EXHIBIT 4.1
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U.S. Timberlands Klamath Falls, L.L.C.
U.S. Timberlands Finance Corp.
_______________
$225,000,000
____% SENIOR NOTES DUE 2007
_____________
FORM OF INDENTURE
Dated as of _________ ___, 1997
_____________
State Street Bank & Trust Company
Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
- ------------------ ----------------------
310(a)(1)............................................ 7.10
(a)(2)......................................... 7.10
(a)(3)......................................... N.A.
(a)(4)......................................... N.A.
(a)(5)......................................... 7.10
(b)............................................ 7.8; 7.10
(c)............................................ N.A.
311(a)............................................... 7.11
(b)............................................ 7.11
(c)............................................ N.A.
312(a)............................................... 2.5
(b)............................................ 11.3
(c)............................................ 11.3
313(a)............................................... 7.6
(b)(1)......................................... N.A.
(b)(2)......................................... 7.6
(c)............................................ 7.6
(d)............................................ 7.6
314(a)............................................... 4.3; 4.4
(b)............................................ N.A.
(c)(1)......................................... 11.4
(c)(2)......................................... 11.4
(c)(3)......................................... N.A.
(d)............................................ N.A.
(e)............................................ 11.5
(f)............................................ N.A.
315(a)............................................... 7.1(2)
(b)............................................ 7.5
(c)............................................ 7.1(1)
(d)............................................ 7.1(3)
(e)............................................ 6.11
316(a)(last sentence)................................ 2.10
(a)(1)(A)...................................... 6.5
(a)(1)(B)...................................... 6.4
(a)(2)......................................... N.A.
(b)............................................ 6.7
(c)............................................ 9.4
317(a)(1)............................................ 6.8
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(a)(2)......................................... 6.9
(b)............................................ 2.3
318(a)............................................... 11.1
(b)............................................ N.A.
(c)............................................ 11.1
______________
N.A. means not applicable
*This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1 Definitions......................................................1
Section 1.2 Other Definitions...............................................22
Section 1.3 Incorporation by Reference of Trust Indenture Act...............23
Section 1.4 Rules of Construction...........................................23
ARTICLE 2
THE NOTES
Section 2.1 Form and Dating.................................................24
Section 2.2 Execution and Authentication....................................25
Section 2.3 Registrar and Paying Agent......................................25
Section 2.4 Paying Agent to Hold Money in Trust.............................26
Section 2.5 Holder Lists....................................................26
Section 2.6 Transfer and Exchange...........................................26
Section 2.7 Replacement Notes...............................................29
Section 2.8 Outstanding Notes...............................................30
Section 2.9 Treasury Notes..................................................30
Section 2.10 Temporary Notes.................................................30
Section 2.11 Cancellation....................................................30
Section 2.12 Defaulted Interest..............................................31
ARTICLE 3
REDEMPTION AND OFFERS TO PURCHASE
Section 3.1 Notice to Trustee...............................................31
Section 3.2 Selection of Notes to Be Redeemed...............................32
Section 3.3 Notice of Redemption...........................................32
Section 3.4 Effect of Notice of Redemption..................................33
Section 3.5 Deposit of Redemption Price.....................................33
Section 3.6 Notes Redeemed in Part..........................................34
Section 3.7 Optional Redemption.............................................34
Section 3.8 Mandatory Redemption............................................34
Section 3.9 Offer to Purchase by Application of Excess Proceeds or
Excess Harvest Proceed..........................................34
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ARTICLE 4
COVENANTS
Section 4.1 Payment of Notes................................................37
Section 4.2 Maintenance of Office or Agency.................................37
Section 4.3 Reports.........................................................38
Section 4.4 Compliance Certificate..........................................38
Section 4.5 Taxes...........................................................39
Section 4.6 Stay, Extension and Usury Laws..................................39
Section 4.7 Company and Corporate Existence.................................39
Section 4.8 Limitation on Additional Indebtedness...........................39
Section 4.9 Limitation on Restricted Payments...............................40
Section 4.10 Limitation on Liens.............................................42
Section 4.11 Limitation on Transactions with Affiliates......................42
Section 4.12 Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries...............................42
Section 4.13 Limitation on Sale and Leaseback Transactions...................43
Section 4.14 Limitation on Finance Corp......................................44
Section 4.15 Line of Business................................................44
Section 4.16 Asset Sales.....................................................44
Section 4.17 Limitation on Harvesting........................................45
Section 4.18 Change of Control...............................................46
Section 4.19 Limitation on Non-Guarantor Restricted Subsidiaries.............47
ARTICLE 5
SUCCESSORS
Section 5.1 Merger, Consolidation or Sale of Assets.........................48
Section 5.2 Successor Person Substituted....................................49
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1 Events of Default...............................................49
Section 6.2 Acceleration....................................................51
Section 6.3 Other Remedies..................................................52
Section 6.4 Waiver of Past Defaults.........................................52
Section 6.5 Control by Majority.............................................52
Section 6.6 Limitation on Suits.............................................52
Section 6.7 Rights of Holders to Receive Payment............................53
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Section 6.8 Collection Suit by Trustee......................................53
Section 6.9 Trustee May File Proofs of Claim................................53
Section 6.10 Priorities......................................................54
Section 6.11 Undertaking for Costs...........................................54
ARTICLE 7
TRUSTEE
Section 7.1 Duties of Trustee...............................................55
Section 7.2 Rights of Trustee...............................................56
Section 7.3 Individual Rights of Trustee....................................56
Section 7.4 Trustee's Disclaimer............................................57
Section 7.5 Notice of Defaults..............................................57
Section 7.6 Reports by Trustee to Holders...................................57
Section 7.7 Compensation and Indemnity......................................57
Section 7.8 Replacement of Trustee..........................................58
Section 7.9 Successor Trustee by Merger, etc................................59
Section 7.10 Eligibility, Disqualification...................................59
Section 7.11 Preferential Collection of Claims Against Issuers...............60
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1 Option to Effect Legal Defeasance or Covenant Defeasance........60
Section 8.2 Legal Defeasance and Discharge..................................60
Section 8.3 Covenant Defeasance.............................................61
Section 8.4 Conditions to Legal Defeasance or Covenant Defeasance...........61
Section 8.5 Deposited Money and Government Securities to be Held in Trust,
Other Miscellaneous Provisions..................................62
Section 8.6 Repayment to Issuers............................................63
Section 8.7 Reinstatement...................................................63
Section 8.8 Discharge of Liability on Securities; Defeasance................64
ARTICLE 9
AMENDMENTS
Section 9.1 Without Consent of Holders......................................64
Section 9.2 With Consent of Holders.........................................65
Section 9.3 Compliance with Trust Indenture Act.............................66
Section 9.4 Revocation and Effect of Consents...............................66
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Section 9.5 Notation on or Exchange of Notes................................67
Section 9.6 Trustee to Sign Amendments, etc.................................67
ARTICLE 10
SUBSIDIARY GUARANTEE OF NOTES
Section 10.1 Unconditional Guarantee.........................................67
Section 10.2 Subsidiary Guarantors May Consolidate, etc., on Certain Terms...68
Section 10.3 Addition of Subsidiary Guarantors...............................68
Section 10.4 Release of a Subsidiary Guarantor...............................69
Section 10.5 Limitation of Subsidiary Guarantor's Liability..................69
Section 10.6 Contribution....................................................70
ARTICLE 11
MISCELLANEOUS
Section 11.1 Trust Indenture Act Controls....................................70
Section 11.2 Notices.........................................................70
Section 11.3 Communication by Holders with Other Holders.....................71
Section 11.4 Certificate and Opinion as to Conditions Precedent..............71
Section 11.5 Statements Required in Certificate or Opinion...................72
Section 11.6 Form of Documents Delivered to Trustee..........................73
Section 11.7 Rules by Trustee and Agents.....................................73
Section 11.8 Legal Holidays..................................................73
Section 11.9 No Recourse Against Others......................................74
Section 11.10 Duplicate Originals.............................................74
Section 11.11 Governing Law...................................................74
Section 11.12 No Adverse Interpretation of Other Agreements...................74
Section 11.13 Successors......................................................75
Section 11.14 Benefits of Indenture...........................................75
Section 11.15 Severability....................................................75
Section 11.16 Counterpart Originals...........................................75
Section 11.17 Table of Contents, Headings, etc................................75
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INDENTURE, dated as of __________ ___, 1997, among U.S. Timberlands Klamath
Falls, L.L.C., a Delaware limited liability company (the "Company"), U.S.
Timberlands Finance Corp., a Delaware corporation ("Finance Corp." and, together
with the Company, the "Issuers"), and State Street Bank & Trust Company, as
trustee ("Trustee").
The Issuers and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the ___% Senior Notes
due 2007 (the "Notes") of the Issuers, as joint and several obligors.
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1 Definitions.
"Acquired Indebtedness" means, with respect to any specified Person,
(a) Indebtedness of any other Person existing at the time such other Person
merged with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person
and (b) Indebtedness encumbering any asset acquired by such specified Person.
"Acquisition Facility" means the loan facility of the Company provided
for in the Credit Agreement for the purpose of financing acquisitions.
"Acquisition Principal Amount" means $75.0 million.
"Adjusted Asset Sales Amount" means $50.0 million as increased by 10%
of the purchase price of Asset Acquisitions (other than like-kind exchanges)
subsequent to the Issue Date.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean
the amount by which the fair value of the properties and assets of such
Subsidiary Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under its Subsidiary Guarantee, of such Subsidiary Guarantor at such
date.
"Affiliate" means, with respect to any specified Person, (a) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person or (b) any other Person who
is a director or executive officer of (i) such specified Person or (ii) any
other Person described in the preceding clause (a). For purposes of this
definition, control shall mean the power to direct the management and policies,
whether through the ownership of voting securities, by contract or otherwise;
provided, that beneficial ownership of 10% or more
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of any class, or any series of any class, of Capital Stock of a Person, whether
or not Voting Stock, shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company, or shall be merged
with or into the Company or any Restricted Subsidiary of the Company, (b) the
acquisition by the Company or any Restricted Subsidiary of the Company of the
assets of any Person (other than a Restricted Subsidiary of the Company) which
constitute all or substantially all of the assets of such Person, (c) the
acquisition by the Company or any Restricted Subsidiary of the Company of
merchantable Timber or Timberlands outside the ordinary course of business, or
(d) the acquisition by the Company or any Restricted Subsidiary of the Company
of any division or line of business of any Person (other than a Restricted
Subsidiary of the Company).
"Attributable Debt" means, with respect to any Sale and Leaseback
Transaction not involving a Capital Lease, as of any date of determination, the
total obligation (discounted to present value at the rate of interest implicit
in the lease included in such transaction) of the lessee for rental payments
(other than amounts required to be paid on account of property taxes,
maintenance, repairs, insurance, assessments, utilities, operating and labor
costs and other items which do not constitute payments for property rights)
during the remaining portion of the term (including extensions which are at the
sole option of the lessor) of the lease included in such transaction (in the
case of any lease which is terminable by the lessee upon the payment of a
penalty, such rental obligation shall also include the amount of such penalty,
but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated).
"Available Cash," as to any quarter means: (a) the sum of (i) all cash
and cash equivalents of the Company and any Subsidiary of the Company, treated
as a single consolidated entity (together the "Partnership Group"), on hand at
the end of such quarter, and (ii) all additional cash and cash equivalents of
the Partnership Group on hand on the date of determination of Available Cash
with respect to such quarter resulting from borrowings for working capital
purposes subsequent to the end of such quarter, less (b) the amount of any cash
reserves that is necessary or appropriate in the reasonable discretion of the
Manager to (i) provide for the proper conduct of the business of the Partnership
Group (including reserves for future capital expenditures and for anticipated
future credit needs of the Partnership Group) subsequent to such quarter, (ii)
comply with applicable law or any loan agreement, security agreement, mortgage,
debt instrument or other agreement or obligation to which any member of the
Partnership Group is a party or by which it is bound or its assets are subject
or (iii) provide funds for distributions under Sections 6.4 or 6.5 of the MLP
Partnership Agreement in respect of any one or more of the next four quarters;
provided, however, that the Manager may not establish cash reserves pursuant to
(iii) above if the effect of such reserves would be that the Master Partnership
is unable to distribute the Minimum Quarterly Distribution (as defined in the
MLP Partnership Agreement) on all Common Units (as defined in the
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MLP Partnership Agreement) with respect to such Quarter; provided, further, that
disbursements made by a member of the Partnership Group or cash reserves
established, increased or reduced after the end of such quarter but before the
date of determination of Available Cash with respect to such quarter shall be
deemed to have been made, established, increased or reduced, for purposes of
determining Available Cash, within such quarter if the Manager so determines;
provided, further, that Available Cash attributable to any Restricted Subsidiary
or the Company shall be excluded to the extent dividends or distributions of
such Available Cash by such Restricted Subsidiary are not at the date of
determination permitted by the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or other regulation.
"Bank Credit Facility" means the Acquisition Facility and the Working
Capital Facility.
"Board of Directors" means, as applicable, the Board of Directors of
the Manager, on behalf of the Company, or of Finance Corp., or any authorized
committee of either Board of Directors.
"Business" means the acquisition, ownership, management and harvesting
of Timber and activities reasonably related and incidental thereto.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by such Person (as lessee or
guarantor or other surety) which would, in accordance with GAAP, be required to
be classified and accounted for as a capital lease on a balance sheet of such
Person.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, units representing interests, participations, rights in or other
equivalents (however designated) of such Person's capital stock, including, with
respect to partnerships, partnership interests (whether general or limited) and
any other interest or participation that confers upon a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
such partnership, and any rights (other than debt securities convertible into
capital stock), warrants or options exchangeable for or convertible into such
capital stock.
"Change of Control" means (a) any "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), excluding Permitted
Holders or any Person of which one or more Permitted Holders beneficially own in
the aggregate at least a majority of the Voting Stock, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of more than 50% of the total voting power with respect
to the total Voting Stock of the Master Partnership or the Company, (b) the
sale, lease, conveyance or other disposition of all or substantially all of the
assets of the Master Partnership or the Company to any Person or group (as such
term is used in Section 13(d)(3) of the Exchange Act) other than Permitted
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Holders or any Person of which one or more Permitted Holders beneficially own in
the aggregate at least a majority of the Voting Stock, (c) the merger or
consolidation of the Master Partnership or the Company with another partnership,
limited liability company or corporation other than a Permitted Holder or any
Person of which one or more Permitted Holders beneficially own in the aggregate
at least a majority of the Voting Stock, in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Master Partnership or
the Company, as applicable, is converted into or exchanged for cash, securities
or other property, other than any such transaction where the Voting Stock of the
Master Partnership or the Company, as applicable, outstanding immediately prior
to such transaction is converted into or exchanged for Voting Stock of the
surviving or transferee Person constituting a majority of the outstanding shares
of such Voting Stock of such surviving or transferee person (immediately after
giving effect to such issuance), (d) the liquidation or dissolution of the
Master Partnership, the Company or the Manager, or (e) the occurrence of any
transaction, the result of which is that Permitted Holders beneficially own in
the aggregate, directly or indirectly, less than a majority of the Voting Stock
of the Manager.
"Common Units" means the common units representing limited partner
interests of the Master Partnership, having the rights and obligations specified
with respect to Common Units of the Master Partnership.
"Consolidated Cash Flow Available for Fixed Charges" means, with
respect to the Company and its Restricted Subsidiaries for any period, the sum
of, without duplication, the amounts for such period, taken as a single
accounting period, of (a) Consolidated Net Income, (b) Consolidated Non-cash
Charges, (c) Consolidated Interest Expense and (d) Consolidated Income Tax
Expense.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to the
Company and its Restricted Subsidiaries, the ratio of the aggregate amount of
Consolidated Cash Flow Available for Fixed Charges for the four full fiscal
quarters for which financial information in respect thereof is available
immediately preceding the date of the transaction (the "Transaction Date")
giving rise to the need to calculate the Consolidated Fixed Charge Coverage
Ratio (such four full fiscal quarter period being referred to herein as the
"Four Quarter Period") to the aggregate amount of Consolidated Fixed Charges of
such Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated Cash Flow
Available for Fixed Charges" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to, without duplication, (a) the incurrence or repayment of any
Indebtedness of the Company or any of its Restricted Subsidiaries (and, in the
case of any incurrence, the application of the net proceeds thereof) during the
period commencing on the first day of the Four Quarter Period to and including
the Transaction Date (the "Reference Period"), including, without limitation,
the incurrence of the Indebtedness giving rise to the need to make such
calculation (and the application of the net proceeds thereof), as if such
incurrence (and application) occurred on the first day of the Reference Period
(including any actual interest payments made with respect to Indebtedness under
the Working Capital Facility), and (b) any Asset Sales or Asset Acquisitions
(including, without limitation, any Asset Acquisition giving
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rise to the need to make such calculation as a result of the Company or one of
its Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of the Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness) occurring during the Reference
Period, as if such Asset Sale or Asset Acquisition occurred on the first day of
the Reference Period; provided, however, that (i) Consolidated Fixed Charges
shall be reduced by amounts attributable to businesses or assets that are so
disposed of or discontinued only to the extent that the obligations giving rise
to such Consolidated Fixed Charges would no longer be obligations contributing
to the Consolidated Fixed Charges subsequent to the date of determination of the
Consolidated Fixed Charge Coverage Ratio and (ii) Consolidated Cash Flow
Available for Fixed Charges generated by an acquired business or asset shall be
determined by (x) in the case of an Asset Acquisition of Timber or Timberlands
by the Company or a Restricted Subsidiary during such period, by using the
projected net cash flow of the Timber or Timberlands so acquired, based on the
harvest plan prepared in the ordinary course of business and in good faith by
the Manager, for the first 12 full months of operations of the acquired Timber
or Timberlands following the date of the Asset Acquisition; provided that such
harvest plan shall not assume the harvesting or sale of more than 10% (or, in
the case of an acquisition under a cutting contract with a term of less than 10
years, such higher percentage as shall be equal to the quotient of 100% divided
by the term of such cutting contract (expressed in years)) of the total
merchantable Timber so acquired in the first 12 full months following the date
of the Asset Acquisition; provided further, in determining projected cash flow
from acquired Timber or Timberlands, prices shall be assumed to equal the
average prices realized by the Company for comparable Timber sold during such
period; and (y) in all the cases of all other Asset Acquisitions the actual
gross profit (revenues minus cost of goods sold) of such acquired business or
asset during the immediately preceding four full fiscal quarters in the
Reference Period minus the pro forma expenses that would have been incurred by
the Company and its Restricted Subsidiaries in the operation of such acquired
business or asset during such period computed on the basis of personnel expenses
for employees retained or to be retained by the Company and its Restricted
Subsidiaries in the operation of the acquired business or asset and non-
personnel costs and expenses incurred by the Company and its Restricted
Subsidiaries in the operation of the Company's business at similarly situated
facilities. If the applicable Reference Period for any calculation of the
Consolidated Fixed Charge Coverage Ratio shall include a portion prior to the
date of this Indenture, then such Consolidated Fixed Charge Coverage Ratio shall
be calculated based upon the Consolidated Cash Flow Available for Fixed Charges
and the Consolidated Fixed Charges of the Company on
a pro forma basis for such portion of the Reference Period prior to the Issue
Date, giving effect to the transactions occurring on the Issue Date, and the
Consolidated Cash Flow Available for Fixed Charges and the Consolidated Fixed
Charges for the remaining portion of the Reference Period on and after the Issue
Date, giving pro forma effect, as described in the two foregoing sentences, to
all applicable transactions occurring on the Issue Date or otherwise.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the "Consolidated Fixed Charge Coverage Ratio," (i) interest on
outstanding Indebtedness (other than Indebtedness referred to in clause (ii)
below) determined on a fluctuating basis as of the last day of the Four Quarter
Period and which will continue to be so determined thereafter shall be deemed to
have accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on such date; (ii) only actual interest payments
associated with Indebtedness incurred in accordance
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with clause (d) of the definition of Permitted Indebtedness and all Permitted
Refinancing Indebtedness in respect thereof, during the Four Quarter Period
shall be included in such calculation; and (iii) if interest on any Indebtedness
actually incurred on such date may optionally be determined at an interest rate
based upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the last day of the
Four Quarter Period will be deemed to have been in effect during such period.
