- --------------------------------------------------------------
KAISER ALUMINUM & CHEMICAL CORPORATION,
as Issuer,
KAISER ALUMINA AUSTRALIA CORPORATION,
ALPART JAMAICA INC.,
KAISER FINANCE CORPORATION,
KAISER JAMAICA CORPORATION,
KAISER MICROMILL HOLDINGS, LLC,
KAISER SIERRA MICROMILLS, LLC,
KAISER TEXAS MICROMILL HOLDINGS, LLC and
KAISER TEXAS SIERRA MICROMILLS, LLC,
as Subsidiary Guarantors,
AND
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
-------------------------------------
INDENTURE
Dated as of October 23, 1996
-------------------------------------
$175,000,000
10-7/8% Senior Notes due 2006
- ---------------------------------------------------------------
RECONCILIATION AND TIE SHEET*
between
PROVISIONS OF THE TRUST INDENTURE ACT OF 1939
and
INDENTURE DATED AS OF OCTOBER 23, 1996
between
KAISER ALUMINUM & CHEMICAL CORPORATION
KAISER ALUMINA AUSTRALIA CORPORATION,
ALPART JAMAICA INC.,
KAISER FINANCE CORPORATION,
KAISER JAMAICA CORPORATION,
KAISER MICROMILL HOLDINGS, LLC,
KAISER SIERRA MICROMILLS, LLC,
KAISER TEXAS MICROMILL HOLDINGS, LLC and
KAISER TEXAS SIERRA MICROMILLS, LLC
and
FIRST TRUST NATIONAL ASSOCIATION, TRUSTEE
Sections Sections of
of Act Indenture
- ------ ---------
310(a)(1) . . . . . . . . . . . . . . . . . 7.09
310(a)(2) . . . . . . . . . . . . . . . . . 7.09
310(a)(3) . . . . . . . . . . . . . . . . . Inapplicable
310(a)(4) . . . . . . . . . . . . . . . . . Inapplicable
310(a)(5) . . . . . . . . . . . . . . . . . 7.09
310(b). . . . . . . . . . . . . . . . . . . 7.08, 7.10
310(c). . . . . . . . . . . . . . . . . . . Inapplicable
311(a). . . . . . . . . . . . . . . . . . . 7.13(a), 7.13(c)
311(b). . . . . . . . . . . . . . . . . . . 7.13(b), 7.13(c)
311(c). . . . . . . . . . . . . . . . . . . Inapplicable
312(a). . . . . . . . . . . . . . . . . . . 5.01, 5.02(a)
312(b). . . . . . . . . . . . . . . . . . . 5.02(b)
312(c). . . . . . . . . . . . . . . . . . . 5.02(c)
313(a). . . . . . . . . . . . . . . . . . . 5.04(a)
313(b)(1) . . . . . . . . . . . . . . . . . Inapplicable
313(b)(2) . . . . . . . . . . . . . . . . . 5.04(b)
313(c). . . . . . . . . . . . . . . . . . . 5.04(c)
313(d). . . . . . . . . . . . . . . . . . . 5.04(d)
314(a)(1) . . . . . . . . . . . . . . . . . 5.03(a)
314(a)(2) . . . . . . . . . . . . . . . . . 5.03(b)
314(a)(3) . . . . . . . . . . . . . . . . . 5.03(c)
314(a)(4) . . . . . . . . . . . . . . . . . 5.03(d)
314(b). . . . . . . . . . . . . . . . . . . Inapplicable
314(c)(1) . . . . . . . . . . . . . . . . . 14.05
314(c)(2) . . . . . . . . . . . . . . . . . 14.05
i
Sections Sections of
of Act Indenture
- ------ ---------
314(c)(3) . . . . . . . . . . . . . . . . . Inapplicable
314(d). . . . . . . . . . . . . . . . . . . Inapplicable
314(e). . . . . . . . . . . . . . . . . . . 14.05
314(f). . . . . . . . . . . . . . . . . . . Omitted
315(a). . . . . . . . . . . . . . . . . . . 7.01
315(b). . . . . . . . . . . . . . . . . . . 6.07
315(c). . . . . . . . . . . . . . . . . . . 7.01
315(d). . . . . . . . . . . . . . . . . . . 7.01
315(e). . . . . . . . . . . . . . . . . . . 6.08
316(a)(1) . . . . . . . . . . . . . . . . . 6.06, 8.04
316(a)(2) . . . . . . . . . . . . . . . . . Omitted
316(b). . . . . . . . . . . . . . . . . . . 6.04
316(c). . . . . . . . . . . . . . . . . . . 8.05
317(a). . . . . . . . . . . . . . . . . . . 6.02
317(b). . . . . . . . . . . . . . . . . . . 4.04(a)
318(a). . . . . . . . . . . . . . . . . . . 14.07
318(c). . . . . . . . . . . . . . . . . . . 14.07
- -------------------------
*This Reconciliation and Tie Sheet is not a part of the
Indenture.
ii
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Certain terms defined. . . . . . . . . . . 12
SECTION 1.02. References are to Indenture. . . . . . . . 36
SECTION 1.03. Other definitions. . . . . . . . . . . . . 36
ARTICLE TWO
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
SECTION 2.01. Designation, amount, authentication and
delivery of Notes. . . . . . . . . . . . 37
SECTION 2.02. Form of Notes and Trustee's certificate. . 38
SECTION 2.03. Date of Notes and denominations. . . . . . 39
SECTION 2.04. Execution of Notes . . . . . . . . . . . . 40
SECTION 2.05. Exchange and transfer of Notes . . . . . . 40
SECTION 2.06. Temporary Notes. . . . . . . . . . . . . . 44
SECTION 2.07. Mutilated, destroyed, lost or stolen
Notes. . . . . . . . . . . . . . . . . . 44
SECTION 2.08. Cancellation of surrendered Notes. . . . . 45
SECTION 2.09. Restrictive Legends. . . . . . . . . . . . 45
SECTION 2.10. Book-Entry Provisions for Global Note and
Regulation S Temporary Global Note . . . 47
ARTICLE THREE
REDEMPTION AND PURCHASES OF NOTES
SECTION 3.01. Redemption prices. . . . . . . . . . . . . 48
SECTION 3.02. Notice of redemption; selection of Notes . 48
SECTION 3.03. When Notes called for redemption become
due and payable. . . . . . . . . . . . . 49
SECTION 3.04. Cancellation of redeemed Notes . . . . . . 50
SECTION 3.05. Purchase of Notes at option of the holder
upon Change of Control . . . . . . . . . 50
SECTION 3.06. Effect of Change of Control Purchase Notice 52
SECTION 3.07. Deposit of Change of Control Purchase Price 53
SECTION 3.08. Covenant to comply with securities laws
upon purchase of Notes . . . . . . . . . 53
SECTION 3.09. Repayment to the Company . . . . . . . . . 53
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.01. Payments on the Notes . . . . . . . . . . 53
SECTION 4.02. Maintenance of office or agency for
registration of transfer, exchange and
payment of Notes. . . . . . . . . . . . 53
SECTION 4.03. Appointment to fill a vacancy in the
office of Trustee . . . . . . . . . . . 54
SECTION 4.04. Provision as to paying agent. . . . . . . 54
SECTION 4.05. Maintenance of corporate existence. . . . 55
SECTION 4.06. Officers' Certificate as to default
and statement as to compliance. . . . . 55
iii
Page
----
SECTION 4.07. Usury laws. . . . . . . . . . . . . . . . 56
SECTION 4.08. Restrictions on transactions with
Affiliates and Unrestricted Subsidiaries 56
SECTION 4.09. Limitations on Restricted Payments,
Restricted Investments and
Unrestricted Subsidiary Investments. . . 57
SECTION 4.10. Limitation on Indebtedness and Preferred
Stock. . . . . . . . . . . . . . . . . . 62
SECTION 4.11. Limitation on Liens. . . . . . . . . . . . 66
SECTION 4.12. Subsidiary guarantees, etc. . . . . . . . 68
SECTION 4.13. Limitation on dividends and other payment
restrictions affecting Subsidiaries. . . 70
SECTION 4.14. Limitation on Asset Sales. . . . . . . . . 70
SECTION 4.15. Limitations on Unrestricted Subsidiaries . 73
ARTICLE FIVE
NOTEHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 5.01. Company to furnish Trustee information
as to names and addresses of
noteholders. . . . . . . . . . . . . . . 73
SECTION 5.02. Preservation and disclosure of lists . . . 74
SECTION 5.03. Reports by the Company . . . . . . . . . . 75
SECTION 5.04. Reports by the Trustee . . . . . . . . . . 76
ARTICLE SIX
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01. Events of Default defined . . . . . . . . 77
SECTION 6.02. Payment of Notes on default; suit therefor 78
SECTION 6.03. Application of moneys collected by Trustee 80
SECTION 6.04. Limitation on suits by holders of Notes . 80
SECTION 6.05. Proceedings by Trustee; remedies
cumulative and continuing; delay or
omission not waiver of default. . . . . 81
SECTION 6.06. Rights of holders of majority in
principal amount of Notes to direct
Trustee and to waive defaults . . . . . 81
SECTION 6.07. Trustee to give notice of defaults
known to it, but may withhold in
certain circumstances . . . . . . . . . 82
SECTION 6.08. Requirement of an undertaking to pay
costs in certain suits under
the Indenture or against the Trustee. . 82
SECTION 6.09. Waiver of stay or extension laws. . . . . 82
ARTICLE SEVEN
CONCERNING THE TRUSTEE
SECTION 7.01. Duties and responsibilities of Trustee. . 83
SECTION 7.02. Reliance on documents, opinions, etc. . . 84
SECTION 7.03. No responsibility for recitals, etc. . . 85
SECTION 7.04. Trustee, paying agent or Note registrar
may own Notes . . . . . . . . . . . . . 85
SECTION 7.05. Moneys received by Trustee to be held in
trust without interest. . . . . . . . . 85
SECTION 7.06. Compensation and expenses of Trustee. . . 85
iv
Page
----
SECTION 7.07. Right of Trustee to rely on Officers'
Certificate where no other evidence
specifically prescribed . . . . . . . . 85
SECTION 7.08. Conflicting interest of Trustee . . . . . 86
SECTION 7.09. Requirements for eligibility of Trustee . 90
SECTION 7.10. Resignation or removal of Trustee . . . . 91
SECTION 7.11. Acceptance by successor to Trustee;
notice of succession of a Trustee . . . . 92
SECTION 7.12. Successor to Trustee by merger,
consolidation or succession to
business; notice by Trustee of
change in its location. . . . . . . . . 92
SECTION 7.13. Limitations on rights of Trustee as a
creditor. . . . . . . . . . . . . . . . 93
ARTICLE EIGHT
CONCERNING THE NOTEHOLDERS
SECTION 8.01. Evidence of action by noteholders . . . . 96
SECTION 8.02. Proof of execution of instruments and
of holding of Notes . . . . . . . . . . 96
SECTION 8.03. Who may be deemed owners of Notes . . . . 96
SECTION 8.04. Notes owned by Company or controlled by
controlling persons disregarded
for certain purposes. . . . . . . . . . 97
SECTION 8.05. Record date for action by noteholders . . 97
SECTION 8.06. Instruments executed by noteholders
bind future holders . . . . . . . . . . 97
ARTICLE NINE
NOTEHOLDERS' MEETINGS
SECTION 9.01. Purposes for which meetings may be
called. . . . . . . . . . . . . . . . . 98
SECTION 9.02. Manner of calling meetings; record date . 98
SECTION 9.03. Call of meeting by Company or
noteholders . . . . . . . . . . . . . . 99
SECTION 9.04. Who may attend and vote at meetings . . . 99
SECTION 9.05. Regulations . . . . . . . . . . . . . . . 99
SECTION 9.06. Manner of voting at meetings and
record to be kept . . . . . . . . . . . 100
SECTION 9.07. Exercise of rights of Trustee and
noteholders not to be hindered
or delayed. . . . . . . . . . . . . . . 100
ARTICLE TEN
SUPPLEMENTAL INDENTURES
SECTION 10.01. Purposes for which supplemental
indentures may be entered into
without consent of noteholders . . . . 100
SECTION 10.02. Modification of Indenture with consent
of holders of a majority
in principal amount of Notes . . . . . 101
SECTION 10.03. Effect of supplemental indentures. . . . 102
SECTION 10.04. Notes may bear notation of changes by
supplemental indentures. . . . . . . . 102
SECTION 10.05. Officers' Certificate and Opinion of
Counsel. . . . . . . . . . . . . . . . 102
V
ARTICLE ELEVEN
CONSOLIDATION, MERGER AND SALE
Page
----
SECTION 11.01. Company may consolidate, etc., on
certain terms. . . . . . . . . . . . . 103
SECTION 11.02. Successor corporation to be
substituted. . . . . . . . . . . . . . 104
SECTION 11.03. Opinion of Counsel . . . . . . . . . . . 104
ARTICLE TWELVE
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 12.01. Satisfaction and discharge of Indenture. 104
SECTION 12.02. Application by Trustee of funds
deposited for payment of Notes. . . . . 105
SECTION 12.03. Repayment of moneys held by paying agent. 105
SECTION 12.04. Repayment of moneys held by Trustee . . . 105
SECTION 12.05. Reinstatement . . . . . . . . . . . . . . 106
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 13.01. Incorporators, stockholders, officers and
directors of Company exempt from
individual liability. . . . . . . . . . 106
ARTICLE FOURTEEN
MISCELLANEOUS PROVISIONS
SECTION 14.01. Successors and assigns of Company bound
by Indenture. . . . . . . . . . . . . . 107
SECTION 14.02. Acts of board, committee or officer of
successor corporation valid . . . . . . 107
SECTION 14.03. Required notices or demands may be
served by mail; waiver. . . . . . . . . 107
SECTION 14.04. Indenture and Notes to be construed in
accordance with the laws of the State
of New York . . . . . . . . . . . . . . 108
SECTION 14.05. Evidence of compliance with conditions
precedent . . . . . . . . . . . . . . . 108
SECTION 14.06. Payments due on Saturdays, Sundays and
holidays. . . . . . . . . . . . . . . . 108
SECTION 14.07. Provisions required by Trust Indenture
Act of 1939 to control. . . . . . . . . 109
SECTION 14.08. Provisions of the Indenture and Notes
for the sole benefit of the parties
and the noteholders . . . . . . . . . . 109
SECTION 14.09. Severability. . . . . . . . . . . . . . . 109
SECTION 14.10. Indenture may be executed in counterparts;
acceptance by Trustee . . . . . . . . . 109
SECTION 14.11. Article and Section headings. . . . . . . 109
SECTION 14.12. No Adverse Interpretation of Other
Instruments . . . . . . . . . . . . . . 109
vi
ARTICLE FIFTEEN
GUARANTEE OF NOTES
Page
----
SECTION 15.01. Guarantee . . . . . . . . . . . . . . . . 109
SECTION 15.02. Guarantee senior in respect of
Subordinated Notes. . . . . . . . . . . 110
SECTION 15.03. Subsidiary Guarantors may consolidate,
etc., on certain terms. . . . . . . . . 110
SECTION 15.04. Application of certain terms and
provisions to the Subsidiary
Guarantors. . . . . . . . . . . . . . . 111
SECTION 15.05. Release of Guarantee. . . . . . . . . . . 112
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . .
EXHIBIT A-1 REGULATION S NOTE PROVISIONS
EXHIBIT A-2 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION
OF TRANSFER FROM REGULATION S GLOBAL NOTE
SCHEDULE A - SCHEDULE OF LIENS SECURING INDEBTEDNESS IN EXCESS
OF $5,000,000
SCHEDULE B - REAL PROPERTY CONSTITUTING PERMITTED COLLATERAL
SCHEDULE C - CERTAIN INDEBTEDNESS IN EXCESS OF $10,000,000
vii
THIS INDENTURE, dated as of the 23rd day of October, 1996,
among KAISER ALUMINUM & CHEMICAL CORPORATION, a corporation duly
organized and existing under the laws of the State of Delaware
(hereinafter referred to as the "Company"), as Issuer, KAISER
ALUMINA AUSTRALIA CORPORATION, KAISER FINANCE CORPORATION, ALPART
JAMAICA INC., KAISER JAMAICA CORPORATION, KAISER MICROMILL
HOLDINGS, LLC, KAISER SIERRA MICROMILLS, LLC, KAISER TEXAS
MICROMILL HOLDINGS, LLC and KAISER TEXAS SIERRA MICROMILLS, LLC,
as Subsidiary Guarantors, and FIRST TRUST NATIONAL ASSOCIATION,
a national banking association (hereinafter referred to as the
"Trustee"), as Trustee.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company has duly authorized an issue of its
10-7/8% Senior Notes due 2006 (hereinafter referred to as the
"Initial Notes"), for an aggregate principal amount of up to one
hundred seventy five million dollars ($175,000,000), to be issued
as registered Initial Notes without coupons, to be authenticated
by the certificate of the Trustee, to be payable on October 15,
2006, and to be redeemable and purchasable as hereinafter
provided; and the Company has duly authorized an issue of its
Series B 10-7/8% Senior Notes due 2006 to be issued in exchange
for the Initial Notes pursuant to the Registration Rights
Agreement (hereinafter referred to as the "Exchange Notes" and
together with the Initial Notes, the "Notes"); and, to provide
the terms and conditions upon which the Notes are to be
authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture;
WHEREAS, the payment of the principal of, premium, if any,
Change of Control Purchase Price, Asset Sale Purchase Price and
interest on, the Notes is hereby expressly designated, and the
monetary obligations of the Company under the Notes shall
hereafter constitute for all purposes, Senior Indebtedness of the
Company under the terms of the 12-3/4% Note Indenture (as
hereinafter defined);
WHEREAS, the Guarantee (as hereinafter defined) of each
Subsidiary Guarantor in respect of the Notes is hereby expressly
designated, and the monetary obligations of such Subsidiary
Guarantor under the Notes shall hereafter constitute for all
purposes Senior Indebtedness of such Subsidiary Guarantor under
the terms of the 12-3/4% Note Indenture, to the extent that such
Subsidiary Guarantor is a guarantor under the 12-3/4% Note
Indenture;
WHEREAS, the Company has duly delivered written notice to
the trustee under the 12-3/4% Note Indenture designating the
Notes and each Guarantee as Senior Indebtedness thereunder;
WHEREAS, the Notes and the Trustee's certificate of
authentication to be borne by the Notes are to be substantially
in the following forms, respectively:
[FORM OF FACE OF NOTE]
No. [Principal Amount]
Issue Date: CUSIP
KAISER ALUMINUM & CHEMICAL CORPORATION
10-7/8% [SERIES B] SENIOR NOTE DUE 2006
KAISER ALUMINUM & CHEMICAL CORPORATION, a corporation duly
organized and existing under the laws of the State of Delaware
(herein referred to as the "Company"), for value received, hereby
promises to pay to , or registered assigns,
--------------------
the principal sum of DOLLARS on October 15,
---------------------
2006, at the office or agency of the Company in the Borough of
Manhattan, the City of New York, State of New York, in such coin
or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private
debts, and to pay to the registered holder hereof, as hereinafter
provided, interest on said principal sum at the rate per annum
specified in the title of this Note, in like coin or currency,
semiannually on April 15 and October 15 in each year. Interest
shall accrue from the most recent date to which interest has been
paid or duly provided for or, if no interest has been paid or
duly provided for, from October 23, 1996; provided, that, in the
case of authentication between the record date for any interest
payment date and such interest payment date, this Note shall be
dated the date of its authentication but shall bear interest from
such interest payment date, subject to certain exceptions. The
interest so payable on any April 15 or October 15 will, subject
to certain exceptions provided in the Indenture hereinafter
referred to, be paid to the person in whose name this Note is
registered at the close of business on the April 1 or October 1,
as the case may be, next preceding such April 15 or October 15
whether or not such April 1 or October 1 is a Business Day.
Interest shall be computed on the basis of a 360-day year of
twelve 30-day months. Payment of interest shall be made at the
office or agency of the Company maintained for such purpose
within the City and State of New York or, at the option of the
Company, by check mailed by first-class mail to the address of
the person entitled thereto at such address as shall appear on
the registry books of the Company; provided that all payments
with respect to this Note, if the holder of this Note has given
wire transfer instructions (which instructions must be received
by the Company at least 5 Business Days prior to the relevant
date of payment) to the Company, will be required to be made by
wire transfer of immediately available funds to the account
specified by the holder of this Note; provided, that such
payments (other than interest payments) may be conditioned upon
surrender of this Note.
As provided in the Indenture, this Note shall be deemed to
be a contract made under the laws of the State of New York, and
for all purposes shall be governed by and construed in accordance
with the laws of such State.
Reference is made to the further provisions of this Note set
forth on the reverse hereof. Such further provisions shall for
all purposes have the same effect as though fully set forth at
this place.
This Note shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have
been signed by the Trustee under the Indenture referred to on the
reverse hereof.
2
IN WITNESS WHEREOF, KAISER ALUMINUM & CHEMICAL CORPORATION
has caused this instrument to be duly executed under its
corporate seal.
Dated
KAISER ALUMINUM & CHEMICAL
CORPORATION
By:
------------------------
Name:
Title:
[Corporate Seal]
Attest:
- -------------------
Secretary
3
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Notes described in the within-mentioned
Indenture.
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
By:
---------------------------
Authorized Signatory
[FORM OF REVERSE OF NOTE]
KAISER ALUMINUM & CHEMICAL CORPORATION
10-7/8% [SERIES B] SENIOR NOTE DUE 2006
This Note is one of a duly authorized issue of Notes of the
Company known as its 10-7/8% Senior Notes due 2006 (herein
referred to as the "Notes"), limited to an aggregate principal
amount of one hundred seventy five million dollars
($175,000,000), all issued or to be issued under and pursuant to
an indenture, dated as of October 23, 1996 (herein referred to as
the "Indenture"), duly executed and delivered between the
Company, the Subsidiary Guarantors (as defined in the Indenture)
and First Trust National Association, as trustee (herein referred
to as the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company, the
Subsidiary Guarantors and the holders of the Notes. All terms
used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal amount of
this Note plus any accrued and unpaid interest to the date of
acceleration may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture. The
Indenture provides that in certain events such declaration and
its consequences may be waived by the holders of a majority of
the aggregate principal amount of the Notes then outstanding or
outstanding on the record date, if any, fixed therefor in
accordance with the provisions of the Indenture. It is also
provided in the Indenture that the holders of a majority of the
aggregate principal amount of the Notes at the time or on any
such record date outstanding may on behalf of the holders of all
of the Notes waive, prior to such declaration, any past default
under the Indenture and its consequences, except a default in the
payment of the principal of, premium, if any, Change of Control
Purchase Price, Asset Sale Purchase Price or interest on any of
the Notes or a default in respect of a covenant or provision in
the Indenture which under Article Ten of the Indenture cannot be
modified or amended without the consent of the holder of each
outstanding Note.
Payment of the Notes is guaranteed on a senior basis by
Kaiser Alumina Australia Corporation, Alpart Jamaica Inc., Kaiser
Finance Corporation, Kaiser Jamaica Corporation, Kaiser Micromill
4
Holdings, LLC, Kaiser Sierra Micromills, LLC, Kaiser Texas
Micromill Holdings, LLC and Kaiser Texas Sierra Micromills, LLC
and, under certain circumstances set forth in the Indenture, may
be guaranteed by certain other Subsidiaries and Non-Affiliate
Joint Ventures of the Company. Under certain circumstances set
forth in the Indenture, each of the Subsidiary Guarantors may be
released from their respective obligations under the Indenture
and the Notes.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a
majority of the aggregate principal amount of the Notes then
outstanding or outstanding on the record date, if any, fixed
therefor in accordance with the provisions of the Indenture,
evidenced as in the Indenture provided, to execute supplemental
indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of
the holders of the Notes; provided, however, that, as provided in
Section 10.02 of the Indenture, without the consent of each
holder of an outstanding Note affected, no such supplemental
indenture shall, inter alia, (i) extend the stated maturity of
----- -----
any Note, reduce the interest rate, extend the time or alter the
manner of payment of interest thereon, or reduce the principal
amount thereof, or alter the timing of or reduce any premium
payable upon the redemption thereof, or reduce the amount payable
thereon in the event of acceleration or the amount thereof
payable in bankruptcy, or (ii) reduce the aforesaid percentage of
aggregate principal amount of Notes, the consent of the holders
of which is required for any such supplemental indenture.
Any such consent or waiver by the registered holder of this
Note (unless effectively revoked as provided in the Indenture)
shall be conclusive and binding upon such holder and upon all
future holders of this Note and of any Note issued in exchange or
substitution herefor, irrespective of whether or not any notation
of such consent or waiver is made upon this Note or such other
Note.
No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of, premium, if any, Change of Control
Purchase Price, Asset Sale Purchase Price and interest on this
Note at the place, at the respective times, at the rate and in
the currency herein prescribed.
The Notes are issuable as fully registered Notes without
coupons in denominations of $1,000 and any integral multiple of
$1,000. At the office or agency to be maintained by the Company
referred to on the face hereof, and in the manner and subject to
the limitations provided in the Indenture, Notes may be exchanged
for a like aggregate principal amount of Notes in other
authorized denominations, without payment of any charge other
than a sum sufficient to reimburse the Company for any tax or
other governmental charge incident thereto. Principal of,
premium, if any, Change of Control Purchase Price, Asset Sale
Purchase Price and interest on this Note are payable at the
office or agency of the Company referred to on the face hereof,
except that, at the option of the Company, payment of interest
hereon may be made by check mailed by first-class mail to the
address of the person entitled thereto at such address as shall
appear on the registry books of the Company; provided that all
payments with respect to this Note, if the holder of this Note
has given wire transfer instructions (which instructions must be
received by the Company at least 5 Business Days prior to the
relevant date of payment) to the Company, will be required to be
made by wire transfer of immediately available funds to the
accounts specified by the holder of this Note; provided, that
such payments (other than interest payments) may be conditioned
upon surrender of this Note.
The Notes are subject to redemption on or after October 15,
2001, at the option of the Company, in whole or in part on any
date prior to maturity, upon mailing by first-class mail a notice
of such
5
redemption not less than 15 nor more than 60 days prior to the
date fixed for redemption to the holders of Notes to be redeemed
in whole or in part at their addresses as they shall appear upon
the registry books of the Company, all as provided in the
Indenture. Any such notice which is mailed in the manner
hereinabove provided shall be conclusively presumed to have been
duly given, whether or not the holder receives the notice.
The table below shows the redemption prices (expressed as a
percentage of principal amount) on the dates shown below. If
redeemed during the 12-month period beginning October 15, the
redemption price shall be:
Redemption
Year Price
---- ----------
2001. . . . . . . . . . . . . . . . . . 105.437%
2002. . . . . . . . . . . . . . . . . . 103.625%
2003. . . . . . . . . . . . . . . . . . 101.813%
2004 and thereafter . . . . . . . . . . 100.00%
in each case together with accrued and unpaid interest to (but
not including) the date fixed for redemption.
Subject to the terms and conditions of the Indenture, if any
Change of Control (as defined in the Indenture) occurs on or
prior to maturity, the Company shall offer to purchase from each
holder all or any part of the holder's Notes for which a Change
of Control Purchase Notice shall have been delivered as provided
in the Indenture and not withdrawn, on the date that is 30
Business Days after the occurrence of such Change of Control (the
"Change of Control Purchase Date"), for a Change of Control
Purchase Price equal to 101% of the principal amount thereof plus
accrued and unpaid interest to (but not including) the Change of
Control Purchase Date, which Change of Control Purchase Price
shall be paid in cash.
Holders have the right to withdraw any Change of Control
Purchase Notice by delivering to the Trustee a written notice of
withdrawal in accordance with the provisions of the Indenture.
If cash sufficient to pay the Change of Control Purchase
Price of all Notes or portions thereof to be purchased on the
Change of Control Purchase Date is deposited with the Trustee as
of the Change of Control Purchase Date, interest shall cease to
accrue (whether or not this Note is delivered to the Trustee or
any other office or agency maintained for such purpose) on such
Notes (or portions thereof) on and after the Change of Control
Purchase Date, and the holders thereof shall have no other rights
as such (other than the right to receive the Change of Control
Purchase Price, upon surrender of such Notes).
Subject to the terms and conditions of the Indenture, the
Company shall apply the Net Cash Proceeds (as defined in the
Indenture) of Asset Sales (as defined in the Indenture), under
certain circumstances described in the Indenture, to (x) the
prepayment of Indebtedness (as defined in the Indenture) in
respect of or under the Credit Agreement (as defined in the
Indenture) and the Specified Pari Passu Indebtedness (as defined
in the Indenture) unless the holders thereof elect not to receive
such
6
prepayment and (y) an offer to purchase (an "Asset Sale Offer")
the then outstanding Notes, on any Business Day occurring no
later than 175 days after the receipt by the Company (or any of
its Subsidiaries, if applicable) of such Net Cash Proceeds, at a
price equal to 100% of the principal amount thereof together with
accrued and unpaid interest, if any, to but not including the
Asset Sale Purchase Date (as defined in the Indenture). Such
Asset Sale Offer with respect to the Notes shall be in an
aggregate principal amount (the "Asset Sale Offer Amount") equal
to the Net Cash Proceeds (rounded down to the nearest $1,000)
from the Asset Sales to which the Asset Sale Offer relates
multiplied by a fraction, the numerator of which is the principal
amount of the Notes outstanding (determined as of the close of
business on the day immediately preceding the date notice of such
Asset Sale Offer is mailed) and the denominator of which is the
principal amount of the Notes outstanding plus the aggregate
principal amount of Indebtedness under the Credit Agreement and
the Specified Pari Passu Indebtedness outstanding (determined as
of the close of business on the day immediately preceding the
date notice of such Asset Sale Offer is mailed). If (x) no
Indebtedness is outstanding in respect of or under the Credit
Agreement or the Specified Pari Passu Indebtedness or (y) the
holders of such Indebtedness entitled to receive payment elect
not to receive the payments provided for in the previous
sentence, or (z) the application of such Net Cash Proceeds
results in the complete prepayment of such Indebtedness, then in
each case any remaining portion of such Net Cash Proceeds will be
required to be applied to an Asset Sale Offer to purchase the
Notes.
Upon surrender of this Note, the transfer of this Note is
registrable by the registered holder hereof in person or by his
attorney duly authorized in writing on the registry books of the
Company at the office or agency to be maintained by the Company
referred to on the face hereof, subject to the terms of the
Indenture but without payment of any charge other than a sum
sufficient to reimburse the Company for any tax or other
governmental charge incident thereto. Upon any such registration
of transfer, a new Note or Notes of authorized denomination or
denominations, for the same aggregate principal amount, will be
issued to the transferee in exchange herefor.
Prior to due presentation for registration of transfer, the
Company, the Trustee, any paying agent and any Note registrar may
deem and treat the person in whose name this Note shall be
registered upon the registry books of the Company as the absolute
owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing
hereon), for the purpose of receiving payment of or on account of
the principal hereof, premium, if any, Change of Control Purchase
Price, Asset Sale Purchase Price and interest due hereon and for
all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any Note registrar shall be affected by any
notice to the contrary. All such payments shall be valid and
effectual to satisfy and discharge the liability on this Note to
the extent of the sum or sums so paid.
No recourse shall be had for the payment of the principal
of, premium, if any, Change of Control Purchase Price, Asset Sale
Purchase Price or the interest on this Note, or for any claim
based hereon, or otherwise in respect hereof, or based on or in
respect of the Indenture or any indenture supplemental thereto,
against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any successor
corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty
or otherwise, all such liability being, by the acceptance hereof
and as part of the consideration for the issue hereof, expressly
waived and released.
7
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
-------------------
-------------------
(Insert assignee's soc.
sec. or tax I.D. no.)
- ---------------------------------------------------------------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
- ---------------------------------------------------------------
- -------------------------------------------------------- agent
to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date: Your Signature:
-------------------- -------------------
................................... -------------------
(Sign exactly as your name(s) appear(s) on the Note)
Signature Guarantee:
---------------------------
(bank, trust company or member firm
of the New York Stock Exchange)
8
OPTION OF HOLDER TO ELECT PURCHASE
Upon an offer by the Company to purchase all or any part of this
Note pursuant to Section 3.05 or 4.14 of the Indenture, please
check the appropriate box below if you wish to elect to have all
or any part of this Note so purchased.
Section 3.05
---
Section 4.14
---
If you wish to have only part of this Note purchased by the
Company pursuant to Section 3.05 or Section 4.14 of the
Indenture, state the principal amount you elect to have
purchased:
$
-------------------
Date: Signature:
------------------ -------------------------
-------------------------
(Sign exactly as your name(s) appear(s) on the face of this Note)
Signature Guarantee:
--------------------------------
(bank, trust company or member firm
of the New York Stock Exchange)
9
[In connection with any transfer of this Note occurring
prior to the date which is the earlier of (i) the date of the
declaration by the SEC of the effectiveness of a registration
statement under the Securities Act of 1933, as amended (the
"Securities Act of 1933"), covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the
date of the transfer) and (ii) the third anniversary of the Issue
Date (or such shorter period permitted under Rule 144(k) under
the Securities Act of 1933) (or a successor clause)), the
undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the
transfer:
[Check One]
---------
(1) to the Company; or
---
(2) pursuant to and in compliance with Rule 144A under the
---
Securities Act of 1933, as amended; or
(3) to an institutional "accredited investor" (as defined
---
in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act of 1933); or
(4) outside the United States to a "Non-U.S. person" in
---
compliance with Rule 904 of Regulation S under the
Securities Act of 1933; or
(5) pursuant to an effective registration statement under
---
the Securities Act of 1933; or
(6) pursuant to another available exemption from the
---
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the
name of any person other than the registered Holder thereof,
provided, that if box (3), (4) or (6) is checked, the Company or
- --------
the Trustee may require, prior to registering any such transfer
of the Notes, in its sole discretion, such written legal
opinions, certifications (including an investment letter in the
case of box (3) or (4)), and other information as the Trustee,
Note registrar or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements
of the Securities Act of 1933.
If none of the foregoing boxes are checked, the Trustee or Note
registrar shall not be obligated to register this Note 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 2.05 of the Indenture shall have been
satisfied.
Dated: Signed:
-------------------------- ----------------------
(Sign exactly as name
appears on the other
side of this Security)
Signature Guarantee:
-------------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
10
The undersigned represents and warrants that it is
purchasing this Note for its own account or an account with
respect to which it exercises sole investment discretion and that
it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933,
as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Date:
------------------------ -----------------------------
NOTICE:
To be executed by an executive
officer1
- ----------------
1 Only to be included on Notes constituting Restricted
Securities.
11
AND WHEREAS, all acts and things necessary to make the
Notes, when executed by the Company and authenticated and
delivered by the Trustee as in this Indenture provided, the
valid, binding and legal obligations of the Company, and to
constitute these presents a valid indenture and agreement
according to its terms, have been done and performed, and the
execution and delivery of this Indenture and the issuance
hereunder of the Notes have in all respects been duly authorized,
and the Company and the Subsidiary Guarantors, in the exercise of
the legal right and power vested in them, execute and deliver
this Indenture and the Company proposes to make, execute, issue
and deliver the Notes;
THEREFORE, in consideration of the premises and of the
purchase and acceptance of the Notes by the holders thereof, the
Company, each Subsidiary Guarantor and the Trustee each covenants
and agrees, for the equal and proportionate benefit of the
respective holders from time to time of the Notes, as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Certain terms defined. The terms defined in
----------------------
this Section 1.01 (except as herein otherwise expressly provided
or unless the context otherwise requires), for all purposes of
this Indenture and of any indenture supplemental hereto, shall
have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture which are defined in the Trust
Indenture Act of 1939 (as defined herein) or which are by
reference therein defined in the Securities Act of 1933 (as
defined herein) (except as herein otherwise expressly provided or
unless the context otherwise requires) shall have the meanings
assigned to such terms in said Trust Indenture Act and in said
Securities Act of 1933 as they were in force at the date of the
execution and delivery of this Indenture.
9-7/8% Notes: The term "9-7/8% Notes" shall mean the
------------
Company's 9-7/8% Senior Notes due 2002, as amended from time to
time, issued pursuant to the 9-7/8% Note Indenture.
9-7/8% Note Indenture: The term "9-7/8% Note Indenture"
---------------------
shall mean the indenture, dated as of February 17, 1994, among
the Company, as issuer, the parties named therein (including in
any amendment or supplement thereto) as subsidiary guarantors,
and First Trust National Association, a national banking
association, as trustee, as heretofore or hereafter amended or
supplemented from time to time in accordance with the terms
thereof.
12-3/4% Notes: The term "12-3/4% Notes" shall mean the
-------------
Company's 12-3/4% Senior Subordinated Notes due 2003, as amended
from time to time, issued pursuant to the 12-3/4% Note Indenture.
12-3/4% Note Indenture: The term "12-3/4% Note Indenture"
----------------------
shall mean the Indenture, dated as of February 1, 1993, among the
Company, as issuer, the parties named therein (including in any
amendment or supplement thereto) as subsidiary guarantors, and
State Street Bank and Trust Company, a Massachusetts trust
company, as successor to The First National Bank of Boston, as
trustee, as heretofore or hereafter amended or supplemented from
time to time in accordance with the terms thereof.
14-1/4% Senior Subordinated Notes: The term "14-1/4% Senior
---------------------------------
Subordinated Notes" shall mean the Company's 14-1/4% Senior
Subordinated Notes Due 1995, as amended, which were retired in
1993 and are no longer outstanding as of the date of this
Indenture.
12
14-1/4% Senior Subordinated Note Indenture: The term "14-
-------------------------------------------
1/4% Senior Subordinated Note Indenture" shall mean the 14-1/4%
Senior Subordinated Note Indenture, dated as of December 21,
1989, among the Company, as issuer, the parties named therein as
and, if applicable, thereafter becoming, subsidiary guarantors,
and The Bank of New York, a New York banking corporation, as
trustee, as amended or supplemented from time to time in
accordance with the terms thereof.
Affiliate: The term "Affiliate" shall mean any other Person
---------
directly or indirectly controlling or controlled by or under
direct or indirect common control with a specified Person;
provided, however, that the term Affiliate shall not (other than
for purposes of Section 3.07) include the Company, any Subsidiary
of the Company, any Unrestricted Subsidiary of the Company or any
Non-Affiliate Joint Venture of the Company so long as no
Affiliate of the Company has any direct or indirect interest
therein, except through the Company, its Subsidiaries, its
Unrestricted Subsidiaries and/or its Non-Affiliate Joint
Ventures. For the purpose of this definition, control when used
with respect to any specified Person means the possession of the
power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms controlling
and controlled have meanings correlative to the foregoing. The
fact that an Affiliate of a Person is a partner of a law firm
that renders services to such Person or its Affiliates does not
(other than for purposes of Section 3.07) mean that the law firm
is an Affiliate of such Person.
Agent Member: The term "Agent Member" shall have the
------------
meaning set forth in Section 2.10 hereof.
AJI: The term "AJI" shall mean Alpart Jamaica Inc., a
---
Delaware corporation, and its successors.
Alpart: The term "Alpart" shall mean Alumina Partners of
------
Jamaica, a Delaware general partnership, and its successors.
Asset Sale: The term "Asset Sale" shall mean any sale,
----------
transfer or other disposition (including, without limitation,
dispositions pursuant to a merger, consolidation or sale and
leaseback transaction) of any assets (other than cash or Cash
Equivalents) on or after the date of the initial issuance of the
Notes by the Company or any of its Subsidiaries to any Person
other than the Company, any of its Subsidiaries or any
Non-Affiliate Joint Venture; provided, however, that solely for
the purposes of the definition of Consolidated Cash Flow
Available for Fixed Charges, the term Asset Sale shall exclude
dispositions pursuant to a sale and leaseback transaction if the
lease under such sale and leaseback transaction is required to be
classified and accounted for as a Capitalized Lease Obligation;
and provided, further, that the term Asset Sale shall not include
a Refinancing Sale and Leaseback Transaction; and provided,
further, that the following sales, transfers or other
dispositions of assets shall not be an "Asset Sale" hereunder:
(A) in the ordinary course of business of the Company
and its Subsidiaries, which may include sales, transfers or
other dispositions to Unrestricted Subsidiaries;
(B) in a single transaction or group of related
transactions, the gross proceeds of which (exclusive of
indemnities) do not exceed $10,000,000 (such proceeds, to
the extent non-cash, to be determined in good faith by the
Board of Directors of the Company);
(C) resulting from the creation, incurrence or
assumption of (but not any foreclosure with respect to) any
Lien not prohibited by Section 4.11;
13
(D) in connection with any consolidation or merger of
the Company or any Subsidiary Guarantor or sale of all or
substantially all of the property of the Company or any
Subsidiary Guarantor in compliance with the provisions of
Article Eleven, Section 15.03(a) or Section 15.03(b)(i)
hereof, as the case may be;
(E) by a Subsidiary to its stockholders not prohibited
by this Indenture;
(F) which are Restricted Investments, Restricted
Payments or Unrestricted Subsidiary Investments permitted by
Section 4.09; or
(G) which consist of extensions, modifications,
renewals or exchanges of Restricted Investments pursuant to
clause (b) of the definition thereof, so long as neither the
Company nor any of its Subsidiaries receives any cash
proceeds as a result of such transaction.
