from that stated in clause (a) of Section 1101;
(d) change the place or currency of payment of principal of, or
premium, if any, or interest on, any Security;
(e) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity (or, in the case of a redemption, on or
after the Redemption Date) of any Security;
(f) reduce the above stated percentage of Outstanding Securities the
consent of whose Holders is necessary to modify or amend this Indenture pursuant
to this Section 902;
(g) waive a default in the payment of principal of, premium, if any,
or interest on the Securities;
(h) reduce the percentage or aggregate principal amount of Outstanding
Securities the consent of whose Holders is necessary for waiver of compliance
with certain provisions of this Indenture under Section l021 or for waiver of
certain defaults under Section 513; or
(i) following the mailing of an offer with respect to an Offer to
Purchase pursuant to Section 1016 or 1017, modify the provisions of this
Indenture with respect to such Offer to Purchase in a manner adverse to such
Holder.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
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SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Mexican Counsel and an Opinion of U.S. Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 907. Notice of Supplemental Indentures.
Promptly after the effective date of each supplemental indenture, the
Company shall mail or shall cause to be mailed to Holders a notice briefly
describing the substance of such supplemental indenture; provided that the
failure to give such notice to any Holder, or any defect therein, will not
impair or affect the validity or such supplemental indenture.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and interest
on the Securities in accordance with the terms of the Securities and this
Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in The City of New York an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan in The City of New
York) where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations. The Company will
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.
SECTION 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will (a) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and (b) during the continuance of any default
by the Company (or any other obligor upon the Securities) in the
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making of any payment in respect of the Securities, upon the written request of
the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
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 or interest on any
Security and remaining unclaimed for two years after such principal or interest
has become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general 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 a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, 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 publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 90 days after the end
of each fiscal year, an Officers' Certificate, stating that a review has been
conducted of the activities of the Company and its Restricted Subsidiaries and
the Company's and its Restricted Subsidiaries' performance under this Indenture
and that the Company has fulfilled all obligations hereunder, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default and the nature and status thereof. In addition, the Company must
immediately notify the Trustee of any default or defaults in the performance of
any covenants or agreements under this Indenture.
SECTION 1005. Existence
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
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SECTION 1006. Maintenance of Properties.
The Company will cause all properties material to the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (b)
all lawful material claims for labor, materials and supplies which, if unpaid,
might by law become a lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which a reserve is being maintained in
accordance with Mexican GAAP.
SECTION 1008. Limitation on Indebtedness.
(a) Other than the Securities and Indebtedness existing on the Closing
Date, the Company will not, and will not permit any of the Restricted
Subsidiaries to, Incur any Indebtedness; provided that the Company may Incur
Indebtedness if, after giving effect to the Incurrence of such Indebtedness and
the receipt and application of the proceeds therefrom, the Interest Coverage
Ratio would be no less than 2.0:1.
Notwithstanding the foregoing, the Company and any Restricted
Subsidiary (except as specified below) may Incur each and all of the following:
(i) Indebtedness of the Company or a Restricted Subsidiary if, after giving
effect to the Incurrence of such Indebtedness and receipt and application of the
proceeds therefrom, (A) the Interest Coverage Ratio would be no less than 2.0:1
and (B) the Consolidated Senior Indebtedness Interest Coverage Ratio would be no
less than 4.0:1; provided that no Indebtedness may be incurred under this sub
clause (a)(i) unless the Refinancing Condition has occurred or occurs
simultaneously with the incurrence of any Indebtedness under this subclause
(a)(i), and provided further that any Indebtedness incurred under this subclause
(a)(i) may only be Incurred in connection with Asset Acquisitions; (ii)
Indebtedness of the Company or a Restricted Subsidiary not to exceed the greater
of (A) $50 million or (B) 2.75% of Adjusted Consolidated Net Tangible Assets;
provided that any Indebtedness incurred or assumed under this subclause (a)(ii)
may not be incurred or assumed in connection with the ACM Merger; (iii)
Indebtedness owed: (A) to the Company by a Restricted Subsidiary which is
evidenced by an unsubordinated promissory note, (B) to any Restricted
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Subsidiary by the Company, or (C) to a Restricted Subsidiary by a Restricted
Subsidiary; provided that (I) any event which results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of
such Indebtedness (other than to the Company or another Restricted Subsidiary)
shall be deemed, in each case, to constitute an Incurrence of such Indebtedness
not permitted by this subclause (a)(iii) and (II) if the Company is the obligor
on such Indebtedness, such Indebtedness must be expressly subordinated in right
of payment to the Securities, once they have become due and payable, whether at
Stated Maturity, by acceleration or otherwise; (iv) Indebtedness issued in
exchange for, or the net proceeds of which are used to refinance or refund, then
outstanding Indebtedness (other than Indebtedness outstanding under subclause
(a)(iii)) and any refinancings thereof in an amount not to exceed the amount so
refinanced or refunded (plus premiums, accrued interest, fees and expenses);
provided that (A) Indebtedness the proceeds of which are used to refinance or
refund the Securities or Indebtedness that is pari passu with, or subordinated
in right of payment to, the Securities shall only be permitted under this
subclause(a)(iv) if (I) in case the Securities are refinanced in part or the
Indebtedness to be refinanced is pari passu with the Securities, such new
Indebtedness, by its terms or by the terms of any agreement or instrument
pursuant to which such new Indebtedness is outstanding, is expressly made pari
passu with, or subordinate in right of payment to, the remaining Securities, or
(II) in case the Indebtedness to be refinanced is subordinated in right of
payment to the Securities, such new Indebtedness, by its terms or by the terms
of any agreement or instrument pursuant to which such new Indebtedness is issued
or remains outstanding, is expressly made subordinate in right of payment to the
Securities at least to the extent that the Indebtedness to be refinanced is
subordinated to the Securities; (B) such new Indebtedness, determined as of the
date of Incurrence of such new Indebtedness, does not have a Stated Maturity
earlier than the Stated Maturity of the Indebtedness to be refinanced or
refunded, and the Average Life of such new Indebtedness is at least equal to the
remaining Average Life of the Indebtedness to be refinanced or refunded; and (C)
such new Indebtedness is Incurred by the Company or by the Restricted Subsidiary
that is the obligor on the Indebtedness to be refinanced or refunded; and
provided further that in no event may Indebtedness of the Company be refinanced
by means of any Indebtedness of any Restricted Subsidiary pursuant to this
subclause (a)(iv); (v) Indebtedness (A) in respect of bid, reimbursement,
performance, surety or appeal bonds or obligations provided in the ordinary
course of business, including Guarantees and letters of credit functioning or
supporting these bonds or obligations (in each case, other than for an
obligation for money borrowed); (B) under Currency Agreements, Commodity
Agreements and Interest Rate Agreements; provided that such agreements (I) are
designed solely to protect the Company or its Restricted Subsidiaries against
fluctuations in foreign currency exchange rates, commodity prices or interest
rates and (II) do not increase the Indebtedness of the obligor outstanding at
any time other than as a result of fluctuations in foreign currency exchange
rates, interest rates or commodity prices or by reason of fees, indemnities and
compensation payable thereunder; and (C) arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or from
Guarantees or letters of credit, surety bonds or performance bonds securing any
obligations of the Company or any of its Restricted Subsidiaries pursuant to
such agreements, in any case Incurred in connection with the disposition of any
business, assets or Restricted Subsidiary of the Company (other than Guarantees
of Indebtedness Incurred by any Person acquiring all or any portion of such
business, assets or Restricted Subsidiary of the Company for the purpose of
financing such acquisition), in a principal amount not to exceed the gross
proceeds actually received by the Company or any Restricted Subsidiary
71
in connection with such disposition; (vi) Indebtedness of the Company, to the
extent the net proceeds thereof are promptly (A) used to purchase Securities
tendered in an Offer to Purchase made as a result of a Change in Control or (B)
deposited to defease the Securities as allowed under Article Twelve hereof,
(vii) Guarantees of the Securities and Guarantees of Indebtedness of the Company
or any Restricted Subsidiary by any Restricted Subsidiary provided the Guarantee
of such Indebtedness is permitted by and made in accordance with Section 1012;
(viii) Guarantees by the Company of Indebtedness of any Restricted Subsidiary
permitted hereunder.
(b) Notwithstanding any other provision of this Section 1008, the
maximum amount of Indebtedness that may be Incurred pursuant to this Section
1008 will not be deemed to be exceeded, with respect to any outstanding
Indebtedness due solely to the result of fluctuations in the exchange rates of
currencies.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 1008: (i) Guarantees, Liens or obligations with respect to
letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included and (ii) any Liens
granted pursuant to the equal and ratable provisions of Section 1014 shall not
be treated as Indebtedness.
(d) Irrespective of whether or not the Company could incur additional
indebtedness under clause (a) of this Section 1008, the Company will not and
will not permit any of the Restricted Subsidiaries to incur or assume any
Indebtedness in connection with the ACM Merger prior to the occurrence of the
Refinancing Condition. Subsequent to the Refinancing Condition, the Company may
incur or assume additional Indebtedness with respect to the ACM Merger if: (1)
after giving effect to the incurrence of the Indebtedness with respect to the
ACM Merger and the receipt and application of the proceeds, the Interest
Coverage Ratio would be no less than 3.0:1, (ii) the Indebtedness, determined as
of the date of its incurrence, does not have a Stated Maturity earlier than the
Stated Maturity of the Securities and (iii) that Indebtedness is subordinated or
made subordinated in right of payment to the Securities and the subordination
provisions are substantially similar to those attached herein as Exhibit B.
For purposes of determining compliance with this Section 1008, in the
event that an item of Indebtedness meets the criteria of more than one of the
types of Indebtedness described in this Section 1008, including under the first
paragraph hereof, the Company, in its sole discretion, shall classify, and from
time to time may reclassify, such item of Indebtedness.
