GRAPHIC PACKAGING INTERNATIONAL CORPORATION
GRAPHIC PACKAGING CORPORATION
$50,000,000
10% Senior Subordinated Notes due August 15, 2008
_____________________
NOTE AGREEMENT
_____________________
Dated as of August 15, 2001
TABLE OF CONTENTS
Page
1. THE NOTES 1
1a. Authorization of Issue of Notes 1
1b. Interest on the Notes 1
2. SALE AND PURCHASE OF NOTES 1
3. CLOSING 1
3a. Closing; Closing Date 1
4. CONDITIONS PRECEDENT 2
4a. Representations and Warranties; Performance; No
Default. 2
4b. Secretary's Certificate 2
4c. Proceedings 2
4d. Approval 2
4e. Legal Opinion and Officer=s Certificate 2
5. REDEMPTION OF THE NOTES 3
5a. Optional and Mandatory Redemption. 3
5b. Notice of Redemption 3
5c. Surrender of Notes; Notations Thereon 3
6. COVENANTS 3
6a. Incorporation By Reference 3
6b. Incurrence of Senior Indebtedness 4
6c. Notice of Senior Indebtedness 4
6d. Senior Credit Facility 5
7. SUBORDINATION 5
7a. Agreement That Notes Be Subordinate 5
7b. Reliance by Senior Indebtedness on Subordination
Provisions 5
7c. Payment Over of Proceeds Upon Dissolution, etc. 6
7d. No Payment When Senior Indebtedness in Default 7
7e. Payment Permitted If No Default 9
7f. Subrogation to Rights of Holders of Senior
Indebtedness 9
7g. Provisions Solely to Define Relative Rights 10
7h. No Waiver of Subordination Provisions 10
7i. Reliance on Judicial Order of Certificate of
Liquidating Agent 10
7j. Reinstatement 10
7k. No Claim 11
7l. Subordination Not Affected 11
8. REPRESENTATIONS AND WARRANTIES OF THE SELLERS 11
8a. Incorporation by Reference 11
8b. Additional Representations and Warranties 11
9. REPRESENTATIONS AND COVENANTS OF THE PURCHASER. 12
9a. Compliance with Securities Laws 12
9b. ERISA 13
9c. Restriction on Sale, Other Disposition 13
9d. Existence; No Violation 13
9e. Legal Opinion 14
10. DEFAULT 14
10a. Events of Default; Acceleration 14
10b. Other Remedies 15
10c. Amendment 16
11. DEFINITIONS 16
12. MISCELLANEOUS 18
12a. Payments 18
12b. Consent to Amendments 18
12c. Registration, Transfer and Exchange of Notes 19
12d. Lost, Etc., Notes 19
12e. Entire Agreement. 20
12f. Disclosure to Other Persons 20
12g. Successors and Assigns 20
12h. Notices 20
12i. Descriptive Headings 21
12j. Governing Law 21
12k. Counterparts 21
12l. Satisfaction Requirement 21
12m. Severability 21
12n. Conflict Between Agreements; Compliance 21
12o. Agent for Holders 22
12p. Joint and Several Liability 22
12q. Survival 22
12r. Payment of Holders Costs and Expenses 22
EXHIBIT A [FORM OF NOTE] A-1
Graphic Packaging International Corporation
Graphic Packaging Corporation
4455 Table Mountain Drive
Golden, CO 80403
10% Senior Subordinated Notes due August 15, 2008
As of August 15, 2001
To Golden Heritage LLC
Ladies and Gentlemen:
Each of GRAPHIC PACKAGING INTERNATIONAL CORPORATION, a
Colorado corporation ("GPK"), and GRAPHIC PACKAGING CORPORATION,
a Delaware corporation ("GPC" and together with GPK, "Seller" or
"Sellers"), jointly and severally hereby agrees with you as
follows:
1. THE NOTES.
1a. Authorization of Issue of Notes. The Sellers have duly
authorized an issue of $50,000,000 aggregate principal amount of
subordinated notes (the "Notes"), each in the form of Exhibit A
(including without limitation the restrictive legend set forth on
such Exhibit A). Each such Note shall bear interest and be
payable as provided herein and therein. As used herein, the term
"Notes" shall include all notes originally issued pursuant to
this Agreement and all notes delivered in substitution or
exchange for any of such notes pursuant to this Agreement and,
where applicable, shall include the singular number as well as
the plural. The term "Note" means one of the Notes.
1b. Interest on the Notes. Each Note shall bear interest
at a rate of ten percent (10%) per annum (the "Applicable
Interest Rate"); provided that upon the occurrence of an Event of
Default, interest on the principal outstanding under each Note
shall accrue at a rate equal to the Applicable Interest Rate plus
two percent (2%) per annum (the "Default Rate"). Interest on
each Note shall be payable as set forth in such Note.
2. SALE AND PURCHASE OF NOTES. Upon the terms and subject
to the conditions herein set forth, the Sellers will issue and
sell to the Initial Purchaser, and the Initial Purchaser will
purchase from the Sellers, Notes in the aggregate principal
amount of $50,000,000, at a purchase price of 100% of such
principal amount.
3. CLOSING.
3a. Closing; Closing Date. The closing of the sale of
Notes to you shall take place at the offices of Holme Roberts &
Owen LLP, 1700 Lincoln Street, Suite 4100, Denver, CO 80203 at
9:00 a.m. Denver time on August 15, 2001 or such other date as
shall be mutually agreeable to you and the Sellers. The date of
the closing is hereinafter referred to as the "Closing Date." At
the closing, the Sellers will deliver to you one or more Notes to
be purchased by you, registered in your name or in the name of
your nominee, in any denominations (multiples of $10,000,000) and
in the aggregate principal amount of $50,000,000, all as you may
specify by timely notice to the Sellers (or in the absence of
such notice, one Note registered in your name), duly executed and
dated the Closing Date, against payment of the purchase price
therefor with funds immediately available to GPK at its account
no. 8730082114 at Wachovia Bank of North Carolina, ABA No.
053100494. If at the closing the Sellers shall fail to tender to
you any of the Notes to be purchased by you as provided above in
this Section, or any of the conditions specified in Section 4
shall not have been satisfied or waived by you by the tenth
Business Day after the date intended for the closing to occur,
you shall, at your election, be relieved of all further
obligations under this Agreement.
4. CONDITIONS PRECEDENT. Your obligation to purchase and
pay for the Notes at the closing hereunder are subject to the
fulfillment, on or before the Closing Date, of the following
conditions:
4a. Representations and Warranties; Performance; No
Default. The representations and warranties of each Seller in
Section 8 shall be true on and as of the Closing Date with the
same effect as though such representations and warranties had
been made on the Closing Date; each Seller shall have performed
and complied with all agreements and conditions required to be
performed by it under this Agreement on or prior to the Closing
Date; and on the Closing Date, before and after giving effect to
the issue and sale of the Notes and the application of the
proceeds thereof, no Default or Event of Default shall exist.
4b. Secretary's Certificate. Execution and delivery of a
certificate by the secretary of each of the Sellers (i)
certifying with respect to each respective Seller true and
complete copies of such Seller=s articles of incorporation or
certificate of incorporation, as the case may be, and bylaws,
(ii) certifying and attaching all requisite resolutions of such
Seller's board of directors approving the execution and delivery
of this Agreement and the Notes, (iii) certifying to the
incumbency of the officers of such Seller executing this
Agreement and the Notes, and (iv) attaching true and complete
copies of good standing certificates from the Secretary of State
of Colorado (in the case of GPK) and Delaware (in the case of
GPC).
4c. Proceedings. All necessary corporate proceedings to be
taken by the Sellers in connection with the transactions
contemplated hereby shall have been taken by the Sellers.
4d. Approval. In accordance with the terms and conditions
of Section 9.27 and Section 9.33 of the Senior Credit Agreement,
the Administrative Agent and Reviewing Lenders (as such terms are
defined in the Senior Credit Agreement) shall have approved of
the Sellers' issuance of the Notes on the terms and conditions
contained herein.
4e. Legal Opinion and Officer=s Certificate. (i) Delivery
of a legal opinion by the General Counsel of GPIC covering: (a)
existence and good standing of Sellers and (b) due authorization,
execution and delivery by Sellers of this Agreement and the Notes
and (ii) a certificate by an officer of the Sellers stating that
the execution, delivery and performance by Sellers of this
Agreement and the Notes do not conflict with or create a Default
under the Senior Credit Agreement.
5. REDEMPTION OF THE NOTES. The Notes may not be paid or
redeemed prior to their final maturity except as hereinafter
provided.