Attributable Debt: The term "Attributable Debt" shall mean,
-----------------
with respect to a Refinancing Sale and Leaseback Transaction, as
of the date of consummation of such transaction, the greater of
(a) the Fair Market Value of the property subject to such
Refinancing Sale and Leaseback Transaction and (b) the present
value (discounted at the interest rate borne by the Notes,
compounded semi-annually) of the total obligations of the lessee
for rental payments during the remaining term of the lease
included in such Refinancing Sale and Leaseback Transaction
(including any period for which such lease has been extended).
Bank: The term "Bank" shall mean any of the financial
----
institutions that are, or from time to time become, lenders under
the Credit Agreement.
Bank Agent: The term "Bank Agent" shall mean BankAmerica
----------
Business Credit, Inc., as agent under the Credit Agreement, and
any successor agent appointed under the Credit Agreement or any
agent under any agreement or agreements pursuant to which
Indebtedness under the Credit Agreement has been Refinanced (or
successively Refinanced) and as to whom the Company has notified
the Trustee and the noteholders pursuant to the terms of this
Indenture.
Bank Guarantors: The term "Bank Guarantors" shall mean each
---------------
of the following Persons, as long as such Person guarantees any
Indebtedness under the Credit Agreement: Akron Holding Company,
an Ohio corporation, Kaiser Aluminum & Chemical Investment, Inc.,
a Delaware corporation, Kaiser Aluminum Properties, Inc., a
Delaware corporation, Kaiser Aluminum Technical Services, Inc., a
California corporation, Oxnard Forge Die Company, Inc., a
California corporation, Kaiser Aluminium International, Inc., a
Delaware corporation, KAC, KFC, each of their respective
successors, each Subsidiary Guarantor and each Non-Recourse
Guarantor so long as such Non-Recourse Guarantor does not
constitute a Subsidiary Guarantor and would not be required to
become a Subsidiary Guarantor hereunder.
Board of Directors: The term "Board of Directors," when
------------------
used with reference to the Company, shall mean the Board of
Directors of the Company, or the executive committee of the Board
of Directors of the Company, or any other duly authorized
committee of the Board of Directors of the Company.
Board Resolution: The term "Board Resolution" shall mean,
----------------
with respect to any Person, a copy of a resolution certified by
the Secretary or an Assistant Secretary of such Person to have
been duly
14
adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and
delivered to the Trustee.
Business Day: The term "Business Day" shall mean a day
------------
other than a Saturday, a Sunday or a day in The City of New York,
New York, Houston, Texas or San Francisco, California on which
banking institutions are authorized or obligated by law,
regulation or executive order to be closed.
Capital Stock: The term "Capital Stock" shall mean, with
-------------
respect to any Person, any and all shares, interests,
participations or other equivalents (however designated) of
capital stock, partnership interests or other undivided ownership
interests in such Person, and warrants, options and similar
rights (other than debt securities convertible into capital
stock) to acquire such capital stock, partnership interests or
other undivided ownership interests in such Person.
Capitalized Lease Obligations: The term "Capitalized Lease
-----------------------------
Obligations" shall mean, with respect to any Person, the
obligations of such Person to pay rent or other amounts under any
lease of (or other agreement conveying the right to use) real or
personal property, which obligations are required to be
classified and accounted for as a capital lease obligation on a
balance sheet of such Person under GAAP and, for purposes of this
Indenture, the amount of such obligations at any date shall be
the amount of the liability thereof at such date, determined in
accordance with GAAP.
CARIFA Financing: The term "CARIFA Financing" shall mean
----------------
the $60,000,000 CBI Industrial Revenue Bonds, Caribbean Basin
Projects Financing Authority CBI Industrial Revenue Bonds 1991
Series A and Series B (Alumina Partners of Jamaica Project)
issued pursuant to that certain Bond Purchase Agreement dated as
of December 1, 1991, among the Caribbean Basin Projects Financing
Authority, Alumina Partners of Jamaica and PaineWebber
Incorporated of Puerto Rico, any Refinancings thereof, and any
letters of credit supporting such bonds or any Refinancings
thereof.
Cash Equivalents: The term "Cash Equivalents" shall mean,
----------------
with respect to any Person:
(A) Government Securities having maturities of not more
than one year from the date of acquisition,
(B) certificates of deposit of any commercial bank
incorporated under the laws of the United States, or any state,
territory or commonwealth thereof, of recognized standing having
capital and unimpaired surplus in excess of $100,000,000 and
whose short-term commercial paper rating at the time of
acquisition is at least A-2 or the equivalent by Standard &
Poor's Corporation or at least P-2 or the equivalent by Moody's
Investors Services, Inc. (any such bank, an "Approved Bank"),
which certificates of deposit have maturities of not more than
one year from the date of acquisition,
(C) repurchase obligations with a term of not more than
31 days for underlying securities of the types described in
clauses (A) , (B) and (D) of this definition entered into with
any Approved Bank,
(D) commercial paper or finance company paper issued by
any Person incorporated under the laws of the United States, or
any state thereof, and rated at least A-2 or the equivalent by
Standard & Poor's Corporation or at least P-2 or the equivalent
by Moody's Investors Services, Inc., and in each case maturing
not more than one year from the date of acquisition, and
15
(E) investments in money market funds that are
registered under the Investment Company Act of 1940, which have
net assets of at least $100,000,000 and at least 85% of whose
assets consist of investments or other obligations of the type
described in clauses (A) through (D) above.
Center for Technology: The term "Center for Technology"
---------------------
shall mean the Company's facilities located in Pleasanton,
California.
Certificated Notes: The term "Certificated Notes" shall
------------------
have the meaning set forth in Section 2.02 hereof.
Commission: The term "Commission" shall mean the United
----------
States Securities and Exchange Commission.
Common Stock: The term "Common Stock" shall mean the
------------
Company's common stock, par value $.01 per share, as it exists on
the date of this Indenture.
Company: The term "Company" shall mean Kaiser Aluminum &
-------
Chemical Corporation, a Delaware corporation, and, subject to the
provisions of Article Eleven, shall also include its successors
and assigns.
Consolidated Amortization Expense: The term "Consolidated
---------------------------------
Amortization Expense" shall mean, with respect to any Person for
any period, the amortization expense (including without
limitation goodwill, deferred financing charges and other
intangible items) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with
GAAP.
Consolidated Cash Flow Available for Fixed Charges: The
--------------------------------------------------
term "Consolidated Cash Flow Available for Fixed Charges" shall
mean (without duplication), with respect to any Person for any
period, the sum of the amounts for such period of
(i) Consolidated Net Income, (ii) Consolidated Fixed Charges,
(iii) Consolidated Income Tax Expense (other than income taxes
(including credits) with respect to items of Net Income not
included in the definition of Consolidated Net Income),
(iv) Consolidated Depreciation Expense, (v) Consolidated
Amortization Expense and (vi) any other non-cash items reducing
Consolidated Net Income, minus any non-cash items increasing
Consolidated Net Income, all as determined on a consolidated
basis for such Person and its Subsidiaries in accordance with
GAAP; provided, however, that (x) if, during such period, such
Person or any of its Subsidiaries shall have engaged in any Asset
Sale, Consolidated Cash Flow Available for Fixed Charges of such
Person and its Subsidiaries for such period shall be reduced by
an amount equal to the Consolidated Cash Flow Available for Fixed
Charges (if positive) directly attributable to the assets that
are the subject of such Asset Sale for such period, or increased
by an amount equal to the Consolidated Cash Flow Available for
Fixed Charges (if negative) directly attributable to the assets
that are the subject of such Asset Sale for such period and
(y) if, during such period, such Person or any of its
Subsidiaries shall have acquired any material assets out of the
ordinary course of business, Consolidated Cash Flow Available for
Fixed Charges shall be calculated on a pro forma basis as if such
asset acquisition and related financing had occurred at the
beginning of such period.
Consolidated Depreciation Expense: The term "Consolidated
---------------------------------
Depreciation Expense" shall mean, with respect to any Person for
any period, the depreciation and depletion expense (including
without limitation the amortization expense associated with
Capitalized Lease Obligations) of such Person and its
Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP.
16
Consolidated Fixed Charge Coverage Ratio: The term
----------------------------------------
"Consolidated Fixed Charge Coverage Ratio" shall mean, with
respect to any Person as of the date of the transactions giving
rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio (the "Transaction Date"), the ratio of (i) the
aggregate amount of Consolidated Cash Flow Available for Fixed
Charges of such Person for the four fiscal quarters immediately
prior to the Transaction Date for which financial information in
respect thereof is available to (ii) the aggregate Consolidated
Fixed Charges of such Person for the fiscal quarter in which the
Transaction Date occurs and the three fiscal quarters immediately
subsequent to such fiscal quarter to be accrued during such
period (based upon the pro forma amount of Indebtedness to be
outstanding on the Transaction Date), assuming for the purposes
of this measurement that the interest rates on which floating
interest rate obligations of such Person are based equal such
rates in effect on the Transaction Date; provided, however, that
if the Company or any of its Subsidiaries has incurred Interest
Hedging Obligations which would have the effect of changing the
interest rate on any Indebtedness for such four quarter period
(or any portion thereof), the resulting rate shall be used for
such four quarter period or portion thereof; and provided,
further, that any Consolidated Fixed Charges with respect to
Indebtedness incurred or for which such Person otherwise becomes
liable during the fiscal quarter in which the Transaction Date
occurs shall be calculated as if such Indebtedness was so
incurred on the first day of the fiscal quarter in which the
Transaction Date occurs.
Consolidated Fixed Charges: The term "Consolidated Fixed
--------------------------
Charges" shall mean (without duplication), with respect to any
Person for any period, the sum of:
(i) the interest expense of such Person and its
Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP (less, to the extent included
therein, the portion of the interest expense required to be
funded or economically borne by the Company's minority
partners in the Company's joint ventures);
(ii) all fees, commissions, discounts and other charges
of such Person and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP,
with respect to letters of credit and bankers' acceptances
and the costs (net of benefits) associated with Interest
Hedging Obligations;
(iii) the aggregate amount of dividends paid or other
similar distributions made by such Person and its
Subsidiaries during such period with respect to preferred
stock (including preference stock) of such Person or its
Subsidiaries determined on a consolidated basis in
accordance with GAAP; and
(iv) amortization or write-off of debt discount in
connection with any Indebtedness of such Person and its
Subsidiaries, determined on a consolidated basis in
accordance with GAAP (excluding, to the extent otherwise
included, the amortization or write-off of any deferred
financing costs in connection with the amendment or
refinancing of the Credit Agreement and the predecessor
credit agreement).
Consolidated Income Tax Expense: The term "Consolidated
-------------------------------
Income Tax Expense" shall mean (without duplication), with
respect to any Person for any period, the aggregate of the income
tax expense (net of applicable credits) of such Person and its
Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP.
17
Consolidated Net Income: The term "Consolidated Net Income"
-----------------------
shall mean, with respect to any Person for any period, the
aggregate of the Net Income of such Person and its Subsidiaries
for such period taken as a single accounting period, all as
determined on a consolidated basis in accordance with GAAP,
excluding (in each case to the extent otherwise included):
(i) extraordinary gains but not extraordinary losses
and excluding gains from extinguishment of debt;
(ii) the Net Income of any Person that is not a
Subsidiary of such Person or that is accounted for on the
equity method of accounting, except to the extent of the
amount of dividends or other distributions (other than
dividends or distributions of Capital Stock) actually paid
to such Person or any of its Subsidiaries by such other
Person during such period;
(iii) except to the extent included by clause (ii), the
Net Income of any Person accrued prior to the date it
becomes a Subsidiary of such Person or is merged into or
consolidated with such Person or any of its Subsidiaries or
that Person's assets are acquired by such Person or any of
its Subsidiaries;
(iv) the Net Income of any Subsidiary of such Person
during such period (A) to the extent that the declaration or
payment of dividends or similar distributions by such
Subsidiary of such Net Income is not at the time permitted
by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or
(B) in the case of a foreign Subsidiary or a Subsidiary with
significant foreign source income, to the extent such Net
Income has not been distributed to such Person and such
distribution would result in a material tax liability not
otherwise deducted from the calculation of Consolidated Net
Income whether or not such deduction is required by GAAP;
(v) net after tax gains from Asset Sales (but not
excluding the net after tax losses from Asset Sales);
(vi) interest income arising from the Existing
Intercompany Note, except to the extent such interest income
is actually received by the Company in cash; and
(vii) the Net Income of any Unrestricted Subsidiary,
whether or not paid or distributed to the Company or one of
its Subsidiaries;
provided, however, that (1) in determining Consolidated Net
Income with respect to the Company there shall be disregarded
(a) any charge with respect to premiums paid in excess of the
principal amount in connection with the repurchase, defeasance or
redemption of the 14-1/4% Senior Subordinated Notes and (b) the
amortization or write-off of any unamortized deferred financing
costs and debt discount (other than original issue discount with
respect to Indebtedness Incurred after the date hereof) in
connection with the amendment or refinancing of the Credit
Agreement and the predecessor credit agreement and/or the
repurchase, defeasance or redemption of the 14-1/4% Senior
Subordinated Notes and (2) the Net Income of each of the
Specified Parties otherwise included in the Consolidated Net
Income of the Company shall not be subject to any of the
limitations contained in clauses (ii) and (iv)(B) of this
definition so long as the Company's cash management and
intercompany practices with respect to such entity, as the case
may be, for such period are consistent with past practice.
18
Consolidated Net Worth: The term "Consolidated Net Worth"
----------------------
shall mean, with respect to any Person as of any date, the total
stockholders' equity of such Person as of such date, less, to the
extent otherwise included, amounts attributable to Redeemable
Stock and, in the case of the Company, the amount attributable to
the Existing Intercompany Note, in each case determined on a
consolidated basis in accordance with GAAP; provided, however,
that in determining Consolidated Net Worth with respect to the
Company there shall be disregarded (i) any charge with respect to
premiums paid in excess of the principal amount in connection
with the repurchase, defeasance or redemption of the 14-1/4%
Senior Subordinated Notes and (ii) the amortization or write-off
of any unamortized deferred financing costs or debt discount
(other than original issue discount with respect to Indebtedness
Incurred after the date hereof) in connection with the amendment
or refinancing of the Credit Agreement and the predecessor credit
agreement and/or the repurchase, defeasance or redemption of the
14-1/4% Senior Subordinated Notes.
Credit Agreement: The term "Credit Agreement" shall mean
----------------
that certain Credit Agreement, dated as of February 15, 1994,
among the Company, KAC, the financial institutions that are, or
from time to time become, parties thereto, and BankAmerica
Business Credit, Inc., as agent, including all related notes,
collateral documents and guarantees, and any agreement (including
all related notes, collateral documents and guarantees) pursuant
to which Indebtedness thereunder has been Refinanced (or
successively Refinanced), in each case as any of the same has
been or may be amended, supplemented, restated, restructured or
otherwise modified from time to time (in each case, in whole or
in part).
Currency Hedging Obligation: The term "Currency Hedging
---------------------------
Obligation" with respect to any Person shall mean the monetary
obligations of such Person pursuant to any foreign exchange
contract, currency swap agreement, option or futures contract,
forward contract or other similar agreement or arrangement
designed to protect such Person or any of its Subsidiaries
against fluctuations in currency values.
Defaulting Equity Owner: The term "Defaulting Equity Owner"
-----------------------
shall mean, with respect to any Permitted Entity, any Equity
Owner who causes an Equity Owner Default.
Depository: The term "Depository" shall mean The Depository
----------
Trust Company, New York, New York.
Equity Owner: The term "Equity Owner" shall mean, with
------------
respect to any Permitted Entity, any holder of an Ownership
Interest in such Permitted Entity.
Equity Owner Default: The term "Equity Owner Default" shall
--------------------
mean, with respect to any issuance of Permitted Entity Securities
to the Equity Owners of a Permitted Entity, the failure by one or
more of such Equity Owners to acquire such Permitted Entity
Securities in an amount corresponding to at least its Ownership
Interest of such Permitted Entity and, as a result thereof, such
Equity Owner becomes subject to, directly or indirectly, a
dilution of its interest in the future net income of such
Permitted Entity and/or a penalty pursuant to the terms of the
governing documents of such Permitted Entity.
Event of Default: The term "Event of Default" shall mean
----------------
any event specified in Section 6.01, continued for the period of
time, if any, and after the giving of notice, if any, therein
designated.
19
Exchange Act: The term "Exchange Act" shall mean the
------------
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated by the Securities and Exchange Commission
thereunder.
Exchange Notes: The term "Exchange Notes" shall have the
--------------
meaning provided in the first paragraph of the recitals hereof.
Existing Intercompany Note: The term "Existing Intercompany
--------------------------
Note" shall mean the Non-Negotiable Intercompany Note, dated
December 21, 1989, issued by KAC to the Company in an initial
principal amount of $818,585,280, as such Non-Negotiable
Intercompany Note has been or may be amended.
Fair Market Value: The term "Fair Market Value" shall mean,
-----------------
with respect to any property other than cash, the fair market
value of such property as determined in good faith by the Board
of Directors of the Company, whose determination shall be
evidenced by a Board Resolution; provided, however, that, in the
event the Company makes a payment in the form of or otherwise
transfers property other than cash to, or receives property other
than cash from, an Affiliate in an amount in excess of
$10,000,000, or in the event that the Company makes a payment in
the form of or otherwise transfers property other than cash or
Cash Equivalents to, or receives property other than cash or Cash
Equivalents from, an Unrestricted Subsidiary in an amount in
excess of $10,000,000, (which amount shall be calculated
excluding the fair market value of any Principal Products within
the scope of the proviso at the end of this definition) the
Company, in addition, shall have received an opinion from an
independent investment banking firm of national standing selected
by the Company to the effect that the Board of Directors'
determination of fair market value is fair; provided that, with
respect to any determination of Fair Market Value of property in
connection with an Unrestricted Subsidiary Investment or the
designation of an Unrestricted Subsidiary, such opinion shall not
be required, to the extent that such property consists of
Principal Products (which Principal Products are used by such
Unrestricted Subsidiary in its operations in the ordinary course
of business).
GAAP: The term "GAAP" shall mean generally accepted
----
accounting principles as in effect on December 31, 1992, and used
in the preparation of the Company's consolidated balance sheet at
such date and the Company's statements of consolidated income and
cash flows for the year then ended, but in any event (i) giving
effect to, but excluding the effect of any one-time charge
related to the implementation of, Statement of Financial
Accounting Standards No. 106 (Employers' Accounting for
Postretirement Benefits Other Than Pensions) and (ii) giving
effect to Statement of Financial Accounting Standards No. 109
(Accounting for Income Taxes).
Global Note: The term "Global Note" shall have the meaning
-----------
provided in Section 2.02.
Government Securities: The term "Government Securities"
---------------------
shall mean direct 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.
Guarantee: The term "Guarantee" shall mean, with respect to
---------
any Subsidiary Guarantor, the guarantee of such Subsidiary
Guarantor set forth in Article Fifteen.
20
Improvements: The term "Improvements" shall mean any
------------
accessories, accessions, additions, attachments, substitutions,
replacements, improvements, parts and other property now or
hereafter affixed to any U.S. Fixed Assets or used in connection
therewith.
Indebtedness: The term "Indebtedness" shall mean, with
------------
respect to any Person at any date, any of the following (without
duplication):
(a) the principal amount of all obligations
(unconditional or contingent) of such Person for borrowed
money (whether or not recourse is to the whole of the assets
of such person or only to a portion thereof) and the
principal amount of all obligations (unconditional or
contingent) of such Person evidenced by debentures, notes or
other similar instruments (including, without limitation,
reimbursement obligations with respect to letters of credit
and bankers' acceptances);
(b) all obligations of such Person to pay the deferred
purchase price of property or services, except (x) accounts
payable and other current liabilities arising in the
ordinary course of business and (y) compensation, pension
obligations and other obligations arising from employee
benefits and employee arrangements;
(c) Capitalized Lease Obligations of such Person;
(d) all Indebtedness of others secured by a Lien on any
asset of such Person, whether or not such Indebtedness is
assumed or guaranteed by such Person;
(e) preferred stock (including preference stock) that
is Redeemable Stock (the amount of the Indebtedness in
respect of such preferred stock to be equal to the aggregate
liquidation value thereof);
(f) all Indebtedness of others guaranteed by such
Person;
(g) pension obligations and other similar obligations
arising from employee benefits, to the extent unfunded and
assumed by such Person after the date of the initial
issuance of the Notes in the acquisition, by such Person, of
the assets or Capital Stock of another Person ("Assumed
Pension Obligations"); and
(h) all obligations under Refinancing Sale and
Leaseback Transactions;
and the amounts thereof shall be the outstanding balance of any
such unconditional obligations as described in clauses (a)
through (f) (other than clause (d)), and the maximum liability of
any such contingent obligations at such date (other than with
respect to clause (d)) and, in the case of clause (d), the lesser
of the fair market value at such date of any asset subject to any
Lien securing the Indebtedness of others and the amount of the
Indebtedness secured and, in the case of clause (g), the amount
of Assumed Pension Obligations shall be the amount determined by
the Company in good faith as evidenced by a certificate of the
Chief Financial Officer of the Company delivered to the Trustee
and, in the case of clause (h), the Attributable Debt with
respect to such Refinancing Sale and Leaseback Transactions;
provided, however, that Indebtedness shall not include:
(A) the obligations of such Person and/or any of its
Subsidiaries to purchase or sell goods, services or
technology utilized in their bauxite, aluminum and alumina
business and related
21
extensions thereof, including on a take-or-pay basis,
pursuant to agreements entered into in the ordinary course
of business consistent with past practice or to fund or
guarantee the obligations of National Refractories &
Minerals Corporation or any of its Affiliates in an
aggregate principal amount at any time outstanding not
exceeding $7,500,000;
(B) obligations of such Person arising from the
honoring by a bank or other financial institution of a
check, draft or similar instrument inadvertently (except in
the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business, provided that such
obligations are extinguished within two Business Days of
their incurrence (or, in the case of foreign overdrafts,
within five Business Days of their incurrence) unless
covered by an overdraft credit line;
(C) obligations of such Person resulting from the
endorsement of negotiable instruments for collection in the
ordinary course of business;
(D) Indebtedness consisting of letters of credit to the
extent collateralized by cash or Cash Equivalents; and
(E) Liens on assets of KAAC granted to secure
Indebtedness of QAL, provided that such Liens are (i) in
existence on the date of this Indenture, (ii) similar in all
material respects to Liens in existence on the date of this
Indenture or (iii) not on assets consisting of cash, Cash
Equivalents or fixed assets and such assets are used or to
be used in connection with the business of QAL.
Indenture: The term "Indenture" shall mean this instrument
---------
as originally executed, or, if amended or supplemented as herein
provided, as so amended or supplemented.
Initial Notes: The term "Initial Notes" shall have the
-------------
meaning provided in the first paragraph of the recitals hereof.
Institutional Accredited Investor: The term "Institutional
---------------------------------
Accredited Investor" shall mean an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act of 1933.
Interest: The term "interest" shall mean, with respect to
--------
the Notes, interest payable on the Notes at the rate set forth
therein, plus any additional interest payable by the Company and
the Subsidiary Guarantors in respect of the Notes pursuant to the
Registration Rights Agreement.
Interest Hedging Obligation: The term "Interest Hedging
---------------------------
Obligation" with respect to any Person shall mean the monetary
obligations of such Person pursuant to any interest rate swap
agreement, interest rate collar agreement, interest rate cap
agreement, options or futures contract, forward contract or other
agreement or arrangement designed to protect such Person or any
of its Subsidiaries against fluctuations in interest rates.
Issue Date: The term "Issue Date" shall mean the date of
----------
first issuance of the Notes under this Indenture, October 23,
1996.
22
KAAC: The term "KAAC" shall mean Kaiser Alumina Australia
----
Corporation, a Delaware corporation, and its successors.
KAC: The term "KAC" shall mean Kaiser Aluminum Corporation,
---
a Delaware corporation, and its successors.
KFC: The term "KFC" shall mean Kaiser Finance Corporation,
---
a Delaware corporation, and its successors.
KJC: The term "KJC" shall mean Kaiser Jamaica Corporation,
---
a Delaware corporation, and its successors.
Lien: The term "Lien" shall mean, with respect to any asset
----
of any Person, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
Maximum Secured Amount: The term "Maximum Secured Amount"
----------------------
shall mean, at any time (i) $400,000,000, plus (ii) Net
Betterments at such time, plus (iii) the outstanding amount of
Indebtedness relating to the CARIFA Financing, secured by a Lien
on Permitted Collateral, but in no event more than $43,000,000,
minus (iv) in the event of a sale of Permitted Collateral which
is subject to a Lien permitted by clause (i) of Section 4.11(b)
of this Indenture, the amount, if any, of the net proceeds
thereof required to be applied to a permanent repayment or
commitment reduction in respect of the Indebtedness secured by
such Lien, minus (v), in the event of the Refinancing of any
Indebtedness secured by a Lien permitted by clause (i) of Section
4.11(b) hereof, the lesser of (A) the amount of Indebtedness, if
any, not secured by Permitted Collateral which Refinances, in
whole or in part, such Indebtedness secured by a Lien permitted
by clause (i) of Section 4.11(b) of this Indenture and (B) the
amount, if any, by which the Maximum Secured Amount immediately
prior to such Refinancing, in whole or in part, of such
Indebtedness secured by a Lien permitted by clause (i) of Section
4.11(b) of this Indenture exceeds the aggregate amount of
Indebtedness which is secured by a Lien on Permitted Collateral
permitted by clause (i) or clause (viii)(a) of Section 4.11(b) of
this Indenture after giving effect to such Refinancing.
MAXXAM: The term "MAXXAM" shall mean MAXXAM Inc., a
------
Delaware corporation, and its successors.
Merger: The term "Merger" shall mean the merger of a
------
subsidiary of MAXXAM with and into KAC on October 28, 1988.
Net Betterments: The term "Net Betterments" shall mean the
---------------
amount, if any, by which capital expenditures (determined in
accordance with GAAP) by the Company or any of its Subsidiaries
in respect of the Permitted Collateral on a cumulative basis for
the period from the date hereof, through the date of
determination exceeds depreciation (determined in accordance with
GAAP) in respect of the Permitted Collateral on a cumulative
basis for such period (provided, however, that with respect to
any Permitted Collateral existing at the time of the Merger, the
depreciation shall be the historical depreciation before
adjustments to reflect the acquisition of the Company in the
Merger), but in no event less than zero, provided, that in the
event any Permitted Collateral ceases to constitute Permitted
Collateral in accordance with the definition thereof, only the
amount of Net Betterments in respect of such Permitted Collateral
at such time shall be included in any subsequent calculation of
Net Betterments and provided, further,
23
that (a) Improvements which are subject to a Lien permitted by
clause (iv), (v) or (vi) of Section 4.11(b) hereof and
(b) U.S. Fixed Assets to the extent subject to a Lien permitted
by clause (ix) of Section 4.11(b) hereof shall not be included in
the determination of Net Betterments.
Net Cash Proceeds: The term "Net Cash Proceeds" shall mean
-----------------
cash payments received (but if received in a currency other than
United States dollars, such payments shall not be deemed received
until the earliest time at which such currency is, or could
freely be, converted into United States dollars) by or on behalf
of the Company and/or any of its Subsidiaries (including any cash
payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise or the
cash realization of any non-cash proceeds of any Asset Sale, but,
in each case, only as and when, and to the extent, received) from
an Asset Sale, in each case and without duplication, net of:
(i) all legal, title and recording tax expenses,
commissions, consulting fees, investment banking, broker's
and accounting fees and expenses and fees and expenses
incurred in obtaining regulatory approvals in connection
with such Asset Sale;
(ii) the amounts of (A) any repayments of debt secured,
directly or indirectly, by Liens on the assets which are the
subject of such Asset Sale or (B) any repayments of debt
associated with such assets which is due by reason of such
Asset Sale (i.e., such disposition is permitted by the terms
of the instruments evidencing or applicable to such debt, or
by the terms of a consent granted thereunder, on the
condition that the proceeds (or portion thereof) of such
disposition be applied to such debt), provided, that this
clause (B) shall not apply with respect to any U.S. Fixed
Assets which do not constitute Permitted Collateral and, in
the case of clauses (A) and (B), other fees, expenses and
other expenditures, in each case, reasonably incurred as a
consequence of such repayment of debt (whether or not such
fees, expenses or expenditures are then due and payable or
made, as the case may be);
(iii) all amounts deemed appropriate by the Company (as
evidenced by a signed certificate of the Chief Financial
Officer of the Company delivered to the Trustee) to be
provided as a reserve, in accordance with GAAP ("GAAP
Reserves"), against any liabilities associated with such
assets which are the subject of such Asset Sale;
(iv) all foreign, federal, state and local taxes
payable (including taxes reasonably estimated to be payable)
in connection with or as a result of such Asset Sale; and
(v) with respect to Asset Sales by Subsidiaries of the
Company, the portion of such cash payments attributable to
Persons holding a minority interest in such Subsidiary;
provided, in each such case, that such fees and expenses and
other amounts are not payable to an Affiliate or an Unrestricted
Subsidiary of the Company (except for amounts payable pursuant to
the Tax Sharing Agreements), and provided, further, that required
redemptions of existing preferred stock (including preference
stock) of the Company outstanding on the date hereof or issued
pursuant to collective bargaining arrangements and related
employee benefit arrangements in effect on the date hereof, in
each case, from Persons other than Affiliates or Unrestricted
Subsidiaries of the Company, shall be deemed to be a fee, expense
or other expenditure of such Asset Sale. Notwithstanding the
foregoing, Net Cash Proceeds shall not include proceeds received
in a foreign jurisdiction from an Asset Sale of an asset located
outside the United States to the extent (i) such proceeds cannot
under applicable law be transferred to the United States or
(ii) such transfer would result (in the good faith determination
of the Board of
24
Directors of the Company set forth in a Board Resolution) in a
foreign tax liability that would be materially greater than if
such Asset Sale occurred in the United States; provided that if,
as, and to the extent that any of such proceeds may lawfully be
(in the case of clause (i)) or are (in the case of clause (ii))
transferred to the United States, such proceeds shall be deemed
to be cash payments that are subject to the terms of this
definition of Net Cash Proceeds. Subject to the provisions of
the next preceding sentence, Net Cash Proceeds shall also include
(i) cash distributions actually received by or on behalf of the
Company or any of its Subsidiaries from any Non-Affiliate Joint
Venture or Unrestricted Subsidiary of the Company representing
the proceeds of a transaction by such Non-Affiliate Joint Venture
or Unrestricted Subsidiary of the Company that would constitute
an Asset Sale if such Non-Affiliate Joint Venture or Unrestricted
Subsidiary were a Subsidiary of the Company and (ii) the amount
of any reversal of GAAP Reserves (but only as and when, and to
the extent, reversed) which amount is otherwise a deduction from
Net Cash Proceeds.
Net Income: The term "Net Income" shall mean, with respect
----------
to any Person for any period, the net income (loss) of such
Person for such period determined in accordance with GAAP.
Non-Affiliate Joint Venture: The term "Non-Affiliate Joint
---------------------------
Venture" shall mean any joint venture, partnership or other
Person (other than the Company, a Subsidiary of the Company or an
Unrestricted Subsidiary of the Company) in which the Company
and/or its Subsidiaries have an ownership interest equal to or
greater than 5% and in which no Affiliate of the Company has a
direct or an indirect ownership interest other than by virtue of
the direct or indirect ownership interest in such Non-Affiliate
Joint Venture held (in the aggregate) by the Company and/or one
or more of its Subsidiaries, provided that such Non-Affiliate
Joint Venture is engaged in one or more of the lines of business
in which the Company or its Subsidiaries or its Non-Affiliate
Joint Ventures are engaged in as of the date of this Indenture or
reasonably related extensions of such lines.
Non-Defaulting Equity Owner: The term "Non-Defaulting
---------------------------
Equity Owner" shall mean, with respect to any Permitted Entity,
any Equity Owner that is not a Defaulting Equity Owner.
Non-Recourse Guarantor: The term "Non-Recourse Guarantor"
----------------------
shall mean a Subsidiary of the Company that guarantees any
Indebtedness under the Credit Agreement, provided that such
guarantee is non-recourse to the assets of such Subsidiary other
than to intercompany Indebtedness owed, or from time to time
owing, by the Company to such Subsidiary, and all monetary
proceeds therefrom.
Non-U.S. Person: The term "Non-U.S. Person" shall mean a
---------------
person who is not a "U.S. person", as defined in Regulation S.
Note or Notes: The terms "Note" or "Notes" shall mean the
-------------
Initial Notes and the Exchange Notes.
Noteholder; registered holder: The terms "noteholder,"
-----------------------------
"holder of Notes," "registered holder" or other similar term
shall mean any person who shall at the time be the registered
holder of any Note or Notes on the registry books of the Company
kept for that purpose in accordance with the provisions of this
Indenture.
Offering Memorandum: The term "Offering Memorandum" shall
-------------------
mean that certain offering memorandum dated October 17, 1996,
relating to the offering by the Company of the Notes.
25
Officers' Certificate: The term "Officers' Certificate"
---------------------
shall mean a certificate of the Company signed on behalf of the
Company by the Chairman of the Board, the President or any Vice
President and by the Chief Financial Officer, the Controller, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company. Each such certificate shall include
the statements provided for in Section 14.05 if and to the extent
required by the provisions thereof.
Opinion of Counsel: The term "Opinion of Counsel" shall
------------------
mean an opinion in writing signed by legal counsel, who may be an
employee of, or of counsel to, the Company and who shall be
reasonably satisfactory to the Trustee. Each such opinion shall
include the statements provided for in Section 14.05 if and to
the extent required by the provisions thereof.
Outstanding: The term "outstanding," when used with
-----------
reference to Notes, shall, subject to the provisions of Section
8.04, mean, as of any particular time, all Notes authenticated
and delivered by the Trustee under this Indenture, except
(a) Notes theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Notes, or portions thereof, for which the payment
of principal, interest, any redemption price, any Change of
Control Purchase Price or any Asset Sale Purchase Price in the
necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company
(if the Company shall act as its own paying agent), provided that
such Notes shall have reached their stated maturity or, if such
Notes are to be or may be redeemed or purchased prior to the
maturity thereof, notice of such redemption or purchase shall
have been given as in Article Three provided, or provision
satisfactory to the Trustee shall have been made for giving such
notice; and
(c) Notes in lieu of or in substitution for which other
Notes shall have been authenticated and delivered pursuant to the
terms of Section 2.07, unless proof satisfactory to the Trustee
is presented that any such Notes are held by bona fide holders in
due course.
Ownership Interest: The term "Ownership Interest" shall
------------------
mean, with respect to any Equity Owner of a Permitted Entity at
the time of the determination thereof, the proportion held at
such time by such Equity Owner of the outstanding Permitted
Entity Securities of such Permitted Entity that are last entitled
to payment upon liquidation or dissolution as provided in the
governing instruments of such Permitted Entity or pursuant to an
agreement among the Equity Owners of such Permitted Entity.
Permitted Collateral: The term "Permitted Collateral" shall
--------------------
mean real property (as set forth in Schedule B hereto), plant and
equipment of the Company or any of its Subsidiaries located in
the United States of America which, as of the date of issuance of
the Notes, secures Indebtedness under the Credit Agreement
(whether or not the Liens on such real property, plant or
equipment are perfected at such time), together with any
Improvements thereto or thereon, any real property that is
contiguous to or structurally related to such real property (the
"Contiguous Property"), and any real property, plant or
equipment, whether owned on the date of the issuance of the Notes
or thereafter acquired, located or used at any time after the
date of issuance of the Notes at a facility (other than the
Company's Gramercy alumina refinery and Nevada micromill) owned,
leased, occupied or used by the Company or any of its
Subsidiaries as of the date of issuance of the Notes or on any
Contiguous Property, and any proceeds thereof; provided, that
notwithstanding anything to the contrary contained in this
Indenture, any Permitted Collateral which is released from all
Liens thereon securing Indebtedness and which does not become
26
subject to a new Lien within 60 days of such release securing
Indebtedness which Refinances any of the Indebtedness (in whole
or in part) previously secured by such Permitted Collateral shall
not thereafter constitute "Permitted Collateral" under this
Indenture.
Permitted Dividend Encumbrance: The term "Permitted
------------------------------
Dividend Encumbrance" shall mean, with respect to any Person, any
consensual encumbrances or restrictions on the ability of such
Person to pay dividends or make any other distributions on its
Capital Stock or pay any Indebtedness owed to the Company or any
Subsidiaries of the Company (or, in the case of a Permitted
Entity, to its Equity Owners) or to make loans or advances or
transfer any of its assets to the Company or any Subsidiary of
the Company (or, in the case of a Permitted Entity, to its Equity
Owners) existing under or by reason of any of:
(i) this Indenture;
(ii) Indebtedness permitted under Section 4.10(b)(ii);
(iii) Indebtedness or other obligations in existence on
the date of this Indenture and customary rights of first
refusal with respect to the Company's and its Subsidiaries'
interests in their respective Subsidiaries, Unrestricted
Subsidiaries, Non-Affiliate Joint Ventures and Permitted
Entities;
(iv) applicable law and agreements with foreign
governments with respect to assets located in their
jurisdictions;
(v)(A) customary provisions restricting (i) the
subletting or assignment of any lease or (ii) the transfer
of copyrighted or patented materials, (B) provisions in
agreements that restrict the assignment of such agreements
or rights thereunder or (C) provisions of a customary nature
contained in the terms of Capital Stock restricting the
payment of dividends and the making of distributions on
Capital Stock;
(vi) Indebtedness or other obligations of any other
Person acquired (whether pursuant to a purchase of stock or
assets) (including any Non-Affiliate Joint Venture of the
Company or Permitted Entity that becomes a Subsidiary of the
Company) or applicable to any assets at the time such Person
or assets were acquired by the Company, its Subsidiaries or
a Permitted Entity, in each case which Indebtedness and
obligations (A) were not created in anticipation of such
acquired Person becoming a Subsidiary of the Company or a
Permitted Entity, as the case may be, or such assets being
acquired by the Company, its Subsidiaries or such Permitted
Entity, as the case may be, and (B) which encumbrances and
restrictions are not applicable to any Person or the
property or assets of any Person other than the Person or
the property or assets of the Person so acquired (including
the Capital Stock of such Person) or any newly organized
entity formed to effect such acquisition and, in each case,
the monetary proceeds thereof;
(vii) encumbrances and restrictions with respect to
such Person imposed in connection with an agreement for the
sale or disposition of such Person or its assets;
(viii) encumbrances and restrictions applicable only to
(A) Alpart and its assets and Capital Stock with respect to
27
Indebtedness permitted to be Incurred by Alpart pursuant to
Section 4.10(a), (B) Alpart, KJC and AJI and their
respective assets and Capital Stock with respect to
Indebtedness permitted to be Incurred pursuant to Section
4.10(b)(iii), (C) KAAC and its assets and Capital Stock with
respect to Indebtedness permitted to be Incurred pursuant to
Section 4.10(b)(iv) and (D) the Person or Persons that
Incurred such Indebtedness and the Person or Persons that
Incurred such Refinancing Indebtedness and, in each case,
such Persons' assets and Capital Stock with respect to
Indebtedness and Refinancing Indebtedness permitted to be
Incurred pursuant to Section 4.10(b)(viii); in each case
provided, that the Board of Directors of the Company has
determined in good faith that such encumbrances and
restrictions would not singly or in the aggregate have a
materially adverse effect on the holders of the Notes;
(ix) Indebtedness of a Person that was a Subsidiary at
the time of Incurrence and the Incurrence of which
Indebtedness is permitted by Section 4.10, provided that
such encumbrances and restrictions apply only to such
Subsidiary and its assets, and provided, further, that the
Board of Directors of the Company has determined in good
faith, at the time of creation of each such encumbrance or
restriction, that such encumbrances and restrictions would
not singly or in the aggregate have a materially adverse
effect on the holders of the Notes;
(x) the subordination of (A) any Indebtedness owed by
the Company or any of its Subsidiaries to the Company or any
other Subsidiary to (B) any other Indebtedness of the
Company or any of its Subsidiaries, provided (A) such other
Indebtedness is permitted under this Indenture and (B) the
Board of Directors of the Company has determined in good
faith, at the time of creation of each such encumbrance or
restriction, that such encumbrances and restrictions would
not singly or in the aggregate have a materially adverse
effect on the holders of the Notes;
(xi) the subordination of (A) any Indebtedness owed by
a Permitted Entity to its Equity Owners or any other Person
to (B) any other Indebtedness of such Permitted Entity,
provided (I) such other Indebtedness, at the time of the
Incurrence thereof, is permitted by the definition of
Permitted Entity and (II) the Board of Directors of the
Company has determined in good faith, at the time of
creation of each such encumbrance or restriction, that such
encumbrances and restrictions would not singly or in the
aggregate have a materially adverse effect on the holders of
the Notes;
(xii) Refinancing Indebtedness that is otherwise
permitted in connection with any Refinanced Indebtedness,
provided that, in the case of all Refinancing Indebtedness
other than Refinancing Indebtedness Incurred with respect to
Indebtedness permitted under Section 4.10(b)(ii), any such
encumbrances or restrictions shall not be materially less
favorable to the holders of the Notes; and
(xiii) the sale or other disposition of property
subject to a Lien securing Indebtedness, provided that such
Lien and such Indebtedness are otherwise permitted by this
Indenture.