"Consolidated Fixed Charges" means, with respect to the Company and
its Restricted Subsidiaries for any period, the sum of, without duplication, (a)
the amounts for such period of Consolidated Interest Expense and (b) the product
of (i) the aggregate amount of dividends and other distributions paid or accrued
during such period in respect of Preferred Stock and Redeemable Capital Stock of
the Company and its Restricted Subsidiaries on a consolidated basis and (ii) a
fraction, the numerator of which is one and the denominator of which is one
minus the then applicable current combined federal, state and local statutory
tax rate, expressed as a percentage.
"Consolidated Income Tax Expense" means, with respect to the Company
and its Restricted Subsidiaries for any period, the provision for federal,
state, local and foreign income taxes of the Company and its Restricted
Subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" means, with respect to the Company and
its Restricted Subsidiaries for any period, without duplication, the sum of (a)
the interest expense of the Company and its Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP, including,
without limitation, (i) any amortization of debt discount, (ii) the net cost
under Interest Rate Agreements, (iii) the interest portion of any deferred
payment obligation, (iv) all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing and (v)
all accrued interest and (b) the interest component of Capital Leases paid,
accrued or scheduled to be paid or accrued by the Company and its Restricted
Subsidiaries during such period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means the net income of the Company and its
Restricted Subsidiaries, as determined on a consolidated basis in accordance
with GAAP and as adjusted to exclude (a) net after-tax extraordinary gains or
losses, (b) net after-tax gains or losses attributable to Asset Sales to the
extent the Net Proceeds therefrom result in the aggregate Net Proceeds received
by the Company or any Restricted Subsidiary from all Asset Sales since the Issue
Date exceeding the Adjusted Asset Sales Amount, (c) the net income or loss of
any Person which is not a Restricted Subsidiary and which is accounted for by
the equity method of accounting, provided that Consolidated Net Income shall
include the amount of dividends or distributions actually paid to the Company or
any Restricted Subsidiary, (d) the net income or loss prior to the date of
acquisition of any Person combined with the Company or any Restricted Subsidiary
in a pooling of interest, (e) the net income of any Restricted Subsidiary to the
extent that dividends or distributions of such net income are not at the date of
determination permitted by the terms of its charter or any agreement,
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instrument, judgment, decree, order, statute, rule or other regulation and (f)
the cumulative effect of any changes in accounting principles.
"Consolidated Net Worth" means, with respect to the Company and its
Restricted Subsidiaries at any date, the consolidated stockholders' equity,
partners' capital or members' capital of the Company and its Restricted
Subsidiaries less the amount of such stockholders' equity, partners' capital or
members' capital attributable to Redeemable Capital Stock as determined in
accordance with GAAP.
"Consolidated Non-cash Charges" means, with respect to the Company and
its Restricted Subsidiaries for any period, the aggregate depreciation,
depletion, amortization and any other non-cash charges, in each case reducing
Consolidated Net Income of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"Contribution Agreement" means the Contribution, Conveyance and
Assumption Agreement, dated as of the Issue Date, among the Company, the Master
Partnership, the Manager and certain other parties together with the additional
conveyance documents and instruments contemplated or referenced thereunder.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.2 hereof or such other address as to which the
Trustee may give notice to the Issuers.
"Credit Agreement" means the Credit Agreement, dated as of __________
___, 1997, among the Company and ______________________, in its individual
capacity and as agent, and the other banks which are or become parties from time
to time thereto, evidencing the Bank Credit Facility, as it may be amended,
supplemented or otherwise modified from time to time, including all exhibits and
schedules thereto, and any successor or replacement facility entered into in
compliance with this Indenture.
"Default" means any event that is, or after notice or passage of time,
or both would be, an Event of Default.
"Definitive Notes" means Notes that are in the form of Exhibit A
attached hereto (but without including the text referred to in footnote 1
thereto).
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.3 hereof as
the Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
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"Designation Amount" means, with respect to the designation of a
Restricted Subsidiary or a newly acquired or formed Subsidiary as an
Unrestricted Subsidiary, an amount equal to (a) the net book value of all assets
of such Subsidiary at the time of such designation in the case of a Restricted
Subsidiary or (b) the cost of acquisition or formation in the case of a newly
acquired or formed Subsidiary.
"Disinterested Director" means, with respect to any transaction or
series of transactions with Affiliates, a member of the Board of Directors of
the Manager who has no financial interest, and whose employer has no financial
interest, in such transaction or series of transactions.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"Event of Default" has the meaning set forth in Section 6.1 hereof.
"Excess Harvest" means a harvest of Timber (including timber deed,
bulk, pay-as-cut and stumpage sales) in excess in the aggregate of the following
limitations: (a) 150% of the Planned Volume during any fiscal year of the
Company, (b) 140% of the Planned Volume during any period of two consecutive
fiscal years of the Company, (c) 130% of the Planned Volume during any period of
three consecutive fiscal years of the Company and (d) 120% of the Planned Volume
during any period of four consecutive fiscal years of the Company. In the event
that the Company or any of its Restricted Subsidiaries sells Timber pursuant to
a timber deed, bulk, pay-as-cut or stumpage contract, the Timber shall be deemed
harvested in equal monthly amounts over the life of the contract, regardless of
when the purchaser actually severs the Timber.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Finance Corp." means the party named as such in this Indenture until
a successor replaces it pursuant to this Indenture and thereafter means the
successor.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States of America, which are applicable from time to
time.
"Global Note" means a Note that is issued in global form in the name
of Cede & Co. or such other name as may be requested by an authorized
representative of the Depositary, and that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in the form of Note attached
hereto as Exhibit A.
-8-
"Government Securities" means 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.
"Guaranty" as applied to any Person, any direct or indirect liability,
contingent or otherwise, of such Person with respect to any Indebtedness, lease,
cash dividend or other obligation of another, including, without limitation (a)
any such obligation directly or indirectly guaranteed or endorsed (otherwise
than for collection or deposit in the ordinary course of business) by such
Person, or in respect of which such Person is otherwise directly or indirectly
liable, (b) any other obligation under any contract which, in economic effect,
is substantially equivalent to a guaranty, including, without limitation, any
such obligation of a partnership in which such Person is a general partner or of
a joint venture in which such Person is a joint venturer, or (c) any obligation
in effect guaranteed by such Person through any agreement (contingent or
otherwise) to purchase, repurchase or otherwise acquire such obligation or any
security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), or to maintain the solvency or any balance sheet or
other financial condition of the obligor of such obligation, or to make payment
for any products, materials or supplies or for any transportation or services
regardless of the non-delivery or nonfurnishing thereof, in any such case if the
purpose or intent of such agreement is to provide assurance that such obligation
will be paid or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such obligation will be protected against
loss in respect thereof.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means as applied to any Person (without duplication):
(a) any indebtedness for borrowed money and all obligations evidenced
by any bond, note, debenture or other similar instrument or letter of credit (or
reimbursement agreements in respect thereof) which such Person has directly or
indirectly created, incurred or assumed (other than obligations with respect to
letters of credit securing obligations (other than obligations described in
paragraphs (a) through (c) of this definition) entered into in the ordinary
course of business of such Person to the extent such letters of credit are not
drawn upon, or, if and to the extent drawn upon, such drawing is reimbursed no
later than the fifth Business Day following receipt by such Person of a demand
for reimbursement following payment on the letter of credit);
(b) any indebtedness for borrowed money and all obligations evidenced
by any bond, note, debenture or other similar instrument secured by any Lien in
respect of property owned by such Person, whether or not such Person has assumed
or become liable for the payment of such indebtedness, provided that the amount
of such Indebtedness, if such Person has not assumed the same or become liable
therefor, shall in no event be deemed to be greater than the fair market value
from time to time (as determined in good faith by such Person) of the property
subject to such Lien;
-9-
(c) any indebtedness, whether or not for borrowed money (excluding
trade payables and accrued expenses arising in the ordinary course of business),
with respect to which such Person has become directly or indirectly liable and
which represents the deferred purchase price (or a portion thereof) or has been
incurred to finance the purchase price (or a portion thereof) of any property or
service or business acquired by such Person, whether by purchase, consolidation,
merger or otherwise;
(d) the principal component of any obligations under Capital Leases to
the extent such obligations would, in accordance with GAAP, appear on a balance
sheet of such Person;
(e) all Attributable Debt of such Person in respect of Sale and Lease-
Back Transactions not involving a Capital Lease;
(f) any indebtedness of any other Person of the character referred to
in clause (a), (b), (c), (d) or (e) of this definition with respect to which the
Person whose Indebtedness is being determined has become liable by way of a
Guaranty;
(g) all Redeemable Capital Stock of such Person valued at the greater
of its voluntary or involuntary maximum fixed repurchase price;
(h) any Preferred Stock (other than Redeemable Capital Stock) of any
Restricted Subsidiary of such Person that is not a Subsidiary Guarantor valued
at the liquidation preference thereof or any mandatory redemption payment
obligations in respect thereof; and
(i) any amendment, supplement, modification, deferral, renewal,
extension or refunding of any liability of the types referred to in clauses (a)
through (h) above.
For purposes hereof, the "maximum fixed repurchase price" of any
Redeemable Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Capital Stock as if
such Redeemable Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the Indenture, and if such price
is based upon, or measured by, the fair market value of such Redeemable Capital
Stock, such fair market value shall be determined in good faith by the board of
directors of the issuer of such Redeemable Capital Stock.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect the Company or any Restricted
Subsidiary from fluctuations in interest rates.
"Investment" means as applied to any Person, any direct or indirect
purchase or other acquisition by such Person of stock or other securities of any
other Person, or any direct or indirect
-10-
loan, advance or capital contribution by such Person to any other Person, and
any other item which would be classified as an "investment" on a balance sheet
of such Person prepared in accordance with GAAP, including, without limitation,
any direct or indirect contribution by such Person of property or assets to a
joint venture, partnership or other business entity in which such Person retains
an interest (it being understood that a direct or indirect purchase or other
acquisition by such Person of assets of any other Person (other than stock or
other securities) shall not constitute an "Investment" for purposes of this
Indenture). The amount involved in Investments made during any period shall be
the aggregate cost to the Company and its Restricted Subsidiaries of all such
Investments made during such period, determined in accordance with GAAP, but
without regard to unrealized increases or decreases in value, or write-ups,
write-downs or write-offs, of such Investments and without regard to the
existence of any undistributed earnings or accrued interest with respect thereto
accrued after the respective dates on which such Investments were made, less any
net return of capital realized during such period upon the sale, repayment or
other liquidation of such Investments (determined in accordance with GAAP, but
without regard to any amounts received during such period as earnings (in the
form of dividends not constituting a return of capital, interest or otherwise)
on such Investments or as loans from any Person in whom such Investments have
been made).
"Issue Date" means the date on which the Notes are originally issued.
"Issuers" means the parties named as such in this Indenture until a
successor replaces either such Issuer pursuant to this Indenture and thereafter
means the remaining Issuer and the successor.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim, or preference
or priority or other encumbrance upon or with respect to any property of any
kind. A Person shall be deemed to own subject to a Lien any property which such
Person has acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, Capital Lease or other title retention
agreement.
"Manager" means U.S. Timberlands Services Company, L.L.C., a Delaware
limited liability company and any successors in the capacity of managing member
of the Company (including, if applicable, more than one successor in any such
capacity at the same time).
"Master Partnership" means U.S. Timberlands Company, L.P., a Delaware
limited partnership.
"Maturity Date" means, with respect to any Note, the date on which any
principal of such Note becomes due and payable as therein or herein provided,
whether at the Stated Maturity with respect to such principal or by declaration
of acceleration, call for redemption or purchase or otherwise.
-11-
"MLP Offering" means the public issuance and sale of Common Units of
the Master Partnership, concurrent with the issuance of Notes under this
Indenture.
"MLP Partnership Agreement" means the Amended and Restated Agreement
of Limited Partnership of the Master Partnership, as in effect on the Issue
Date, and as the same may from time to time be amended, supplemented or
otherwise modified in accordance with the terms thereof.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Amount of Unrestricted Investment" means, without duplication,
the sum of (a) the aggregate amount of all Investments made after the Issue Date
pursuant to subdivision (h) of the definition of Permitted Investment (computed
as provided in the last sentence of the definition of Investment) and (b) the
aggregate of all Designation Amounts in connection with the designation of
Unrestricted Subsidiaries less all Designation Amounts in respect of
Unrestricted Subsidiaries which have been designated as Restricted Subsidiaries
and otherwise reduced in a manner consistent with the provisions of the last
sentence of the definition of Investment.
"Net Proceeds" means, with respect to any Asset Sale or Excess
Harvest, the proceeds thereof in the form of cash or cash equivalents including
payments in respect of deferred payment obligations when received in the form of
cash or cash equivalents (except to the extent that such deferred payment
obligations are financed or sold with recourse to the Company or any Restricted
Subsidiary of the Company) net of (a) brokerage commissions and other fees and
expenses (including, without limitation, fees and expenses of legal counsel and
accountants and fees, expenses, discounts or commissions of underwriters,
placement agents and investment bankers) related to such Asset Sale or Excess
Harvest, (b) provisions for all taxes payable as a result of such Asset Sale or
Excess Harvest, (c) amounts required to be paid to any person (other than the
Company or any Restricted Subsidiary of the Company) owning a beneficial
interest in the assets subject to such Asset Sale or Excess Harvest, (d)
appropriate amounts to be provided by the Company or any Restricted Subsidiary
of the Company, as the case may be, as a reserve required in accordance with
GAAP against any liabilities associated with such Asset Sale or Excess Harvest
and retained by the Company or any Restricted Subsidiary of the Company, as the
case may be, after such Asset Sale or Excess Harvest, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale or Excess Harvest and (e) amounts
required to be applied to the repayment of Indebtedness secured by a Lien on the
asset or assets sold in such Asset Sale or Excess Harvest.
"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Notes" means the ___% Senior Notes due 2007.
-12-
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person; provided,
however, that any reference to an Officer with respect to the Company shall mean
the respective Officer of the Manager.
"Officers' Certificate" means a certificate signed on behalf of (i)
the Manager (acting on behalf of the Company) by two Officers of the Manager,
one of whom must be the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of the Manager, or
(ii) Finance Corp. by two Officers of Finance Corp., one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of Finance Corp., in either case that meets the
requirements of Section 11.5 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.5 hereof. The counsel may be an employee of or counsel to the Company, the
Manager, Finance Corp., any of their respective Subsidiaries or the Trustee.
"Permitted Holders" means (a) John M. Rudey, any member of Mr. Rudey's
immediate family, any of Mr. Rudey's lineal descendants and any member of such
lineal descendent's immediate family, (b) any trust (to the extent that it is
for the benefit of any of the foregoing), (c) any of Rudey Timber Company,
L.L.C., U.S. Timberlands Management Company, L.L.C., U.S. Timberlands Holdings,
L.L.C. and the Master Partnership, and (d) in the event of the incompetence or
death of any of the individuals described in clause (a) above, such individual's
estate, executor, administrator, committee or other personal representatives, or
beneficiaries.
"Permitted Indebtedness" means any of the following:
(a) Indebtedness of the Company evidenced by the Notes;
(b) Indebtedness outstanding on the Issue Date;
(c) Indebtedness of the Company or a Restricted Subsidiary incurred
for any purpose permitted under the Acquisition Facility, provided that the
aggregate principal amount of such Indebtedness outstanding at any time may not
exceed the Acquisition Principal Amount;
(d) Indebtedness of the Company or a Restricted Subsidiary incurred
for any purpose permitted under the Working Capital Facility, provided that the
aggregate principal amount of such Indebtedness outstanding at any time may not
exceed the Working Capital Principal Amount;
(e) Indebtedness of the Company owing to the Master Partnership or the
Manager or an Affiliate of the Master Partnership or the Manager that is
unsecured and that is Subordinated
-13-
Indebtedness; provided that the aggregate principal amount of such Indebtedness
outstanding at any time may not exceed $10 million;
(f) Indebtedness owed by the Company or any Restricted Subsidiary to
any Restricted Subsidiary;
(g) Indebtedness under Interest Rate Agreements;
(h) Permitted Refinancing Indebtedness;
(i) Indebtedness of the Company and its Restricted Subsidiaries
represented by letters of credit supporting (i) obligations under workmen's
compensation laws and (ii) the repayment of Permitted Indebtedness;
(j) surety bonds and appeal bonds required in the ordinary course of
business or in connection with the enforcement of rights or claims of the
Company or any of its Subsidiaries or in connection with judgments that do not
result in a Default or Event of Default;
(k) the Subsidiary Guarantees of the Notes (and any assumption of the
obligations guaranteed thereby);
(l) the incurrence by the Company or any Restricted Subsidiary of
Indebtedness in respect of Capital Leases, mortgage financings or purchase money
obligations, in each case incurred for the purpose of financing all or any part
of the purchase price or cost of construction or improvement of property, plant
or equipment used in the business of the Company or such Restricted Subsidiary,
in an aggregate principal amount which, when aggregated with the principal
amount of all other Indebtedness then outstanding and incurred pursuant to this
clause (1) (together with any Permitted Refinancing Indebtedness with respect
thereto) does not exceed $5 million at any time outstanding;
(m) the incurrence by the Company or any Restricted Subsidiary of
additional Indebtedness in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any other Indebtedness
incurred pursuant to this clause (m), not to exceed $10 million.
For purposes of determining compliance with Section 4.8 hereof, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (a) through (m) above
or is entitled to be incurred pursuant to the first paragraph of such covenant,
the Company shall, in its sole discretion, classify such item of Indebtedness in
any manner that complies with this covenant and such item of Indebtedness will
be treated as having been incurred pursuant to only one of such clauses or
pursuant to the first paragraph of such covenant.
-14-
"Permitted Investments" means any of the following:
(a) Investments made or owned by the Company or any Restricted
Subsidiary in (i) any evidence of Indebtedness with a maturity of 365 days or
less issued by or directly, fully and unconditionally guaranteed or insured by
the United States of America or any agency or instrumentality thereof (provided
that the full faith and credit of the United States of America is pledged in
support thereof); (ii) deposits, certificates of deposit or acceptances with a
maturity of 365 days or less of any institution that is a member of the Federal
Reserve System having combined capital and surplus and undivided profits of not
less than $500.0 million; (iii) commercial paper with a maturity of 365 days or
less issued by a corporation (other than an Affiliate of the Company)
incorporated or organized under the laws of the United States or any state
thereof or the District of Columbia and rated at least "A-l" by S&P or "P-l" by
Moody's; (iv) repurchase agreements and reverse repurchase agreements relating
to marketable direct obligations issued by or directly, fully and
unconditionally guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof), in each case
maturing within 365 days from the date of acquisition, (v) marketable direct
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and having as at such date
the highest rating obtainable from either S&P or Moody's, or (vi) money market
mutual or similar funds that invest in obligations referred to in clauses (i)
through (v) of this definition, in each case having assets in excess of $100.0
million.