5a. Optional and Mandatory Redemption. To the extent
permitted by the Senior Indebtedness, upon notice given as
provided in Section 5b, either Seller, at its option, may redeem
the Notes in whole (or from time to time in part in integral
multiples of $500,000), in each case at the principal amount of
the Notes so to be redeemed, without penalty, together with
interest accrued thereon to the date fixed for such redemption
plus an Optional Redemption Premium. During the period ending
one year after the Closing Date, the Optional Redemption Premium
shall be 3.0% of the principal amount of the Notes so redeemed.
During the period beginning one year after and ending two years
after the Closing Date, the Optional Redemption Premium shall be
1.5% of the principal amount of the Notes so redeemed. During
the period beginning two years after the Closing Date and
thereafter, there shall be no Optional Redemption Premium.
Notwithstanding the foregoing, it is understood that, to the
extent permitted by the Senior Indebtedness, the Sellers may, but
need not, redeem, at par plus accumulated and unpaid interest and
without premium or penalty, Notes in an amount up to 50% of the
original principal amount of all Notes issued on the Closing Date
from net proceeds of one or more public offerings of common stock
of GPK issued during the period when any Notes are outstanding.
5b. Notice of Redemption. The Sellers shall give written
notice of each redemption of Notes pursuant to Section 5a to each
holder of such Notes, which notice shall be given not less than 5
days prior to the date fixed for such redemption and shall
specify the amount so to be redeemed and the date fixed for such
redemption. Notice of redemption having been so given, the
aggregate principal amount of the Notes so to be redeemed as
specified in such notice, together with interest accrued thereon
to such date fixed for redemption together with any premium
payable in connection therewith, shall become due and payable on
the specified redemption date.
5c. Surrender of Notes; Notations Thereon. Subject to the
provisions of Section 12a, as a condition of redemption of all or
any part of the principal of and interest on any Note, the
Sellers may require the holder to present such Note for notation
of such redemption and, if such Note is paid in full, require the
surrender thereof.
6. COVENANTS.
6a. Incorporation By Reference. The covenants set forth in
Section 9 of the Senior Credit Agreement (other than Sections 9.6
(except 9.6(a), 9.16, 9.22, 9.27, 9.28, 9.29, 9.30, 9.31, 9.32
and 9.33), as such covenants may be waived, modified or amended
from time to time by the "Lenders" thereunder in accordance with
the terms thereof, shall be and hereby are incorporated by
reference into this Agreement (with such necessary conforming
changes consistent with this Agreement), and the Sellers hereby
covenant and agree to perform, observe and comply with such
covenants as if they were fully set forth herein; provided that
(i) references in the Senior Credit Agreement to the
"Administrative Agent" and the "Lenders" shall be deemed to mean
the Noteholder Representative hereunder and the holders of Notes,
respectively, (ii) references in the Senior Credit Agreement to
agreements between or among the "Borrowers," the "Companies" and
the "Lenders" shall mean the corresponding agreements, if any,
between the Sellers and the holders of Notes, (iii) references in
the Senior Credit Agreement to "Borrowers" or "Companies" shall
be references to Sellers, (iv) references in the Senior Credit
Agreement to "Loan Documents" shall be references to this
Agreement, the Notes and all documents, certificates and
instruments delivered in connection herewith and (v) references
in the Senior Credit Agreement to "Borrowings" shall be
references to the amount outstanding under the Notes. If the
Sellers' obligations under the Senior Credit Agreement terminate
prior to the date all Notes are paid in full, the Noteholder
Representative shall propose, for substitution herein,
commercially reasonable covenants consistent with covenants
customary for transactions of this nature but in no event less
favorable to Sellers than the covenants in any senior credit
agreement then in existence to which either Seller is a party,
and if Sellers shall agree (such agreement not to be unreasonably
withheld), then the parties shall amend this Agreement
accordingly. If Sellers and Noteholder Representatives shall not
agree as to such substituted provisions, the covenants in this
Section 6a shall remain unchanged. Notwithstanding the
foregoing, (a) all obligations of the Sellers to provide the
holders of the Notes with notices, information or other periodic
documentation pursuant to this Section 6 (by virtue of the
incorporation of the covenants from Section 9 of the Senior
Credit Agreement) shall be satisfied if the Sellers provide the
holders of the Notes with copies of such notices, information,
certificates, reports or other periodic reports, certificates and
other documentation or items furnished or provided to the
Administrative Agent or the Lenders under the Senior Credit
Agreement at the same time as so furnished or provided or
promptly thereafter, (b) Sellers shall, promptly after any
waiver, modification or amendment of any covenant set forth in
Section 9 of the Senior Credit Agreement (as incorporated herein)
or any Default set forth in Section 10 of the Senior Credit
Agreement (as incorporated herein), provide the holders of the
Notes with notice of any such waiver, modification or amendment
and (c) Sellers shall, promptly (but not less than 10 Business
Days) after either Seller knows or has reason to know of any
Default under the Senior Credit Agreement, provide the holders of
the Notes with notice of any such Default.
6b. Incurrence of Senior Indebtedness. Notwithstanding the
provisions of Section 6a, (i) Sellers may incur and allow to
exist indebtedness not otherwise permitted hereunder that is
senior in right of payment to the Notes up to an amount not to
exceed at any time (x) $710,000,000 minus (y) the sum of (a) the
total unused commitment at such time plus the total outstanding
indebtedness at such time under the Senior Credit Agreement, plus
(b) the total unused commitment at such time plus the total
outstanding indebtedness at such time under any other Senior
Indebtedness previously incurred pursuant to this Section 6b(i),
and (ii) Sellers may incur and allow to exist indebtedness not
otherwise permitted hereunder (including without limitation
Section 6b(i)) that is senior in right of payment to the Notes so
long as, after giving effect to the incurrence thereof, the
Leverage Ratio (as defined in the Senior Credit Agreement) is not
greater than 5.0 to 1.0.
6c. Notice of Senior Indebtedness. Promptly upon the
incurrence by the Sellers of any Senior Indebtedness pursuant to
Section 6b(ii), the Sellers shall provide the holders of the
Notes with written notice of the incurrence of such Senior
Indebtedness, which notice shall include (x) a copy of the
executed agreement or other instrument (with all exhibits and
schedules ) pursuant to which such Indebtedness was incurred, (y)
a certificate of a senior officer of either Seller confirming
that such Indebtedness was incurred within all applicable
provisions of this Agreement, and (z) a list of the names and
addresses of all holders of such Indebtedness.
6d. Senior Credit Facility. Notwithstanding anything in
this Agreement to the contrary (including, without limitation,
the covenants in this Section 6), this Agreement expressly
permits the following: (i) the Senior Indebtedness, now existing
or hereafter arising (to the extent increases thereof are
incurred in accordance with the terms of this Agreement) under
the Senior Credit Agreement, Financial Hedges (as defined in the
Senior Credit Agreement), and the related loan, guaranty, and
collateral documents (collectively, as amended, modified,
restated, or refinanced from time to time, the "Senior Loan
Documents"), (ii) guaranties by Sellers and Subsidiaries of
Sellers guaranteeing indebtedness arising under the Senior Loan
Documents, (iii) liens securing indebtedness outstanding and
arising under the Senior Loan Documents and liens securing any
other Senior Indebtedness outstanding and arising pursuant to
Section 6b(i), and (iv) restrictions on Subsidiaries of Sellers,
now existing or hereafter arising, under the Senior Loan
Documents; it being expressly agreed that for purposes of
determining permitted Senior Indebtedness under Section 6b or
otherwise under this Agreement, (a) borrowings, repayments,
prepayments and reborrowings under any revolving facilities or
lines of credit under the Senior Loan Documents are permitted
without further compliance with any debt incurrence limitations
hereunder to the extent that the commitments to extend such
revolving loans or lines of credit (whether used or unused) were
in effect under the Senior Loan Documents on the Closing Date of
this Agreement (without giving effect to any repayments or
reductions made on such date) and (b) any increases in any
revolver commitments or lines of credit under the Senior Loan
Documents or any additional revolver facilities, lines of credit,
or multiple advance term facilities must comply with the debt
incurrence requirements of this Agreement at the time the
commitments to increase or advance such facilities are made, not
at the time of each borrowing, repayment, or reborrowings
thereunder.
