1
EXECUTION COPY
==========================================================
KAISER ALUMINUM & CHEMICAL CORPORATION,
as Issuer,
KAISER ALUMINA AUSTRALIA CORPORATION,
ALPART JAMAICA INC.,
KAISER FINANCE CORPORATION and
KAISER JAMAICA CORPORATION,
as Subsidiary Guarantors,
AND
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
----------------------------------------------------------------------
INDENTURE
Dated as of February 17, 1994
----------------------------------------------------------------------
$225,000,000
9 % Senior Notes due 2002
==========================================================
2
RECONCILIATION AND TIE SHEET*
between
PROVISIONS OF THE TRUST INDENTURE ACT OF 1939
and
INDENTURE DATED AS OF FEBRUARY 17, 1994
between
KAISER ALUMINUM & CHEMICAL CORPORATION
KAISER ALUMINA AUSTRALIA CORPORATION,
ALPART JAMAICA INC.,
KAISER FINANCE CORPORATION and
KAISER JAMAICA CORPORATION
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
i
3
314(c)(2). . . . . . . . . . . . . . . . . . 14.05
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
4
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Certain terms defined . . . . . . . . . . . . . . . 9
SECTION 1.02. References are to Indenture . . . . . . . . . . . . .29
SECTION 1.03. Other definitions . . . . . . . . . . . . . . . . . .29
ARTICLE TWO
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
SECTION 2.01. Designation, amount, authentication and
delivery of Notes . . . . . . . . . . . . . . . . . 31
SECTION 2.02. Form of Notes and Trustee's certificate . . . . . . . 31
SECTION 2.03. Date of Notes and denominations . . . . . . . . . . . 31
SECTION 2.04. Execution of Notes. . . . . . . . . . . . . . . . . . 32
SECTION 2.05. Exchange and transfer of Notes. . . . . . . . . . . . 32
SECTION 2.06. Temporary Notes . . . . . . . . . . . . . . . . . . . 33
SECTION 2.07. Mutilated, destroyed, lost or stolen Notes. . . . . . 33
SECTION 2.08. Cancellation of surrendered Notes . . . . . . . . . . 34
ARTICLE THREE
REDEMPTION AND PURCHASES OF NOTES
SECTION 3.01. Redemption prices . . . . . . . . . . . . . . . . . . 34
SECTION 3.02. Notice of redemption; selection of Notes. . . . . . . 34
SECTION 3.03. When Notes called for redemption become
due and payable . . . . . . . . . . . . . . . . . . 35
SECTION 3.04. Cancellation of redeemed Notes. . . . . . . . . . . . 36
SECTION 3.05. Purchase of Notes at option of the holder
upon Change of Control. . . . . . . . . . . . . . . 36
SECTION 3.06. Effect of Change of Control Purchase Notice . . . . . 38
SECTION 3.07. Deposit of Change of Control Purchase Price . . . . . 39
SECTION 3.08. Covenant to comply with securities laws upon
purchase of Notes . . . . . . . . . . . . . . . . . 39
SECTION 3.09. Repayment to the Company. . . . . . . . . . . . . . . 39
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.01. Payments on the Notes . . . . . . . . . . . . . . . . 39
SECTION 4.02. Maintenance of office or agency for registration of
transfer, exchange and payment of Notes. . . . . . 39
SECTION 4.03. Appointment to fill a vacancy in the office of
Trustee . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.04. Provision as to paying agent. . . . . . . . . . . . . 40
SECTION 4.05. Maintenance of corporate existence. . . . . . . . . . 41
SECTION 4.06. Officers' Certificate as to default and statement
as to compliance. . . . . . . . . . . . . . . . . . 41
SECTION 4.07. Usury laws. . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.08. Restrictions on transactions with Affiliates. . . . . 42
iii
5
SECTION 4.09. Limitations on Restricted Payments and
Restricted Investments . . . . . . . . . . . . . . 43
SECTION 4.10. Limitation on Indebtedness and Preferred Stock. . . . 47
SECTION 4.11. Limitation on Liens . . . . . . . . . . . . . . . . . 50
SECTION 4.12. Subsidiary guarantees, etc. . . . . . . . . . . . . . 52
SECTION 4.13. Limitation on dividends and other payment
restrictions affecting Subsidiaries . . . . . . . . 54
SECTION 4.14. Limitation on Asset Sales . . . . . . . . . . . . . . 54
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 . . . . . . . . . . . 57
SECTION 5.02. Preservation and disclosure of lists.. . . . . . . . 57