(b) the acquisition by the Company or any Restricted Subsidiary of
Capital Stock or other ownership interests, whether in a single transaction or
in a series of related transactions, of a Person engaged in substantially the
same business as the Company such that upon the completion of such transaction
or series of transactions, such Person becomes a Restricted Subsidiary;
(c) subject to the provisions of subdivision (h) below, the making or
ownership by the Company or any Restricted Subsidiary of Investments (in
addition to Investments permitted by subdivisions (a), (b), (d), (e), (f) and
(g)) in any Person which is engaged in substantially the same business as the
Company, provided that the aggregate amount of all such Investments made by the
Company and its Restricted Subsidiaries following the Issue Date and outstanding
pursuant to this subdivision (c) and subdivision (h) below shall not at any date
of determination exceed 10% of Total Assets (the "Investment Limit"), provided
that, in addition to Investments that would be permitted under the Investment
Limit, during any fiscal year the Company and its Restricted Subsidiaries may
invest up to $11 million (the "Annual Limit") pursuant to the provisions of this
subdivision (c), but the unused amount of the Annual Limit shall not be carried
over to any future years;
(d) the making or ownership by the Company or any Restricted
Subsidiary of Investments (i) arising out of loans and advances to employees
incurred in the ordinary course of business, (ii) arising out of extensions of
trade credit or advances to third parties in the ordinary course of business and
(iii) acquired by reason of the exercise of customary creditors' rights upon
default or pursuant to the bankruptcy, insolvency or reorganization of a debtor,
-15-
(e) the creation or incurrence of liability by the Company or any
Restricted Subsidiary with respect to any Guaranty constituting an obligation,
warranty or indemnity, not guaranteeing Indebtedness of any Person, which is
undertaken or made in the ordinary course of business;
(f) the creation or incurrence of liability by the Company or any
Restricted Subsidiary with respect to any Interest Rate Agreements;
(g) the making by the Company or any Restricted Subsidiary of
Investments in the Company or another Restricted Subsidiary;
(h) the making or ownership by the Company or any Restricted
Subsidiary of Investments in Unrestricted Subsidiaries; provided that the Net
Amount of Unrestricted Investment shall not at any time exceed $5 million (and
subject to the limitations specified in subdivision (c) above); and
(i) the making or ownership by the Company or any Restricted
Subsidiary of Investments in Finance Corp.
"Permitted Liens" means any of the following:
(a) Liens for taxes, assessments or other governmental charges the
payment of which is not yet due and is being contested in good faith by
appropriate proceedings promptly initiated and diligently conducted and as to
which reserves or other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor and be adequate in the good faith judgment of
the obligor;
(b) Liens of lessors, landlords and carriers, vendors, warehousemen,
mechanics, materialmen, repairmen and other like Liens incurred in the ordinary
course of business for sums not yet due or the payment of which is being
contested in good faith by appropriate proceedings promptly initiated and
diligently conducted and as to which reserves or other appropriate provision, if
any, as shall be required by GAAP shall have been made therefor and be adequate
in the good faith judgment of the obligor, in each case (i) not incurred or made
in connection with the borrowing of money, the obtaining of advances or credit
or the payment of the deferred purchase price of property or (ii) incurred in
the ordinary course of business securing the unpaid purchase price of property
or services constituting current accounts payable;
(c) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business (i) in connection with workers'
compensation, unemployment insurance and other types of social security, or (ii)
to secure (or to obtain letters of credit that secure) the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
performance bonds, purchase, construction or sales contracts and other similar
obligations, in each case not incurred or made in connection with the borrowing
of money;
-16-
(d) other deposits made to secure liability to insurance carriers
under insurance or self insurance arrangements;
(e) Liens securing reimbursement obligations under letters of credit,
provided in each case that such Liens cover only the title documents and related
goods (and any proceeds thereof) covered by the related letter of credit;
(f) any attachment or judgment Lien relating to a judgment that does
not constitute an Event of Default;
(g) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, which, in each case
either (i) are granted, entered into or created in the ordinary course of the
business of the Company or any Restricted Subsidiary or (ii) do not materially
impair the value or intended use of the property covered thereby;
(h) Liens on property or assets of any Restricted Subsidiary securing
Indebtedness of such Restricted Subsidiary owing to the Company or a Restricted
Subsidiary;
(i) Liens on assets of the Company or any Restricted Subsidiary
existing on the Issue Date;
(j) Liens existing on any property of any Person at the time it
becomes a Subsidiary of the Company, or existing at the time of acquisition upon
any property acquired by the Company or any such Subsidiary through purchase,
merger or consolidation or otherwise, whether or not assumed by the Company or
such Subsidiary, or created to secure Indebtedness incurred to pay all or any
part of the purchase price or cost of construction or improvement (a "Purchase
Money Lien") of property (including, without limitation, Capital Stock and other
securities) acquired by the Company or a Restricted Subsidiary; provided that
(i) any such Lien shall be confined solely to such item or items of property and
other property which is an improvement to or is acquired for use specifically in
connection with such acquired property, or, in the case of construction, related
unimproved land, (ii) in the case of a Purchase Money Lien, the principal amount
of the Indebtedness secured by such Purchase Money Lien shall at no time exceed
an amount equal to 100% of the purchase price or cost of construction or
improvement to the Company and the Restricted Subsidiaries of such property,
(iii) any such Purchase Money Lien shall be created not later than 180 days
after the acquisition of such property and (iv) any such Lien (other than a
Purchase Money Lien) shall not have been created or assumed in contemplation of
such Person's becoming a Subsidiary of the Company or such acquisition of
property by the Company or any Subsidiary;
(k) easements, exceptions or reservations in any property of the
Company or any Restricted Subsidiary granted or reserved for the purpose of
pipelines, roads, the removal of oil, gas, coal or other minerals, and other
like purposes, or for the joint or common use of real property,
-17-
facilities and equipment, which are incidental to, and do not materially
interfere with, the ordinary conduct of the business of the Company or any
Restricted Subsidiary; or
(l) any Lien renewing or extending any Lien permitted by subdivision
(i) or (j), provided that (i) the principal amount of the Indebtedness secured
by any such Lien shall not exceed the principal amount of such Indebtedness
outstanding immediately prior to the renewal or extension of such Lien, and (ii)
no assets encumbered by any such Lien other than the assets encumbered
immediately prior to such renewal or extension shall be encumbered thereby.
"Permitted Refinancing Indebtedness" means Indebtedness incurred by
the Company or any Restricted Subsidiary to substantially concurrently
(excluding any notice period on redemptions) repay, refund, renew, replace,
extend or refinance, in whole or in part, any Permitted Indebtedness of the
Company or any Restricted Subsidiary or any other Indebtedness incurred by the
Company or any Restricted Subsidiary pursuant to Section 4.8 hereof, to the
extent (a) the principal amount of such Permitted Refinancing Indebtedness does
not exceed the principal or accreted amount plus the amount of accrued and
unpaid interest of the Indebtedness so repaid, refunded or refinanced (except
that, in the case of the Notes, such Permitted Refinancing Indebtedness may
include the redemption premium set forth in Section 3.7 hereof), (b) the
Permitted Refinancing Indebtedness ranks no more favorably in right of payment
with respect to the Notes than the Indebtedness so repaid, refunded, renewed,
replaced, extended or refinanced, and (c) the Permitted Refinancing Indebtedness
has a Weighted Average Life to Stated Maturity and Stated Maturity equal to, or
greater than, the Indebtedness so repaid, refunded, renewed, replaced, extended
or refinanced; provided, however, that Permitted Refinancing Indebtedness shall
not include Indebtedness incurred by a Restricted Subsidiary to repay, refund,
renew, replace, extend or refinance Indebtedness of the Company.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, charitable
foundation, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Planned Volume" means, as of the Closing Date, 125 million board feet
per calendar year of Timber. In the event of the acquisition of merchantable
Timber or Timberlands (other than in a like-kind exchange of Timber or
Timberlands for other Timber or Timberlands and other than Timber or Timberlands
acquired with the Net Proceeds of an Excess Harvest) constituting an Asset
Acquisition, Planned Volume will be increased for 10 years by 10% of the volume
of merchantable Timber so acquired; provided that if such Asset Acquisition is
made under a cutting contract with a term of less than 10 years, Planned Volume
will be increased for each year during the term of the cutting contract by a
number of board feet equal to the number of board feet so acquired multiplied by
the quotient of 100% divided by the number of years in the cutting contract. In
the event of a disposition of merchantable Timber or Timberlands constituting an
Asset Sale, Planned Volume will be reduced by 10% of the volume of merchantable
Timber sold in such Asset Sale. In the event of an Excess Harvest, Planned
Volume will be reduced by 10% of the amount of the Excess Harvest.
-18-
"Preferred Stock," as applied to the Capital Stock of any Person,
means Capital Stock (other than the Common Units) of any class or classes
(however designated), which is preferred as to the payment of distributions,
dividends, or upon any voluntary or involuntary liquidation or dissolution of
such Person, over shares or units of Capital Stock of any other class of such
Person.
"Prospectus" means the Prospectus of the Issuers relating to the
offering of the Notes.
"Public Equity Offering" means a public offering by the Master
Partnership or the Company of its Capital Stock (other than Redeemable Capital
Stock) pursuant to a registration statement declared effective under the
Securities Act; provided that the MLP Offering (including any over-allotment
option in respect thereof) shall be excluded from the definition of Public
Equity Offering.
"Redeemable Capital Stock" means any shares of any class or series of
Capital Stock, that, either by the terms thereof, by the terms of any security
into which it is convertible or exchangeable or by contract or otherwise, is or
upon the happening of an event or passage of time would be, required to be
redeemed prior to the Stated Maturity with respect to the principal of any Note
or is redeemable at the option of the holder thereof at any time prior to the
Stated Maturity of the Notes, or is convertible into or exchangeable for debt
securities at any time prior to the Stated Maturity of the Notes.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee (or any successor
of the Trustee) or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Subsidiary" means a Subsidiary of the Company, which, as
of the date of determination, is not an Unrestricted Subsidiary of the Company.
"Sale and Leaseback Transaction" of any Person (a "Transferor") means
any arrangement (other than between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries) whereby (a) property (the "Subject Property")
has been or is to be disposed of by such Transferor to any other Person with the
intention on the part of such Transferor of taking back a lease of such Subject
Property pursuant to which the rental payments are calculated to amortize the
purchase price of such Subject Property substantially over the useful life of
such Subject Property, and (b) such Subject Property is in fact so leased by
such Transferor or an Affiliate of such Transferor.
"SEC" means the Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiary" shall have the same meaning as in Rule
1.02(w) of Regulation S-X under the Securities Act.
"S&P" means Standard & Poor's Ratings Group, and its successors.
"Stated Maturity" means, (a) when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable, and (b) when used with respect to any other Indebtedness, means the
date or dates specified in the instrument governing such Indebtedness as the
fixed date or dates on which each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect of such Indebtedness, or any installment of interest
thereon, is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or any
Subsidiary Guarantor which is expressly subordinated in right of payment to the
Notes or the Subsidiary Guarantee, respectively.
"Subsidiary" means, with respect to any Person, (a) a corporation a
majority of whose Voting Stock (or, in the case of a partnership, a majority of
the partners' Capital Stock, considering all partners' Capital Stock as a single
class) is at the time, directly or indirectly, owned by such Person, by one or
more Subsidiaries of such Person or by such Person and one or more Subsidiaries
thereof and (b) any other Person, including, without limitation, a joint
venture, in which such Person, one or more Subsidiaries thereof or such Person
and one or more Subsidiaries thereof, directly or indirectly, at the date of
determination thereof, has at least majority ownership interest entitled to vote
in the election of directors, managers, general partners or trustees thereof (or
other Person performing similar functions) or, if such Persons are not elected,
to vote on any matter that is submitted to the vote of all Persons holding
ownership interests in such entity. For purposes of this definition, any
directors' qualifying shares or investments by foreign nationals mandated by
applicable law shall be disregarded in determining the ownership of a
Subsidiary.
"Subsidiary Guarantee" means any guarantee of the Notes by any
Subsidiary Guarantor in accordance with the provisions described under Article
10.
"Subsidiary Guarantor" means (i) each of the Company's Subsidiaries,
if any, executing a supplemental indenture in which such Subsidiary agrees to be
bound by the terms of the Indenture and (ii) any Person that becomes a successor
guarantor of the Notes in compliance with the provisions described under Section
10.2.
"Timber" means all crops and all trees, timber, whether severed or
unsevered and including standing and down timber, stumps and cut timber, and
logs, wood chips and other forest products, whether not located on or hereafter
planted or growing in or on the Timberlands or
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otherwise or now or hereafter removed from the Timberlands or otherwise for sale
or other disposition.
"Timberlands" means, at any date of determination, all real property
owned by or leased to the Company that is suitable for Timber production.
"TIA" means the Trust Indenture Act of 1939, as in effect on the date
this Indenture is qualified under the TIA, except as provided in Section 9.3
hereof.
"Total Assets" means as of any date of determination, the consolidated
total assets of the Company and the Restricted Subsidiaries as would be shown on
a consolidated balance sheet of the Company and the Restricted Subsidiaries
prepared in accordance with GAAP as of that date.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"UCC" means the Uniform Commercial Code as it may be from time to time
in effect in the State of New York.
"Unrestricted Subsidiary" means any Subsidiary of the Company or a
Restricted Subsidiary that is designated as such by the Manager, provided that
no portion of the Indebtedness or any other obligation (contingent or otherwise)
of such Subsidiary (a) is guaranteed by the Company or any Restricted
Subsidiary, (b) is recourse to or obligates the Company or any Restricted
Subsidiary in any way or (c) subjects any property or assets of the Company or
any Restricted Subsidiary, directly or indirectly, contingently or otherwise, to
the satisfaction thereof. Notwithstanding the foregoing, the Company or a
Restricted Subsidiary may Guaranty or agree to provide funds for the payment or
maintenance of, or otherwise become liable with respect to Indebtedness of an
Unrestricted Subsidiary, but only to the extent that the Company or a Restricted
Subsidiary would be permitted to (a) make an Investment in such Unrestricted
Subsidiary pursuant to subdivision (h) of the definition of Permitted
Investments and (b) incur the Indebtedness represented by such Guaranty or
agreement pursuant to Section 4.8 herein. The Board of Directors may designate
an Unrestricted Subsidiary to be a Restricted Subsidiary, provided that
immediately after giving effect to such designation, (a) there exists no Default
or Event of Default and (b) if such Unrestricted Subsidiary has, as of the date
of such designation, outstanding Indebtedness (other than Permitted
Indebtedness), the Company could incur at least $1.00 of Indebtedness (other
than Permitted Indebtedness). Notwithstanding the foregoing, (a) no Subsidiary
may be designated an Unrestricted Subsidiary if such Subsidiary, directly or
indirectly, holds Capital Stock of a Restricted Subsidiary and (b) Finance Corp.
may not be designated an Unrestricted Subsidiary.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers,
general partners or trustees of any Person (irrespective
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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) or, with respect to a partnership (whether general or limited), any
general partner interest in such partnership.
"Weighted Average Life to Stated Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness; provided, however, that with respect to any
revolving Indebtedness, the foregoing calculation of Weighted Average Life to
Stated Maturity shall be determined based upon the total available commitments
and the required reductions of commitments in lieu of the outstanding principal
amount and the required payments of principal, respectively.
"Wholly-Owned Restricted Subsidiary" means any Subsidiary of the
Company of which 98% of the outstanding Capital Stock is owned by the Company or
by one or more Wholly-Owned Restricted Subsidiaries of the Company or by the
Company and one or more Wholly-Owned Restricted Subsidiaries of the Company.
For purposes of this definition, any directors' qualifying shares or investments
by foreign nationals mandated by applicable law shall be disregarded in
determining the ownership of a Subsidiary.
"Working Capital Facility" means the working capital facility of the
Company provided for in the Credit Agreement.
"Working Capital Principal Amount" means $25.0 million.
Section 1.2 Other Definitions.
Defined in
Term Section
- ---- ----------
"Asset Sale".............................................. 4.16
"Asset Sale Offer"........................................ 4.16
"Bankruptcy Law".......................................... 6.1
"Change of Control Offer"................................. 4.18
"Change of Control Payment"............................... 4.18
"Change of Control Payment Date".......................... 4.18
"Covenant Defeasance"..................................... 8.3
"Custodian"............................................... 6.1
"Excess Harvest Proceeds"................................. 4.17
"Excess Proceeds"......................................... 4.16
"Funding Subsidiary Guarantor"............................ 10.6
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"incur"................................................... 4.8
"Legal Defeasance"........................................ 8.2
"Legal Holiday"........................................... 11.8
"Offer Amount"............................................ 3.9
"Offer Period"............................................ 3.9
"Paying Agent"............................................ 2.3
"Payment Default"......................................... 6.1
"Payment Restrictions".................................... 4.12
"Purchase Date"........................................... 3.9
"Registrar"............................................... 2.3
"Restricted Payments"..................................... 4.9
Section 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of Notes;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee;
"obligor" on the Notes means the Issuers, as joint and several
obligors, or any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.4 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in the United States;
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(3) references to "generally accepted accounting principles"
shall mean generally accepted accounting principles in effect in the
United States as of the date hereof;
(4) "or" is not exclusive;
(5) words in the singular include the plural, and in the plural
include the singular;
(6) provisions apply to successive events and transactions; and
(7) references to sections of or rules under the Securities Act
or the Exchange Act shall be deemed to include substitute, replacement
or successor or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.1 Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, the terms of which are incorporated in
and made a part of this Indenture. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Note shall be
dated the date of its authentication. The Notes shall be in denominations of
$1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture, and the Issuers and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
The Notes will initially be issued in the form of a Global Note,
substantially in the form of Exhibit A attached hereto (including the text
referred to in footnote 1 thereto). Definitive Notes shall be substantially in
the form of Exhibit A attached hereto (but without including the text referred
to in footnote 1 thereto). The Global Note shall represent such of the
outstanding Notes as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding Notes from time to time endorsed
thereon and that the aggregate amount of outstanding Notes represented thereby
may from time to time be reduced or increased, as appropriate, to reflect
exchanges and redemptions. Any endorsement of a Global Note to reflect the
amount of any increase or decrease in the amount of outstanding Notes
represented thereby shall be made by the Trustee in accordance with instructions
given by the Holder thereof as required by Section 2.6 hereof.
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Section 2.2 Execution and Authentication.
The Notes shall be executed on behalf of the Company by the Chief
Executive Officer, the President or any Executive Vice President or Senior Vice
President of the Manager and on behalf of Finance Corp. by its Chief Executive
Officer, its President or any of its Executive Vice Presidents or Senior Vice
Presidents, under its corporate seal reproduced or imprinted on the Notes by
facsimile or otherwise, and shall be attested by the Secretary or any Assistant
Secretary of the Manager and Finance Corp.
If an Officer of the Manager or of Finance Corp. whose signature is on
a Note no longer holds that office at the time the Note is authenticated, the
Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature of the Trustee shall be conclusive evidence that
the Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Issuers signed by an
Officer of each of the Manager, on behalf of the Company, and of Finance Corp.,
authenticate Notes for original issue up to $225,000,000. The aggregate
principal amount of Notes outstanding at any time may not exceed $225,000,000,
except as provided in Section 2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same right as an
Agent to deal with the Issuers or an Affiliate of the Issuers.
Section 2.3 Registrar and Paying Agent.
The Issuers shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Issuers may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agents. The Issuers may change
any Paying Agent or Registrar without notice to any Holder. The Issuers shall
notify the Trustee of the name and address of any Agent not a party to this
Indenture. If the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation in accordance with Section 7.7 hereof. The Issuers
or any of their Subsidiaries may act as Paying Agent or Registrar.