7. SUBORDINATION.
7a. Agreement That Notes Be Subordinate. Each Seller
covenants and agrees, and the Initial Purchaser and each other
holder of Notes issued hereunder by the acceptance thereof
likewise covenants and agrees, that all Notes shall be issued
subject to the provisions of this Section 7; and each Person
holding any Note, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such
provisions. All Notes shall, for all purposes and in all
respects without limitation, including those hereinafter in this
Section 7 set forth, be subordinated and subject in right of
payment to the prior payment in full in cash or other property
acceptable to the holders of the Senior Indebtedness (or to have
such payment duly provided for in a manner satisfactory to the
holders of the Senior Indebtedness ("money's worth")) on all
Senior Indebtedness, as more fully set forth in this Section 7.
7b. Reliance by Senior Indebtedness on Subordination
Provisions. Each holder of any Note by the acceptance thereof
acknowledges and agrees that the subordination provisions set
forth in this Section 7 are, and are intended to be, an
inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or
acquired before or after the issuance of the Notes, to acquire
and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be
deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold such Senior
Indebtedness and shall be deemed a third party beneficiary
hereof.
7c. Payment Over of Proceeds Upon Dissolution, etc.
(i) In the event of any Proceeding (as defined below),
the holders of Senior Indebtedness shall be entitled to receive
or retain payment in full in cash or moneys worth of all amounts
due or to become due on or in respect of all Senior Indebtedness
(including any interest on or after the filing of any Proceeding
relating to any Seller, whether or not allowed in such
Proceeding), before the holders of the Notes are entitled to
receive any Note Payments (as defined below), and to that end the
holders of Senior Indebtedness shall be entitled to receive, for
application to the payment thereof, any Note Payment which may be
payable or deliverable in respect of the Notes in any such
Proceeding. The holders of Senior Indebtedness are hereby
authorized to file an appropriate claim for and on behalf of the
holders of any Notes if they or any of them do not file, and
there is not otherwise filed on behalf of such holders, a proper
claim or proof of claim in the form required in any such
proceeding prior to 30 days before the expiration of the time to
file such claim or claims. For purposes hereof: "Proceeding"
means (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case
or proceeding in connection therewith, relative to either Seller
or to its creditors, as such, or to its assets, or (b) any
liquidation, dissolution or other winding up of either Seller,
whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit
of creditors or any other marshaling of assets and liabilities of
either Seller.
(ii) In the event that, notwithstanding the foregoing
provisions of this Section 7c, the holder of any Note shall have
received any Note Payment in violation of this Section 7c, then
and in such event such Note Payment shall be paid over or
delivered forthwith to the Administrative Agent under the Senior
Credit Agreement (or if no indebtedness, commitments, or letters
of credit are outstanding under the Senior Credit Agreement, the
holders of the Senior Indebtedness) for the application to the
payment of all Senior Indebtedness remaining unpaid, to the
extent necessary to pay the Senior Indebtedness in full in cash
or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness.
(iii) For purposes of this Section 7, the term
"Note Payment" means, with respect to any holder of any Note, any
payment or distribution (whether direct or indirect, whether in
cash, property, securities, or otherwise, and whether obtained or
distributed by set-off, liquidation, bankruptcy distribution,
settlement, or otherwise) made by any Person (including, without
limitation, any payments or distributions made by any court or
governmental body or agency, any trustee in bankruptcy, or any
liquidating trustee) with respect to any Note or otherwise under
this Agreement, including, without limitation, payment of
principal, premium, interest, or liquidated damages, if any, on
the Notes, any depositing of funds with any holder or the
Noteholder Representative (including, without limitation, a
deposit in respect of defeasance or redemption), any payment on
account of any optional or mandatory redemptions or repurchase
provisions, any payment or recovery on any claim under the
Agreement, any interest accruing on or after the filing of any
Proceeding relating to any Seller (whether or not allowed in such
Proceeding), any Note, or relating to or arising out of the
offer, sale, or purchase of any Note (whether for rescission or
damages and whether based on contract, tort, duty imposed by law,
or any other theory of liability); provided that, the term "Note
Payment," as used in this Section 7 shall not be deemed to
include a payment or distribution of stock or securities of
either Seller provided for by a plan of reorganization or
readjustment authorized by an order or decree of a court of
competent jurisdiction in a reorganization proceeding under any
applicable bankruptcy law or of any other corporation provided
for by such plan of reorganization or readjustment which stock or
securities (x) are subordinated in right of payment to all then
outstanding Senior Indebtedness to substantially the same extent
as, or to a greater extent than, the Notes are so subordinated as
provided in this Section 7 and (y) have been approved by the
Administrative Agent and the Reviewing Lenders (defined in the
Senior Credit Agreement) (including by acceptance or approval of
such plan of reorganization or otherwise). The consolidation of
either Seller with, or the merger of either Seller into, another
Person or the liquidation or dissolution of either Seller
following the conveyance or transfer of all or substantially all
of its properties and assets as an entirety to another Person
upon the terms and conditions permitted by the Senior Credit
Agreement shall not be deemed a Proceeding for the purposes of
this Section 7c if the Person formed by such consolidation or
into which such Seller is merged or the Person which acquires by
conveyance or transfer such properties and assets, as the case
may be, shall, as a part of such consolidation, merger,
conveyance or transfer, complies with the conditions set forth in
the Senior Credit Agreement.
7d. No Payment When Senior Indebtedness in Default.
(i) In the event that any Senior Payment Default (as
defined below) shall have occurred and be continuing, then no
Note Payment shall be made, and the holders of the Notes shall
not be permitted to enforce any of their rights or remedies set
forth in Sections 10a(ii) or 10b(i) with respect to any Event of
Default hereunder (except that interest on the Notes may accrue
at the Default Rate during the existence of any such Event of
Default), unless and until such Senior Payment Default shall have
been cured or waived or shall have ceased to exist or all amounts
then due and payable in respect of Senior Indebtedness shall have
been paid in full in cash or moneys worth. "Senior Payment
Default" means (a) any default in the payment of principal of (or
premiums, if any), interest on, or material fees or other amounts
owing in connection with any Senior Indebtedness when due,
whether at the due date of any such payment or by declaration of
acceleration, prepayment, call for redemption or otherwise or (b)
any default under any financial covenant set forth in Section
9.30 of the Senior Credit Agreement.
(ii) Upon the occurrence and during the continuance of
a Senior Nonmonetary Default (as defined below), no Note Payment
shall be made, and the holders of the Notes shall not be
permitted to enforce any of their rights or remedies set forth in
Sections 10a(ii) or 10b(i) with respect to any Event of Default
hereunder (except that interest on the Notes may accrue at the
Default Rate during the existence of any such Event of Default)
during a period (the "Blockage Period" commencing on the date
such Senior Nonmonetary Default occurred and ending on the date
that such Senior Nonmonetary Default shall have been waived,
cured, or otherwise ceases to exist or until the Senior
Indebtedness that is the subject of such Blockage Period has been
paid in full in cash or moneys worth; provided that,
notwithstanding the continued existence of a Blockage Period, but
only for so long as no Senior Payment Default then exists or
arises:
(x) any interest payments which were due and
payable under the Notes during the Blockage Period and
which remain unpaid on the 180th day of the Blockage
Period or on any 180th-day anniversary thereof (each
such date being a "Payment Determination Date") may be
paid on or after any such Payment Determination Date
but only in an amount equal to the interest payments
due and payable under the Notes during the Blockage
Period which remain unpaid on such Payment
Determination Date; provided further that, if more than
one Blockage Period concurrently exists under this
Section 7d(ii), then the Payment Determination Dates
shall be calculated for purposes of this Section
7d(ii)(x) from the commencement date of the earliest-to-
occur of the Blockage Periods, regardless of whether
such Blockage Period remains in effect on such Payment
Determination Date; and
(y) to the extent the interest payments permitted
to be paid pursuant to clause (x) hereof are not so
paid and after providing 5 Business Days= advance
written notice to Administrative Agent under the Senior
Credit Agreement (or if no indebtedness, commitments,
or letters of credit are outstanding under the Senior
Credit Agreement, the holders of the Senior
Indebtedness) of the intention to exercise such rights
and remedies, the holders of the Notes may exercise
their rights and remedies in accordance with the
requirements of Section 10b(i) solely with respect to
the collection of such unpaid interest payments on the
Notes allowed to be paid pursuant to clause (x)
preceding.
"Senior Nonmonetary Default" means the existence and continuance
of an event of default, with respect to any Senior Indebtedness,
other than a Senior Payment Default, that permits the holders of
the such Senior Indebtedness (or a trustee or other agent on
behalf of the holders thereof) then to declare such Senior
Indebtedness due and payable prior to the date on which it would
otherwise become due and payable.