SECTION 5.03. Reports by the Company. . . . . . . . . . . . . . . .58
SECTION 5.04. Reports by the Trustee. . . . . . . . . . . . . . . .59
ARTICLE SIX
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01. Events of Default defined . . . . . . . . . . . . . .60
SECTION 6.02. Payment of Notes on default; suit therefor. . . . . .62
SECTION 6.03. Application of moneys collected by Trustee. . . . . .63
SECTION 6.04. Limitation on suits by holders of Notes . . . . . . .63
SECTION 6.05. Proceedings by Trustee; remedies cumulative
and continuing; delay or omission not waiver
of default. . . . . . . . . . . . . . . . . . . . .64
SECTION 6.06. Rights of holders of majority in principal amount of
Notes to direct Trustee and to waive defaults . . .64
SECTION 6.07. Trustee to give notice of defaults known to it, but
may withhold in certain circumstances. . . . . . . 65
SECTION 6.08. Requirement of an undertaking to pay
certain suits under the Indenture or against
the Trustee. . . . . . . . . . . . . . . . . . . . 65
SECTION 6.09. Waiver of stay or extension laws. . . . . . . . . . .65
ARTICLE SEVEN
CONCERNING THE TRUSTEE
SECTION 7.01. Duties and responsibilities of Trustee. . . . . . . .66
SECTION 7.02. Reliance on documents, opinions, etc. . . . . . . . .67
SECTION 7.03. No responsibility for recitals, etc . . . . . . . . .67
SECTION 7.04. Trustee, paying agent or Note registrar may
own Notes . . . . . . . . . . . . . . . . . . . . .68
SECTION 7.05. Moneys received by Trustee to be held in trust
without interest. . . . . . . . . . . . . . . . . .68
SECTION 7.06. Compensation and expenses of Trustee. . . . . . . . .68
SECTION 7.07. Right of Trustee to rely on Officers' Certificate
where no other evidence specifically prescribed. . 68
SECTION 7.08. Conflicting interest of Trustee . . . . . . . . . .. 69
iv
6
SECTION 7.09. Requirements for eligibility of Trustee . . . . . . .73
SECTION 7.10. Resignation or removal of Trustee . . . . . . . . . .73
SECTION 7.11. Acceptance by successor to Trustee; notice of
succession of a Trustee. . . . . . . . . . . . . . 74
SECTION 7.12. Successor to Trustee by merger, consolidation or
succession to business; notice by Trustee of
change in its location . . . . . . . . . . . . . . 75
SECTION 7.13. Limitations on rights of Trustee as a creditor. . . .75
ARTICLE EIGHT
CONCERNING THE NOTEHOLDERS
SECTION 8.01. Evidence of action by noteholders . . . . . . . . . .78
SECTION 8.02. Proof of execution of instruments and of
holding of Notes. . . . . . . . . . . . . . . . . .79
SECTION 8.03. Who may be deemed owners of Notes . . . . . . . . . .79
SECTION 8.04. Notes owned by Company or controlled by controlling
persons disregarded for certain purposes. . . . . .79
SECTION 8.05. Record date for action by noteholders . . . . . . . .79
SECTION 8.06. Instruments executed by noteholders bind
future holders. . . . . . . . . . . . . . . . . . .80
ARTICLE NINE
NOTEHOLDERS' MEETINGS
SECTION 9.01. Purposes for which meetings may be called . . . . . .80
SECTION 9.02. Manner of calling meetings; record date . . . . . . .81
SECTION 9.03. Call of meeting by Company or noteholders . . . . . .81
SECTION 9.04. Who may attend and vote at meetings . . . . . . . . .81
SECTION 9.05. Regulations . . . . . . . . . . . . . . . . . . . . .81
SECTION 9.06. Manner of voting at meetings and record to be kept. .82
SECTION 9.07. Exercise of rights of Trustee and noteholders not to
be hindered or delayed. . . . . . . . . . . . . . .82
ARTICLE TEN
SUPPLEMENTAL INDENTURES
SECTION 10.01. Purposes for which supplemental indentures may
be entered into without consent of noteholders. . .83
SECTION 10.02. Modification of Indenture with consent of holders of
a majority in principal amount of Notes. . . . . ..83
SECTION 10.03. Effect of supplemental indentures . . . . . . . . . .84
SECTION 10.04. Notes may bear notation of changes by supplemental
indentures. . . . . . . . . . . . . . . . . . . . .84
SECTION 10.05. Officers' Certificate and Opinion of Counsel. . . . .85
ARTICLE ELEVEN
CONSOLIDATION, MERGER AND SALE
SECTION 11.01. Company may consolidate, etc., on certain terms . . .85
SECTION 11.02. Successor corporation to be substituted . . . . . . .86
SECTION 11.03. Opinion of Counsel. . . . . . . . . . . . . . . . . .86
v
7
ARTICLE TWELVE
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 12.01. Satisfaction and discharge of Indenture . . . . . . .87
SECTION 12.02. Application by Trustee of funds deposited for
payment of Notes. . . . . . . . . . . . . . . . . .87
SECTION 12.03. Repayment of moneys held by paying agent. . . . . . .88
SECTION 12.04. Repayment of moneys held by Trustee . . . . . . . . .88
SECTION 12.05. Reinstatement . . . . . . . . . . . . . . . . . . . .88
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 13.01. Incorporators, stockholders, officers and directors
of Company exempt from individual liability. . . . 88
ARTICLE FOURTEEN
MISCELLANEOUS PROVISIONS
SECTION 14.01. Successors and assigns of Company bound by
Indenture . . . . . . . . . . . . . . . . . . . . .89
SECTION 14.02. Acts of board, committee or officer of successor
corporation valid . . . . . . . . . . . . . . . . .89
SECTION 14.03. Required notices or demands may be served by
mail; waiver. . . . . . . . . . . . . . . . . . . .89
SECTION 14.04. Indenture and Notes to be construed in accordance
with the laws of the State of New York. . . . . . .90
SECTION 14.05. Evidence of compliance with conditions precedent. . .90
SECTION 14.06. Payments due on Saturdays, Sundays and holidays . . .90
SECTION 14.07. Provisions required by Trust Indenture Act of 1939
to control. . . . . . . . . . . . . . . . . . . . .91
SECTION 14.08. Provisions of the Indenture and Notes for the sole
benefit of the parties and the noteholders. . . . .91
SECTION 14.09. Severability. . . . . . . . . . . . . . . . . . . . .91
SECTION 14.10. Indenture may be executed in counterparts; acceptance
by Trustee. . . . . . . . . . . . . . . . . . . . .91
SECTION 14.11. Article and Section headings. . . . . . . . . . . . .91
SECTION 14.12. No Adverse Interpretation of Other Instruments. . . .91
ARTICLE FIFTEEN
GUARANTEE OF NOTES
SECTION 15.01. Guarantee . . . . . . . . . . . . . . . . . . . . . .91
SECTION 15.02. Guarantee senior in respect of Subordinated Notes . .92
SECTION 15.03. Subsidiary Guarantors may consolidate, etc., on
certain terms . . . . . . . . . . . . . . . . . . .92
SECTION 15.04. Application of certain terms and provisions to the
Subsidiary Guarantors. . . . . . . . . . . . . . ..93
SECTION 15.05. Release of Guarantee. . . . . . . . . . . . . . . . .94
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
vi
8
SCHEDULE A - SCHEDULE OF LIENS SECURING INDEBTEDNESS IN EXCESS OF
$5,000,000
SCHEDULE B - REAL PROPERTY CONSTITUTING PERMITTED COLLATERAL
vii
9
THIS INDENTURE, dated as of the 17th day of February, 1994,
between 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. and KAISER JAMAICA CORPORATION, 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
9 % Senior Notes due February 15, 2002 (hereinafter referred to
as the "Notes"), for an aggregate principal amount of up to two
hundred twenty five million dollars ($225,000,000), to be issued
as registered Notes without coupons, to be authenticated by the
certificate of the Trustee, to be payable on February 15, 2002,
and to be redeemable and purchasable as hereinafter provided;
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 Subordinated 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 Subordinated Note Indenture, to the extent that
such Subsidiary Guarantor is a guarantor under the Subordinated
Note Indenture;
WHEREAS, the Company has duly delivered written notice to
the trustee under the Subordinated Note Indenture designating the
Notes and the 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 483008 AE 8
KAISER ALUMINUM & CHEMICAL CORPORATION
9 % SENIOR NOTE DUE 2002
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 February 15,
2002, 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
10
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
February 15 and August 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 February 17, 1994. The interest so payable on any
February 15 or August 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 February 1 or August 1, as the case may be, next
preceding such February 15 or August 15 whether or not such
February 1 or August 1 is 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.
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.
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
2
11
[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
9 % SENIOR NOTE DUE 2002
This Note is one of a duly authorized issue of Notes of the
Company known as its 9 % Senior Notes due 2002 (herein referred
to as the "Notes"), limited to an aggregate principal amount of
two hundred twenty five million dollars ($225,000,000), all
issued or to be issued under and pursuant to an indenture, dated
as of February 17, 1994 (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 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 and Kaiser Jamaica Corporation 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
3
12
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.
The Notes are subject to redemption on or after February 15,
1998, 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 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 February 15, the
redemption price shall be:
4
13
Redemption
Year Price
---- ----------
1998 . . . . . . . . . . . . . . . . . . . .104.125%
1999 . . . . . . . . . . . . . . . . . . . .102.750%
2000 . . . . . . . . . . . . . . . . . . . .101.375%
2001 and thereafter . . . . . . . . . . . . .100.000%
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 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 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 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
5
14
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.
6
15
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)
7
16
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)
8
17
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, in the exercise of the legal right and power
vested in it, executes and delivers this Indenture and 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 as they were in force at the date of the execution
and delivery of this Indenture.
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.
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 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 and/or its
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.
9
18
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 or 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,
(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,
(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 or Restricted Payments
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.
10
19
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 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, and any letters of credit supporting
such bonds.
11
20
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
(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.
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,
-------- -------
12
21
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.
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,
(a) 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 and (b) interest expense related to the
PIK Note),
(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
13
22
(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, (A) the
amortization or write-off of any deferred financing costs in
connection with the amendment or refinancing of the Credit
Agreement and the Old Credit Agreement and/or the repurchase,
defeasance or redemption of the 14 1/4% Senior Subordinated Notes
and (B) the amortization or write-off of any debt discount and
the premiums paid in excess of the principal amount in connection
with the repurchase, defeasance or redemption of the 14 1/4%
Senior Subordinated Notes).
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.
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) and
(vi) interest income arising from the Existing Intercompany
Note, except to the extent such interest income is actually
received by the Company in cash;
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
14
23
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 Old 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.
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 plus the
amount of Indebtedness outstanding under the PIK Note 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 Old 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, 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.
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
15
24
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.
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.
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 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, 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
Director's determination of fair market value is fair.
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).
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.
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
16
25
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 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;
17
26
(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.
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.
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) $300,000,000, 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), 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.
18
27
MAXXAM: The term "MAXXAM" shall mean MAXXAM Inc., a
-------
Delaware corporation, and its successors.
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 of a
subsidiary of MAXXAM with and into KAC on October 28, 1988 (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, that (a) Improvements
-------- -------
which are subject to a Lien permitted by clause (iv), (v) or (vi)
of Section 4.11(b) and (b) U.S. Fixed Assets to the extent
subject to a Lien permitted by clause (ix) of Section 4.11(b)
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;
19
28
provided, in each such case, that such fees and expenses and
- --------
other amounts are not payable to an Affiliate 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 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 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 of the Company representing the proceeds of a
transaction by such Non-Affiliate Joint Venture that would
constitute an Asset Sale if such Non-Affiliate Joint Venture 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 or a 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.
20
29
Note or Notes; outstanding: The terms "Note" or "Notes"
---------------------------
shall mean any Note or Notes, as the case may be, authenticated
and delivered under this Indenture.
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.
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.
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.
Old Credit Agreement: The term "Old Credit Agreement" shall
---------------------
mean that certain Credit Agreement, dated as of December 13,
1989, among the Company, KAC, the financial institutions party
thereto, Bank of America National Trust and Savings Association,
as agent, and Mellon Bank, N.A., as collateral agent, which was
replaced by the Credit Agreement.
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.
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.
21
30
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) 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 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 the 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, 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)
22
31
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
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
that Incurred such Indebtedness and such Person's assets and
Capital Stock with respect to Indebtedness permitted to be
Incurred pursuant to Section 4.10(b)(viii) or (ix); 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 own all or a portion of the Permitted Entity Securities of
such Person;
23
32
(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 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 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
Subordinated 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
24
33
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
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.
PIK Note: The term "PIK Note" shall mean that certain PIK
---------
Note issued by the Company to a subsidiary of MAXXAM on
December 15, 1992, in the principal amount of $2.5 million,
bearing interest at a rate equal to 12% per annum and due on
June 30, 1995.
Preferred Dividend Intercompany Notes: The term "Preferred
--------------------------------------
Dividend Intercompany Notes" shall mean (i) the intercompany note
in respect of the Series A Shares, (ii) the intercompany note in
respect of the PRIDES and (iii) 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 (iii) 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.
25
34
Preferred Stock ($100): The term "Preferred Stock ($100)"
-----------------------
shall mean the Company's 4 % Preference Stock, par value $100 per
share, 4 % Preference Stock (1957 Series), par value $100 per
share, 4 % Preference Stock (1959 Series), par value $100 per
share, and 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.
Prospectus: The term "Prospectus" shall mean that certain
-----------
prospectus dated February 10, 1994, relating to the offering by
the Company of the Notes.
QAL: The term "QAL" shall mean Queensland Alumina Limited,
----
a Queensland, Australia corporation, and its successors.
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 hereof, which notice
shall indicate the Attributable Debt with respect to such
Refinancing Sale and Leaseback Transaction.
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.
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
26
35
(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);
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 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 this 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.
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 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 and (ii)
27
36
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%.
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.
Subordinated Notes: The term "Subordinated Notes" shall
-------------------
mean the Company's 12 3/4% Senior Subordinated Notes due 2003, as
amended from time to time, issued pursuant to the Subordinated
Note Indenture.
Subordinated Note Indenture: The term "Subordinated Note
----------------------------
Indenture" shall mean the indenture, dated as of February 1,
1993, among the Company, as issuer, the parties named therein as
and, if applicable, thereafter becoming guarantors, and The First
National Bank of Boston, a national banking association, as
trustee, as amended or supplemented from time to time in
accordance with the terms thereof.
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 as 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.
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 AJI, KFC, KAAC and KJC.
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
28
37
agreement between the Company and MAXXAM, dated as of December
21, 1989, as each is described in the Prospectus 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.
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)
"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(b)
"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)
29
38
"Controlled Non-Affiliate Joint Venture" . 4.09(a)
"Incur". . . . . . . . . . . . . . . . . . 4.10(a)
"Notice of Default". . . . . . . . . . . . 6.01(c)
"Other Indebtedness" . . . . . . . . . . . 4.10(c)
"PRIDES" . . . . . . . . . . . . . . . . . 4.09(b)(IX)
"record date". . . . . . . . . . . . . . . 2.03
"Refinanced Indebtedness". . . . . . . . . 4.10(b)(vi)
"Refinancing Indebtedness" . . . . . . . . 4.10(b)(vi)
"Restricted Payment" . . . . . . . . . . . 4.09(a)
"Series A Shares". . . . . . . . . . . . . 4.09(b)(IX)
"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 the 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
30
39
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 9 % Senior Notes due 2002. Notes for an aggregate
principal amount of two hundred twenty five million dollars
($225,000,000), 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.
The aggregate principal amount of Notes authorized by this
Indenture is limited to two hundred twenty five million dollars
($225,000,000), 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.
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.
SECTION 2.03. Date of Notes and denominations. The Notes
--------------------------------
shall bear interest at the rate per annum of 9 %, payable semi-
annually on February 15 and August 15, shall mature on
February 15, 2002 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 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. 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 February 1 or August 1, as
31
40
the case may be, next preceding such interest payment date,
whether or not such February 1 or August 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 February 17, 1994. 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 February 15 or August 15, 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 February 17, 1994.
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. 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.
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 for registration of
transfer of any Note at such office or agency,
32
41
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.
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 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.
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 or other
governmental charge that may be imposed in relation thereto.
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.
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 the 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), 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
33
42
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 Company may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and
any other expenses 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.
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
February 15, 1998.
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
34
43
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.
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
35
44
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 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 interest accrued 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
36
45
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;
(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
37
46
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.
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
38
47
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).
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,
39
48
and where the Notes may be presented or surrendered for payment,
redemption or purchase. The 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.
(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
40
49
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. 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, 1994, 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
(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
41
50
(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.
---------------------------------------------
(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 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, 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.
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)) with Affiliates of the Company occurring during such
fiscal quarter, and (y) with respect to any transaction with an
Affiliate of the Company, or series of related transactions
(other than transactions referred to in Section 4.08(b)) with
Affiliates of the Company, occurring during such fiscal quarter,
shall briefly describe such transaction or transactions.
(b) The provisions contained in the foregoing paragraphs of
this Section 4.08 shall not apply to:
(i) the making of any Restricted Payments and
Restricted 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
42
51
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 and
---------------------------------------
Restricted 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 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 hereof, (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 or (v)
make or permit any of its Subsidiaries to make any Restricted
Investment, unless at the time of, and after giving effect to,
each such Restricted Payment or Restricted Investment:
43
52
(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, and
(y) the aggregate amount of 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)
(in each case, the amount expended for such Restricted
Payments and Restricted 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:
(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 or Restricted Investment is being made,
and
(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 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;
provided, however, that in no event shall the Company make, or
- -------- -------
permit any of its Subsidiaries to make, a Restricted Payment or
Restricted 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 and
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
44
53
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) 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 or Restricted 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 Investor Services, 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 the following Restricted Payments:
(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 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 hereof (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 or a Non-Affiliate Joint
Venture or Subsidiary of the Company), after the date
hereof, 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
45
54
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 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 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 and Restricted Investments
after February 1, 1993, other than Restricted Payments and
Restricted 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); and
(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)
(in each case, the amount expended for such Restricted Payments
and Restricted 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 or Restricted 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
46
55
Restricted Payment or Restricted 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 and 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)
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") or
shares of KAC's Series A Mandatory Conversion Premium
Dividend Preferred Stock (the "Series A Shares") 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 and Restricted
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 and Restricted Investments under Section 4.09(a).
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 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:
47
56
(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 $325,000,000, 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 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,
48
57
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 solely to finance the construction, acquisition or the
acquisition and retrofitting of an aluminum smelter or
smelters or related facilities (or interests therein) and
the reasonable fees and expenses in connection with the
Incurrence of such Indebtedness, in an amount not to exceed
$150,000,000 in any fiscal year (without cumulation of
unused amounts to successive years);
(ix) the Company and its Subsidiaries may Incur
Indebtedness, the proceeds of which are used solely to
finance the construction or acquisition of a fabrication
plant or plants or related facilities and the reasonable
fees and expenses in connection with the Incurrence of such
Indebtedness, in an aggregate amount not to exceed
$25,000,000 in any fiscal year (without cumulation of unused
amounts to successive years);
(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
49
58
may be Incurred by Subsidiaries of the Company (other than
Subsidiary Guarantors that are not Permitted Entities) shall
not exceed $25,000,000 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 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;
50
59
(ii) Liens in existence on the date of the issuance of
the Notes 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;
(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), (viii) and (ix) 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), the
applicable aluminum smelter or smelters and related
facilities in the case of clause (viii) and the applicable
fabrication plant or plants and related facilities in the
case of clause (ix), 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;
51
60
(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
(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), (viii) and (ix);
52
61
(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;
(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
53
62
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
(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 clause (e) of this Section 4.12, to remain a
Permitted Entity pursuant to the 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
54
63
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 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 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;
55
64
(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, whether
now owned or hereafter acquired, or any proceeds thereof or
(ii) any U.S. Fixed Assets acquired 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
56
65
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.
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.
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
on
required on the part of the Trustee, such Subsidiary Guarantor,
the Company or any holder of the Notes, provided that any
--------
guarantee of such Subsidiary Guarantor with respect to the Credit
Agreement and the Subordinated 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 such release.
(d) 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.
94
103
IN WITNESS WHEREOF, each of KAISER ALUMINUM & CHEMICAL
CORPORATION, KAISER ALUMINA AUSTRALIA CORPORATION, ALPART JAMAICA
INC., KAISER FINANCE CORPORATION and KAISER JAMAICA CORPORATION
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: __________________________________________
John T. La Duc
Vice President and Chief Financial Officer
[SEAL]
Attest:
___________________
Assistant Secretary
KAISER ALUMINA AUSTRALIA CORPORATION
By: __________________________________________
John T. La Duc
Vice President and Chief Financial Officer
[SEAL]
Attest:
___________________
Assistant Secretary
ALPART JAMAICA INC.
By: __________________________________________
John T. La Duc
Vice President and Chief Financial Officer
[SEAL]
Attest:
___________________
Assistant Secretary
95
104
KAISER FINANCE CORPORATION
By: __________________________________________
John T. La Duc
Vice President and Chief Financial Officer
[SEAL]
Attest:
___________________
Assistant Secretary
KAISER JAMAICA CORPORATION
By: __________________________________________
John T. La Duc
Vice President and Chief Financial Officer
[SEAL]
Attest:
___________________
Assistant Secretary
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
By: ____________________________
Name:
Title:
[SEAL]
Attest:
___________________
Assistant Secretary
96