The Issuers shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the TIA. The agreement shall
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implement the provisions of this Indenture that relate to such Agent. The
Issuers initially appoint The Depository Trust Company ("DTC") to act as
Depositary with respect to the Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar and
Paying Agent and agent for service of notices and demands in connection with the
Notes.
Section 2.4 Paying Agent to Hold Money in Trust.
The Issuers shall require each Paying Agent (other than the Trustee)
to agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest, on the Notes, and shall notify the
Trustee of any default by the Issuers or any Subsidiary Guarantor in making any
such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Issuers at any
time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Issuers or
a Subsidiary) shall have no further liability for the money. If an Issuer or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to an Issuer or a
Subsidiary Guarantor, the Trustee shall serve as sole Paying Agent for the
Notes.
Section 2.5 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is not
the Registrar, the Issuers shall furnish to the Trustee at least seven Business
Days before each interest payment date and at such other times as the Trustee
may request in writing a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of Holders, including the
aggregate principal amount of Notes held by each Holder, and the Issuers shall
otherwise comply with TIA (S) 312(a).
Section 2.6 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes
are presented to the Registrar with the request to register the transfer of the
Definitive Notes or to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested if its requirement
for such transactions are met; provided, however, that the Definitive Notes
presented or surrendered for register of transfer or exchange shall be duly
endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by the Holder thereof or by his
attorney, duly authorized in writing.
(b) Transfer of a Definitive Note for a Beneficial Interest in a
Global Note. A Definitive Note may not be exchanged for a beneficial interest
in a Global Note except upon
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satisfaction of the requirements set forth below. Upon receipt by the Trustee
of a Definitive Note, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Trustee, together with written
instructions from the Holder thereof directing the Trustee to make, or direct
the Note Custodian to make, an endorsement on the Global Note to reflect an
increase in the aggregate principal amount of the Notes represented by the
Global Note, then the Trustee shall cancel such Definitive Note in accordance
with Section 2.11 hereof and cause, or direct the Note Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Note Custodian, the aggregate principal amount of Notes
represented by the Global Note to be increased accordingly. If no Global Notes
are then outstanding, the Issuers shall issue and, upon receipt of an
authentication order in accordance with Section 2.2 hereof, the Trustee shall
authenticate a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through the
Depositary, in accordance with this Indenture and the procedures of the
Depositary therefor.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note. Any Person having a beneficial interest in a Global Note may
upon request exchange such beneficial interest for a Definitive Note. Upon
receipt by the Trustee of written instructions or such other form of
instructions as is customary for the Depositary, from the Depositary or its
nominee on behalf of any Person having a beneficial interest in a Global Note,
then the Trustee or the Note Custodian, at the direction of the Trustee, shall,
in accordance with the standing instructions and procedures existing between the
Depositary and the Note Custodian, cause the aggregate principal amount of
Global Notes to be reduced accordingly and, following such reduction, the
Issuers shall execute and, upon receipt of an authentication order in accordance
with Section 2.2 hereof, the Trustee shall authenticate and deliver to the
transferee a Definitive Note in the appropriate principal amount. Definitive
Notes issued in exchange for a beneficial interest in a Global Note pursuant to
this Section 2.6(d) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Definitive Notes to the Persons in whose names such Notes are
so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), a Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Notes in Absence of Depositary. If
at any time (i) the Depositary for the Notes notifies the Issuers that the
Depositary is unwilling or unable to continue as Depositary for the Global Notes
and a successor Depositary for the Global Notes is not appointed by the Issuers
within 90 days after delivery of such notice or (ii) the Issuers, at their sole
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discretion, notify the Trustee in writing that they elect to cause the issuance
of Definitive Notes under this Indenture, then each of the Issuers will execute,
and the Trustee, upon receipt of an Officers' Certificate requesting the
authentication and delivery of Definitive Notes, will authenticate and deliver
Definitive Notes, in an aggregate principal amount equal to the principal amount
of the Global Notes, in exchange for such Global Notes and registered in such
names as the Depositary shall instruct the Trustee or the Issuers in writing.
(g) Cancellation and/or Adjustment of Global Note. At such time as
all beneficial interests in a Global Note have either been exchanged for
Definitive Notes, redeemed, repurchased or canceled, such Global Note shall be
returned to or retained and cancelled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for
Definitive Notes, redeemed, repurchased or cancelled, the principal amount of
Notes represented by such Global Note shall be reduced and an endorsement shall
be made on such Global Note, by the Trustee or the Note Custodian, at the
direction of the Trustee to reflect such reduction.
(h) General Provisions with respect to Transfer and Exchanges.
(i) To permit registrations of transfers and exchanges, each
of the Issuers shall execute and the Trustee shall
authenticate Definitive Notes and Global Notes at the
Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Issuers
may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes
or similar governmental charges payable upon exchange or
transfer pursuant to Sections 3.7, 3.9, 4.16, 4.17, 4.18
and 9.5 hereof).
(iii) The Registrar shall not be required to register the
transfer or exchange of any Note selected for redemption
in whole or in part, except the unredeemed portion of
any Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes
or Global Notes shall be the valid obligations of each
of the Issuers, as joint and several obligors,
evidencing the same debt, and entitled to the same
benefit under this Indenture as the Definitive Notes or
Global Notes surrendered upon such registration of
transfer or exchange.
(v) The Issuers shall not be required to issue, register the
transfer of or exchange Notes during a period beginning
at the opening of business 15 days before the day of any
selection of Notes for redemption under
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Section 3.2 and ending at the close of business on the
day of selection.
(vi) Prior to due presentment for registration of transfer of
any Note, the Trustee, any Agent and the Issuers may
deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the
purpose of receiving payment of principal of, and
premium, and interest on, such Note, and neither the
Trustee, any Agent nor the Issuers shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Definitive Notes and
Global Notes in accordance with the provisions of
Section 2.2 hereof.
(viii) None of the Issuers nor the Trustee will have any
responsibility or liability for any aspect of the
records relating to, or payments made on account of,
Notes by the Depositary, or for maintaining, supervising
or reviewing any records of the Depositary relating to
such Notes. None of the Issuers nor the Trustee shall be
liable for any delay by the related Global Note Holder
or the Depositary in identifying the beneficial owners
of the related Notes and each such Person may
conclusively rely on, and shall be protected in relying
on, instructions from such Global Note Holder or of the
Depositary for all purposes (including with respect to
the registration and delivery, and the respective
principal amounts, of the Notes to be issued).
(ix) The Registrar shall retain copies of all letters,
notices and other written communications received
pursuant to this Section 2.6. The Issuers shall have the
right to inspect and make copies of all such letters,
notices or other written communications at any
reasonable time upon the giving of reasonable written
notice to the Registrar.
Section 2.7 Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the Issuers
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Note, the Issuers shall issue and the Trustee, upon the written
order of the Issuers signed by an Officer of each of the Manager, on behalf of
the Company, and of Finance Corp. shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Issuers, an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Trustee and the Issuers to protect the Issuers, any Subsidiary Guarantor,
the Trustee, any Agent or any authenticating agent from any loss which any of
them may suffer if a Note is replaced. The Issuers and the Trustee may charge
for their expenses in replacing a Note.
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Every replacement Note is an obligation of the Issuers and any
Subsidiary Guarantor and shall be entitled to all of the benefits of this
Indenture and any Subsidiary Guarantee equally and ratably with all other Notes
duly issued hereunder.
Section 2.8 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee hereunder, and those described in this Section as not outstanding.
Except as set forth in Section 2.9 hereof, a Note does not cease to be
outstanding because either of the Issuers or an Affiliate of the Issuers holds a
Note. If a Note is replaced pursuant to Section 2.7 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser. If the principal amount of any
Note is considered paid under Section 4.1 hereof, it ceases to be outstanding
and interest on it ceases to accrue.
Section 2.9 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by either
of the Issuers or any Affiliate of the Issuers shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which a Responsible Officer of the Trustee knows are so owned shall be so
disregarded.
Section 2.10 Temporary Notes.
Until definitive Notes are ready for delivery, the Issuers may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Issuers and the Trustee consider appropriate for temporary Notes. Without
unreasonable delay, the Issuers shall prepare and the Trustee, upon receipt of
the written order of the Issuers signed by an Officer of each of the Manager, on
behalf of the Company, and of Finance Corp., shall authenticate, definitive
Notes in exchange for temporary Notes.
Until such exchange, Holders of temporary Notes shall be entitled to
all of the right, benefit and privileges of this Indenture.
Section 2.11 Cancellation.
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee shall cancel all Notes surrendered for registration of transfer or
exchange, payment, replacement or cancellation. The Issuers may not
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issue new Notes to replace Notes that have been redeemed or paid or that have
been delivered to the Trustee for cancellation. All cancelled Notes held by the
Trustee shall be destroyed and certification of their destruction delivered to
the Issuers unless by a written order, signed by one Officer of each of the
Manager, on behalf of the Company, and of Finance Corp., the Issuers shall
direct that cancelled Notes be returned to them.
Section 2.12 Defaulted Interest.
If the Issuers or any Subsidiary Guarantor defaults in a payment of
interest on the Notes, the Issuers or the Subsidiary Guarantors shall pay the
defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, which date shall be at the earliest practicable
date but in all events at least five Business Days prior to the payment date, in
each case at the rate provided in the Notes and in Section 4.1 hereof. The
Issuers shall, with the consent of the Trustee, fix or cause to be fixed each
such special record date and payment date. At least 15 days before the special
record date, the Issuers (or the Trustee, in the name of and at the expense of
the Issuers) shall mail to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.
ARTICLE 3
REDEMPTION AND OFFERS TO PURCHASE
Section 3.1 Notice to Trustee.
If the Issuers elect to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof, they shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date (unless a
shorter notice period shall be satisfactory to the Trustee), an Officers'
Certificate setting forth (a) the Section of this Indenture pursuant to which
the redemption shall occur, (b) the redemption date, (c) the principal amount of
Notes to be redeemed and (iv) the redemption price.
If the Issuers are required to make an offer to purchase Notes
pursuant to the provisions of Sections 4.16, 4.17 or 4.18 hereof, they shall
furnish to the Trustee, at least 30 days before the scheduled purchase date, an
Officers' Certificate setting forth (a) the Section of this Indenture pursuant
to which the offer to purchase shall occur, (b) the terms of the offer, (c) the
purchase price, (d) the principal amount of the Notes to be purchased, and (e)
further setting forth a statement to the effect that (i) the Company or one of
its Subsidiaries has made an Asset Sale and there are Excess Proceeds
aggregating more than $10 million and the amount of such Excess Proceeds, (ii)
the Company and its Subsidiaries have had an Excess Harvest and there are Excess
Harvest Proceeds aggregating more than $10 million and the amount of such Excess
Harvest Proceeds or (iii) a Change of Control has occurred, as applicable.
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Section 3.2 Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed among the Holders of the Notes pro rata, by lot
or in accordance with a method which the Trustee considers to be fair and
appropriate (and in such manner as complies with applicable legal and stock
exchange requirements, if any). In the event of partial redemption by lot, the
particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Issuers in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
them selected shall be in face amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
In the event the Issuers are required to make an Asset Sale Offer
pursuant to Section 3.9 and Section 4.16 or an Excess Harvest Offer pursuant to
Section 3.9 and Section 4.17, and the amount of the Net Proceeds from the Asset
Sale or Excess Harvest is not evenly divisible by $1,000, the Trustee shall
promptly refund to the Issuers the portion of such Excess Proceeds or Excess
Harvest Proceeds that is not necessary to purchase the immediately lesser
principal amount of Notes that is so divisible.
Section 3.3 Notice of Redemption.
Subject to the provisions of Section 3.9 hereof, at least 30 days but
not more than 60 days before a redemption date, the Issuers shall mail a notice
of redemption by first class mail to each Holder whose Notes are to be redeemed
at its registered address.
The notice shall identify the Notes to be redeemed (including CUSIP
number) and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued;
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(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Issuers default in making such redemption
payment, interest on Notes or portions of Notes called for redemption
ceases to accrue on and after the redemption date; and
(g) the paragraph of the Notes or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed.
At the Issuers' request, the Trustee shall give the notice of
redemption in the names of the Issuers and at their expense; provided, however,
that the Issuers shall deliver to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.4 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.3
hereof, Notes called for redemption become due and payable on the redemption
date at the redemption price stated in such notice. A notice of redemption may
not be conditional.
Section 3.5 Deposit of Redemption Price.
On or before the redemption date, the Issuers shall deposit with the
Trustee (to the extent not already held by the Trustee) or with the Paying Agent
money in immediately available funds sufficient to pay the redemption price of
and accrued interest, if any, on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall return to the Issuers any money deposited with
the Trustee or the Paying Agent by the Issuers in excess of the amount necessary
to pay the redemption price of and accrued interest on all Notes to be redeemed.
If the Issuers comply with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest, if any, shall be paid to the Person in
whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Issuers to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.1 hereof.
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Section 3.6 Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Issuers shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Issuers a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
Section 3.7 Optional Redemption.
The Notes are not redeemable prior to ___________, 2002. Thereafter,
the Notes will be subject to redemption at the option of the Issuers, in whole
or in part, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest thereon, if any, to the applicable
redemption date, if redeemed during the 12-month period beginning on __________
of the years indicated below:
YEAR PERCENTAGE
---- ----------
2002................................................ _______%
2003................................................ _______%
2004................................................ _______%
2005 and thereafter................................. 100.000%
Notwithstanding the foregoing, at any time on or before __________,
2000, the Company may redeem up to 35% of the original aggregate principal
amount of the Notes at a redemption price of ___% of the principal amount
thereof, plus accrued and unpaid interest thereon to the redemption date, with
the net proceeds of a Public Equity Offering; provided, however, that at least
65% of the aggregate principal amount of Notes originally issued shall be
outstanding immediately after such redemption; provided further, that such
redemption shall occur within 120 days of the date of the closing of such Public
Equity Offering; provided further, that in the event of a Public Equity Offering
by the Master Partnership, the Master Partnership contributes to the capital of
the Company the portion of the net cash proceeds of such Public Equity Offering
necessary to pay the aggregate redemption price (plus accrued and unpaid
interest thereon to the redemption date) of the Notes to be redeemed.
Section 3.8 Mandatory Redemption.
The Issuers shall have no mandatory redemption or sinking fund
obligations with respect to the Notes.
Section 3.9 Offer to Purchase by Application of Excess Proceeds or Excess
Harvest Proceeds.
Any Asset Sale Offer pursuant to Section 4.16 or Excess Harvest Offer
pursuant to Section 4.17 shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period").
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On a date within five Business Days after the termination of the Offer Period
(the "Purchase Date"), the Issuers shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.16 or Section 4.18 hereof (the
"Offer Amount") or, if less than the Offer Amount has been tendered, all Notes
tendered in response to the Asset Sale Offer or Excess Harvest Offer. Payment
for any Notes so purchased shall be made in the same manner as interest payments
are made.
The Issuers shall comply with any tender offer rules under the
Exchange Act which may then be applicable, including Rule 14e-1, in connection
with any offer required to be made by the Issuers to repurchase the Notes as a
result of an Asset Sale Offer or Excess Harvest Offer. To the extent that the
provisions of any securities laws or regulations conflict with provisions of
this Section 3.9, the Issuers shall comply with the applicable securities laws
or regulations and shall not be deemed to have breached their obligations
hereunder by virtue thereof.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer or Excess Harvest
Offer.
Upon the commencement of an Asset Sale Offer or Excess Harvest Offer,
the Issuers shall send, by first class mail, a notice to the Trustee and each of
the Holders, with a copy to the Trustee. The notice shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Asset Sale Offer or Excess Harvest Offer. The Asset Sale Offer
or Excess Harvest Offer shall be made to all Holders. The notice, which shall
govern the terms of the Asset Sale Offer or Excess Harvest Offer, shall state:
(a) (i) in the case of an Asset Sale Offer, that the Asset Sale
Offer is being made pursuant to this Section 3.9 and Section 4.16 hereof
and the length of time the Asset Sale Offer shall remain open and (ii)
in the case of an Excess Harvest Offer, that the Excess Harvest Offer is
being made pursuant to this Section 3.9 and Section 4.17 hereof and the
length of time the Excess Harvest Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Issuers default in making such payments,
any Note accepted for payment pursuant to the Asset Sale Offer or Excess
Harvest Offer shall cease to accrue interest after the Purchase Date;
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(e) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer or Excess Harvest Offer may only elect to have all
of such Note purchased and may not elect to have only a portion of such
Note purchased;
(f) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer or Excess Harvest Offer shall be required to
surrender the Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, or transfer by book-
entry transfer, to the Issuers, a depositary, if appointed by the
Issuers, or a Paying Agent at the address specified in the notice at
least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if
the Issuers, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount, the Issuers shall select the Notes
to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Issuers so that only Notes in denominations of
$1,000, or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered (or transferred by book-entry transfer) .
On or before the Purchase Date, the Issuers shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer or Excess Harvest Offer, or if less than the Offer Amount has been
tendered, all Notes tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Notes or portions thereof were accepted for
payment by the Issuers in accordance with the terms of this Section 3.9. The
Issuers, the Depositary or the Paying Agent, as the case may be, shall promptly
(but in any case not later than five days after the Purchase Date) mail or
deliver to each tendering Holder an amount equal to the purchase price of the
Notes tendered by such Holder and accepted by the Issuers for purchase, and the
Issuers shall promptly issue a new Note, and the Trustee, upon written request
from the Issuers shall authenticate and mail or deliver such new Note to such
Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Issuers to the Holder thereof. The Issuers shall publicly announce by means
of a press release the results of the Asset Sale Offer or Excess Harvest Offer
on the Purchase Date.
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Other than as specifically provided in this Section 3.9, any purchase
pursuant to this Section 3.9 shall be made pursuant to the provisions of
Sections 3.1 through 3.6 hereof.
No repurchase of Notes under this Section 3.9 shall be deemed to be a
redemption of Notes.
ARTICLE 4
COVENANTS
Section 4.1 Payment of Notes.
The Issuers shall pay the principal of and interest on the Notes on
the dates and in the manner provided in the Notes. Principal and interest shall
be considered paid on the date due if the Paying Agent, other than the Issuers
or any of their Subsidiaries, holds on or before that date money deposited by
the Issuers in immediately available funds and designated for and sufficient to
pay all principal, premium, if any, and interest then due.
The Issuers shall pay interest (including post-petition interest under
any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in
excess of the then applicable interest rate on the Notes to the extent lawful
and shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
Section 4.2 Maintenance of Office or Agency.
The Issuers shall maintain in the Borough of Manhattan, The City of
New York, an office or agency (which may be an office of the Trustee, Registrar
or co-registrar) where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Issuers or Subsidiary
Guarantors in respect of the Notes and this Indenture may be served. The
Issuers shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Issuers or
Subsidiary Guarantors shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Issuers 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
Issuers of their obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Issuers will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
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The Issuers hereby designate the Corporate Trust Office of the Trustee
as one such office or agency of the Issuers in accordance with Section 2.3.
Section 4.3 Reports.
Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Issuers shall furnish to the Holders of
Notes (a) all quarterly and annual financial information that would be required
to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Issuers
were required to file such forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect to
the annual information only, a report thereon by the Issuers' certified
independent accountants and (ii) all reports that would be required to be filed
with the SEC on Form 8-K if the Issuers were required to file such reports. In
addition, whether or not required by the rules and regulations of the SEC, each
of the Issuers shall file a copy of all such information with the SEC for public
availability (unless the SEC will not accept such a filing) and make such
information available to investors who request it in writing. Each Issuer and
each Subsidiary Guarantor shall also comply with the provisions of TIA (S)
314(a).
Section 4.4 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries (including Finance Corp.)