Permitted Entity: The term "Permitted Entity" shall mean
----------------
any Person (other than a Subsidiary Guarantor) designated as such
by a Board Resolution and as to which (i) the Company, any
Subsidiary Guarantor or any Permitted Entity owns all or a
portion of the Permitted Entity Securities of such Person;
(ii) no more than 10 unaffiliated Equity Owners own of record any
Permitted Entity Securities of such Person; (iii) at all times,
each Equity Owner owns a proportion of each class of Permitted
Entity Securities of such Person outstanding equal to such Equity
Owner's Ownership Interest at such time, other than as a result
of an Equity Owner Default; (iv) no Indebtedness or preferred
stock (including preference stock) is or has been Incurred by
such Person that is outstanding other than (x) Permitted
28
Entity Securities held by Equity Owners and/or (y) if such Person
is a Subsidiary of the Company, Indebtedness permitted to be
Incurred by such Subsidiary at the time of the Incurrence thereof
under Sections 4.10(b)(v) and 4.10(b)(xiii); (v) there exist no
consensual encumbrances or restrictions on the ability of such
Person to (x) pay dividends or make any other distributions to
its Non-Defaulting Equity Owners or (y) make loans or advances or
transfer any of its assets to its Non-Defaulting Equity Owners,
in each case other than Permitted Dividend Encumbrances of such
Permitted Entity; (vi) the Company, any Subsidiary Guarantor or
any Permitted Entity has the right at any time (whether by
agreement, operation of law or otherwise) to (A) require the
Permitted Entity that it owns an Ownership Interest in to
dissolve, liquidate or wind up its affairs (subject to any right
of the other Equity Owners and/or such Permitted Entity to
acquire all of the Permitted Entity Securities owned by such
Equity Owner) and, subject to applicable law, to distribute its
remaining assets to its Equity Owners after payment to creditors
or (B) have all of the Permitted Entity Securities that it owns
purchased by such Permitted Entity and/or other Equity Owners;
and (vii) the business engaged in by such Person is one in which
the Company or its Subsidiaries or its Non-Affiliate Joint
Ventures were engaged on the date of this Indenture or reasonably
related thereto or is the business of holding or disposing of
Permitted Entity Securities.
Permitted Entity Securities: The term "Permitted Entity
---------------------------
Securities" shall mean, with respect to any Permitted Entity, any
Capital Stock or Indebtedness (whether or not a security) of such
Permitted Entity, other than Indebtedness permitted to be
Incurred by such Permitted Entity pursuant to clause (iv)(y) of
the definition of Permitted Entity, but in any event including
Permitted Indebtedness described in clause (b) of the definition
thereof.
Permitted Indebtedness: The term "Permitted Indebtedness"
----------------------
shall mean:
(a) Indebtedness and preferred stock (including
preference stock) of the Company and its Subsidiaries
existing on the date of this Indenture, including, but not
limited to, the 9-7/8% Notes and the 12-3/4% Notes;
(b) Indebtedness (including Redeemable Stock) owed or
issued by the Company to a Subsidiary or owed or issued by a
Subsidiary to the Company, any other Subsidiary of the
Company or to any other holder of Capital Stock of such
Subsidiary in proportion to such holder's ownership interest
in such Subsidiary;
(c) Indebtedness and preferred stock (including
preference stock) of a Permitted Entity to the extent not
prohibited by clause (iii) or clause (iv)(x) of the
definition thereof;
(d) Indebtedness of the Company and its Subsidiaries by
reason of entering into indemnification agreements and
guarantees in connection with the disposition of assets,
provided that the Indebtedness with respect to such
indemnification agreements and guarantees shall be limited
to the amount of the net proceeds of such disposition;
(e) guarantees, letters of credit and indemnity
agreements relating to performance and surety bonds incurred
in the ordinary course of business;
(f) Indebtedness of a Subsidiary of the Company
(including undrawn amounts under lines of credit that are
subsequently drawn upon) issued, assumed or guaranteed by
such Subsidiary prior to the date upon which such Subsidiary
becomes a Subsidiary of the Company (excluding Indebtedness
incurred by such entity in connection with, or in
contemplation of, its becoming a
29
Subsidiary of the Company), provided that such Indebtedness
and the holders thereof do not, at any time, have direct or
indirect recourse to any property or assets of the Company
and its Subsidiaries other than the property and assets of
such acquired entity and its Subsidiaries, including the
Capital Stock thereof, or any newly organized entity formed
to effect such acquisition, and, in each case, the monetary
proceeds thereof;
(g) Indebtedness incurred by the Company in connection
with the purchase, redemption, retirement or other
acquisition by the Company of the USWA Preferred Stock
outstanding on the date hereof (plus additional shares of
such USWA Preferred Stock issued as dividends thereon or on
such shares issued as dividends);
(h) Indebtedness of the Company and its captive wholly
owned insurance Subsidiaries in respect of letters of credit
in an aggregate amount not to exceed at any one time
outstanding $20,000,000 issued for the account of the
Company or such Subsidiaries in support of certain
self-insurance and reinsurance obligations entered into from
time to time by the Company or such captive wholly owned
insurance Subsidiaries of the Company;
(i) Indebtedness consisting of industrial revenue bonds
and related indemnity agreements; and
(j) prior to the merger of the Company and KAC,
Indebtedness in respect of the Preferred Dividend
Intercompany Notes.
Person: The term "Person" shall mean any individual,
------
corporation, partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or
other agency or political subdivision thereof.
Preferred Dividend Intercompany Notes: The term "Preferred
-------------------------------------
Dividend Intercompany Notes" shall mean (i) the intercompany note
in respect of the PRIDES and (ii) any other intercompany note
representing a loan by KAC to the Company from the proceeds of an
offering of preferred stock by KAC which loan shall have a term
not in excess of five years from the date of issuance and shall
be in an amount equal to the aggregate dividends scheduled to
accrue on such preferred stock during the term thereof and
payable at approximately the same times and in approximately the
same amounts as such dividends are payable, provided that,
(a) the aggregate amount of all such intercompany notes referred
to in this clause (ii) shall not exceed $50,000,000 at any one
time outstanding and (b) the remaining net proceeds from such
preferred stock offering shall have been used by KAC to make a
capital contribution to (or to purchase common stock of) the
Company.
Preferred Stock ($100): The term "Preferred Stock ($100)"
----------------------
shall mean the Company's 4-1/8% Preference Stock, par value $100
per share, 4-3/4% Preference Stock (1957 Series), par value $100
per share, 4-3/4% Preference Stock (1959 Series), par value $100
per share, and 4-3/4% Preference Stock (1966 Series), par value
$100 per share.
Principal; principal amount: The terms "principal" or
---------------------------
"principal amount" of a Note shall mean the principal amount of
such Note as set forth on the face of such Note.
30
Principal Products: The term "Principal Products" shall
------------------
mean bauxite, alumina, aluminum, fabricated aluminum products,
and other assets related to the production of the foregoing, used
or sold by the Company, its Subsidiaries and its Unrestricted
Subsidiaries in the ordinary course of business.
Private Placement Legend: The term "Private Placement
------------------------
Legend" shall have the meaning set forth in Section 2.09 hereof.
QAL: The term "QAL" shall mean Queensland Alumina Limited,
---
a Queensland, Australia corporation, and its successors.
Qualified Institutional Buyer or QIB: The terms "Qualified
------------------------------------
Institutional Buyer" or "QIB" shall have the meaning specified in
Rule 144A under the Securities Act of 1933.
Redeemable Stock: The term "Redeemable Stock" shall mean,
----------------
with respect to any Person, any preferred Capital Stock of such
Person, that, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable at the
option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, in whole or in part,
pursuant to a sinking fund obligation or otherwise, or, at the
option of the holder thereof, is redeemable in whole or in part,
or is exchangeable into a security of a Person other than the
issuer of such Capital Stock that is owned by such Person or its
Subsidiaries or into Indebtedness of, or that is owned by, such
Person or its Subsidiaries, in each case on or prior to the
scheduled maturity date of the Notes.
Refinance: The term "Refinance" shall mean to renew,
---------
extend, refund, replace, restructure, refinance, amend or modify
any Indebtedness. The term "Refinancing" shall have a
correlative meaning.
Refinancing Sale and Leaseback Transaction: The term
------------------------------------------
"Refinancing Sale and Leaseback Transaction" shall mean any sale
and leaseback transaction with respect to which the Attributable
Debt is at least $100,000,000, and which is designated by the
Company as a Refinancing Sale and Leaseback Transaction in a
notice to the Trustee pursuant to the terms of this Indenture,
which notice shall indicate the Attributable Debt with respect to
such Refinancing Sale and Leaseback Transaction.
Registration Rights Agreement: The term "Registration
-----------------------------
Rights Agreement" shall mean that certain registration rights
agreement among the Company, the Subsidiary Guarantors and the
Initial Purchasers, to be entered into on the date hereof.
Regulation S: The term "Regulation S" shall mean Regulation
------------
S under the Securities Act of 1933.
Regulation S Temporary Global Note: The term "Regulation S
----------------------------------
Temporary Global Note" shall mean a single temporary global Note
in the form of the Global Note with the additional provisions set
forth in Exhibit A-1 hereto that is deposited with the Trustee
-----------
and registered in the name of the Depository or its nominee ,
representing a series of Notes sold in offshore transactions in
reliance on Regulation S.
Responsible Officer: The term "responsible officer," when
-------------------
used with respect to the Trustee, shall mean any officer in its
principal corporate trust office and every other officer and
assistant officer to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular
subject.
31
Restricted Investment: The term "Restricted Investment"
---------------------
shall mean, with respect to any Person, (i) any amount paid, or
any property transferred, in each case, directly or indirectly by
such Person for Capital Stock or other securities of, or as a
contribution to, any Affiliate of the Company; (ii) any direct or
indirect loan or advance by such Person to any Affiliate of the
Company other than accounts receivable of such Person relating to
the purchase and sale of inventory, goods or services arising in
the ordinary course of business; (iii) any direct or indirect
guarantee by such Person of any obligations, contingent or
otherwise, of any Affiliate of the Company; and (iv) the
acquisition by such Person of, or any investment by such Person
in, any Capital Stock or similar interest of any other Person
(other than the Company or an Unrestricted Subsidiary); provided,
however, that the following shall not be Restricted Investments:
(a) investments in or acquisitions of Capital Stock or
similar interests in any Person (other than a Person in
which Affiliates of the Company have an interest other than
through the Company, its Subsidiaries, its Unrestricted
Subsidiaries and its Non-Affiliate Joint Ventures) that
(I) is or becomes, at the time of the acquisition thereof, a
Subsidiary of the Company and is or is to be primarily
engaged in an operating business or (II) is, at the time of
the acquisition thereof, engaged or to be engaged primarily
in businesses in which the Company or its Subsidiaries or
its Non-Affiliate Joint Ventures were engaged on the date of
this Indenture or reasonably related extensions thereof,
provided that such securities are not, at the time of the
acquisition thereof (without regard to any exchanges,
modifications or other changes thereto subsequent to such
acquisition), registered under the Exchange Act;
(b) Restricted Investments of such Person existing as
of the date of the 9-7/8% Note Indenture and any extension,
modification or renewal of such Restricted Investment (but
not increases thereof, other than as a result of the accrual
or accretion of interest or original issue discount pursuant
to the terms of such Restricted Investment), or any
Restricted Investment made in connection with an exchange of
such Restricted Investment with the issuer thereof;
(c) investments in or acquisitions of Permitted Entity
Securities of any Permitted Entity;
(d) transactions with officers or directors of the
Company or any Subsidiary of the Company entered into in the
ordinary course of business (including compensation or
employee benefit arrangements with any officer or director
of the Company or any Subsidiary of the Company);
(e) investments in or acquisitions of Capital Stock or
similar interests in Persons (other than Affiliates of the
Company) received in the bankruptcy or reorganization of or
by such Person or any exchange of such investment with the
issuer thereof or taken in settlement of or other resolution
of claims or disputes, and, in each case, extensions,
modifications and renewals thereof; and
(f) investments in Persons (other than Affiliates of
the Company) received by such Person as consideration from
Asset Sales to the extent not prohibited by Section 4.14
(including, for the purposes of this definition, those
sales, transfers and other dispositions described in
clause (B) and the transactions described in clause (D) of
such definition) or any exchange of such investment with the
issuer thereof, and extensions, modifications and renewals
thereof.
32
Restricted Security: The term "Restricted Security" shall
-------------------
have the meaning assigned to such term in Rule 144(a)(3) under
the Securities Act of 1933; provided, however, that the Trustee
shall be entitled to request and conclusively rely on an Opinion
of Counsel with respect to whether any Note constitutes a
Restricted Security.
Rule 144A: The term "Rule 144A" shall mean Rule 144A under
---------
the Securities Act of 1933.
Securities Act of 1933: The term "Securities Act of 1933"
----------------------
shall mean the Securities Act of 1933, as amended, and the rules
and regulations promulgated by the Securities and Exchange
Commission thereunder.
Significant Subsidiary: The term "Significant Subsidiary"
----------------------
shall have the meaning assigned to that term under Regulation S-X
of the Securities Act of 1933 as in effect on the date of this
Indenture; provided, however, that (i) each Subsidiary Guarantor
on the date of this Indenture shall be deemed to be a Significant
Subsidiary of the Company for so long as such Subsidiary is a
Subsidiary Guarantor, (ii) each of VALCO, KAAC and Alpart, and
each Subsidiary of the Company that, directly or indirectly,
holds an interest in VALCO, Alpart or QAL, and each Subsidiary
Guarantor that becomes a Subsidiary Guarantor after the date of
this Indenture (so long as such Subsidiary Guarantor is a
Subsidiary Guarantor) shall be deemed to be a Significant
Subsidiary if it (singly, or, in the case of VALCO, Alpart or
QAL, together with the other Subsidiaries of the Company that
hold an interest in such entity) meets the total assets test of
the term "Significant Subsidiary" under Regulation S-X as in
effect on the date of this Indenture, but substituting 5% in such
test for 10% and (iii) no Unrestricted Subsidiary shall be deemed
to be a Significant Subsidiary.
Specified Parties: The term "Specified Parties" shall mean
-----------------
each of AJI, Alpart, KAAC, KJC, VALCO, Kaiser Aluminium
International, Inc., a Delaware corporation, and its successors,
Kaiser Bauxite Company, a Nevada corporation, and its successors,
Kaiser Jamaica Bauxite Company, a Jamaican partnership, and its
successors, and Queensland Alumina Security Corporation, a
Delaware corporation, and its successors.
Subsidiary: The term "Subsidiary" shall mean any
----------
corporation or other entity of which more than 50% of the equity
interest (which for a corporation shall be the outstanding stock
having ordinary voting power to elect a majority of the Board of
Directors of such corporation, irrespective of whether or not at
the time stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned
(either alone or through Subsidiaries or together with
Subsidiaries) by the Company or another Subsidiary; provided,
however, that Queensland Alumina Security Corporation, a Delaware
corporation, shall be deemed not to be a Subsidiary of the
Company or any of its Subsidiaries and shall be deemed to be a
Non-Affiliate Joint Venture (for as long as it meets the
definition of Non-Affiliate Joint Venture and for as long as its
operations remain substantially the same), and provided, further,
that, for purposes of the definitions of Asset Sale and Net Cash
Proceeds and for purposes of Section 4.14, each of Alpart and
VALCO, so long as it is not a wholly owned Subsidiary, shall be
deemed not to be a Subsidiary of the Company or any of its
Subsidiaries and shall be deemed to be a Non-Affiliate Joint
Venture of the Company (for so long as it meets the definition of
Non-Affiliate Joint Venture). For purposes of this definition,
any directors' qualifying shares shall be disregarded in
determining the ownership of a Subsidiary. Notwithstanding
anything to the contrary contained herein, no Unrestricted
Subsidiary shall be deemed to be a Subsidiary of the Company or
of any Subsidiary or Subsidiaries of the Company.
33
Subsidiary Guarantors: The term "Subsidiary Guarantors"
---------------------
shall mean the Persons from time to time named as Subsidiary
Guarantors in this Indenture or that become Subsidiary Guarantors
hereunder, and each of their respective successors, provided,
however, that in the event that a Subsidiary Guarantor is
released from its Guarantee in accordance with the terms of this
Indenture, such Subsidiary Guarantor shall without any further
action no longer be a Subsidiary Guarantor for any purpose of
this Indenture or the Notes. On the date of this Indenture, the
Subsidiary Guarantors are Kaiser Alumina Australia Corporation,
Kaiser Finance Corporation, Alpart Jamaica Inc., Kaiser Jamaica
Corporation, Kaiser Micromill Holdings, LLC, Kaiser Sierra
Micromills, LLC, Kaiser Texas Micromill Holdings, LLC and Kaiser
Texas Sierra Micromills, LLC.
Tax Sharing Agreements: The term "Tax Sharing Agreements"
----------------------
shall mean, collectively, the tax-sharing agreement between the
Company and KAC, dated as of June 30, 1993, and the tax-sharing
agreement between the Company and MAXXAM, dated as of
December 21, 1989, as each is described in the prospectus dated
February 10, 1994, relating to the Offering by the Company of the
9-7/8% Notes and as each may be amended in accordance with
Section 4.08(b)(x) of this Indenture.
Trust Indenture Act of 1939: The term "Trust Indenture Act
---------------------------
of 1939" shall mean the Trust Indenture Act of 1939 as it was in
force at the date of this Indenture, except as provided by
Article Ten.
Trustee; principal office: The term "Trustee" shall mean
-------------------------
First Trust National Association, a national banking association,
until a successor replaces it in accordance with the provisions
of Article Seven. The term "principal office of the Trustee"
shall mean the office of the Trustee at which at any particular
time its corporate trust business may be principally
administered, which office at the date hereof is located at First
Trust Center, 180 East 5th Street, St. Paul, Minnesota 55101.
U.S. Fixed Assets: The term "U.S. Fixed Assets" shall mean,
-----------------
at any time, any real property, plant or equipment of the Company
or any of its Subsidiaries located at such time in the United
States of America, now owned or hereafter acquired, together with
any fixed assets that are Improvements thereto or thereon and any
fixed assets that are proceeds thereof.
USWA Preferred Stock: The term "USWA Preferred Stock" shall
--------------------
mean the shares of the Company's Cumulative (1985 Series A)
Preference Stock and shares of the Company's Cumulative (1985
Series B) Preference Stock that have been or may in the future be
issued in connection with the Kaiser Aluminum USWA Employee Stock
Ownership Plan and/or the Kaiser Aluminum Salaried Employee Stock
Ownership Plan.
Unrestricted Subsidiary: The term "Unrestricted Subsidiary"
-----------------------
shall mean each of the Subsidiaries of the Company or any entity
which is to become a Subsidiary of the Company, designated as an
"Unrestricted Subsidiary" by a Board Resolution; but only to the
extent that such Subsidiary (i) is not, at the time of such
designation, party to any transaction or series of related
transactions with the Company or any Subsidiary of the Company,
unless such transaction or series of related transactions would
be permitted by the provisions of Section 4.08 of this Indenture
and (ii) has, at the time of such designation, at least one
director on its board of directors that is not a director or
executive officer of the Company or any of its Subsidiaries and
has at least one executive officer that is not a director or
executive officer of the Company or any of its Subsidiaries. Any
such designation by the Board of Directors of the Company 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 such
designation complied with the foregoing conditions and was
permitted by Sections 4.09 and 4.15 of this
34
Indenture. The Board of Directors of the Company may designate
an Unrestricted Subsidiary to be a Subsidiary, provided that any
such redesignation shall be deemed to be an Incurrence by the
Company or its Subsidiaries of the Indebtedness (if any) of such
redesignated Subsidiary, to the extent such Indebtedness does not
already constitute Indebtedness of the Company or one or more of
its Subsidiaries, for purposes of Section 4.10 of this Indenture
as of the date of such redesignation, and such redesignation
shall only be permitted if (i) such Indebtedness is permitted
under Section 4.10 and (ii) no Event of Default (or event that,
after notice or lapse of time or both, would become an Event of
Default) would be in existence as a result of such designation.
Unrestricted Subsidiary Investment: The term "Unrestricted
----------------------------------
Subsidiary Investment" shall mean with respect to the Company or
any Subsidiary of the Company (such Person being referred to in
this definition as the "Investor") (without duplication), (i) any
amount paid, or any property transferred, in each case, directly
or indirectly, by the Investor for Capital Stock or other
securities of, or as a contribution to, an Unrestricted
Subsidiary, (ii) any direct or indirect loan or advance by the
Investor to an Unrestricted Subsidiary other than accounts
receivable of the Investor relating to the purchase and sale of
inventory, goods or services arising in the ordinary course of
business, (iii) any direct or indirect guarantee by the Investor
of, or liability (other than liabilities arising by operation of
law) of the Investor for, any obligations, contingent or
otherwise, of an Unrestricted Subsidiary, (iv) any provision of
credit support (including any undertaking, agreement or
instrument that would constitute Indebtedness) by the Investor to
or on behalf of an Unrestricted Subsidiary, (v) any Incurrence of
Indebtedness by an Unrestricted Subsidiary, a default with
respect to which (including any rights that the holders thereof
may have to take enforcement action against such Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any
holder of any Indebtedness of the Investor (other than the Notes,
Indebtedness set forth in Schedule C to this Indenture and
Indebtedness in a principal amount of no more than $10,000,000 in
any single case) to declare a default on such Indebtedness of the
Investor or cause the payment thereof to be accelerated or
payable prior to its stated maturity, (vi) any direct or indirect
obligation or liability of the Investor (A) to subscribe for
additional Equity Interests of an Unrestricted Subsidiary or
(B) to maintain or preserve such Unrestricted Subsidiary's
financial condition or to cause such Unrestricted Subsidiary to
achieve any specified levels of operating results, and (vii) the
acquisition by the Investor of, or any investment by the Investor
in, any Capital Stock or similar interests of an Unrestricted
Subsidiary. The amount of any Unrestricted Subsidiary
Investment, if other than in cash or a sum certain guaranteed,
shall be the Fair Market Value thereof.
Unrestricted Subsidiary Investments Outstanding: The term
-----------------------------------------------
"Unrestricted Subsidiary Investments Outstanding" shall mean, at
any time of determination, in respect of any Unrestricted
Subsidiary, the amount, if any, by which (i) the sum of all
Unrestricted Subsidiary Investments theretofore made by the
Company or any Subsidiary of the Company in such Unrestricted
Subsidiary after the date hereof, exceeds (ii) the amount of all
dividends and distributions received, directly or indirectly, by
the Company or a Subsidiary of the Company that is a Subsidiary
Guarantor from such Unrestricted Subsidiary in cash or Cash
Equivalents during the period that such Person was an
Unrestricted Subsidiary, and all repayments in cash or Cash
Equivalents from such Unrestricted Subsidiary, directly or
indirectly, to the Company or one of its Subsidiaries that is a
Subsidiary Guarantor of loans or advances from the Company or any
of its Subsidiaries to such Unrestricted Subsidiary, during the
period that such Person was an Unrestricted Subsidiary, any other
reduction (including as a result of the sale by the Company or a
Subsidiary of the Company of Capital Stock of an Unrestricted
Subsidiary) received, directly or indirectly, by the Company or a
Subsidiary of the Company that is a Subsidiary Guarantor in cash
or Cash Equivalents of Unrestricted Subsidiary Investments in
such Unrestricted Subsidiary during the period that such Person
was an Unrestricted Subsidiary, and any reductions of
Unrestricted Subsidiary
35
Investments in such Unrestricted Subsidiary of the kind referred
to in clauses (iii) through (vi) of the definition of
Unrestricted Subsidiary Investment; provided that the amount of
Unrestricted Subsidiary Investments Outstanding in respect of any
Unrestricted Subsidiary shall at no time be a negative amount.
Notwithstanding the foregoing, in the event that the Company
redesignates an Unrestricted Subsidiary as a Subsidiary, the
amount of Unrestricted Subsidiary Investments Outstanding in
respect of such Unrestricted Subsidiary at the time of such
redesignation shall continue to constitute Unrestricted
Subsidiary Investments Outstanding and such redesignated
Subsidiary shall not be required to become a Subsidiary Guarantor
in connection with such redesignation.
VALCO: The term "VALCO" shall mean Volta Aluminium Company
-----
Limited, a Ghanaian corporation, and its successors.
SECTION 1.02. References are to Indenture. Unless the
---------------------------
context otherwise requires, all references herein to "Articles,"
"Sections" and other subdivisions refer to the corresponding
Articles, Sections and other subdivisions of this Indenture, and
the words "herein," "hereof," hereby," "hereunder" and words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision hereof.
SECTION 1.03. Other definitions.
-----------------
The following terms are defined in the referenced section of
this Indenture and have the meaning set forth therein for all
purposes in this Indenture (except as otherwise expressly
provided or unless the context otherwise requires):
Term Defined in Section
---- ------------------
"applicants" . . . . . . . . . . . . . . . . . . 5.02(b)
"Approved Bank". . . . . . . . . . . . . . . . . 1.01
"Asset Sale Offer" . . . . . . . . . . . . . . . 4.14(b)
"Asset Sale Offer Amount". . . . . . . . . . . . 4.14(b)
"Asset Sale Purchase Date" . . . . . . . . . . . 4.14(b)
"Asset Sale Purchase Notice" . . . . . . . . . . 4.14(c)
"Asset Sale Purchase Price". . . . . . . . . . . 4.14(b)
"Change of Control". . . . . . . . . . . . . . . 3.05(a)
"Change of Control Purchase Date". . . . . . . . 3.05(a)
"Change of Control Purchase Notice". . . . . . . 3.05(c)
"Change of Control Purchase Price" . . . . . . . 3.05(a)
"Controlled Non-Affiliate Joint Venture" . . . . 4.09(a)
"Global Note". . . . . . . . . . . . . . . . . . 2.02
"Incur". . . . . . . . . . . . . . . . . . . . . 4.10(a)
"Notice of Default". . . . . . . . . . . . . . . 6.01(c)
"Other Indebtedness" . . . . . . . . . . . . . . 4.10(c)
"PRIDES" . . . . . . . . . . . . . . . . . . . . 4.09(b)(IX)
"Private Placement Legend. . . . . . . . . . . . 2.09
"record date". . . . . . . . . . . . . . . . . . 2.03
"Refinanced Indebtedness". . . . . . . . . . . . 4.10(b)(vi)
"Refinancing Indebtedness" . . . . . . . . . . . 4.10(b)(vi)
"Restricted Payment" . . . . . . . . . . . . . . 4.09(a)
36
Term Defined in Section
---- ------------------
"Specified Pari Passu Indebtedness". . . . . . . 4.14(b)
"surviving corporation". . . . . . . . . . . . . 11.01(a)
"Twenty-Five Million Threshold". . . . . . . . . 4.14(c)
"Voting Stock" . . . . . . . . . . . . . . . . . 3.05(a)
The following terms are defined in the referenced section of
this Indenture and have the meaning set forth therein for
purposes provided therein, and such definitions are limited to
those sections of this Indenture specifically referenced:
Defined in Definition Limited
Term Section to Section
---- ---------- -------------------
"amount" . . . . . . . . . . . . .7.08(d). . . . . . . . 7.08
"cash transaction" . . . . . . . .7.13(c). . . . . . . . 7.13
"Company". . . . . . . . . . . . .7.08(d). . . . . . . . 7.08
"Company". . . . . . . . . . . . .7.13(c). . . . . . . . 7.13
"defaults" . . . . . . . . . . . .6.07 . . . . . . . . . 6.07
"defaults" . . . . . . . . . . . .7.13(c). . . . . . . . 7.13
"director" . . . . . . . . . . . .7.08(d). . . . . . . . 7.08
"dividends". . . . . . . . . . . .7.13(a). . . . . . . . 7.13(a)
"executive officer". . . . . . . .7.08(d). . . . . . . . 7.08
"in default" . . . . . . . . . . .7.08(c). . . . . . . . 7.08(c)(6),
(7),(8)
and (9)
"other indenture securities". 7.13(c) 7.13
"outstanding" . . . . . . . . . . . . . . . . . 7.08(d)7.08
"person" . . . . . . . . . . . . .7.08(d). . . . . . . . 7.08
"security" . . . . . . . . . . . .7.08(c). . . . . . . . 7.08(c)(6),
(7),(8)
and (9)
"security" . . . . . . . . . . . .7.08(d). . . . . . . . 7.08 (other
than
7.08(c)(6),
(7), (8)
and (9))
"self liquidating paper" . . . . .7.13(c). . . . . . . . 7.13
"trust". . . . . . . . . . . . . .7.08(d). . . . . . . . 7.08
"voting security". . . . . . . . .7.08(d). . . . . . . . 7.08
ARTICLE TWO
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
SECTION 2.01. Designation, amount, authentication and
---------------------------------------
delivery of Notes. The Notes shall be designated as the
- -----------------
Company's 10-7/8% Senior Notes due 2006. Notes for an aggregate
principal amount of one hundred and seventy five million dollars
($175,000,000), upon the execution of this Indenture, or from
time to time thereafter, may be executed by the Company and
delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver said Notes to or upon
the written order of the Company, signed by its Chairman of the
Board, President or a Vice President, without any further
corporate action by the Company.
37
The aggregate principal amount of Notes authorized by this
Indenture is limited to one hundred seventy five million dollars
($175,000,000) and, except as provided in this Section 2.01 and
in Section 2.07, the Company shall not execute and the Trustee
shall not authenticate or deliver Notes in excess of such
aggregate principal amount. The Trustee shall authenticate
Exchange Notes from time to time for issue only in exchange for a
like principal amount of Initial Notes, in each case upon a
written order of the Company. The written order of the Company
shall specify the amount of Notes to be authenticated and the
date on which the Notes are to be authenticated, whether the
Notes are to be Initial Notes or Exchange Notes and whether the
Notes are to be issued as Certificated Notes or a Global Note and
such other information as the Trustee may reasonably request.
Nothing contained in this Section 2.01 or elsewhere in this
Indenture, or in the Notes, is intended to or shall limit
execution by the Company or authentication or delivery by the
Trustee of Notes under the circumstances contemplated by Sections
2.05, 2.06, 2.07, 3.03, 3.05 and 10.04.
SECTION 2.02. Form of Notes and Trustee's certificate. The
---------------------------------------
definitive Notes and the Trustee's certificate of authentication
to be borne by the Notes shall be substantially in the form set
forth in the Recitals of this Indenture, which are part of this
Indenture, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as the officers
executing the same may deem appropriate and as are not
inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock
exchange on which the Notes may be listed, or to conform to
usage.
Notes offered and sold in reliance on Rule 144A shall
be issued initially in the form of a single, permanent global
Note in fully registered form, without interest coupons,
substantially in the form set forth in the recitals to this
Indenture (the "Global Note"), deposited with the Trustee, as
custodian for the Depository, and registered in the name of Cede
& Co., or such other nominee as the Depository may designate,
duly executed by the Company and authenticated by the Trustee as
hereinafter provided and shall bear the legends set forth in
Section 2.09 hereof. The aggregate principal amount of the
Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
Notes offered and sold in reliance on Regulation S
shall be issued initially in the form of the Regulation S
Temporary Global Note in fully registered form, which shall be
deposited on behalf of the purchasers of the Notes represented
thereby with the Trustee, as custodian for the Depository, and
registered in the name of the Depository or the nominee of the
Depository, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The 40-day restricted period
(as defined in Regulation S) shall be terminated upon the receipt
by the Trustee of (i) a written certificate from the Depository
as to the non-United States beneficial ownership of 100% of the
aggregate principal amount of the Regulation S Temporary Global
Note (except to the extent of any beneficial owners thereof who
acquired an interest therein pursuant to another exemption from
registration under the Securities Act of 1933, all as
contemplated by Section 2.05(e) hereof), and (ii) an Officers'
Certificate from the Company. Following the termination of the
40-day restricted period, beneficial interests in the
Regulation S Temporary Global Note shall be exchanged for
Certificated Notes or beneficial interests in the Global Note
pursuant to the applicable procedures of the Depository. The
aggregate principal amount of the Regulation S Temporary Global
Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
38
Notes offered and sold in reliance on any other
exemption from registration under the Securities Act of 1933
other than as described in the preceding paragraph shall be
issued, and Notes offered and sold in reliance on Rule 144A may
be issued, in the form of certificated Notes in fully registered
form, without interest coupons, in substantially the form set
forth in the recitals to this Indenture (the "Certificated
Notes"). Certificated Notes shall initially be registered in the
name of the Depository or a nominee of the Depository and be
delivered to the Trustee as custodian for the Depository, duly
executed by the Company and authenticated by the Trustee as
hereinafter provided. Beneficial owners of Certificated Notes,
however, may request registration of such Certificated Notes in
their names or the names of their nominees.
SECTION 2.03. Date of Notes and denominations. The Notes
-------------------------------
shall bear interest at the rate per annum of 10-7/8%, payable
semi-annually on April 15 and October 15, shall mature on October
15, 2006 and shall be issuable as registered Notes without
coupons in denominations of $1,000 and any integral multiple
thereof. The person in whose name any Note is registered at the
close of business on any record date (as hereinbelow defined)
with respect to any interest payment date shall be entitled to
receive the interest payable thereon on such interest payment
date notwithstanding the cancellation of such Note upon any
registration of transfer or exchange thereof subsequent to such
record date and prior to such interest payment date, unless such
Note shall have been redeemed on a date fixed for redemption
subsequent to such record date and prior to such interest payment
date, or unless an Event of Default shall have occurred and be
continuing as the result of a default in the payment of interest
due on such interest payment date on any Note, in which case such
defaulted interest shall be paid to the person in whose name such
Note (or any Note or Notes issued upon registration of transfer
or exchange thereof) is registered on the record date for the
payment of such defaulted interest. The principal of, premium,
if any, Change of Control Purchase Price, Asset Sale Purchase
Price and interest on the Notes shall be payable to the
registered holder thereof at the office or agency to be
maintained by the Company in accordance with the provisions of
Section 4.02; provided, however, that payment of interest may be
made at the option of the Company by check mailed by first-class
mail to the address of the person entitled thereto as such
address shall appear on the registry books of the Company;
provided that all payments with respect to any Note, if the
holder of such Note has given wire transfer instructions (which
instructions must be received by the Company at least 5 Business
Days prior to the relevant date of payment) to the Company, will
be required to be made by wire transfer of immediately available
funds to the account specified by the holder of such Note;
provided, that such payments (other than interest payments) may
be conditioned upon surrender of the Notes. The term "record
date" as used in this Section 2.03 with respect to any interest
payment date shall mean the close of business on the April 1 or
October 1, as the case may be, next preceding such interest
payment date, whether or not such April 1 or October 1 is a
Business Day, and such term, as used in this Section 2.03, with
respect to the payment of any defaulted interest shall mean the
tenth day next preceding the date fixed by the Company for the
payment of defaulted interest whether or not a Business Day, but
in no case shall such record date be less than ten days after
notice thereof shall have been mailed by or on behalf of the
Company to all registered holders of Notes at their addresses.
The Notes shall be dated the date of their authentication.
Except as provided in the next sentence, interest shall accrue on
the Notes from the most recent date to which interest has been
paid or duly provided for or, if no interest has been paid or
duly provided for, from October 23, 1996. Each Note
authenticated between the record date for any interest payment
date and such interest payment date shall be dated the date of
its authentication but shall bear interest from such interest
payment date; provided, however, that if and to the extent the
Company shall default in the payment of the interest due on such
interest payment date, then any Note so authenticated shall bear
interest from the April 15 or October 15,
39
as the case may be, next preceding the date of such Note to which
interest has been paid or duly provided for or, if no interest
has been paid or duly provided for on the Notes, from October 23,
1996.
Interest on the Notes shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
SECTION 2.04. Execution of Notes. The Notes shall be
------------------
signed on behalf of the Company, manually or in facsimile, by its
Chairman of the Board or its President or a Vice President under
its corporate seal (which may be in facsimile) reproduced thereon
and attested, manually or in facsimile, by its Secretary or an
Assistant Secretary. Only such Notes as shall bear thereon a
certificate of authentication substantially in the form
hereinbefore recited, signed manually by the Trustee, shall be
entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. Such signature by the Trustee upon
any Note executed by the Company shall be conclusive evidence
that the Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
In case any officer of the Company whose signature appears
on any of the Notes, manually or in facsimile, shall cease to be
such officer before such Notes so signed shall have been
authenticated and delivered by the Trustee, such Notes
nevertheless may be authenticated and delivered as though the
person whose signature appears on such Notes had not ceased to be
such officer of the Company; and any Note may be signed, and the
corporate seal reproduced thereon may be attested, on behalf of
the Company, manually or in facsimile, by persons as, at the
actual date of the execution of such Note, shall be the proper
officers of the Company, although at the date of the execution of
this Indenture any such person was not such officer.
SECTION 2.05. Exchange and transfer of Notes.
------------------------------
(a) Subject to the other provisions of this Section 2.05:
(1) Notes may be exchanged for a like aggregate
principal amount of Notes in other authorized denominations.
Notes to be exchanged shall be surrendered at the office or
agency to be maintained by the Company in accordance with
the provisions of Section 4.02, and the Company shall
execute and the Trustee shall authenticate and deliver in
exchange therefor the Note or Notes which the noteholder
making the exchange shall be entitled to receive.
(2) The Company shall keep, at the office or agency to
be maintained by the Company in accordance with the
provisions of Section 4.02, a register or registers in
which, subject to such reasonable regulations as it may
prescribe, the Company shall register Notes and shall
register the transfer of Notes as in this Article Two
provided. Upon surrender by any noteholder for registration
of transfer of any Note at such office or agency, the
Company shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new
Note or Notes for a like aggregate principal amount.
(3) All Notes presented or surrendered for exchange,
registration of transfer, redemption, purchase or payment
shall, if so required by the Company or the Trustee or any
Note registrar (if other than the Trustee), be accompanied
by a written instrument or instruments of transfer, in form
satisfactory to the Company and the Trustee or the Note
registrar (if other than the Trustee), duly executed by the
registered holder or by his attorney duly authorized in
40
writing and, in every case, each Note presented or surrendered
for registration of transfer shall be accompanied by the
assignment form attached to the Notes, duly executed by the
registered holder or by his attorney duly authorized in writing.
(4) No service charge shall be made for any exchange
or registration of transfer of Notes, but the Company may
require payment of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed
in relation thereto.