(iii) The payment blockages and stays of rights and
remedies provided for in Sections 7d(i) and 7(d)(ii) shall be
effected automatically upon the occurrence of a Senior Payment
Default or a Senior Nonmonetary Default, as the case may be,
without the requirement of any further action or notices by the
holders of the Senior Indebtedness.
(iv) Upon termination of any Blockage Period the
Sellers shall resume making any and all required payments in
respect of the Notes, including any missed payments together with
interest thereon.
(v) In the event that, notwithstanding the foregoing,
any holder of any Notes shall receive any Note Payment prohibited
by the foregoing provision of this Section 7d, then in such event
such Note Payment shall be paid over and delivered forthwith to
the Administrative Agent under the Senior Credit Agreement (or if
no indebtedness, commitments, or letters of credit are
outstanding under the Senior Credit Agreement, the holders of the
Senior Indebtedness) in the same form received and, until so
turned over, the same shall be held in trust by such holder of
Notes as the property of the holders of the Senior Indebtedness.
(vi) It is understood that, by reason of the
subordination set forth in this Section 7, in the event of
insolvency by either Seller, unsubordinated creditors of either
Seller who are not holders of Senior Indebtedness or of the Notes
may recover less, ratably, than holders of Senior Indebtedness
and more, ratably, than the holders of the Notes.
The provisions of this Section 7d shall not apply to
any Note Payment with respect to which Section 7c would be
applicable.
7e. Payment Permitted If No Default. Nothing contained in
this Section 7 or elsewhere in this Agreement or in any of the
Notes shall prevent or shall be construed to prohibit or prevent
the Sellers, at any time except during the pendency of any
Proceeding referred to in Section 7c or under the conditions
described in Section 7d, this Section 7e, or Section 10(a)(ii),
from making Note Payments when due, whether on the scheduled
payment date, by acceleration or otherwise, provided that the
Sellers shall not make any voluntary prepayment on, or
voluntarily redeem, the Notes nor voluntarily advance the
scheduled maturity date or any interest payment date of the
Notes, increase the interest rate, amend the covenants or
representations to make such provisions more restrictive, nor
amend the subordination provisions hereof, except (a) to the
extent permitted under the Senior Credit Agreement and other
Senior Indebtedness, or (b) with the prior written consent of the
Administrative Agent and the Reviewing Lenders under the Senior
Credit Agreement (as defined therein) as long as the Senior
Credit Agreement is in effect. Except with respect to any Event
of Default relating to the events described in Sections 10.3(c)
or 10.3(d) of the Senior Credit Agreement (or any comparable
events described in any other senior credit agreement to which
either Seller is a party), the holders shall give a written
notice to the Administrative Agent under the Senior Credit
Agreement (or if no indebtedness, commitments, or letters of
credit are outstanding under the Senior Credit Agreement, the
holders of the Senior Indebtedness) of any declaration of
acceleration of the Notes at least five Business Days in advance
of the effectiveness of such declaration of acceleration;
provided, however, that all Senior Indebtedness then due or
thereafter declared to be due shall first be paid in full before
the holders of the Notes are entitled to receive any payment from
either Seller of principal of, or interest on, the Notes, it
being understood that payments made to the holders at a time when
no Senior Indebtedness is due and payable shall not be deemed a
violation of this proviso.
7f. Subrogation to Rights of Holders of Senior
Indebtedness. After the Senior Indebtedness has been paid in
full, and prior to the Notes being paid in full, the holders of
the Notes shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments and distributions of
cash, property, securities, assets and other collateral
applicable to such Senior Indebtedness (to the extent that
payments and distributions otherwise payable to the holders have
been applied to payment of the Senior Indebtedness). For
purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or
securities to which the holders of the Notes would be entitled
except for the provisions of this Section 7, and no payments
pursuant to the provisions of this Section 7 to the holders of
Senior Indebtedness by holders of the Notes, shall, as among the
Sellers, their creditors (other than holders of Senior
Indebtedness) and the holders of the Notes, be deemed to be a
payment or distribution by the Sellers to or on account of the
Senior Indebtedness of the Sellers. For the purposes of this
Section 7, all obligations and indebtedness now or hereafter
existing under any Senior Indebtedness (including, without
limitation, the Senior Credit Agreement, any Financial Hedge (as
defined in the Senior Credit Agreement), or agreements with
respect to the issuance of letters of credit) shall not be deemed
to have been paid in full unless the holders thereof shall have
received payment in full in cash or money's worth and all
commitments or obligations thereunder and all letters of credit
issued thereunder have expired and all Financial Hedges have
terminated.
7g. Provisions Solely to Define Relative Rights. The
provisions of this Section 7 are and are intended solely for the
purpose of defining the relative rights of the holders of the
Notes on the one hand and the holders of Senior Indebtedness on
the other hand. Nothing contained in this Section 7 or elsewhere
in this Agreement or in the Notes is intended to or shall (a)
impair, as among the Sellers, their creditors (other than holders
of Senior Indebtedness) and the holders of the Notes, the
obligation of the Sellers to pay to the holders of the Notes the
principal of and interest on the Notes as and when the same shall
become due and payable in accordance with their terms; or (b)
affect the relative rights against the Sellers of the holders of
the Notes and creditors of the Sellers (other than the holders of
Senior Indebtedness); or (c) prevent the holder of any Note from
exercising all remedies otherwise permitted by applicable law
upon default under this Agreement, subject to the rights, if any,
under this Section 7 of the holders of Senior Indebtedness to
receive cash, property, securities, assets and other collateral
otherwise payable or deliverable to such holder of such Note.
7h. No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce
subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part
of the Sellers or by any act or failure to act, in food faith, by
any such holder, or by any noncompliance by the Sellers with the
terms, provisions and covenants of this Agreement, regardless of
any knowledge thereof any such holder may have or be otherwise
charged with.
7i. Reliance on Judicial Order of Certificate of
Liquidating Agent. Upon any payment or distribution of assets or
securities of either Seller referred to in this Section 7, the
holders of the Notes shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which
such Proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee
for the benefit of creditors, agent or other Person making such
payment or distribution, delivered to the holders of Notes (so
long as the existence of the subordination provisions of Section
7 have been brought to the attention of such court, trustee,
receiver, liquidating trustee, custodian, assignee, agent, or
other Person), for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the
holders of the Senior Indebtedness and other indebtedness of the
Sellers, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent
thereto or to this Section 7.
7j. Reinstatement. The provisions of this Section 7 shall
continue to be effective or be reinstated, and the Senior
Indebtedness shall not be deemed to be paid in full, as the case
may be, if at any time any payment of any of the Senior
Indebtedness is rescinded or must otherwise be returned by the
holder thereof upon the insolvency, bankruptcy or reorganization
of either Seller or otherwise, all as though such payment had not
been made.
7k. No Claim. No holder of any Note shall have any claim
to any property or assets of any Seller or any of its or their
Subsidiaries unless and until the Senior Indebtedness shall have
been paid and/or satisfied in full.
7l. Subordination Not Affected. Subject to the other
provisions of this Agreement, the holders of the Senior
Indebtedness may, at any time and from time to time, without the
consent of or notice to the Noteholder Representative or the
holders (except as may be required by law), without incurring
responsibility to the holders, and without impairing or releasing
the subordination provided in Section 7, or the obligations
hereunder of the holders to the holders of the Senior
Indebtedness, do any one or more of the following: (a) change
the manner, place, or terms of payment, or extend the time of
payment of, or renew or alter, Senior Indebtedness or any
instrument evidencing the same or any agreement under which the
Senior Indebtedness is outstanding or secured; (b) sell,
exchange, release, or otherwise deal with any property pledged,
mortgaged, or otherwise securing the Senior Indebtedness; (c)
release any person liable in any manner for the collection of the
Senior Indebtedness; and (d) exercise or refrain from exercising
any rights against either Seller or any other Person.
8. REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
8a. Incorporation by Reference. The representations and
warranties set forth in Section 8 of the Senior Credit Agreement
(other than Sections 8.21, 8.22 or 8.25), as such representations
and warranties may be waived, modified or amended by the
"Lenders" thereunder from time to time in accordance with the
terms thereof, shall be and hereby are incorporated by reference
into this Agreement (with such necessary conforming changes
consistent with this Agreement) and are hereby made to and in
favor of the Initial Purchaser as of the date hereof as if set
forth herein and such representations and warranties shall be
true and correct on the Closing Date; provided that
(i) references in the Senior Credit Agreement to the
"Administrative Agent" and the "Lenders" shall be deemed to mean
the Noteholder Representative hereunder and the holders of Notes,
respectively, (ii) references in the Senior Credit Agreement to
agreements between or among the "Borrowers," the "Companies" and
the "Lenders" shall mean the corresponding agreements, if any,
between the Sellers and the holders of Notes, (iii) references in
the Senior Credit Agreement to "Borrowers" or "Companies" shall
be references to Sellers, (iv) references in the Senior Credit
Agreement to "Loan Documents" shall be references to this
Agreement, the Notes and all documents, certificates and
instruments delivered in connection herewith and (v) references
in the Senior Credit Agreement to "Borrowings" shall be
references to the amount outstanding under the Notes.