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether each Issuer and Subsidiary
Guarantor has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his knowledge each has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture, and
is not in default in the performance or observance of any of the terms,
provisions and conditions hereof or thereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he may have knowledge and what action each is making or proposes to
take with respect thereto).
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.3 above shall be accompanied by a
written statement of the Company's independent certified public accountants that
in making the examination necessary for certification of such financial
statements nothing has come to their attention which would lead them to believe
that either the Company or any of its Subsidiaries has violated any provisions
of Article 4 or Article 5 of this Indenture or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) Each Issuer and Subsidiary Guarantor shall, so long as any of the
Notes are outstanding, deliver to the Trustee, forthwith upon any Officer
becoming aware of (i) any Default
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or Event of Default or (ii) any event of default under any other mortgage,
indenture or instrument referred to in Section 6.1(d), an Officers' Certificate
specifying such Default, Event of Default or other event of default and what
action the Issuers and the Subsidiary Guarantors are taking or propose to take
with respect thereto.
Section 4.5 Taxes.
Each Issuer shall, and shall cause each of its respective Subsidiaries
to, pay prior to delinquency all material taxes, assessment, and governmental
levies except as contested in good faith and by appropriate proceedings or where
the failure to effect such payment is not adverse in any material respect to the
Holders.
Section 4.6 Stay, Extension and Usury Laws.
Each Issuer and any Subsidiary Guarantor covenants (to the extent that
each may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
which may affect the covenants or the performance of this Indenture; and each of
the Issuers and any Subsidiary Guarantor (to the extent that each may lawfully
do so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
Section 4.7 Company and Corporate Existence.
Subject to Section 4.16 and Article 5 hereof, each Issuer shall do or
cause to be done all things necessary to preserve and keep in full force and
effect (a) its limited liability company or corporate existence, as the case may
be, and the corporate, partnership or other existence of each of their
respective Subsidiaries, in accordance with their respective organizational
documents (as the same may be amended from time to time) and (b) its (and its
Subsidiaries') rights (charter and statutory), licenses and franchises;
provided, however, that the Issuers shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any Subsidiary, if the Board of Directors of the Manager on behalf of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Issuers and their respective Subsidiaries
taken as a whole and that the loss thereof is not adverse in any material
respect to the Holders.
Section 4.8 Limitation on Additional Indebtedness.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or in any manner become directly or indirectly liable, contingently or
otherwise, for the payment of (in each case, to "incur"), any
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Indebtedness (including, without limitation, any Redeemable Capital Stock and
Acquired Indebtedness), unless at the time of such incurrence, and after giving
pro forma effect to the receipt and application of the proceeds of such
Indebtedness, the Consolidated Fixed Charge Coverage Ratio of the Company is
greater than 2.25 to 1.
Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may incur Permitted Indebtedness.
Section 4.9 Limitation on Restricted Payments.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(a) declare or pay any dividend or make any other distribution
or payment on or in respect of Capital Stock of the Company or any of
its Restricted Subsidiaries or any payment made to the direct or
indirect holders (in their capacities as such) of Capital Stock of the
Company or any of its Restricted Subsidiaries (other than (i) dividends
or distributions payable solely in Capital Stock of the Company (other
than Redeemable Capital Stock) or in options, warrants or other rights
to purchase Capital Stock of the Company (other than Redeemable Capital
Stock), (ii) the declaration or payment of dividends or other
distributions to the extent declared or paid to the Company or any
Restricted Subsidiary of the Company and (iii) the declaration or
payment of dividends or other distributions by any Restricted Subsidiary
of the Company to all holders of Capital Stock of such Restricted
Subsidiary on a pro rata basis), (including, in the case of the Company,
to the Manager)),
(b) purchase, redeem, defease or otherwise acquire or retire for
value any Capital Stock of the Company or any of its Restricted
Subsidiaries (other than any such Capital Stock owned by a Wholly-Owned
Restricted Subsidiary of the Company),
(c) make any principal payment on, or purchase, defease,
repurchase, redeem or otherwise acquire or retire for value, prior to
any scheduled maturity, scheduled repayment, scheduled sinking fund
payment or other Stated Maturity, any Subordinated Indebtedness (other
than any such Indebtedness owned by the Company or a Wholly-Owned
Restricted Subsidiary of the Company), or
(d) make any Investment (other than any Permitted Investment) in
any Person
(such payments or Investments described in the preceding clauses (a), (b), (c)
and (d) are collectively referred to as "Restricted Payments"), unless, at the
time of and after giving effect to the proposed Restricted Payment, (A) no
Default or Event of Default shall have occurred and be continuing and
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(B) such Restricted Payment, together with the aggregate of all other Restricted
Payments made by the Company and its Restricted Subsidiaries during the fiscal
quarter during which such Restricted Payment is made, shall not exceed (1) if
the Consolidated Fixed Charge Coverage Ratio of the Company shall be greater
than 1.75 to 1, an amount equal to Available Cash for the immediately preceding
fiscal quarter or (2) if the Consolidated Fixed Charge Coverage Ratio of the
Company shall be equal to or less than 1.75 to 1, an amount equal to the sum of
(x) $7.5 million less the aggregate amount of all Restricted Payments made by
the Company and its Restricted Subsidiaries pursuant to this clause (2) (x)
during the period ending on the last day of the fiscal quarter of the Company
immediately preceding the date of such Restricted Payment and beginning on the
later of (I) the Issue Date and (II) the first day of the sixteenth full fiscal
quarter immediately preceding the date of such Restricted Payment, plus (y) the
aggregate net cash proceeds of any substantially concurrent (I) capital
contribution to the Company from any Person (other than a Restricted Subsidiary
of the Company) or (II) issuance and sale of shares of Capital Stock (other than
Redeemable Capital Stock) of the Company to any Person (other than to a
Restricted Subsidiary of the Company) (excluding any cash proceeds received
pursuant to any transaction occurring on or prior to the Issue Date). The
amount of any such Restricted Payment, if other than cash, shall be the fair
market value (as determined in good faith by the Board of Directors of the
Manager) on the date of such Restricted Payment of the asset(s) proposed to be
transferred by the Company or such Restricted Subsidiary, as the case may be,
pursuant to such Restricted Payment.
None of the foregoing provisions will prohibit: (a) the payment of any
dividend or distribution within 60 days after the date of its declaration, if at
the date of declaration such payment would be permitted by the foregoing
paragraph; (b) the redemption, repurchase or other acquisition or retirement of
any shares of any class of Capital Stock of the Company or any Restricted
Subsidiary of the Company in exchange for, or out of the net cash proceeds of, a
substantially concurrent (i) capital contribution to the Company from any Person
(other than a Restricted Subsidiary of the Company) or (ii) issue and sale of
other shares of Capital Stock (other than Redeemable Capital Stock) of the
Company to any Person (other than to a Restricted Subsidiary of the Company);
provided, however, that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase or other acquisition or retirement
shall be excluded from the calculation of Available Cash; or (c) any redemption,
repurchase or other acquisition or retirement of Subordinated Indebtedness by
exchange for, or out of the net cash proceeds of, a substantially concurrent (i)
capital contribution to the Company from any Person (other than a Restricted
Subsidiary of the Company) or (ii) issue and sale of (A) Capital Stock (other
than Redeemable Capital Stock) of the Company to any Person (other than to a
Restricted Subsidiary of the Company) or (B) Indebtedness of the Company issued
to any Person (other than a Restricted Subsidiary of the Company), so long as
such Indebtedness is Permitted Refinancing Indebtedness; provided, however, in
each case, that the amount of any such net cash proceeds that are utilized for
any such redemption, repurchase or other acquisition or retirement shall be
excluded from the calculation of Available Cash. In computing the amount of
Restricted Payments previously made for purposes of the preceding paragraph,
Restricted Payments made under clause (a) shall be included and Restricted
Payments made under clauses (b) and (c) shall not be so included.
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Section 4.10 Limitation on Liens.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens, other than
Permitted Liens, upon any of its respective property or assets, whether owned on
the Issue Date or thereafter acquired, unless the Notes and the Subsidiary
Guarantees, as applicable, are secured equally and ratably with (or prior to, in
the case of the Subordinated Indebtedness) the obligations secured by such Lien.
Section 4.11 Limitation on Transactions with Affiliates.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, transfer, disposition, purchase, exchange or lease of assets, property
or services), with, or for the benefit of, any Affiliate of the Company, unless
(a) such transaction or series of related transactions is between the Company
and its Restricted Subsidiaries or between two Restricted Subsidiaries or (b)
(i) such transaction or series of related transactions is on terms that are no
less favorable to the Company or such Restricted Subsidiary, as the case may be,
than those which would have been obtained in a comparable transaction at such
time from Persons who are not Affiliates of the Company or a Restricted
Subsidiary and (ii) with respect to (A) a transaction or series of transactions
involving aggregate payments or value equal to or greater than $5 million, the
Company shall have delivered an Officers' Certificate to the Trustee certifying
that such transaction or series of transactions complies with the preceding
clause (i) and that such transaction or series of transactions has been approved
by a majority of the Board of Directors of the Manager (including a majority of
the Disinterested Directors) and (B) a transaction or series of transactions
involving aggregate payments or value equal to or greater than $10 million, the
Company delivers to the Trustee an opinion as to the fairness to the Company or
such Restricted Subsidiary from a financial point of view issued by an
accounting or investment banking firm of national standing; provided, however,
that this Section 4.11 will not apply to (i) any employment agreement, stock
option agreement, restricted stock agreement, consulting agreement or similar
agreement entered into in the ordinary course of business, (ii) transactions
permitted by the provisions of the Indenture set forth in Section 4.9 hereof,
(iii) any agreement in effect on the Issue Date or any amendment thereto (so
long as such amendment is no less favorable to the holders of the Notes than the
original agreement as in effect on the Issue Date) and any transactions
contemplated thereby, (iv) any transaction described in the Prospectus under the
caption "Certain Relationships and Related Transactions" and (v) the payment of
reasonable fees to, and indemnities provided on behalf of, officers, directors,
employees or consultants of the Company, the Manager or any Restricted
Subsidiary in the ordinary course of business.
Section 4.12 Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or consensual
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restriction on the ability of any Restricted Subsidiary to (a) pay dividends, in
cash or otherwise, or make any other distributions on or in respect of its
Capital Stock, (b) pay any Indebtedness owed to the Company or any other
Restricted Subsidiary, (c) make loans or advances to, or any investment in, the
Company or any other Restricted Subsidiary, or (d) transfer any of its
properties or assets to the Company or any other Restricted Subsidiary
(collectively, "Payment Restrictions"), except for such encumbrances or
restrictions existing under or by reason of (i) applicable law, rules or
regulations, or any order or ruling by any governmental authority; (ii) any
agreement in effect at or entered into on the Issue Date (including, without
limitation, the Credit Agreement) or any agreement relating to any Permitted
Indebtedness; provided, however, that the encumbrances and restrictions
contained in the agreements governing such Permitted Indebtedness are no more
restrictive with respect to such Payment Restrictions than those set forth in
the Credit Agreement as in effect on the Issue Date; (iii) customary non-
assignment provisions of any contract, license or any lease governing a
leasehold interest of the Company or any Restricted Subsidiary; (iv) customary
restrictions on cash or other deposits imposed by customers under contracts
entered into in the ordinary course of business; (v) purchase money obligations
for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (d) above on the property so
acquired; (vi) contracts for the sale of assets, including, without limitation,
customary restrictions with respect to a Restricted Subsidiary pursuant to an
agreement that has been entered into for the sale of all or substantially all of
the Capital Stock or assets of such Restricted Subsidiary; (vii) any agreement
or other instrument governing Indebtedness of a Person acquired by the Company
or any Restricted Subsidiary (or of a Restricted Subsidiary of such Person) in
existence at the time of such acquisition (but not created in contemplation
thereof), which encumbrance or restriction is not applicable to any Person, or
the properties or assets of any Person, other than the Person, or the
properties, assets or Subsidiaries of the Person, so acquired; (viii) provisions
contained in agreements or instruments relating to Indebtedness which prohibit
the transfer of all or substantially all of the assets of the obligor thereunder
unless the transferee shall assume the obligations of the obligor under such
agreement or instrument; or (ix) Permitted Refinancing Indebtedness, provided
that the encumbrances or restrictions of the type referred to in clause (a),
(b), (c), or (d) above, contained in agreements governing such Permitted
Refinancing Indebtedness are no more restrictive than those contained in the
agreement governing the Indebtedness being refinanced.
Section 4.13 Limitation on Sale and Leaseback Transactions.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction with respect to
any property of the Company or any of its Restricted Subsidiaries.
Notwithstanding the foregoing, the Company and its Restricted Subsidiaries may
enter into Sale and Leaseback Transactions with respect to property acquired or
constructed after the Issue Date; provided that (a) the Company or such
Restricted Subsidiary would be permitted under this Indenture to incur
Indebtedness secured by a Lien on such property in an amount equal to the
Attributable Debt with respect to such Sale and Leaseback Transaction, or (b)
the lease in such Sale and Leaseback Transaction is for a term not in excess of
the lesser of (i) three years and (ii) 60% of the remaining useful life of such
property.
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Section 4.14 Limitation on Finance Corp.
In addition to the restrictions set forth under Section 4.8 hereof,
Finance Corp. may not incur any Indebtedness unless (a) the Company is a co-
obligor and guarantor of such Indebtedness or (b) the net proceeds of such
Indebtedness are lent to the Company, used to acquire outstanding debt
securities issued by the Company or used directly or indirectly to refinance or
discharge Indebtedness permitted under the limitation of this Section 4.14.
Finance Corp. may not engage in any business not related directly or indirectly
to obtaining money or arranging financing for the Company.
Section 4.15 Line of Business.
The Company and its Restricted Subsidiaries will not engage to any
material extent in any business other than the Business.
Section 4.16 Asset Sales.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, (a) sell, lease, convey or otherwise dispose of any assets
(including by way of a Sale and Leaseback Transaction) other than sales of
inventory in the ordinary course of business and consistent with past practice
(provided, that the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company shall be governed by the
provisions of this Indenture set forth under Section 4.18 hereof or Article 5
hereof and not by the provisions of this Section 4.16) or (b) issue or sell
Capital Stock of any of its Restricted Subsidiaries, in the case of either
clause (a) or (b) above, whether in a single transaction or a series of related
transactions that has a fair market value (as determined in good faith by the
Board of Directors of the Manager) in excess of $1.0 million or for net cash
proceeds of $1.0 million (each of the foregoing, an "Asset Sale"), unless (i)
the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (as determined in good faith by the Board of Directors of the Manager) of
the assets sold or otherwise disposed of and (ii) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash or cash equivalents; provided, however, that the amount of
(A) any liabilities (as shown on the Company's or such Restricted Subsidiary's
most recent balance sheet or in the notes thereto) of the Company or any
Restricted Subsidiary that are assumed by the transferee of any such assets and
(B) any notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are converted by the Company or
such Restricted Subsidiary into cash (to the extent of the cash received) within
90 days of such Asset Sale, shall be deemed to be cash for purposes of this
provision; and provided further, that the 75% limitation referred to in this
clause (ii) shall not apply to any Asset Sale in which the cash portion of the
consideration received therefrom, determined in accordance with the foregoing
proviso, is equal to or greater than what the after-tax proceeds would have been
had such Asset Sale complied with the aforementioned 75% limitation.
Notwithstanding the foregoing, Asset Sales shall not be deemed to include (a)
any transfer of assets or Capital Stock by the Company or any of its Restricted
Subsidiaries to a Restricted Subsidiary of the Company, (b)
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any transfer of assets pursuant to a Permitted Investment, (c) the sale of
Timberlands in a like-kind exchange for a like interest in other Timberlands
having a fair market value (as determined in good faith by the Board of
Directors of the Manager) at least equal to the fair market value (as determined
in good faith by the Board of Directors of the Manager) of the Timberlands sold,
(d) the sale of not more than 10,000 acres in the aggregate of Timberlands
designated in good faith by the Board of Directors of the Manager for a higher
and better use, (e) a disposition of obsolete equipment in the ordinary course
of business, (f) any sale of Capital Stock of, or Indebtedness or other
securities of, an Unrestricted Subsidiary, and (g) timber deed, bulk, pay-as-cut
and stumpage sales in the ordinary course of business.
In the event that the aggregate Net Proceeds received by the Company
or any of its Restricted Subsidiaries from one or more Asset Sales exceed the
Adjusted Asset Sales Amount since the Issue Date, within 270 days after the date
such aggregate Net Proceeds exceed such amount (or such longer period as may be
required to comply with any agreement in effect on the Issue Date), the Company,
at its option, shall apply the amount of such aggregate Net Proceeds (less the
amount of any such Net Proceeds previously applied during such fiscal year for
the purposes set forth in clauses (a) or (b) below) to (a) reduce senior
Indebtedness of the Company or Indebtedness of a Restricted Subsidiary (with a
permanent reduction of availability in the case of the Working Capital Facility)
or (b) make, or commit, pursuant to a binding written contract (provided that
the contract is consummated substantially in accordance with the terms thereof
within 30 days after the end of the 270-day period), to make, an investment in
assets used or useful in the Business. Pending the final application of any
such Net Proceeds, the Company or any Restricted Subsidiary may temporarily
reduce borrowings under the Bank Credit Facility or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture. Any such Net
Proceeds that are not applied or invested as provided in the first sentence of
this paragraph will be deemed to constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $10 million, the Issuers shall make
an offer to all Holders of Notes (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes that may be purchased out of the Excess Proceeds, at
an offer price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase, in
accordance with the procedures set forth in this Indenture. To the extent that
the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, the Company or any Restricted Subsidiary may use such
deficiency for general business purposes. If the aggregate principal amount of
Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of such Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero.
Section 4.17 Limitation on Harvesting.
In the event that the Company or any of its Restricted Subsidiaries
receive any Net Proceeds from one or more Excess Harvests, within 270 days after
the date of such receipt (or such longer period as may be required to comply
with any agreement in effect on the Issue Date), the Company, at its option,
shall apply the amount of such aggregate Net Proceeds (less the amount of any
such Net Proceeds previously applied during such fiscal year for the purposes
set forth in clauses
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(a) or (b) below) to (a) reduce senior Indebtedness of the Company or
Indebtedness of a Restricted Subsidiary (with a permanent reduction of
availability in the case of the Working Capital Facility) or (b) make, or
commit, pursuant to a binding written contract (provided that the contract is
consummated substantially in accordance with the terms thereof within 30 days
after the end of the 270-day period), to make, an investment in assets used or
useful in the Business. Pending the final application of any such Net Proceeds,
the Company or any Restricted Subsidiary may temporarily reduce borrowings under
the Bank Credit Facility or otherwise invest such Net Proceeds in any manner
that is not prohibited by the Indenture. Any such Net Proceeds that are not
applied or invested as provided in the first sentence of this paragraph will be
deemed to constitute "Excess Harvest Proceeds." When the aggregate amount of
Excess Harvest Proceeds exceeds $10 million, the Issuers shall make an offer to
all holders of Notes (an "Excess Harvest Offer") to purchase the maximum
principal amount of Notes that may be purchased out of the Excess Harvest
Proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
purchase, in accordance with the procedures set forth in the Indenture. To the
extent that the aggregate amount of Notes tendered pursuant to an Excess Harvest
Offer is less than the Excess Harvest Proceeds, the Company or any Restricted
Subsidiary may use such deficiency for general business purposes. If the
aggregate principal amount of Notes surrendered by holders thereof exceeds the
amount of Excess Harvest Proceeds, the Trustee shall select the Notes to be
purchased on a pro rata basis. Upon completion of such Excess Harvest Offer,
the amount of Excess Harvest Proceeds shall be reset at zero.