SECTION 1009. Limitation on Restricted Payments.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly (a) declare or pay any dividend or make any
distribution on or with respect to its Capital Stock other than (i) dividends or
distributions payable solely in shares of its Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to acquire shares of
such Capital Stock, (ii) dividends or distributions payable to the Company or a
Restricted Subsidiary, and (iii) pro rata dividends or distributions on Capital
Stock of Restricted Subsidiaries held by minority stockholders; provided that
such dividends do not in the aggregate exceed the minority stockholders' pro
rata share of such Restricted Subsidiaries' net income from the first day of the
fiscal quarter beginning immediately following the Closing Date held by
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Persons other than the Company or any of its Restricted Subsidiaries; (b)
purchase, call for redemption or redeem, retire or otherwise acquire for value
any shares of Capital Stock of (i) the Company (including options, warrants or
other rights to acquire such shares of Capital Stock) held by any Person or (ii)
a Restricted Subsidiary (including options, warrants or other rights to acquire
such shares of Capital Stock) held by any of the Company's Affiliates (other
than a Wholly Owned Restricted Subsidiary) or any holder (or any Affiliate of
such holder) of 5% or more of the Capital Stock of the Company; (c) make any
voluntary or optional principal payment, or voluntary or optional redemption,
repurchase, defeasance, or other acquisition or retirement for value, of
Indebtedness of the Company that is subordinated in right of payment to the
Securities prior to the Stated Maturity of such Indebtedness; or (d) make any
Investment, other than a Permitted Investment, in any Person (such payments or
any other actions described in subclauses (a) through (d) above being
collectively "Restricted Payments") if, at the time of, and after giving effect
to, the proposed Restricted Payment: (i) a Default or Event of Default shall
have occurred and be continuing, (ii) the Company could not Incur at least $1.00
of Indebtedness under the first paragraph of clause (a) of Section 1008 or (iii)
the aggregate amount of all Restricted Payments made after the Closing Date
shall exceed the sum of (A) 50% of the aggregate amount of the Adjusted
Consolidated Net Income (or, if the Adjusted Consolidated Net Income is a loss,
minus 100% of the amount of such loss) (determined by excluding income resulting
from transfers of assets by the Company or a Restricted Subsidiary to an
Unrestricted Subsidiary) accrued on a cumulative basis during the period (taken
as one accounting period) beginning on the first day of the fiscal quarter
immediately following the Closing Date and ending on the last day of the last
fiscal quarter preceding the Transaction Date, plus (B) the aggregate Net Cash
Proceeds received by the Company after the Closing Date as a capital
contribution or from the issuance and sale permitted by this Indenture of the
Company's Capital Stock (other than Disqualified Stock) to a Person who is not a
Restricted Subsidiary of the Company, including an issuance or sale permitted by
this Indenture of Indebtedness of the Company for cash subsequent to the Closing
Date upon the conversion of such Indebtedness into the Company's Capital Stock
(other than Disqualified Stock), or from the issuance to a Person who is not a
Restricted Subsidiary of the Company of any options, warrants or other rights to
acquire the Company's Capital Stock (in each case, exclusive of any Disqualified
Stock or any options, warrants or other rights that are redeemable at the option
of the holder, or are required to be redeemed, prior to the Stated Maturity of
the Securities), plus (C) an amount equal to the net reduction in Investments
(other than reductions in Permitted Investments) in any Person resulting from
payments of interest on Indebtedness, dividends, repayments of loans or
advances, or other transfers of assets, in each case to the Company or any
Restricted Subsidiary or from the Net Cash Proceeds from the sale or redemption
of any such Investment (except, in each case, to the extent any such payment or
proceeds are included in the calculation of Adjusted Consolidated Net Income),
or from redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of "Investments"), not to
exceed, in each case, the amount of Investments (and treated as a Restricted
Payment) previously made by the Company or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary.
The foregoing covenant shall not be violated by reason of (a) the
payment of any dividend or redemption of any Capital Stock within 60 days after
the related date of declaration or call for redemption if, at such date of
declaration or call for redemption, such payment or redemption would comply with
the first paragraph of this Section 1009; (b) the redemption, repurchase,
defeasance or other acquisition or retirement for value of Indebtedness that is
73
subordinated in right of payment to the Securities, including premium, if any,
and accrued interest, with the proceeds of, or in exchange for, Indebtedness
Incurred under subclause (iv) of the second paragraph of clause (a) of Section
1008; (c) the making of any principal payment or the repurchase, redemption,
retirement, defeasance or other acquisition for value of Indebtedness which is
subordinated in right of payment to the Securities in exchange for, or out of
the proceeds of a substantially concurrent offering of shares of the Company's
Capital Stock (other than Disqualified Stock) or options, warrants or other
rights to acquire such Capital Stock; provided that such options, warrants or
other rights are not redeemable prior to the Stated Maturity of the Securities;
(d) the repurchase, redemption or other acquisition of the Company's Capital
Stock or options, warrants or other rights to acquire such Capital Stock in
exchange for, or out of the proceeds of a substantially concurrent offering of,
shares of the Company's Capital Stock (other than Disqualified Stock) or
options, warrants or other rights to acquire such Capital Stock; provided that
such options, warrants or other rights are not redeemable prior to the Stated
Maturity of the Securities; (e) the repurchase, redemption or other acquisition
of shares of Capital Stock of the Company or any Restricted Subsidiary from
employees, directors or former directors (or transferees thereof) pursuant to
the terms of agreements (including employment agreements) or plans approved by
the Board of Directors of the Company or the relevant Restricted Subsidiary;
provided that the aggregate amount of such repurchases, redemptions or other
acquisitions shall not exceed $2.5 million in any year and $5.0 million prior to
the Stated Maturity of the Securities; (f) payments or distributions to
dissenting stockholders pursuant to applicable law or constituent documents (as
in effect on the Closing Date or, in the case of the constituent documents of
any Restricted Subsidiary acquired after the Closing Date, on the date of such
acquisition), or pursuant to or in connection with a consolidation, merger or
transfer of assets that complies with the provisions of Section 8.01 of this
Indenture; or (g) Investments acquired as a capital contribution or in exchange
for, or out of the proceeds of a substantially concurrent offering of, the
Company's Capital Stock (other than Disqualified Stock); provided that, except
in the case of subclauses (a) and (d) of this paragraph of Section 1009, no
Default or Event of Default shall have occurred and be continuing or occur as a
consequence of the actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the second paragraph of
this Section 1009 (other than the Restricted Payment referred to in subclause
(b) thereof; an exchange of Capital Stock for Capital Stock or Indebtedness
referred to in subclause (c) or (d) thereof and an Investment acquired as a
capital contribution or in exchange for Capital Stock referred to in subclause
(g) thereof), and the Net Cash Proceeds from any issuance of Capital Stock
referred to in subclause (c) or (d) of the second paragraph of this Section
1009, shall be included in calculating whether the conditions of subclause (iii)
of clause (d) of the first paragraph of this Section 1009 have been met with
respect to any subsequent Restricted Payments. In the event the proceeds of an
issuance of the Company's Capital Stock are used for the redemption, repurchase
or other acquisition of the Securities, or Indebtedness that is pari passu with
the Securities, then the Net Cash Proceeds of such issuance shall be included in
subclause (iii) of clause (d) of the first paragraph of this Section 1009 only
to the extent such proceeds are not used for such redemption, repurchase or
other acquisition of Indebtedness.
For purposes of determining compliance with this Section 1009, (a) the
amount, if other than in cash, of any Restricted Payment shall be determined in
good faith by the Board of Directors, whose determination shall be conclusive
and evidenced by a Board Resolution, and
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(b) in the event that a Restricted Payment meets the criteria of more than one
of the types of Restricted Payments described in this Section 1009, the Company,
in its sole discretion, may order and classify, and from time to time may
reclassify, such Restricted Payment if it would have been permitted at the time
such Restricted Payment was made and at the time of such reclassification.
SECTION 1010. Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company will not, and will not permit any Restricted Subsidiary
to, create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions
permitted by applicable law on any Capital Stock of such Restricted Subsidiary
owned by the Company or any other Restricted Subsidiary, (b) pay any
Indebtedness owed to the Company or any other Restricted Subsidiary, (c) make
loans or advances to the Company or any other Restricted Subsidiary, or (d)
transfer any of its property or assets to the Company or any other Restricted
Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions (a) existing on the Closing Date in this Indenture, or any other
agreements in effect on the Closing Date, and any extensions, refinancings,
renewals or replacements of such agreements; provided that the encumbrances and
restrictions in any such extensions, refinancings, renewals or replacements
taken as a whole are no less favorable in any material respect to the Holders
than those encumbrances or restrictions that are then in effect and that are
being extended, refinanced, renewed or replaced; (b) existing under or by reason
of applicable law; (c) existing with respect to any Person or the property or
assets of such Person acquired by the Company or any Restricted Subsidiary,
existing at the time of such acquisition and not incurred in contemplation
thereof, which encumbrances or restrictions are not applicable to any Person or
the property or assets of any Person other than such Person or the property or
assets of such Person so acquired; (d) in the case of clause (d) of the first
paragraph of this Section 1010, (i) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset, (ii) existing by
virtue of any transfer of, agreement to transfer, option or right with respect
to, or Lien on, any property or assets of the Company or any Restricted
Subsidiary not otherwise prohibited by this Indenture, or (iii) arising or
agreed to in the ordinary course of business, not relating to any Indebtedness;
(e) with respect to a Restricted Subsidiary and imposed pursuant to an agreement
that has been entered into for the sale or disposition of all or substantially
all of the Capital Stock of, or property and assets of, such Restricted
Subsidiary; (f) contained in the terms of (i) any Indebtedness Incurred by any
Restricted Subsidiary in connection with an Asset Acquisition if the Incurrence
of such Indebtedness otherwise complies with subclause (i) of clause (a) of
Section 1008 or (ii) any Indebtedness Incurred by any Restricted Subsidiary as
allowed under subclause (ii) of clause (a) of Section 1008, and any extensions,
refinancings, renewals or replacements of such agreements; provided that the
encumbrances and restrictions in any such extensions, refinancings, renewals or
replacements taken as a whole are no less favorable in any material respect to
the Holders than those encumbrances or restrictions that are then in effect and
that are being extended, refinanced, renewed or replaced; (g) contained in the
terms of any Indebtedness or any agreement pursuant to which such Indebtedness
was issued if (i) the encumbrance or restriction applies only in the
75
event of a payment default or a default with respect to a financial covenant
contained in such Indebtedness or agreement, (ii) the encumbrance or restriction
is not materially more disadvantageous to the Holders of the Securities than is
customary in comparable financings (as determined by the Company in good faith),
and (iii) the Company determines that any such encumbrance or restriction will
not materially affect the Company's ability to make principal or interest
payments on the Securities; or (h) contained in Standard Securitization
Undertakings made in connection with Qualified Receivables Transactions.
Nothing contained in this Section 1010 shall prevent the Company or
any Restricted Subsidiary from (a) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted under Section 1014 or (b) restricting the
sale or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
SECTION 1011. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries.
The Company will not sell, and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell, any shares of Capital
Stock of a Restricted Subsidiary (including options, warrants or other rights to
purchase shares of such Capital Stock) except (a) to the Company or a Wholly
Owned Restricted Subsidiary; (b) issuances of director's qualifying shares or
issuances or sales to foreign nationals of shares of Capital Stock of foreign
Restricted Subsidiaries, to the extent required by applicable law; (c) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary and any Investment
in such Person remaining after giving effect to such issuance or sale would have
been permitted to be made under Section 1009 if made on the date of such
issuance or sale; (d) issuance of Common Stock in connection with dividends or
distributions payable by a Restricted Subsidiary solely in shares of Common
Stock of such Restricted Subsidiary; provided that subsequent to the dividend or
distribution, the Company's direct or indirect equity interest in such
Restricted Subsidiary is at least equal to the Company's direct or indirect
equity interest in such Restricted Subsidiary prior to the dividend or
distribution; (e) issuances of Common Stock of a Restricted Subsidiary in a
merger of such Restricted Subsidiary with another Person; provided that the
surviving entity is a Restricted Subsidiary; or (f) sales of Common Stock
(including options, warrants or other rights to purchase shares of such Common
Stock) of a Restricted Subsidiary by the Company or a Restricted Subsidiary;
provided that the Company or such Restricted Subsidiary applies the Net Cash
Proceeds of any such sale in accordance with Section 1016.
SECTION 1012. Limitation on Issuances of Guarantees by Restricted Subsidiaries.
The Company will not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee any Indebtedness of the Company or any other Restricted
Subsidiary which is pari passu with or subordinate in right of payment to the
Securities ("Guaranteed Indebtedness") unless (a) such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture to this Indenture
providing for a Guarantee (a "Subsidiary Guarantee") of payment of the
Securities by such Restricted Subsidiary and (b) such Restricted Subsidiary
waives and will not in any manner whatsoever claim or take the benefit or
advantage of, any rights of
76
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Subsidiary Guarantee until the Securities have been paid in
full, in U.S. Dollars; provided that this paragraph shall not be applicable to
any Guarantee of any Restricted Subsidiary that existed at the time such Person
became a Restricted Subsidiary and was not Incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary. If the
Guaranteed Indebtedness is (i) pari passu with the Securities, then the
Guarantee of such Guaranteed Indebtedness shall be pari passu with, or
subordinated to, the Subsidiary Guarantee or (ii) subordinated to the
Securities, then the Guarantee of such Guaranteed Indebtedness shall be
subordinated to the Subsidiary Guarantee at least to the extent that the
Guaranteed Indebtedness is subordinated to the Securities.
Notwithstanding the foregoing, (a) the Company may permit any of the
Restricted Subsidiaries to issue Guarantees otherwise restricted by this Section
1012 to secure indebtedness which, if Incurred by such Restricted Subsidiary
would comply with subclause (i) or (ii) of clause (a) of Section 1008, and (b)
any Subsidiary Guarantee by a Restricted Subsidiary may provide by its terms
that it shall be automatically and unconditionally released and discharged upon
any sale, exchange or transfer, to any Person not an Affiliate of the Company,
of all of the Company's and each Restricted Subsidiary's Capital Stock in, or
all or substantially all the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited by this Indenture) or the release or
discharge of the Guarantee which resulted in the creation of such Subsidiary
Guarantee, except a discharge or release by or as a result of payment under such
Guarantee.
SECTION 1013. Limitation on Transactions with Shareholders and Affiliates.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any holder (or any
Affiliate of such holder) of 5% or more of any class of the Company's Capital
Stock or with any Affiliate of the Company or any Restricted Subsidiary (other
than the Company or a Restricted Subsidiary), except (a) upon terms no less
favorable to the Company or such Subsidiary than could be obtained in a
comparable arm's-length transaction with a Person that is not such a holder or
Affiliate; provided that, with respect to a transaction or series of related
transactions involving aggregate payments by the Company or such Subsidiary
having a fair market value equal to or in excess of (i) $5 million but less than
$15 million, the Company's Board of Directors approves such transaction (or
series of transactions) and, in its good faith judgment, believes that such
transaction (or series of transactions) complies with clause (a) of this
paragraph as evidenced by a Board Resolution and (ii) $15 million, (A) the
Company receives the written opinion of an investment banking firm nationally
recognized in the United States that such transaction (or series of
transactions) is fair, from a financial point of view, to the Company or such
Restricted Subsidiary and (B) the Board of Directors of the Company approves
such transaction (or series of transactions) and, in its good faith judgment,
believes that such transaction (or series of transactions) complies with clause
(a) of this paragraph, as evidenced by a Board Resolution
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The foregoing limitation does not limit, and shall not apply to (a)
any transaction solely between the Company and any of its Restricted
Subsidiaries or solely among Restricted Subsidiaries; (b) any transaction
between the Company or any Restricted Subsidiary and any Person that is an
Affiliate of the Company or of any Restricted Subsidiary, if (i) such Person is
engaged in the Pulp and Paper Business, (ii) such transaction is in the ordinary
course of business of the Company or such Restricted Subsidiary, as the case may
be, and such Person, (iii) such transaction is on fair and reasonable terms no
less favorable to the Company or such Restricted Subsidiary than could be
obtained in a comparable arm's-length transaction with a Person that is not an
Affiliate, (iv) such transaction is in the best interests of the Company or such
Restricted Subsidiary, and (v) such Person is an Affiliate solely by virtue of
being directly or indirectly controlled by the Company or a Restricted
Subsidiary; (c) the payment of reasonable and customary regular fees to the
Company's directors and officers and indemnification arrangements entered into
by the Company in the ordinary course of business and consistent with its past
practices; (d) loans or advances by the Company or any Restricted Subsidiary to
employees thereof in the ordinary course of business in an aggregate amount to
all employees not to exceed US$2.5 million per year and US$5.0 million prior to
the Stated Maturity of the Securities; (e) any payments or other transactions
pursuant to any tax-sharing agreement between the Company and any Subsidiary
with which the Company flies a consolidated tax return or with which the Company
is part of a consolidated group for tax purposes; (I) any sale of shares of the
Company's Capital Stock (other than Disqualified Stock); (g) any merger or
consolidation with an Affiliate, including (but not limited to) the ACM Merger,
which is permitted under Section 801; (h) Qualified Receivables Transactions;
(i) contributions in cash to the common equity of the Company by the Existing
Shareholders; (j) any Permitted investments or any Restricted Payments not
prohibited by Section 1009; (k) any issuance of securities or other payments,
awards or grants in cash, securities or otherwise pursuant to, or for the
funding of, employment compensation plans, stock option plans or other similar
incentive plans approved by the Board of Directors, provided that all
distributions under this clause (k) shall not exceed US$5.0 million per year;
and (1) any payment to ACM; provided that any payments made under this clause
(1) will be treated as a Restricted Payment under Section 1009, and may only be
made in accordance with such Section 1009.
SECTION 1014. Limitation on Liens.
The Company will not, and will not permit any Restricted Subsidiary
to, create, incur, assume or suffer to exist any Lien on any of its assets or
properties of any character, or any shares of Capital Stock or Indebtedness of
any Restricted Subsidiary, without making effective provision for all of the
Securities and all other amounts due under this Indenture to be directly secured
equally and ratably with (or, if the obligation or liability to be secured by
such Lien is subordinated in right of payment to the Securities, prior to) the
obligation or liability secured by such Lien.
The foregoing limitation does not apply to (a) Liens existing on the
Closing Date; (b) Liens granted after the Closing Date on any assets or Capital
Stock of the Company or its Restricted Subsidiaries created in favor of the
Holders; (c) Liens with respect to the assets of a Restricted Subsidiary granted
by such Restricted Subsidiary to the Company or a Restricted Subsidiary to
secure Indebtedness owing to the Company or such other Restricted Subsidiary;
(d) Liens securing Indebtedness which is Incurred to refinance secured
Indebtedness which is
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permitted to be Incurred under subclause (iv) of the second paragraph of clause
(a) of Section 1008;provided that such Liens do not extend to, or cover any,
property or assets of the Company or any Restricted Subsidiary other than the
property or assets securing the Indebtedness being refinanced; (e) Liens
securing Indebtedness Incurred under subclause (i) of the second paragraph of
clause (a) of Section 1008 or Indebtedness Incurred by our Restricted
Subsidiaries under subclause (ii) of the second paragraph of clause (a) of
Section 1008; or (h) Permitted Liens.
SECTION 1015. Limitation on Sale-Leaseback Transactions.