(5) The Company shall not be required to issue,
register the transfer of or exchange any Notes for a period
of fifteen days next preceding any date for the selection of
Notes to be redeemed. The Company shall not be required to
register the transfer of or exchange any Note called or
being called for redemption except, in the case of any Note
to be redeemed in part, the portion thereof not to be so
redeemed. The Company shall not be required to register the
transfer of or exchange any Note in respect of which a
Change of Control Purchase Notice or an Asset Sale Purchase
Notice has been given (unless such notice has been withdrawn
in accordance with Section 3.06 or 4.14) except, in the case
of any Note to be purchased in part, the portion thereof not
to be so purchased.
(b) Transfers to Non-QIB Institutional Accredited
---------------------------------------------
Investors, Non-U.S. Persons and Certain QIBs. The following
- --------------------------------------------
provisions shall apply with respect to the registration of any
proposed transfer of a Note to any Institutional Accredited
Investor which is not a QIB, to any Non-U.S. Person or to any QIB
electing to take delivery of Certificated Notes:
(1) the Note registrar shall register on its books and
records the transfer of any Note constituting a Restricted
Security if such transfer is (i) pursuant to a registration
statement which has been declared effective under the
Securities Act of 1933, (ii) for as long as the Notes are
eligible for resale pursuant to Rule 144A, to a person who
has checked the box provided for on the form of Note
stating, or has otherwise advised the Company and the Note
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
Note stating, or has otherwise advised the Company and the
Note registrar in writing, that it is purchasing the Note
for its own account or an account with respect to which it
exercises sole investment discretion and that it and any
such account is a QIB within the meaning of Rule 144A, and
is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such
information regarding the Company as 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, (iii)
pursuant to offers and sales to non-U.S. Persons that occur
outside the United States within the meaning of Regulation S
under the Securities Act of 1933, (iv) to an Institutional
Accredited Investor that is acquiring the security for its
own account, or for the account of such an Institutional
Accredited Investor, for investment purposes and not with a
view to or for offer or sale in connection with, any
distribution in violation of the Securities Act of 1933, or
(v) pursuant to another available exemption from the
registration requirements of the Securities Act of 1933,
subject to the Company's and the Trustee's right prior to
any such offer, sale or transfer (A) pursuant to clauses
(iii), (iv) or (v) to require the delivery of an opinion of
counsel, certification and/or other information satisfactory
to each of them and (B) in each of the foregoing cases, to
require that an assignment form in the form appearing on the
reverse side of the form of Note is completed and delivered
by the transferor to the Trustee; and
41
(2) the Note registrar shall register on its books and
records the transfer of any Note other than as described in
the preceding paragraph, upon the completion and delivery of
an assignment form in the form appearing on the reverse side
of the form of Note by the transferor to the Trustee;
(3) if the proposed transferor is an Agent Member
holding a beneficial interest in the Global Note, upon
receipt by the Note registrar of written instructions given
in accordance with the Depository's and the Note registrar's
procedures, the Note registrar shall reflect on its books
and records the date and (if the transfer involves a
transfer of a beneficial interest in the Global Note) a
decrease in the principal amount of the Global Note in an
amount equal to the principal amount of the beneficial
interest in the Global Note to be transferred;
(4) if the Notes to be transferred consist of
Certificated Notes, the transferor shall present or
surrender such Certificated Notes to the Note registrar for
registration of transfer; and
(5) subject to this Section 2.05, the Company shall
execute and the Trustee shall authenticate and deliver one
or more Certificated Notes of like tenor and amount to the
Notes proposed to be transferred hereunder.
(c) Transfers to Certain QIBs. The following provisions
-------------------------
shall apply with respect to the registration of any proposed
transfer of a Certificated Note to a QIB electing to take an
interest in the Global Note:
(1) the Note registrar shall register on its books and
records the transfer of any Certificated Note constituting a
Restricted Security if such transfer is being made by a
proposed transferor who has checked the box provided for on
the form of Note stating, or has otherwise advised the
Company and the Note 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 Note stating, or has otherwise advised the
Company and the Note registrar in writing, that it is
purchasing the Note for its own account or an account with
respect to which it exercises sole investment discretion and
that it and any such account is a QIB within the meaning of
Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as 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; and
(2) the Note registrar shall register on its books and
records the transfer of any Note other than as described in
the preceding paragraph, upon the completion and delivery of
an assignment form in the form appearing on the reverse side
of the form of Note by the transferor to the Trustee; and
(3) upon receipt by the Note registrar of written
instructions given in accordance with the Depository's and
the Note registrar's procedures, the Note registrar shall
reflect on its books and records the date and an increase in
the principal amount of the Global Note in an amount equal
to the principal amount of the Certificated Notes to be
transferred, and the Trustee shall cancel the Certificated
Notes so transferred.
42
(d) Transfers and Exchange of Global Securities. The
-------------------------------------------
transfer and exchange of an interest in the Global Note or
beneficial interests therein shall be effected through the
Depository, in accordance with this Indenture (including
applicable restrictions on transfer set forth therein, if any)
and the procedures of the Depository therefor which shall include
restrictions on transfer comparable to those set forth herein to
the extent required by the Securities Act of 1933.
(e) Transfers from the Regulation S Temporary Global Note.
----------------------------------------------------
If, at any time, an owner of a beneficial interest in the
Regulation S Temporary Global Note wishes to transfer its
beneficial interest in such Regulation S Temporary Global Note to
a Person who is permitted to take delivery thereof in the form of
an interest in the Global Note or to a Person who is taking
delivery of such beneficial interest in the form of Certificated
Notes or, upon expiration of the 40-day restricted period and
upon certification of beneficial ownership of the Notes
represented by the Regulation S Temporary Global Note by non-U.S.
Persons or U.S. Persons who purchased such Notes in transactions
that did not require registration under the Securities Act of
1933, to exchange such beneficial interest for Certificated
Notes, such owner shall, subject to the applicable procedures of
the Depository, exchange or cause the exchange of such interest
for an equivalent beneficial interest in the Global Note or for
Certificated Notes as provided in this Section 2.05(e). Upon
receipt by the Trustee of (1) instructions from the Depository,
directing the Trustee, as a Note registrar, to credit or cause to
be credited a beneficial interest in the Global Note or to issue
and authenticate Certificated Notes in an amount equal to the
beneficial interest in the Regulation S Temporary Global Note to
be transferred or exchanged, such instructions to contain
information regarding the participant account with the Depository
to be credited with such increase or the name and address of the
transferee thereof, as applicable, and (2) a certificate in the
form of Exhibit A-2 attached hereto given by the owner of such
-----------
beneficial interest in the Regulation S Temporary Global Note
stating (A) if the transfer is pursuant to Rule 144A, that the
Person transferring such interest in the Regulation S Temporary
Global Note reasonably believes that the Person acquiring such
interest in the Global Note is a QIB and is obtaining such
beneficial interest in a transaction meeting the requirements of
Rule 144A and any applicable blue sky or securities laws of any
state of the United States or (B) if the transfer is pursuant to
any other exemption from the registration requirements of the
Securities Act of 1933, that the transfer of such interest has
been made in compliance with the transfer restrictions applicable
to the Regulation S Temporary Global Note and pursuant to and in
accordance with the requirements of the exemption claimed, such
statement, in the case of clause (B), to be supported by an
Opinion of Counsel from the transferee or the transferor in form
reasonably acceptable to the Company and to the Note registrar,
then the Trustee, as Note registrar, shall instruct the
Depository to reduce or cause to be reduced the aggregate
principal amount of such Regulation S Temporary Global Note and
(x) shall instruct the Depository to increase or cause to be
increased the aggregate principal amount of the Global Note and
instruct the Depository to credit or cause to be credited to the
account of the Person specified in such instructions a beneficial
interest in the Global Note or (y) shall issue and authenticate
Certificated Notes in an amount equal to the principal amount of
the beneficial interest in the Regulation S Temporary Global Note
to be exchanged or transferred, and the Trustee, as Note
registrar, shall instruct the Depository to debit or cause to be
debited from the account of the Person making such transfer the
beneficial interest in the Regulation S Temporary Global Note
that is being exchanged or transferred.
(f) Private Placement Legend. Upon the transfer, exchange
------------------------
or replacement of Notes not bearing the Private Placement Legend,
the Note registrar shall deliver Notes that do not bear the
Private Placement Legend. Upon the transfer, exchange or
replacement of Notes bearing the Private Placement Legend, the
Note registrar shall deliver only Notes that bear the Private
Placement Legend unless (i) the requested transfer is after the
third anniversary of the Issue Date (or such shorter period
permitted under Rule 144(k) under the Securities Act of 1933 (or
any successor provision)), (ii) such Notes have been sold
43
pursuant to a registration statement which has been declared
effective under the Securities Act of 1933 or (iii) there is
delivered to the Note registrar an Opinion of 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 of 1933.
(g) General. By its acceptance of any Note bearing the
-------
Private Placement Legend, each Holder of such Note acknowledges
the restrictions on transfer of such Note set forth in this
Indenture and in the Private Placement Legend and agrees that it
will transfer such Note only as provided in this Indenture.
The Note registrar shall retain copies of all letters,
notices and other written communications received pursuant to
Section 2.09 of this Indenture or this Section 2.05. The Company
shall have the right to inspect and make copies of all such
letters, notices or other written communications at any
reasonable time during the Note registrar's normal business hours
upon the giving of reasonable written notice to the Note
registrar.
SECTION 2.06. Temporary Notes. Pending the preparation of
---------------
definitive Notes, the Company may execute and the Trustee shall
authenticate and deliver temporary Notes (printed, lithographed
or typewritten) of any authorized denomination and substantially
in the form of the definitive Notes, but with or without a
recital of specific redemption prices and with such omissions,
insertions and variations as may be appropriate for temporary
Notes, all as may be determined by the Company. Temporary Notes
may contain such reference to any provisions of this Indenture as
may be appropriate. Every temporary Note shall be authenticated
by the Trustee upon the same conditions and in substantially the
same manner, and with the same effect, as the definitive Notes.
Without unnecessary delay the Company will execute and deliver to
the Trustee definitive Notes and thereupon any or all temporary
Notes may be surrendered in exchange therefor, at the office or
agency to be maintained by the Company in accordance with the
provisions of Section 4.02, and the Trustee shall authenticate
and deliver in exchange for such temporary Notes an equal
aggregate principal amount of definitive Notes. Until so
exchanged, the temporary Notes shall in all respects be entitled
to the same benefits under this Indenture, and shall be subject
to the same provisions hereof, as definitive Notes authenticated
and delivered hereunder.
SECTION 2.07. Mutilated, destroyed, lost or stolen Notes.
------------------------------------------
In case any temporary or definitive Note shall become mutilated
or be destroyed, lost or stolen, the Company, in the case of any
mutilated Note shall, and in the case of any destroyed, lost or
stolen Note may, execute, and upon its request the Trustee shall
authenticate and deliver, a new Note bearing a number, letter or
other distinguishing symbol not contemporaneously outstanding in
exchange and substitution for the mutilated Note, or in lieu of
and in substitution for the Note so destroyed, lost or stolen,
or, instead of issuing a substituted Note, if any such Note shall
have matured or shall be about to mature or shall have been
selected for redemption or if the Company shall have received a
Change of Control Purchase Notice or an Asset Sale Purchase
Notice in respect of any such Note (unless such notice has been
withdrawn in accordance with Section 3.06 or 4.14, respectively),
the Company may pay the same without surrender thereof except in
the case of a mutilated Note. In every case the applicant for a
substituted Note or for such payment shall furnish to the Company
and to the Trustee such security or indemnity as may be required
by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to
the Company and to the Trustee evidence to their satisfaction of
the destruction, loss or theft of such Note and of the ownership
thereof. The Trustee may authenticate any such substituted Note
and deliver the same, or the Trustee or any paying agent of the
Company may make any such payment, upon the written request or
authorization of any officer of the Company. Upon the issuance
of any substituted Note, the
44
Company may require the payment of a sum sufficient to cover any
tax, assessment or other governmental charge that may be imposed
in relation thereto and any other expenses connected therewith.
Every substituted Note issued pursuant to the provisions of
this Section 2.07 shall constitute an additional contractual
obligation of the Company whether or not the destroyed, lost or
stolen Note shall be found at any time, and shall be entitled to
all the benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder.
All Notes shall be held and owned upon the express condition
that the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Notes, and shall preclude (to the extent lawful) any and all
other rights or remedies, notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other
securities without their surrender.
SECTION 2.08. Cancellation of surrendered Notes. All Notes
---------------------------------
surrendered for the purpose of payment, redemption, purchase by
the Company at the option of the holder, exchange, substitution
or registration of transfer, shall, if surrendered to the Company
or any paying agent or Note registrar, be delivered to the
Trustee and the same, together with Notes surrendered to the
Trustee for cancellation, shall be cancelled by it, and no Notes
shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Indenture. The Trustee shall
destroy cancelled Notes and shall deliver certificates of
destruction thereof to the Company. If the Company shall
purchase or otherwise acquire any of the Notes, however, such
purchase or acquisition shall not operate as a payment,
redemption or satisfaction of the indebtedness represented by
such Notes unless and until the Company, at its option, shall
deliver or surrender the same to the Trustee for cancellation.
SECTION 2.09. Restrictive Legends. Each Global Note and
-------------------
Certificated Note that constitutes a Restricted Security shall
bear the following legend (the "Private Placement Legend") on the
face thereof until the third anniversary of the Issue Date (or
such shorter period permitted by Rule 144(k) under the Securities
Act of 1933 (or any successor provision)), unless otherwise
agreed by the Company and the Holder thereof:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT OF 1933") OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE
DATE WHICH IS THREE YEARS (OR SUCH SHORTER PERIOD
PERMITTED UNDER RULE 144(K) UNDER THE SECURITIES ACT OF
1933 (OR A SUCCESSOR CLAUSE)) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH
THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE")
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
45
UNDER THE SECURITIES ACT OF 1933, (C) FOR AS LONG AS THE
NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF
1933 THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS WHO
MAKE CERTAIN REPRESENTATIONS TO THE TRUSTEE WHICH OFFERS AND
SALES OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OF 1933, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (a)(1),(2),(3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT OF 1933 THAT IS ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR" FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OF 1933, AND
WHO MAKES CERTAIN REPRESENTATIONS TO THE TRUSTEE OR (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933,
SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSES
(D), (E) OR (F) PRIOR TO THE RESALE RESTRICTION TERMINATION
DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO THE
COMPANY AND THE TRUSTEE AND (ii) IN EACH OF THE FOREGOING
CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
Each Global Note shall also bear the following legend on the
face thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR INTERESTS IN THE GLOBAL NOTE OR NOTES IN DEFINITIVE
FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY,
OR BY ANY SUCH NOMINEE OF THE DEPOSITORY TO THE
DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY, OR BY
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR
46
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO 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 2.05 OF THE INDENTURE.
SECTION 2.10. Book-Entry Provisions for Global Note and
-----------------------------------------
Regulation S Temporary Global Note.
- ----------------------------------
(a) Each of the Global Note and the Regulation S Temporary
Global Note initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, (ii) be delivered
to the Trustee as custodian for such Depository and (iii) bear
legends as set forth in Section 2.09 and Exhibit A-1, as
applicable, of this Indenture.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect
to the Global Note or the Regulation S Temporary Global Note, as
applicable, held on their behalf by the Depository, or the
Trustee as its custodian, or under the Global Note or the
Regulation S Temporary Global Note, as applicable, and the
Depository may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of the
Global Note and the Regulation S Temporary Global Note 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
Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices governing the
exercise of the rights of a holder of any Note.
(b) Transfers of the Global Note or the Regulation S
Temporary Global Note shall be limited to transfers in whole, but
not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in the
Global Note or Regulation S Temporary Global Note may be
transferred or exchanged for Certificated Notes in accordance
with the rules and procedures of the Depository and the
provisions of Section 2.05 of this Indenture. In addition,
Certificated Notes shall be transferred to all beneficial owners
in exchange for their beneficial interests (1) in the Global
Note, if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the Global Note
and a successor depositary is not appointed by the Company within
90 days of such notice or (ii) an Event of Default has occurred
and is continuing and the Note registrar has received a written
request from the Depository to issue Certificated Notes and (2)
the Regulation S Temporary Global Note, upon (i) the expiration
of the 40-day restricted period and (ii) certification of
beneficial ownership of the Notes represented by the Regulation S
Temporary Global Note by non-U.S. Persons or U.S. Persons who
purchased such Notes in transactions that did not require
registration under the Securities Act of 1933.
(c) In connection with any transfer or exchange of a
portion of the beneficial interest in the Global Note or
Regulation S
47
Temporary Global Note to beneficial owners pursuant to paragraph
(b) above, the Note registrar shall (if one or more Certificated
Notes are to be issued) reflect on its books and records the date
and a decrease in the principal amount of the Global Note or
Regulation S Temporary Global Note, as applicable, in an amount
equal to the principal amount of the beneficial interest in the
Global Note or Regulation S Temporary Global Note, as applicable,
to be transferred, and the Company shall execute, and the Trustee
shall authenticate and deliver, one or more Certificated Notes of
like tenor and amount.
(d) In connection with the transfer of the entire Global
Note or Regulation S Temporary Global Note to beneficial owners
pursuant to paragraph (b) above, the Global Note 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 Depository in
exchange for its beneficial interest in the Global Note, an equal
aggregate principal amount of Certificated Notes of authorized
denominations.
(e) Any Certificated Note constituting a Restricted
Security delivered in exchange for an interest in the Global Note
or Regulation S Temporary Global Note, as applicable, pursuant to
paragraph (b), (c) or (d) above shall, except as otherwise
provided by paragraph (e) of Section 2.05 of this Indenture, bear
the Private Placement Legend.
(f) The Holder of the Global Note or the Regulation S
Temporary Global Note 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 Notes.
ARTICLE THREE
REDEMPTION AND PURCHASES OF NOTES
SECTION 3.01. Redemption prices. The Company may, at its
-----------------
option, redeem at any time all or from time to time any part of
the Notes, on any date prior to maturity at the redemption prices
specified in the Notes, together with accrued and unpaid interest
thereon to but excluding the date fixed for redemption and in the
manner set forth in this Article Three. The Company, however,
shall not have the right to redeem any of the Notes prior to
October 15, 2001.
SECTION 3.02. Notice of redemption; selection of Notes. In
----------------------------------------
case the Company shall desire to exercise such right to redeem
all or, as the case may be, any part of the Notes in accordance
with the right reserved so to do, the Company, or, at the
Company's request, the Trustee in the name and at the expense of
the Company, shall fix a date for redemption and give notice of
such redemption to holders of the Notes to be redeemed as
hereinafter in this Section 3.02 provided.
Notice of redemption shall be given to the holders of Notes
to be redeemed as a whole or in part by mailing by first-class
mail a notice of such redemption not less than fifteen nor more
than sixty days prior to the date fixed for redemption to their
last addresses as they shall appear upon the registry books of
the Company, but any failure to give such notice by mailing to
the holder of any Note designated for redemption as a whole or in
part, or any defect therein, shall not affect the validity of the
proceedings for the redemption of any other Notes.
Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether
or not the holder receives the notice.
48
Each such notice of redemption shall specify the total
principal amount to be redeemed, the date fixed for redemption
and the redemption price at which Notes are to be redeemed, and
shall state that payment of the redemption price of the Notes to
be redeemed will be made at the office or agency to be maintained
by the Company in accordance with the provisions of Section 4.02,
upon presentation and surrender of such Notes, that interest
accrued to but not including the date fixed for redemption will
be paid as specified in said notice, and that on and after said
date interest thereon will cease to accrue and that the only
remaining right of the noteholder is to receive payment of the
redemption price plus such accrued interest upon surrender. If
less than all the Notes are to be redeemed, the notice of
redemption to each holder also shall state the aggregate
principal amount of Notes to be redeemed and shall identify the
Notes of such holder to be redeemed. In case any Note is
redeemed in part only, the notice which relates to such Note
shall state the portion of the principal amount thereof to be
redeemed (which shall be $1,000 or an integral multiple thereof),
and shall state that on and after the date fixed for redemption,
upon surrender of such Note, the holder will receive, without
charge, a new Note or Notes of authorized denominations in the
principal amount thereof remaining unredeemed. Each notice shall
give the name and address of each paying agent.
On or prior to the date fixed for redemption specified in
the notice of redemption given as provided in this Section 3.02,
the Company will deposit with the Trustee or with one or more
paying agents (or, if the Company is acting as its own paying
agent, set aside, segregate and hold in trust as provided in
Section 4.04(c)) an amount of money sufficient to redeem on the
date fixed for redemption all the Notes or portions of Notes so
called for redemption (other than Notes or portions thereof
called for redemption on that date which have been delivered by
the Company to the Trustee for cancellation) at the applicable
redemption price, together with accrued interest to but not
including the date fixed for redemption.
If less than all the Notes then outstanding are to be
redeemed, the Company shall give the Trustee, at least
twenty-five days (or such shorter period acceptable to the
Trustee) in advance of the date fixed for redemption, notice of
the aggregate principal amount of Notes to be redeemed, and
thereupon the Trustee shall select in such manner as it shall
deem appropriate and fair, in its discretion, the Notes or
portions thereof to be redeemed and shall thereafter promptly
notify the Company of the Notes or portions thereof to be
redeemed within a sufficient period of time in order that the
notice provision in Section 3.02 may be satisfied.
SECTION 3.03. When Notes called for redemption become due
-------------------------------------------
and payable. If the giving of notice of redemption shall have
- -----------
been completed as provided in Section 3.02, the Notes or portions
of Notes specified in such notice shall become due and payable on
the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to (but not
including) the date fixed for redemption, and on and after such
date fixed for redemption (unless the Company shall default in
the payment of such Notes at the redemption price, together with
interest accrued to (but not including) the date fixed for
redemption) interest on the Notes or portions of Notes so called
for redemption shall cease to accrue whether or not such Notes
are presented for payment and such Notes or portions thereof
shall be deemed not to be outstanding hereunder and shall not be
entitled to any right or benefit hereunder except to receive
payment of the redemption price plus accrued interest to but not
including the redemption date. On presentation and surrender of
such Notes for redemption at said place of payment in said notice
specified on or after the date fixed for redemption, the said
Notes shall be paid and redeemed by the Company at the applicable
redemption price, together with interest accrued to (but not
including) the date fixed for redemption. If the date fixed for
redemption is an interest payment date, such payment shall not
include accrued interest, which interest shall be paid in the
usual manner
49
otherwise provided for herein. Upon presentation of any Note
which is redeemed in part only, the Company shall execute and
register and the Trustee shall authenticate and deliver to the
holder thereof at the expense of the Company, a new Note or Notes
in principal amount equal to the unredeemed portion of the Note
so presented.
SECTION 3.04. Cancellation of redeemed Notes. All Notes
------------------------------
surrendered to the Trustee, upon redemption pursuant to the
provisions of this Article Three, shall be forthwith cancelled by
it.
SECTION 3.05. Purchase of Notes at option of the holder
-----------------------------------------
upon Change of Control.
- ----------------------
(a) If on or prior to maturity, there shall have
occurred a Change of Control, the Company shall offer to purchase
each Note at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest to (but
not including) the Change of Control Purchase Date (the "Change
of Control Purchase Price"), on the date that is thirty Business
Days after the occurrence of the Change of Control (the "Change
of Control Purchase Date"), subject to the satisfaction by or on
behalf of the holder of the requirements set forth in Section
3.05(c). Following a Change of Control, the Company shall not be
obligated to purchase any Notes pursuant to this Section 3.05(a)
or give any notice under Section 3.05(b) with respect to any
subsequent Change of Control. The Company's obligation to
purchase Notes as provided hereunder shall for all purposes
hereof be satisfied by, and shall cease upon, the deposit of
funds with the Trustee as provided for in Section 3.07.
A "Change of Control" shall be deemed to have occurred at
such time as MAXXAM, directly or indirectly, shall cease to have
(other than by reason of the existence of a Lien but including by
reason of the foreclosure of or other realization upon a Lien)
direct or indirect sole beneficial ownership (as defined under
Regulation 13d-3 of the Exchange Act as in effect on the date of
this Indenture) of at least 40% of the total Voting Stock, on a
fully diluted basis, of the Company; provided, however, that such
ownership by MAXXAM, directly or indirectly, of 30% or greater,
but less than 40%, of the total Voting Stock, on a fully diluted
basis, of the Company shall not be a Change of Control if MAXXAM,
through direct representation or through persons nominated by it,
controls a majority of the Board of Directors of the Company
necessary to effectuate any actions by the Board of Directors of
the Company; and provided, further, that the foregoing minimum
percentages shall be deemed not satisfied if any person or group
(as defined in Section 13(d)(3) of the Exchange Act as in effect
on the date of this Indenture) shall, directly or indirectly, own
more of the total Voting Stock entitled to vote generally in the
election of directors of the Company than MAXXAM.
"Voting Stock" means, with respect to any person, the
capital stock of such person having general voting power under
ordinary circumstances to elect at least a majority of the board
of directors, managers or trustees of such person (irrespective
of whether or not at the time capital stock of any other class or
classes shall have or might have voting power by reason of the
happening of any contingency).
(b) Within ten Business Days after the occurrence of a
Change of Control, the Company shall mail a written notice of
Change of Control by first-class mail to the Trustee and to each
holder (and to beneficial owners as required by applicable law,
including without limitation, Rule 13e-4 of the Exchange Act, if
applicable) and shall cause a copy of such notice to be published
in a daily newspaper of national circulation. The notice shall
include a form of Change of Control Purchase Notice (as described
below) to be completed by the holder and shall state:
(1) the events causing a Change of Control and the date
of such Change of Control;
50
(2) the date by which the Change of Control Purchase
Notice pursuant to this Section 3.05 must be given;
(3) the Change of Control Purchase Date;
(4) the Change of Control Purchase Price;
(5) the name and address of the Trustee and the office
or agency referred to in Section 4.02;
(6) that the Notes must be surrendered to the Trustee
or the office or agency referred to in Section 4.02 to
collect payment;
(7) that the Change of Control Purchase Price for any
Note as to which a Change of Control Purchase Notice has
been duly given and not withdrawn will be paid promptly
following the later of the Change of Control Purchase Date
and the time of surrender of such Note as described in (6);
(8) the procedures the holder must follow to exercise
rights under this Section 3.05 and a brief description of
those rights; and
(9) the procedures for withdrawing a Change of Control
Purchase Notice.
(c) To accept the offer to purchase Notes described in
Section 3.05(a), a holder must deliver a written notice of
purchase (a "Change of Control Purchase Notice") to the Trustee
or to the office or agency referred to in Section 4.02 at any
time prior to the close of business on the Business Day
immediately preceding the Change of Control Purchase Date,
stating:
(1) the name of the holder, the principal amount of
Notes, the certificate number or numbers of the Note or
Notes which the holder will deliver to be purchased and a
statement that the offer to purchase is being accepted;
(2) the portion of the principal amount of the Note
which the holder will deliver to be purchased, which portion
must be $1,000 or an integral multiple thereof; and
(3) that such Note shall be purchased on the Change of
Control Purchase Date pursuant to the terms and conditions
specified in the Notes.
The delivery of the Note, by hand or by registered mail
prior to, on or after the Change of Control Purchase Date
(together with all necessary endorsements), to the Trustee or to
the office or agency referred to in Section 4.02 shall be a
condition to the receipt by the holder of the Change of Control
Purchase Price therefor; provided, however, that such Change of
Control Purchase Price shall be so paid pursuant to this Section
3.05 only if the Note so delivered to the Trustee or such office
or agency shall conform in all respects to the description
thereof set forth in the related Change of Control Purchase
Notice; and provided, further that the Company shall have no
obligation to purchase any Notes with respect to which the Change
of Control Purchase Notice has not been received by the Company
prior to the close of business on the Business Day immediately
preceding the Change of Control Purchase Date.
51
In the event that the offer to purchase described in Section
3.05(a) shall be accepted in accordance with the terms hereof,
the Company shall purchase from the holder thereof, pursuant to
this Section 3.05, a portion of a Note if the principal amount of
such portion is $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to the purchase of all of
a Note also apply to the purchase of such portion of such Note.
Any purchase by the Company contemplated pursuant to the
provisions of this Section 3.05 shall be consummated by the
delivery by the Trustee or other paying agent of the
consideration to be received by the holder promptly following the
later of the Change of Control Purchase Date and the time of
delivery of the Note.
Notwithstanding anything herein to the contrary, any holder
delivering to the Trustee or to the office or agency referred to
in Section 4.02, the Change of Control Purchase Notice
contemplated by this Section 3.05(c) shall have the right to
withdraw such Change of Control Purchase Notice by delivery of a
written notice of withdrawal to the Trustee or to such office or
agency in accordance with Section 3.06 at any time prior to the
close of business on the Business Day next preceding the Change
of Control Purchase Date.
SECTION 3.06. Effect of Change of Control Purchase Notice.
-------------------------------------------
Upon receipt by the Company of the Change of Control Purchase
Notice specified in Section 3.05(c), the holder of the Note in
respect of which such Change of Control Purchase Notice was given
shall (unless such Change of Control Purchase Notice is withdrawn
as specified in the following paragraph) thereafter be entitled
to receive solely the Change of Control Purchase Price with
respect to such Note. Such Change of Control Purchase Price
shall be due and payable as of the Change of Control Purchase
Date and shall be paid to such holder promptly following the
later of (x) the Change of Control Purchase Date (provided the
conditions in Section 3.05(c), as applicable, have been
satisfied) and (y) the date of delivery of such Note to the
Trustee or to the office or agency referred to in Section 4.02 by
the holder thereof in the manner required by Section 3.05(c).
A Change of Control Purchase Notice may be withdrawn by
means of a written notice of withdrawal delivered to the office
of the Trustee or to the office or agency referred to in Section
4.02 at any time on or prior to the close of business on the
Business Day next preceding the Change of Control Purchase Date,
specifying:
(1) the certificate number or numbers of the Note or
Notes in respect of which such notice of withdrawal is being
submitted;
(2) the principal amount of the Note or Notes with
respect to which such notice of withdrawal is being submitted;
and
(3) the principal amount, if any, of such Note or Notes
which remains subject to the original Change of Control Purchase
Notice, and which has been or will be delivered for purchase by
the Company.
There shall be no purchase of any Notes pursuant to Section
3.05 if there has occurred (prior to, on or after, as the case
may be, the giving, by the holders of such Notes, of the required
Change of Control Purchase Notice), and is continuing an Event of
Default (other than a default in the payment of the Change of
Control Purchase Price with respect to such Notes).
52
SECTION 3.07. Deposit of Change of Control Purchase Price.
-------------------------------------------
On or prior to the Change of Control Purchase Date, the Company
shall deposit with the Trustee (or, if the Company or a
Subsidiary or an Affiliate of either of them is acting as paying
agent, shall segregate and hold in trust as provided in Section
4.04(c)) an amount of cash in immediately available funds
sufficient to pay the aggregate Change of Control Purchase Price
of all the Notes or portions thereof which are to be purchased on
the Change of Control Purchase Date. Upon such deposit, the
Company shall be deemed to have satisfied its obligations to
purchase Notes pursuant to Section 3.05. If cash sufficient to
pay the Change of Control Purchase Price of all Notes or portions
thereof to be purchased on the Change of Control Purchase Date is
deposited with the Trustee as of the Change of Control Purchase
Date, interest shall cease to accrue (whether or not any such
Note is delivered to the Trustee or any other office or agency
maintained for such purpose) on such Notes (or portions thereof)
on and after the Change of Control Purchase Date, and the holders
thereof shall have no other rights as such (other than the right
to receive the Change of Control Purchase Price, upon surrender
of such Notes).
SECTION 3.08. Covenant to comply with securities laws upon
--------------------------------------------
purchase of Notes. In connection with any offer to purchase or
- -----------------
any purchase of securities under Section 3.05 hereof, the Company
shall (i) comply with Section 14(e) under the Exchange Act (or
any successor provision thereof), if applicable, and (ii)
otherwise comply with all Federal and state securities laws
regulating the purchase of the Notes so as to permit the rights
and obligations under Section 4.05 to be exercised in the time
and in the manner specified in Sections 4.05 and 4.06.
SECTION 3.09. Repayment to the Company. The Trustee shall
-------------------------
return to the Company any cash, together with interest or
dividends, if any, thereon (subject to the provisions of Section
7.05) held by it for the payment of the Change of Control
Purchase Price of the Notes that remain unclaimed as provided in
Section 12.04 hereof; provided, however, that to the extent that
the aggregate amount of cash deposited by the Company pursuant to
Section 3.07 exceeds the aggregate Change of Control Purchase
Price of the Notes or portions thereof to be purchased on the
Change of Control Purchase Date, then promptly after the Change
of Control Purchase Date, the Trustee shall return any such
excess to the Company together with interest or dividends, if
any, thereon (subject to the provisions of Section 7.05).
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
The Company covenants as follows:
SECTION 4.01. Payments on the Notes. The Company will duly
---------------------
and punctually pay or cause to be paid the principal of, premium,
if any, Change of Control Purchase Price, Asset Sale Purchase
Price and interest on each of the Notes at the time and place
such amounts may become due and payable and in the manner
provided in the Notes and this Indenture.
SECTION 4.02. Maintenance of office or agency for
------------------------------------
registration of transfer, exchange and payment of Notes. So long
- -------------------------------------------------------
as any of the Notes shall remain outstanding, the Company will
maintain an office or agency in the Borough of Manhattan, City of
New York, State of New York, where the Notes may be surrendered
for exchange or registration of transfer as in this Indenture
provided, and where notices and demands to or upon the Company in
respect to the Notes or of this Indenture may be served, and
where the Notes may be presented or surrendered for payment,
redemption or purchase. The
53
Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such
-------- -------
designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough
of Manhattan, City of New York, State of New York for such
purposes. The Company will give to the Trustee notice of the
location of any such office or agency and of any change of
location thereof. In case the Company shall fail to maintain any
such office or agency or shall fail to give such notice of the
location or of any change in the location thereof, such
surrenders, presentations and demands may be made and notices may
be served at the principal office of the Trustee in St. Paul,
Minnesota, and the Company hereby appoints the Trustee its agent
to receive at the aforesaid office all such surrenders,
presentations, notices and demands.
SECTION 4.03. Appointment to fill a vacancy in the office
-------------------------------------------
of Trustee. The Company, whenever necessary to avoid or fill a
- ----------
vacancy in the office of Trustee, will appoint, in the manner
provided in Section 7.10, a Trustee, so that there shall at all
times be a Trustee hereunder.
SECTION 4.04. Provision as to paying agent.
----------------------------
(a) If the Company shall appoint a paying agent other
than the Trustee, it will cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall
agree with the Trustee, subject to the provisions of this Section
4.04,
(1) that it will hold all sums held by it as such agent
for the payment of the principal of, premium, if any, Change
of Control Purchase Price, Asset Sale Purchase Price or
interest on the Notes (whether such sums have been paid to
it by the Company or by any other obligor on the Notes) in
trust for the benefit of the holders of the Notes, and will
notify the Trustee of the receipt of sums to be so held,
(2) that it will give the Trustee notice of any failure
by the Company (or by any other obligor on the Notes) to
make any payment of the principal of, premium, if any,
Change of Control Purchase Price, Asset Sale Purchase Price
or interest on the Notes when the same shall be due and
payable, and
(3) that it will at any time during the continuance of
any Event of Default specified in subsection (a) or (b) of
Section 6.01, upon the written request of the Trustee,
deliver to the Trustee all sums so held in trust by it.
If any obligations under the Credit Agreement are
outstanding, the Company will notify the Bank Agent of the name
and address of any paying agent other than the Company or the
Trustee.
(b) If the Company shall not act as its own paying
agent, it will, prior to each due date of the principal of,
premium, if any, Change of Control Purchase Price, Asset Sale
Purchase Price or interest on any Notes, deposit with such paying
agent a sum sufficient to pay the principal, premium, if any,
Change of Control Purchase Price, Asset Sale Purchase Price or
interest so becoming due, such sum to be held in trust for the
benefit of the holders of Notes entitled to such principal,
premium, if any, Change of Control Purchase Price, Asset Sale
Purchase Price or interest, and (unless such paying agent is the
Trustee) the Company will promptly notify the Trustee of its
failure so to act.
54
(c) If the Company shall act as its own paying agent,
it will, on or before each due date of the principal of, premium,
if any, Change of Control Purchase Price, Asset Sale Purchase
Price or interest on the Notes, set aside, segregate and hold in
trust for the benefit of the persons entitled thereto, a sum
sufficient to pay such principal, premium, if any, Change of
Control Purchase Price, Asset Sale Purchase Price or interest so
becoming due and will notify the Trustee of any failure to take
such action.
(d) Anything in this Section 4.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of
obtaining a satisfaction and discharge of this Indenture, or for
any other reason, pay or cause to be paid to the Trustee all sums
held in trust by it, or by any paying agent hereunder, as
required by this Section 4.04, such sums to be held by the
Trustee upon the trusts herein contained.
(e) Anything in this Section 4.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided
in this Section 4.04 is subject to the provisions of Sections
12.03 and 12.04.
SECTION 4.05. Maintenance of corporate existence. Subject
----------------------------------
to Article 11, so long as any of the Notes shall remain
outstanding, the Company will at all times (except as otherwise
provided or permitted in this Section 4.05 or elsewhere in this
Indenture) do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate
existence and the corporate existence of each Subsidiary;
provided, however, that nothing herein shall require the Company
- -------- -------
to continue the corporate existence of any Subsidiary other than
a Subsidiary Guarantor (so long as any such Subsidiary is a
Subsidiary Guarantor) if in the judgment of the Company it shall
be necessary, advisable or in the interest of the Company to
discontinue the same; and provided, further, that any Subsidiary
-------- -------
Guarantor may:
(a) merge or consolidate with or into the Company or
any other Subsidiary Guarantor or transfer all or substantially
all of its property to the Company or any other Subsidiary
Guarantor;
(b) merge or consolidate with or into any other Person
or transfer all or substantially all of its property to any other
Person as provided in Section 15.03; and
(c) liquidate or dissolve under the laws of its
jurisdiction of formation, provided that such Subsidiary
---------
Guarantor is wholly owned directly by the Company and/or another
Subsidiary Guarantor.
SECTION 4.06. Officers' Certificate as to default and
----------------------------------------
statement as to compliance. The Company will, so long as any of
- --------------------------
the Notes are outstanding:
(a) deliver to the Trustee, promptly upon becoming
aware of any Event of Default or any event which after the
passage of time or notice would become an Event of Default, an
Officers' Certificate specifying such event or Event of Default;
(b) deliver to the Trustee within one hundred and
twenty days after the end of each fiscal year of the Company,
beginning with the fiscal year ending December 31, 1996, a
statement as to compliance signed on behalf of the Company by the
Chairman of the Board or the President or any Vice President and
by the Chief Financial Officer, Treasurer or Controller of the
Company stating as to each signer thereof that:
(1) a review of the activities of the Company during
such year and of performance under this Indenture has been
made under his supervision, and
55
(2) to the best of his knowledge, based on such review,
there is no Event of Default or event which with notice or
the passage of time would become an Event of Default which
has occurred and is continuing, or, if there is such an
event or Event of Default, specifying each such event or
Event of Default known to him and the nature and status
thereof; and
(c) deliver to the Trustee within five days after
becoming aware of the occurrence thereof written notice of any
acceleration which, with the giving of notice and the lapse of
time, would be an Event of Default within the meaning of Section
6.01(d).
SECTION 4.07. Usury laws. The Company, to the extent it
----------
may lawfully do so, will not voluntarily claim, and will actively
resist any attempts to claim, the benefit of any usury laws
against any holder of the Notes.
SECTION 4.08. Restrictions on transactions with Affiliates
--------------------------------------------
and Unrestricted Subsidiaries.
- -----------------------------
(a) The Company shall not, and shall not permit any of
its Subsidiaries or its Non-Affiliate Joint Ventures to, enter
into any transaction or series of related transactions with any
Affiliate or Unrestricted Subsidiary of the Company, unless:
(i) the terms thereof are no less favorable to the
Company, such Subsidiary or such Non-Affiliate Joint
Venture, as the case may be, than those that could
reasonably be expected to be obtained in a comparable
transaction with an unrelated Person,
(ii) such transaction or series of related transactions
shall have been approved as meeting such standard, in good
faith, by a majority of the independent members of the Board
of Directors of the Company evidenced by a Board Resolution
and
(iii) if the amount of such transaction or the
aggregate amount of such series of related transactions is
greater than $10,000,000 (which amount shall be calculated
excluding the amount of Principal Products transferred to or
from an Unrestricted Subsidiary in accordance with the
proviso at the end of this clause (iii)), the Company, such
Subsidiary and/or such Non-Affiliate Joint Venture, as the
case may be, shall have received an opinion that such
transaction or series of related transactions is fair to the
Company, such Subsidiary and/or such Non-Affiliate Joint
Venture, as the case may be, from a financial point of view,
from an independent investment banking firm of national
standing selected by the Company, provided that, in the case
of this clause (iii), the Company, such Subsidiary and/or
such Non-Affiliate Joint Venture shall not be required to
procure any such opinion to the extent that such transaction
involves the purchase or sale for cash of Principal Products
from or to an Unrestricted Subsidiary (which Principal
Products are used by the purchaser thereof in its operations
in the ordinary course of business).
The Company shall deliver to the Trustee, within 60 days after
the end of each fiscal quarter of the Company, an Officers'
Certificate which (x) shall specify the aggregate dollar amount
of transactions (other than transactions referred to in Section
4.08(b) or in the proviso at the end of clause (iii) of this
Section 4.08(a)) with Affiliates or Unrestricted Subsidiaries of
the Company occurring during such fiscal quarter, and (y) with
respect to any transaction with an Affiliate or Unrestricted
Subsidiary of the Company, or series of related transactions
(other than transactions referred to in Section 4.08(b) or in the
proviso at the end of clause (iii) of this Section 4.08(a)) with
Affiliates or Unrestricted Subsidiaries of the Company, occurring
during such fiscal quarter, shall briefly describe such
transaction or transactions.
56
(b) The provisions contained in the foregoing
paragraphs of this Section 4.08 shall not apply to:
(i) the making of any Restricted Payments, Restricted
Investments and Unrestricted Subsidiary Investments
otherwise permitted by Section 4.09 (other than
4.09(b)(IV)),
(ii) the making of payments permitted by the Tax Sharing
Agreements,
(iii) the making of payments to MAXXAM for
reimbursement for actual services provided thereby to the
Company or its Subsidiaries or Non-Affiliate Joint Ventures
based on actual costs and an allocable share of overhead
expenses,
(iv) compensation (in the form of reasonable director's
fees and reimbursement or advancement of reasonable
out-of-pocket expenses) paid to any director of the Company
or its Subsidiaries or Non-Affiliate Joint Ventures for
services rendered in such person's capacity as a director
and indemnification and directors' and officers' liability
insurance in connection therewith,
(v) compensation, indemnification and other benefits
paid or made available to officers and employees of the
Company or its Subsidiaries or Non-Affiliate Joint Ventures
for services actually rendered, comparable to those
generally paid or made available by entities engaged in the
same or similar businesses (including reimbursement or
advancement of reasonable out-of-pocket expenses and
directors' and officers' liability insurance),
(vi) loans to officers, directors and employees of the
Company or its Subsidiaries for business or personal
purposes and other loans and advances to such officers,
directors and employees for travel, entertainment, moving
and other relocation expenses, in each case made in the
ordinary course of business and consistent with past
practices of the Company and its Subsidiaries,
(vii) any amendment to the Existing Intercompany Note
that extends the maturity thereof or reduces the interest
rate thereon, or any other amendment thereto that does not
materially adversely affect the holders of the Notes,
(viii) the dividend by the Company of all or any
portion of the Existing Intercompany Note and accrued
interest thereon,
(ix) any merger, consolidation, transfer or sale
permitted by Section 11.01(b), and
(x) any amendment to the Tax Sharing Agreements,
provided that a majority of the independent members of the
Board of Directors of the Company evidenced by a Board
Resolution determines that such amendment would not
materially adversely affect the holders of the Notes.
SECTION 4.09. Limitations on Restricted Payments,
-----------------------------------
Restricted Investments and Unrestricted Subsidiary Investments.
- ---------------------------------------------------------------
(a) The Company shall not, directly or indirectly,
(i) declare or pay any dividend or make any distribution in
respect of its Capital Stock (other than dividends payable in
Capital Stock of the Company
57
other than Redeemable Stock), (ii) make or permit any of its
Subsidiaries to make any payment on account of the purchase,
redemption or other acquisition or retirement of any Capital
Stock of the Company other than through the issuance solely of
Capital Stock of the Company (other than Redeemable Stock) or
rights thereto, provided that any Subsidiary of the Company may
purchase Capital Stock of the Company from the Company or from
any other Subsidiary of the Company (which purchase shall not be
a Restricted Payment or a Restricted Investment), (iii) make or
permit any of its Subsidiaries to make any voluntary purchase,
redemption or other acquisition or retirement for value of any
Indebtedness that is subordinated (pursuant to its terms) in
right and priority of payment to the Notes or any Subsidiary
Guarantor's obligations under its Guarantee, as the case may be,
other than purchases, redemptions or other acquisitions or
retirements of Permitted Indebtedness described in clause (b) of
the definition thereof or purchases, redemptions or other
acquisitions otherwise permitted by the terms of this Indenture
(each of the foregoing in clauses (i), (ii) and (iii), a
"Restricted Payment"), (iv) to the extent the Company or its
Subsidiaries exercise actual control over a Non-Affiliate Joint
Venture existing on the date of this Indenture or formed or
acquired after the date of this Indenture (each a "Controlled
Non-Affiliate Joint Venture"), permit such Controlled
Non-Affiliate Joint Venture to make any Restricted Investment,
(v) make or permit any of its Subsidiaries to make any Restricted
Investment or (vi) make or permit any of its Subsidiaries to make
any Unrestricted Subsidiary Investment, unless at the time of,
and after giving effect to, each such Restricted Payment,
Restricted Investment or Unrestricted Subsidiary Investment:
(A) no Event of Default (and no event that, after
notice or lapse of time or both, would become an Event of
Default) shall have occurred and be continuing (or would
occur and be continuing after giving effect thereto); and
(B) the Consolidated Fixed Charge Coverage Ratio of the
Company is greater than 2.0 to 1; and
(C) the sum of:
(x) the aggregate amount expended for all
Restricted Payments after December 31, 1992,
(y) the aggregate amount expended for all
Restricted Investments after the date of the 9-7/8% Note
Indenture (less the amount of (1) such Restricted
Investments returned in cash, or in property if made in
property, (2) any guarantee that constitutes a
Restricted Investment, to the extent it has been
released, and (3) any direct liabilities or obligations
to be assumed or discharged in connection with such
Restricted Investments (in either case without recourse
to the Company, any of its Subsidiaries or any
Controlled Non-Affiliate Joint Venture) if such
liability or obligation had been a liability or
obligation of the Company, any of its Subsidiaries or
any Controlled Non-Affiliate Joint Venture), and
(z) the aggregate amount of Unrestricted
Subsidiary Investments Outstanding
(in each case, the amount expended for such Restricted
Payments, Restricted Investments and Unrestricted Subsidiary
Investments or the amount of any Restricted Investments
returned, if paid or returned in property other than in cash
or a sum certain guaranteed, to be the Fair Market Value of
such property), would not exceed the sum of:
58
(I) 50% of the Consolidated Net Income of the Company
(or, if the aggregate Consolidated Net Income of the Company
for any such period shall be a deficit, minus 100% of such
deficit) accrued on a cumulative basis for the period (taken
as one accounting period) from January 1, 1993 to the end of
the Company's most recently ended fiscal quarter for which
financial statements are available at the time such
Restricted Payment, Restricted Investment or Unrestricted
Subsidiary Investment is being made,
(II) the aggregate net proceeds, including the Fair
Market Value of property other than cash, received by the
Company as capital contributions to the Company after
December 31, 1992, or from the issue or sale (other than to
a Non-Affiliate Joint Venture or to a Subsidiary or an
Unrestricted Subsidiary of the Company), after December 31,
1992, of Capital Stock other than Redeemable Stock
(including Capital Stock, other than Redeemable Stock,
issued upon the conversion of, or in exchange for,
indebtedness or Redeemable Stock, and including upon
exercise of warrants or options or other rights to purchase
such Capital Stock, issued after December 31, 1992), or from
the issue or sale, after December 31, 1992 of any debt or
other security of the Company convertible or exercisable
into such Capital Stock that has been so converted or
exercised, and
(III) 50% of any dividends or other distributions
consisting of cash or Cash Equivalents received, directly or
indirectly, by the Company or a Subsidiary of the Company
that is a Subsidiary Guarantor after the date of this
Indenture from any Unrestricted Subsidiary to the extent
that such dividends or other distributions are not required
to reduce the amount of the Unrestricted Subsidiary
Investments Outstanding in respect of such Unrestricted
Subsidiary to zero;
provided, however, that in no event shall the Company make,
or permit any of its Subsidiaries to make, a Restricted
Payment, Restricted Investment or Unrestricted Subsidiary
Investment pursuant to this Section 4.09(a) to or in MAXXAM
or any Affiliate of MAXXAM if, after giving effect thereto,
(A) the aggregate amount of all Restricted Payments,
Restricted Investments (less the amount of (1) such
Restricted Investments returned in cash, or in property if
made in property, (2) any guarantee that constitutes a
Restricted Investment, to the extent it has been released,
and (3) any direct liabilities or obligations to be assumed
or discharged in connection with such Restricted Investments
(in either case without recourse to the Company, any of its
Subsidiaries or any Controlled Non-Affiliate Joint Venture)
if such liability or obligation had been a liability or
obligation of the Company, any of its Subsidiaries or any
Controlled Non-Affiliate Joint Venture) and Unrestricted
Subsidiary Investments Outstanding made pursuant to this
Section 4.09(a) in any calendar year to or in MAXXAM or any
Affiliate of MAXXAM, less (B) the aggregate amount of such
Restricted Payments and Restricted Investments made to or in
KAC in such calendar year which are distributed or paid
within thirty days thereafter by KAC to its holders of
Common Stock other than MAXXAM and any Affiliate of MAXXAM,
would exceed (C) $75,000,000; and provided, further, that
notwithstanding the foregoing, the Company may make any such
Restricted Payment, Restricted Investment or Unrestricted
Subsidiary Investment to or in MAXXAM or any Affiliate of
MAXXAM if, after giving pro forma effect thereto, the
Company's senior debt rating would be Baa3 (or the
equivalent) or better by Moody's Investors Service, Inc. (or
a successor rating agency) or BBB (or the equivalent) or
better by Standard & Poor's Corporation (or a successor
rating agency).
(b) The foregoing provisions of this Section 4.09 shall
not be violated by reason of:
59
(I) the payment of any dividend or distribution or the
redemption of any securities within 60 days after the date
of declaration of such dividend or distribution or the
giving of the formal notice by the Company of such
redemption, if at said date of declaration of such dividend
or distribution or the giving of the formal notice of such
redemption, such dividend, distribution or redemption would
have complied with Section 4.09(a);
(II) the retirement of any shares of the Company's
Capital Stock by exchange for, or out of the proceeds of,
the substantially concurrent sale (other than to a
Non-Affiliate Joint Venture or to a Subsidiary or an
Unrestricted Subsidiary of the Company) of other shares of
its Capital Stock other than Redeemable Stock or out of the
proceeds of a substantially concurrent capital contribution
to the Company, provided, however, that, to the extent the
proceeds are so used, a sale of Capital Stock or capital
contribution permitted by this clause (II) shall be excluded
in determining the aggregate net proceeds received by the
Company referred to under clause (II) of Section 4.09(a);
(III) the payments provided for by clauses (ii),
(iii), (iv) and (v) and the transactions described in
clauses (vi), (vii), (viii) and (ix) (so long as, in the
case of clause (ix), immediately following such transaction,
the Consolidated Net Worth of the entity that survives such
transaction is not materially lower than the Consolidated
Net Worth of the Company immediately prior to such
transaction) of Section 4.08(b);
(IV) the voluntary purchase, redemption or other
acquisition or retirement for value of Indebtedness that is
subordinated (pursuant to its terms) in right and priority
of payment to the Notes or any Subsidiary Guarantor's
obligation under its Guarantee, as the case may be, to the
extent that the aggregate amount expended (exclusive of
amounts expended pursuant to clauses (V) and (VIII) of this
Section 4.09(b)) for all such voluntary purchases,
redemptions or other acquisitions or retirements after the
date of the 9-7/8% Note Indenture (the amount expended for
such purchases, redemptions or other acquisitions or
retirements, if paid in property other than in cash or a sum
certain guaranteed, to be the Fair Market Value of such
property) does not exceed the aggregate net proceeds,
including the Fair Market Value of property other than cash,
received by the Company or any Subsidiary Guarantor from the
issue or sale (other than an issuance or sale to the
Company, a Non-Affiliate Joint Venture or a Subsidiary or
Unrestricted Subsidiary of the Company), after the date of
the 9-7/8% Note Indenture, of Indebtedness that is
subordinated (pursuant to its terms) in right and priority
of payment to the Notes or such Subsidiary Guarantor's
obligation under its Guarantee, as the case may be, and that
is otherwise permitted to be incurred pursuant to this
Indenture, provided, that, to the extent the proceeds of
Indebtedness so subordinated to the Notes or any Subsidiary
Guarantor's obligation under its Guarantee, as the case may
be, are so used, the net proceeds of issuance of any such
Indebtedness upon conversion into Capital Stock shall not be
included in determining the aggregate net proceeds received
by the Company referred to under clause (II) of Section
4.09(a);
(V) the voluntary purchase, redemption or other
acquisition or retirement for value of any Indebtedness that
is subordinated (pursuant to its terms) in right and
priority of payment to the Notes or any Subsidiary
Guarantor's obligation under its Guarantee, as the case may
be, by exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Non-Affiliate
Joint Venture or to a Subsidiary or an Unrestricted
Subsidiary of the Company) of Capital Stock (other than
Redeemable Stock) of the Company, provided, however, that,
to the extent the proceeds are so used, the issuance of
Capital Stock as permitted by this clause (V) shall
60
not be included in determining the aggregate net proceeds
received by the Company referred to under clause (II) of
Section 4.09(a);
(VI) the payment of dividends on, and the purchase,
redemption, retirement or other acquisition of, the USWA
Preferred Stock or the Preferred Stock ($100), provided that
no such payment is made, directly or indirectly, to an
Affiliate of the Company;
(VII) the payment to KAC of an amount not to exceed
$300,000 in any fiscal year for the payment of KAC's
reasonable out-of-pocket expenses, provided that no part of
such amount is paid directly or indirectly to any other
Affiliate of the Company and that, at the time of each such
payment, the Company is in compliance with clause (A) of
Section 4.09(a);
(VIII) Restricted Payments, Restricted Investments and
Unrestricted Subsidiary Investments after February 1, 1993,
other than Restricted Payments, Restricted Investments and
Unrestricted Subsidiary Investments permitted by Section
4.09(a) or clauses (I) through (VII) of Section 4.09(b), in
an aggregate amount such that the sum of:
(x) the aggregate amount expended for all such
Restricted Payments after February 1, 1993 made pursuant
to this clause (VIII);
(y) the aggregate amount of all Restricted
Investments made after February 1, 1993 pursuant to this
clause (VIII) (less the amount of (1) such Restricted
Investments returned in cash, or in property if made in
property, (2) any guarantee that constitutes a
Restricted Investment, to the extent it has been
released, and (3) any direct liabilities or obligations
to be assumed or discharged in connection with such
Restricted Investments (in either case without recourse
to the Company, any of its Subsidiaries or any
Controlled Non-Affiliate Joint Venture) if such
liability or obligation had been a liability or
obligation of the Company, any of its Subsidiaries or
any Controlled Non-Affiliate Joint Venture); and
(z) the aggregate amount of Unrestricted
Subsidiary Investments Outstanding made pursuant to this
clause (VIII)
(in each case, the amount expended for such Restricted
Payments, Restricted Investments and Unrestricted Subsidiary
Investments or the amount of any Restricted Investments
returned, if paid or returned in property other than in cash
or a sum certain guaranteed, to be the Fair Market Value of
such property) would not exceed $50,000,000, provided that
at the time of each such Restricted Payment, Restricted
Investment or Unrestricted Subsidiary Investment made
pursuant to this clause (VIII), no Event of Default (and no
event that, after notice or lapse of time or both, would
become an Event of Default) shall have occurred and be
continuing (or would occur and be continuing after giving
effect thereto); and provided, further, that in no event
shall the Company make, or permit any of its Subsidiaries to
make, a Restricted Payment, Restricted Investment or
Unrestricted Subsidiary Investment pursuant to this clause
(VIII) to or in MAXXAM or any Affiliate of MAXXAM if, after
giving effect thereto, (A) the aggregate amount of all
Restricted Payments, Restricted Investments (less the amount
of (1) such Restricted Investments returned in cash, or in
property if made in property, (2) any guarantee that
constitutes a Restricted Investment, to the extent it has
been released, and (3) any direct liabilities or obligations
to be assumed or discharged in connection with such
Restricted Investments (in either case without recourse to
the Company, any of its Subsidiaries or any Controlled
61
Non-Affiliate Joint Venture) if such liability or obligation
had been a liability or obligation of the Company, any of
its Subsidiaries or any Controlled Non-Affiliate Joint
Venture) and Unrestricted Subsidiary Investments Outstanding
made pursuant to this clause (VIII) to or in MAXXAM or any
Affiliate of MAXXAM, less (B) the aggregate amount of such
Restricted Payments and Restricted Investments made to or in
KAC which are distributed or paid within thirty days
thereafter by KAC to its holders of Common Stock other than
MAXXAM and Affiliates of MAXXAM, would exceed
(C) $20,000,000; and
(IX) in the event that the Company merges with or into
KAC and the Preferred Dividend Intercompany Notes are
extinguished, the payment of dividends on shares of KAC's
Preferred Redeemable Increased Dividend Equity Securities,
8.255% PRIDES, Convertible Preferred Stock (the "PRIDES")
and any other preferred stock of KAC the proceeds of which
gave rise to a Preferred Dividend Intercompany Note, in an
aggregate amount not to exceed the outstanding principal
amount of such Preferred Dividend Intercompany Notes at the
time of such merger.
No payments and other transfers made under clauses (II) through
(VII) and (IX) of this Section 4.09(b) shall reduce the amount
available for Restricted Payments, Restricted Investments and
Unrestricted Subsidiary Investments under Section 4.09(a);
payments and other transfers made under clauses (I) and (VIII) of
this Section 4.09(b) shall reduce the amount available for
Restricted Payments, Restricted Investments and Unrestricted
Subsidiary Investments under Section 4.09(a).
The Board of Directors of the Company may designate any
Subsidiary to be an Unrestricted Subsidiary if such designation
would not cause an Event of Default (or event that, after notice
or lapse of time or both, would become an Event of Default). For
purposes of making such determination, all outstanding
Unrestricted Subsidiary Investments by the Company and its
Subsidiaries in the Unrestricted Subsidiary so designated will be
deemed to be Unrestricted Subsidiary Investments Outstanding at
the time of such designation and will reduce the amount available
for Restricted Payments, Restricted Investments and Unrestricted
Subsidiary Investments under Section 4.09(a). All such
Unrestricted Subsidiary Investments Outstanding will be deemed to
have been made at the time of such designation and to be in an
amount equal to the greater of (A) the net book value of such
Unrestricted Subsidiary Investments at the time of such
designation and (B) the Fair Market Value of such Unrestricted
Subsidiary Investments at the time of such designation. Such
designation will only be permitted if such Unrestricted
Subsidiary Investments would be permitted at such time and if
such Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
SECTION 4.10. Limitation on Indebtedness and Preferred
-----------------------------------------
Stock.
- ------
(a) The Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur,
issue, assume, guarantee or become liable with respect to, or
extend the maturity of or become liable for the payment of,
contingently or otherwise (collectively, "Incur"), any preferred
stock (including preference stock) or Indebtedness, except that,
without duplication, the Company, the Subsidiary Guarantors and
Alpart may Incur preferred stock (including preference stock) or
Indebtedness (including, without duplication, guarantees of
Indebtedness of the Company and its Subsidiaries otherwise
permitted by this Indenture) if after giving effect thereto and
the receipt and application of the proceeds therefrom, and
assuming that the full amount of Indebtedness permitted to be
Incurred under Section 4.10(b)(ii) (after taking into account any
reduction in such amount as set forth in such Section
4.10(b)(ii)) has been Incurred (assuming, for purposes of this
calculation, an interest rate on such additional Indebtedness
equal to the weighted average interest rate on the Indebtedness
then outstanding under
62
Section 4.10(b)(ii)), the Consolidated Fixed Charge Coverage
Ratio of the Company is greater than 2.0 to 1; provided, however,
that Indebtedness of Alpart Incurred pursuant to this clause (a)
shall not exceed an aggregate of $150,000,000 at any one time
outstanding, plus an amount equal to the reasonable fees and
expenses in connection with the Incurrence of such Indebtedness.
(b) Notwithstanding the foregoing paragraph (a) of this
Section 4.10, the following shall be permitted:
(i) the Company and the Subsidiary Guarantors may
Incur Indebtedness in respect of the Notes;
(ii) the Company and the Subsidiary Guarantors may
Incur Indebtedness (without duplication), and the Bank
Guarantors may guarantee such Indebtedness, under the Credit
Agreement, in connection with Refinancing Sale and Leaseback
Transactions or otherwise, in an aggregate amount at any one
time outstanding not to exceed $400,000,000, as reduced from
time to time by any permanent reduction in such amount as
set forth in a Board Resolution;
(iii)(A) Alpart may Incur Indebtedness in an aggregate
amount not to exceed $150,000,000 at any one time
outstanding and (B) the Company, KJC and AJI (without
duplication) may Incur Indebtedness in an aggregate amount
not to exceed at any one time outstanding the product of
(I) $150,000,000 multiplied by (II) the Company's then
percentage ownership interest in Alpart; provided, however,
that the aggregate Indebtedness (without duplication)
Incurred pursuant to clauses (A) and (B) of this clause
(b)(iii) may not exceed $150,000,000 at any one time
outstanding; and provided, further, that in each case the
proceeds of such Indebtedness are used solely for capital
improvements and expenditures, expansion and working capital
with respect to Alpart and/or to reimburse the partners of
Alpart for advances to Alpart used solely for capital
improvements and expenditures, expansion and working capital
with respect to Alpart, plus in each case an amount equal to
the reasonable fees and expenses in connection with the
Incurrence of such Indebtedness;
(iv) the Company and/or KAAC (without duplication) may
Incur Indebtedness in an amount not to exceed $75,000,000 at
any one time outstanding, the proceeds of which are used
solely for capital improvements and expenditures, expansion
and working capital with respect to QAL and/or to reimburse
the stockholders of QAL for advances to QAL used solely for
capital improvements and expenditures, expansion and working
capital with respect to QAL, plus an amount equal to the
reasonable fees and expenses in connection with the
Incurrence of such Indebtedness;
(v) VALCO may Incur Indebtedness, and the Company may
guarantee such Indebtedness, in an aggregate amount (without
duplication) not to exceed $25,000,000 at any one time
outstanding, the proceeds of which are used solely for
capital improvements and expenditures, expansion and working
capital with respect to VALCO and/or to reimburse the
shareholders of VALCO for advances to VALCO used solely for
capital improvements and expenditures, expansion and working
capital, plus an amount equal to the reasonable fees and
expenses in connection with the Incurrence of such
Indebtedness;
(vi) the Company and its Subsidiaries may Incur
Indebtedness ("Refinancing Indebtedness") that serves to
Refinance, in whole or in part, the Indebtedness permitted
by
63
clauses (a) and (b) of this Section 4.10 (the "Refinanced
Indebtedness"), or any one or more successive Refinancings
of any thereof; provided, however, that:
(A) such Refinancing Indebtedness is in an
aggregate amount not to exceed the aggregate amount of
such Refinanced Indebtedness (including accrued
interest thereon and undrawn amounts under credit
arrangements otherwise permitted to be Incurred
pursuant to this Indenture), the amount of any premium
required to be paid in connection with such Refinancing
pursuant to the terms of such Refinanced Indebtedness
or the amount of any reasonable and customary premium
determined by the Company to be necessary to accomplish
such Refinancing by means of a redemption, tender
offer, privately negotiated transaction, defeasance or
other similar transaction, and an amount equal to the
reasonable fees and expenses in connection with the
Incurrence of such Refinancing Indebtedness;
(B) neither the Company nor any of its
Subsidiaries is an obligor of such Refinancing
Indebtedness, except to the extent that such Person (I)
was an obligor of such Refinanced Indebtedness or
(II) is otherwise permitted, at the time such
Refinancing Indebtedness is Incurred, to be an obligor
of such Refinancing Indebtedness; and
(C) in the case of any Refinanced Indebtedness
that is subordinated (pursuant to its terms) in right
and priority of payment to the Notes or any Subsidiary
Guarantor's obligation under its Guarantee, as the case
may be, such Refinancing Indebtedness (I) has a final
maturity and weighted average maturity at least as long
as such Refinanced Indebtedness and (II) is
subordinated (pursuant to its terms) in right and
priority of payment to the Notes or such Subsidiary
Guarantor's obligation under its Guarantee, as the
case may be, at least to the same extent as such
Refinanced Indebtedness;
(vii) the Company may Incur Capitalized Lease
Obligations not exceeding $50,000,000 at any one time
outstanding in connection with the sale and leaseback of all
or a portion of the Company's interest in the Center for
Technology, provided that the Net Cash Proceeds therefrom
are applied as provided by Section 4.14;
(viii) the Company and its Subsidiaries may Incur
Indebtedness, without duplication, the proceeds of which are
used, directly or indirectly, (A) to finance the
construction, acquisition and/or retrofitting of (I) a
bauxite mine or mines and/or related facilities, (II) an
alumina refinery or refineries, and/or related facilities,
(III) an aluminum smelter or smelters and/or related
facilities, and/or (IV) a fabrication plant or plants and/or
related facilities (and, in each case, any direct or
indirect interests therein; collectively, the "Facilities")
and the reasonable fees and expenses in connection with the
Incurrence of such Indebtedness, in an aggregate amount not
to exceed $150,000,000 in any fiscal year (without
cumulation of unused amounts to successive years); provided,
however, that the aggregate amount of Indebtedness Incurred
pursuant to subclause (A)(IV) of this clause (viii) shall
not exceed $75,000,000 in any fiscal year (without
cumulation of unused amounts to successive years), (B) to
Refinance, in whole or in part, any Indebtedness permitted
by this clause (viii) (including Indebtedness owed to the
Company or a Subsidiary of the Company), or any one or more
successive Refinancings of any thereof, provided, however,
that such Refinancing Indebtedness is in an aggregate amount
not to exceed the aggregate amount of such Refinanced
Indebtedness, the amount of any premium required to be paid
in connection with such Refinancing pursuant to the terms of
such Refinanced
64
Indebtedness or the amount of any reasonable and customary
premium determined by the Company to be necessary to
accomplish such Refinancing by means of a redemption, tender
offer, privately negotiated transaction, defeasance, or
other similar transaction, and an amount equal to the
reasonable fees and expenses in connection with the
Incurrence of such Refinancing Indebtedness and/or (C) to
provide working capital in connection with or in respect of
any of the Facilities and the reasonable fees and expenses
in connection with the Incurrence of such Indebtedness,
provided that (x) the amount of such Indebtedness that may
be Incurred pursuant to this subclause (C) shall not exceed
$40,000,000 in any fiscal year (without cumulation of unused
amounts to successive years), and provided, further, that
the aggregate amount of any Indebtedness Incurred pursuant
to subclauses (A) and (C) of this clause (viii) shall not
exceed $150,000,000 in any fiscal year (without cumulation
of unused amounts to successive years), and (y) for purposes
of computing the amount of Indebtedness Incurred pursuant to
this clause (viii) at any time in any fiscal year, the
amount of Indebtedness Incurred by any Subsidiary of the
Company pursuant to this clause (viii) under lines of credit
and/or revolving credit agreements in such fiscal year to
such time shall not be deemed to exceed the amount of the
net borrowings (i.e., aggregate borrowings during such
fiscal year less aggregate repayments during such fiscal
year) by such Subsidiary under lines of credit and/or
revolving credit agreements to such time;
(ix) [intentionally omitted];
(x) the Company and its Subsidiaries may Incur
preferred stock (including preference stock) that is not
Redeemable Stock; provided, however, that in the case of
preferred stock (including preference stock) Incurred by any
Subsidiary of the Company that is not a Subsidiary
Guarantor, such preferred stock shall be issued pro rata to
the holders of Capital Stock of such Subsidiary;
(xi) the Company and its Subsidiaries may Incur
preferred stock (including preferred stock and preference
stock that is Redeemable Stock), provided that such
preferred stock or preference stock is issued to the
Company, any of its Subsidiaries or pro rata to the holders
of Capital Stock of any such Subsidiary;
(xii) the Company and its Subsidiaries may Incur
Permitted Indebtedness; and
(xiii) the Company and its Subsidiaries may Incur
Indebtedness in an amount at any one time outstanding not to
exceed $75,000,000, provided that the amount of such
Indebtedness that may be Incurred by Subsidiaries of the
Company (other than Subsidiary Guarantors that are not
Permitted Entities) shall not exceed $50,000,000 at any one
time outstanding, and provided, further, that, to the extent
any such Indebtedness is Incurred from a Bank or an
affiliate thereof, the Bank Guarantors may guarantee such
Indebtedness.
(c) Notwithstanding the foregoing, no Subsidiary of the
Company shall assume, guarantee or in any other manner become
liable with respect to any Indebtedness of the Company or a
Subsidiary Guarantor (other than such Subsidiary) ("Other
Indebtedness") which is subordinated (pursuant to its terms) in
right and priority of payment to any other Indebtedness of the
Company or such Subsidiary Guarantor, unless such Subsidiary also
assumes, guarantees or otherwise becomes liable with respect to
the Notes on a substantially similar basis for so long as such
Subsidiary is liable with respect to such Other Indebtedness;
provided, however, that if such Other Indebtedness is
subordinated (pursuant to its
65
terms) in right and priority of payment to the Notes or any
Subsidiary Guarantor's obligation under its Guarantee, as the
case may be, any such assumption, guarantee or other liability of
such Subsidiary with respect to such Other Indebtedness shall be
subordinated to such Subsidiary's assumption, guarantee or other
liability with respect to the Notes to the same extent as such
subordinated Indebtedness is subordinated to the Notes or such
Subsidiary Guarantor's obligation under its Guarantee, as the
case may be; and provided, further, that this paragraph shall not
be applicable to any assumption, guarantee or other liability of
any Subsidiary of the Company which existed at the time such
Person became a Subsidiary of the Company and was not Incurred in
connection with, or in contemplation of, such Person becoming a
Subsidiary of the Company, or any Refinancing Indebtedness in
connection therewith complying with Section 4.10(b)(vi)
(provided, that the guarantee of such Refinancing Indebtedness is
on substantially the same terms as the guarantee of the
Refinanced Indebtedness). In the event that any Subsidiary of
the Company (other than a Subsidiary Guarantor) is required to
guarantee the Notes pursuant to the next preceding sentence, the
Company shall cause such Subsidiary to (a) execute and deliver to
the Trustee a supplemental indenture in form and substance
reasonably satisfactory to the Trustee pursuant to which such
Subsidiary shall be named as an additional Subsidiary Guarantor
for so long as such Subsidiary Guarantor is so obligated with
respect to such Other Indebtedness and (b) deliver to the Trustee
an Opinion of Counsel reasonably satisfactory to the Trustee that
such supplemental indenture has been duly executed and delivered
by such Person.
(d) For the purpose of determining compliance with this
Section 4.10, in the event that any Indebtedness is permitted to
be Incurred pursuant to more than one clause of Section 4.10(b),
the Incurrence of such Indebtedness shall not limit the amount of
Indebtedness otherwise permitted to be Incurred, and shall not be
required to be included under more than one such clause.
SECTION 4.11. Limitation on Liens.
-------------------
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon any of their respective U.S. Fixed Assets to secure,
directly or indirectly, any Indebtedness, unless the Notes are
equally and ratably secured on a senior basis for so long as such
secured Indebtedness is so secured.
(b) Notwithstanding anything to the contrary, this Section
4.11 shall not prohibit:
(i) Liens on the Permitted Collateral securing
outstanding Indebtedness permitted by this Indenture in an
aggregate principal amount not to exceed the Maximum Secured
Amount at the time such Indebtedness is Incurred;
(ii) Liens in existence on the date of this Indenture
after giving effect thereto which Liens, if such Liens
secure a single or related items of Indebtedness in a
principal amount in excess of $5,000,000, are referred to in
Schedule A hereto;
(iii) Liens in favor of the Company or any
Subsidiary Guarantor;
(iv) Liens on U.S. Fixed Assets of a person existing at
the time such person is merged into or consolidated with the
Company or any Subsidiary of the Company, provided, that
such Liens were in existence prior to the contemplation of
such merger or consolidation and do not extend to any other
U.S. Fixed Assets of the Company or any Subsidiary of the
Company;
66
(v) Liens on U.S. Fixed Assets existing at the time of
acquisition thereof by the Company or any Subsidiary of the
Company, provided, that such Liens were in existence prior
to the contemplation of such acquisition and do not extend
to any other U.S. Fixed Assets of the Company or any
Subsidiary of the Company;
(vi) Liens securing Indebtedness permitted by clauses
(vii) and (viii) of Section 4.10(b), provided, that such
Liens do not extend to any U.S. Fixed Assets other than the
Center for Technology in the case of clause (vii) and the
applicable Facility or Facilities in the case of
clause (viii), and, in each case, together with any
Improvements thereto or thereon and any proceeds thereof;
(vii) Liens securing Indebtedness permitted by
clause (e) of the definition of Permitted Indebtedness;
(viii) Liens securing the Indebtedness permitted by
clauses (iii), (iv) or (v) of Section 4.10(b), provided that
such Liens do not extend to any U.S. Fixed Assets other than
(a) Permitted Collateral (in which case the principal amount
of such Indebtedness shall be included in the calculation of
the Maximum Secured Amount for purposes of clause (i) of
this paragraph and such Liens shall only be permitted if the
requirements of clause (i) are satisfied) and (b) the
Capital Stock and assets of Alpart, KJC and AJI in the case
of clause (iii), the Capital Stock and assets of KAAC in the
case of clause (iv), and the Capital Stock and assets of
VALCO in the case of clause (v), plus, in each case, the
proceeds thereof;
(ix) Liens securing Indebtedness consisting of
Capitalized Lease Obligations, mortgage financings,
industrial revenue bonds or other monetary obligations, in
each case incurred for the purpose of financing all or any
part of the purchase price or cost of construction or
installation of U.S. Fixed Assets used in the business of
the Company and its Subsidiaries, or repairs, additions or
Improvements to such U.S. Fixed Assets, provided, that such
Liens (a) secure Indebtedness in an amount not in excess of
the original purchase price or the original cost of any such
U.S. Fixed Assets or repair, addition or Improvement thereto
(plus an amount equal to the reasonable fees and expenses in
connection with the Incurrence of such Indebtedness), (b) do
not extend to any other U.S. Fixed Assets (other than
Improvements thereto or thereon and any proceeds thereof) of
the Company or any Subsidiary of the Company (and, in the
case of a repair, addition or Improvement, such Lien extends
only to the U.S. Fixed Assets (and Improvements thereto or
thereon) repaired, added to or improved), and (c) secure
Indebtedness incurred no later than 180 days after the
acquisition or final completion of such construction,
repair, addition or Improvement;
(x) Liens securing any Refinancings (in whole or in
part) of any Indebtedness secured by the Liens described in
clauses (ii), (iv), (v), (vi), (viii) or (ix) of this
paragraph, and any successive Refinancings of any thereof
(together with any increased amount of such Indebtedness
specifically permitted pursuant to Section 4.10(b) (to cover
the reasonable fees and expenses incurred in connection with
a Refinancing)), provided that each such Lien (unless
otherwise permitted by this paragraph) does not extend to
any additional U.S. Fixed Assets (other than Improvements
thereto or thereon and any proceeds thereof);
(xi) Liens on U.S. Fixed Assets securing Indebtedness
in an aggregate principal amount not to exceed $10,000,000;
and
67
(xii) Liens on any U.S. Fixed Assets consisting of
easements, covenants, restrictions, exceptions, reservations
and similar matters which do not materially impair the use
of such U.S. Fixed Assets for the uses for which it is held
and which Liens are granted to secure Indebtedness secured
by Liens permitted by the foregoing clauses (i) through
(xi).
(c) For purposes of this Section 4.11, the Notes will be
considered equally and ratably secured on a senior basis with any
other Lien if the Lien securing the Notes is of at least equal
priority and covers the same U.S. Fixed Assets as such other
Lien, provided, that if the Indebtedness secured by such other
Lien is expressly subordinated in right and priority of payment
by its terms to the Notes, the Lien securing the Notes will be
senior to such other Lien.
(d) For the purpose of determining compliance with this
Section 4.11, in the event that any Lien is permitted pursuant to
more than one clause of Section 4.11(b), such Lien shall not
limit any other Lien otherwise permitted, and shall not be
required to be included under more than one such clause.
SECTION 4.12. Subsidiary guarantees, etc.
---------------------------
(a) If the Company or any Subsidiary Guarantor shall
transfer or cause to be transferred, in one or a series of
related transactions, any property or assets (including, without
limitation, businesses, divisions, real property, assets or
equipment) to any Subsidiary of the Company or to any
Non-Affiliate Joint Venture of the Company, the Company shall
cause such transferee Subsidiary or Non-Affiliate Joint Venture
to (i) execute and deliver to the Trustee a supplemental
indenture in form and substance reasonably satisfactory to the
Trustee pursuant to which such transferee Subsidiary or
Non-Affiliate Joint Venture shall be named as an additional
Subsidiary Guarantor and (ii) deliver to the Trustee an Opinion
of Counsel reasonably satisfactory to the Trustee that such
supplemental indenture has been duly executed and delivered by
such Person.
(b) The provisions set forth in the immediately preceding
paragraph shall not apply to the following transfers of property
or assets by the Company or any Subsidiary Guarantor:
(A) transfers of property or assets (other than cash)
to Subsidiaries of the Company and Non-Affiliate Joint
Ventures, provided that such transfer is made in exchange
for cash in an amount equal to the Fair Market Value of such
property or assets;
(B) transfers of property or assets to Subsidiary
Guarantors;
(C) the use of the proceeds of Indebtedness described
in Sections 4.10(b)(iii), (iv), (v) and (viii);
(D) transfers to Alpart of the proceeds of
Indebtedness described in Section 4.10(a) to the extent that
Alpart is an obligor or guarantor of such Indebtedness;
(E) the provision of, and the payment for, goods and
services, working capital and technology to Subsidiaries of
the Company and Non-Affiliate Joint Ventures, in each case
in the ordinary course of the businesses in which the
Company or its Subsidiaries or its Non-Affiliate Joint
Ventures were engaged on the date of this Indenture or
reasonably related extensions thereof;
68
(F) transfers of assets to a Subsidiary of the Company
immediately prior to the sale of such Subsidiary;
(G) transfers of cash or Cash Equivalents to
Non-Affiliate Joint Ventures engaged or to be engaged in the
business of bauxite mining and/or alumina refining and/or
aluminum smelting and/or fabrication and/or reasonably
related extensions thereof;
(H) transfers of cash, Cash Equivalents, property or
other assets to a Permitted Entity in exchange for Permitted
Entity Securities of such Permitted Entity if, immediately
after giving effect to such transfer, such Permitted Entity
remains a Permitted Entity;
(I) transfers of Capital Stock or other equity
interests to the issuer of such Capital Stock or other
equity interests such that immediately after giving effect
to such transfer and related transfers, the proportional
beneficial ownership by the transferor of the class of
Capital Stock or equity interests so transferred is not
reduced; and
(J) other transfers of assets, provided that the
aggregate amount thereof (if other than cash, such amount
shall be the Fair Market Value of such asset at the time of
such transfer), less the aggregate amount of such assets
returned to the Company or any Subsidiary Guarantor (if
returned other than in cash, the amount of such assets shall
be the Fair Market Value of such assets at the time so
returned), does not exceed, in the aggregate, the greater of
(i) $25,000,000 or (ii) 5% of the Company's Consolidated Net
Worth, calculated after giving effect to such transfers and
returns.
(c) If any of the Company's existing or future Subsidiaries
(other than a Bank Guarantor) or existing or future Non-Affiliate
Joint Ventures shall guarantee, directly or indirectly, or become
a direct obligor with respect to, Indebtedness under the Credit
Agreement or any Refinancings thereof, the Company shall cause
each such Subsidiary or Non-Affiliate Joint Venture to (A)
execute and deliver to the Trustee a supplemental indenture in
form and substance reasonably satisfactory to the Trustee
pursuant to which such Subsidiary or Non-Affiliate Joint Venture
shall be named as an additional Subsidiary Guarantor for as long
as such Subsidiary or Non-Affiliate Joint Venture is so obligated
with respect to such Indebtedness and (B) deliver to the Trustee
an Opinion of Counsel reasonably satisfactory to the Trustee that
such supplemental indenture has been duly executed and delivered
by such Person.