Section 4.18 Change of Control.
Upon the occurrence of a Change of Control, each Holder of Notes will
have the right to require the Issuers to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the
offer described below (the "Change of Control Offer") at an offer price in cash
equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase (the "Change of Control Payment").
Within 30 days following any Change of Control, the Issuers will mail a notice
to each Holder stating: (a) that the Change of Control Offer is being made
pursuant to this Section 4.18 and that all Notes tendered will be accepted for
payment; (b) the purchase price and the purchase date, which shall be no earlier
than 30 days nor later than 60 days from the date such notice is mailed (the
"Change of Control Payment Date"); (c) that any Note not tendered will continue
to accrue interest; (d) that, unless the Issuers default in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant to the Change
of Control Offer will cease to accrue interest after the Change of Control
Payment Date; (e) that Holders electing to have any Notes purchased pursuant to
a Change of Control Offer will be required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Payment Date; (f) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the
expiration date of the Change of Control Offer, a telegram, telex, facsimile
transmission or letter setting forth the name of the holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder is
withdrawing his election to have such
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Notes purchased; (g) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof; and (h) the material
circumstances and material facts regarding such Change of Control.
The Issuers will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth herein applicable to a Change of Control Offer made by Issuers and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
On the Change of Control Payment Date, the Issuers will, to the extent
lawful, (a) accept for payment Notes or portions thereof tendered pursuant to
the Change of Control Offer, (b) deposit with the Paying Agent therefor an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (c) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate amount of the Notes or portions thereof tendered to the Issuers. The
Paying Agent will promptly mail to each Holder of Notes so accepted the Change
of Control Payment for such Notes, and the Trustee will promptly authenticate
and mail to each Holder a new Note equal in principal amount to the unpurchased
portion of the Notes surrendered, if any; provided that each such new Note will
be in a principal amount of $1,000 or an integral multiple thereof. The Issuers
will publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.
The Issuers shall comply with any tender offer rules under the
Exchange Act which may then be applicable, including Rule 14e-1, in connection
with any offer required to be made by the Issuers to repurchase the Notes as a
result of a Change of Control. To the extent that the provisions of any
applicable securities laws or regulations conflict with provisions of this
Section 4.18, the Issuers shall comply with such securities laws and regulations
and shall not be deemed to have breached its obligations hereunder by virtue
thereof.
Section 4.19 Limitation on Non-Guarantor Restricted Subsidiaries.
The Company will not permit any Restricted Subsidiary that is not a
Subsidiary Guarantor to guarantee the payment of any Indebtedness of the Company
unless: (a) (i) such Restricted Subsidiary simultaneously executes and delivers
a supplemental indenture to the Indenture providing for a Subsidiary Guarantee
of the Notes by such Restricted Subsidiary and (ii), with respect to any
guarantee of Subordinated Indebtedness by a Subsidiary, any such guarantee shall
be subordinated to such Restricted Subsidiary's Subsidiary Guarantee at least to
the same extent as such Subordinated Indebtedness is subordinated to the Notes;
and (b) such Subsidiary waives, and agrees not to exercise any right or claim or
take the benefit or advantage of, any rights of reimbursement, indemnity or
subrogation or any other rights against the Company or any other Subsidiary as a
result of any payment by such Subsidiary under its Subsidiary Guarantee until
such
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time as the obligations guaranteed thereby are paid in full; provided that this
covenant shall not be applicable to any guarantee of any Subsidiary that (A)
existed at the time such Person became a Subsidiary of the Company and (B) was
not incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary of the Company. Further, a pledge of assets to secure any
Indebtedness for which the pledgor is not otherwise liable shall not be
considered a guarantee.
ARTICLE 5
SUCCESSORS
Section 5.1 Merger, Consolidation or Sale of Assets.
(a) The Company may not consolidate or merge with or into (whether or
not the Company is the surviving Person), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, another Person unless (a) the
Company is the surviving Person, or the Person formed by or surviving such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation, partnership or limited liability company organized or
existing under the laws of the United States, any state thereof or the District
of Columbia; (b) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made assumes
all the obligations of the Company, pursuant to a supplemental indenture in a
form reasonably satisfactory to the Trustee, under the Notes and the Indenture;
(c) immediately after such transaction no Default or Event of Default exists;
and (d) the Company or such other Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made (A) will have Consolidated
Net Worth (immediately after the transaction but prior to any purchase
accounting adjustments resulting from the transaction) equal to or greater than
the Consolidated Net Worth of the Company immediately preceding the transaction
and (B) will, at the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of the applicable
Four-Quarter Period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set
forth in Section 4.8 hereof. Notwithstanding the foregoing clause (d), any
Restricted Subsidiary (other than Finance Corp.) may consolidate or merge with
or into, or dispose of all or any part of its properties or assets to, the
Company.
(b) Finance Corp. may not consolidate or merge with or into (whether
or not Finance Corp. is the surviving Person), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, another Person unless (a) Finance
Corp. is the surviving Person, or the Person formed by or surviving such
consolidation or merger (if other than Finance Corp.) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia and a Wholly-
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Owned Restricted Subsidiary of the Company; (b) the Person formed by or
surviving any such consolidation or merger (if other than Finance Corp.) or the
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of Finance Corp.,
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee, under the Notes and this Indenture; and (c) immediately after such
transaction no Default or Event of Default exists.
(c) The Company or Finance Corp., as the case may be, shall deliver to
the Trustee prior to the consummation of any proposed transaction subject to the
foregoing paragraphs (a) and (b) an Officers' Certificate to the foregoing
effect and an Opinion of Counsel stating that the proposed transaction and such
supplemental indenture comply with this Indenture. The Trustee shall be
entitled to conclusively rely upon such Officers' Certificate and Opinion of
Counsel.
Section 5.2 Successor Person Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company or Finance Corp. in accordance with Section 5.1 hereof, the
successor Person formed by such consolidation or into or with which the Company
or Finance Corp. is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted for
(so that from and after the date of such consolidation, merger, sale, lease,
conveyance or other disposition, the provisions of this Indenture referring to
the "Company," "Finance Corp." or the "Issuers," as the case may be, shall refer
to or include instead the successor Person and not the Company or Finance Corp.,
as the case may be), and may exercise every right and power of the Company or
Finance Corp., as the case may be, under this Indenture with the same effect as
if such successor Person had been named as the Company or Finance Corp., as the
case may be, herein.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1 Events of Default.
An "Event of Default" occurs if:
(a) default by the Issuers or any Subsidiary Guarantors in the
payment of the principal of or premium, if any, on any Note when the
same becomes due and payable (upon Stated Maturity, acceleration,
optional redemption, required purchase or otherwise); or
(b) default by the Issuers or any Subsidiary Guarantors default
in the payment of an installment of interest on any of the Notes, when
the same becomes due and payable, which default continues for a period
of 30 days; or
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(c) failure to perform or observe any other term, covenant or
agreement contained in the Notes, any Subsidiary Guarantee or the
Indenture (other than a default specified in clause (a) or (b) above)
and such default continues for a period of 60 days after written notice
of such default requiring the Issuers to remedy the same shall have been
given (i) to the Issuers or such Subsidiary Guarantor by the Trustee or
(ii) to the Issuers and the Trustee by Holders of 25% in aggregate
principal amount of the Notes then outstanding; or
(d) default or defaults under one or more agreements,
instruments, mortgages, bonds, debentures or other evidences of
Indebtedness under which the Company or any Restricted Subsidiary of the
Company then has outstanding Indebtedness, which default (i) is caused
by a failure to pay at its Stated Maturity or within the applicable
grace period, if any, provided with respect to such Indebtedness,
principal, premium or interest with respect to Indebtedness of the
Company or a Restricted Subsidiary (collectively, a "Payment Default")
or (ii) results in the acceleration of such Indebtedness prior to its
Stated Maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $10 million or
more; or
(e) a final judgment or judgments (which is or are non-
appealable and non-reviewable or which has or have not been stayed
pending appeal or review) shall be rendered against the Master
Partnership, the Company, any Restricted Subsidiary or the Manager for
the payment of money in excess of $10 million in the aggregate (other
than that portion of a final judgment as to which a reputable insurance
company has accepted liability) and such judgments shall not be
discharged or execution thereon stayed pending appeal or review within
60 days after entry of such judgment, or, in the event of such a stay,
such judgment shall not be discharged within 30 days after such stay
expires; or
(f) any Subsidiary Guarantee shall for any reason cease to be,
or be asserted by the Company or any Subsidiary Guarantor, as
applicable, not to be, in full force and effect (except pursuant to the
release of any such Subsidiary Guarantee in accordance with this
Indenture); or
(g) the Company, Finance Corp. or any of their respective
Significant Subsidiaries that are Restricted Subsidiaries pursuant to or
within the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it
in an involuntary case,
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(c) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors,
(e) admits in writing its inability to pay debts as the same
become due; or
(h) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company, Finance Corp. or any of their
respective Significant Subsidiaries that are Restricted Subsidiaries in
an involuntary case,
(b) appoints a Custodian of the Company, Finance Corp. or any of their
respective Significant Subsidiaries that are Restricted Subsidiaries or
for all or substantially all of their property,
(c) orders the liquidation of the Company, Finance Corp. or any of
their respective Significant Subsidiaries that are Restricted
Subsidiaries,
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
Section 6.2 Acceleration.
If an Event of Default (other than an Event of Default specified in
clauses (g) and (h) of Section 6.1) occurs and is continuing, the Trustee by
notice to the Issuers, or the Holders of at least 25% in principal amount of the
then outstanding Notes by written notice to the Issuers and the Trustee may
declare the unpaid principal of and any accrued interest on all the Notes to be
due and payable. Upon such declaration the principal and interest shall be due
and payable immediately. If an Event of Default specified in clause (g) or (h)
of Section 6.1 occurs, such an amount shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holder. The Holders of a majority in principal amount of the then
outstanding Notes by written notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been cured
or waived. The Trustee may withhold from Holders of the Notes notice of any
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continuing Default or Event of Default (except a Default relating to the payment
of principal or interest) if it determines in good faith that withholding notice
is in their interest.
Section 6.3 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy (under this Indenture or otherwise) to collect the
payment of principal or interest on the Notes or to enforce the performance of
any provision of the Notes, or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of Notes in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 6.4 Waiver of Past Defaults.
Holders of a majority in principal amount of the then outstanding
Notes by notice to the Trustee may waive an existing Default or Event of Default
and its consequences, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any or interest on, the Notes. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.5 Control by Majority.
The Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it. However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture that the Trustee determines may be unduly prejudicial to
the rights of other Holders of Notes, or that may involve the Trustee in
personal liability.
Section 6.6 Limitation on Suits.
A Holder of Notes may pursue a remedy with respect to this Indenture or the
Notes only if:
(a) the Holder gives to the Trustee written notice of a continuing
Event of Default or the Trustee receives such notice from either Issuer;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
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(c) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of Notes may not use this Indenture to prejudice the rights of another
Holder of Notes or to obtain a preference or priority over another Holder of
Notes.
Section 6.7 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium and interest on,
if any, the Notes, on or after the respective due dates expressed in the Note
(including in connection with a Change of Control Offer, an Asset Sale Offer and
an Excess Harvest Offer), or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
Section 6.8 Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Issuers for the whole amount of
principal and interest remaining unpaid on the Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.9 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of Notes allowed in any judicial proceedings relative to the Issuers (or
any other obligor upon the Notes, including any Subsidiary Guarantor), their
creditors or their property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable on any
such claims and any custodian in any such judicial proceeding is hereby
authorized by each Holder of Notes to make such payments to the Trustee, and in
the event that the Trustee shall consent to the making of such payments directly
to the Holders of Notes, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements
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and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.7 hereof. To the extent that the payment of any
such compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section 7.7
hereof out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of, any
and all distributions, dividends, money, securities and other properties which
the Holders of the Notes may be entitled to receive in such proceeding whether
in liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder of Notes any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder of Notes in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.7, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Notes for principal,
premium and interest, respectively; and
Third: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.
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ARTICLE 7
TRUSTEE
Section 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) The duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b) of this
Section.
(ii) The Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.5.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section.
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(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee may refuse to perform
any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuers. Money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.2 Rights of Trustee.
Subject to the provisions of (S)(S) 315(a) through 315(d) of the TIA:
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability, in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Issuers shall be sufficient if
signed by an Officer of the Manager, on behalf of the Company or by an Officer
of Finance Corp.
Section 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
Holder or pledgee of Notes and may otherwise deal with either the Issuer or any
Subsidiary Guarantor or an Affiliate of either the Issuer or any Subsidiary
Guarantor with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
7.10 and 7.11.
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Section 7.4 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Issuers' use of the proceeds from the Notes or any money
paid to the Issuers or upon the Issuers' direction under any provision hereof,
it shall not be responsible for the use or application of any money received by
any Paying Agent other than the Trustee and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other
than its certificate of authentication and that it is duly authorized to execute
and deliver this Indenture, authenticate the Notes and perform its obligations
hereunder and that the statements made by it in a Statement of Eligibility and
Qualification on Form T-1, if any, supplied to the Issuers are true and accurate
subject to the qualifications set forth therein.
Section 7.5 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders
of Notes a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment on any
Note pursuant to Section 6.1 (a) or (b), the Trustee may withhold the notice if
it determines in good faith that withholding the notice is in the interests of
Holders of Notes.
Section 7.6 Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to Holders of Notes a brief
report dated as of such reporting date that complies with TIA (S) 313(a) (but if
no event described in TIA (S) 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA (S) 313(b). The Trustee shall also transmit by mail all
reports as required by TIA (S) 313(c).
A copy of each report at the time of its mailing to Holders of Notes
shall be filed with the SEC and each stock exchange on which the Notes are
listed.
Section 7.7 Compensation and Indemnity.
The Issuers and any Subsidiary Guarantor shall pay to the Trustee from
time to time reasonable compensation for its acceptance of this Indenture and
services hereunder. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Issuers and the
Subsidiary Guarantors shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel, except such disbursements, advances and expenses as may be attributable
to its negligence or bad faith.
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The Issuers and the Subsidiary Guarantors shall indemnify the Trustee
against any and all losses, liabilities or expenses incurred by it without
negligence or bad faith on its part arising out of or in connection with the
acceptance or administration of its duties under this Indenture, except as set
forth below. The Trustee shall notify the Issuers and the Subsidiary Guarantors
promptly of any claim for which it may seek indemnity. Failure by the Trustee
to so notify the Issuers shall not relieve the Issuers and the Subsidiary
Guarantors of their obligations hereunder. The Issuers shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Issuers and the Subsidiary Guarantors shall pay the reasonable
fees and expenses of such counsel. Neither the Issuers and the Subsidiary
Guarantors need pay for any settlement made without their consent, which consent
shall not be unreasonably withheld.
The obligations of the Issuers and the Subsidiary Guarantors under
this Section 7.7 shall survive the satisfaction and discharge of this Indenture.
The Issuers and the Subsidiary Guarantors need not reimburse any
expense or indemnify against any loss or liability incurred by the Trustee
through its own negligence or bad faith.
To secure the Issuers' and the Subsidiary Guarantors' payment
obligations in this Section, the Issuers and the Subsidiary Guarantors hereby
grant to the Trustee a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(a) or (b) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.8 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying the Issuers. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuers. The Issuers may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
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(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuers shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, the
Subsidiary Guarantors or the Holders of at least 10% in principal amount of the
then outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee after written request by any Holder of Notes who has
been a Holder of Notes for at least six months fails to comply with Section
7.10, such Holder of Notes may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.7. Notwithstanding replacement of the Trustee pursuant to this
Section 7.8, the Issuers' obligations under Section 7.7 hereof shall continue
for the benefit of the retiring Trustee.
Section 7.9 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
Section 7.10 Eligibility, Disqualification.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trust powers, shall be subject to supervision or examination by Federal or state
authority and shall have a combined capital and surplus of at least $100,000,000
as set forth in its most recent published annual report of condition.
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This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S)(S) 310(a)(1) and 310(a)(5). The Trustee is subject to
TIA (S) 310(b).
Section 7.11 Preferential Collection of Claims Against Issuers.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1 Option to Effect Legal Defeasance or Covenant Defeasance.
The Issuers may, at their option and at any time, in each case
evidenced by a resolution set forth in an Officers' Certificate, elect to apply
either Section 8.2 or 8.3 hereof to all outstanding Notes upon compliance with
the conditions set forth below in this Article 8.
Section 8.2 Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Issuers and any Subsidiary Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.4 hereof,
have all of their obligations discharged with respect to all outstanding Notes
and any Subsidiary Guarantees on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Issuers shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.5 hereof and the
other Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all their other obligations under such Notes and this Indenture (and
the Trustee, on demand of and at the expense of the Issuers, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder: (a) the
rights of Holders of outstanding Notes to receive solely from the trust fund
described in Section 8.4 hereof, and as more fully set forth in such Section,
payments in respect of the principal of, premium, if any, and interest on such
Notes when such payments are due, (b) the Issuers' obligations with respect to
the Notes concerning issuing temporary Notes, registration of Notes, mutilated,
destroyed, lost or stolen Notes and the maintenance of an office or agency for
payment and money for security payments held in trust, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Issuers' and
Subsidiary Guarantors' obligations in connection therewith and (d) this Article
8. Subject to compliance with this Article 8, the Issuers may exercise their
option under this Section 8.2 notwithstanding the prior exercise of their option
under Section 8.3 hereof.
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Section 8.3 Covenant Defeasance.
Upon the Issuers' exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, each of the Issuers and Subsidiary Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.4
hereof, be released from their obligations under the covenants contained in
Sections 4.3(a), 4.4, 4.5, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15,
4.16, 4.17, 4.18 and 4.19 and Article 5 hereof with respect to the outstanding
Notes and Subsidiary Guarantors on and after the date the conditions set forth
below are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Issuers may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein or in any
other document, and such omission to comply shall not constitute a Default under
Section 6.1 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Issuers' exercise under Section 8.1 hereof of the option applicable to this
Section 8.3 hereof, subject to the satisfaction of the conditions set forth in
Section 8.4 hereof, Sections 6.1(c), 6.1(d) and 6.1(e) hereof, and Sections
6.1(g) and 6.1(h) hereof with respect to any Restricted Subsidiary that is a
Significant Subsidiary, shall not constitute Events of Default.
Section 8.4 Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance,
as applicable:
(a) the Issuers must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
certified public accountants, to pay the principal of, premium, if any, and
interest on the outstanding Notes on the stated date for payment thereof or on
the applicable redemption date, as the case may be;
(b) in the case of an election under Section 8.2 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
not unacceptable to the Trustee in its reasonable discretion confirming that (A)
the Issuers have received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Indenture, there has been
a change in the applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
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Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of an election under Section 8.3 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
not unacceptable to the Trustee in its reasonable discretion confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not
occurred;
(d) no Default shall have occurred and be continuing on the date of
such deposit or insofar as Section 6.1(g) or 6.1(h) hereof are concerned, at any
time in the period ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violations of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which either of the Issuers or any
of their respective Restricted Subsidiaries or Subsidiary Guarantors is a party
or by which either of the Issuers or any of their respective Restricted
Subsidiaries or Subsidiary Guarantors is bound;
(f) on or prior to the 91st day following the deposit, the Issuers
shall have delivered to the Trustee an Opinion of Counsel to the effect that on
the 91st day following the deposit, the trust funds are not subject to any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(g) the Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers or the
Subsidiary Guarantors with the intent of preferring the Holders over any other
creditors of the Issuers or the Subsidiary Guarantors or with the intent of
defeating, hindering, delaying or defrauding any other creditors of the Issuers
or the Subsidiary Guarantors or others; and
(h) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.5 Deposited Money and Government Securities to be Held in Trust,
Other Miscellaneous Provisions.