The Company will not, and will not permit any Restricted Subsidiary
to, enter into any sale-leaseback transaction involving any assets or
properties, whether now owned or hereafter acquired, whereby the Company or a
Restricted Subsidiary sells or transfers such assets or properties and then or
thereafter leases such assets or properties or any part thereof or any other
assets or properties which the Company or such Restricted Subsidiary, as the
case may be, intends to use for substantially the same purpose or purposes as
the assets or properties sold or transferred.
The foregoing restriction does not apply to any sale-leaseback
transaction if (a) the lease is for a period, including renewal rights, of not
in excess of three years; (b) the transaction is solely between the Company and
any Wholly Owned Restricted Subsidiary or solely between Wholly Owned Restricted
Subsidiaries; or (c) the Company or a Restricted Subsidiary, within 12 months
after the sale or transfer of any assets or properties is completed, applies an
amount not less than the net proceeds received from such sale in accordance with
Section 1016.
SECTION 1016. Limitation on Asset Sales.
The Company will not, and will not permit any Restricted Subsidiary
to, consummate any Asset Sale, unless (a) the consideration received by the
Company or such Restricted Subsidiary is at least equal to the fair market value
of the assets sold or disposed of, and (b) at least 75% of the consideration
received (including any amount of Released Indebtedness) consists of cash or
Temporary Cash investments.
In the event and to the extent that the Net Cash Proceeds received by
the Company or any of its Restricted Subsidiaries from one or more Asset Sales
occurring on or after the Closing Date in any period of 12 consecutive months
exceed 10% of Adjusted Consolidated Net Tangible Assets (determined as of the
date closest to the commencement of such 12-month period for which a
consolidated balance sheet of the Company and its Subsidiaries has been filed
with the Commission or provided to the Trustee), then the Company shall or shall
cause the relevant Restricted Subsidiary to: (a) within twelve months after the
date Net Cash Proceeds so received exceed 10% of Adjusted Consolidated Net
Tangible Assets, (i) apply an amount equal to such excess Net Cash Proceeds to
permanently repay unsubordinated Indebtedness of the Company or Indebtedness of
any other Restricted Subsidiary, in each case owing to a Person other than the
Company or any of the Restricted Subsidiaries, or (ii) invest an equal amount,
or the amount not so applied pursuant to subclause (i) of this paragraph (or
enter into a definitive agreement committing to so invest within 12 months after
the date of such agreement), in Replacement Assets; and (b) apply (no later than
the end of the 12-month period referred to in
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clause (a) of this paragraph) such excess Net Cash Proceeds (to the extent not
applied pursuant to clause (a) of this paragraph) as provided in the following
paragraph of this Section 1016. The amount of such excess Net Cash Proceeds
required to be applied (or to be committed to be applied) during such 12-month
period as set forth in clause (a) of the preceding sentence and not applied as
so required by the end of such period shall constitute "Excess Proceeds."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 1016 totals at least $5 million, the Company must commence, not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders (and, if required by the terms of any Indebtedness
that is pari passu with the Securities ("Pari Passu Indebtedness"), from the
holders of such Pari Passu Indebtedness) on a pro rata basis an aggregate
principal amount of Securities (and Pari Passu Indebtedness) equal to the Excess
Proceeds on such date, at a purchase price equal to 100% of their principal
amount, plus, in each case, accrued interest (if any) to the Payment Date.
SECTION 1017. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder shall have
the right to have its Securities repurchased by the Company on the terms and
conditions set forth in this Section 1017 and this Indenture. Within 30 days of
the occurrence of Change of Control, the Company shall make an Offer to Purchase
all Outstanding Securities at a Purchase Price equal to 101% of their aggregate
principal amount plus accrued interest, if any, to the Payment Date (subject to
the right of Holders of record on the relevant Record Date to receive interest
due on an Interest Payment Date that is on or prior to the Payment Date).
(b) One Business Day prior to the Payment Date, the Company shall
deposit with the Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) money sufficient
to pay the Redemption Price of all Securities or portions thereof so accepted.
On the Payment Date, the Company shall (i) accept for payment Securities or
portions thereof tendered pursuant to the Offer to Purchase, and (ii) deliver,
or cause to be delivered, to the Trustee all Securities, or portions thereof so
accepted together with an Officers' Certificate specifying the Securities or
portions thereof accepted for payment by the Company. The Paying Agent shall
promptly mail or deliver to the Holders of Securities so accepted payment in an
amount equal to the purchase price, and the Trustee shall promptly authenticate
and mail or deliver to such Holders a new Security or Securities equal in
principal amount to any unpurchased portion of the Security surrendered as
requested by the Holder. The Company shall publicly announce the results of the
Offer to Purchase on or as soon as practicable after the Payment Date.
SECTION 1018. Indemnification of Judgment Currency.
The Company agrees that U.S. dollars are the sole currency of account
and payment for all sums payable by the Company under or in connection with this
Indenture or the Securities, including damages. Any amount received or recovered
in a currency (the "Judgment Currency") other than dollars (whether as a result
of, or of the enforcement of, a judgment or order of a court of any
jurisdiction, in the winding-up or dissolution of the Company or
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otherwise) by any Holder in respect of any sum expressed to be due to it from
the Company shall only constitute a discharge to the Company to the extent of
the U.S. dollar amount which the recipient is able to purchase with the amount
so received or recovered in that other currency on the date of that receipt or
recovery (or, if it is not practicable to make that purchase on that date, on
the first date on which it is practicable to do so). If that U.S. dollar amount
is less than the U.S. dollar amount expressed to be due to the recipient under
any Security, the Company shall indemnify the recipient against any loss
sustained by it as a result, In any event, the Company shall indemnify the
recipient against the cost of making any such purchase of U.S. dollars. For the
purposes of this Section 1018, it will be sufficient for the recipient to
certify in a satisfactory manner (indicating the sources of information used)
that it would have suffered a loss had an actual purchase of U.S. dollars been
made with the amount so received in that other currency on the date of receipt
or recovery (or, if a purchase of U.S. dollars on such date had not been
practicable, on the first date on which it would have been practicable, it being
required that the need for a change of date be certified in the manner mentioned
above). These indemnities constitute a separate and independent obligation from
other obligations of the Company, shall give rise to a separate and independent
cause of action, shall apply irrespective of any indulgence granted by any
Holder and shall continue in lull force and effect despite any other judgment,
order, claim or proof for a liquidated amount in respect of any sum due under
any Security.
SECTION 1019. Payment of Additional Amounts.
Any and all payments made by the Company to the Holders, under or with
respect to the Securities, will be made free and clear of and without
withholding or deduction for or on account of any present or future tax, duty,
levy, impost, assessment or other governmental charge (including any interest or
penalties with respect thereto) imposed or levied by or on behalf of Mexico or
any political subdivision thereof or by any authority or agency therein or
thereof having power to tax (hereinafter "Mexican Withholding Taxes"), unless
the withholding or deduction of such Mexican Withholding Taxes is required by
law on payments of interest and original issue discount or by the interpretation
or administration thereof. In the event any Mexican Withholding taxes are
required to be so withheld or deducted the Company will (a) pay such additional
amounts ("Additional Amounts") as may be necessary so that after making all
required deductions or withholdings imposed on payments of interest and original
issue discount (including those applicable to additional sums payable under this
provision) the net amount received by Holders or other beneficial owners of the
Securities will not be less than the amounts as would have been received by them
had no such withholding or deduction been required, (b) deduct or withhold such
Mexican Withholding Taxes and (c) remit the full amount so deducted or withheld
to the relevant taxing or other authority.
Notwithstanding the foregoing, no such Additional Amounts shall be
payable for or on account of (a) any Mexican Withholding Taxes which would not
have been imposed or levied on a Holder or beneficial owner but for the
existence of any present, future or former connection between the Holder or
beneficial owner of the Securities and Mexico or any political subdivision or
territory or possession thereof or area subject to its jurisdiction, including,
without limitation, such Holder or beneficial owner (i) being or having been a
citizen or resident of Mexico, (ii) maintaining or having maintained an office,
permanent establishment or branch therein, or (iii) being or having been present
or engaged in trade or business therein, except for a connection solely arising
from the mere ownership of; or receipt of payment under, such
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Securities or the exercise of rights under such Securities or this Indenture
(personally or through the Trustee); (b) any estate inheritance, gift or similar
tax, assessment or other governmental charge; (c) any Mexican Withholding Taxes
that are imposed or levied by reason of the failure by the Holder or beneficial
owner of such Securities to comply with any certification, identification,
information, documentation, declaration or other reporting requirement which is
required or imposed by a statute, treaty, regulation, general rule or
administrative practice as a precondition to exemption from, or reduction in the
rate of, the imposition, withholding or deduction of any Mexican Withholding
Taxes; provided that at least 60 days prior to (i) the first payment date with
respect to which the Company shall apply this clause (c) and (ii) in the event
of a change in such certification, identification, information, documentation,
declaration or other reporting requirements, the first payment date subsequent
to such change, the Company shall have notified the Trustee, in writing, that
the Holders or beneficial owners of the Securities will be required to provide
such certification, identification, information or documentation, declaration or
other reporting documentation; (d) any Mexican Withholding Taxes that are
imposed or levied by reason of the failure by the Holder or beneficial owners of
such Securities to timely comply (subject to the conditions set forth below)
with a written request by or on behalf of the Company, to provide information,
documentation or other evidence concerning the nationality, residence, identity,
eligibility for benefits under a treaty for avoidance of double taxation to
which Mexico is a party which is in effect, a present or former connection with
Mexico or any political subdivision or territory or possession thereof or area
subject to its jurisdiction, or of the Holder or beneficial owner of such
Securities that is necessary from time to time to determine the appropriate rate
of deduction or withholding of Mexican Withholding Taxes applicable to such
Holder or beneficial owner; provided that at least 60 days prior to the first
payment date with respect to which the Company shall apply this clause (d), the
Company shall have notified the Trustee, in writing, that such Holders or
beneficial owners of the Securities will be required to provide such
information, documentation or other evidence; (e) the presentation of such
Securities (where presentation is required) for payment on a date more than 30
days after the date on which such payment became due and payable or the date on
which payment thereof is duly provided for, whichever occurs later, except to
the extent that the Holder or the beneficial owner of such Securities should
have been entitled to Additional Amounts in respect of such Mexican Withholding
Taxes on presenting such Securities for payment on any date during such 30-day
period; or (f) any combination of items (a), (b), (c), (d) or (e) above.
Notwithstanding the foregoing, the limitations on the Company's
obligation to pay Additional Amounts Set forth in clauses (c) and (d) of the
preceding paragraph shall not apply if the provision of the certification,
identification, information, documentation, declaration or other evidence
described in such clauses (c) and (d) would be materially more onerous, in form,
in procedure or in the substance of information disclosed, to a Holder or
beneficial owner of a Security (taking into account any relevant differences
between United States and Mexican law, regulation or administrative practice)
than comparable information or other applicable reporting requirements imposed
or provided for under United States federal income tax law (including the United
States-Mexico Income Tax Treaty), regulations (including proposed regulations)
and administrative practice (such as IRS Forms 0000, X-0, X-0XXX and 6166). In
addition, the limitations on the Company's obligation to pay Additional Amounts
set forth in clauses (c) and (d) above of the preceding paragraph shall not
apply if the withholding rate of 4.9% is applicable under the terms of paragraph
(a) of Section II of Article 195 of the Mexican Income Tax Law, unless (i) the
provision of the certification, identification, information,
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documentation, declaration or other evidence described in above referenced
clauses (c) and (d) is expressly required by statute, regulation, general rules
or administrative practice in order to apply paragraph (a) of Section II of
Article 195 of the Mexican Income Tax Law, the Company cannot obtain such
certification, identification, information, or satisfy any other reporting
requirements on its own through reasonable diligence and the Company otherwise
would meet the requirements for application of paragraph (a) of Section II of
Article 195 of the Mexican Income Tax Law or (ii) in the case of a Holder or
beneficial owner of Securities that is a pension or retirement fund or other
tax-exempt organization, such Holder or beneficial owner would be subject to
Mexican Withholding Taxes at a rate that is lower than the rate resulting from
the application of paragraph (a) of Section II of Article 195 of the Mexican
Income Tax Law if the information, documentation or other evidence required
under above referenced clauses (c) and (d) were provided. In addition, clauses
(c) and (d) of the preceding paragraph shall not be construed to require that a
non-resident pension or retirement fund, a non-Mexican tax-exempt organization,
a non-resident financial institution or any other Holder or beneficial owner of
a Security obtain registration with the Ministry of Finance and Public Credit
for the purpose of establishing eligibility for an exemption from or reduction
of Mexican Withholding Taxes.
Upon the Trustee's receipt of timely notification from the Company
that the Holders or beneficial owners of securities will be required to provide
information or documentation as described in clauses (c) and (d) above, the
Trustee shall provide such notification to the Holders or beneficial owners, as
the case may be. The Company will, upon written request, provide the Trustee,
the Holders and the Paying Agent with a duly certified or authenticated copy of
an original receipt of the payment of Mexican Withholding Taxes which the
Company has withheld or deducted in respect of any payments made under or with
respect to the Securities. The Trustee shall, for a period of five years
following the due date for each payment, maintain in its files each such
certified copy received from the Company.
If the Company is obligated to pay Additional Amounts with respect to
any payment under or with respect to the Securities (other than Additional
Amounts payable on the date of this Indenture), the Company will, upon written
request, deliver to the Trustee an Officers' Certificate stating the fact that
such Additional Amounts are payable and the amounts so payable.
The Company shall pay any stamp, issue, registration, documentary or
other similar taxes and other duties (including interest and penalties with
respect thereto) imposed or levied by Mexico (or any political subdivision or
taxing authority thereof or therein) in respect of the creation, issue and
offering of the Securities.
Except as specifically provided in the Securities or this Indenture,
the Company shall not be required to make any payment with respect to any tax,
duty, assessment or other governmental charge of whatever nature imposed or
levied by any government or any political subdivision or taxing authority
thereof or therein.
SECTION 1020. Provision of Financial Information.
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, the Company shall file all
reports and other information
83
with the Commission which the Company would have been required to file with the
Commission pursuant to such Section 13(a) or 15(d) of the Exchange Act if the
Company were so subject. In addition to annual reports on Form 20-F, the Company
shall file on Form 6-K interim consolidated reports, including consolidated
financial statements, as soon as they become available, but in no event later
than 60 days after the end of each interim period, prepared in accordance with
Mexican GAAP. The Company shall file such interim consolidated reports with the
Commission whether or not the Company is subject to corporate reporting
requirements under Mexican law.
If the Commission does not permit the filings described in the first
paragraph of this Section 1020, the Company shall provide such reports and other
information to the Trustee (within the same time periods described above or, if
earlier, that would be applicable if the Company were required and permitted to
file reports with the Commission) and instruct the Trustee to mail such reports
and other information to Holders at their addresses set forth on the Security
Register. The Company shall supply to the Trustee and to each Holder or shall
supply to the Trustee for forwarding to each such Holder, without cost to such
Holder, copies of such reports and other information.
SECTION 1021. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 1008 to 1019, inclusive, if before
the time for such compliance the Holders of at least a majority in aggregate
principal amount of the Outstanding Securities shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect; provided, however, with respect to an Offer to Purchase as to
which an offer has been mailed, no such waiver may be made or shall be effective
against any Holder tendering Securities pursuant to such offer, and the Company
may not omit to comply with the terms of such offer as to such Holder.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.
(a) Optional Redemption. The Securities may be redeemed at any time,
in whole or in part, at the Company's option at a Redemption Price equal to the
greater of (i) 100% of the principal amount; or (ii) the sum of the present
values of the Remaining Scheduled Payments, discounted to the redemption date on
a semiannual basis, at the Adjusted Treasury Rate, as determined by an
Independent Investment Banker.
In addition, at any time prior to July 15, 2005, the Company may
redeem up to 35% of the principal amount of the Securities with the Net Cash
Proceeds of one or more sales of the Company's Capital Stock (other than
Disqualified Stock) at a Redemption Price (expressed
84
as a percentage of principal amount) of 113.75%, plus accrued and unpaid
interest to the Redemption Date; provided that at least 65% of the aggregate
principal amount of the Securities originally issued on the Closing Date remain
outstanding after each such redemption and notice of any such redemption is
mailed within 120 days of each such sale of the Company's Capital Stock.
The Company will give notice of any redemption as provided in Section
1103. If less than all of the Securities are to be redeemed, selection of the
Securities for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Securities are listed, or if the Securities are not listed on a national
securities exchange, by lot or by such other method as the Trustee in its sole
discretion shall deem to be fair and appropriate. No Security of $1,000 in
principal amount or less shall be redeemed in part.
(b) Redemption for Changes in Mexican Withholding Taxes. In the event
that the Company has become or would become obligated to pay, on the next date
on which any amount would be payable under or with respect to the Securities,
any Additional Amounts in excess of those attributable to Mexican Withholding
Taxes imposed at a rate of 10%, as a result of (i) any change in or amendment to
the laws, treaties, rules or regulations of Mexico, or any political subdivision
or taxing authority or other instrumentality thereof or therein, or (ii) any
change in the interpretations relating to such laws, treaties, rules or
regulations made by any legislative body, governmental or regulatory agency or
authority (including the enactment of any legislation and the publication of any
regulatory determination) of Mexico, or any political subdivision or taxing
authority or other instrumentality thereof or therein, or (iii) any official
interpretation, application or pronouncement by any legislative body or
governmental or regulatory agency or authority that provides for a position with
respect to such laws, treaties, rules or regulations that differ from the
theretofore generally accepted position, which amendment or change is enacted,
promulgated, issued or announced or which interpretation, application or
pronouncement is issued or announced, in each case, after the date hereof, then
the Company may redeem all, but not less than all, of the Securities at any
time, on giving notice as provided in Section 1103 at a Redemption Price equal
to 100% of the unpaid principal amount together with accrued and unpaid
interest, if any, and original issue discount thereon, if any, to the Redemption
Date. This notice, once delivered, will be irrevocable, except if the Company no
longer continues to be obligated to pay those Additional Amounts.
SECTION 1102. Election to Redeem: Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any redemption
at the election of the Company, the Company shall, not more than 60 nor less
than 30 days prior to the Redemption Date fixed by the Company (unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities to be redeemed.
SECTION 1103. Notice of Redemption.
Notices to redeem Securities shall be given to each Holder in the
manner set forth in Section 106. Such notice will be given once not more than 60
days nor less than 30 days prior
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to the date fixed for redemption. Such notices will be deemed to have been given
on the date of mailing. Notices to redeem Securities shall identify the
Securities to be redeemed (including CUSIP numbers), specify the Redemption
Date, the places of payment, that payment will be made upon presentation and
surrender of the Securities to be redeemed, that interest accrued to the date
fixed for redemption (subject to the right of Holders of record on the relevant
Record Date to receive interest on an Interest Payment Date that is on or prior
to the Redemption Date) will be paid as specified in said notice, and that on
and after said date interest thereon will cease to accrue. Such notice shall
also state that the conditions precedent to such redemption have occurred and
the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
If any Security is to be redeemed in part only, the notice of
redemption relating to such Security will state the portion of the principal
amount to be redeemed. A new Security in principal amount equal to the
unredeemed portion will be issued upon cancellation of the original Security.
In connection with a notice of redemption for tax reasons, the
following shall apply:
(a) no such notice of redemption may be given earlier than 90 days
prior to the earliest date on which, but for such redemption, the Company would
be obligated to pay such Additional Amounts were a payment on the Securities
then due; and
(b) at the time such notice of redemption is given, such obligation to
pay such Additional Amounts remains in effect.
Prior to publication of any notice of redemption for tax reasons, the
Company shall deliver to the Trustee:
(i) a certificate signed by a duly authorized officer of the Company
stating that the Company is entitled to effect such redemption and setting forth
a statement of facts showing that the conditions precedent of the right of the
Company to so redeem have occurred; and
(ii) an Opinion of Mexican Counsel or independent public accountants,
in both cases of recognized standing, selected by the Company reasonably
acceptable to the Trustee to the effect that the Company has or will become
obligated to pay such Additional Amounts as a result of such change, amendment,
official interpretation, application or pronouncement.
SECTION 1104. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and
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(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.
SECTION 1105. Securities Payable on Redemption Date.
If notice of redemption has been given in the manner set forth in
Section 1103, the Securities shall become due and payable on the Redemption Date
specified in such notice and upon presentation and surrender of the Securities
at the place or places specified in such notice, the Securities shall be paid
and redeemed by the Company at the places and in the manner herein specified and
at the Redemption Price herein specified together with accrued interest (subject
to the right of Holders of record on the relevant Record Date to receive
interest on an Interest Payment Date that is on or prior to the Redemption Date)
to the Redemption Date. From and after the Redemption Date, if monies for the
redemption of Securities called for redemption shall have been made available at
the office of the Paying Agent (or, if the Company is acting as its own Paying
Agent, segregated and held in trust as provided in Section 1003), for redemption
on the Redemption Date, the Securities called for redemption shall cease to bear
interest, and the only right of the Holders of such Securities shall be to
receive payment of the Redemption Price together with accrued interest (subject
to the right of Holders of record on the relevant Record Date to receive
interest on an Interest Payment Date that is on or prior to the Redemption Date)
to the Redemption Date as aforesaid. If monies for the redemption of the
Securities are not made available for payment until after the Redemption Date,
the Securities called for redemption shall not cease to bear interest until such
monies have been so made available.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear interest
from the Redemption Date at the rate borne by the Security.
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Defeasance and Discharge of the Indenture.
The Company shall be deemed to have paid and shall be discharged from
any and all obligations in respect of the Outstanding Securities and the
provisions of this Indenture will no longer be in effect with respect to the
Securities and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same if:
(a) the Company has irrevocably deposited or caused to be irrevocably
deposited with the Trustee, in trust, money and/or Government Securities that
through the payment of interest and principal in respect thereof in accordance
with their terms will provide money in an amount sufficient to pay the principal
of, premium, if any, and accrued interest on the Securities on the Stated
Maturity of such payments in accordance with the terms of this Indenture and the
Securities,
(b) the Company has delivered to the Trustee:
87
(i) either:
(A) an Opinion of U.S. Counsel to the effect that Holders
will not recognize income, gain or loss for U.S. federal income
tax purposes as a result of the Company's exercise of its option
under this Section 1201 and will be subject to U.S. federal
income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit,
defeasance and discharge had not occurred, which Opinion of U.S.
Counsel must be based upon (and accompanied by a copy of) a
ruling of the Internal Revenue Service to the same effect unless
there has been a change in applicable federal income tax law
after the Closing Date such that a ruling is no longer required
or
(B) a ruling directed to the Trustee received from the
Internal Revenue Service to the same effect as the aforementioned
Opinion of U.S. Counsel,
(ii) either:
(A) an Opinion of Mexican Counsel to the effect that, based
upon Mexican law then in effect, Holders will not recognize
income, gain or loss for Mexican tax purposes (including
withholding tax except for withholding tax then payable on
interest payments due) as a result of the Company's exercise of
its option under this Section 1201 and will be subject to Mexican
tax (including withholding tax except for withholding tax then
payable on interest payments due) on the same amount and in the
same manner and at the same time as would have been the case if
such deposit, defeasance and discharge had not occurred, or
(B) a ruling directed to the Trustee received from the
Mexican tax authorities to the same effect as the aforementioned
Opinion of Mexican Counsel, and
(iii) an Opinion of U.S. Counsel to the effect that the creation
of the defeasance trust does not violate the Investment Company Act of
1940 and the trust find will not be subject to the effect of Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code or Section 15 of the New York
Debtor and Creditor Law,
(c) immediately after giving effect to such deposit on a pro forma
basis, no Default or Event of Default, shall have occurred and be continuing on
the date of such deposit or during the period ending on the 27lst day after the
date of such deposit, and such deposit shall not result in a breach or violation
of, or constitute a default under, any other material agreement or instrument to
which the Company or any of its Restricted Subsidiaries is a party or by which
the Company or any of its Restricted Subsidiaries is bound,
(d) if at such time the Securities are listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of U.S. Counsel to
the effect that the Securities will not be delisted as a result of such deposit,
defeasance and discharge, and
88
(e) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of U.S. Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by this
Section 1201 have been complied with.
The following provisions, shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of such Securities to receive,
solely from the trust find, payments in respect of the principal of and interest
on such Securities when such payments are due, (b) the Company's obligations
with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (c)
the rights, powers, trusts, duties and immunities of the Trustee hereunder,
including, without limitation, the rights of the Trustee under Section 607
hereunder, and (d) this Article Twelve.
After any irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations in the
immediately preceeding paragraph.
SECTION 1202. Covenant Defeasance.
This Indenture will no longer be in effect with respect to clauses (c)
and (d) under Sections 801, clause (c) of Section 501 with respect to such
clauses (c) and (d) under Section 801, Sections 1008 through 1017, Section 1019,
Section 1020, clause (d) of Section 501 with respect to such other covenants,
clauses (e) and (f) of Section 501 and, with respect to a Significant
Subsidiary, and clause (g) of Section 501 (hereinafter, "Covenant Defeasance")
if,
(a) the Company shall have irrevocably deposited or caused to be
irrevocably deposited with the Trustee, in trust, money and/or Government
Securities that through the payment of interest and principal in respect thereof
in accordance with their terms will provide money in an amount sufficient to pay
the principal of premium, if any, and accrued interest on the Securities on the
Stated Maturity of such payments in accordance with the terms of this Indenture
and the Securities,
(b) the Company shall have satisfied the provisions of subclauses
(b)(iii), (c) and (d) of Section 1201,
(c) the Company shall have delivered to the Trustee of an Opinion of
U.S. Counsel to the effect that the Holders will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit and defeasance
of certain covenants and Events of Default and will be subject to federal income
tax on the same amount and in the same manner and at the same times as would
have been the case if such deposit and defeasance had not occurred,
(d) if at such time the Securities are listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of U.S. Counsel to
the effect that the Securities will not be delisted as a result of such Covenant
Defeasance, and
(e) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of U.S. Counsel, in each case stating that all conditions
precedent provided for herein relating to Covenant Defeasance contemplated by
this Section 1202 have been complied with.
89
SECTION 1203. Deposited Money and Government Securities to Be Held in Trust:
Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and Government Securities (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee -- collectively, for purposes of this
Section 1203, the "Trustee") pursuant to Section 1202 in respect of the
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities,
of all sums due and to become due thereon in respect of principal and interest,
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 Government Securities
deposited pursuant to Section 1203 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 Securities.
Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1202 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent Defeasance or Covenant
Defeasance.
SECTION 1204. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 1201 or 1202 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
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Twelve until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 1201 or 1202;
provided, however, that if the Company makes any payment of principal of or
interest on any Security following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or the Paying Agent.
----------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument. Delivery of an
executed counterpart of a signature page of this Indenture by telecopier shall
be as effective as delivery of a manually executed counterpart thereof.
90
IN WITNESS WHEREOF, the parties hereto have caused this indenture to
be duly executed, and the Trustee has caused its corporate seals to be hereunto
affixed and attested, day and year first above written.
CORPORACION DURANGO, S.A. de C.V.
By: /s/ Xxxxxx Xxxxxx xx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx xx Xxxxxxx
Title: Chief Financial Officer
JPMORGAN CHASE BANK,
as Trustee
By: /s/ Xxxxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Vice President
91
Exhibit A
[APPLICABLE LEGENDS]
[FACE OF SECURITY]
CORPORACION DURANGO, S.A. de C.V.
13-3/4% SENIOR NOTES DUE 2009
CUSIP No.
ISIN No.
No.
$____,000,000
CORPORACION DURANGO, S.A. de C.V., a variable capital company
(sociedad anonima de capital variable) organized under the laws of the United
Mexican States (herein called the "Company," which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ___________, or registered assigns, the principal sum of
_______________________ U.S. Dollars on July 15, 2009 and to pay interest
thereon from the Closing Date or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semiannually on January 15
and July 15 in each year, commencing on January 15, 2003 at the rate of 13-3/4%
per annum, until the principal hereof is paid or made available for payment. The
interest so payable and punctually paid or duly provided for on any Interest
Payment Date shall, as provided in the Indenture (as defined on the reverse
hereof), be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the January 1 or July 1 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment at such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities not less than
ten days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which this Security may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. Payment of the
principal of and interest on this Security shall be made at the office or agency
of the Company maintained in The City of New York for that purpose, 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; provided, however, that at the
option of
1
the Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register.
The Company shall pay Additional Amounts and this Security shall be
subject to redemption by the Company as provided in Sections 1019 and 1101 of
the Indenture.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
CORPORACION DURANGO, S.A. de C.V.
By:______________________
Name:
Title:
2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated:
JPMORGAN CHASE BANK,
as Trustee
By:____________________
Authorized Signatory
3
[FORM OF REVERSE OF SECURITY]
General
This Security is one of a duly authorized issue of Securities of the
Company designated as its 13-3/4% Senior Notes due 2009 (herein called the
"Securities"), issued under an Indenture, dated as of June 24, 2002 (herein
called the "Indenture"), between the Company and JPMorgan Chase Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. All terms used in this Security which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
The Securities will rank senior in right of payment to all of the
Company's subordinated Indebtedness.
[Pursuant to the Registration Rights Agreement, dated June 18, 2002,
among the Company, Xxxxxx Xxxxxxx & Co. Incorporated and Banc of America
Securities LLC (the "Registration Rights Agreement"), in the event (i) the
Company fails to file an Exchange Offer Registration Statement (the "Exchange
Offer Registration Statement") with the Commission on or prior to the l80th day
after the Closing Date, (ii) the Exchange Offer Registration Statement is not
declared effective by the Commission on or prior to the 270th day after the
Closing Date, (iii) an exchange offer (the "Exchange Offer") is not consummated
on or before the 30th day after the Exchange Offer Registration Statement is
declared effective, (iv) the Company is obligated to file a Shelf Registration
Statement (the "Shelf Registration Statement"), and, the Company fails to file
the Shelf Registration Statement with the Commission on or prior to the 90th day
after the date (the "Shelf Filing Date") on which the obligation to file a Shelf
Registration Statement arises, (v) the Company is obligated to file a Shelf
Registration Statement, and the Shelf Registration Statement is not declared
effective on or prior to the 180th day after the Shelf Filing Date, or (vi)
after the Exchange Offer Registration Statement or the Shelf Registration
Statement, as the case may be, is declared effective, such Registration
Statement ceases to be effective or usable (subject to certain exceptions) (each
such event referred to in the preceding clauses (i) through (vi) a "Registration
Default"), the annual interest rate borne by the Securities shall be increased
by 0.25% per annum from the rate shown above for the first 90-day period
immediately following the occurrence of a Registration Default, and such annual
interest rate shall be increase by an additional 0.25% per annum with respect to
each subsequent 90-day period, up to a maximum additional interest rate of 1.0%
per annum. The Company will pay such additional interest on Interest Payment
Dates. Once all Registration Defaults have been cured, the annual interest rate
borne by the Securities shall be changed to again be the rate shown above. The
Holder of this Security is entitled to the benefits of the Registration Rights
Agreement.]*
* Do not include in Registered Global Securities or Registered Physical
Securities.
4
Additional Amounts
Any and all payments made by the Company to the Holder, under or with
respect to this Security, shall be made free and clear of and without
withholding or deduction for or on account of any present or future tax, duty,
levy, impost, assessment or other governmental charge (including any interest or
penalties with respect thereto) imposed or levied by or on behalf of Mexico or
any political subdivision thereof or by any authority or agency therein or
thereof having power to tax (hereinafter "Mexican Withholding Taxes"), unless
the withholding or deduction of such Mexican Withholding Taxes is required by
law on payments of interest and original issue discount or by the interpretation
or administration thereof. In the event any Mexican Withholding Taxes are
required to be so withheld or deducted, the Company shall:
(a) pay such additional amounts ("Additional Amounts") as may be
necessary so that after making all required deductions or withholdings imposed
on payments of interest and original issue discount (including those applicable
to additional sums payable under this provision) the net amount received by
Holder or other beneficial owners of this Security shall not be less than the
amounts as would have been received by it had no such withholding or deduction
been required,
(b) deduct or withhold such Mexican Withholding Taxes and
(c) remit the full amount so deducted or withheld to the relevant
taxing or other authority.
Notwithstanding the foregoing, no such Additional Amounts shall be payable for
or on account of:
(a) any Mexican Withholding Taxes which would not have been imposed or
levied on the Holder or a beneficial owner but for the existence of any
present, future or former connection between such Holder or beneficial
owner of this Security and Mexico or any political subdivision or territory
or possession thereof or area subject to its jurisdiction, including,
without limitation, such Holder or beneficial owner: (i) being or having
been a citizen or resident of Mexico, (ii) maintaining or having maintained
an office, permanent establishment or branch therein, or (iii) being or
having been present or engaged in trade or business therein, except for a
connection solely arising from the mere ownership of, or receipt of payment
under, this Security or the exercise of rights under this Security or the
Indenture (personally or through the Trustee);
(b) any estate, inheritance, gift or similar tax, assessment or other
governmental charge;
(c) any Mexican Withholding Taxes that are imposed or levied by reason
of the failure by the Holder or beneficial owner of this Security to comply
with any certification, identification, information, documentation,
declaration or other reporting requirement which is required or imposed by
a statute, treaty, regulation, general rule or administrative practice as a
precondition to exemption from, or reduction in the rate of the imposition,
withholding or deduction of any Mexican Withholding Taxes; provided that at
least 60 days prior to: (i) the first payment date with respect to which
the Company
5
shall apply this clause (c) and (ii) in the event of a change in such
certification, identification, information, documentation, declaration or
other reporting requirements, the first payment date subsequent to such
change,
the Company shall have notified the Trustee, in writing, that the Holder or
beneficial owners of this Security will be required to provide such
certification, identification, information or documentation, declaration or
other reporting documentation;
(d) any Mexican Withholding Taxes that are imposed or levied by reason
of the failure by the Holder or beneficial owners of this Security to
timely comply (subject to the conditions set forth below) with a written
request by or on behalf of the Company, to provide information,
documentation or other evidence concerning the nationality, residence,
identity, eligibility for benefits under a treaty for avoidance of double
taxation to which Mexico is a party which is in effect, a present or former
connection with Mexico or any political subdivision or territory or
possession thereof or area subject to its jurisdiction, or of the Holder or
beneficial owner of this Security that is necessary from time to time to
determine the appropriate rate of deduction or withholding of Mexican
Withholding Taxes applicable to such Holder or beneficial owner; provided
that at least 60 days prior to the first payment date with respect to which
the Company shall apply this clause (d), the Company shall have notified
the Trustee, in writing, that the Holder or beneficial owners of this
Security will be required to provide such information, documentation or
other evidence;
(e) the presentation of this Security (where presentation is required)
for payment on a date more than 30 days after the date on which such
payment became due and payable or the date on which payment hereof is duly
provided for, whichever occurs later, except to the extent that the Holder
or the beneficial owner of this Security should have been entitled to
Additional Amounts in respect of such Mexican Withholding Taxes on
presenting this Security for payment on any date during such 30-day period;
or
(f) any combination of item (a), (b), (c), (d) or (e) above.
Notwithstanding the foregoing, the limitations on the Company's
obligation to pay Additional Amounts set forth in clauses (c) and (d) above
shall not apply if the provision of the certification, identification,
information, documentation, declaration or other evidence described in such
clauses (c) and (d) would be materially more onerous, in form, in procedure or
in the substance of information disclosed, to a Holder or beneficial owner of
this Security (taking into account any relevant differences between United
States and Mexican law, regulation or administrative practice) than comparable
information or other applicable reporting requirements imposed or provided for
under United States federal income tax law (including the United States-Mexico
Income Tax Treaty), regulations (including proposed regulations) and
administrative practice (such as IRS Forms 0000, X-0, X-0XXX and 6166). In
addition, the limitations on the Company's obligation to pay Additional Amounts
set forth in clauses (c) and (d) above shall not apply if the withholding rate
of 4.9% is applicable under the terms of paragraph (a) of Section II of Article
195 of the Mexican Income Tax Law, unless:
6
(i) the provision of the certification, identification, information,
documentation, declaration or other evidence described in clauses (c) and (d) is
expressly required by statute, regulation, general rules or administrative
practice in order to apply paragraph (a) of Section II of Article 195 of the
Mexican Income Tax Law, the Company cannot obtain such certification,
identification, information, or satisfy any other reporting requirements on its
own through reasonable diligence and the Company otherwise would meet the
requirements for application of paragraph (a) Section II of Article 195 of the
Mexican Income Tax Law, or
(ii) in the case of a Holder or beneficial owner of this Security that
is a pension or retirement fund or other tax-exempt organization, such Holder or
beneficial owner would be subject to Mexican Withholding Taxes at a rate that is
lower than the rate resulting from the application of paragraph (a) of Section
II of Article 195 of the Mexican Income Tax Law if the information,
documentation or other evidence required under clauses (c) and (d) above were
provided.
In addition, clauses (c) and (d) above shall not be construed to require that a
non-resident pension or retirement fund, a non-Mexican tax-exempt organization,
a non-resident financial institution or any other Holder or beneficial owner of
this Security obtain registration with the Ministry of Finance and Public Credit
for the purpose of establishing eligibility for an exemption from or reduction
of Mexican Withholding Taxes.
Upon the Trustee's receipt of timely notification from the Company
that the Holder or beneficial owners of this Security will be required to
provide information or documentation as described in clauses (c) and (d) above,
the Trustee shall provide such notification to the Holder or beneficial owners,
as the case may be. The Company will, upon written request, provide the Trustee,
the Holder and the Paying Agent with a duly certified or authenticated copy of
an original receipt of the payment of Mexican Withholding Taxes which the
Company has withheld or deducted in respect of any payments made under or with
respect to this Security. The Trustee shall, for a period of five years
following the due date for each payment, maintain in its files each such
certified copy received from the Company.
If the Company is obligated to pay Additional Amounts with respect to
any payment under or with respect to this Security (other than Additional
Amounts payable on the date of the Indenture), the Company will, upon written
request, deliver to the Trustee an Officers' Certificate stating the fact that
such Additional Amounts are payable and the amounts so payable.
The Trustee shall, upon written request by the beneficial owner of
this Security or any Paying Agent, provide such beneficial owner or Paying Agent
with a copy of the certified copy of the receipt provided to the Trustee by the
Company regarding the amount of Mexican Withholding Tax withheld by the Company
with respect to this Security within 30 Business Days following the receipt by
the Trustee of such request.
All references in this Security to principal or interest in respect of
this Security shall be deemed to mean and include all Additional Amounts, if
any, payable in respect of such principal or interest, unless the context
otherwise requires, and express mention of the payment
7
of Additional Amounts in any provision hereof shall not be construed as
excluding reference to Additional Amounts in those provisions hereof where such
express mention is not made. All references in this Security to principal in
respect of any Security shall be deemed to mean and include any redemption price
or purchase price payable in respect of such Security pursuant to any redemption
provided for below or pursuant to any Offer to Purchase, and express mention of
the payment of any redemption price or purchase price in any provision hereof
shall not be construed as excluding reference to any redemption price or
purchase price in those provisions hereof where such express reference is not
made.
In the event that Additional Amounts actually paid with respect to
this Securities are based on rates of deduction or withholding of Mexican
Withholding Taxes in excess of the appropriate rate applicable to the Holder or
beneficial owner of this Security, and, as a result thereof, such Holder or
beneficial owner is entitled to make a claim for a refund or credit of such
excess from Mexican tax authorities, then such Holder or beneficial owner shall,
by accepting this Security, be deemed to have assigned and transferred all
right, title and interest to any such claim for a refund or credit of such
excess to the Company. However, by making such assignment, such Holder or
beneficial owner makes no representation or warranty that the Company will be
entitled to receive such claim for a refund or credit and incurs no other
obligation with respect thereto.
Redemption for Changes in Mexican Withholding Taxes
In the event that the Company has become or would become obligated to
pay, on the next date on which any amount would be payable under or with respect
to the Securities, any Additional Amounts in excess of those attributable to
Mexican Withholding Taxes imposed at a rate of 10%, as a result of
(a) any change in or amendment to the laws, treaties, rules or
regulations of Mexico, or any political subdivision or taxing authority or other
instrumentality thereof or therein, or
(b) any change in the interpretations relating to such laws, treaties,
rules or regulations made by any legislative body, governmental or regulatory
agency or authority (including the enactment of any legislation and the
publication of any regulatory determination) of Mexico, or any political
subdivision or taxing authority or other instrumentality thereof or therein, or
(c) any official interpretation, application or pronouncement by any
legislative body or governmental or regulatory agency or authority that provides
for a position with respect to such laws, treaties, rules or regulations that
differs from the theretofore generally accepted position, which amendment or
change is enacted, promulgated, issued or announced or which interpretation,
application or pronouncement is issued or announced, in each case, after the
date of the Indenture, then
the Company may redeem all, but not less than all, of the Securities at any
time, on giving not less than 30 nor more than 60 days' notice mailed to the
Holder of this Security at a Redemption Price equal to 100% of the unpaid
principal amount together with accrued and unpaid interest, if
8
any, and original issue discount thereon, if any, to the Redemption Date. This
notice, once delivered to the Trustee, will be irrevocable, except if the
Company no longer continues to be obligated to pay those Additional Amounts.
In connection with a notice of redemption for tax reasons, the
following shall apply:
(a) no such notice of redemption may be given earlier than 90 days
prior to the earliest date on which, but for such redemption, the Company would
be obligated to pay such Additional Amounts were a payment on this Security then
due; and
(b) at the time such notice of redemption is given, such obligation to
pay such Additional Amounts remains in effect.
Prior to publication of any notice of redemption for tax reasons, the
Company shall deliver to the Trustee:
(i) a certificate signed by a duly authorized officer of the Company
stating that the Company is entitled to effect such redemption and setting forth
a statement of facts showing that the conditions precedent of the right of the
Company to so redeem have occurred; and
(ii) an Opinion of Mexican Counsel or independent public accountants,
in both cases of recognized standing, selected by the Company reasonably
acceptable to the Trustee to the effect that the Company has or will become
obligated to pay such Additional Amounts as a result of such change, amendment,
official interpretation, application or pronouncement.
Optional Redemption
This Security may be redeemed at any time, in whole or in part, at the
Company's option at a Redemption Price equal to the greater of (a) 100% of the
principal amount hereof or (b) the sum of the present values of the Remaining
Scheduled Payments discounted to the Redemption Date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate, as determined by an Independent Investment Banker, plus, in each
case, accrued and unpaid interest, if any, to the Redemption Date.
In addition, at any time prior to July 15, 2005, the Company may
redeem up to 35% of the principal amount of the Securities with the Net Cash
Proceeds of one or more sales of the Company's Capital Stock (other than
Disqualified Stock) at a Redemption Price (expressed as a percentage of
principal amount) of 113.75%, plus accrued and unpaid interest to the Redemption
Date; provided that at least 65% of the aggregate principal amount of the
Securities originally issued on the Closing Date remain outstanding after each
such redemption and notice of any such redemption is mailed within 120 days of
each such sale of the Company's Capital Stock.
The Company will give not less than 30 days' nor more than 60 days'
notice of any redemption to the Holder of this Security. If less than all of the
Securities are to be redeemed, selection of the Securities for redemption will
be made by the Trustee:
9
(a) in compliance with the requirements of the principal national
securities exchange, if any, on which the Securities are listed, or
(b) if the Securities are not listed on a national securities
exchange, by lot or by such other method as the Trustee in its sole
discretion shall deem to be fair and appropriate.
However, no Security of $1,000 in principal amount or less shall be redeemed in
part. If this Security is to be redeemed in part only, the notice of redemption
relating to this Security will state the portion of the principal amount to be
redeemed. A new Security in principal amount equal to the unredeemed portion
will be issued upon cancellation of this Security.
Other
The Company shall pay any stamp, issue, registration, documentary or
other similar taxes and other duties (including interest and penalties with
respect thereto) imposed or levied by Mexico (or any political subdivision or
taxing authority thereof or therein) in respect of the creation, issue and
offering of this Security.
Except as specifically provided in this Security or the Indenture, the
Company shall not be required to make any payment with respect to any tax, duty,
assessment or other governmental charge of whatever nature imposed or levied by
any government or any political subdivision or taxing authority thereof or
therein.
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture provides that, subject to certain conditions, if (a)
certain Net Cash Proceeds are available to the Company as a result of an Asset
Sale or (b) a Change of Control occurs, the Company shall be required to make an
Offer to Purchase for all or a specified portion of the Securities.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of this Security or (b) certain restrictive covenants
and Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities at the time. The Indenture also contains provisions permitting the
Holders of a majority in aggregate principal amount of the Outstanding
Securities at the time, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the
10
registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have any right to institute any proceeding,
judicial or otherwise, with respect to the Indenture or for the appointment of a
receiver or trustee or for any other remedy thereunder, unless (i) such Holder
shall have previously given written notice to the Trustee of a continuing Event
of Default, (ii) the Holders of at least 25% in aggregate principal amount of
the Outstanding Securities shall have made a written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee, (iii) such
Holder or Holders have offered to the Trustee indemnity satisfactory to the
Trustee against any cost, liability or expense to be incurred in compliance with
such request, (iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding, and
(v) no direction inconsistent with such request shall have been given to the
Trustee during such 60-day period by the Holders of a majority in aggregate
principal amount of the Outstanding Securities. The foregoing shall not apply to
any suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof, premium hereon, if any, or interest hereon on or
after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in The City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Security Registrar duly executed by the Holder hereof or an attorney for the
Holder duly authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities are issuable only in fully registered form, without
coupons, in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith.
Prior to the due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this
11
Security be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
Interest on this Security shall be computed on the basis of a 360-day
year of twelve 30-day months.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTING LAWS.
12
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
Please print or typewrite name and address including zip code of assignee
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing attorney to transfer said Note on the books of the Company with
full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN REGISTERED GLOBAL
SECURITIES, REGISTERED PHYSICAL SECURITIES,
UNLEGENDED OFFSHORE GLOBAL SECURITIES AND
UNLEGENDED OFFSHORE PHYSICAL SECURITIES]
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date the Shelf Registration Statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act of 1933 provided
by Rule 144A thereunder.
or
[ ] (b) this Security is being transferred other than in accordance
with (a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
13
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 207 of the Indenture shall have
been satisfied.
Date:________________ ____________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants (i) that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion, (ii) that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933 and is aware that the sale to it is being made in reliance on Rule 144A,
(iii) that it acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information, and (iv) that it is aware that the transferor
is relying upon the undersigned's foregoing representations in order to claim
the exemption from registration provided by Rule 144A.
Date:________________ _______________________________________
NOTICE: To be executed by an executive officer
14
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 1016 or 1017 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Security purchased by the Company
pursuant to Section 1016 or 1017 of the Indenture, state the amount (in
principal amount): $_____________
Date:
Your Signature: _________________________________
(Sign exactly as your name appears on the other side of this
Security)
Signature Guarantee: ___________________________
15
EXHIBIT B
Form of Certificate
-----------,
JPMorgan Chase Bank
000 Xxxx 00xx Xxxxxx, x0xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Corporate Trust Office
Re: Corporacion Durango, S.A. de C.V. (the "Company")
13-3/4% Senior Notes due 2009 (the "Notes")
----------------------------------------------------
Dear Sirs:
This letter relates to U. S. $_____________ principal amount of Notes
represented by a Note (the "Legended Note") which bears a legend outlining
restrictions upon transfer of such Legended Note. Pursuant to Section 202 of the
Indenture dated as of June 24, 2002 (the "Indenture") relating to the Notes, we
hereby certify that we are (or we will hold such securities on behalf of) a
person outside the United States to whom the Notes could be transferred in
accordance with Rule 904 of Regulation S promulgated under the U.S. Securities
Act of 1933. Accordingly, you are hereby requested to exchange the legended
certificate for an unlegended certificate representing an identical principal
amount of Notes, all in the manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:__________________
Authorized Signature
EXHIBIT C
------------,
Form of Certificate to Be Delivered in
Connection with Transfers Pursuant to Regulation S
JPMorgan Chase Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Corporate Trust Office
Re: Corporacion Durango, S.A, de C.V. (the "Company")
l3-3/4% Senior Notes due 2009 (the "Notes")
-------------------------------------------------
Dear Sirs:
In connection with our proposed sale of U.S.$__________ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the Securities Act of 1933 and,
accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United States;
(2) at the time the buy order was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed
that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation
5, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933, as amended.
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. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:________________
Authorized Signature