(d) Sections 4.12(a) and (b) shall not apply to any
Restricted Investment or Restricted Payment otherwise permitted
by Section 4.09.
(e) The Company shall not permit any Permitted Entity to
cease to be a Permitted Entity except:
(i) pursuant to a liquidation or dissolution of such
Permitted Entity or a transfer of all or substantially all
of the properties and assets of such Permitted Entity to its
Equity Owners in proportion to their interests, including by
way of merger or consolidation of such Permitted Entity with
or into its sole Equity Owner;
(ii) pursuant to a sale in compliance with Section 4.14
of all of the Permitted Entity Securities of such Permitted
Entity held directly or indirectly by the Company or any
Subsidiary Guarantor; or
69
(iii) if such Permitted Entity becomes a
Subsidiary Guarantor.
(f) Notwithstanding anything in this Section 4.12 to the
contrary, VALCO shall be permitted to merge with or into, or
distribute substantially all of its assets and liabilities to, a
Permitted Entity, provided that, at the time of such merger or
distribution, such Permitted Entity has no more than $50,000 of
assets other than Capital Stock or other similar interests in
VALCO. Upon the consummation of any transaction contemplated by
this clause (f), the entity surviving such merger or distribution
shall not be required (i) to become a Subsidiary Guarantor
pursuant to this Section 4.12 or (ii) if such entity has no
assets except as contemplated in this clause (f) or meets the
conditions of this Section 4.12, to remain a Permitted Entity
pursuant to this Section 4.12.
SECTION 4.13. Limitation on dividends and other payment
-----------------------------------------
restrictions affecting Subsidiaries. The Company shall not, and
- -----------------------------------
shall not permit its Subsidiaries to, create or otherwise suffer
to exist any consensual encumbrances or restrictions on the
ability of any Subsidiary to pay dividends or make any other
distributions on its Capital Stock or pay any Indebtedness owed
to the Company or any Subsidiaries of the Company or to make
loans or advances or transfer any of its assets to the Company or
any Subsidiary of the Company; provided, however that this
-------- -------
Section 4.13 shall not prohibit Permitted Dividend Encumbrances.
SECTION 4.14. Limitation on Asset Sales.
-------------------------
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, consummate any Asset Sale unless at least 75% of
the consideration therefor received by the Company or such
Subsidiary (exclusive of indemnities) is in the form of cash or
Cash Equivalents, provided that this sentence shall not apply to
the sale or disposition of assets as a result of a foreclosure
(or a secured party taking ownership of such assets in lieu of
foreclosure) or as a result of an involuntary proceeding in which
the Company cannot, directly or through its Subsidiaries, direct
the type of proceeds received. The amount of (i) any liabilities
of the Company or any Subsidiary of the Company that are actually
assumed by the transferee in such Asset Sale, or for which the
Company and its Subsidiaries are fully released, shall be deemed
to be cash for purposes of determining the percentage of cash
consideration received by the Company or its Subsidiaries and
(ii) any notes or other obligations received by the Company or
any Subsidiary of the Company from such transferee that are
immediately converted (or are converted within thirty days of the
related Asset Sale) by the Company or such Subsidiary into cash
shall be deemed to be cash for purposes of determining the
percentage of cash consideration received by the Company or its
Subsidiaries.
(b) The Company shall apply any Net Cash Proceeds received
after the date of this Indenture to (A) the prepayment of
Indebtedness in respect of or under the Credit Agreement and any
other Indebtedness of the Company (other than the Notes) entitled
to receive payment pursuant to the terms thereof (excluding
Indebtedness that is subordinated by its terms to the Notes or
the Guarantee thereof) (the "Specified Pari Passu Indebtedness"),
unless the holders thereof elect not to receive such prepayment
and (B) an offer to purchase (an "Asset Sale Offer") the then
outstanding Notes, on any Business Day occurring no later than
175 days after the receipt by the Company (or any of its
Subsidiaries, if applicable) of such Net Cash Proceeds (the
"Asset Sale Purchase Date," which date shall be deferred to the
extent necessary to permit the Asset Sale Offer to remain open
for the period required by applicable law), at a price (the
"Asset Sale Purchase Price") equal to 100% of the principal
amount thereof together with accrued and unpaid interest, if any,
to but not including the Asset Sale Purchase Date pursuant to the
provisions set forth below. Such Asset Sale Offer with respect
to the Notes shall be in an aggregate
70
principal amount (the "Asset Sale Offer Amount") equal to the Net
Cash Proceeds (rounded down to the nearest $1,000) from the Asset
Sales to which the Asset Sale Offer relates multiplied by a
fraction, the numerator of which is the principal amount of the
Notes outstanding (determined as of the close of business on the
day immediately preceding the date notice of such Asset Sale
Offer is mailed) and the denominator of which is the principal
amount of the Notes outstanding plus the aggregate principal
amount of Indebtedness under the Credit Agreement and the
Specified Pari Passu Indebtedness outstanding (determined as of
the close of business on the day immediately preceding the date
notice of such Asset Sale Offer is mailed). If (x) no
Indebtedness is outstanding in respect of or under the Credit
Agreement or the Specified Pari Passu Indebtedness or (y) the
holders of such Indebtedness entitled to receive payment elect
not to receive the payments provided for in the previous
sentence, or (z) the application of such Net Cash Proceeds
results in the complete prepayment of such Indebtedness, then in
each case any remaining portion of such Net Cash Proceeds will be
required to be applied to an Asset Sale Offer to purchase the
Notes.
(c) Notice of an Asset Sale Offer shall be mailed by the
Company to all holders at their last registered address within
145 days of the receipt by the Company or any of its Subsidiaries
of such Net Cash Proceeds. The Asset Sale Offer shall remain
open from the time of mailing until the last Business Day before
the Asset Sale Purchase Date, but in no event for a period less
than twenty-four days or less than that required by applicable
law. The notice shall state:
(1) that the Asset Sale Offer is being made pursuant
to this Section 4.14;
(2) the Asset Sale Offer Amount, the purchase price
and the Asset Sale Purchase Date;
(3) the name and address of the Trustee and that Notes
must be surrendered to the Trustee to collect the purchase
price;
(4) that any Note not tendered or accepted for payment
will continue to accrue interest;
(5) that any Note accepted for payment pursuant to the
Asset Sale Offer shall cease to accrue interest on and after
the Asset Sale Purchase Date;
(6) that each holder electing to have a Note purchased
pursuant to an Asset Sale Offer will be required to
surrender the Note, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Note (the "Asset
Sale Purchase Notice") completed, to the Trustee at the
address specified in the notice at least five Business Days
before the Asset Sale Purchase;
(7) that holders will be entitled to withdraw their
election if the Trustee receives, not later than one
Business Day prior to the Asset Sale Purchase Date, a
telegram, telex, facsimile transmission or letter setting
forth the name of the holder, the principal amount of the
Notes the holder delivered for purchase, the certificate
number of each Note the holder delivered for purchase and a
statement that such holder is withdrawing his, her or its
election to have such Notes purchased;
71
(8) that if Notes in a principal amount in excess of
the Asset Sale Offer Amount are surrendered pursuant to the
Asset Sale Offer, the Company shall purchase Notes on a pro
---
rata basis (with such adjustments as may be deemed
----
appropriate by the Company so that only Notes in
denominations of $1,000 or integral multiples thereof shall
be acquired); and
(9)(x) that Notes may be purchased in whole or in part
(in denominations of $1,000 or integral multiples thereof)
and (y) that holders whose Notes are purchased only in part
will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.
On or before the Asset Sale Purchase Date, the Company shall
(i) accept for payment Notes (having denominations of $1,000 or
integral multiples thereof) surrendered pursuant to the Asset
Sale Offer (on a pro rata basis if required pursuant to paragraph
--- ----
(c)(8) above), (ii) deposit by 10:30 a.m. New York City time, on
the Asset Sale Purchase Date, with the Trustee money in
immediately available funds sufficient to pay the Asset Sale
Purchase Price of all Notes or portions thereof so accepted and
(iii) deliver Notes so accepted to the Trustee together with an
Officers' Certificate stating the Notes or portions thereof
accepted for payment by the Company. The Trustee shall promptly
mail or deliver to holders of Notes so accepted payment in an
amount equal to the purchase price, and the Company shall execute
and the Trustee shall promptly authenticate and mail or deliver
to such holders a new Note equal in principal amount to any
unpurchased portion of the Note surrendered. Any Notes not so
accepted shall be promptly mailed or delivered to the holder
thereof. The Company will publicly announce the results of the
Asset Sale Offer on, or as soon as practicable after, the Asset
Sale Purchase Date.
Notwithstanding the foregoing, the Company shall not be
required to make an Asset Sale Offer until the aggregate amount
of Net Cash Proceeds so to be applied pursuant to this Section
4.14 exceeds $25,000,000 (the "Twenty-Five Million Threshold")
and then the total amount of such Net Cash Proceeds shall be
required to be so applied in accordance with this Section 4.14.
The Company may credit against its obligation to offer to
repurchase Notes pursuant to this Section 4.14 the principal
amount of Notes acquired or held by the Company subsequent to the
date of the Asset Sale giving rise to such Asset Sale Offer and
surrendered for cancellation or redeemed or called for redemption
subsequent to such date and not previously used to satisfy any
obligation of the Company to redeem or offer to purchase Notes.
In no event shall any Net Cash Proceeds that are applied to an
Asset Sale Offer be required to be applied to more than one Asset
Sale Offer.
(d) Notwithstanding the provisions of clauses (a) and (b)
of this Section 4.14, the Company shall have no obligation to
make an Asset Sale Offer pursuant to this Section 4.14, if, and
to the extent, the Company or any of its Subsidiaries commits
within 140 days of the receipt of such Net Cash Proceeds to
reinvest (whether by acquisition of an existing business or
expansion, including, without limitation, capital expenditures)
such Net Cash Proceeds in one or more of the lines of business
(including capital expenditures) in which the Company or its
Subsidiaries or its Non-Affiliate Joint Ventures were engaged on
the date of this Indenture or reasonably related extensions of
such lines of business, provided that such Net Cash Proceeds are
substantially so utilized no later than the last day of the
twelfth consecutive month (or, in the event the amount of such
Net Cash Proceeds from a single Asset Sale or series of related
Asset Sales exceeds $200,000,000, the twenty-fourth consecutive
month) following the month in which such Net Cash Proceeds are
received.
(e) Notwithstanding the foregoing, if an Asset Sale
consists of a sale of (i) all or a portion of the property, plant
or equipment of the Company's Gramercy alumina refinery or Nevada
micromill, whether now owned or hereafter acquired, or any
proceeds thereof or (ii) any U.S. Fixed Assets acquired
72
after the date of this Indenture which do not constitute
Permitted Collateral, the Company shall make an Asset Sale Offer
with the Net Cash Proceeds received from such Asset Sale (without
regard to the Twenty-Five Million Threshold) to the extent the
Company has not committed within 140 days of the receipt of such
Net Cash Proceeds to reinvest (whether by acquisition of an
existing business or expansion, including, without limitation,
capital expenditures) such Net Cash Proceeds in U.S. Fixed Assets
(other than Permitted Collateral), provided that such Net Cash
Proceeds are substantially so utilized no later than the last day
of the twelfth consecutive month (or, in the event the amount of
such Net Cash Proceeds from a single Asset Sale or series of
related Asset Sales exceeds $200,000,000, the twenty-fourth
consecutive month) following the month in which such Net Cash
Proceeds are received.
SECTION 4.15. Limitations on Unrestricted Subsidiaries.
-----------------------------------------
(i) The Company shall not permit any of its Unrestricted
Subsidiaries to guarantee or otherwise directly or indirectly
provide credit support for any Indebtedness of the Company or any
of its Subsidiaries, (ii) in the event that an Unrestricted
Subsidiary of the Company Incurs Indebtedness that does not
involve an Unrestricted Subsidiary Investment by the Company or
any of its Subsidiaries in such Unrestricted Subsidiary pursuant
to the definition of "Unrestricted Subsidiary Investment," the
Company will cause such Unrestricted Subsidiary to notify the
lenders thereof in writing that such lenders will not have any
recourse to the stock or assets of the Company or any of its
Subsidiaries and (iii) the Company shall cause each of its
Unrestricted Subsidiaries to have at all times at least one
director on its board of directors that is not a director or
executive officer of the Company or any of its Subsidiaries and
to have at all times at least one executive officer that is not a
director or executive officer of the Company or any of its
Subsidiaries (except for any period not exceeding 30 days
following the death or resignation of any such director or
executive officer).
ARTICLE FIVE
NOTEHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 5.01. Company to furnish Trustee information as to
--------------------------------------------
names and addresses of noteholders. The Company will furnish or
- ----------------------------------
cause to be furnished to the Trustee:
(a) semi-annually, not more than fifteen days after each
record date for the payment of interest, a list, in such form as
the Trustee may reasonably require, of the names and addresses of
the noteholders as of such record date as the case may be, and
(b) at such other times as the Trustee may request in
writing, within thirty 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 fifteen days prior to the time such list is
furnished;
provided, however, that so long as the Trustee is the Note
registrar, no such list shall be required to be furnished. Any
such list may be dated as of a date not more than fifteen days
prior to the time such information is furnished or caused to be
furnished, and need not include information received after such
date.
73
SECTION 5.02. Preservation and disclosure of lists.
------------------------------------
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and
addresses of the holders of Notes (1) contained in the most
recent list furnished to it as provided in Section 5.01 and (2)
received by it in the capacity of paying agent (if so acting) or
Note registrar.
The Trustee may destroy any list furnished to it as provided
in Section 5.01 upon receipt of a new list so furnished.
(b) In case three or more holders of Notes (hereinafter
referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant
has owned a Note for a period of at least six months preceding
the date of such application, and such application states that
the applicants desire to communicate with other holders of Notes
with respect to their rights under this Indenture or under the
Notes, and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the
Trustee shall, within five Business Days after the receipt of
such application, at its election either
(1) afford such applicants access to the information
preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 5.02, or
(2) inform such applicants as to the approximate
number of holders of Notes whose names and addresses appear
in the information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this
Section 5.02, and as to the approximate cost of mailing to
such noteholders the form of proxy or other communication,
if any, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written
request of such applicants, mail to each noteholder whose name
and address appears in the information preserved at the time by
the Trustee in accordance with the provisions of subsection (a)
of this Section 5.02, a copy of the form of proxy or other
communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file
with the Commission, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests
of the holders of Notes or would be in violation of applicable
law. Such written statement shall specify the basis of such
opinion. After opportunity for hearing upon the objections
specified in the written statement so filed, the Commission may,
and if demanded by the Trustee or by such applicants shall, enter
an order either sustaining one or more of such objections or
refusing to sustain any of them. If the Commission shall enter
an order refusing to sustain any of such objections, or if, after
the entry of an order sustaining one or more of such objections,
the Commission shall find, after notice and opportunity for
hearing, that all objections so sustained have been met, and
shall enter an order so declaring, the Trustee shall mail copies
of such material to all noteholders with reasonable promptness
after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty
to such applicants respecting their application.
74
(c) Each and every holder of the Notes, by receiving and
holding the same, agrees with the Company and the Trustee that
neither the Company nor the Trustee nor any paying agent nor the
Note registrar shall be held accountable by reason of the
disclosure of any such information as to the names and addresses
of the holders of Notes in accordance with the provisions of
subsection (b) of this Section 5.02, regardless of the source
from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material
pursuant to a request made under said subsection (b), nor shall
any such disclosure be deemed a violation of existing law, or any
law hereafter enacted which does not specifically refer to
Section 312 of the Trust Indenture Act of 1939.
SECTION 5.03. Reports by the Company.
----------------------
(a) The Company covenants and agrees to file with the
Trustee within fifteen days after the Company is required to file
the same with the Commission, copies of the annual reports and of
the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act. If the Company is not subject
to the requirements of Section 13 or 15(d) of the Exchange Act,
the Company shall nonetheless file with the Commission and the
Trustee copies of such annual reports and such information,
documents and other reports as it would file if it were subject
to the requirements of Section 13 or 15(d) of the Exchange Act.
(b) The Company covenants and agrees to file with the
Trustee and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such
additional information, documents, and reports with respect to
compliance by the Company with the conditions and covenants
provided for in this Indenture as may be required from time to
time by such rules and regulations, including, in the case of
annual reports, certificates or opinions of independent public
accountants, conforming to the requirements of Section 14.05, as
to compliance with conditions or covenants, compliance with which
is subject to verification by accountants.
(c) The Company covenants and agrees to transmit to the
holders of Notes within thirty days after the filing thereof with
the Trustee, in the manner and to the extent provided in
subsection (c) of Section 5.04 with respect to reports pursuant
to subsection (a) of said Section 5.04, such summaries of any
information, documents and reports required to be filed by the
Company pursuant to subsections (a) and (b) of this Section 5.03
as may be required by rules and regulations prescribed from time
to time by the Commission.
(d) The Company covenants and agrees to furnish to the
Trustee, not less often than annually, a brief certificate from
the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this
Indenture. For purposes of this paragraph (d), such compliance
shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture.
(e) For so long as any Restricted Securities remain
outstanding, the Company and the Subsidiary Guarantors covenant
and agree to furnish to the Holders of the Notes and to
securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act of 1933.
75
SECTION 5.04. Reports by the Trustee.
----------------------
(a) On or before May 15, 1997, and on or before May 15 in
every year thereafter, so long as any Notes are outstanding
hereunder, the Trustee, if required to do so by the provisions of
the Trust Indenture Act of 1939, shall transmit to the
noteholders, as hereinafter in this Section 5.04 provided, a
brief report dated as of March 15 of the year in which such
report is made with respect to any of the following events which
may have occurred within the previous 12 months (but if no such
event has occurred within such period no report need be
transmitted):
(1) any change to its eligibility under Section 7.09
and its qualifications under Section 7.08;
(2) the creation of or any material change to a
relationship specified in paragraphs (1) through (10) of
Section 7.08(c);
(3) the character and amount of any advances (and if
the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as
such) which remain unpaid on the date of such report, and
for the reimbursement of which it claims or may claim a lien
or charge, prior to that of the Notes, on any property or
funds held or collected by it as Trustee, except that the
Trustee shall not be required (but may elect) to state such
advances if such advances so remaining unpaid aggregate not
more than 0.5% of the principal amount of the Notes
outstanding on the date of such report;
(4) the amount, interest rate, and maturity date of
all other indebtedness owing by the Company (or by any other
obligor on the Notes) to the Trustee in its individual
capacity, on the date of such report, with a brief
description of any property held as collateral security
therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in paragraph
(2), (3), (4) or (6) of subsection (b) of Section 7.13;
(5) any change to the property and funds, if any,
physically in the possession of the Trustee (as such) on the
date of such report; and
(6) any action taken by the Trustee in the performance
of its duties under this Indenture which it has not
previously reported and which in its opinion materially
affects the Notes, except action in respect of a default,
notice of which has been or is to be withheld by it in
accordance with the provisions of Section 6.07.
(b) The Trustee shall transmit to the noteholders, as
hereinafter provided, a brief report with respect to the
character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof)
made by the Trustee (as such) since the date of the last report
transmitted pursuant to the provisions of subsection (a) of this
Section 5.04 (or if no such report has yet been so transmitted,
since the date of execution of this Indenture), for the
reimbursement of which it claims or may claim a lien or charge
prior to that of the Notes on property or funds held or collected
by it as Trustee, and which it has not previously reported
pursuant to this subsection, except that the Trustee shall not be
required (but may elect) to report such advances if such advances
remaining unpaid at any time aggregate 10% or less of the
principal amount of Notes outstanding at such time, such report
to be transmitted within ninety days after such time.
76
(c) Reports pursuant to this Section 5.04 shall be
transmitted by mail (i) to all holders of Notes, as the names and
addresses of such holders appear upon the registry books of the
Company, (ii) to all noteholders who have, within the two years
preceding such transmission, filed their names and addresses with
the Trustee for that purpose, and, (iii) except in the case of
reports pursuant to Section 5.04(b), to all holders of Notes
whose names and addresses have been furnished to or obtained by
the Trustee pursuant to Section 5.01.
(d) A copy of each such report shall, at the time of such
transmission to noteholders, be filed by the Trustee with each
stock exchange (if any) upon which the Notes are listed or
admitted for trading and also with the Commission. The Company
will notify the Trustee when and as the Notes become listed on
any stock exchange.
ARTICLE SIX
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01. Events of Default defined. In case one or
-------------------------
more of the following Events of Default shall have occurred and
be continuing:
(a) default in the payment of any installment of interest
upon any of the Notes as and when the same shall become due and
payable, and continuance of such default for a period of thirty
days; or
(b) default in the payment of the principal of, Change of
Control Purchase Price, Asset Sale Purchase Price, or premium, if
any, on any of the Notes as and when the same shall become due
and payable either at maturity, upon redemption or purchase by
the Company pursuant to Article Three, by declaration or
otherwise; or
(c) failure on the part of the Company, duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Company in the Notes or in this
Indenture for a period of sixty days after the date on which
written notice of such failure, which notice must specify the
failure, demand it be remedied and state that the notice is a
"Notice of Default," shall have been given to the Company by the
Trustee by registered mail, which notice the Trustee shall give
upon receipt of requests to do so by the holders of at least 25%
of the aggregate principal amount of the Notes at the time
outstanding, or to the Company and the Trustee by the holders of
at least 25% of the aggregate principal amount of the Notes at
the time outstanding; or
(d) a default under any mortgage, indenture, or instrument
under which there may be issued or by which there may be secured
or evidenced any indebtedness for money borrowed by the Company
or any Subsidiary, whether such indebtedness now exists or shall
hereafter be created, in an aggregate principal amount exceeding
$25,000,000, which default (a) in the case of a failure to make
payment on any such indebtedness, shall not have been waived,
cured or otherwise ceased to exist within 30 days thereafter, or
(b) in the case of any default other than a payment default
referred to in clause (a), shall have resulted in such
indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise have become due and payable,
or with respect to which the principal amount remains unpaid upon
its stated maturity; or
77
(e) a final judgment which, together with other outstanding
final judgments against the Company and its Significant
Subsidiaries, exceeds an aggregate of $25,000,000 (to the extent
such judgments are not covered by valid and collectible insurance
from solvent unaffiliated insurers) shall be entered against the
Company and/or its Significant Subsidiaries and (i) within 30
days after entry thereof, judgments exceeding such amount shall
not have been discharged, settled or bonded or execution thereof
stayed pending appeal or, within 30 days after the expiration of
any such stay, such judgments exceeding such amount shall not
have been discharged, settled or bonded or execution thereof
stayed or (ii) an enforcement proceeding shall have been
commenced (and not discharged, settled or bonded or execution
thereof stayed) by any creditor upon judgments exceeding such
amount; or
(f) a court having jurisdiction in the premises shall have
entered a decree or order for relief against the Company in an
involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Company or for all or any
substantial part of its property, or ordering the winding-up or
liquidation of its affairs, and such decree or order shall have
remained unstayed and in effect for a period of ninety
consecutive days; or
(g) the Company shall have commenced a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall have consented to the entry of an
order for relief in an involuntary case under any such law, or
shall have consented to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or similar official) of the Company or for all or
any substantial part of its property, or shall have made an
assignment for the benefit of creditors, or shall have taken any
corporate action in furtherance of any of the foregoing; or
(h) the Guarantee of any Subsidiary Guarantor shall be held
to be unenforceable or invalid by a final non-appealable order or
judgment issued by a court of competent jurisdiction or shall
cease for any reason to be in full force and effect with respect
to such Subsidiary Guarantor, or any Subsidiary Guarantor or any
Person acting by or on behalf of any Subsidiary Guarantor shall
deny or disaffirm its obligations under its Guarantee;
then, in the case of an Event of Default specified in clause (a),
(b), (c), (d), (e) or (h), and in each and every such case,
unless the principal of all the Notes shall have already become
due and payable, either the Trustee or the holders of not less
than 25% of the aggregate principal amount of the Notes then
outstanding hereunder, by notice in writing to the Company (and
to the Trustee if given by noteholders), may, and the Trustee
shall if requested to do so by the holders of not less than 25%
of the aggregate principal amount of the Notes then outstanding
hereunder, declare the principal amount and accrued interest to
the date of declaration of all the Notes to be due and payable
immediately. Upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture
or in the Notes contained to the contrary notwithstanding. If an
Event of Default specified in clause (f) or (g) above occurs,
such amount shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the
Trustee or any noteholder.
SECTION 6.02. Payment of Notes on default; suit therefor.
------------------------------------------
The Company covenants that (1) in case default shall be made in
the payment of any installment of interest on any of the Notes,
as and when the same shall become due and payable, and such
default shall have continued for a period of thirty days, or (2)
in case default shall be made in the payment of the principal of,
and premium, if any, Change of Control Purchase Price or Asset
Sale Purchase Price on any of the Notes when the same shall have
78
become due and payable, whether upon maturity of the Notes or
upon redemption or purchase by the Company pursuant to Article
Three or upon declaration or otherwise then, upon demand of the
Trustee, the Company will pay to the Trustee, for the benefit of
the holders of the Notes, the whole amount that then shall have
become due and payable on all such Notes for such amounts, as the
case may be, with interest upon the overdue principal, premium,
if any, Change of Control Purchase Price or Asset Sale Purchase
Price, as the case may be, and installments of interest (to the
extent permitted by law) at the rate of interest borne by the
Notes; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection,
including a reasonable compensation to the Trustee, its agents,
attorneys and counsel, and any expense or liabilities incurred by
the Trustee hereunder other than through its negligence or bad
faith.
In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of
an express trust, shall be entitled and empowered to institute
any actions or proceedings at law or in equity for the collection
of the sums so due and unpaid, and may prosecute any such action
or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Company or any other
obligor upon the Notes, and collect in the manner provided by law
out of the property of the Company or any other obligor upon the
Notes wherever situated the moneys adjudged or decreed to be
payable.
In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other
obligor upon the Notes under any applicable bankruptcy,
insolvency or similar law or in case a receiver or trustee shall
have been appointed for the property of the Company or such other
obligor, or in case of any other similar judicial proceedings
relative to the Company or any other obligor upon the Notes, or
to creditors or property of the Company or such other obligor,
the Trustee, irrespective of whether the principal, Change of
Control Purchase Price or Asset Sale Purchase Price, as the case
may be, of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the
provisions of this Section 6.02, shall be entitled and empowered
by intervention in such proceedings or otherwise, to file and
prove a claim or claims for the whole amount of principal,
premium, if any, Change of Control Purchase Price, Asset Sale
Purchase Price and interest owing and unpaid in respect of the
Notes, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
and of the noteholders allowed in any judicial proceeding
relative to the Company or any other obligor upon the Notes, its
creditors, or its property, and to collect and receive any moneys
or other property payable or deliverable on any such claims, and
to distribute the same after the deduction of its reasonable
charges and expenses; and any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized by each of the
noteholders 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 noteholders, to pay to the Trustee any
amount due it for compensation and expenses, including reasonable
counsel fees incurred by it up to the date of such distribution.
To the extent that such payment of reasonable compensation,
expenses, liabilities and counsel fees out of the estate in any
such proceedings shall be denied for any reason, payment of the
same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, moneys, securities and other
property which the holders of the Notes may be entitled to
receive in such proceedings, whether in liquidation or under any
plan of reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the
Trustee without the possession of any of the Notes, or the
production thereof on any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the
Trustee shall
79
be brought in its own name as trustee of an express trust, and
any recovery of judgment, subject to the payment of the
reasonable expenses, disbursements and compensation of the
Trustee, its agents and attorneys, shall be for the ratable
benefit of the holders of the Notes.
SECTION 6.03. Application of moneys collected by Trustee.
------------------------------------------
Any moneys collected by the Trustee pursuant to Section 6.02
shall be applied to the payment of all amounts due the Trustee
pursuant to Section 7.06 and thereafter in the order following,
at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the several Notes, and stamping
thereon the payment, if only partially paid, and upon surrender
thereof if fully paid:
FIRST: In case no principal of, Change of Control
Purchase Price or Asset Sale Purchase Price on the
outstanding Notes shall have become due and be unpaid, to
the payment of interest on the Notes, in the order of the
maturity of the installments of such interest, with interest
upon the overdue installments of interest (so far as
permitted by law and to the extent that such interest has
been collected by the Trustee) at the rate of interest borne
by the Notes, such payments to be made ratably to the
persons entitled thereto, without discrimination or
preference;
SECOND: In case any principal of, Change of Control
Purchase Price or Asset Sale Purchase Price on the
outstanding Notes shall have become due, by declaration or
otherwise, to the payment of the whole amount then owing and
unpaid upon the Notes for principal, premium, if any, Change
of Control Purchase Price, Asset Sale Purchase Price and
interest, as the case may be, with interest on the overdue
principal, premium, if any, Change of Control Purchase
Price, Asset Sale Purchase Price and installments of
interest (so far as permitted by law and to the extent that
such interest has been collected by the Trustee), as the
case may be, at the rate of interest borne by the Notes; and
in case such moneys shall be insufficient to pay in full the
whole amount so due and unpaid upon the Notes, then to the
payment of such principal, premium, if any, Change of
Control Purchase Price, Asset Sale Purchase Price and
interest, without preference or priority of any one such
applicable amount over another, or of any installment of
interest over any other installment of interest, ratably to
the aggregate of such principal, premium, if any, Change of
Control Purchase Price, Asset Sale Purchase Price and
accrued and unpaid interest; and
THIRD: To the payment of the remainder, if any, to the
Company, its successors or assigns, or to whosoever may be
lawfully entitled to receive the same, or as a court of
competent jurisdiction may direct.
SECTION 6.04. Limitation on suits by holders of Notes. No
----------------------------------------
holder of any Note shall have any right by virtue or by availing
of any provision of this Indenture to institute any suit, action
or proceeding or to seek any remedy in equity or at law upon or
under or with respect to this Indenture or the Notes or for the
appointment of a receiver or trustee, or for any other remedy,
unless such holder previously shall have given to the Trustee
written notice of default and of the continuance thereof, as
hereinabove provided, and unless also the holders of not less
than 25% of the aggregate principal amount of the Notes then
outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding or to seek such remedy
in its own name as Trustee hereunder and shall have offered to
the Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for sixty days after its receipt of
such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request shall have
been given to the Trustee pursuant to
80
Section 6.06; it being understood and intended, and being
expressly covenanted by the taker and holder of every Note with
every other taker and holder and the Trustee, that no one or more
holders of Notes shall have any right in any manner whatever by
virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any
other of such Notes, or to obtain or seek to obtain priority over
or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all holders of
Notes. For the protection and enforcement of the provisions of
this Section 6.04, each and every noteholder and the Trustee
shall be entitled to such relief as can be given either at law or
in equity.
Notwithstanding any other provisions in this Indenture,
however, the right of any holder of any Note to receive payment
of the principal of, premium, if any, Change of Control Purchase
Price, Asset Sale Purchase Price and interest, as the case may
be, on such Note, on or after the respective due dates expressed
in such Note, or to institute suit for the enforcement of any
such payment on or after such respective dates or to demand
purchase of its Notes pursuant to Article Three or Section 4.14,
shall not be impaired or affected without the consent of such
holder.
SECTION 6.05. Proceedings by Trustee; remedies cumulative
-------------------------------------------
and continuing; delay or omission not waiver of default. In case
- -------------------------------------------------------
of a default hereunder, the Trustee may in its discretion proceed
to protect and enforce the rights vested in it by this Indenture
by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any of such rights,
either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid
of the exercise of any power granted in this Indenture, or to
enforce any other legal or equitable right vested in the Trustee
by this Indenture or by law. All powers and remedies given by
this Article Six to the Trustee or to the noteholders shall, to
the extent permitted by law, be deemed cumulative and not
exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Notes, by judicial
proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any
holder of any of the Notes to exercise any right or power
accruing upon any default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be
a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 6.04, every power and remedy
given by this Article Six or by law to the Trustee or to the
noteholders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the noteholders.
SECTION 6.06. Rights of holders of majority in principal
------------------------------------------
amount of Notes to direct Trustee and to waive defaults. The
- -------------------------------------------------------
holders of a majority of the aggregate principal amount of the
Notes at the time outstanding (determined as provided in Section
8.04), or, if a record date is set in accordance with Section
8.05, as of such record date, 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, however, that subject to the
provisions of Section 7.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee shall
determine that the action so directed may not lawfully be taken,
or if the Trustee in good faith shall, by a responsible officer
or officers of the Trustee, determine that the proceedings so
directed would be illegal or involve it in personal liability or
be unjustly prejudicial to the noteholders not joining therein,
and provided further that nothing in this Indenture shall impair
the right of the Trustee in its discretion to take any action
deemed proper by the Trustee and which is not inconsistent with
such direction by noteholders. Prior to the declaration of the
maturity of the Notes as provided in Section 6.01, the holders of
a majority of the aggregate principal amount of the Notes at the
time outstanding (determined as provided in Sections 8.04
81
and 8.05) may on behalf of the holders of all of the Notes waive
any past default hereunder and its consequences, except a default
in the payment of principal of, premium, if any, Change of
Control Purchase Price, Asset Sale Purchase Price or interest on
any of the Notes or a default under Article Four or any other
covenant or provision of this Indenture which under Article Ten
cannot be modified or amended without the consent of the holder
of each outstanding Note. In the case of any such waiver the
Company, the Trustee and the holders of the Notes shall be
restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
SECTION 6.07. Trustee to give notice of defaults known to
-------------------------------------------
it, but may withhold in certain circumstances. The Trustee
- ---------------------------------------------
shall, within ninety days after the occurrence of a default
hereunder, give to the noteholders, in the manner and to the
extent provided in subsection (c) of Section 6.04 with respect to
reports pursuant to subsection (a) of Section 6.04, notice of
such defaults known to the Trustee unless such defaults shall
have been cured or waived before the giving of such notice (the
term "defaults" for the purposes of this Section 6.07 being
hereby defined to be the events specified in clauses (a), (b),
(c), (d), (e), (f), (g) and (h) of Section 6.01, not including
any periods of grace provided for in clauses (a), (c), (d) and
(e), respectively, and irrespective of the giving of notice
specified in clauses (c) and (d)); provided that, except in the
case of default in the payment of the principal of, premium, if
any, Change of Control Purchase Price, Asset Sale Purchase Price
or interest on any of the Notes, the Trustee shall be protected
in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of
directors and/or responsible officers of the Trustee in good
faith determines that the withholding of such notice is in the
interest of the noteholders.
SECTION 6.08. Requirement of an undertaking to pay costs in
---------------------------------------------
certain suits under the Indenture or against the Trustee. All
- --------------------------------------------------------
parties to this Indenture agree, and each holder of any Note by
his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, 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, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant
in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; but the
provisions of this Section 6.08 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any
noteholder, or group of noteholders, holding in the aggregate
more than 10% of the aggregate principal amount of the Notes
outstanding, or to any suit instituted by any noteholder for the
enforcement of the payment of the principal of, premium, if any,
Change of Control Purchase Price, Asset Sale Purchase Price or
interest on any Note on or after the due date expressed in such
Note.
SECTION 6.09. 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 benefits 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.
82
ARTICLE SEVEN
CONCERNING THE TRUSTEE
SECTION 7.01. Duties and responsibilities of Trustee. The
--------------------------------------
Trustee, prior to the occurrence of an Event of Default and after
the curing or waiving of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture. In case an Event
of Default has occurred (which has not been cured or waived) the
Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct;
provided, however, that
(a) prior to the occurrence of an Event of Default and
after the curing or waiving of all Events of Default which may
have occurred:
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable except for
the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates
or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a responsible officer or officers
of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of the holders of not less than
a majority in principal amount of the Notes at the time
outstanding (determined as provided in Section 8.04 or 8.05)
relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
83
SECTION 7.02. Reliance on documents, opinions, etc.
-------------------------------------
Subject to the provisions of Section 7.01:
(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, consent,
order, approval, bond, note 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, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an instrument
signed in the name of the Company by the Chairman of the Board,
the President or any Vice President and the Secretary or any
Assistant Secretary or the Treasurer or any Assistant Treasurer
(unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Directors of the
Company may be evidenced to the Trustee by a copy thereof
certified by the Secretary or any Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel and the advice of
such counsel or any Opinion of 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
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the noteholders, pursuant
to the provisions of this Indenture, unless such noteholders
shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby; but nothing herein contained
shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default (which has not been cured or
waived), to exercise such of the rights and powers vested in it
by this Indenture, and to use the same degree of care and skill
in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(e) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of
Default, 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, consent,
order, approval, bond, note or other paper or document, unless
requested in writing so to do by the holders of not less than a
majority in aggregate principal amount of the Notes then
outstanding (determined as provided in Section 8.04 or 8.05);
provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the
Trustee may require from the noteholders reasonable indemnity
against such expenses or liability as a condition to so
proceeding. The reasonable expenses of every such examination
shall be paid by the Company or, if paid by the Trustee, shall be
repaid by the Company upon demand; and
(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.
84
SECTION 7.03. No responsibility for recitals, etc. The
------------------------------------
recitals contained herein and in the Notes (other than the
certificate of authentication on the Notes) shall be taken as the
statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes
no representation as to the validity or sufficiency of this
Indenture or of the Notes. The Trustee shall not be accountable
for the use or application by the Company of any of the Notes or
of the proceeds of such Notes, or for the use or application of
any moneys paid over by the Trustee in accordance with any
provision of this Indenture, or for the use or application of any
moneys received by any paying agent other than the Trustee.
SECTION 7.04. Trustee, paying agent or Note registrar may
-------------------------------------------
own Notes. The Trustee, any paying agent or Note registrar, in
- ---------
its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were
not Trustee, paying agent or Note registrar.
SECTION 7.05. Moneys received by Trustee to be held in
----------------------------------------
trust without interest. Subject to the provisions of Section
- ----------------------
12.04, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other
funds except to the extent required by law or by any national
securities exchanges on which the Notes are listed or admitted
for trading. The Trustee shall be under no liability for
interest on any moneys received by it hereunder except such as it
may agree with the Company to pay thereon.
SECTION 7.06. Compensation and expenses of Trustee. The
------------------------------------
Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compen-
sation (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust), and
the Company will pay or reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred
or made by the Trustee in connection with the acceptance or
administration of its trust under this Indenture (including the
reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except
any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify
the Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on
the part of the Trustee or its agents and 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 of liability under this Indenture in connection with the
exercise of its powers or duties hereunder. The obligations of
the Company under this Section 7.06 to compensate the Trustee and
to pay or reimburse the Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder and
shall survive the satisfaction and discharge of this Indenture or
resignation or removal of the Trustee. Such additional
indebtedness shall be secured by a Lien upon all property and
funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the holders of particular Notes.
SECTION 7.07. Right of Trustee to rely on Officers'
-------------------------------------
Certificate where no other evidence specifically prescribed.
- ------------------------------------------------------------
Subject to the provisions of Section 7.01, whenever in the
administration of the provisions of this Indenture, the Trustee
shall deem it necessary or desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to
be conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such Certificate, in
the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted by it under the provisions of this
Indenture in reliance thereon.
85
SECTION 7.08. Conflicting interest of Trustee.
-------------------------------
(a) If the Trustee has or shall acquire any conflicting
interest, as defined in this Section 7.08, then, within ninety
days after ascertaining that it has such conflicting interest,
and if the default (as defined in Section 7.08(c)) to which such
conflicting interest relates has not been cured or duly waived or
otherwise eliminated before the end of such ninety-day period,
the Trustee shall either eliminate such conflicting interest or,
except as otherwise provided in this Section 7.08, resign in the
manner and with the effect specified in Section 7.10, and the
Company shall take prompt steps to have a successor appointed in
the manner provided in Section 7.10.
(b) In the event that the Trustee shall fail to comply with
the provisions of subsection (a) of this Section 7.08, the
Trustee shall, within ten days after the expiration of such
ninety-day period, transmit notice of such failure to the
noteholders in the manner and to the extent provided in
subsection (c) of Section 5.04 with respect to reports pursuant
to subsection (a) of Section 5.04.
(c) For the purposes of this Section 7.08, the Trustee
shall be deemed to have a conflicting interest if the Notes are
in default (defined as the occurrence of any event specified in
Section 6.01, but exclusive of any period of grace or requirement
of notice) and
(1) the Trustee is trustee under another indenture
under which any other securities, or certificates of
interest or participation in any other securities, of the
Company are outstanding, unless such other indenture is a
collateral trust indenture under which the only collateral
consists of Notes issued under this Indenture, provided that
there shall be excluded from the operation of this paragraph
any indenture or indentures under which other securities, or
certificates of interest or participation in other
securities, of the Company are outstanding if (i) this
Indenture and such other indenture or indentures are wholly
unsecured and such other indenture or indentures are
hereafter qualified under the Trust Indenture Act of 1939,
unless the Commission shall have found and declared by order
pursuant to Subsection (b) of Section 305 or Subsection (c)
of Section 307 of the Trust Indenture Act of 1939 that
differences exist between the provisions of this Indenture
and the provisions of such other indenture or indentures
which are so likely to involve a material conflict of
interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee
from acting as such under this Indenture and such other
indenture or indentures, or (ii) the Company shall have
sustained the burden of proving, on application to the
Commission and after opportunity for hearing thereon, that
the trusteeship under this Indenture and such other
indenture is not so likely to involve a material conflict of
interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee
from acting as such under one of such indentures;
(2) the Trustee or any of its directors or executive
officers is an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or
indirect common control with an underwriter for the Company;
(4) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee,
appointee, or representative of the Company, or of an
underwriter (other than the Trustee itself) for the Company
who is currently engaged in the business of underwriting,
except that (A) one individual may be a director and/or an
executive officer of the Trustee and
86
a director and/or an executive officer of the Company, but
may not be at the same time an executive officer of both the
Trustee and the Company; (B) if and so long as the number of
directors of the Trustee in office is more than nine, one
additional individual may be a director and/or an executive
officer of the Trustee and a director of the Company; and
(C) the Trustee may be designated by the Company or by any
underwriter for the Company to act in the capacity of
transfer agent, registrar, custodian, paying agent, fiscal
agent, escrow agent, or depositary, or in any other similar
capacity, or, subject to the provisions of paragraph (1) of
this subsection (c), to act as trustee whether under an
indenture or otherwise;
(5) ten percent or more of the voting securities of
the Trustee is beneficially owned either by the Company or
by any director, partner, or executive officer thereof, or
20 percent or more of such voting securities is beneficially
owned, collectively, by any two or more of such persons; or
10 percent or more of the voting securities of the Trustee
is beneficially owned either by an underwriter for the
Company or by any director, partner, or executive officer
thereof, or is beneficially owned, collectively, by any two
or more such persons;
(6) the Trustee is the beneficial owner of, or holds
as collateral security for an obligation which is in
default, (A) five percent or more of the voting securities,
or 10 percent or more of any other class of security, of the
Company, not including the Notes issued under this Indenture
and securities issued under any other indenture under which
the Trustee is also trustee, or (B) 10 percent or more of
any class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds
as collateral security for an obligation which is in
default, five percent or more of the voting securities of
any person who, to the knowledge of the Trustee, owns 10
percent or more of the voting securities of, or controls
directly or indirectly or is under direct or indirect common
control with, the Company;
(8) the Trustee is the beneficial owner of, or holds
as collateral security for an obligation which is in
default, 10 percent or more of any class of security of any
person who, to the knowledge of the Trustee, owns 50 percent
or more of the voting securities of the Company;
(9) the Trustee owns on the date of default upon the
Notes (defined as the occurrence of any event specified in
Section 6.01, but exclusive of any period of grace or
requirement of notice) or any anniversary of such default
while such default upon the Notes remains outstanding, in
the capacity of executor, administrator, testamentary or
inter vivos trustee, guardian, committee or conservator, or
----- -----
in any other similar capacity, an aggregate of 25 per cent
or more of the voting securities, or of any class of
security, of any person, the beneficial ownership of a
specified percentage of which would have constituted a
conflicting interest under paragraph (6), (7), or (8) of
this subsection (c). As to any such securities of which the
Trustee acquired ownership through becoming executor,
administrator, or testamentary trustee of an estate which
included them, the provisions of the preceding sentence
shall not apply, for a period of two years from the date of
such acquisition, to the extent that such securities
included in such estate do not exceed 25 percent of such
voting securities or 25 percent of any such class of
security. Promptly after the dates of any such default upon
the Notes and annually in each succeeding year that the
Notes remain in default, the Trustee shall make a check of
its holdings of such securities in any of the
above-mentioned capacities as of such dates. If the Company
fails to make payment in full of principal of, premium, if
any, Change of Control Purchase Price, Asset Sale Purchase
Price
87
or interest on any of the Notes when and as the same becomes
due and payable and such failure continues for 30 days
thereafter, the Trustee shall make a prompt check of its
holdings of such securities in any of the above-mentioned
capacities as of the date of the expiration of such 30-day
period, and after such date, notwithstanding the foregoing
provisions of this paragraph (9), all such securities so
held by the Trustee, with sole or joint control over such
securities vested in it, shall, but only so long as such
failure shall continue, be considered as though beneficially
owned by the Trustee for the purposes of paragraphs (6), (7)
and (8) of this subsection (c); or
(10) except under the circumstances described in
paragraphs (1), (3), (4), (5) or (6) of Section 311(b) of
the Trust Indenture Act of 1939, the Trustee shall become a
creditor of the Company.
The specifications of percentages in paragraphs (5) to (9),
inclusive, of this subsection (c) shall not be construed as
indicating that the ownership of such percentages of the
securities of a person is or is not necessary or sufficient to
constitute direct or indirect control for the purpose of
paragraph (3) or (7) of this subsection (c).
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection (c) only, (A) the terms "security" and "securities"
shall include only such securities as are generally known as
corporate securities, but shall not include any note or other
evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or
participation in any such note or evidence of indebtedness; (B)
an obligation shall be deemed to be "in default" when a default
in payment of principal shall have continued for thirty days or
more and shall not have been cured; and (C) the Trustee shall not
be deemed to be the owner or holder of (i) any security which it
holds as collateral security (as trustee or otherwise) for an
obligation which is not in default as defined in clause (B)
above, or (ii), any security which it holds as collateral
security under this Indenture, irrespective of any default
hereunder, or (iii) any security which it holds as agent for
collection, or as custodian, escrow agent, or depositary, or in
any similar representative capacity.
Except as above provided, the word "security" or
"securities" as used in this Indenture, shall mean any note,
stock, treasury stock, bond, note, evidence of indebtedness,
certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a
security, fractional undivided interest in oil, gas, or other
mineral rights, or, in general, any interest or instrument
commonly known as a "security," or any certificate of interest or
participation in, temporary or interim certificate for, receipt
for, guarantee of, or warrant or right to subscribe to or
purchase, any of the foregoing.
Except in the case of a default in the payment of the
principal of or interest on the Notes, or in the payment of any
sinking or purchase fund installment, the Trustee shall not be
required to resign as provided by this Section 7.08 if the
Trustee shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing
thereon, that (i) the default under this Indenture may be cured
or waived during a reasonable period and under the procedures
described in such application, and (ii) a stay of the Trustee's
duty to resign will not be inconsistent with the interests of
holders of the Notes. The filing of such an application shall
automatically stay the performance of the duty to resign until
the Commission orders otherwise.
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Any resignation of the Trustee shall become effective only
upon the appointment of a successor trustee and such successor's
acceptance of such an appointment.
(d) For the purposes of this Section 7.08:
(1) The term "underwriter" when used with reference to
the Company shall mean every person, who, within one year
prior to the time as of which the determination is made, has
purchased from the Company with a view to, or has offered or
sold for the Company in connection with, the distribution of
any security of the Company outstanding at such time, or has
participated or has had a direct or indirect participation
in any such undertaking, or has participated or has had a
participation in the direct or indirect underwriting of any
such undertaking, but such term shall not include a person
whose interest was limited to a commission from an
underwriter or dealer not in excess of the usual and
customary distributors' or sellers' commission.
(2) The term "director" shall mean any director of a
corporation or any individual performing similar functions
with respect to any organization whether incorporated or
unincorporated.
(3) The term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock
company, a trust, an unincorporated organization, or a
government or political subdivision thereof. As used in this
paragraph, the term "trust" shall include only a trust where
the interest or interests of the beneficiary or
beneficiaries are evidenced by a security.
(4) The term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote in
the direction or management of the affairs of a person, or
any security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustees or
agent or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of
the affairs of a person.
(5) The term "Company" shall mean any obligor upon the
Notes.
(6) The term "executive officer" shall mean the
president, every vice-president, every trust officer, the
cashier, the secretary, and the treasurer of a corporation,
and any individual customarily performing similar functions
with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the
board of directors.
The percentages of voting securities and other securities
specified in this Section 7.08 shall be calculated in accordance
with the following provisions:
(A) A specified percentage of the voting securities of
the Trustee, the Company or any other person referred to in
this Section 7.08 (each of whom is referred to as a "person"
in this paragraph) means such amount of the outstanding
voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the
aggregate votes which the holders of all the outstanding
voting securities of such person are entitled to cast in the
direction or management of the affairs of such person.
89
(B) A specified percentage of a class of securities of
a person means such percentage of the aggregate amount of
securities of the class outstanding.
(C) The term "amount," when used in regard to
securities, means the principal amount if relating to
evidences of indebtedness, the number of shares if relating
to capital shares, and the number of units if relating to
any other kind of security.
(D) The term "outstanding" means issued and not held
by or for the account of the issuer. The following
securities shall not be deemed outstanding within the
meaning of this definition:
(i) securities of an issuer held in a sinking
fund relating to securities of the issuer of the same
class;
(ii) securities of an issuer held in a sinking
fund relating to another class of securities of the
issuer, if the obligation evidenced by such other class
of securities is not in default as to principal or
interest or otherwise;
(iii) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default
as to principal or interest or otherwise; and
(iv) securities held in escrow if placed in
escrow by the issuer thereof;
provided, however, that any voting securities of an issuer
shall be deemed outstanding if any person other than the
issuer is entitled to exercise the voting rights thereof.
(E) A security shall be deemed to be of the same class
as another security if both securities confer upon the
holder or holders thereof substantially the same rights and
privileges, provided, however, that, in the case of secured
evidences of indebtedness, all of which are issued under a
single indenture, differences in the interest rates or
maturity dates of various series thereof shall not be deemed
sufficient to constitute such series different classes, and
provided, further, that, in the case of unsecured evidences
of indebtedness, differences in the interest rates or
maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or
not they are issued under a single indenture.
SECTION 7.09. Requirements for eligibility of Trustee. The
----------------------------------------
Trustee hereunder shall at all times be a corporation organized
and doing business under the laws of the United States or any
State or territory thereof or of the District of Columbia or a
corporation or other person permitted to act as the Trustee by
the Commission (pursuant to the requirements of Section 310(a)(1)
of the Trust Indenture Act of 1939), authorized under such laws
to exercise corporate trust powers, having a combined capital and
surplus of at least $25,000,000, and subject to supervision or
examination by Federal, State, Territorial, or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 7.09, the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published. The Trustee shall not be an
obligor upon the Notes or a person directly or indirectly
controlling, controlled by, or under common control with such
obligor. In addition, the Trustee shall at all times be approved
to serve as transfer agent and registrar by any securities
exchange on which the Notes are listed or
90
admitted for trading. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this
Section 7.09, the Trustee shall resign immediately in the manner
and with the effect specified in Section 7.10.
SECTION 7.10. Resignation or removal of Trustee.
----------------------------------
(a) The Trustee, or any trustee hereafter appointed, may at
any time resign by giving written notice of such resignation to
the Company and to the noteholders, such notice to the
noteholders to be given, by mailing (by first-class mail) the
notice to their addresses as they shall appear on the registry
books of the Company within thirty days after such notice is
given to the Company. Upon receiving such notice of resignation
and evidence satisfactory to it of such mailing, the Company
shall promptly appoint a successor trustee by written instrument,
in duplicate, executed by order of the Board of Directors of the
Company, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted
appointment within thirty days after the mailing of such notice
of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor
trustee, or any noteholder who has been a bona fide holder of a
Note or Notes for at least six months may, subject to the
provisions of Section 6.08, on behalf of himself and all others
similarly situated, petition any such court for the appointment
of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the
provisions of subsection (a) of Section 7.08 after written
request therefor by the Company or by any noteholder who has
been a bona fide holder of a Note or Notes for at least six
months, or
(2) the Trustee shall cease to be eligible in
accordance with the provisions of Section 7.09 and shall
fail to resign after written request therefor by the Company
or by any such noteholder, or
(3) the Trustee shall become incapable of acting, or
shall be adjudged a 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, the Company may remove the Trustee and
appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors of the Company, one
copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the
provisions of Section 6.08, any noteholder who has been a bona
fide holder of a Note or Notes 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. Such court may
thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) Any resignation or removal of the Trustee and
appointment of any successor trustee pursuant to any of the
provisions of this Section 7.10 shall become effective upon
acceptance of appointment by the successor trustee as provided in
Section 7.11.
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SECTION 7.11. Acceptance by successor to Trustee; notice of
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succession of a Trustee. Any successor trustee appointed as
- ------------------------
provided in Section 7.10 shall execute, acknowledge and deliver
to the Company and to its predecessor trustee an instrument
accepting such appointment hereunder, and thereupon the resigna-
tion or removal of the predecessor trustee shall become effective
and such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like
effect as if originally named as trustee herein; but,
nevertheless, on the written request of the Company or of the
successor trustee, the trustee ceasing to act shall, upon payment
of any amounts then due it pursuant to the provisions of Section
7.06, execute and deliver an instrument transferring to such
successor trustee all the rights and powers of the trustee so
ceasing to act. Upon request of any such successor trustee, the
Company shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor
trustee of such rights and powers. Any trustee ceasing to act
shall, nevertheless, retain a lien upon all property or funds
held or collected by such trustee to secure any amounts then due
it pursuant to the provisions of Section 7.06.
No successor trustee shall accept appointment as provided in
this Section 7.11 unless at the time of such acceptance, such
successor trustee shall be qualified under the provisions of
Section 7.08 and eligible under the provisions of Section 7.09.
Upon acceptance of appointment by a successor trustee as
provided in this Section 7.11, the Company shall mail to the
noteholders by first-class mail notice thereof. If the Company
fails to mail such notice within thirty days after acceptance of
appointment by the successor trustee, the successor trustee
shall, in its discretion, cause such notice to be mailed at the
expense of the Company.
SECTION 7.12. Successor to Trustee by merger, consolidation
--------------------------------------------
or succession to business; notice by Trustee of change in its
- -------------------------------------------------------------
location. 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 or conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder without
the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the
contrary notwithstanding, provided such corporation shall be
qualified under the provisions of Section 7.08 and eligible under
the provisions of Section 7.09.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Notes
shall have been authenticated but not delivered, any such
successor to the Trustee may adopt the certificate of
authentication of any predecessor Trustee, and deliver such Notes
so authenticated; and in case at that time any of the Notes shall
not have been authenticated, any successor to the Trustee may
authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all
such cases such certificates shall have the full force which it
is anywhere in the Notes or in this Indenture provided that the
certificate of the Trustee shall have; provided, however, that
the right to adopt the certificate of authentication of any
predecessor Trustee or authenticate Notes in the name of any
predecessor Trustee shall apply only to its successor, or
successors by merger, conversion or consolidation.
The Trustee will give the Company prompt notice of any
change in the location of the Trustee's principal office.
92
SECTION 7.13. Limitations on rights of Trustee as a
-------------------------------------
creditor.
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(a) Subject to the provisions of subsection (b) of this
Section 7.13, if the Trustee shall be or shall become a creditor,
directly or indirectly, secured or unsecured, of the Company or
of any other obligor on the Notes within three months prior to a
default, as defined in subsection (c) of this Section 7.13, or
subsequent to such a default, then, unless and until such default
shall be cured or waived, the Trustee shall set apart and hold in
a special account for the benefit of, the Trustee individually,
the holders of the Notes, and the holders of other indenture
securities (as defined in subsection (c) of this Section 7.13)
(1) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in
respect of principal or interest, effected after the
beginning of such three months' period, and valid as against
the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this subsection, or
from the exercise of any right of set-off which the Trustee
could have exercised if a petition in bankruptcy had been
filed by or against the Company upon the date of such
default; and
(2) all property received by the Trustee in respect of
any claims as such creditor, either as security therefor, or
in satisfaction or composition thereof, or otherwise, after
the beginning of such three months' period, or an amount
equal to the proceeds of any such property if disposed of,
subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of
the Trustee
(A) to retain for its own account (i) payments made on
account of any such claim by any person (other than the
Company) who is liable thereon, and (ii) the proceeds of the
bona fide sale of any such claim by the Trustee to a third
person, and (iii) distributions made in cash, securities, or
other property in respect of claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to any applicable bankruptcy,
insolvency or similar law;
(B) to realize, for its own account, upon any property
held by it as security for any such claim, if such property
was so held prior to the beginning of such three months'
period;
(C) to realize, for its own account, but only to the
extent of the claim hereinafter mentioned, upon any property
held by it as security for any such claim, if such claim was
created after the beginning of such three months' period and
such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee
shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause
to believe that a default, as defined in subsection (c) of
this Section 7.13, would occur within three months; or
(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any property
held as security for such claim as provided in such
paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
93
For the purposes of paragraphs (B), (C) and (D) above,
property substituted after the beginning of such three months'
period for property held as security at the time of such
substitution shall, to the extent of the fair value of the
property released, have the same status as the property released,
and to the extent that any claim referred to in any of such
paragraphs is created in renewal of or in substitution for or for
the purpose of repaying or refunding any preexisting claim of the
Trustee as such creditor, such claim shall have the same status
as such preexisting claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof
shall be apportioned between the Trustee, the noteholders, and
the holders of other indenture securities in such manner that the
Trustee, the noteholders and the holders of other indenture
securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to applicable law, the same percentage of
their respective claims, figured before crediting to the claim of
the Trustee anything on account of receipt by it from the Company
of the funds and property in such special account and before
crediting to the respective claims of the Trustee, the
noteholders, and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to
applicable law, but after crediting thereon receipts on account
of the indebtedness represented by their respective claims from
all sources other than from such dividends and from the funds and
property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall
include any distribution with respect to such claim in bankruptcy
or receivership or in proceedings for reorganization pursuant to
applicable law, whether such distribution is made in cash,
securities, or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such
claim. The court in which such bankruptcy, receivership or
proceeding for reorganization is pending shall have jurisdiction
(i) to apportion between the Trustee, the noteholders, and the
holders of other indenture securities, in accordance with the
provisions of this paragraph, the funds and property held in such
special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of
this paragraph due consideration in determining the fairness of
the distributions to be made to the Trustee, the noteholders and
the holders of other indenture securities with respect to their
respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such
claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or
otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any trustee who has resigned or been removed after the
beginning of such three months' period shall be subject to the
provisions of this subsection (a) as though such resignation or
removal had not occurred. If any trustee has resigned or been
removed prior to the beginning of such three months' period, it
shall be subject to the provisions of this subsection (a) if and
only if the following conditions exist:
(i) the receipt of property or reduction of claim
which would have given rise to the obligation to account, if
such trustee had continued as trustee, occurred after the
beginning of such three months' period; and
(ii) such receipt of property or reduction of claim
occurred within three months after such resignation or
removal.
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(b) There shall be excluded from the operation of
subsection (a) of this Section 8.13 a creditor relationship
arising from
(1) the ownership or acquisition of securities issued
under any indenture, or any security or securities having a
maturity of one year or more at the time of acquisition by
the Trustee;
(2) advances authorized by a receivership or
bankruptcy court of competent jurisdiction, or by this
Indenture, for the purpose of preserving any property which
shall at any time be subject to the lien of this Indenture
or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advance and of the
circumstances surrounding the making thereof is given to the
noteholders at the time and in the manner provided in
Section 5.04 with respect to reports pursuant to subsections
(a) and (b) thereof, respectively;
(3) disbursements made in the ordinary course of
business in the capacity of trustee under an indenture,
transfer agent, registrar, custodian, paying agent, fiscal
agent or depositary, or other similar capacity;
(4) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness created as a
result of goods or securities sold in a cash transaction as
defined in subsection (c) of this Section 7.13;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a)
of the Federal Reserve Act, as amended, which is directly or
indirectly a creditor of the Company; or
(6) the acquisition, ownership, acceptance or
negotiation of any drafts, bills of exchange, acceptances or
obligations which fall within the classification of
self-liquidating paper as defined in subsection (c) of this
Section 7.13.
(c) As used in this Section 7.13:
(1) the term "default" shall mean any failure to make
payment in full of the principal of, premium, if any, Change
of Control Purchase Price, Asset Sale Purchase Price or
interest upon any of the Notes or upon the other indenture
securities when and as any such amounts become due and
payable.
(2) the term "other indenture securities" shall mean
securities upon which the Company is an obligor (as defined
in the Trust Indenture Act of 1939) outstanding under any
other indenture (A) under which the Trustee is also trustee,
(B) which contains provisions substantially similar to the
provisions of subsection (a) of this Section 7.13, and (C)
under which a default exists at the time of the
apportionment of the funds and property held in said special
account.
(3) the term "cash transaction" shall mean any
transaction in which full payment for goods or securities
sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn
upon banks or bankers and payable upon demand.
95
(4) the term "self-liquidating paper" shall mean any
draft, bill of exchange, acceptance or obligation which is
made, drawn, negotiated or incurred by the Company for the
purpose of financing the purchase, processing, manufacture,
shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to,
possession of, or lien upon, the goods, wares or merchandise
or the receivables or proceeds arising from the sale of the
goods, wares or merchandise previously constituting the
security, provided the security is received by the Trustee
simultaneously with the creation of the creditor
relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation.
(5) the term "Company" shall mean any obligor upon the
Notes.
ARTICLE EIGHT
CONCERNING THE NOTEHOLDERS
SECTION 8.01. Evidence of action by noteholders. Whenever
---------------------------------
in this Indenture it is provided that the holders of a specified
percentage in aggregate principal amount of the Notes may take
any action (including the making of any demand or request, the
giving of any notice, consent, or waiver or the taking of any
other action), the fact that the holders of such specified
percentage, determined as of the time such action was taken or,
if a record date was set with respect thereto pursuant to Section
8.05, as of such record date, have joined therein may be
evidenced (a) by any instrument or any number of instruments of
similar tenor executed by noteholders in person or by agent or
proxy appointed in writing, or (b) by the record of the holders
of Notes voting in favor thereof at any meeting of noteholders
duly called and held in accordance with the provisions of Article
Nine, or (c) by a combination of such instrument or instruments
and any such record of such a meeting of noteholders.
SECTION 8.02. Proof of execution of instruments and of
----------------------------------------
holding of Notes. Subject to the provisions of Sections 7.01,
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7.02 and 9.05, proof of the execution of any instrument by a
noteholder or his agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee.
The ownership of Notes shall be proved by the register of
such Notes, or by a certificate of the registrar thereof.
The Trustee may accept such other proof or require such
additional proof of any matter referred to in this Section 8.02
as it shall deem reasonable.
The record of any noteholders' meeting shall be proved in
the manner provided in Section 9.06.
SECTION 8.03. Who may be deemed owners of Notes. Prior to
----------------------------------
due presentation for registration of transfer, the Company, the
Trustee, any paying agent and any Note registrar may deem and
treat the person in whose name any Note shall be registered upon
the books of the Company as the absolute owner of such Note
(whether or not such Note shall be overdue and notwithstanding
any notation of ownership or other writing thereon) for the
purposes of receiving payment of or on account of the principal
of, premium, if any, Change of Control Purchase Price, Asset Sale
Purchase Price and interest on such Note and for all other
purposes; and neither the Company nor the Trustee nor any paying
agent
96
nor any Note registrar shall be affected by any notice to the
contrary. All such payments so made to, or upon the order of,
any such holder shall be valid, and, to the extent of the sum or
sums so paid, effectual to satisfy and discharge the liability
for moneys payable upon any such Note.
SECTION 8.04. Notes owned by Company or controlled by
----------------------------------------
controlling persons disregarded for certain purposes. In
- ----------------------------------------------------
determining whether the holders of the requisite aggregate
principal amount of Notes have concurred in any demand,
direction, request, notice, consent, waiver or other action under
this Indenture, Notes which are owned by the Company or any other
obligor on the Notes or by any person directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Company or any other obligor on the Notes shall
be disregarded and deemed not to be outstanding for the purpose
of any such determination, provided that for the purposes of
determining whether the Trustee shall be protected in relying on
any such demand, direction, request, notice, consent or waiver,
only Notes which the Trustee knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this
Section 8.04, if the pledgee shall establish to the satisfaction
of the Trustee the pledgee's right to vote such Notes and that
the pledgee is not a person directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Company or any such other obligor. In case of a dispute as to
such right, any decision by the Trustee taken upon the advice of
counsel shall be full protection to the Trustee.
SECTION 8.05. Record date for action by noteholders.
-------------------------------------
Whenever in this Indenture it is provided that holders of a
specified percentage in aggregate principal amount of the Notes
may take any action (including the making of any demand or
request, the giving of any direction, notice, consent or waiver
or the taking of any other action), other than any action taken
at a meeting of noteholders called pursuant to Article Nine, the
Company, pursuant to a resolution of its Board of Directors, or
the holders of at least 10% in aggregate principal amount of the
Notes then outstanding, may request the Trustee to fix a record
date for determining noteholders entitled to notice of and to
take any such action. In case the Company or the holders of
Notes in the amount above specified shall desire to request
noteholders to take any such action and shall request the Trustee
to fix a record date with respect thereto by written notice
setting forth in reasonable detail the noteholder action to be
requested, the Trustee shall promptly (but in any event within
five days of receipt of such request) fix a record date which
shall be a Business Day not less than fifteen nor more than
twenty days after the date on which the Trustee receives such
request. If the Trustee shall fail to fix a record date as
hereinabove provided, then the Company or the holders of Notes in
the amount above specified may fix the same by mailing notice
thereof (the record date so fixed to be a Business Day not less
than fifteen nor more than twenty days after the date on which
such written notice shall be given) to the Trustee. If a record
date is fixed according to this Section 8.05, only persons shown
as noteholders on the registry books of the Company at the close
of business on the record date so fixed shall be entitled to take
the requested action and the taking of any such action by the
holders on the record date of the required percentage of the
aggregate principal amount of the Notes shall be binding on all
noteholders, provided that the taking of the requested action by
the holders on the record date of the percentage in aggregate
principal amount of the Notes specified in this Indenture in
connection with such action shall have been evidenced to the
Trustee, as provided in Section 8.01, not later than one hundred
eighty days after such record date.
SECTION 8.06. Instruments executed by noteholders bind
-----------------------------------------
future holders. At any time prior to (but not after) the
- --------------
evidencing to the Trustee, as provided in Section 8.01, of the
taking of any action by the holders of the percentage in
aggregate principal amount of the Notes specified in this
Indenture in connection with such action, any holder of a Note
which is shown by the evidence to be included in the Notes the
holders of which have consented to such action may, by filing
written notice with the Trustee
97
at its principal office and upon proof of holding as provided in
Section 8.02, revoke such action so far as concerns such Note.
Except as aforesaid any such action taken by the holder of any
Note and any direction, demand, request, waiver, consent, vote or
other action of the holder of any Note which by any provisions of
this Indenture is required or permitted to be given shall be
conclusive and binding upon such holder and upon all future
holders and owners of such Note, and of any Note issued in lieu
thereof, irrespective of whether or not any notation in regard
thereto is made upon such Note. Any action taken by the holders
of the percentage in aggregate principal amount of the Notes
specified in this Indenture in connection with such action shall
be conclusively binding upon the holders of all the Notes.
ARTICLE NINE
NOTEHOLDERS' MEETINGS
SECTION 9.01. Purposes for which meetings may be called. A
-----------------------------------------
meeting of noteholders may be called at any time and from time to
time pursuant to the provisions of this Article Nine for any of
the following purposes:
(1) to give any notice to the Company or to the Trustee, or
to give any directions to the Trustee, or to consent to the
waiving of any default hereunder and its consequences, or to take
any other action authorized to be taken by noteholders pursuant
to any of the provisions of Article Six;
(2) to remove the Trustee and appoint a successor trustee
pursuant to the provisions of Article Seven;
(3) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of
Section 10.02; or
(4) to take any other action authorized to be taken by or
on behalf of the holders of any specified aggregate principal
amount of the Notes under any other provisions of this Indenture
or under applicable law.
SECTION 9.02. Manner of calling meetings; record date. The
---------------------------------------
Trustee may at any time call a meeting of noteholders to take any
action specified in Section 9.01 to be held at such time and at
such place in the Borough of Manhattan, City of New York, State
of New York, as the Trustee shall determine. Notice of every
meeting of the noteholders, setting forth the time and the place
of such meeting and in general terms the action proposed to be
taken at such meeting shall be mailed not less than twenty nor
more than sixty days prior to the date fixed for the meeting to
such noteholders at their addresses as such addresses appear on
the registry books of the Company. For the purpose of
determining noteholders entitled to notice of any meeting of
noteholders, the Trustee shall fix in advance a date as the
record date for such determination, such date to be a Business
Day not more than ten days prior to the date of the mailing of
such notice as hereinabove provided. Only persons in whose name
any Note shall be registered upon the registry books of the
Company at the close of business on a record date fixed by the
Trustee as aforesaid, or by the Company or the noteholders as in
Section 9.03 provided, shall be entitled to notice of the meeting
of noteholders with respect to which such record date was so
fixed.
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SECTION 9.03. Call of meeting by Company or noteholders.
-----------------------------------------
In case at any time the Company, pursuant to a resolution of its
Board of Directors, or the holders of at least 10% in aggregate
principal amount of the Notes then outstanding, shall have
requested the Trustee to call a meeting of noteholders to take
any action authorized in Section 9.01 by written request setting
forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have mailed notice of such
meeting within twenty days after receipt of such request, then
the Company or the holders of Notes in the amount above
specified, as the case may be, may fix the record date with
respect to, and determine the time and the place in said Borough
of Manhattan, City of New York, State of New York, for, such
meeting and may call such meeting to take any action authorized
in Section 9.01, by mailing notice thereof as provided in Section
9.02. The record date fixed as provided in the preceding
sentence shall be set forth in a written notice to the Trustee
and shall be a Business Day not less than fifteen nor more than
twenty days after the date on which such notice is sent to the
Trustee.
SECTION 9.04. Who may attend and vote at meetings. Only
-----------------------------------
persons entitled to receive notice of a meeting of noteholders
and their respective proxies duly appointed by an instrument in
writing shall be entitled to vote at such meeting. The only
persons who shall be entitled to be present or to speak at any
meeting of noteholders shall be the persons entitled to vote at
such meeting and their counsel and any representatives of the
Trustee and its counsel and any representatives of the Company
and its counsel. When a determination of noteholders entitled to
vote at any meeting of noteholders has been made as provided in
this Section, such determination shall apply to any adjournment
thereof.
SECTION 9.05. Regulations. Notwithstanding any other
-----------
provisions of this Indenture, the Trustee may make such
reasonable regulations as it may deem advisable for any meeting
of noteholders, in regard to proof of the holding of Notes and of
the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as
it shall think fit. Except as otherwise permitted or required by
any such regulations, the holding of Notes shall be proved in the
manner specified in Section 8.02.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have
been called by the Company or by noteholders as provided in
Section 9.03, in which case the Company or the noteholders
calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by a vote of
the holders of a majority in principal amount of the Notes
represented at the meeting and entitled to vote.
Subject to the provisions of Section 8.04, at any meeting
each noteholder or proxy entitled to vote thereat shall be
entitled to one vote for each $1,000 principal amount of Notes
held or represented by him; provided, however, that no vote shall
be cast or counted at any meeting in respect of any Note
challenged as not outstanding and ruled by the chairman of the
meeting to be not outstanding. The chairman of the meeting shall
have no right to vote other than by virtue of Notes held by him
or instruments in writing as aforesaid duly designating him as
the person to vote on behalf of other noteholders. Any meeting
of noteholders duly called pursuant to the provisions of Section
9.02 or 9.03 may be adjourned from time to time, and the meeting
may be held as so adjourned without further notice.
At any meeting of noteholders, the presence of persons who
held, or who are acting as proxy for persons who held, an
aggregate principal amount of Notes on the record date for such
meeting sufficient to take action on the business for the
transaction of which such meeting was called shall constitute a
99
quorum, but, if less than a quorum is present, the persons
holding or representing a majority in aggregate principal amount
of the Notes represented at the meeting may adjourn such meeting
with the same effect, for all intents and purposes, as though a
quorum had been present.
SECTION 9.06. Manner of voting at meetings and record to be
--------------------------------------------
kept. The vote upon any resolution submitted to any meeting of
- ----
noteholders shall be by written ballots on each of which shall be
subscribed the signature of the noteholder or proxy casting such
ballot, the principal amount and, if practicable, the identifying
number or numbers of the Notes held or represented in respect of
which such ballot is cast. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes
cast at the meeting for or against any resolution and who shall
make and file with the secretary of the meeting their verified
written reports in duplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of
noteholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing
that said notice was mailed as provided in Section 9.02. The
record shall show the aggregate principal amount and, if
practicable, the identifying numbers of the Notes voting in favor
of or against any resolution. Each counterpart of such record
shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one of the counterparts
shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee.
Any counterpart record so signed and verified shall be
conclusive evidence of the matters therein stated and shall be
the record referred to in clause (b) of Section 8.01.
SECTION 9.07. Exercise of rights of Trustee and noteholders
--------------------------------------------
not to be hindered or delayed. Nothing in this Article Nine
- -----------------------------
shall be deemed or construed to authorize or permit, by reason of
any call of a meeting of noteholders or any rights expressly or
impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the noteholders under any of the
provisions of this Indenture or of the Notes.
ARTICLE TEN
SUPPLEMENTAL INDENTURES
SECTION 10.01. Purposes for which supplemental indentures
------------------------------------------
may be entered into without consent of noteholders. The Company,
- --------------------------------------------------
when authorized by a Board Resolution, and the Trustee may from
time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall comply with the
provisions of the Trust Indenture Act of 1939 as then in effect)
for one or more of the following purposes:
(a) to comply with Article Eleven and Sections 4.10(c),
4.12(a), 4.12(c) and 15.03;
(b) to add to the covenants of the Company such further
covenants, restrictions or conditions as its Board of Directors
shall consider to be for the protection of the holders of Notes,
and to make the occurrence, or the occurrence and continuance, of
a default in any of such additional covenants, restrictions or
conditions a default or an Event of Default permitting the
enforcement of all or any of the several remedies provided in
this Indenture as herein set forth; provided, however, that in
respect of any
100
such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than
that allowed in the case of other defaults) or may provide for an
immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default.
(c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which
may be defective or inconsistent with any other provision
contained herein or in any supplemental indenture, or to comply
with any requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the Trust
Indenture Act of 1939, or to make such other provisions in regard
to matters or questions arising under this Indenture or any
supplemental indenture as shall not adversely affect the rights
of the holders of the Notes;
(d) to provide for the issuance under this Indenture of
Notes, whether or not then outstanding, in coupon form (including
Notes registrable as to principal only) and to provide for
exchangeability of such Notes with Notes issued hereunder in
fully registered form and to make all appropriate changes for
such purpose; and
(e) to comply with the requirements of the New York Stock
Exchange or any other national securities exchange on which the
Notes may be issued or admitted for trading, provided such
changes do not adversely affect the rights of any holder of
Notes.
The Trustee is hereby authorized to join with the Company in
the execution and delivery of any such supplemental indenture, to
make any further appropriate agreement and stipulations which may
be therein contained and to accept the conveyance, transfer,
mortgage, pledge or assignment of, any property thereunder,
provided that if any such supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture
or otherwise, the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
Any supplemental indenture authorized by the provisions of
this Section 10.01 may be executed by the Company and the Trustee
without the consent of the holders of any of the Notes at the
time outstanding, notwithstanding any of the provisions of
Section 10.02.
SECTION 10.02. Modification of Indenture with consent of
-----------------------------------------
holders of a majority in principal amount of Notes. With the
- --------------------------------------------------
consent (evidenced as provided in Section 8.01) of the holders of
not less than a majority in aggregate principal amount of the
Notes at the time outstanding (determined as provided in Sections
8.04 and 8.05), or, if a record date is set with respect to such
consent in accordance with Section 8.05, as of such record date,
the Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall comply
with the provisions of the Trust Indenture Act of 1939 as then in
effect) for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any
manner the rights of the holders of the Notes; provided, however,
that without the consent of each holder of an outstanding Note
affected, no such supplemental indenture shall (i) extend the
stated maturity of any Note, reduce the interest rate, extend the
time or alter the manner of payment of interest thereon, reduce
the principal amount thereof or alter the timing of or reduce any
premium payable upon the redemption thereof or the amount payable
thereon in the event of acceleration or the amount thereof
payable in bankruptcy, or (ii) reduce the aforesaid percentage of
aggregate principal amount of Notes, the consent of the holders
of which is required for any such supplemental indenture.
101
Upon the request of the Company, accompanied by a copy of a
Board Resolution authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of
evidence of the consent of noteholders as aforesaid, the Trustee
shall join with the Company in the execution and delivery of such
supplemental indenture, provided that if such supplemental
indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, the Trustee may in its
discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the noteholders
under this Section 10.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if
such consent shall approve the substance thereof.
Promptly after the execution and delivery by the Company and
the Trustee of any supplemental indenture pursuant to the
provisions of this Section 10.02, the Company shall mail a notice
to the noteholders, setting forth in general terms the substance
of such supplemental indenture. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental
indenture.
SECTION 10.03. Effect of supplemental indentures. Upon the
---------------------------------
execution and delivery of any supplemental indenture pursuant to
the provisions of this Article Ten, this Indenture shall be and
be deemed to be modified and amended in accordance therewith and
the respective rights, limitation of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company
and the holders of Notes shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of
any such supplemental indenture shall be and be deemed to be part
of the terms and conditions of this Indenture for any and all
purposes.
SECTION 10.04. Notes may bear notation of changes by
-------------------------------------
supplemental indentures. Notes authenticated and delivered after
- -----------------------
the execution and delivery of any supplemental indenture pursuant
to the provisions of this Article Ten, or after any action taken
at a noteholders' meeting pursuant to Article Nine, may bear a
notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture or as to any action
taken at any such meeting. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the
Trustee and the Company, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by
the Company, authenticated by the Trustee and delivered in
exchange for the Notes then outstanding upon surrender of such
Notes. Failure to make the appropriate notation or issue a new
Note shall not affect the validity and effect of such
supplemental indenture or noteholders' meeting.
SECTION 10.05. Officers' Certificate and Opinion of
------------------------------------
Counsel. The Trustee may receive upon its request and, subject
- -------
to the provisions of Sections 7.01 and 7.02, may rely upon an
Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such indenture complies with the provisions of
this Article Ten.
102
ARTICLE ELEVEN
CONSOLIDATION, MERGER AND SALE
SECTION 11.01. Company may consolidate, etc., on certain
------------------------------------------
terms.
- -----
(a) Nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of the Company
with or into any other corporation or corporations (whether or
not affiliated with the Company) or successive consolidations or
mergers in which the Company or its successor or successors shall
be a party or parties, or shall prevent any sale or conveyance of
all or substantially all the property of the Company to any other
corporation (whether or not affiliated with the Company) whether
in a single transaction or series of related transactions;
provided, however, and the Company hereby covenants and agrees,
that any such consolidation, merger, sale or conveyance shall be
upon the condition that (i) immediately after giving effect to
such consolidation, merger, sale or conveyance, the corporation
(whether the Company or such other corporation) formed by or
surviving any such consolidation or merger, or to which such sale
or conveyance shall have been made, whether the Company or such
other corporation (the "surviving corporation"), shall not be in
default in the performance or observance of any of the terms,
covenants and conditions of this Indenture to be kept or
performed by the Company, (ii) the surviving corporation (if
other than the Company) shall be a corporation organized under
the laws of The United States of America or any State thereof,
(iii) immediately after giving effect to such consolidation,
merger, sale or conveyance, the surviving corporation (whether
the Company or such other corporation) could incur $1.00 of
Indebtedness pursuant to Section 4.10(a), (iv) the surviving
corporation (if other than the Company) shall expressly assume
the due and punctual payment of the principal of, premium, if
any, Change of Control Purchase Price, Asset Sale Purchase Price
and interest on all of the Notes, according to their tenor, and
the due and punctual performance and observance of all the
covenants and conditions of this Indenture to be performed or
observed by the Company, by supplemental indenture complying with
the requirements of Article Ten, satisfactory in form to the
Trustee, executed and delivered to the Trustee by such
corporation and (v) immediately after giving effect to such
consolidation, merger, sale or conveyance, the surviving
corporation (whether the Company or such other corporation) shall
have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such
transaction. If at any time there be any consolidation or merger
or sale or conveyance of property to which the covenant of this
Section 11.01 is applicable, then, in any such event, the
surviving corporation will promptly deliver to the Trustee:
(1) an Officers' Certificate stating that as of the
time immediately after the effective date of any such
transaction the covenants contained in this Section 11.01
have been complied with; and
(2) an Opinion of Counsel stating that such covenants
have been complied with and that any instrument or
instruments executed in the performance of such covenants
comply with the requirements thereof.
(b) Notwithstanding the foregoing Section 11.01(a), (i) the
Company may consolidate or merge with or into, or sell or convey
all or substantially all of its property to, KAC; provided,
--------
however, that the surviving corporation (if other than the
- -------
Company) shall expressly assume by supplemental indenture
complying with the requirements of Article Ten, satisfactory in
form to the Trustee, the due and punctual payment of the
principal of, premium, if any, Change of Control Purchase Price,
Asset Sale
103
Purchase Price and interest on all of the Notes, according to
their tenor, and the due and punctual performance and observance
of all the covenants and conditions of this Indenture to be
performed or observed by the Company and (ii) the Company may
consolidate or merge with or into, or sell or convey all or
substantially all of its property to, a Subsidiary Guarantor;
provided, that the surviving corporation (if other than the
- --------
Company) shall expressly assume by supplemental indenture
complying with the requirements of Article Ten, satisfactory in
form to the Trustee, the due and punctual payment of the
principal of, premium, if any, Change of Control Purchase Price,
Asset Sale Purchase Price and interest on all of the Notes,
according to their tenor, and the due and punctual performance
and observance of all the covenants and conditions of this
Indenture to be performed or observed by the Company.
SECTION 11.02. Successor corporation to be substituted. In
----------------------------------------
case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor corporation, in the manner
hereinabove provided, of the due and punctual payment of the
principal of, premium, if any, Change of Control Purchase Price,
Asset Sale Purchase Price and interest on all of the Notes and
the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed or
observed by the Company, such successor corporation shall succeed
to and be substituted for the Company, with the same effect as if
it had been named herein as the party of the first part and the
Company shall be relieved of all its obligations and duties under
this Indenture and the Notes. Such successor corporation
thereupon may cause to be signed, and may issue either in its own
name or in the name of the Company, any or all of the Notes
issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee; and, upon the order
of such successor corporation (instead of the Company) and
subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall
deliver any Notes which previously shall have been signed and
delivered by the officers of the Company to the Trustee for
authentication, and any Notes which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee
for that purpose. All the Notes so issued shall in all respects
have the same legal rank and benefit under this Indenture as the
Notes theretofore or thereafter issued in accordance with the
terms of this Indenture as though all of such Notes had been
issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or
conveyance such changes in phraseology and form (but not in
substance) may be made in the Notes thereafter to be issued as
may be appropriate.
SECTION 11.03. Opinion of Counsel. The Trustee, subject to
------------------
the provisions of Sections 7.01 and 7.02, may receive upon its
request and rely on an Opinion of Counsel as conclusive evidence
that any such consolidation, merger, sale or conveyance, and any
such assumption, complies with the provisions of this Article
Eleven.
ARTICLE TWELVE
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 12.01. Satisfaction and discharge of Indenture. If
---------------------------------------
at any time
(a) the Company shall deliver to the Trustee for
cancellation all Notes theretofore authenticated and delivered,
other than (1) any Notes which shall have been destroyed, lost or
stolen and which shall have been replaced or paid as provided in
Section 2.07 or (2) any Note for the payment of
104
the principal of which money has theretofore been deposited in
trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust,
as provided in Section 12.04, and not theretofore cancelled, or
(b) (1) all the Notes not theretofore cancelled or
delivered to the Trustee for cancellation shall have become due
and payable, or are by their terms to become due and payable
within one year or are to be or may be called for redemption
within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption and (2) the Company has
deposited with the Trustee, in trust, money or non-callable
Government Securities maturing as to principal and interest in
such amounts and at such times as are sufficient (in the opinion
of a nationally recognized firm of independent certified
accountants expressed in a written certification thereof
delivered to the Trustee), without consideration of any
reinvestment of such interest, to pay at maturity or upon
redemption all of such Notes (other than any Notes which shall
have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.07) not theretofore
cancelled or delivered to the Trustee for cancellation, including
principal, premium, if any, Change of Control Purchase Price,
Asset Sale Purchase Price and interest due or to become due to
such date of maturity or date fixed for redemption, as the case
may be,
and if in either case the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this
Indenture shall cease to be of further effect and the Trustee, on
demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel complying with Section 14.05 and at the
cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture,
except for those provisions which expressly survive as provided
below; the Company, however, hereby agreeing to reimburse the
Trustee for any costs or expenses theretofore and thereafter
reasonably and properly incurred by the Trustee in connection
with this Indenture or the Notes.
Notwithstanding the foregoing, the Company's obligations in
Sections 2.05, 2.07, 4.01, 4.02, 4.04, 5.01, 5.02, 7.06, 12.03
and 12.04 shall survive until the Notes are no longer
outstanding. Thereafter, only the Company's obligations in
Sections 7.06, 12.03 and 12.04 shall survive.
After a deposit made pursuant to this Section 12.01, the
Trustee upon request shall acknowledge in writing the discharge
of the Company's obligations under the Notes and this Indenture,
except for those surviving obligations specified above.
SECTION 12.02. Application by Trustee of funds deposited
------------------------------------------
for payment of Notes. All amounts deposited with the Trustee
- --------------------
pursuant to Section 12.01 shall be held in trust and applied by
it to the payment, either directly or through any paying agent
(including the Company acting as its own paying agent), to the
holders of the particular Notes, for the payment or redemption of
which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal, premium, if
any, Change of Control Purchase Price, Asset Sale Purchase Price
and interest.
SECTION 12.03. Repayment of moneys held by paying agent.
----------------------------------------
In connection with the satisfaction and discharge of this
Indenture, all moneys then held by any paying agent under the
provisions of this Indenture shall, upon demand of the Company,
be paid to the Trustee and thereupon such paying agent shall be
released from all further liability with respect to such moneys.
SECTION 12.04. Repayment of moneys held by Trustee. The
-----------------------------------
Trustee shall promptly pay to the Company upon written request
any excess money or securities held by it at any time. Any
moneys
105
deposited with the Trustee or any paying agent for the payment of
the principal of, premium, if any, Change of Control Purchase
Price, Asset Sale Purchase Price or interest on any Notes and not
applied but remaining unclaimed by the holders of Notes for two
years after the date upon which such payment shall have become
due, shall be promptly repaid (together with any interest earned
thereon) to the Company by the Trustee or by such paying agent;
and thereupon the Trustee and such paying agent shall be released
from all further liability with respect to such moneys, and the
holder of any of the Notes entitled to receive such payment shall
thereafter look only to the Company for the payment thereof,
provided, however, that the Trustee or such paying agent, before
being required to make any such repayment, may, at the expense of
the Company, mail to the holders of Notes at their last known
address or 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 Borough of Manhattan, City of
New York, State of New York, a notice that such money remains
unclaimed and that, after a date specified therein, which shall
not be less than thirty days from the date of such mailing or
publication, any unclaimed balance of such money then remaining
will be paid to the Company.
SECTION 12.05. Reinstatement. If the Trustee is unable to
-------------
apply any money or securities deposited by the Company with the
Trustee in accordance with Section 12.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations
under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section
12.01 until such time as the Trustee is permitted to apply all
such money or securities deposited by the Company with the
Trustee in accordance with Section 12.01; provided that if the
--------
Company has made any payment of principal of, premium, if any,
Change of Control Purchase Price, Asset Sale Purchase Price or
interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the
holders of such Notes to receive such payment from the money or
securities deposited by the Company and held by the Trustee.
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 13.01. Incorporators, stockholders, officers and
-----------------------------------------
directors of Company exempt from individual liability. No
- -----------------------------------------------------
recourse under or upon any obligation, covenant or agreement of
this Indenture or any indenture supplemental hereto or of any
Note, or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, stockholder,
officer or director, as such, past, present or future, of the
Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no
such personal liability whatever shall attach to, or is or shall
be incurred by, the incorporators, stockholders, officers or
directors, as such, of the Company or of any successor
corporation, or any of them, because of the creation of the
indebtedness hereby authorized, or under or
106
by reason of the obligations, covenants or agreements contained
in this Indenture or in any of the Notes or implied therefrom;
and that any and all such personal liability of every name and
nature, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director, as
such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants
or agreements contained in this Indenture or in any of the Notes
or implied therefrom are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this
Indenture and the issue of such Notes.
ARTICLE FOURTEEN
MISCELLANEOUS PROVISIONS
SECTION 14.01. Successors and assigns of Company bound by
------------------------------------------
Indenture. All the covenants, stipulations, promises and
- ---------
agreements in this Indenture contained by or in behalf of the
Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 14.02. Acts of board, committee or officer of
--------------------------------------
successor corporation valid. Any act or proceeding by any
- ---------------------------
provision of this Indenture authorized or required to be done or
performed by any board, committee or officer of the Company shall
and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at
the time be the lawful sole successor of the Company.
SECTION 14.03. Required notices or demands may be served by
-------------------------------------------
mail; waiver. Any notice or demand which by any provisions of
- ------------
this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Notes to or on the Company may
be given or served by being deposited postage prepaid (except as
provided in Section 6.01(c)) by first class mail in a post office
letter box addressed (until another address is filed by the
Company with the Trustee for such purpose), as follows: Kaiser
Aluminum & Chemical Corporation, 5847 San Felipe, Suite 2600,
Houston, Texas 77057, Attention: Secretary. Any notice,
direction, request or demand by any noteholder to or upon the
Trustee shall be deemed to have been sufficiently given or made,
for all purposes, if given or made at the principal office of the
Trustee, to the attention of the Corporate Trust Department.
Any notice or communication to a noteholder shall be mailed
by first-class mail to his address shown on the Company's
registry. Failure to mail a notice or communication to a
noteholder or any defect in it shall not affect its sufficiency
with respect to other noteholders. If a notice or communication
is mailed in the manner so provided within the time prescribed,
it is duly given, whether or not the addressee receives it.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the person entitled to receive
such notice, either before or after the event or action relating
thereto, and such waiver shall be equivalent of such notice.
Waivers of notice by noteholders 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 as a result of a strike, work stoppage or similar activity, or
any act of God or any other cause, it shall be impractical to
mail any notice as required by this Indenture, then any manner of
giving such notice as shall be made with the approval of the
Trustee shall constitute sufficient giving of notice hereunder.
107
SECTION 14.04. Indenture and Notes to be construed in
--------------------------------------
accordance with the laws of the State of New York. THIS
- -------------------------------------------------
INDENTURE AND EACH NOTE SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SAID STATE WITHOUT REGARD TO THE PRINCIPLES OF THE CONFLICT OF
LAWS PROVISIONS THEREOF.
SECTION 14.05. Evidence of compliance with conditions
---------------------------------------
precedent. Upon any demand, request or application by the
- ---------
Company to the Trustee to take any action under any of the
provisions of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions
precedent have been complied with, except that in the case of any
such demand, request or application as to which the furnishing of
such document is specifically required by any provision of this
Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate (other than those provided for in Section
5.03(d)) or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (1) a
statement that the person making such certificate or opinion has
read such covenant or condition; (2) a brief statement as to the
nature and scope of the examination or investigation upon which
the statements or opinions contained in such certificate or
opinion are based; (3) a statement that, in the opinion of such
person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with;
and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement 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 that the certificate or opinion or
representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are
erroneous. Any certificate, statement or opinion of counsel may
be based, insofar as it relates to factual matters, information
with respect to which is in the possession of the Company, upon
the certificate, statement or opinion of or representations by an
officer or officers of the Company or public officials, unless
such counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his
certificate, statements or opinion may be based as aforesaid are
erroneous.
Any certificate, statement or opinion of an officer of the
Company or of counsel may be based, insofar as it relates to
accounting matters, upon a certificate or opinion of or
representations by an accountant or firm of accountants unless
such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the
accounting matters upon which his certificate, statement of
opinion may be based as aforesaid are erroneous. Any certificate
or opinion of any independent firm of public accountants filed
with the Trustee shall contain a statement that such firm is
independent.
SECTION 14.06. Payments due on Saturdays, Sundays and
---------------------------------------
holidays. In any case where the date of payment of principal of,
- --------
premium, if any, Change of Control Purchase Price, Asset Sale
108
Purchase Price or interest on the Notes or the date fixed for
redemption or purchase of any Note shall not be a Business Day,
then payment of principal, premium, if any, Change of Control
Purchase Price, Asset Sale Purchase Price or interest 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
date of payment or the date fixed for redemption or purchase, and
no interest shall accrue on or after such original date of
payment or such original date fixed for redemption or purchase.
SECTION 14.07. Provisions required by Trust Indenture Act
------------------------------------------
of 1939 to control. If and to the extent that any provision of
- ------------------
this Indenture limits, qualifies or conflicts with the duties
imposed by operation of the following sentence, the imposed
duties shall control. The provisions of Sections 310 to 317,
inclusive, of the Trust Indenture Act of 1939 that impose duties
on any person (including provisions automatically deemed included
in this Indenture unless this Indenture provides that such
provisions are excluded) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 14.08. Provisions of the Indenture and Notes for
-----------------------------------------
the sole benefit of the parties and the noteholders. Nothing in
- ----------------------------------------------------
this Indenture or in the Notes, expressed or implied, shall give
or be construed to give any person, firm or corporation, other
than the parties hereto and the holders of the Notes, any legal
or equitable right, remedy or claim under or in respect of this
Indenture, or under any covenant, condition or provision herein
contained; all its covenants, conditions and provisions being for
the sole benefit of the parties hereto and of the holders of the
Notes.
SECTION 14.09. Severability. In case any one or more of
------------
the provisions contained in this Indenture or in the Notes shall
for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of
such Notes, but this Indenture and such Notes shall be construed
as if such invalid or illegal or unenforceable provision had
never been contained herein or therein.
SECTION 14.10. Indenture may be executed in counterparts;
------------------------------------------
acceptance by Trustee. This Indenture may be executed in any
- ---------------------
number of counterparts, each of which shall be an original; but
such counterparts shall together constitute but one and the same
instrument. First Trust National Association hereby accepts the
trusts in this Indenture declared and provided, upon the terms
and conditions hereinabove set forth.
SECTION 14.11. Article and Section headings. The Article
----------------------------
and Section references herein and in the Table of Contents are
for convenience only and shall not affect the construction
hereof.
SECTION 14.12. No Adverse Interpretation of Other
----------------------------------
Instruments. This Indenture shall not be used to interpret
- -----------
another indenture, loan or debt agreement of the Company or any
Subsidiary or Affiliate of the Company. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
ARTICLE FIFTEEN
GUARANTEE OF NOTES
SECTION 15.01. Guarantee. Subject to the provisions of
---------
this Article Fifteen, each Subsidiary Guarantor, jointly and
severally, hereby unconditionally guarantees to each holder of a
Note authenticated and delivered by the Trustee (i) the due and
punctual payment of the principal of, premium, if any, Change of
Control Purchase Price, Asset Sale Purchase Price and interest on
such Note, when and as the same shall become due and payable,
whether at maturity, by acceleration or otherwise, the due and
109
punctual payment of interest on the overdue principal of,
premium, Change of Control Purchase Price, Asset Sale Purchase
Price and interest, if any, on the Notes, to the extent lawful,
and the due and punctual performance of all other obligations of
the Company to the holders of the Notes or the Trustee all in
accordance with the terms of such Note and of this Indenture and
(ii) in the case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that the same will
be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, at stated maturity, by
acceleration or otherwise. Each Subsidiary Guarantor hereby
agrees that its obligations hereunder shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any
invalidity, irregularity or unenforceability of any such Note or
this Indenture, any failure to enforce the provisions of any such
Note or this Indenture, any waiver, modification or indulgence
granted to the Company with respect thereto, by the holder of
such Note or the Trustee, or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety
or guarantor. Each Subsidiary Guarantor hereby waives diligence,
presentment, filing of claims with a court in the event of merger
or bankruptcy of the Company, any right to require a proceeding
first against the Company, the benefit of discussion, protest or
notice with respect to any such Note or the indebtedness
evidenced thereby and all demands whatsoever, and covenants that
this Guarantee will not be discharged as to any such Note except
by payment in full of the principal thereof, premium, if any,
Change of Control Purchase Price, Asset Sale Purchase Asset and
interest thereon or as provided in Sections 12.01, 15.03 and
15.05. Each Subsidiary Guarantor further agrees that, as between
such Subsidiary Guarantor, on the one hand, and the holders of
Notes and the Trustee, on the other hand, (i) the maturity of the
obligations guaranteed hereby may be accelerated as provided in
Article Six for the purposes of this Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and
(ii) in the event of any declaration of acceleration of such
obligations as provided in Article Six, such obligations (whether
or not due and payable) shall, subject to the other provisions of
this Article Fifteen, forthwith become due and payable by such
Subsidiary Guarantor for the purpose of this Guarantee. In
addition, without limiting the foregoing provisions, upon the
effectiveness of an acceleration under Article Six, the Trustee
shall promptly make a demand for payment on the Notes under the
Guarantee provided for in this Article Fifteen.
Each Subsidiary Guarantor shall be subrogated to all rights
of the holder of any Notes against the Company in respect of any
amounts paid to the holder of Notes by such Subsidiary Guarantor
pursuant to the provisions of this Guarantee; provided, that such
--------
Subsidiary Guarantor shall not be entitled to enforce, or to
receive any payments arising out of or based upon, such right of
subrogation until the principal of, premium, if any, Change of
Control Purchase Price, Asset Sale Purchase Price and interest on
all Notes shall have been paid in full.
SECTION 15.02. Guarantee senior in respect of Subordinated
-------------------------------------------
Notes. Each Subsidiary Guarantor, for itself, its successors and
- -----
assigns, hereby acknowledges that the Guarantee issued hereunder
in respect of the Notes shall hereafter constitute for all
purposes Senior Indebtedness of such Subsidiary Guarantor under
the terms of the 12-3/4% Note Indenture to the extent that such
Subsidiary Guarantor is a guarantor under the 12-3/4% Note
Indenture.
SECTION 15.03. Subsidiary Guarantors may consolidate, etc.,
-------------------------------------------
on certain terms.
- ----------------
(a) Notwithstanding any other provision of this Indenture
(i) a Subsidiary Guarantor may consolidate or merge with or into,
or sell or convey all or substantially all of its property to,
the Company, provided, that the surviving corporation (if other
--------
than the Company) shall expressly assume by supplemental
indenture complying with the requirements of Article Ten,
satisfactory in form to the
110
Trustee, the due and punctual payment of the principal of,
premium, if any, Change of Control Purchase Price, Asset Sale
Purchase Price and interest on all of the Notes, according to
their tenor, and the due and punctual performance and observance
of all the covenants and conditions of this Indenture to be
performed or observed by the Company and (ii) a Subsidiary
Guarantor may consolidate or merge with or into, or sell or
convey all or substantially all of its property to, any other
Subsidiary Guarantor.
(b) Nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of any Subsidiary
Guarantor with or into any other corporation or corporations
(whether or not affiliated with such Subsidiary Guarantor), or
successive consolidations or mergers in which such Subsidiary
Guarantor or its successor or successors shall be a party or
parties, or shall prevent any sale or conveyance of the property
of any Subsidiary Guarantor as an entirety or substantially as an
entirety to any other corporation (whether or not affiliated with
such Subsidiary Guarantor) authorized to acquire and operate the
same, whether in a single transaction or a series of related
transactions; provided, however, that each Subsidiary Guarantor
-------- -------
hereby covenants and agrees that any such consolidation, merger,
sale or conveyance shall be upon the condition that: (i) in the
event that the surviving corporation is a Subsidiary of the
Company, then (A) such surviving corporation (if other than such
Subsidiary Guarantor) shall be a corporation organized under the
laws of the United States of America or any State thereof, (B)
such surviving corporation (if other than such Subsidiary
Guarantor) shall assume the due and punctual performance and
observance of all of the covenants and conditions of this
Indenture to be performed by such Subsidiary Guarantor by
supplemental indenture complying with the requirements of Article
Ten, satisfactory in form to the Trustee, executed and delivered
to the Trustee, (C) immediately after giving effect to such
consolidation, merger, sale or conveyance, the Company could
incur $1.00 of Indebtedness pursuant to Section 4.10(a) and (D)
immediately after giving effect to such consolidation, merger,
sale or conveyance, the surviving corporation (whether such
Subsidiary Guarantor or such other corporation) shall have a
Consolidated Net Worth equal to or greater than the Consolidated
Net Worth of such Subsidiary Guarantor immediately prior to such
transaction; and (ii) in the event that the surviving corporation
is not a Subsidiary of the Company, then such consolidation,
merger, sale or conveyance shall otherwise have been made in
compliance with the terms of this Indenture (including, without
limitation, Section 4.14). In the event that the surviving
corporation is a Subsidiary of the Company, (I) such Subsidiary
Guarantor shall deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such merger,
consolidation or transfer and such supplemental indenture comply
with this Section 15.03(b) and that all conditions precedent
herein provided relating to such transaction have been complied
with and (II) in case of any such consolidation, merger, sale or
conveyance and upon the assumption by the surviving corporation
(if other than such Subsidiary Guarantor), by supplemental
indenture executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the due and punctual performance of
all the covenants and conditions of this Indenture to be
performed by such Subsidiary Guarantor, such surviving
corporation shall succeed to and be substituted for such
Subsidiary Guarantor, with the same effect as if it had been
named herein as such Subsidiary Guarantor and in the case of any
such sale or conveyance, such Subsidiary Guarantor (if not the
surviving corporation) shall be relieved of all of its
obligations and duties under this Indenture and the Notes.
SECTION 15.04. Application of certain terms and provisions
-------------------------------------------
to the Subsidiary Guarantors.
- ----------------------------
(a) For purposes of any provision of this Indenture which
provides for the delivery by any Subsidiary Guarantor of an
Officer's Certificate and/or an Opinion of Counsel, the
definitions of such terms in Section 1.01 shall apply to such
Subsidiary Guarantor as if references therein to the Company were
references to such Subsidiary Guarantor.
111
(b) The Subsidiary Guarantors shall comply with all
reporting requirements of Section 5.03 as if references therein
to the Company were references to the Subsidiary Guarantors.
(c) Any request, direction, order or demand which by any
provision of this Indenture is to be made by any Subsidiary
Guarantor, shall be sufficient if evidenced as described in
Section 7.02 as if references therein to the Company were
references to such Subsidiary Guarantor.
(d) Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the
Trustee or by the holders of Notes to or on any Subsidiary
Guarantor may be given or served as described in Section 14.03 as
if references therein to the Company were references to such
Subsidiary Guarantor.
(e) Upon any demand, request or application by any
Subsidiary Guarantor to the Trustee to take any action under this
Indenture, such Subsidiary Guarantor shall furnish to the Trustee
such certificates and opinions as are required in Section 14.05
as if all references therein to the Company were references to
such Subsidiary Guarantor.
SECTION 15.05. Release of Guarantee.
--------------------
(a) If at any time any Subsidiary Guarantor ceases to be a
Bank Guarantor, is not a Subsidiary Guarantor under the 12-3/4%
Note Indenture and the 9-7/8% Note Indenture and no Event of
Default (or event or condition which with the giving of notice or
the passage of time would be an Event of Default) then exists and
is continuing, and either (x) such Subsidiary Guarantor has not
Incurred any Indebtedness or preferred stock (including
preference stock) after the date hereof that is then outstanding
other than Indebtedness Incurred pursuant to Section 4.10(a) (but
only to the extent such Indebtedness is also Indebtedness of
Alpart), Section 4.10(b)(iii) or Section 4.10(b)(iv) and, in each
case, permitted refinancings thereof, or (y) the Notes are then
rated Baa3 (or the equivalent) or better by Moody's Investors
Service, Inc. (or a successor rating agency) or BBB- (or the
equivalent) or better by Standard & Poor's Corporation (or a
successor rating agency), then such Person shall cease to be a
Subsidiary Guarantor hereunder upon the delivery of the Officers'
Certificate and Opinion of Counsel set forth in paragraph (b) of
this Section 15.05. Thereafter, the Guarantee given by such
Subsidiary Guarantor shall no longer have any force or effect and
such Person shall be relieved of all of its obligations and
duties under this Indenture and the Notes.
(b) Upon any Subsidiary Guarantor ceasing to be a Bank
Guarantor, the Company may, at its option, deliver to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating
that such Subsidiary Guarantor is no longer a Bank Guarantor, is
not a Subsidiary Guarantor under the 9-7/8% Note Indenture or the
12-3/4% Note Indenture and that no Event of Default (or event or
condition which with the giving of notice or the passage of time
would become an Event of Default) exists and is continuing and
that all conditions precedent herein provided relating to Section
15.05(a) have been complied with.
(c) Upon the sale or disposition (by merger or otherwise,
including, without limitation, pursuant to Section 15.03(b)(ii))
of a Subsidiary Guarantor (or the Company's or a Subsidiary's
interest therein) by the Company or a Subsidiary of the Company
to a Person that is not the Company or a Subsidiary of the
Company and which sale or disposition is otherwise in compliance
with the terms of this Indenture (including, without limitation,
Section 4.14), the obligations of such Subsidiary Guarantor under
its Guarantee shall be deemed released without any further action
required on the part of the Trustee, such Subsidiary Guarantor,
the Company or any holder of the Notes, provided that any
--------
112
guarantee of such Subsidiary Guarantor with respect to the Credit
Agreement, the 12-3/4% Notes and the 9-7/8% Notes, and any
renewals, extensions, refundings, replacements, restructurings or
refinancings, amendments and modifications thereof, if any, has
been or is simultaneously released. At the request of the
Company, the Trustee shall execute and deliver an appropriate
instrument evidencing any such release.
(d) Upon the designation by the Board of Directors of the
Company of a Subsidiary Guarantor as an Unrestricted Subsidiary
in compliance with the terms of this Indenture, the obligations
of such Subsidiary Guarantor under its Guarantee shall be deemed
released without any further action required on the part of the
Trustee, such Subsidiary Guarantor, the Company or any holder of
the Notes; provided, however, that, any guarantee of such
Subsidiary Guarantor with respect to the Credit Agreement, the
12-3/4% Notes and the 9-7/8% Notes, and any renewals, extensions,
refundings, replacements, restructurings or refinancings,
amendments and modifications thereof, if any, has been or is
simultaneously released.
(e) Upon the release of any Subsidiary Guarantor from its
Guarantee pursuant to any provision of this Indenture, each other
Subsidiary Guarantor not so released shall remain liable for the
full amount of principal of, and interest on, the Notes as and to
the extent provided in this Indenture. At the request of the
Company, the Trustee shall execute and deliver an appropriate
instrument evidencing any such release.
113
IN WITNESS WHEREOF, each of KAISER ALUMINUM & CHEMICAL
CORPORATION, KAISER ALUMINA AUSTRALIA CORPORATION, ALPART JAMAICA
INC., KAISER FINANCE CORPORATION, KAISER JAMAICA CORPORATION,
KAISER MICROMILL HOLDINGS, LLC, KAISER SIERRA MICROMILLS, LLC,
KAISER TEXAS MICROMILL HOLDINGS, LLC and KAISER TEXAS SIERRA
MICROMILLS, LLC, has caused this Indenture to be signed and
acknowledged by its Chairman of the Board, its President or one
of its Vice Presidents, and its corporate seal to be affixed
hereunto, and the same to be attested by one of its Vice
Presidents; and FIRST TRUST NATIONAL ASSOCIATION has caused this
Indenture to be signed and acknowledged by one of its Vice
Presidents or Assistant Vice Presidents, has caused its corporate
seal to be affixed hereunto, and the same to be attested by one
of its Assistant Secretaries, all as of the day and year first
written above.
KAISER ALUMINUM & CHEMICAL CORPORATION
By:
-----------------------------------------------------------
Name:
Title:
[SEAL]
Attest:
KAISER ALUMINA AUSTRALIA CORPORATION
By:
-----------------------------------------------------------
Name:
Title:
[SEAL]
Attest:
ALPART JAMAICA INC.
By:
-----------------------------------------------------------
Name:
Title:
[SEAL]
Attest:
KAISER FINANCE CORPORATION
By:
------------------------------------------------------------
Name:
Title:
[SEAL]
Attest:
KAISER JAMAICA CORPORATION
By:
----------------------------------------------------------
Name:
Title:
[SEAL]
Attest:
KAISER MICROMILL HOLDINGS, LLC
By:
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Name:
Title:
[SEAL]
Attest:
KAISER SIERRA MICROMILLS, LLC
By:
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Name:
Title:
[SEAL]
Attest:
KAISER TEXAS MICROMILL HOLDINGS, LLC
By:
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Name:
Title:
[SEAL]
Attest:
KAISER TEXAS SIERRA MICROMILLS, LLC
By:
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Name:
Title:
[SEAL]
Attest:
FIRST TRUST NATIONAL ASSOCIATION, as Trustee
By:
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Name:
Title:
[SEAL]
Attest:
Exhibit A-1
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(Back of Regulation S Temporary Global Note)
% Senior Note due 2006
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY
GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE
INDENTURE (AS DEFINED HEREIN).
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS
REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE
PAYMENT OF INTEREST HEREON.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR INTERESTS IN THE GLOBAL NOTE OR NOTES IN DEFINITIVE FORM,
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE
OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION, ("DTC"), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
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 2.05 OF THE INDENTURE.
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT OF 1933"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO
REGISTRATION. THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, INTEREST OR
PARTICIPATION PRIOR TO THE DATE WHICH IS THREE YEARS (OR SUCH
SHORTER PERIOD PERMITTED UNDER RULE 144(K) UNDER THE SECURITIES
ACT OF 1933 (OR A SUCCESSOR CLAUSE)) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE") ONLY (1) BY THE INITIAL INVESTOR (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT OF 1933, (C) FOR SO
LONG AS THE NOTES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF 1933 THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PERSONS WHO MAKE CERTAIN REPRESENTATIONS TO THE
TRUSTEE WHICH OFFERS AND SALES OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OF
1933, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AND (2)
BY SUBSEQUENT INVESTORS, AS SET FORTH IN (1) ABOVE AND, IN
ADDITION, TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER
THE SECURITIES ACT OF 1933 THAT IS ACQUIRING THE SECURITY FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR" FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OF 1933, AND WHO MAKES CERTAIN
REPRESENTATIONS TO THE TRUSTEE, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (2) PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO THE COMPANY AND THE TRUSTEE, AND, IN EACH CASE,
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES
OF THE UNITED STATES AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTES
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
Until this Regulation S Temporary Global Note is
exchanged for interests in the Global Notes or for Certificated
Notes, the Holder hereof shall not be entitled to receive
payments of interest hereon; until so exchanged in full, this
Regulation S Temporary Global Note shall in all other respects be
entitled to the same benefits as other Notes under the Indenture.
This Regulation S Temporary Global Note is exchangeable
in whole or in part for interests in the Global Note or for
Certificated Notes only (i) on or after the termination of the
40-day restricted period (as defined in Regulation S) and (ii)
upon presentation of certificates required by Article 2 of the
Indenture. Upon exchange of this Regulation S Temporary Global
Note in full for interests in the Global Note or Certificated
Notes, the Trustee shall cancel this Regulation S Temporary
Global Note.
This Regulation S Temporary Global Note shall not
become valid or obligatory until the certificate of
authentication hereon shall have been duly manually signed by the
Trustee in accordance with the Indenture. This Regulation S
Temporary Global Note shall be governed by and construed in
accordance with the laws of the State of the New York. All
references to "$," "Dollars," "dollars" or "U.S. $" are to such
coin or currency of the United States of America as at the time
shall be legal tender for the payment of public and private debts
therein.
Exhibit A-2
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FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE
(Pursuant to Section 2.05(e) of the Indenture)
First Trust National Association
180 E. Fifth Street
St. Paul, MN 55101
Attention: Corporate Trust Division
Re: 10-7/8% Senior Notes due 2006 of Kaiser Aluminum &
Chemical Corporation
Reference is hereby made to the Indenture, dated as of
October 23, 1996 (the "Indenture"), among Kaiser Aluminum &
Chemical Corporation, as issuer (the "Company"), the parties
listed therein as subsidiary guarantors and First Trust National
Association, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
This letter relates to $ principal amount of
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Notes which are evidenced by one or more Regulation S Temporary
Global Notes (CUSIP ) and held with the Depository in
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the name of (the "Transferor"). The
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Transferor has requested a transfer of such beneficial interest
in the Notes to a Person who will take delivery thereof in the
form of an equal principal amount of Notes evidenced by (i) the
Global Notes (CUSIP ), to be held with the Depository
-----------
or (ii) Certificated Notes (CUSIP ).
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In connection with such request and in respect of such
Notes, the Transferor hereby certifies that:
[CHECK ONE]
-- such transfer is being effected pursuant to and in
accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor hereby further
certifies that the Notes are being transferred to a
Person that the Transferor reasonably believes is
purchasing the Notes for its own account, or for one or
more accounts with respect to which such Person
exercises sole investment discretion, and such Person
and each such account is a "qualified institutional
buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A;
-- such transfer is being effected pursuant to an
effective registration statement under the Securities
Act;
or
-- such transfer is being effected pursuant to an
exemption from the registration requirements of the
Securities Act other than Rule 144A,
and the Transferor hereby further certifies that the Notes are
being transferred in compliance with the transfer restrictions
applicable to the Regulation S Temporary Global Note and in
accordance with the requirements of the exemption claimed, which
certification is supported by an Opinion of Counsel, provided by
the Transferor or the transferee (a copy of which the Transferor
has attached to this certification) in form reasonably acceptable
to the Company and to the Note registrar, to the effect that such
transfer is in compliance with the Securities Act;
and such Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United
States.
Upon giving effect to this request to exchange a
beneficial interest in Regulation S Temporary Global Notes for a
beneficial interest in Global Notes or for Certificated Notes, as
applicable, the resulting beneficial interest shall be subject to
the restrictions on transfer applicable to Global Notes or
Certificated Notes, as applicable, pursuant to the Indenture and
the Securities Act.
This certificate and the statements contained herein
are made for your benefit and the benefit of the Company and the
Purchasers of such Notes being transferred.
- -------------------------
[Name of Transferor]
By: -----------------------------------------
Name:
Title:
Dated: ,
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SCHEDULE A
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SCHEDULE OF LIENS SECURING
INDEBTEDNESS IN EXCESS OF $5,000,000
1. Liens granted pursuant to, in connection with or
otherwise contemplated by that certain Credit Agreement, dated as
of February 15, 1994, among Kaiser Aluminum & Chemical
Corporation, Kaiser Aluminum Corporation, the financial
institutions that are, or from time to time become, parties
thereto, and BankAmerica Business Credit, Inc., as agent,
including all related notes, collateral documents and guarantees,
in each case as any of the same has been or may be amended,
supplemented, restated, restructured or otherwise modified from
time to time (in each case, in whole or in part).
2. Liens granted pursuant to, in connection with or
otherwise contemplated by the Jackson County, West Virginia
Refunding Pollution Control Revenue Bonds, Series 1978.
SCHEDULE B
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REAL PROPERTY CONSTITUTING
PERMITTED COLLATERAL
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State Location 1
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California Oxnard
1001 McWane Blvd.
Oxnard, CA 93033
California 6177 Sunol Boulevard
Pleasanton, CA 94566-7769
Ohio Newark
South Hebron Rd., Rt. 79
Heath, Ohio 43056
Oklahoma Tulsa Magnesium
7311 E. 41st Street
Tulsa, OK 74145
Pennsylvania Erie
1015 E. 12th Street
Erie, PA 16503
South Carolina Greenwood
1508 Highway 246 So.
Greenwood, SC 29649
South Carolina Greenwood
813 West Alexander Avenue
Greenwood, SC
Texas Sherman
Highway 75 South
Sherman TX 75090
Washington Mead
Spokane County
E. 2111 Hawthorne Road
Mead, WA 99021
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1 The real property referred to in this Schedule B is more fully
and completely described in mortgages and deeds of trust executed
and delivered by the Company in connection with the execution and
delivery of the Credit Agreement, and the descriptions set forth
in such mortgages and deeds of trust, as the same have been
amended, shall be deemed to control with respect to the real
property referred to herein.
Washington Mead South, and Cowles
Spokane County
No Applicable Street Address
Washington 3400 Taylor Way
Tacoma, WA 98421
Washington Trentwood
15000 East Euclid
Spokane, WA 99215
2
SCHEDULE C
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CERTAIN INDEBTEDNESS
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Each of the following as it has been or may be amended,
supplemented, restated, restructured or otherwise modified from
time to time:
1. Indebtedness under, in connection with or relating to the
CARIFA Financing (as such term is defined in the Indenture
to which this is Schedule C (the "Indenture").
2. Indebtedness under, in connection with or relating to
Installment Sale Agreement dated as of December 1, 1992,
between the Parish of St. James, State of Louisiana, and
Kaiser Aluminum & Chemical Corporation; Trust Indenture
between the Parish of St. James, State of Louisiana, and
First National Bank of Commerce dated as of December 1,
1992; and other documents, each in respect of Parish of St.
James, Louisiana, Solid Waste Disposal Revenue Bonds (Kaiser
Aluminum Project) Series 1992.
3. Indebtedness under, in connection with or relating to
Financing Agreement dated as of March 1, 1978, between
Jackson County, West Virginia, and Kaiser Aluminum &
Chemical Corporation; Indenture of Trust dated as of March
1, 1978, between Jackson County, West Virginia, and Mellon
Bank, N.A.; Guaranty Agreement dated as of March 1, 1978;
between Kaiser Aluminum & Chemical Corporation and Mellon
Bank, N.A.; Agreement dated as of March 1, 1978, between
Jackson County, West Virginia, and Kaiser Aluminum &
Chemical Corporation; and Deed and Bill of Sale dated as of
March 1, 1978, between Jackson County, West Virginia, and
Kaiser Aluminum & Chemical Corporation, each in respect of
Jackson County, West Virginia Refunding Pollution Control
Revenue Bonds, Series 1978 (Kaiser Aluminum & Chemical
Corporation Project).
4. Indebtedness under, in connection with or relating to Series
V Loan Agreements, dated July 19, 1995, and all documents
related thereto, including (without limitation) deed
amendments, financing agreements, tolling agreements,
participant agreements, all in respect to Queensland Alumina
Limited U.S. Dollar Debentures (Series V).
5. Indebtedness under, in connection with or relating to Series
W Loan Agreements, dated July 31, 1996, and all documents
related thereto, including deeds, financing agreements,
tolling agreements, participant agreements, all in respect
to Queensland Alumina Limited U.S. Dollar Debentures (Series
W).
6. Indebtedness under, in connection with or relating to
bauxite vessels under lease to TNT Bulkships and Australia
National Line in connection with the business of Queensland
Alumina Limited.
7. Indebtedness under, in connection with or relating to any
Indebtedness to Refinance (as defined in the Indenture), in
whole or in part, any obligations identified above in Items
1 through 6, or any one or more successive Refinancings of
any thereof; provided, however, that such Refinancing
Indebtedness (as defined in the Indenture) in each such case
is in an aggregate amount not in excess of the aggregate
amount of such Refinanced Indebtedness (as defined in the
Indenture) (including accrued interest thereon and undrawn
amounts under credit arrangements otherwise permitted to be
incurred pursuant to the Indenture), the amount of any
premium required to be paid in connection with such
Refinancing pursuant to the terms of such Refinanced
Indebtedness or the amount of any reasonable and customary
premium determined by Kaiser Aluminum & Chemical Corporation
to be necessary to accomplish such refinancing by means of a
redemption, tender offer, privately negotiated transaction,
defeasance, or other similar transaction, and an amount
equal to the reasonable fees and expenses in connection with
the incurrence of such Refinancing Indebtedness.
2