Subject to Section 8.6 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively
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for purposes of this Section 8.5, the "Trustee") pursuant to Section 8.4 hereof
in respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Issuers
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
The Issuers shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.4. hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Section 8.6 Repayment to Issuers.
(a) Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuers from time to time upon the request
of the Issuers any money or non-callable Government Securities held by it as
provided in Section 8.4 hereof which, in the opinion of a nationally recognized
firm of independent certified public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(a) hereof), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Legal Defeasance
or Covenant Defeasance.
(b) Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Issuers upon request any money held by them
for the payment of principal, interest or premium, if any, that remains
unclaimed for one year after such principal, interest or premium, if any, became
due and payable, and, thereafter, Holders entitled to the money must look to the
Issuers for payment of such money as secured creditors and all liability of the
Trustee and the Paying Agent with respect to such money shall cease.
Section 8.7 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.2 or
8.3 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Issuers' and Subsidiary Guarantors' obligations under this
Indenture, the Subsidiary Guarantors and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.2 or 8.3
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.2 or 8.3 hereof, as the case may,
provided that, if the Issuers or the Subsidiary Guarantors make any payment of
principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Issuers shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
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Section 8.8 Discharge of Liability on Securities; Defeasance.
When (a)(i) the Issuers deliver to the Trustee all outstanding Notes
for cancellation or (ii) all outstanding Notes have become due and payable,
whether at maturity or on a specified redemption date as a result of the mailing
of a notice of redemption pursuant to Article 3 hereof, (b) the Issuers
irrevocably deposit with the Trustee money sufficient to pay at maturity or upon
redemption all outstanding Notes, including interest and premium thereon to
maturity or such redemption date, and if in either case the Issuers pay all
other sums payable hereunder by the Issuers, and (c) if the Notes have been
called for redemption and the redemption date has not occurred, the Issuers
deliver to the Trustee an Opinion of Counsel in the United States not
unacceptable to the Trustee in its reasonable discretion confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such actions and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such actions had not occurred, then this
Indenture shall cease to be of further effect except for (i) the provisions set
forth in Article 2, Sections 4.2, 7.7 and 8.6 hereof and (ii) if the Notes have
been called for redemption and the redemption date has not occurred, the
Issuers' obligation to pay the redemption price on such redemption date. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Issuers accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Issuers.
ARTICLE 9
AMENDMENTS
Section 9.1 Without Consent of Holders.
The Issuers, the Subsidiary Guarantors and the Trustee may amend this
Indenture any Subsidiary Guarantee or the Notes without the consent of any
Holder of Notes:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for the assumption of the Issuers' and Subsidiary
Guarantors' obligations to the Holders of the Notes in the case of
a merger or consolidation pursuant to Article 5 or Article 10;
(c) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(d) to add or release any Subsidiary Guarantor pursuant to the terms
hereunder (provided that such addition or release will not adversely
affect the interests of the Holders in any material respect);
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(e) to make any change that could provide additional rights or
benefits to the Holders of the Notes or that does not adversely affect
the legal rights hereunder of any Holder of the Notes; or
(f) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Issuers, accompanied by a resolution of the
Board of Directors of the Manager on behalf of the Company and the Board of
Directors of Finance Corp., authorizing the execution of any such supplemental
indenture or amendment, and upon receipt by the Trustee of the documents
described in Section 9.6 hereof required or requested by the Trustee, the
Trustee shall join with the Issuers and any Subsidiary Guarantor in the
execution of any supplemental indenture or amendment authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into such supplemental indenture or amendment which affects
its own rights, duties or immunities under this Indenture or otherwise.
Section 9.2 With Consent of Holders.
The Issuers, the Subsidiary Guarantors and the Trustee, as applicable,
may amend this Indenture, any Subsidiary Guarantee or the Notes with the
written consent of the Holders of at least a majority in principal amount of the
then outstanding Notes and, subject to Sections 6.4 and 6.7 hereof, the Holders
of a majority in principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Issuers or any Subsidiary Guarantor
with any provision of this Indenture, any Subsidiary Guarantee or the Notes.
Upon the request of the Issuers, accompanied by a resolution of the
Board of Directors of the Manager on behalf of the Company and the Board of
Directors of Finance Corp., authorizing the execution of any such supplemental
indenture, amendment or waiver, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 9.6
hereof, the Trustee shall join with the Issuers and any Subsidiary Guarantor in
the execution of such supplemental indenture or amendment unless such
supplemental indenture, amendment or waiver affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture, amendment or waiver.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed supplemental indenture,
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After a supplemental indenture, amendment or waiver under this Section
becomes effective, the Issuers shall mail to the Holders of each Note affected
thereby a notice briefly
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describing the supplemental indenture, amendment or waiver. Any failure of the
Issuers to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture, amendment
or waiver. Without the consent of each Holder of Notes affected, an amendment
or waiver under this Section may not (with respect to any Notes held by a non-
consenting Holder of Notes):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note,
alter the optional redemption provisions of any Note or reduce the prices at
which the Issuers shall offer to purchase such Notes pursuant to Sections 3.9,
4.16, 4.17 and 4.18 hereof, provided, however, that such Sections 3.9, 4.16,
4.17 and 4.18 may otherwise be amended or deleted in accordance with the
requirements of this Section 9.2;
(c) reduce the rate of or change the time for payment of interest on
any Notes;
(d) waive a Default in the payment of principal or premium, if any, or
interest (except a rescission of acceleration of the Notes by the holders of at
least a majority in aggregate principal amount of the Notes and a waiver of the
payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in Section 6.4 or 6.7 hereof;
(g) waive a redemption payment with respect to any Note (other than an
offer to purchase Notes under Section 4.16, 4.17 or 4.18);
(h) release any Subsidiary Guarantee other than in accordance
hereunder; or
(i) make any change in this sentence of Section 9.2.
Section 9.3 Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Notes shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents.
Until a supplemental indenture, an amendment or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by the
Holder and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if
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notation of the consent is not made on any Note. A supplemental indenture,
amendment or waiver becomes effective in accordance with its terms and
thereafter binds every Holder of Notes.
The Issuers may fix a record date for determining which Holders must
consent to such supplemental indenture, amendment or waiver. If the Issuers fix
a record date, the record date shall be fixed at (a) the later of 30 days prior
to the first solicitation of such consent or the date of the most recent list of
Holders furnished to the Trustee prior to such solicitation pursuant to Section
2.5, or (b) such other date as the Issuers shall designate.
Section 9.5 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about a supplemental
indenture, amendment or waiver on any Note thereafter authenticated. The
Issuers in exchange for all Notes may issue and the Trustee shall authenticate
new Notes that reflect the amendment or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment or waiver.
Section 9.6 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment, supplemental indenture or waiver
authorized pursuant to this Article 9 if the amendment, supplemental indenture
or waiver does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign it.
In signing or refusing to sign such amendment, supplemental indenture or waiver,
the Trustee shall be entitled to receive, if requested, an indemnity reasonably
satisfactory to it and to receive and, subject to Section 7.1, shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that such amendment, supplemental indenture or waiver is
authorized or permitted by this Indenture, that it is not inconsistent herewith
or therewith, and that it will be valid and binding upon the Issuers in
accordance with its terms. The Issuers and the Subsidiary Guarantors may not
may sign an amendment, supplemental indenture or waiver until the Board of
Directors of the Manager on behalf of the Company or the Board of Directors of
Finance Corp. approves it.
ARTICLE 10
SUBSIDIARY GUARANTEE OF NOTES
Section 10.1 Unconditional Guarantee.
Each Subsidiary Guarantor hereby unconditionally, jointly and
severally, guarantees to each Holder and to the Trustee the full and prompt
payment of the principal of, premium, if any, and interest on the Notes and all
other amounts due and payable under this Indenture and the Notes by the Issuers
whether at maturity, by acceleration, redemption, repurchase or otherwise,
including,
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without limitation, interest on the overdue principal of, premium, if any, and
interest on the Notes, to the extent lawful, all in accordance with the terms
hereof and thereof(; subject, however, to the limitations set forth in Section
10.5).
Each Subsidiary Guarantee shall be an unsecured general obligation of
the Subsidiary Guarantor and rank senior in right of payment to all existing and
future subordinated indebtedness of the Subsidiary Guarantor and pari passu in
right of payment to all existing and future senior indebtedness of the
Subsidiary Guarantor.
Section 10.2 Subsidiary Guarantors May Consolidate, etc., on Certain Terms.
(a) Except as set forth in Article 5, nothing contained in this
Indenture or in any of the Notes shall prevent any consolidation or merger of a
Subsidiary Guarantor with or into the Company or another Subsidiary Guarantor or
shall prevent any disposition of assets to the Company or another Subsidiary.
(b) Except as set forth in Article 5, nothing contained in this
Indenture or in any of the Notes shall prevent any consolidation or merger or
sale of a Subsidiary Guarantor with or into a Person other than an Issuer or a
Subsidiary Guarantor (regardless of whether an Affiliate of such Subsidiary
Guarantor), or successive consolidations or mergers in which a Subsidiary
Guarantor or its successor or successors shall be a party or parties, or shall
prevent any sale, assignment, transfer, lease, conveyance or other disposition
of all or substantially all of the assets of a Subsidiary Guarantor to a Person
other than an Issuer or another Subsidiary Guarantor (regardless of whether an
Affiliate of such Subsidiary Guarantor) authorized to acquire and operate the
same; provided, however, (a) that if such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition results in a
surviving Person who is not a Subsidiary Guarantor, then the Person surviving
such consolidation or merger, or to which such sale, assignment, transfer,
lease, conveyance or disposition has been made agrees to assume such Subsidiary
Guarantor's Guarantee and all its obligations arising under this Indenture
(except to the extent that Section 10.4 would result in the release of such
Subsidiary Guarantee and obligations) and (b) immediately after such
transaction, and giving effect thereto, no Default or Event of Default has
occurred and is continuing. Upon any consolidation or merger, or any sale,
assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the assets of a Subsidiary Guarantor in accordance with
this paragraph (b) of Section 10.2, the successor Person formed by such
consolidation or into which such Subsidiary Guarantor is merged or to which such
sale, assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of, a
Subsidiary Guarantor under this Indenture with the same effect as if such
successor had been named as a Subsidiary Guarantor herein.
Section 10.3 Addition of Subsidiary Guarantors.
(a) Any Restricted Subsidiary may become a Subsidiary Guarantor by
executing and delivering to the Trustee (i) a supplemental indenture in form and
substance satisfactory to the
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Trustee, which subjects such Restricted Subsidiary to the provisions of this
Indenture as a Subsidiary Guarantor and (ii) a guarantee in the form set forth
in Exhibit B. In addition, in order to become a Subsidiary Guarantor, such
Restricted Subsidiary (i) shall obtain any registration, permit, consent,
approval, authorization or order of any court, governmental agency or body or
financial institution that may be required in connection with such Restricted
Subsidiary becoming a Subsidiary Guarantor and (ii) shall provide the Trustee
with an Officers' Certificate to the effect that (A) such supplemental indenture
has been duly authorized and executed by such Restricted Subsidiary and
constitutes the legal, valid, binding and enforceable obligation of such
Restricted Subsidiary (subject to such customary exceptions concerning
creditors' rights and equitable principles as may be acceptable to the Trustee
in its discretion) and (B) except for any registrations, permits, consents,
approvals and similar authorizations or orders that may have been obtained prior
to the time that such Restricted Subsidiary becomes a Subsidiary Guarantor, no
registration, permit, consent, approval, authorization or order of any court,
governmental agency or body or financial institution is required in connection
with such Restricted Subsidiary becoming a Subsidiary Guarantor.
Section 10.4 Release of a Subsidiary Guarantor.
Except as provided in this Section 10.4, a Subsidiary Guarantor may
not otherwise be released from its Subsidiary Guarantee and its related
obligations hereunder. The Trustee shall deliver an appropriate instrument
evidencing such release upon receipt of a request by the Company accompanied by
an Officer's Certificate and an Opinion of Counsel certifying that such
consolidation, merger, sale, assignment, transfer, lease, conveyance or other
disposition was made in accordance with the provisions of this Indenture. Any
Subsidiary Guarantor not so released remains liable for all amounts due on the
Notes as provided in this Article 10.
Section 10.5 Limitation of Subsidiary Guarantor's Liability.
By becoming a Subsidiary Guarantor, each Subsidiary Guarantor shall be
deemed to confirm, and by its acceptance of any Note, each Holder, confirms that
it is the intention of all Holders and all parties to this Indenture that the
Subsidiary Guarantee of such Subsidiary Guarantor not constitute a fraudulent
transfer or conveyance for purposes of any federal or state law. To effectuate
the foregoing intention, the obligations of each Subsidiary Guarantor under its
Subsidiary Guarantee shall be limited to the maximum amount, after giving effect
to all other contingent and fixed liabilities of such Subsidiary Guarantor and
after giving effect to any collections from or payments made by or on behalf of
any other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to Section 10.6,
as will result in the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under federal or state law. This Section 10.5 is for the benefit of
the creditors of each Subsidiary Guarantor, and, for purposes of applicable
fraudulent transfer and fraudulent conveyance law, any Indebtedness of a
Subsidiary Guarantor pursuant to the Bank Credit Facility shall be deemed to
have been incurred prior to the incurrence by such Subsidiary Guarantor of its
liability under its Subsidiary Guarantee.
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Section 10.6 Contribution.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, in the event any payment or distribution is made by any
Subsidiary Guarantor (a "Funding Subsidiary Guarantor") under its Subsidiary
Guarantee, such Funding Subsidiary Guarantor shall be entitled to a contribution
from each other Subsidiary Guarantor in a pro rata amount based on the Adjusted
Net Assets of each Subsidiary Guarantor (including the Funding Subsidiary
Guarantor) for all payments, distributions, damages and expenses incurred by the
Funding Subsidiary Guarantor in discharging the Company's obligations with
respect to the Notes or any other Subsidiary Guarantor's obligations with
respect to any Subsidiary Guarantee.
ARTICLE 11
MISCELLANEOUS
Section 11.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA (S) 318(c), the imposed duties shall control. If any
provision of this Indenture modifies or excludes any provision of the TIA that
may be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
Section 11.2 Notices.
Any notice or communication by the Issuers or the Trustee to the
others is duly given if in writing and delivered in person or mailed by first-
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' addresses:
If to the Issuers:
U.S. Timberlands Klamath Falls, L.L.C.
U.S. Timberlands Finance Corp.
6400 Highway 66
Klamath Falls, Oregon 97601
Attention: President
Telecopier No.: _________________
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If to the Trustee:
State Street Bank & Trust Company
___________________________
___________________________
___________________________
Attn: _____________________
Telecopier No.: ______________
The Issuers, the Subsidiary Guarantors or the Trustee by notice to the
others may designate additional or different addresses of subsequent notices or
communications.
All notices and communications (other than those sent to Holders of
Notes) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder of Notes shall be mailed by
first-class mail, certified or registered, return receipt requested, to his
address shown on the register kept by the Registrar. Failure to mail a notice
or communication to a Holder of Notes or any defect in it shall not affect its
sufficiency with respect to other Holders of Notes. If a notice or
communication is mailed in the manner provided above within the time prescribed,
it is duly given, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
If the Issuers mail a notice or communication to Holders of Notes, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 11.3 Communication by Holders with Other Holders.
Holders of Notes may communicate pursuant to TIA (S) 312(b) with other
Holders of Notes with respect to their rights under this Indenture or the Notes.
The Issuers, the Subsidiary Guarantors, the Trustee, the Registrar and anyone
else shall have the protection of TIA (S) 312(c).
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Section 11.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by an Issuer or a Subsidiary Guarantor
to the Trustee to take any action under this Indenture, such Issuer or
Subsidiary Guarantor shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.5) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.5) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been complied with; and
provided, however, in the case of any such application or request as to which
the furnishing of such certificates and/or opinions is specifically required by
any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Section 11.5 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA (S) 314(a)(4)) shall include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with; provided, however, that with
respect to matters of fact, an Opinion of Counsel may rely upon an Officers'
Certificate or a certificate of a public official.
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Section 11.6 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer of the Issuers, may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Officer knows that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or opinion
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Issuers stating
that the information with respect to such factual matters is in the possession
of the Issuers, unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous. Opinions of Counsel
required to be delivered to the Trustee may have qualifications customary for
opinions of the type required and counsel delivering such Opinions of Counsel
may rely on certificates of the Company or government or other officials
customary for opinions of the type required, including certificates certifying
as to matters of fact, including that various financial covenants have been
complied with.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 11.7 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders of Notes. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 11.8 Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in The City of New York, in the city in which the Corporate Trust
Office of the Trustee is located or at a place of payment are authorized or
obligated by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
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Section 11.9 No Recourse Against Others.
(a) No member of the Company or director, officer, employee, partner
or stockholder of the Master Partnership, the Manager, Finance Corp. or any
Subsidiary Guarantor, as such, shall have any liability for any obligations of
the Issuers and the Subsidiary Guarantors under the Notes, the Subsidiary
Guarantors or this Indenture or for any claim based on, in respect of or by
reason of such obligations. Each Holder of Notes, by accepting a Note, waives
and releases all such liability. The waiver and release shall be part of the
consideration for the issuance of the Notes.
(b) Except as provided for in any Subsidiary Guarantee, the
obligations of the Issuers under this Indenture and the Notes will be non-
recourse to the Manager and the Master Partnership (and their respective
affiliates (other than the Issuers)) and payable only out of the cash flow and
assets of the Issuers. The Trustee agrees, and each Holder of a Note, by
accepting a Note, will be deemed to have agreed in this Indenture that neither
the Manager nor its assets nor the Master Partnership nor its assets (nor any of
their respective affiliates (other than the Issuers) nor their respective
assets) shall be liable for any of the obligations of the Issuers under this
Indenture or the Notes (except as provided for by any Subsidiary Guarantee). In
addition, neither the Manager nor the Holders of Notes will have any right to
require the Company to make distributions to the Master Partnership.
(c) Notwithstanding the foregoing, nothing in this provision shall be
construed as a waiver or release of any claims under the federal securities
laws.
Section 11.10 Duplicate Originals.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
Section 11.11 Governing Law.
This Indenture, the Notes and the Subsidiary Guarantees shall be
governed by, and construed in accordance with, the laws of the State of New York
but without giving effect to applicable principles of conflicts of law to the
extent that the application of the laws of another jurisdiction would be
required thereby.
Section 11.12 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Issuers or their respective Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
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Section 11.13 Successors.
All agreements of the Issuers and the Subsidiary Guarantors in this
Indenture, the Notes and the Subsidiary Guarantees shall bind their successors.
All agreements of the Trustee in this Indenture shall bind its successor.
Section 11.14 Benefits of Indenture.
Nothing in this Indenture, the Notes or the Subsidiary Guarantees,
expressed or implied, shall give to any Person (other than the parties hereto
and their successors hereunder, any Paying Agent and the Holders) any benefit or
any legal or equitable right, remedy or claim under this Indenture.
Section 11.15 Severability.
In case any provision in this Indenture, the Notes or the Subsidiary
Guarantees shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 11.16 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 11.17 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
[signatures on following page]
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SIGNATURES
IN WITNESS WHEREOF, the undersigned have caused this Indenture to be
executed as of the date first above written.
U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
By: U.S. Timberlands Services Company, L.L.C.
as Managing Member
By:
-------------------------------------------
Name:
Title:
U.S. TIMBERLANDS FINANCE CORP.