8b. Additional Representations and Warranties. Each Seller
also represents and warrants as of the date hereof and as of the
Closing Date that (i) neither such Seller nor any agent acting on
its behalf has offered the Notes or any similar securities of
such Seller for sale to, or solicited any offers to buy the Notes
or any similar securities of such Seller from, or otherwise
approached or negotiated with respect thereof with, any Person
other than you, in each case in violation of the Securities Act,
and such Seller has offered the Notes to you for purposes of
investment and not for distribution; (ii) neither such Seller nor
any agent acting on its behalf has offered or will offer the
Notes or any part thereof or any similar securities for issue or
sale to, or solicit any offer to acquire any of the same from,
anyone so as to bring the issuance and sale of the Notes within
the provisions of Section 5 of the Securities Act; and (iii) it
will use the proceeds of the sale of the Notes for general
corporate purposes, including without limitation making payments
under the Senior Indebtedness.
9. REPRESENTATIONS AND COVENANTS OF THE PURCHASER.
9a. Compliance with Securities Laws.
(i) You understand that the Notes have not been
registered under the Securities Act or the securities laws of any
state, based upon an exemption from such registration
requirements for non-public offerings pursuant to Regulation D
under the Securities Act or other exemptions thereunder. You
understand that neither the Securities and Exchange Commission
nor any state securities commission has approved the Notes or
passed upon or endorsed the merits of the investment or reviewed
or confirmed the accuracy or determined the adequacy of any
information furnished to you by the Sellers.
(ii) You understand that the Notes are and will be
"restricted securities," as defined in Rule 144 promulgated under
the Securities Act. The Notes may not be sold or otherwise
transferred unless, in addition to complying with any
restrictions on transfer set forth in this Agreement, they have
been first registered under the Securities Act and all applicable
state securities laws, or unless exemptions from such
registration provisions are available with respect to said resale
or transfer. You understand that the Sellers are under no
obligation to register the Notes or to comply with any exemption
in connection with your sale, transfer or other disposition under
applicable rules and regulations.
(iii) You are acquiring the Notes solely for your
own account, for investment purposes only, and not with a view
towards the resale or distribution thereof.
(iv) You are an entity all equity owners of which are
"accredited investors" as such term is defined in Regulation D of
the Rules and Regulations promulgated under the Securities Act.
(v) The Sellers have made all information, including
documents, books and other records, requested by you or your
advisors available to you and you have received sufficient
information to enable you to evaluate the merits and risks of
your investment. You have had a reasonable opportunity to ask
questions of and receive answers from the Sellers concerning the
Sellers, and all such questions, if any, have been answered to
your satisfaction and you have had the opportunity to receive all
other relevant documents concerning the Sellers. You have such
knowledge and expertise in financial and business matters that
you are capable of evaluating the merits and risks involved in an
investment in the Notes and you acknowledge that an investment in
the Notes entails a number of very significant risks.
(vi) Except as set forth in this Agreement, no
representations or warranties have been made to you by the
Sellers or any agent, employee or affiliate of the Sellers and in
entering into this transaction, you are not relying upon any
information, other than the results of your independent
investigation.
(vii) You understand that the Notes are being
offered and sold expressly conditioned upon the satisfaction of
specific exemptions from the registration requirements of federal
and state securities laws and that the Sellers are relying upon
the truth and accuracy of your representations, warranties,
agreements, acknowledgments and understandings set forth herein
in order to determine the applicability of such exemptions and
your suitability to acquire the Notes. You agree to indemnify
and hold harmless the Sellers, its shareholders, officers, agents
and employees from and against any claim, demand, loss, liability
and expense (including, without limitation, reasonable attorneys'
fees and disbursements) incurred as a result of any
misrepresentation or breach of any agreement, representation,
warranty or covenant made by you herein or in any other documents
furnished by you to any of such persons in connection with this
transaction.
9b. ERISA. You represent that your purchase of Notes
hereunder is not being made for or on behalf of any pension or
welfare plan, as defined in Section 3 of ERISA.
9c. Restriction on Sale, Other Disposition. You agree
that, without the prior consent of the Sellers, you will not,
directly or indirectly, sell, transfer, pledge, encumber or
otherwise dispose of (a "Transfer") any Notes or any interest
therein; provided that upon prior written notice to Sellers you
or any Permitted Transferee may transfer Notes to any Member
Trust without Sellers= consent (any such transferee with respect
to any such Transfer so consented to by the Sellers and any such
Member Trust, a "Permitted Transferee"). Without limiting the
foregoing, any Permitted Transferee shall, by a written agreement
reasonably satisfactory to the Sellers, expressly assume your
obligations, duties and covenants under this Agreement as to the
Notes so Transferred and make representations to the Sellers to
the same or similar effect as is contained in Sections 9a and 9b
or, in the case of Section 9b, to provide other information
reasonably satisfactory to the Sellers to enable the Sellers to
determine that the Transfer of such Note to such Transferee will
not constitute a non-exempt prohibited transaction under Section
406 of ERISA. Each Person that becomes a holder of any Note
shall be deemed to have agreed to comply with this Section 9c.
9d. Existence; No Violation. You represent that:
(i) You are a limited liability company, duly
organized, validly existing and in good standing under the laws
of the State of Colorado, you have full power and authority to
execute and deliver this Agreement and to perform your
obligations hereunder; and this agreement has been duly
authorized by all requisite limited liability company action on
your part and is a legally binding obligation enforceable against
you in accordance with its terms and no authorization, approval,
consent or license of any court or governmental regulatory body
or authority is required on your part or on your behalf for the
valid purchase of the Notes.
(ii) The consummation of the transactions
contemplated herein and compliance with the terms hereof and the
ownership of the Notes do not and will not conflict with, or
result in a breach of any of the terms or provisions of or
default under, your articles of organization or your limited
liability company or operating agreement, any material agreement,
indenture or other instrument to which you are a party or by
which you are bound, or any existing applicable law, rule,
regulation, judgment, order or decree of any government,
governmental instrumentality or court having jurisdiction over
you or any of your properties.
(iii) Neither you nor any of your Subsidiaries, nor
any Person controlling any of you or any of your Subsidiaries,
(i) is an "Investment Company" within the meaning of the
Investment Company Act of 1940, as amended, or (ii) is required
to register under the provisions thereof.
9e. Legal Opinion. On or prior to the Closing Date, you
shall deliver a legal opinion of Davis Graham & Stubbs LLP
covering: (a) existence and good standing of Initial Purchaser
and (ii) due authorization, execution and delivery by Initial
Purchaser of this Agreement.
10. DEFAULT.
10a. Events of Default; Acceleration. (i) The "Defaults" in
Section 10 of the Senior Credit Agreement (other than Sections
10.7, 10.8(a), 10.12 and 10.13), as such Defaults may be waived,
modified or amended by the "Lenders" thereunder from time to time
in accordance with the terms of thereof, shall be and hereby are
incorporated by reference into this Agreement (with such
necessary conforming changes consistent with this Agreement) as
if set forth herein; provided that (i) references in the Senior
Credit Agreement to the "Administrative Agent" and the "Lenders"
shall be deemed to mean the Noteholder Representative hereunder
and the holders of Notes, respectively, (ii) references in the
Senior Credit Agreement to agreements between or among the
"Borrowers," the "Companies" and the "Lenders" shall mean the
corresponding agreements, if any, between the Sellers and the
holders of Notes, and (iii) references in the Senior Credit
Agreement to "Borrowers" or "Companies" shall be references to
Sellers. The term "Event of Default", wherever used herein with
respect to Notes, means any such condition, event or effect as
described in the immediately preceding sentence. Notwithstanding
the above, it shall not be an Event of Default hereunder upon the
occurrence of a "Default" under any Senior Indebtedness unless
the Required Lenders (as defined in the Senior Credit Agreement)
shall have taken action specified in Section 11.1(b)(i) of the
Senior Credit Agreement or any lender takes any comparable action
under any other senior credit agreement then in existence to
which either Seller is a party. Without limiting the foregoing,
if any "Default" under the Senior Credit Agreement has been cured
or waived in accordance with the terms thereof, then any similar
Event of Default hereunder (or any other Event of Default
hereunder arising out of the same event or events that resulted
in the Default under the Senior Credit Agreement), other than any
default in payment of principal of or interest on any Notes
hereunder, shall be deemed cured or waived, as the case may be,
by all holders of all Notes hereunder.
(ii) Subject at all times to Section 7, upon the
occurrence and during the continuance of any Event of Default,
the holder or holders of at least 66 2/3% of the outstanding
principal amount of the Notes may, by five days written notice to
the Sellers and the Administrative Agent under the Senior Credit
Agreement, declare the unpaid principal amount of all (but not
less than all) Notes to be, and the same shall forthwith become,
due and payable, together with the interest accrued thereon;
provided that with respect to any Event of Default relating to
the events described in Sections 10.3(c) or 10.3(d) of the Senior
Credit Agreement (or any comparable events described in any other
senior credit agreement to which either Seller is a party), the
unpaid principal amount of all (but not less than all) Notes
shall be, and the same shall forthwith become, automatically due
and payable, together with the interest accrued thereon.
(iii) The provisions of this Section 10a are
subject, however, to the condition that if, at any time after any
Note shall have so become due and payable, any Seller shall pay
all arrears of interest on the Notes and all payments on account
of the principal of the Notes which shall have become due
otherwise than by acceleration (with interest on such principal
and, to the extent permitted by law, on overdue payments of
interest, at the rate specified in the Notes) and all Events of
Default (other than nonpayment of principal of and accrued
interest on Notes due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section
12b, then, and in every such case, any such acceleration and its
consequences shall be rescinded and annulled, but no such action
shall affect any subsequent Default or Event of Default or impair
any right consequent thereon.
10b. Other Remedies. (i) If any Event of Default shall
exist, subject to the provisions of Section 7, the principal
outstanding under the Notes shall bear interest at the Default
Rate and the holder or holders of more than 25% in principal
amount of the Notes at the time outstanding may cause all (but
not less than all) holders, and all such holders shall be
required, to (a) proceed to protect and enforce their rights,
either by suit in equity or by action at law, or both, (b)
proceed to enforce the payment of all sums due upon all Notes, or
(c) enforce any other legal or equitable rights of the holders of
all Notes. Notwithstanding the preceding sentence, no holder or
holders of the Notes shall be permitted to proceed to protect and
enforce its rights pursuant to this Section 10b if the Required
Holders prohibit the taking of such action by written notice to
all holders.
(ii) The Sellers covenant that, if it shall default in
the making of any payment due under any Note, it will, upon
reasonable demand by the holder thereof, pay to such holder such
further amounts, to the extent lawful, as shall be sufficient to
pay the reasonable out-of-pocket costs and expenses of collection
or of otherwise enforcing such holder's rights, including
reasonable legal fees.
(iii) No remedy herein conferred upon you or the
holder of any Note is intended to be exclusive of any other
remedy each and every such remedy shall be cumulative and shall
be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or
otherwise.
(iv) No course of dealing between the Sellers and you
or any other holder of a Note, and no delay or failure in
exercising any rights hereunder or under any Note, shall operate
as a waiver of any rights you or any such holder of a Note may
have.
10c. Amendment. If the Sellers' obligations under the
Senior Credit Agreement terminate prior to the date all Notes are
paid in full, the Noteholder Representative shall propose, for
substitution herein, commercially reasonable Events of Default
herein consistent with Events of Default customary for
transactions of this nature but in no event less favorable to
Sellers than the events of default in any senior credit agreement
then in existence to which either Seller is a party, and if the
Sellers shall agree (such agreement not to be unreasonably
withheld), the parties shall amend this Agreement accordingly.
If Sellers and Noteholder Representative shall not agree as to
such substituted provisions, the Events of Default in Section
10a(i) shall remain unchanged.
11. DEFINITIONS. For the purpose of this Agreement the
following terms shall have the meanings specified with respect
thereto below:
"Agreement" means this Note Agreement.
"Applicable Interest Rate" shall have the meaning specified
in Section 1b.
"Blockage Period" shall have the meaning set forth in
Section 7d(ii).
"Business Day" means any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of Colorado
are authorized or obligated by law or executive order to close.
"Closing Date" shall have the meaning specified in Section
3a.
"Code" means the Internal Revenue Code of 1986, as amended.
"Default" means any event which, with notice or the lapse of
time or both, would constitute an Event of Default.
"Default Rate" shall have the meaning specified in Section
1b.
"ERISA" means the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"Event of Default" shall have the meaning set forth in
Section 10a.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Initial Purchaser" means the initial purchaser of the Notes
accepting this Agreement on the signature page hereof.
"Member Trust" means any and each of the Grover C. Coors
Trust, the Herman F. Coors Trust, the Augusta Coors Collbran
Trust, the Bertha Coors Munroe Trust and the Louise Coors Porter
Trust, so long as any such trust is a member of the Initial
Purchaser.
"Noteholder Representative" means Golden Heritage LLC, or if
Golden Heritage LLC no longer holds any notes, then any
Significant Holder that is designated as the Noteholder
Representative by the Required Holders, and if no Significant
Holder is so designated or if no holder is a Significant Holder,
then any holder designated by the Sellers.
"Note Payment" shall have the meaning specified in Section
7c(iii).
"Notes" shall have the meaning specified in Section 1a.
"Optional Redemption Premium" shall have the meaning set
forth in Section 5a.
"Permitted Transferee" means a Person to whom Notes are
permitted to be Transferred pursuant to Section 9c.
"Person" means and include an individual, a partnership, a
limited liability company, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any
department or agency thereof.
"Proceeding" shall have the meaning set forth in Section 7c.
"Required Holder(s)" means the holder or holders of at least
51% of the outstanding principal amount of the Notes at the time.
"Securities Act" means the Securities Act of 1933, as
amended.
"Seller" and "Sellers" shall have the meaning specified in
the introduction to this Agreement.
"Senior Credit Agreement" means the credit agreement among
the Sellers, Banc of America Securities LLC, as Sole Lead
Arranger and Book Manager, Bank of America, N.A., as
Administrative Agent, and the Agents and Lenders party thereto,
dated as of August 2, 1999, as such agreement or provisions
thereof have been, or are in the future, waived, amended,
modified or supplemented from time to time or as the commitments
thereunder have been, or are in the future, increased from time
to time (to the extent such increase is permitted under Section
6b).
"Senior Indebtedness" means (i) all indebtedness under the
Senior Credit Agreement (and any refinancings thereof in whole
or in part), including without limitation all obligations of
Sellers under any Financial Hedges (as defined in the Senior
Credit Agreement), (ii) all other indebtedness of either Seller
for borrowed money that is duly created in accordance with
Section 6b and pursuant to a contemporaneous writing expressly
providing for such indebtedness to be senior in right of payment
to the Notes, and (iii) all debts, liabilities, obligations,
covenants and duties of such Seller arising under either of the
foregoing.
"Senior Nonmonetary Default" shall have the meaning set
forth in Section 7d(ii).
"Senior Payment Default" shall have the meaning set forth in
Section 7d(i).
"Significant Holder" means each Holder of at least
$15,000,000 in aggregate principal amount of Notes that is a
Permitted Transferee thereof.
"Subsidiary" shall have the meaning set forth in the Senior
Credit Agreement. Except as otherwise expressly indicated
herein, references to Subsidiaries shall refer to Subsidiaries of
GPK.
"Transfer" shall have the meaning specified in Section 9c.
12. MISCELLANEOUS.
12a. Payments. Each Seller agrees that, as long as you
shall hold any Notes, all payments to be made on, or in
connection with the payment or prepayment of, such Notes will be
made at such place and in such manner you may designate in
writing, without any requirement for the presentation or
surrender of such Notes. You agree that (i) if any Note shall be
paid in full you will promptly surrender such Note to the Sellers
for cancellation, and (ii) prior to any delivery upon the sale or
other disposition of any Note held by you, you will surrender
such Note to the Sellers in exchange for a new Note or Notes in
the same aggregate principal amount being sold or disposed of and
the aggregate unpaid principal amount of Notes to be held by you
after such sale or disposition. Each Seller agrees to afford the
benefits of this Section 12a to any Permitted Transferee which
shall have made the same agreement as you have made in this
Section 12a.
12b. Consent to Amendments. (i) Subject to the terms
hereof and the Senior Credit Agreement, this Agreement may be
amended only with the consent of the Sellers and the Required
Holders, and the Sellers may take any action herein prohibited,
or omit to perform any act herein required to be performed by it,
only if the Sellers shall have obtained the consent to such
amendment or waiver with respect to such action or omission to
act, by one or more substantially concurrent written instruments
signed by the Required Holder(s); provided, however, that
(A) no such amendment or waiver shall
(1) change the rate or extend the time
of payment of interest on any of the Notes,
without the consent of the holder of each
Note so affected, or
(2) modify any of the provisions of
this Agreement or of the Notes with respect
to the payment or redemption thereof, or
reduce the percentage of the principal amount
of the Notes the holders of which are
required to approve any such amendment or
effectuate any such waiver, without the
consent of the holders of all the Notes then
outstanding, and
(B) no such waiver shall extend to or affect any
obligation not expressly waived or impair any right
consequent thereon.
(ii) Any amendment or waiver pursuant to clause (i)
above shall apply equally to all the holders of the Notes and
shall be binding upon them, upon each future holder of any Note
and upon the Sellers, in each case whether or not a notation
thereof shall have been placed on any Note.
(iii) For the purpose of determining whether the
holders of the requisite outstanding principal amount of Notes
have taken any action or given any consent or approval under this
Agreement, any Notes held by any Seller shall not be deemed
outstanding.
12c. Registration, Transfer and Exchange of Notes. GPK will
keep at its principal executive office a note register in which,
subject to such reasonable regulations as it may prescribe, but
at its expense (other than transfer taxes, if any, or similar
governmental charges), it will provide for the registration and
transfer of Notes.
The holder of any Note may, at such holder's option but
subject to the terms hereof (including without limitation
Section 9c), surrender the same for transfer or exchange at said
office, or at the place of payment named in such Note,
accompanied in the case of a transfer by a written instrument of
transfer duly executed by the holder thereof or by such holder's
attorney-in-fact duly authorized in writing. In case any holder
shall so request transfer or exchange of any Note, the Sellers at
their expense (other than transfer taxes, if any, or similar
governmental charges) will deliver in exchange therefor one or
more new Notes (in minimum denominations of $10,000,000, except
to the extent necessary to evidence the entire unpaid principal
amount of the Note so surrendered), as requested by such holder,
in the same aggregate principal amount as the Note so
surrendered, each dated the later of the date of issue of such
Note so surrendered, or the date to which interest has been paid
on such Note so surrendered.
The Sellers and any agent of the Sellers may treat the
Person in whose name any Note is registered as the owner of such
Note for the purpose of receiving payment of the principal of and
interest on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and prior to due presentment
for registration of transfer, the Sellers shall not be affected
by notice to the contrary. If any Note shall have been
transferred to another holder pursuant to this Section and such
holder shall have designated in writing the address to which
communications with respect to such Note shall be mailed, all
notices, certificates, requests, statements and other documents
required or permitted to be delivered to any holder of a Note by
any provision hereof shall be delivered to such holder.
12d. Lost, Etc., Notes. Upon receipt by the Sellers of
evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any Note, and (i) in case of loss,
theft or destruction, of indemnity satisfactory to it, or (ii) in
the case of mutilation, upon surrender and cancellation of such
Note, the Sellers will make and deliver in lieu of such Note a
new Note of like tenor and for the same unpaid principal amount,
dated the later of the date of, or the date to which interest has
been paid on, the Note in lieu of which such new Note is made and
delivered.
12e. Entire Agreement. This Agreement embodies the entire
agreement and understanding between you and Sellers and
supersedes all prior agreements and understandings relating to
the subject matter hereof.
12f. Disclosure to Other Persons. The holder of any Notes
may not deliver copies of any financial statements or other
documents delivered to such holder, nor disclose any other
information disclosed to such holder, by or on behalf of the
Sellers or any Subsidiary of any Seller in connection with or
pursuant to this Agreement, except to (i) such holder's
directors, officers, employees, agents, managers, members,
trustees and professional consultants (who shall be made aware of
the requirements of this Section 12f and the need to comply
herewith), (ii) any Person expressly identified in a prior
written consent of the Sellers if such Person shall have executed
and delivered to the Sellers an agreement agreeing to comply with
this Section 12f, or (iii) any other Person to whom such delivery
or disclosure may be necessary (a) in compliance with any law,
rule, regulation or order applicable to such holder or (b) in
response to any subpoena or other legal process to which such
holder is subject. Each holder shall be liable for breaches of
this Section 12f by any persons described in clause (i) of this
Section 12f. Should any holder be required to disclose any
information by virtue of clause (iii) of this Section 12f, such
holder shall promptly notify the Sellers thereof so as to allow
the Sellers to seek a protective order or to take any other
appropriate action to protect their rights.
12g. Successors and Assigns. All covenants and agreements
in this Agreement contained by or on behalf of either of the
parties hereto shall bind and inure to the benefit of the
Sellers' successors and assigns and your successors and assigns,
including any Permitted Transferees.
12h. Notices. All communications provided for hereunder
shall be sent by facsimile transmission, with written
confirmation of receipt, or a nationwide overnight delivery
service, with receipt of delivery requested, and (i) if to you,
addressed to you at the address set forth by you for such
communications on the signature page hereof, or to such other
address as you may have designated to the Sellers in writing,
with a copy to Linda Tafoya, 3943 South Chase Way, Denver,
Colorado 80235 (Tel: (303) 885-1243; Fax: (303) ___________),
(ii) if to any other holder of the Notes, addressed to such
holder at the address of such holder in the note register of the
Sellers, (iii) if to the Noteholder Representative, addressed to
the Noteholder Representative at the address set forth for you on
the signature page hereof, or to such other address as the
Noteholder Representative may have designated to the Sellers and
the Administrative Agent under the Senior Credit Agreement in
writing, with a copy to Linda Tafoya, 3943 South Chase Way,
Denver, Colorado 80235 (Tel: (303) 885-1243; Fax: (303)
______________) and (iv) if to either Seller, addressed to it at
Graphic Packaging International Corporation, 4455 Table Mountain
Drive, Golden, CO 80403, Attention: President (Tel: (303) 215-
2765; Fax: (303) 273-2935), with a copy to General Counsel (Tel:
(303) 215-2761; Fax: (303) 215-0737), and to the attention of
W. Dean Salter at Holme Roberts & Owen LLP, Suite 4100, 1700
Lincoln Street, Denver, CO 80203 (Tel: (303) 861-7000; Fax: (303)
866-0200), or to such other address or addresses as either Seller
may have designated in writing to you and each other holder of
any of the Notes at the time outstanding. All notices hereunder
to the Administrative Agent under the Senior Credit Agreement
shall be sent to Bank of America, N.A., Bank of America Plaza,
67th Floor, 901 Main Street, Dallas, TX 75202, Attention: Daniel
M. Killian (Tel: (214) 209-0978; Fax: (214) 209-0980) and to the
attention of Karen Nelson at Haynes & Boone, LLP, 3100 Main St.,
Dallas, TX 75202 (Tel: (214) 651-5648; Fax: (214) 200-0673), or
to such other address as advised by the Administrative Agent in
writing to the holders of Notes and the Sellers. All notices
hereunder to the any other holders of Senior Indebtedness shall
be sent to such address as advised by such Person in writing to
the holders of Notes and the Sellers. All notices and
communications given hereunder shall be deemed to be duly given:
at the time delivered by hand if personally delivered; three (3)
days after being deposited in the mail postage pre-paid if
mailed; when answered back, if telexed; when receipt confirmed,
if telecopied; and the next business day after timely delivery to
the courier if sent by overnight air courier guaranteeing next
day delivery.
12i. Descriptive Headings. The descriptive headings of the
several Sections of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.
12j. Governing Law. This Agreement and the Notes shall be
construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of Colorado
(without regard to conflicts of laws provisions thereof).
12k. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, and
it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
12l. Satisfaction Requirement. If any agreement,
certificate or other writing, or any action taken or to be taken,
or any other thing, is by the terms of this Agreement required to
be (or is construed to be required to be) satisfactory to you,
any holder of Notes or the Required Holder(s), the determination
of such satisfaction shall be made by you, such holder or the
Required Holder(s), as the case may be, in the reasonable
judgment (exercised in good faith) of the Person or Persons
making such determination.
12m. Severability. In case any one or more of the
provisions contained in this Agreement or in any instrument
contemplated hereby, or any application thereof, shall be
invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained
herein and therein, and any other application thereof, shall not
in any way be affected or impaired thereby.
12n. Conflict Between Agreements; Compliance. In the event
that any of the provisions of this Agreement conflict or are
inconsistent with the provisions of the Senior Credit Agreement,
this Agreement shall control. Notwithstanding the foregoing
sentence or any other provisions hereof, other than with respect
to any default in payment of principal of or interest on any Note
hereunder, if the Sellers are in compliance with Sections 8, 9
and 10 of the Senior Credit Agreement (or any non-compliance with
such Sections has been cured or waived in accordance with the
terms thereof), then the Sellers shall be deemed to be in
compliance with Sections 8, 6 and 10 (respectively) hereof. No
provision hereof (including without limitation the incorporated
representations, covenants and Events of Default in Sections 8, 6
and 10) shall be construed in a way so as to violate Section
9.12(k) of the Senior Credit Agreement.
12o. Agent for Holders. Each holder of Notes hereby
designates and appoints the Noteholder Representative as its
agent under this Agreement to take such action on its behalf
under the provisions of this Agreement and to exercise such
powers and perform such duties on its behalf as such Noteholder
Representative determines reasonably necessary. Sellers shall be
entitled to rely on the representations and authority of the
Noteholder Representative for purposes of this Agreement,
including without limitation as to whether any condition
hereunder has been satisfied or whether sufficient holders have
agreed to any consent, waiver or amendment provided by Section
12b.
12p. Joint and Several Liability. Each Seller shall be
jointly and severally liable for all amounts due to the holders
of Notes under this Agreement, regardless of which Seller
actually receives proceeds of the Notes or the amount of such
proceeds received. Notwithstanding the above, it is the
intention of the parties that the amounts that each Seller is
liable for hereunder and under the Notes shall be, and shall not
be in excess of, the maximum amount permitted by fraudulent
conveyance, fraudulent transfer or similar laws applicable to
such Seller and shall be limited to an aggregate amount equal to
the largest amount that would not render such Seller's
obligations hereunder or under the Notes subject to avoidance
under Section 548 of the United States Bankruptcy Code or any
comparable provision of applicable law. Each Seller appoints the
other Seller as its agent for all purposes relevant to this
Agreement, including the giving and receipt of notices and
execution and delivery of all documents, instruments and
certificates contemplated herein and all modifications hereto.
Any acknowledgment, consent, direction, certification or other
action which might otherwise be valid or effective only if given
or taken by both of the Sellers shall be valid and effective if
given or taken only by one Seller, whether or not the other
Seller joins therein.
12q. Survival. All representations and warranties contained
herein shall survive the execution and delivery of this Agreement
and the Notes and the payment of any Note, regardless of any
investigation made at any time by you or on your behalf.
12r. Payment of Holders Costs and Expenses. The Sellers
shall promptly pay upon a request by Initial Purchaser therefor
all reasonable out-of-pocket costs, fees and expense paid or
incurred by Initial Purchaser incident to this Agreement or the
Notes (including reasonable attorneys= fees) in connection with
(i) the negotiation, preparation, delivery, execution,
coordination and administration of this Agreement and the Notes
and any related amendments, waivers, or consents thereof (such
costs, fees and expense pursuant to this clause (i) not to exceed
$25,000), and (ii) the exercise of any rights and remedies
hereunder after the occurrence of a Default or Event of Default.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
If you are in agreement with the foregoing, please sign the
form of acceptance on the enclosed counterpart of this letter and
return the same to the undersigned, whereupon this letter shall
become a binding agreement between you and the undersigned.
Very truly yours,
GRAPHIC PACKAGING INTERNATIONAL CORPORATION
By ________________________________
Name: _____________________________
Title: ____________________________
GRAPHIC PACKAGING CORPORATION
By ________________________________
Name: _____________________________
Title: ____________________________
The foregoing Agreement is hereby
accepted and agreed as of the date
first above written:
GOLDEN HERITAGE LLC
By _______________________________
Name: ____________________________
Title: ___________________________
Address:
Telephone:
Fax Number:
EXHIBIT A
[FORM OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR
REGISTERED OR QUALIFIED UNDER ANY STATE
SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS
SUCH SALE, TRANSFER, PLEDGE OR HYPOTHECATION
IS IN ACCORDANCE WITH SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS.
GRAPHIC PACKAGING INTERNATIONAL CORPORATION
GRAPHIC PACKAGING CORPORATION
10% Senior Subordinated Note due August __, 2008
No. ________ Denver, Colorado
$__________ ____________, 2001
GRAPHIC PACKAGING INTERNATIONAL CORPORATION, a Colorado
corporation (the "GPK"), and GRAPHIC PACKAGING CORPORATION, a
Delaware corporation ("GPC" and together with GPK, "Makers"), for
value received, hereby promises to pay to the order of
or registered assigns (the "Payee"), the principal sum of
DOLLARS ($[_______]) (or so much thereof as shall have not been
prepaid) on [ ], 2008 and to pay interest (computed
on the basis of a 360-day year consisting of twelve 30-day
months) on the unpaid principal hereof from the date hereof at a
rate of ten percent (10%) per annum (the "Applicable Interest
Rate"); provided that upon the occurrence of an Event of Default,
interest on the principal outstanding under each Note shall
accrue at a rate equal to the "Applicable Interest Rate" plus two
percent (2%) per annum, payable in arrears on each Interest
Payment Date (as defined below) (unless any such Interest Payment
Date is not a Business Day, in which case the interest payment
due on such Interest Payment Date will be made the next day
thereafter that is a Business Day), until such principal sum
shall have become due and payable (whether at maturity, upon
acceleration, upon notice of redemption or otherwise). Payments
of principal and interest shall be made in lawful money of the
United States of America upon the presentation hereof (subject to
the provisions of Section 12a of the Note Agreement with respect
to payments to certain holders) at said principal office of GPK.
"Interest Payment Date" means each March 15, June 15, September
15 and December 15 of each year, beginning on September 15, 2001,
and the final maturity date hereof.
This Note is one of the Subordinated Notes due August [___],
2008 of the Makers issued pursuant to the Note Agreement dated as
of August 15, 2001 (as at any time amended, the "Note Agreement")
entered into by the Makers with the Initial Purchaser, and the
duly registered holder of this Note is entitled to the benefits
thereof. Capitalized terms used herein without definition have
the meanings ascribed thereto in the Note Agreement.
It is not intended hereby to charge interest at a rate in
excess of the maximum rate of interest that the holder of this
Note may charge the Makers under applicable usury and other laws,
but if, notwithstanding such intention, interest in excess of
such rate shall be paid hereunder, the interest rate on this Note
shall be adjusted to the maximum permitted under applicable law
during the period or periods that the interest rate otherwise
provided herein would exceed such rate.
Either Maker may at its election redeem this Note, in whole
or in part, and the maturity hereof may be accelerated following
an Event of Default, all as provided in the Note Agreement, to
which reference is made for the terms and conditions of such
provisions as to prepayment and acceleration.
Upon surrender of this Note for registration of transfer or
exchange, duly endorsed or accompanied by a written instrument of
transfer duly executed by the registered holder hereof or such
holder's attorney-in-fact duly authorized in writing, a new Note
of the same series and for a like principal amount will be issued
to, and, at the option of the holder, registered in the name of,
the transferee. The Makers and any agent of either Maker may
deem and treat the Person in whose name this Note is registered
as the owner hereof for the purpose of making payments of the
principal hereof and interest hereon and for all other purposes
whatsoever whether or not this Note is overdue, and the Makers
shall not be affected by any notice to the contrary.
Payments of principal and interest in respect of this Note
are subordinate, to the extent and upon the terms set forth in
the Note Agreement, to all payments on or in respect of "Senior
Indebtedness". The holder of this Note, by acceptance hereof, is
deemed to accept the terms and conditions of said Note Agreement
providing for such subordination.
In addition to, and not in limitation of, the Note
Agreement, the Makers agree to pay all reasonable out-of-pocket
costs, expenses and fees and other amounts (including reasonable
attorneys' fees and expenses) incurred by any holder of this Note
in pursuing its rights and remedies and collecting any amounts
due and payable hereunder which are not paid and delivered or
otherwise satisfied when due, whether on a scheduled payment
date, by acceleration or otherwise.
As provided in the Note Agreement, this Note shall be
governed by and construed in accordance with the laws of the
State of Colorado.
GRAPHIC PACKAGING INTERNATIONAL CORPORATION
By ________________________________
Name: _____________________________
Title: ____________________________
GRAPHIC PACKAGING CORPORATION
By ________________________________
Name: _____________________________
Title: ____________________________