By:
-------------------------------------------
Name:
Title:
STATE STREET BANK & TRUST COMPANY
By:
-------------------------------------------
Name:
Title:
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EXHIBIT A
[Face of Note]
U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
U.S. TIMBERLANDS FINANCE CORP.
_______% SENIOR NOTE DUE 2007 -
No. $225,000,000.00
CUSIP NO.____________
U.S. Timberlands Klamath Falls, L.L.C., a Delaware limited liability
company, and U.S. Timberlands Finance Corp., a Delaware corporation, jointly and
severally, promise to pay to __________________or registered assigns the
principal sum of $225,000,000.00 Dollars on __________, 2007.
Interest Payment Dates: ____________ and _____________
Record Dates: ____________ and _____________
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Issuers have caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
Dated:
[Seal] U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
Attest: BY: U.S. TIMBERLANDS SERVICES
COMPANY, L.L.C.,
By: its Managing Member
------------------------
By:
-------------------------
By:
-------------------------
Certificate of Authentication: U.S. TIMBERLANDS FINANCE CORP.
State Street Bank & Trust Company, as
Trustee, certifies that this is one of the By:
Notes referred to in the Indenture. ------------------------------
By:
------------------------------
By
-----------------------
Authorized Signature
Additional provisions of this Note are set forth on the other side of this Note.
A-1
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. The Depository Trust Company shall act as the Depositary until a
successor shall be appointed by the Company and the Registrar. Unless this
certificate is presented by an authorized representative of The Depository Trust
Company (55 Water Street, New York, New York) ("DTC"), to the Issuers or their
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as may be
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]/1/
- ----------
/1/ This paragraph should be included only if the Note is issued in global
form.
A-2
[Reverse of Note]
U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
U.S. TIMBERLANDS FINANCE CORP.
______% SENIOR NOTE DUE 2007
1. Interest. U.S. Timberlands Klamath Falls, L.L.C., a Delaware limited
liability company (the "Company"), and U.S. Timberlands Finance Corp., a
Delaware corporation ("Finance Corp." and, together with the Company, the
"Issuers"), jointly and severally promise to pay interest on the principal
amount of this Note at ____% per annum from _________, 1997 until maturity. The
Issuers will pay interest semiannually on __________ and __________ of each year
(each an "Interest Payment Date"), or if any such day is not a Business Day, on
the next succeeding Business Day. Interest on the Notes will accrue from the
most recent Interest Payment Date on which interest has been paid or, if no
interest has been paid, from __________, 1998; provided, that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
___________, 1998. The Issuers shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 1% per annum in
excess of the interest rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Issuers will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the record date immediately preceding the Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect to
defaulted interest. The Notes will be payable as to principal, premium,
interest, if any, at the office or agency of the Issuers maintained for such
purpose within or without the City and State of New York, or, at the option of
the Issuers, payment of interest may be made by check mailed to the Holders at
their respective addresses set forth in the register of Holders; provided that
payment by wire transfer of immediately available/same day funds will be
required with respect to principal of an interest and premium, if any, on, the
Global Note. Such payment shall be in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.
3. Paying Agent and Registrar. Initially, the Trustee will act as Paying
Agent and Registrar. The Issuers may change any Paying Agent, Registrar or co-
registrar without notice. The Issuers or any of their Subsidiaries may act as
Paying Agent or Registrar.
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4. Indenture. The Issuers issued the Notes under an Indenture, dated as
of November __, 1997 (the "Indenture"), among the Issuers and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S. Code (S)(S) 77aaa-77bbb) as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms. The Notes are unsecured senior general
obligations of the Issuers limited to $225,000,000 aggregate principal amount.
Under certain circumstances, the Notes may become obligations of the Subsidiary
Guarantees.
5. Optional Redemption. The Notes are not redeemable prior to _________,
2002. Thereafter, the Notes will be subject to redemption at the option of the
Issuers, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid interest thereon to the applicable
redemption date, if redeemed during the 12-month period beginning on ________ of
the years indicated below:
Year Percentage
---- ----------
2002................ _______%
2003................ _______%
2004................ _______%
2005 and thereafter. 100.000%
Notwithstanding the foregoing, at any time on or before __________, 2000,
the Company may redeem up to 35% of the original aggregate principal amount of
the Notes at a redemption price of ___% of the principal amount thereof, plus
accrued and unpaid interest thereon to the redemption date, with the net
proceeds of a Public Equity Offering; provided, however, that at least 65% of
the aggregate principal amount of Notes originally issued shall be outstanding
immediately after such redemption; provided further, that such redemption shall
occur within 120 days of the date of the closing of such Public Equity Offering;
provided further, that in the event of a Public Equity Offering by the Master
Partnership, the Master Partnership contributes to the capital of the Company
the portion of the net cash proceeds of such Public Equity Offering necessary to
pay the aggregate redemption price (plus accrued and unpaid interest thereon to
the redemption date) of the Notes to be redeemed.
6. Notice of Redemption. Notice of redemption will be mailed by first
class mail to the Holder's registered address at least 30 days but not more than
60 days before the redemption date to each Holder of Notes to be redeemed. If
less than all Notes are to be redeemed, the Trustee shall select the Notes to be
redeemed among the Holders of Notes pro rata, by lot or in accordance with a
method which the Trustee considers to be fair and appropriate (and in such
manner as complies with applicable legal and stock exchange requirements, if
any). If any Note is to be redeemed in part only, the notice of redemption that
relates to such Note shall state the portion of the principal amount
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thereof to be redeemed. A new Note in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. On and after the redemption date interest
ceases to accrue on Notes or portions of them called for redemption (unless the
Issuers shall default in the payment of the redemption price or accrued
interest).
7. Change of Control. In the event of a Change of Control of the Company,
the Issuers shall be required to make an offer to purchase all or any portion of
each Holder's Notes, at 101% of the principal amount thereof, plus accrued
interest to the Change of Control Payment Date.
8. Asset Sale Offer. In the event of certain Asset Sales, the Issuers may
be required to make an Asset Sale Offer to purchase all or any portion of each
Holder's Notes, at 100% of the principal amount of the Notes plus accrued
interest, if any, to the Purchase Date.
9. In the event of an Excess Harvest the Issuers may be required to make
an Excess Harvest, offer to purchase the maximum principal amount of Notes that
may be purchased out of Excess Harvest Proceeds, at 100% of the principal amount
thereof plus accrued interest, if any, to the Purchase Date.
10. Restrictive Covenants. The Indenture imposes certain limitations on,
among other things, the ability of the Company and Finance to merge or
consolidate with any other Person or sell, lease or otherwise transfer all or
substantially all of their respective properties or assets, the ability of the
Company or its Restricted Subsidiaries to dispose of certain assets, to pay
dividends and make certain other distributions and payments, to make certain
investments or redeem, retire, repurchase or acquire for value shares of Capital
Stock, to incur additional Indebtedness or incur encumbrances against certain
property, to harvest Timber and to enter into certain transactions with
Affiliates, all subject to certain limitations described in the Indenture.
11. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Notes selected for redemption. Also, it need not transfer or exchange any
Notes for a period of 15 days before a selection of Notes to be redeemed.
12. Persons Deemed Owners. The registered Holder of a Note may be treated
as the owner of it for all purposes and neither the Issuers, the Trustee nor any
Agent shall be affected by notice to the contrary.
13. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for one year, the Trustee or Paying Agent will pay the money
back to the Issuers at its request. After that, all liability of the Trustee
and such Paying Agent with respect to such money shall cease.
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14. Amendment, Supplement, Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for Notes), and any existing default or noncompliance with any provision may be
waived with the consent of the Holders of a majority in principal amount of the
Notes then outstanding (including consents obtained in connection with a tender
offer or exchange offer for Notes). Without the consent of any Holder, the
Issuers may amend or supplement the Indenture, any Subsidiary Guarantee or the
Notes to, among other things, cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Issuer's obligations to holders of
the Notes in the case of merger or consideration, to add or release any
Subsidiary Guarantor pursuant to the terms of the Indenture or to make any
change that does not adversely affect the rights of any Holder.
15. Defaults and Remedies. An event of default generally is: default by
the Issuers or any Subsidiary Guarantor for 30 days in payment of interest on
the Notes; default by the Issuers or any Subsidiary Guarantor in payment of
principal of or premium, if any, on the Notes; defaults resulting in
acceleration prior to maturity of certain other Indebtedness or resulting from
payment defaults under certain other Indebtedness; failure by the Issuers for 60
days after notice to comply with any of its other agreements in the Indenture;
certain final judgments against the Issuers; the cessation, or assertion of
cessation by the Issuers or any Subsidiary Guarantor, of any Subsidiary
Guarantee; and certain events of bankruptcy or insolvency. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately,
except that in the case of an Event of Default arising from certain events of
bankruptcy, insolvency or reorganization relating to either of the Issuers or
any Significant Subsidiaries, all outstanding Notes shall become due and payable
immediately without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Notes. Subject to certain limitations, Holders of a majority in principal
amount of the Notes may direct the Trustee in its exercise of any trust or
power. The Issuers must furnish an annual compliance certificate to the
Trustee.
16. Trustee Dealings with Issuers. State Street Bank & Trust Company, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with the Issuers or their
respective Subsidiaries or Affiliates with the same rights it would have if it
were not Trustee.
17. No Recourse Against Others. No member of the Company, director,
officer, employee, or stockholder of the Master Partnership, the Manager,
Finance Corp. or any Subsidiary Guarantor, as such, shall have any liability for
any obligations of the Issuers and the Subsidiary Guarantors under the Notes,
the Subsidiary Guarantees or the Indenture or for any claim based on, in respect
of or by reason of such obligations. Each Holder of Notes, by accepting a Note,
waives
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and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
The obligations of the Issuers under the Indenture and the Notes will be
non-recourse to the Manager and the Master Partnership (and their respective
Affiliates (other than the Issuers)), and payable only out of the cash flow and
assets of the Issuers. The Trustee has, and each Holder of a Note, by accepting
a Note, will be deemed to have agreed in the Indenture that neither the Manager
nor its assets nor Master Partnership nor its assets (nor any of their
respective affiliates (other than the Issuers)) nor their respective assets,
shall be liable for any of the obligations of the Issuers under the Indenture or
the Notes (except as provided in the Subsidiary Guarantee). In addition,
neither the Issuers nor the Holders of Notes will have any right to require the
Company to make distributions to the Master Partnership.
17. Authentication. This Note shall not be valid until the Trustee or an
authenticating agent signs the certificate of authentication on the other side
of this Note.
18. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
19. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Securities Identification Procedures, the Issuers will
cause CUSIP numbers to be printed on the Notes as a convenience to Holder of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Issuers will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to U.S. Timberlands
Klamath Falls, L.L.C., 6400 Highway 66, Klamath Falls, Oregon 97601, Attention:
Secretary.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
---------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint as agent to transfer this Note on the books of
---------
the Issuers. The agent may substitute another to act for him.
Your Signature:
-----------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Date:
--------------------
Signature Guarantee:
--------------------
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FORM OF OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.16, Section 4.17 or Section 4.18 of the Indenture, check the
appropriate box:
Section 4.16 [ ] Section 4.17 [ ] Section 4.18 [ ]
If you want to have only part of this Note purchased by the Issuers
pursuant to Section 4.16, Section 4.17 or Section 4.18 of the Indenture, state
the amount (in integral multiples of $1,000):
$
----------------
Date: Signature:
------------ ----------------------
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:
------------------------------------------------------------
A-9
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTE/*/
The following exchanges of a part of this Global Note for Definitive Notes have
been made:
Principal Amount
Amount of Amount of of this Global Note Signature of
decrease in increase in following such authorized officer
Principal Amount Principal Amount decrease of Trustee or
Date of Exchange of this Global Note of this Global Note (or increase) Note Custodian
- ---------------- ------------------- ------------------- -------------- ------------------
- ----------
/*/ This should be included only if the Note is issued in global form.
A-10
EXHIBIT B
SUBSIDIARY GUARANTEE
This Subsidiary Guarantee, dated as of ___________________, (this
"Subsidiary Guarantee" and together with all such guarantees delivered from time
to time under Article 11 of the Indenture referred to below being referred to
herein as the "Subsidiary Guarantees") is made by ______________ and
______________ (each a "Subsidiary Guarantor" and collectively, the "Subsidiary
Guarantors") in favor of STATE STREET BANK & TRUST COMPANY as Trustee (together
with its successors and assigns in such capacity, the "Trustee") under the
Indenture (as amended or modified from time to time, the "Indenture") dated as
of November __, 1997 made by U.S. Timberlands Klamath Falls, L.L.C., a Delaware
limited liability (the "Company"), and U.S. Timberlands Finance Corp. ("Finance
Corp."), a Delaware corporation (together, the "Issuers") pursuant to which the
Issuers issued _______% Senior Notes due 2007 (the "Notes"). Unless otherwise
defined herein, capitalized terms used herein have the meanings assigned to such
terms in the Indenture.
WHEREAS, pursuant to Section 4.18 of the Indenture, each Subsidiary
Guarantor is prohibited from incurring certain Indebtedness without executing
and delivering a Subsidiary Guarantee; and
WHEREAS, the Subsidiary Guarantor wishes to incur such Indebtedness;
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Subsidiary Guarantor agrees as follows:
SECTION 1. Unconditional Guarantee.
-----------------------
Each Subsidiary Guarantor hereby unconditionally, jointly and
severally, guarantees to each Holder and to the Trustee the full and prompt
payment of the principal of, premium, if any, and interest on the Notes and all
other amounts due and payable under the Indenture and the Notes by the Issuers,
whether at maturity, by acceleration, redemption, repurchase or otherwise,
including, without limitation, interest on the overdue principal of, premium, if
any, and interest on the Notes, to the extent lawful, all in accordance with the
terms hereof and thereof; subject, however, to the limitations set forth in
Section 2 herein.
Failing payment when due of any amount so guaranteed for whatever
reason, the Subsidiary Guarantors will be jointly and severally obligated to pay
the same immediately. Each Subsidiary Guarantor hereby agrees that its
obligations hereunder shall be unconditional irrespective of the validity,
regularity or enforceability of the Notes, the Indenture or any other Subsidiary
Guarantee, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the
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Issuers or any other Subsidiary Guarantor, any action to enforce the same or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of any Subsidiary Guarantor. Each Subsidiary Guarantor, to
the extent permitted by law, hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of an Issuer, any right to require a proceeding first against the Issuers or any
other Subsidiary Guarantor, protest, notice, notice of intent to accelerate,
notice of acceleration and all demands whatsoever and covenants that this
Subsidiary Guarantee will not be discharged except by complete performance of
the obligations contained in the Notes, this Indenture and in this Subsidiary
Guarantee. If any Holder or the Trustee is required by any court or otherwise
to return to the Issuers, any Subsidiary Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to the Issuers or any
Subsidiary Guarantor, any amount paid by the Issuers or any Subsidiary Guarantor
to the Trustee or such Holder, this Subsidiary Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Subsidiary Guarantor agrees it shall not be entitled to any right of subrogation
in relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. Each Subsidiary Guarantor
further agrees that, as between each Subsidiary Guarantor, on the one hand, and
the Holders and the Trustee, on the other hand, (a) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 of the
Indenture for the purposes of this Subsidiary Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (b) in the event of any acceleration of
such obligations as provided in Article 6 of the Indenture and subject to the
rescission thereof as provided therein, such obligations (whether or not due and
payable) shall forthwith become due and payable by each Subsidiary Guarantor for
the purpose of this Subsidiary Guarantee.
SECTION 2. Amendments. The provisions of this Subsidiary Guarantee
----------
shall not be amended or modified except in accordance with Article 9 of the
Indenture.
SECTION 3. Representations and Warranties. Each Subsidiary Guarantor
------------------------------
hereby represents and warrants as follows:
(a) Such Subsidiary Guarantor is (i) a duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (ii) has all requisite power and authority to own or lease and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted; and (iii) is duly qualified or licensed to do business
as a foreign [corporation] and is in good standing in all jurisdictions in which
it owns or leases assets and property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure to so qualify
or be licensed would not have a material adverse effect on the operations,
business, prospects, assets, properties or condition (financial or other) of the
Company and its Subsidiaries, including such Guarantor, considered as one
enterprise.
(b) The execution, delivery and performance by such Subsidiary
Guarantor of this Subsidiary Guarantee, have been duly authorized by all
necessary corporate or other action on the part of such Subsidiary Guarantor and
do not and will not violate any provision of the articles or
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certificate of incorporation or by-laws or other charter documents of such
Subsidiary Guarantor and do not and will not violate, or be in conflict with, or
constitute a default under, or permit the termination of, or result in the
creation of any Lien (other than a Permitted Lien) upon any property of such
Subsidiary Guarantor under (i) any statute or law or any judgment, decree,
order, regulation or rule of any court or governmental authority to which such
Subsidiary Guarantor or any of its properties may be subject, or (ii) any
contract, indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which such Subsidiary Guarantor is a party or by which it may be
bound, or to which any of its properties may be subject, which conflict,
default, termination or Lien would have a material adverse effect upon the
operations, business, prospects, assets, properties or condition (financial or
other) of the Company and its Subsidiaries, including such Subsidiary Guarantor,
considered as one enterprise. This Subsidiary Guarantee is the legal, valid and
binding obligation of such Subsidiary Guarantor, enforceable against such
Subsidiary Guarantor in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting enforcement of creditors rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(c) No authorization, consent, approval or other action by, and no
notice to or filing with, any court, governmental, administrative or judicial
authority or regulatory body (domestic or foreign) is required for the due
execution, delivery or performance by such Subsidiary Guarantor of this
Subsidiary Guarantee.
SECTION 4. Addresses for Notices. All notices, requests, demands and
---------------------
other communications provided for or permitted hereunder shall be in writing
(including telegraphic communication) and, if to any Subsidiary Guarantor,
mailed or telegraphed or delivered to it, addressed to it at the address of the
Company specified in the Indenture, if to Trustee, addressed to it at the
address specified in the Indenture, or as to each party at such other address as
shall be designated by such party in a written notice to each other party
complying as to delivery with the terms of this section.
SECTION 5. No Waiver; Remedies. No failure on the part of the
-------------------
Trustee or any Holder, to exercise, and no delay in exercising, an right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law or any other agreement.
SECTION 6. Continuing Guaranty; Transfer of Notes; Termination
---------------------------------------------------
of Guaranty.
-----------
(a) This Subsidiary Guarantee is a continuing guaranty and, subject
to the provisions of subsection (b) below, shall (i) remain in full force and
effect until payment in full of the Notes and all other amounts payable under
this Subsidiary Guarantee, (ii) be binding upon each Subsidiary Guarantor, its
successors and assigns, and (iii) inure to the benefit of and be enforceable by
the Trustee and its successors, transferees and assigns.
B-3
(b) All obligations of a particular Subsidiary Guarantor hereunder
shall automatically terminate as set forth in Section 10.04 of the Indenture
enforceable in such jurisdiction and such illegal, invalid or unenforceable
provision shall be legal, valid and enforceable in all other jurisdictions.
SECTION 7. Indenture Obligations. Each Subsidiary Guarantor agrees
---------------------
to perform the obligations of a Subsidiary Guarantor under the Indenture.
SECTION 8. GOVERNING LAW. THIS SUBSIDIARY GUARANTEE SHALL BE
-------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
UNITED STATES.
SECTION 9. Severability. In case any provision of this Subsidiary
------------
Guarantee shall be invalid, illegal or unenforceable, that portion of such
provision that is not invalid, illegal or unenforceable shall remain in effect,
and the validity, legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
B-4
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused this
Subsidiary Guarantee to be duly executed and delivered by its officer thereunto
duly authorized as of the date first above written.
[LIST OF SUBSIDIARY GUARANTORS]
By:
------------------------------
Name and Title: