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Exhibit 4.1
ROYAL OAK MINES INC.,
as Issuer
and
KEMESS MINES INC.,
as Guarantor
and
MELLON BANK, F.S.B.,
as Trustee
INDENTURE
Dated as of August 12, 1996
$175,000,000
11% Senior Subordinated Notes due 2006
and
Series B 11% Senior Subordinated Notes due 2006
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- ---------
310 (a)(1) ............................ 7.10
(a)(2) ............................ 7.10
(a)(3) ............................ N.A.
(a)(4) ............................ N.A.
(a)(5) ............................ 7.08; 7.10
(b) ............................ 7.08; 7.10;
13.02
(c) ............................ N.A.
311 (a) ............................ 7.11
(b) ............................ 7.11
(c) ............................ N.A.
312 (a) ............................ 2.05
(b) ............................ 13.03
(c) ............................ 13.03
313 (a) ............................ 7.06
(b)(1) ............................ N.A.
(b)(2) ............................ 7.06
(c) ............................ 7.06; 13.02
(d) ............................ 7.06
314 (a) ............................ 4.07; 4.08;
13.02
(b) ............................ N.A.
(c)(1) ............................ 13.04
(c)(2) ............................ 13.04
(c)(3) ............................ N.A.
(d) ............................ N.A.
(e) ............................ 13.05
(f) ............................ N.A.
315 (a) ............................ 7.01(b)
(b) ............................ 7.05; 13.02
(c) ............................ 7.01(a)
(d) ............................ 7.01(c)
(e) ............................ 6.11
316 (a)(last sentence) ............... 2.09
(a)(1)(A) ........................ 6.05
(a)(1)(B) ........................ 6.04
(a)(2) ........................ N.A.
(b) ............................ 6.07
(c) ............................ 9.05
317 (a)(1) ............................ 6.08
(a)(2) ............................ 6.09
(b) ............................ 2.04
318 (a) ............................ 13.01
(c) ............................ 13.01
______________________
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions ...................................... 1
Section 1.02 Incorporation by Reference of
TIA ............................................ 27
Section 1.03 Rules of Construction ............................ 27
ARTICLE TWO
THE NOTES
Section 2.01 Form and Dating .................................. 28
Section 2.02 Execution and Authentication; Aggregate
Principal Amount ............................... 29
Section 2.03 Registrar and Paying Agent ....................... 30
Section 2.04 Paying Agent To Hold Assets in
Trust .......................................... 31
Section 2.05 Noteholder Lists ................................. 31
Section 2.06 Transfer and Exchange ............................ 32
Section 2.07 Replacement Notes ................................ 33
Section 2.08 Outstanding Notes ................................ 33
Section 2.09 Treasury Notes ................................... 34
Section 2.10 Temporary Notes .................................. 34
Section 2.11 Cancellation ..................................... 34
Section 2.12 Defaulted Interest ............................... 35
Section 2.13 CUSIP Number ..................................... 35
Section 2.14 Deposit of Moneys ................................ 35
Section 2.15 Restrictive Legends .............................. 36
Section 2.16 Book-Entry Provisions for Global
Security ....................................... 38
Section 2.17 Special Transfer Provisions ...................... 39
ARTICLE THREE
REDEMPTION
Section 3.01 Notices to Trustee ............................... 42
Section 3.02 Selection of Notes To Be Redeemed ................ 42
Section 3.03 Notice of Redemption ............................. 43
Section 3.04 Effect of Notice of Redemption ................... 44
Section 3.05 Deposit of Redemption Price ...................... 45
Section 3.06 Notes Redeemed in Part ........................... 45
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ARTICLE FOUR
COVENANTS
Section 4.01 Payment of Notes ................................. 45
Section 4.02 Maintenance of Office or Agency .................. 47
Section 4.03 Corporate Existence .............................. 47
Section 4.04 Payment of Taxes and Other Claims ................ 47
Section 4.05 Maintenance of Properties and
Insurance ...................................... 48
Section 4.06 Compliance Certificate; Notice of
Default ........................................ 48
Section 4.07 Compliance with Laws ............................. 49
Section 4.08 SEC Reports ...................................... 50
Section 4.09 Waiver of Stay, Extension or Usury
Laws ........................................... 51
Section 4.10 Limitation on Restricted Payments ................ 51
Section 4.11 Limitation on Transactions with
Affiliates ..................................... 53
Section 4.12 Limitation on Indebtedness ....................... 54
Section 4.13 Limitation on Dividend and Other
Payment Restrictions Affecting
Subsidiaries ................................... 56
Section 4.14 Prohibition on Incurrence of Senior
Subordinated Indebtedness ...................... 57
Section 4.15 Change of Control ................................ 57
Section 4.16 Limitation on Sale of Assets ..................... 60
Section 4.17 Limitation on Preferred Stock of
Restricted Subsidiaries ........................ 63
Section 4.18 Limitation on Liens .............................. 63
Section 4.19 Conduct of Business .............................. 64
Section 4.20 Additional Subsidiary Guarantees ................. 64
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01 Merger, Consolidation and Sale of
Assets ......................................... 65
Section 5.02 Successor Corporation Substituted ................ 67
ARTICLE SIX
DEFAULT AND REMEDIES
Section 6.01 Events of Default ................................ 68
Section 6.02 Acceleration ..................................... 70
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Section 6.03 Other Remedies ................................... 71
Section 6.04 Waiver of Past Defaults .......................... 71
Section 6.05 Control by Majority .............................. 71
Section 6.06 Limitation on Suits .............................. 72
Section 6.07 Rights of Holders To Receive Payment ............. 72
Section 6.08 Collection Suit by Trustee ....................... 73
Section 6.09 Trustee May File Proofs of Claim ................. 73
Section 6.10 Priorities ....................................... 74
Section 6.11 Undertaking for Costs ............................ 74
ARTICLE SEVEN
TRUSTEE
Section 7.01 Duties of Trustee ................................ 75
Section 7.02 Rights of Trustee ................................ 76
Section 7.03 Individual Rights of Trustee ..................... 78
Section 7.04 Trustee's Disclaimer ............................. 78
Section 7.05 Notice of Default ................................ 78
Section 7.06 Reports by Trustee to Holders .................... 78
Section 7.07 Compensation and Indemnity ....................... 79
Section 7.08 Replacement of Trustee ........................... 80
Section 7.09 Successor Trustee by Merger, Etc. ................ 81
Section 7.10 Eligibility; Disqualification .................... 81
Section 7.11 Preferential Collection of Claims
Against Company ................................ 82
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.01 Termination of the
Company's Obligations .......................... 82
Section 8.02 Legal Defeasance and Covenant
Defeasance ..................................... 84
Section 8.03 Conditions to Legal Defeasance or
Covenant Defeasance ............................ 85
Section 8.04 Application of Trust Money ....................... 87
Section 8.05 Repayment to the Company
or the Guarantors .............................. 88
Section 8.06 Reinstatement .................................... 89
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01 Without Consent of Holders ...................... 89
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Section 9.02 With Consent of Holders ......................... 90
Section 9.03 Effect on Senior Indebtedness and
Guarantor Senior Indebtedness .................. 92
Section 9.04 Compliance with TIA .............................. 92
Section 9.05 Revocation and Effect of Consents ................ 92
Section 9.06 Notation on or Exchange of Notes ................. 93
Section 9.07 Trustee To Sign Amendments, Etc. ................. 94
ARTICLE TEN
SUBORDINATION
Section 10.01 Notes Subordinated to
Senior Indebtedness ............................ 94
Section 10.02 No Payment on Notes in
Certain Circumstances .......................... 95
Section 10.03 Payment Over of Proceeds upon
Dissolution, Etc. .............................. 96
Section 10.04 Payments May Be Paid Prior to
Dissolution .................................... 98
Section 10.05 Subrogation ...................................... 99
Section 10.06 Obligations of the Company
Unconditional .................................. 99
Section 10.07 Notice to Trustee ................................ 100
Section 10.08 Reliance on Judicial Order or
Certificate of Liquidating Agent ............... 100
Section 10.09 Trustee's Relation to Senior
Indebtedness ................................... 101
Section 10.10 Subordination Rights Not Impaired by
Acts or Omissions of the Company
or Holders of Senior Indebtedness .............. 101
Section 10.11 Noteholders Authorize Trustee To
Effectuate Subordination of Notes .............. 102
Section 10.12 This Article Ten Not To Prevent
Events of Default .............................. 103
Section 10.13 Trustee's Compensation Not
Prejudiced ..................................... 103
ARTICLE ELEVEN
GUARANTEE
Section 11.01 Unconditional Guarantee .......................... 103
Section 11.02 Subordination of
Guarantee ...................................... 104
Section 11.03 Severability ..................................... 104
Section 11.04 Release of a Guarantor ........................... 105
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Section 11.05 Limitation of Subsidiary Guarantor's
Liability ...................................... 105
Section 11.06 Guarantors May Consolidate, Etc., on
Certain Terms .................................. 106
Section 11.07 Contribution ..................................... 107
Section 11.08 Waiver of Subrogation ............................ 107
Section 11.09 Execution of Guarantee ........................... 108
Section 11.10 Waiver of Stay, Extension or Usury
Laws ........................................... 109
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE OBLIGATIONS
Section 12.01 Guarantee Obligations
Subordinated to Guarantor Senior
Indebtedness ................................... 109
Section 12.02 No Payment on Notes in Certain
Circumstances .................................. 110
Section 12.03 Payment Over of Proceeds upon
Dissolution, Etc. .............................. 112
Section 12.04 Payments May Be Paid Prior to
Dissolution .................................... 113
Section 12.05 Subrogation ...................................... 114
Section 12.06 Obligations of the Subsidiary
Guarantors Unconditional ....................... 114
Section 12.07 Notice to Trustee ................................ 115
Section 12.08 Reliance on Judicial Order or
Certificate of Liquidating Agent ............... 116
Section 12.09 Trustee's Relation to Guarantor
Senior Indebtedness ............................ 116
Section 12.10 Subordination Rights Not Impaired by
Acts or Omissions of the Subsidiary
Guarantors or Holders of Guarantor
Senior Indebtedness ............................ 117
Section 12.11 Noteholders Authorize Trustee To
Effectuate Subordination of
Guarantee Obligations .......................... 117
Section 12.12 This Article Twelve Not To Prevent
Events of Default .............................. 118
Section 12.13 Trustee's Compensation Not
Prejudiced ..................................... 118
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ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01 TIA Controls ..................................... 118
Section 13.02 Notices .......................................... 119
Section 13.03 Communications by Holders with Other
Holders ........................................ 120
Section 13.04 Certificate and Opinion as to
Conditions Precedent ........................... 120
Section 13.05 Statements Required in Certificate
or Opinion ..................................... 121
Section 13.06 Rules by Trustee, Paying Agent,
Registrar ...................................... 121
Section 13.07 Legal Holidays ................................... 121
Section 13.08 Governing Law .................................... 122
Section 13.09 No Adverse Interpretation of Other
Agreements ..................................... 122
Section 13.10 No Recourse Against Others ....................... 122
Section 13.11 Successors ....................................... 122
Section 13.12 Duplicate Originals .............................. 122
Section 13.13 Severability ..................................... 122
Signatures ..................................................... 124
Exhibit A - Form of Initial Note with Guarantee
Exhibit B - Form of Exchange Note with Guarantee
Exhibit C - Form of Certificate To Be Delivered in Connection
with Transfers to Non-QIB Accredited Investors
Exhibit D - Form of Certificate To Be Delivered in Connection
with Transfers Pursuant to Regulation S
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of the Indenture.
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INDENTURE, dated as of August 12, 1996, by and among Royal Oak Mines Inc.,
an Ontario, Canada corporation (the "Company"), Kemess Mines Inc., an Ontario,
Canada corporation (the "Guarantor"), and Mellon Bank, F.S.B., a federal savings
bank with trust powers, as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 11% Senior
Subordinated Notes due 2006 (the "Initial Notes") and Series B 11% Senior
Subordinated Notes due 2006 (the "Exchange Notes," and together with the Initial
Notes, the "Notes") and, to provide therefor, the Company and the Guarantor have
duly authorized the execution and delivery of this Indenture. All things
necessary to make the Notes, when duly issued and executed by the Company, and
authenticated and delivered hereunder, the valid obligations of the Company and
the Guarantor, and to make this Indenture a valid and binding agreement of the
Company and the Guarantor, have been done.
Each party hereto agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Acquired Indebtedness" of any Person means Indebtedness of another Person
and any of its Subsidiaries existing at the time such other Person becomes a
Restricted Subsidiary of such Person or at the time it merges or consolidates
with such Person or any of such Person's Restricted Subsidiaries or is assumed
by such Person or any Restricted Subsidiary of such Person in connection with
the acquisition of assets from such other Person and in each case not Incurred
by such Person or any Restricted Subsidiary of such Person or such other Person
in connection with, or in anticipation or contemplation of, such other Person
becoming a Restricted Subsidiary of such Person or such acquisition, merger or
consolidation, and which Indebtedness is without recourse to the Company or any
of its Restricted Subsidiaries or to any of their respective properties or
assets other than the Person or the assets to which such Indebtedness related
prior to the time such Person becomes a Restricted Subsidiary of the Company or
the time of such acquisition, merger or consolidation.
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"Additional Amounts" has the meaning set forth in Section 6(c) of Exhibit A
hereto. Whenever in this Indenture there is mentioned, in any context, (a) the
payment of principal (and premium, if any), (b) purchase prices in connection
with a repurchase of Notes, (c) interest, or (d) any other amount payable on or
with respect to any of the Notes, such mention shall be deemed to include
mention of the payment of Additional Amounts provided for in Section 4.01 to the
extent that, in such context, Additional Amounts are, were or would be payable
in respect thereof.
"Adjusted Consolidated Net Tangible Assets" means the total amount of
consolidated assets of the Company and its Restricted Subsidiaries (net of
applicable depletion, depreciation, amortization and other valuation reserves),
except to the extent resulting from write-ups of capital assets (excluding
write-ups in connection with accounting for acquisitions in conformity with
GAAP), after deducting therefrom (i) all current liabilities of the Company and
its Restricted Subsidiaries (excluding intercompany items) and (ii) all
goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, all as set forth on the most recently
available quarterly or annual consolidated balance sheet of the Company and its
Restricted Subsidiaries, prepared in conformity with GAAP.
"Affiliate" means, when used with reference to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct or cause the direction of management or policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative of the foregoing.
"Affiliate Transaction" has the meaning set forth in Section 4.11.
"Agent" means any Registrar, Paying Agent, co-Registrar or Authenticating
Agent.
"Agent Members" has the meaning provided in Section 2.16.
"all or substantially all" shall have the meaning given such phrase in the
Revised Model Business Corporation Act of 1984, as amended.
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"Asset Acquisition" means (i) 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 or (ii) the
acquisition by the Company or any Restricted Subsidiary of the Company of assets
of any Person comprising a division or line of business of such Person.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease, assignment or other transfer for value by the Company or by any
of its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to
any Person other than to the Company or to a direct or indirect wholly owned
Restricted Subsidiary of the Company of (i) any Capital Stock of any Restricted
Subsidiary of the Company or (ii) any other property or assets of the Company or
of any Restricted Subsidiary of the Company, other than with respect to this
clause (ii) any disposition of mineral products for value in the ordinary course
of business.
"Asset Sale Offer" has the meaning set forth in Section 4.16.
"Authenticating Agent" has the meaning provided in Section 2.02.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal, state or
foreign law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the board of directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions in the City of New York are required or authorized
by law or other governmental action to be closed.
"Capital Stock" means (i) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of
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corporate stock, including each class of Common Stock and Preferred Stock of
such Person and (ii) with respect to any Person that is not a corporation, any
and all partnership or other equity interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease that are required to be
classified and accounted for as capital lease obligations under GAAP and, for
purposes of this definition, the amount of such obligations at any date shall
be the capitalized amount of such obligations at such date, determined in
accordance with GAAP. The stated maturity of such obligations shall be the
date of the last payment of rent or any other amount due under such lease prior
to the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Cash Equivalents" means (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or Canadian
Government or issued by any agency thereof and backed by the full faith and
credit of the United States or Canada, in each case maturing within one year
from the date of acquisition thereof; (ii) 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 or any province of Canada
or any political subdivision of any such province or any public instrumentality
thereof maturing within one year from the date of acquisition thereof and, at
the time of acquisition, having one of the two highest ratings obtainable from
either S&P or Moody's; (iii) commercial paper maturing no more than one year
from the date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 from S&P or at least P-1 from Moody's; (iv) certificates
of deposit or bankers' acceptances maturing within one year from the date of
acquisition thereof issued by any commercial bank organized under the laws of
the United States of America or any state thereof or the District of Columbia
or Canada or any province thereof or any U.S. branch of a foreign bank having
at the date of acquisition thereof combined capital and surplus of not less
than US$250 million; and (v) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in clause
(iv) above.
"Change of Control" means the occurrence of one or more of the following
events (whether or not approved by the board of directors of the Company): (i)
the Company or any of its Restricted Subsidiaries, directly or indirectly,
sells, assigns, conveys, transfers, leases or otherwise disposes of, in one
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transaction or a series of related transactions, all or substantially all of
the property or assets of the Company and its Restricted Subsidiaries
(determined on a consolidated basis) to any Person or group of related Persons
for purposes of Section 13(d) of the Exchange Act other than the Company or a
Person which is a Restricted Subsidiary (a "Group of Persons"); or (ii) the
adoption of any plan of liquidation or dissolution of the Company; or (iii) any
Person or Group of Persons is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of 30% or more of
the Voting Stock of the Company; or (iv) the first day on which a majority of
the members of the Board of Directors of the Company are not Continuing
Directors.
"Change of Control Offer" has the meaning provided in Section 4.15.
"Change of Control Payment Date" has the meaning provided in Section 4.15.
"Change of Control Triggering Event" means the occurrence of both a Change
of Control and a Rating Event.
"Commodity Agreement" of any Person means any option or futures contract
or similar agreement or arrangement.
"Common Stock" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated and whether voting
or non-voting) of such Person's common stock, whether outstanding on the Issue
Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Consolidated EBITDA" means, with respect to any Person, for any period,
the sum (without duplication) of (i) Consolidated Net Income plus (ii) to the
extent that any of the following shall have been taken into account in
determining Consolidated Net Income, (A) all income taxes of such Person and
its Restricted Subsidiaries paid or accrued in accordance with GAAP for such
period (other than income taxes attributable to extraordinary, unusual or
non-recurring gains or losses or taxes attributable to sales or dispositions of
assets outside the ordinary course of business), Consolidated Interest Expense,
amortization expense and depreciation expense, and (B) other non-cash items
(other than non-cash interest) reducing Consolidated Net Income, other than any
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non-cash item which requires the accrual of or a reserve for cash charges for
any future period and other than any non-cash charge constituting an
extraordinary item of loss, less other non-cash items increasing Consolidated
Net Income, all as determined on a consolidated basis for such Person and its
Restricted Subsidiaries in conformity with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction or event giving rise to the need to calculate the Consolidated
Fixed Charge Coverage Ratio (the "Transaction Date") to 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
EBITDA" and "Consolidated Fixed Charges" shall be calculated after giving
effect on a pro forma basis for the period of such calculation to (i) the
Incurrence or repayment of any Indebtedness of such Person or any of its
Restricted Subsidiaries (and the application of the proceeds thereof) giving
rise to the need to make such calculation and any Incurrence or repayment of
other Indebtedness (and the application of the proceeds thereof), other than
the Incurrence or repayment of Indebtedness in the ordinary course of business
for working capital purposes pursuant to working capital facilities, at any
time subsequent to the first day of the Four Quarter Period and on or prior to
the Transaction Date, as if such Incurrence or repayment, as the case may be
(and the application of the proceeds thereof), occurred on the first day of
the Four Quarter Period and (ii) any Asset Sales or Asset Acquisitions
(including, without limitation, any Asset Acquisition giving rise to the need
to make such calculation as a result of such Person or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as a
result of any such Asset Acquisition) Incurring, assuming or otherwise being
liable for Acquired Indebtedness at any time subsequent to the first day of the
Four Quarter Period and on or prior to the Transaction Date, as if such Asset
Sale or Asset Acquisition (including the Incurrence, assumption or liability
for any such Indebtedness or Acquired Indebtedness) and also including any
Consolidated EBITDA associated with such Asset Acquisition) occurred on the
first day of the Four Quarter Period; provided that the Consolidated EBITDA of
any Person acquired shall be included only to the extent includable pursuant to
the definition of "Consolidated Net Income." If such Person or any of its
Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a
third Person, the preceding sentence shall give effect to the Incurrence of
such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of
such Person had directly Incurred or
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otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of determining the denominator (but
not the numerator) of this "Consolidated Fixed Charge Coverage Ratio," (1)
interest on Indebtedness determined on a fluctuating basis as of the
Transaction Date (including Indebtedness actually Incurred on the Transaction
Date) 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 the Transaction Date; and (2) notwithstanding clause
(1) above, interest on Indebtedness determined on a fluctuating basis, to the
extent such interest is covered by agreements relating to Interest Swap
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense
(including amortization or write-off of deferred financing costs of such Person
and its consolidated Restricted Subsidiaries during such period and any premium
or penalty paid in connection with redeeming or retiring Indebtedness of such
Person and its consolidated Restricted Subsidiaries prior to the stated
maturity thereof pursuant to the agreements governing such Indebtedness) and
(ii) the product of (x) the amount of all dividend payments on any series of
Preferred Stock of such Person (other than dividends paid in Common Stock)
paid, accrued or scheduled to be paid or accrued during such period times (y) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current effective consolidated Federal, state and local tax rate
of such Person, expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the aggregate of the interest expense (without deduction of interest
income) of such Person and its Restricted Subsidiaries for such period, on a
consolidated basis, as determined in accordance with GAAP, and including (a)
all amortization of original issue discount; (b) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by such Person and its Restricted Subsidiaries during such period; (c)
net cash costs under all Interest Swap Obligations (including amortization of
fees); (d) all capitalized interest; and (e) the interest portion of any
deferred payment obligations for such period.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a
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consolidated basis, determined in accordance with GAAP; provided that there
shall be excluded therefrom (a) after-tax gains from Asset Sales or
abandonments or reserves relating thereto, (b) after-tax items classified as
extraordinary or non-recurring gains, (c) the net income of any Person acquired
in a "pooling of interests" transaction accrued prior to the date it becomes a
Restricted Subsidiary of the referent Person or is merged or consolidated with
the referent Person or any Restricted Subsidiary of the referent Person, (d)
the net income (but not loss) of any Restricted Subsidiary of the referent
Person to the extent that the declaration of dividends or similar distributions
by that Restricted Subsidiary of that income is restricted by a contract,
operation of law or otherwise, (e) the net income of any Person, other than a
Restricted Subsidiary of the referent Person, except to the extent of cash
dividends or distributions paid to the referent Person or to a wholly owned
Restricted Subsidiary of the referent Person by such Person, (f) any
restoration to income of any contingency reserve, except to the extent that
provision for such reserve was made out of Consolidated Net Income accrued at
any time following the Issue Date, (g) income or loss attributable to
discontinued operations (including, without limitation, operations disposed of
during such period whether or not such operations were classified as
discontinued), and (h) in the case of a successor to the referent Person by
consolidation or merger or as a transferee of the referent Person's assets, any
earnings of the successor corporation prior to such consolidation, merger or
transfer of assets.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person and its consolidated Restricted
Subsidiaries, determined on a consolidated basis in accordance with GAAP, less
(without duplication) amounts attributable to Disqualified Capital Stock of
such Person.
"Continuing Director" means, as of the date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of this Indenture or (ii) was nominated for election or
elected to such Board of Directors with the affirmative vote of a majority of
the Continuing Directors who were members of such Board at the time of such
election or nomination; provided, however, that in the event of a business
combination involving the Company, by merger or consolidation or otherwise,
from the time of effectiveness of such business combination until the next
annual general meeting of the shareholders of the surviving entity, Continuing
Directors shall only be directors of the Company not elected in anticipation
of, or in connection with, any such transaction who are also directors of the
surviving entity.
17
-9-
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of
Default.
"Default Notice" has the meaning provided in Section 10.02.
"Depositary" means The Depository Trust Company, its nominees and
successors.
"Designated Senior Debt" means Indebtedness constituting Senior
Indebtedness which, at the time of designation, has an aggregate principal
amount of at least US$25 million and is specifically designated in the
instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness" by the Company.
"Disqualified Capital Stock" means any Capital Stock which, by its terms
(or by the terms of any security into which it is convertible or for which it
is exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the sole option of the holder thereof, in whole or in part, on or
prior to the final maturity date of the Notes.
"Events of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended or
any successor statute or statutes thereto.
"Exchange Notes" has the meaning provided in the preamble to this
Indenture.
"Exchange Offer" means the registration by the Company and the Guarantors
under the Securities Act pursuant to a registration statement of the offer by
the Company and the Guarantors to each Holder of the Initial Notes to exchange
all the Initial Notes held by such Holder for the Exchange Notes in an
aggregate principal amount equal to the aggregate principal amount
18
-10-
of the Initial Notes held by such Holder, all in accordance with the terms and
conditions of the Registration Rights Agreement.
"fair market value" or "fair value" means, with respect to any asset or
property, the price which could be negotiated in an arm's-length, free market
transaction, for cash, between an informed and willing seller and an informed
and willing and able buyer, neither of whom is under undue pressure or
compulsion to complete the transaction. Fair market value shall be determined
by the board of directors of the Company acting reasonably and in good faith
and shall be evidenced by a Board Resolution delivered to the Trustee;
provided, however, that if the aggregate non-cash consideration to be received
by the Company or any of its Restricted Subsidiaries from any Asset Sale could
be reasonably likely to exceed US$15 million the fair market value shall be
determined by an Independent Financial Advisor.
"Financial Advisor" means an accounting, appraisal or investment banking
firm of nationally recognized standing that is, in the reasonable and good
faith judgment of the board of directors of the Company, qualified to perform
the task for which such firm has been engaged.
"Fiscal Year" has the meaning set forth in Section 4.06(a).
"Foreign Exchange Obligations" means the obligations of any Person under
any foreign currency future, option, swap or cap or other foreign currency
hedge or arrangement.
"Four Quarter Period" has the meaning set forth in the definition of
"Consolidated Fixed Charge Coverage Ratio."
"Funding Guarantor" has the meaning provided in Section 11.07.
"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, which are in effect as of the Issue Date.
"Global Note" has the meaning provided in Section 2.01.
19
-11-
"Gradation" means a gradation within a Rating Category, which shall be "+"
and "-", in the case of S&P's current Rating Categories (e.g., a decline from
BB+ to BB would constitute a decrease of one gradation); "1", "2" and "3", in
the case of Moody's current Rating Categories (e.g., a decline from B1 to B2
would constitute a decrease of one gradation); or the equivalent in respect of
successor Rating Categories of S&P or Moody's or Rating Categories used by
Rating Agencies other than S&P and Moody's.
"Guarantee" means the guarantee of each Guarantor set forth in Article
Eleven and any additional guarantee of the Notes executed by any Subsidiary of
the Company.
"Guarantor" or "Guarantors" means (i) Kemess Mines Inc. and (ii) each of
the Company's Subsidiaries that in the future executes a supplemental indenture
in which such Subsidiary agrees to be bound by the terms of this Indenture as a
Guarantor; provided that any Person constituting a Guarantor as described above
shall cease to constitute a Guarantor when its respective Guarantee is released
in accordance with the terms of this Indenture.
"Guarantor Senior Indebtedness" means any Indebtedness of any Guarantor
(including any interest accruing subsequent to the filing of a petition in
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law), whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Guarantee of such Guarantor. Notwithstanding the foregoing, Guarantor Senior
Indebtedness shall not include (i) any Indebtedness of such Guarantor to a
Subsidiary of such Guarantor or to a Subsidiary of the Company, (ii)
Indebtedness to, or guaranteed on behalf of, any shareholder, director, officer
or employee of such Guarantor or any Subsidiary of such Guarantor (including,
without limitation, amounts owed for compensation), (iii) Indebtedness and
other amounts incurred in connection with obtaining goods, materials or
services owing to trade creditors, (iv) Disqualified Capital Stock, (v) any
liability for federal, state, local or other taxes owed or owing by such
Guarantor, (vi) Indebtedness incurred in violation of the covenant described in
Section 4.12 and (vii) any Indebtedness which is, by its express terms,
subordinated in right of payment to any other Indebtedness of such Guarantor.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered in the Registrar's books.
20
-12-
"Incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
guarantee or otherwise become liable in respect of such Indebtedness or other
obligation or the initial recording, as required pursuant to GAAP or otherwise,
of any such Indebtedness or other obligation on the balance sheet of such
Person (and "Incurrence," "Incurred," "Incurrable" and "Incurring" shall have
meanings correlative to the foregoing); provided, however, that (A) any
Indebtedness assumed in connection with an acquisition of assets and any
Indebtedness of a Person existing at the time such Person becomes a Restricted
Subsidiary (whether by merger, consolidation, acquisition or otherwise) of the
Company or at the time such Person is merged or consolidated with the Company
or any Restricted Subsidiary of the Company shall be deemed to be Incurred at
the time of the acquisition of such assets or by such Restricted Subsidiary at
the time it becomes, or is merged or consolidated with, a Restricted Subsidiary
of the Company or by the Company at the time of such merger or consolidation,
as the case may be, and (B) any amendment, modification or waiver of any
document pursuant to which Indebtedness was previously Incurred shall be deemed
to be an Incurrence of Indebtedness unless such amendment, modification or
waiver does not (i) increase the principal or premium thereof or interest rate
thereon (including by way of original issue discount) or (ii) change to an
earlier date the stated maturity thereof or the date of any scheduled or
required principal payment thereon or the time or circumstances under which
such Indebtedness shall be redeemed.
"Indebtedness" means with respect to any Person, any liability of such
Person or such Person's Restricted Subsidiaries, without duplication, (i) for
borrowed money, (ii) evidenced by bonds, debentures, notes or other similar
instruments, (iii) for Capitalized Lease Obligations, (iv) issued or assumed as
the deferred purchase price of property, all conditional sale obligations and
under any title retention agreement (but excluding trade accounts payable and
accrued liabilities arising in the ordinary course of business that are not
overdue by 90 days or more or are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted), (v) for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction, (vi) for all Indebtedness of others (including all
dividends of other Persons for the payment of which is) guaranteed, directly or
indirectly, by such Person or its Restricted Subsidiaries or that is otherwise
its legal liability or which such Person or its Restricted Subsidiaries has
agreed to purchase or repurchase or in respect of which such Person or its
Restricted Subsidiaries has agreed contingently to supply or advance funds,
(vii) comprising net liabilities under Interest
21
-13-
Swap Obligations and Commodity Agreements, (viii) for all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on any asset or
property (including, without limitation, leasehold interests and any other
tangible or intangible property) of such Person or its Restricted Subsidiaries,
whether or not such Indebtedness is assumed by such Person or its Restricted
Subsidiaries or is not otherwise such Person's or its Restricted Subsidiaries'
legal liability; provided that if the Obligations so secured have not been
assumed by such Person or its Restricted Subsidiaries or are otherwise not such
Person's or its Restricted Subsidiaries' legal liability, the amount of such
Indebtedness for the purposes of this definition shall be limited to the lesser
of the amount of such Indebtedness secured by such Lien or the fair market
value of the assets or property securing such Lien, and (ix) all Disqualified
Capital Stock issued by such Person with the amount of Indebtedness represented
by such Disqualified Capital Stock being equal to the greater of its voluntary
or involuntary liquidation preference and its maximum fixed repurchase price,
but excluding accrued dividends if any. The amount of Indebtedness of any
Person or its Restricted Subsidiaries at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and
the maximum liability, upon the occurrence of the contingency giving rise to
the obligation, of any contingent obligations at such date; provided that the
amount outstanding at any time of any Indebtedness issued with original issue
discount is the full amount of such Indebtedness less the remaining unamortized
portion of the original issue discount of such Indebtedness at such time as
determined in conformity with GAAP.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Independent," when used with respect to any specified Person, means such
a Person who (a) is in fact independent, (b) does not have any direct financial
interest or any material indirect financial interest in the Company or any of
its Subsidiaries, or in any Affiliate of the Company or any of its
Subsidiaries, and (c) is not an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions for the
Company or any of its Subsidiaries. Whenever it is provided in this Indenture
that any Independent Person's opinion or certificate shall be furnished to the
Trustee, such Person shall be appointed by the Company and approved by the
Trustee in the exercise of reasonable care, and such opinion or certificate
shall state that the signer has read this definition and that the signer is
Independent within the meaning thereof.
22
-14-
"Initial Notes" has the meaning provided in the preamble to this
Indenture.
"Initial Purchasers" means BT Securities Corporation and Scotia Capital
Markets
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Notes.
"Interest Swap Obligations" means the obligations of any Person under any
interest rate protection agreement, interest rate future, interest rate option,
interest rate swap, interest rate cap or other interest rate hedge or
arrangement.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"Investment" by any Person means any direct or indirect (i) loan, advance
or other extension of credit or capital contribution (by means of transfers of
cash or other property (valued at the fair market value thereof as of the date
of transfer) to others or payments for property or services for the account or
use of others, or otherwise); (ii) purchase or acquisition of Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness
issued by any other Person; (iii) guarantee or assumption of any Indebtedness
or any other obligation of any other Person (except for an assumption of
Indebtedness for which the assuming Person receives consideration at the time
of such assumption in the form of property or assets with a fair market value
at least equal to the principal amount of the Indebtedness assumed); and (iv)
all other items that would be classified as investments (including, without
limitation, purchases of assets outside the ordinary course of business) on a
balance sheet of such Person prepared in accordance with GAAP. The amount of
any Investment shall not be adjusted for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment. If the
Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Common Stock of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, the
Company no longer owns, directly or indirectly, greater than 50% of the
outstanding Common Stock of such Restricted Subsidiary, the Company shall be
deemed to have made an Investment on the date of any such
23
-15-
sale or disposition equal to the fair market value of the Common Stock of such
Subsidiary not sold or disposed of.
"Issue Date" means the date of original issuance of the Notes.
"Kemess South" means that portion of the Kemess gold-copper ore body
(located in British Columbia and the acquisition of which was completed by the
Company in January 1996) upon which construction of an open-pit mine and
processing facility began in July, 1996.
"Legal Holiday" has the meaning provided in Section 13.07.
"Lien" means, with respect to any Person, any mortgage, pledge, lien,
encumbrance, easement, restriction, covenant, right-of-way, charge or adverse
claim affecting title or resulting in an encumbrance against real or personal
property of such Person, or a security interest of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option, right of first refusal or other similar agreement to sell,
in each case securing obligations of such Person and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or
equivalent statute or statutes) of any jurisdiction other than to reflect
ownership by a third party of property leased to the referent Person or any of
its Subsidiaries under a lease that is not in the nature of a conditional sale
or title retention agreement).
"Maturity Date" means August 15, 2006.
"Mining Business" means (i) the acquisition, exploration, development,
operation and disposition of mineral interests, (ii) the gathering, marketing,
treating, processing, storage, selling and transporting of any production from
such interests and (iii) ancillary activities that are directly related to,
and necessary in connection with, the activities described in clauses (i) and
(ii) above.
"Mining Related Assets Investment" means any Investment or capital
expenditure (but not including additions to working capital or repayments of
any revolving credit or working capital borrowings) by the Company or any
Restricted Subsidiary of the Company which is related to the business of the
Company and its Restricted Subsidiaries as it is conducted on the date of the
Asset Sale giving rise to the Net Cash Proceeds to be reinvested.
24
-16-
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds 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)
received by the Company or any of its Restricted Subsidiaries from such Asset
Sale net of (a) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, brokerage, legal, accounting and
investment banking fees and sales commissions), (b) taxes paid or payable ((1)
including, without limitation, income taxes reasonably estimated to be actually
payable as a result of any disposition of property within two years of the date
of disposition and (2) after taking into account any reduction in tax liability
due to available tax credits or deductions and any tax sharing arrangements)
and (c) appropriate amounts to be provided by the Company or any Restricted
Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against
any liabilities associated with such Asset Sale and retained by the Company or
any Restricted Subsidiary, as the case may be, after such Asset Sale,
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale.
"Net Equity Proceeds" means (a) in the case of any sale by the Company of
Qualified Capital Stock of the Company, the aggregate net cash proceeds
received by the Company, after payment of expenses, commissions and the like
(including, without limitation, brokerage, legal, accounting and investment
banking fees and commissions) incurred in connection therewith, and (b) in the
case of any exchange, exercise, conversion or surrender of any outstanding
Indebtedness of the Company or any Restricted Subsidiary issued after the Issue
Date for or into shares of Qualified Capital Stock of the Company, the amount
of such Indebtedness (or, if such Indebtedness was issued at an amount less
than the stated principal amount thereof, the accrued amount thereof as
determined in accordance with GAAP) as reflected in the consolidated financial
statements of the Company prepared in accordance with GAAP as of the most
recent date next preceding the date of such exchange, exercise, conversion or
surrender (plus any additional amount required to be paid by the holder of such
Indebtedness to the Company or to any wholly owned Restricted Subsidiary of the
Company upon such exchange, exercise, conversion or surrender and less any and
all payments made to the holders of such Indebtedness, and all other expenses
incurred by the Company
25
-17-
in connection therewith), in each case (a) and (b) to the extent consummated
after the Issue Date.
"Non-U.S. Person" means a person who is not a U.S. person, as defined in
Regulation S.
"Notes" means the Initial Notes and the Exchange Notes treated as a single
class of securities, as amended or supplemented from time to time in accordance
with the terms hereof, that are issued pursuant to this Indenture.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"Offering Memorandum" means the Offering Memorandum dated August 5, 1996,
pursuant to which the Initial Notes were offered, and any supplement thereto.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary of such
Person, or any other officer designated by the Board of Directors serving in a
similar capacity.
"Officers' Certificate" means a certificate signed by two Officers of the
Company.
"Opinion of Counsel" means a written opinion from legal counsel which and
who are acceptable to the Trustee.
"Paying Agent" shall initially be Mellon Securities Trust Co., a New York
chartered trust company, until a successor paying agent for the Notes is
selected in accordance with this Indenture.
"Payment Blockage Period" has the meaning provided in Section 10.02.
"payment default" has the meaning set forth in Section 6.01.
"Permitted Indebtedness" has the meaning set forth in Section 4.12.
"Permitted Investments" means (a) investments in cash and Cash
Equivalents; (b) Investments by the Company or by any Restricted Subsidiary of
the Company in any Person (i) that is or
26
-18-
will become immediately after such Investment a direct or indirect Restricted
Subsidiary of the Company, or (ii) such that such Investment, when combined
with all other outstanding Investments of the Company permitted pursuant to
this clause (ii), would not exceed, in the aggregate, 5% of the Company's
Adjusted Consolidated Net Tangible Assets; (c) any Investments in the Company
by any Restricted Subsidiary of the Company; provided that any Indebtedness
evidencing such Investment is unsecured and subordinated, pursuant to a written
agreement, to the Company's obligations in respect of the Notes and this
Indenture; and (d) Investments made by the Company or by its Restricted
Subsidiaries as a result of an Asset Sale made in compliance with Section 4.16.
"Permitted Liens" means:
(i) Liens on assets or property of the Company that secure Senior
Indebtedness of the Company and Liens on assets or property of a Restricted
Subsidiary that secure Senior Indebtedness of such Restricted Subsidiary,
in each case to the extent such Senior Indebtedness is permitted under
paragraph (b) of the covenant described under Section 4.12 or clause (vi)
of the definition of Permitted Indebtedness;
(ii) Liens securing Indebtedness permitted under clause (iv) of the
definition of Permitted Indebtedness;
(iii) Liens securing Indebtedness of a Person existing at the time
that such Person is merged into or consolidated with the Company or a
Restricted Subsidiary, provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend to any
assets other than those of such Person;
(iv) Liens on property acquired by the Company or a Restricted
Subsidiary, provided that such Liens were in existence prior to the
contemplation of such acquisition and do not extend to any other property;
(v) Liens relating to royalty payments to be made by the Company to
the British Columbia provincial government in respect of copper extracted
and processed from the Kemess South property;
(vi) Liens in respect of Interest Swap Obligations, Commodity
Agreements, Capitalized Lease Obligations or Purchase Money Obligations, in
each case permitted under this Indenture;
27
-19-
(vii) Liens in favor of the Company or any Restricted Wholly Owned
Subsidiary;
(viii) Liens incurred, or pledges and deposits in connection with,
workers' compensation, unemployment insurance and other social security
benefits, and leases, appeal bonds and other obligations of like nature
incurred by the Company or any Restricted Subsidiary in the ordinary course
of business;
(ix) Liens imposed by law, including, without limitation, mechanics',
carriers', warehousemen's, materialmen's, suppliers' and vendors' Liens,
incurred by the Company or any Restricted Subsidiary in the ordinary course
of business; and
(x) Liens for ad valorem, income or property taxes or assessments and
similar charges which either are not delinquent or are being contested in
good faith by appropriate proceedings for which the Company has set aside
on its books reserves to the extent required by GAAP.
"Person" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
"Physical Notes" has the meaning provided in Section 2.01.
"Preferred Stock" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"principal" of any Indebtedness (including the Notes) means the principal
amount of such Indebtedness plus the premium, if any, on such Indebtedness.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.15.
"pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms of this Indenture, a calculation in accordance with
Article 11 of Regulation S-X under the Securities Act, as determined by the
Board of Directors of the Company in consultation with its independent public
accountants.
28
-20-
"Public Equity Offering" means a public offering of Common Stock of the
Company resulting in net proceeds to the Company in excess of US$20 million.
"Purchase Money Obligations" means Indebtedness of the Company and its
Restricted Subsidiaries incurred in connection with the purchase of property or
assets of the business of the Company; provided that any Lien so created in
connection with such incurrence is limited solely to the property or assets so
purchased.
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning specified
in Rule 144A under the Securities Act.
"Rating Agencies" means (i) S&P and (ii) Moody's or (iii) if S&P or
Moody's or both of them are not making publicly available ratings of the Notes,
a nationally recognized U.S. rating agency or agencies, as the case may be,
selected by the Company, which will be substituted for S&P or Moody's or both,
as the case may be.
"Rating Category" means (i) with respect to S&P, any of the following
categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor
categories); (ii) with respect to Moody's, any of the following categories:
Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories);
and (iii) the equivalent of any such categories of S&P or Moody's used by
another Rating Agency, if applicable.
"Rating Event" means that at any time within 90 days (which period shall
be extended so long as the rating of the Notes is under publicly announced
consideration for possible downgrade or for review without indication of
direction by any Rating Agency) after the earlier of the date of public notice
of a Change of Control or of the intention of the Company or of any Person to
effect a Change of Control, the rating of the Notes is decreased by any Rating
Agency by one or more Gradations.
"Record Date" means the Record Dates specified in the Notes, whether or
not a Legal Holiday.
"Redemption Date," when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
29
-21-
"Redemption Price," when used with respect to any Note to be redeemed,
means the price fixed for such redemption pursuant to this Indenture and the
Notes.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company of
Indebtedness Incurred in accordance with Section 4.12 (other than pursuant to
clause (iv), (v), (vi), (vii) or (viii) of the definition of Permitted
Indebtedness), in each case that does not (1) result in an increase in the
aggregate principal amount of Indebtedness of such Person as of the date of
such proposed Refinancing (plus the amount of any premium required to be paid
under the terms of the instrument governing such Indebtedness and plus the
amount of reasonable expenses incurred by the Company in connection with such
Refinancing) or (2) create Indebtedness with (A) a Weighted Average Life to
Maturity that is less than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced or (B) a final maturity earlier than the final
maturity of the Indebtedness being Refinanced; provided that (x) if such
Indebtedness being Refinanced is Indebtedness of the Company, then such
Refinancing Indebtedness shall be Indebtedness solely of the Company, and (y)
if such Indebtedness being Refinanced is subordinate or junior to the Notes,
then such Refinancing Indebtedness shall be subordinate to the Notes at least
to the same extent and in the same manner as the Indebtedness being Refinanced.
"Registrar" shall initially mean the Trustee, as the registration agent
for the Notes, until a successor registrar for the Notes is appointed in
accordance with Section 2.03.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of August 12, 1996 among the Company, the Guarantors and the Initial
Purchasers for the benefit of themselves and the Holders, as the same may be
amended or modified from time to time in accordance with the terms thereof.
"Regulation S" means Regulation S under the Securities Act.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Indebtedness; provided that
if, and for so long as, any
30
-22-
Designated Senior Indebtedness lacks such a representative, then the
Representative for such Designated Senior Indebtedness shall at all times
constitute the holders of a majority in outstanding principal amount of such
Designated Senior Indebtedness in respect of any Designated Senior
Indebtedness.
"Restricted Payment" has the meaning provided in Section 4.10.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided that the Trustee shall be entitled
to request and conclusively rely on an Opinion of Counsel with respect to
whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company that is not an
Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Corporation and its successors.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Senior Indebtedness" means any Indebtedness of the Company (including any
interest accruing subsequent to the filing of a petition of bankruptcy at the
rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable law), whether outstanding on
the Issue Date or thereafter created, incurred or assumed, unless, in the case
of any particular Indebtedness, the instrument creating or evidencing the same
or pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Notes.
Notwithstanding the foregoing, Senior Indebtedness shall not include (i) any
Indebtedness of the Company to a Subsidiary of the Company, (ii) Indebtedness
to, or guaranteed on behalf of, any shareholder, director, officer or employee
of the Company or any Subsidiary (including, without limitation, amounts owed
for compensation), (iii) Indebtedness and other amounts incurred in connection
with obtaining goods, materials or services owing to trade creditors, (iv)
Disqualified Capital Stock, (v) any liability for federal, state, local or
other taxes owed or owing by the Company, (vi) Indebtedness incurred in
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violation of the covenant described in Section 4.12 and (vii) any Indebtedness
which is, by its express terms, subordinated in right of payment to any other
Indebtedness of the Company.
"Subsidiary," with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section Section
77aaa-77bbbb), as amended, as in effect on the date of this Indenture, except
as otherwise provided in Section 9.04.
"Trust Officer" means any officer of the Trustee assigned by the Trustee
to administer this Indenture, or in the case of a successor trustee, an officer
assigned to the department, division or group performing the corporation trust
work of such successor and assigned to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Unrestricted Subsidiary" means any Subsidiary of the Company designated
as an Unrestricted Subsidiary by the Board of Directors of the Company;
provided, however, that (i) the Subsidiary to be so designated (x)(I) has total
assets with a fair market value at the time of such designation of US$1,000 or
less or (II) is being so designated prior to the acquisition by the Company of
such Subsidiary by merger or consolidation with an Unrestricted Subsidiary, and
(y) does not own any Capital Stock of the Company or any Restricted Subsidiary,
(ii) if such Subsidiary is acquired by the Company, such Subsidiary is
designated as an Unrestricted Subsidiary prior to the consummation of such
acquisition, (iii) no Default or Event of Default shall have occurred and be
continuing, (iv) no portion of any Indebtedness or any other obligation
(contingent or otherwise) of such Subsidiary (a) is guaranteed by or is
otherwise the subject of credit support provided by the Company or any of its
Restricted Subsidiaries, (b) is recourse to or obligates the Company or any of
its Restricted Subsidiaries in any way, or (c) subjects any property or asset
of the Company or any of its Restricted Subsidiaries directly or indirectly,
contingently or otherwise, to the satisfaction of such Indebtedness or other
obligation, (v) neither the Company nor any of its
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Restricted Subsidiaries has any contract, agreement, arrangement or
understanding with such Subsidiary other than on terms as favorable to the
Company or such Restricted Subsidiary as those that might be obtained at the
time from Persons that are not Affiliates of the Company, and (vi) neither the
Company nor any of its Restricted Subsidiaries has any obligations (a) to
subscribe for additional shares of Capital Stock of such Subsidiary, or (b) to
maintain or preserve such Subsidiary's financial condition or to cause such
Subsidiary to achieve certain levels of operating results. Any such
designation by the Company's Board of Directors shall be evidenced to the
Trustee by filing with the trustee a certified certificate stating that such
designation complies with the foregoing conditions. The Company's Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such
designation, no Default or Event of Default shall have occurred and be
continuing, including, without limitation, under Sections 4.12 and 4.18,
assuming the incurrence by the Company and its Restricted Subsidiaries at the
time of such designation of all existing Indebtedness and Liens of the
Unrestricted Subsidiary to be so designated as a Restricted Subsidiary. In the
event of any Disposition involving the Company in which the Company is not the
Surviving Person, the Board of Directors of the Surviving Person may (x) prior
to such Disposition, designate any of its Subsidiaries, and any of the
Company's Subsidiaries being acquired pursuant to such Disposition that are not
Restricted Subsidiaries, as Unrestricted Subsidiaries, and (y) after such
Disposition, designate any of its direct or indirect Subsidiaries as an
Unrestricted Subsidiary under the same conditions and in the same manner as the
Company under the terms of this Indenture.
"U.S. Government Obligations" means direct obligations of, and obligations
guaranteed by, the United States of America for the payment of which the full
faith and credit of the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"U.S. Physical Notes" has the meaning provided in Section 2.01.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any
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contingency) to vote in the election of members of the Board of Directors of
such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"wholly owned Subsidiary" of any Person means any Subsidiary of such
Person of which all the outstanding voting securities (other than directors'
qualifying shares or similar legally required de minimis holdings) which
normally have the right to vote in the election of directors are owned by such
Person or any wholly owned Subsidiary of such Person.
"Working Capital Facility" means the existing working capital facility
provided to the Company pursuant to a credit agreement between The Bank of Nova
Scotia and the Company dated February 15, 1996, as the same may be amended from
time to time, and any agreement evidencing the refinancing, modification,
replacement, renewal, restatement, refunding, deferral, extension,
substitution, supplement, reissuance or resale thereof.
SECTION 1.02 Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such 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 or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the Guarantors or
any other obligor on the Notes or the Guarantees.
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All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03 Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP as in effect on the date hereof;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the plural
include the singular;
(v) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision;
(vi) all references to "$" and "US$" shall refer to the lawful
currency of the United States of America; and
(vii) all references to "Cdn.$" shall refer to the lawful currency of
Canada.
ARTICLE TWO
THE NOTES
SECTION 2.01 Form and Dating.
The Initial Notes, the notation thereon relating to the Guarantees and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A hereto. The Exchange Notes, the notation relating to the Guarantees
and the Trustee's certificate of authentication shall be substantially in the
form of Exhibit B hereto. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or depository rule or usage.
The Company, the Guarantors and the Trustee shall approve the form of the Notes
and any notation, legend or
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endorsement on them. Each Note shall be dated the date of its issuance and
shall show the date of its authentication.
The terms and provisions contained in the Notes and the Guarantees,
annexed hereto as Exhibits A and B, shall constitute, and are hereby expressly
made, a part of this Indenture and, to the extent applicable, the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Notes offered and sold (i) to Qualified Institutional Buyers ("QIBs") in
reliance on Rule 144A or (ii) Institutional Accredited Investors (who are not
QIBs) shall be issued initially in the form of one or more permanent global
Notes in registered form, substantially in the form set forth in Exhibit A (the
"Global Note"), deposited with the Trustee, as custodian for the Depositary,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Note may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on Regulation
S shall be issued in the form of permanent certificated Notes in registered
form in substantially the form set forth in Exhibit A (the "Offshore Physical
Notes"). Notes offered and sold in reliance on any exemption from registration
under the Securities Act other than as described in the preceding paragraph
shall be issued, and Notes offered and sold in reliance on Rule 144A or to
Institutional Accredited Investors, as described in the preceding paragraph,
may be issued, in the form of permanent certificated Notes in registered form,
in substantially the form set forth in Exhibit A (the "U.S. Physical Notes").
The Offshore Physical Notes and the U.S. Physical Notes are sometimes
collectively herein referred to as the "Physical Notes."
SECTION 2.02 Execution and Authentication;
Aggregate Principal Amount.
One Officer shall sign, or one Officer and a Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Notes for the Company by manual or facsimile
signature. The Company's seal shall also be reproduced on the Notes. Each
Guarantor shall execute the Guarantees in the manner set forth in Section
11.09.
If an Officer or Secretary whose signature is on a Note was an Officer or
Secretary at the time of such execution but no
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longer holds that office or position at the time the Trustee authenticates the
Note, the Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue in the
aggregate principal amount not to exceed $175,000,000, and (ii) Exchange Notes
from time to time for issue only in exchange for a like principal amount of
Initial Notes, in each case upon written orders of the Company in the form of
an Officers' Certificate. The Officers' Certificate shall specify the amount
of Notes to be authenticated, the date on which the Notes are to be
authenticated and the aggregate principal amount of Notes outstanding on the
date of authentication, whether the Notes are to be Initial Notes or Exchange
Notes, and shall further specify the amount of such Notes to be issued as the
Global Note, Offshore Physical Notes or U.S. Physical Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed $175,000,000,
except as provided in Section 2.07.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the 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 Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with
the Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and integral multiples thereof.
SECTION 2.03 Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented or surrendered for registration of transfer or for exchange
("Registrar"). The Company shall also maintain an office or offices or agency
(which shall be located in the Borough of Manhattan in the City of New York,
State of New York) where Notes may be presented or surrendered for payment
("Paying Agent") and notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company, upon
prior written notice to the Trustee, may appoint one
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or more co-Registrars and one or more additional paying agents reasonably
acceptable to the Trustee. The term "Paying Agent" includes any additional
Paying Agent. Neither the Company nor any Affiliate of the Company may act as
Paying Agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee, in advance, of the
name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee
shall act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. The
Paying Agent or Registrar may resign upon 30 days' notice to the Company.
SECTION 2.04 Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all assets held by the Paying Agent for the payment
of principal of, premium, if any, or interest on the Notes (whether such assets
have been distributed to it by the Company or any other obligor on the Notes),
and the Paying Agent shall notify the Trustee of any Default by the Company (or
any other obligor on the Notes) in making any such payment. The Company at any
time may require a Paying Agent to distribute all assets held by it to the
Trustee and account for any assets disbursed and the Trustee may at any time
during the continuance of any payment Default, upon written request to a Paying
Agent, require such Paying Agent to distribute all assets held by it to the
Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.
SECTION 2.05 Noteholder 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
the Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee is not the Registrar, the Company shall furnish or cause the Registrar
to furnish to the Trustee before each Record Date and at such other times as
the Trustee may
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request in writing a list as of such date and in such form as the Trustee may
reasonably require of the names and addresses of the Holders and the Company
and the Guarantor shall otherwise comply with TIA Section 312(a).
SECTION 2.06 Transfer and Exchange.
Subject to the provisions of Sections 2.16 and 2.17, when Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Notes or to exchange such Notes for an equal principal amount
of Notes of other authorized denominations, the Registrar or co-Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transaction are met; provided, however, that the Notes presented or
surrendered for registration of transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar, duly executed by the Holder thereof
or his attorney, duly authorized in writing. To permit registrations of
transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's or co-Registrar's request. No service
charge shall be made for any registration of transfer or exchange, but the
Company 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 charge payable upon exchanges or
transfers pursuant to Section 2.10, 3.06, 4.15, 4.16 or 9.06); provided, that
in no event shall the Trustee, Registrar or co-Registrar be responsible for the
payment of any such taxes or governmental charges.
The Company shall not be required to issue, and the Company and the
Registrar or co-Registrar shall not be required to register the transfer of or
exchange of any Note (i) during a period beginning at the opening of business
15 days before the mailing of a notice of redemption of Notes and ending at the
close of business on the day of such mailing and (ii) selected for redemption
in whole or in part pursuant to Article Three, except the unredeemed portion of
any Note being redeemed in part.
Any Holder of the Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Notes may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry.
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SECTION 2.07 Replacement Notes.
If a mutilated Note is surrendered to the Trustee or the Company and the
Trustee receive evidence to their satisfaction that a Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note if the conditions for replacement set forth
herein have been met. If required by the Trustee or the Company, such Holder
must provide an affidavit of lost certificate and an indemnity bond or other
indemnity, sufficient in the judgment of both the Company and the Trustee, to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. The Company may charge such Holder for its
reasonable, out-of-pocket expenses in replacing a Note, including reasonable
fees and expenses of counsel. Every replacement Note shall constitute an
additional obligation of the Company.
SECTION 2.08 Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Note effected
by the Trustee in accordance with the provisions hereof and those described in
this Section as not outstanding. Subject to the provisions of Section 2.09, a
Note does not cease to be outstanding because the Company, the Guarantors or
any of their respective Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives an Opinion of Counsel that the replaced Note is held by a bona
fide purchaser. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date, the Paying Agent holds U.S.
Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned
by the Company, the Guarantors or
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any of their respective Affiliates shall be considered as though they are 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 Trust Officer of the Trustee actually knows are so owned shall be
so considered.
SECTION 2.10 Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon receipt of a written order
of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate upon receipt of a written order of the Company pursuant to Section
2.02 definitive Notes in exchange for temporary Notes.
SECTION 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for transfer, exchange or payment. The Trustee, or at the
direction of the Trustee, the Registrar or the Paying Agent, and no one else,
shall cancel all Notes surrendered for transfer, exchange, payment, replacement
or cancellation and shall retain or destroy, in accordance with its normal
practice, cancelled Notes (subject to the record retention requirement of the
Exchange Act). If such Notes are destroyed, certification of the destruction
of all cancelled Notes shall be delivered to the Company. Subject to Section
2.07, the Company may not issue new Notes to replace Notes that it has paid or
that have been delivered to the Trustee for cancellation. If the Company or
the Guarantors shall acquire any of the Notes, such acquisition shall not
operate as a redemption or satisfaction of the Indebtedness represented by such
Notes unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.
SECTION 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest to the
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Persons who are Holders on a subsequent special record date, which date shall
be the fifteenth day next preceding the date fixed by the Company for the
payment of defaulted interest or the next succeeding Business Day if such date
is not a Business Day, in each case at the rate provided in Section 4.01
hereof. At least 15 days before the subsequent special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or caused to be mailed to each
Holder, as of a recent date selected by the Company, with a copy to the
Trustee, a notice that states the subsequent special record date, the payment
date and the amount of defaulted interest, and interest payable on such
defaulted interest, if any, to be paid.
SECTION 2.13 CUSIP Number.
The Company in issuing the Notes may use one or more "CUSIP" numbers, and
if so, the Trustee shall use the CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided that no representation is
hereby deemed to be made by the Trustee as to the correctness or accuracy of
the CUSIP numbers printed in the notice or on the Notes, and that reliance may
be placed only on the other identification numbers printed on the Notes. The
Company shall promptly notify the Trustee of any change in the CUSIP numbers.
SECTION 2.14 Deposit of Moneys.
Prior to 11:00 a.m. New York City time on each Interest Payment Date and
Maturity Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or Maturity Date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Holders on such
Interest Payment Date or Maturity Date, as the case may be.
SECTION 2.15 Restrictive Legends.
Each Global Note and Physical Note that constitutes a Restricted Security
shall bear the following legend (the "Private Placement Legend") on the face
thereof until August 12, 1999, unless otherwise agreed by the Company and the
Holder thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
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PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN
THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE ACT, (C) INSIDE THE UNITED STATES TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS
FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE OR TRANSFER
AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE OR TRANSFER AGENT FOR THIS
SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF
AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF THE SECURITY, IF THE PROPOSED TRANSFEREE IS AN
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE TRUSTEE OR TRANSFER AGENT AND THE ISSUER SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS ANY OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE ACT.
Each Global Note shall also bear the following legend on the face thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY TO A
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NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE DEPOSITORY, OR BY
THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY SUCH NOMINEE
TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.17 OF THE INDENTURE.
SECTION 2.16 Book-Entry Provisions
for Global Security.
(a) The Global Note initially shall (i) be registered in the name of the
Depositary or the nominee of such Depositary, (ii) be delivered to the Trustee
as custodian for such Depositary and (iii) bear legends as set forth in Section
2.15.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Note, and the Depositary may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of the Global
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Note.
(b) Transfers of the Global Note shall be limited to transfers in whole,
but not in part, to the Depositary, its
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successors or their respective nominees. Interests of beneficial owners in the
Global Note may be transferred or exchanged for Physical Notes in accordance
with the rules and procedures of the Depositary and the provisions of Section
2.17. In addition, Physical Notes shall be transferred to all beneficial
owners in exchange for their beneficial interests in the Global Note if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for the Global Note and a successor depositary is not appointed by
the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a written request
from the Depositary to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver,
one or more Physical Notes of like tenor and amount.
(d) In connection with the transfer of the entire Global Note to beneficial
owners pursuant to paragraph (b), the Global Note shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, and
the Trustee shall authenticate and deliver, to each beneficial owner identified
by the Depositary in exchange for its beneficial interest in the Global Note, an
equal aggregate principal amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Security delivered in
exchange for an interest in the Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section
2.17, bear the legend regarding transfer restrictions applicable to the Physical
Notes set forth in Section 2.15.
(f) The Holder of the Global Note may grant proxies and otherwise authorize
any person, including Agent Members and persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.
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SECTION 2.17 Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S.
Persons. The following provisions shall apply with respect to the registration
of any proposed transfer of a Note constituting a Restricted Security to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note constituting
a Restricted Security, whether or not such Note bears the Private Placement
Legend, if (x) the requested transfer is after August 12, 1999 or (y) (1)
in the case of a transfer to an Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons), the proposed transferee has
delivered to the Registrar a certificate substantially in the form of
Exhibit C hereto or (2) in the case of a transfer to a Non-U.S. Person, the
proposed transferor has delivered to the Registrar a certificate
substantially in the form of Exhibit D hereto; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depositary's and the Registrar's
procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of outstanding Physical Notes) a
decrease in the principal amount of the Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note to be
transferred, and (b) the Company shall execute and the Trustee shall
authenticate and deliver one or more Physical Notes of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with respect
to the registration of any proposed transfer of a Note constituting a Restricted
Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for on
the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the Note for
its own account or an
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account with respect to which it exercises sole investment discretion and
that it and any such account is a QIB within the meaning of Rule 144A, and
is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as
it has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to
be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the Global Note, upon receipt by the Registrar
of instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Global Note
in an amount equal to the principal amount of the Physical Notes to be
transferred, and the Trustee shall cancel the Physical Notes so
transferred.
(c) Private Placement Legend. Upon the transfer, exchange or replacement
of Notes not bearing the Private Placement Legend, the Registrar shall deliver
Notes that do not bear the Private Placement Legend. Upon the transfer,
exchange or replacement of Notes bearing the Private Placement Legend, the
Registrar shall deliver only Notes that bear the Private Placement Legend unless
(i) the circumstance contemplated by paragraph (a)(i)(x) of this Section 2.17
exist or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(d) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.16 or this Section 2.17.
The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Registrar.
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ARTICLE THREE
REDEMPTION
SECTION 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to Paragraph 6 of the
Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.01 at
least 30 days before the Redemption Date (or at least 45 days if the Company
requests the Trustee to give notice to the Holders pursuant to Section 3.03
hereof) (unless a shorter notice period shall be satisfactory to the Trustee,
as evidenced in a writing signed on behalf of the Trustee), together with an
Officers' Certificate stating that such redemption shall comply with the
conditions contained herein and in the Notes.
SECTION 3.02 Selection of Notes To Be Redeemed
If fewer than all of the Notes are to be redeemed, the Trustee shall select
the Notes to be redeemed in compliance with the requirements of the principal
national securities exchange, if any, on which such Notes are listed or, if such
Notes are not then listed on a national securities exchange, on a pro rata
basis, by lot or in such other fair and reasonable manner chosen at the
discretion of the Trustee; provided, however, that if a partial redemption is
made with the proceeds of a Public Equity Offering, selection of the Notes or
portion thereof for redemption shall be made by the Trustee only on a pro rata
basis, unless such method is otherwise prohibited. Not less than 30 days nor
more than 60 days prior to the Redemption Date, the Trustee shall make the
selection from the Notes outstanding and not previously called for redemption
and shall promptly notify the Company 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 in denominations of $1,000 or
less may be redeemed only in whole; except that if all of the Notes of the
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. Unless the Company
defaults in making the redemption payment, interest on Notes or portions thereof
called for redemption ceases to accrue on and after the Redemption Date, and the
only remaining right of the Holders of such Notes is to receive payment of the
Redemption Price plus accrued interest, if any, upon surrender to the Paying
Agent
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of the Notes redeemed. The Trustee may select for redemption portions (equal to
$1,000 or any integral multiple thereof) of the principal of Notes that have
denominations larger than $1,000. Provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption.
SECTION 3.03 Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail or cause to be mailed a notice of redemption by first class
mail, postage prepaid, to each Holder whose Notes are to be redeemed to such
Holder's registered address, with a copy to the Trustee and any Paying Agent.
At the Company's written request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
Each notice for redemption shall identify the Notes to be redeemed and
shall state:
(i) the Redemption Date;
(ii) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(iii) the name and address of the Paying Agent or the place or places
where such Notes are to be surrendered for payment;
(iv) the subparagraph of the Notes pursuant to which such redemption
is being made;
(v) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price plus accrued interest, if any;
(vi) that, unless the Company defaults in making the redemption
payment, interest on Notes or portions thereof called for redemption ceases
to accrue on and after the Redemption Date, and the only remaining right of
the Holders of such Notes is to receive payment of the Redemption Price
plus accrued interest, if any, upon surrender to the Paying Agent of the
Notes redeemed;
(vii) 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, and upon surrender and cancellation of such Note, a new Note or Notes
in the aggregate principal
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amount equal to the unredeemed portion thereof will be issued in the name
of the Holder thereof; and
(viii) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Notes to be redeemed and the
aggregate principal amount of Notes to be outstanding after such partial
redemption; and
(ix) the CUSIP number, if any, listed on such Note or printed on the
Notes, provided, that such notice shall specify that no representation is
made as to the correctness or accuracy of such CUSIP number.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall have delivered to the Trustee, at least 45 days prior to the Redemption
Date, an Officer's Certificate, requesting that the Trustee give such notice
and setting forth the information to be stated in such notice.
SECTION 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03, Notes
called for redemption become due and payable on the Redemption Date and at the
Redemption Price plus accrued interest, if any. Upon surrender to the Trustee
or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price (which shall include accrued interest thereon to the
Redemption Date), but installments of interest, the maturity of which is on or
prior to the Redemption Date, shall be payable to Holders of record at the
close of business on the relevant record dates referred to in the Notes.
SECTION 3.05 Deposit of Redemption Price.
On or before the Redemption Date, the Company shall deposit with the
Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price plus
accrued interest, if any, of all Notes to be redeemed on that date. The Paying
Agent shall promptly return to the Company any U.S. Legal Tender so deposited
which is not required for that purpose.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be redeemed will cease to accrue on and after
the applicable
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Redemption Date, whether or not such Notes are presented for payment.
SECTION 3.06 Notes Redeemed in Part.
Upon surrender of a Note that is to be redeemed in part, the Trustee shall
authenticate for the Holder a new Note or Notes equal in principal amount to
the unredeemed portion of the Note surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01 Payment of Notes.
The Company shall pay the principal of and interest on the Notes on the
dates and in the manner provided in the Notes and in this Indenture. An
installment of principal of or interest on the Notes shall be considered paid
on the date it is due if the Trustee or Paying Agent (other than the Company or
an Affiliate of the Company) holds on that date U.S. Legal Tender designated
for and sufficient to pay the installment in full and is not prohibited from
paying such money to the Holders pursuant to the terms of this Indenture.
The Company shall pay, to the extent such payments are lawful, interest on
overdue principal and on overdue installments of interest (without regard to
any applicable grace periods) from time to time on demand at the rate borne by
the Notes plus 2% per annum. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months.
Notwithstanding anything to the contrary contained in this Indenture, the
Company may, to the extent it is required to do so by law, deduct or withhold
income or other similar taxes imposed by the United States of America from
principal or interest payments hereunder.
If the Company is required to make any withholding or deduction for or on
account of any Canadian taxes from any payment made under or with respect to the
Notes, the Company will pay such Additional Amounts as may be necessary so that
the net amount received by each Holder (including Additional Amounts) will not
be less than the amount the Holder would have received had such Canadian taxes
not been withheld or deducted; provided that no
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Additional Amounts will be payable with respect to a payment made to a Holder
(an "Excluded Holder") (i) with which the Company does not deal at arm's length
(within the meaning of the Income Tax Act (Canada)) at the time of making such
payment, or (ii) which is subject to such Canadian taxes by reason of its being
connected with Canada otherwise than by the mere holding of the Notes or the
receipt of payments thereunder.
The Company will also (i) make such withholding or deduction and (ii)
remit the full amount deducted or withheld to the relevant authority in
accordance with applicable law. The Company will furnish, within 30 days after
the date the payment of any Canadian taxes is due pursuant to applicable law,
to the Holders of Notes that are outstanding on the date of the withholding or
deduction copies of tax receipts evidencing that such payment has been made by
the Company. The Company will indemnify and hold harmless each Holder of Notes
that are outstanding on the date of the withholding or deduction (other than an
Excluded Holder) and upon written request reimburse each such Holder for the
amount of (i) any Canadian taxes so levied or imposed and paid by such Holder
as a result of payments made under or with respect to the Notes, (ii) any
liability (including penalties, interest and expense) arising therefrom or with
respect thereto, and (iii) any Canadian taxes imposed with respect to any
reimbursement under clause (i) or (ii) above.
At least 30 days prior to each date on which any payment under or with
respect to the Notes is due and payable, if the Company becomes obligated to
pay Additional Amounts with respect to such payment, the Company will deliver
to the Trustee an Officers' Certificate stating the fact that such Additional
Amounts will be payable, and the amounts so payable and will set forth such
other information as is necessary to enable the Trustee to pay such Additional
Amounts to the Holders on the payment date.
SECTION 4.02 Maintenance of Office or Agency.
The Company shall maintain the office or agency located in the Borough of
Manhattan, State of New York as required under Section 2.03. The Company shall
give prior written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 13.02.
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SECTION 4.03 Corporate Existence.
Except as otherwise permitted by Article Five and Section 4.16, the Company
shall do or cause to be done, at its own cost and expense, all things necessary
to preserve and keep in full force and effect its corporate existence and the
corporate existence of each of its Restricted Subsidiaries in accordance with
the respective organizational documents of each such Restricted Subsidiary and
the material rights (charter and statutory) and franchises of the Company and
each such Restricted Subsidiary; provided, however, that the Company shall not
be required to preserve, with respect to itself, any material right or franchise
and, with respect to any of its Restricted Subsidiaries, any such existence,
material right or franchise, if the Board of Directors of the Company shall
determine in good faith that the preservation thereof is no longer desirable in
the conduct of the business of the Company and the Restricted Subsidiaries,
taken as a whole.
SECTION 4.04 Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
properties of it or any of its Subsidiaries; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings or where the failure to
effect such payment is not adverse in any material respect to the Holders of the
Notes.
SECTION 4.05 Maintenance of Properties and Insurance.
(a) The Company shall, and shall cause each of its Restricted Subsidiaries
to, maintain its material operating properties in appropriate condition (subject
to ordinary wear and tear and taking into account the historical and intended
use of any such properties) and make appropriate repairs, renewals and
replacements thereto, all as in the sole judgment of the Company and its
Management may be necessary so that business carried on in connection therewith
may be properly conducted at all times unless the failure to so maintain such
properties would not have a material adverse effect on the financial condition
of the Company and its Restricted Subsidiaries taken as a whole; provided,
however, that nothing in this Section 4.05 shall prevent the Company or any of
its Restricted Subsidiaries from discontinuing or
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abandoning the operation and maintenance of any of such properties, if such
discontinuance or abandonment is, in the sole judgment of Management of the
Company or the Restricted Subsidiary, as the case may be, desirable in the
conduct of their respective businesses and does not materially affect the
ability of the Company to repay principal on the Securities.
(b) The Company shall provide or cause to be provided, for itself and each
of its Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the good faith judgment of the
Board of Directors of the Company, are adequate and appropriate for the conduct
of the business of the Company and such Restricted Subsidiaries in a prudent
manner, with reputable insurers or with the government of the United States of
America or an agency or instrumentality thereof, in such amounts, with such
deductibles, and by such methods as shall be customary, in the good faith
judgment of the Board of Directors of the Company, for companies similarly
situated in the industry.
SECTION 4.06 Compliance Certificate;
Notice of Default.
(a) The Company shall deliver to the Trustee, within 90 days after the end
of the Company's fiscal year, an Officers' Certificate stating that a review of
its activities and the activities of its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether each of the Company and its Subsidiaries 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 such Officer's knowledge each of the Company and its Subsidiaries during
such preceding fiscal year has kept, observed, performed and fulfilled each and
every such covenant and no Default or Event of Default occurred during such year
and at the date of such certificate there is no Default or Event of Default that
has occurred and is continuing or, if such signers do know of such Default or
Event of Default, the certificate shall describe such Default or Event of
Default and its status. The Officers' Certificate shall also notify the Trustee
should the Company elect to change the manner in which it fixes its fiscal year
end.
(b) The annual financial statements delivered pursuant to Section 4.08
shall be accompanied by a written report of the Company's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit of such financial statements nothing has come to their
attention that
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would lead them to believe that the Company has violated any provisions of
Article Four, Five or Six of this Indenture insofar as they relate to accounting
matters 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) (i) If any Default or Event of Default has occurred and is continuing
or (ii) if any Holder seeks to exercise any remedy hereunder with respect to a
claimed Default under this Indenture or the Notes, the Company shall deliver to
the Trustee, at its address set forth in Section 13.02 hereof, by registered or
certified mail or by telegram, telex or facsimile transmission followed by hard
copy by registered or certified mail an Officers' Certificate specifying such
event, notice or other action within five Business Days of its becoming aware
of such occurrence.
SECTION 4.07 Compliance with Laws.
The Company shall comply, and shall cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America and Canada, all states, provinces
and municipalities thereof, and of any governmental department, commission,
board, regulatory authority, bureau, agency and instrumentality of the
foregoing, in respect of the conduct of their respective businesses and the
ownership of their respective properties, except for such noncompliances as are
not in the aggregate reasonably likely to have a material adverse effect on the
financial condition or results of operations of the Company and its Restricted
Subsidiaries, taken as a whole.
SECTION 4.08 SEC Reports.
(a) Upon consummation of the Exchange Offer and the issuance of the
Exchange Notes, the Company (at its own expense) shall file with the SEC when
due as required by the Exchange Act and shall file with the Trustee within 15
days after it files them with the SEC copies of the quarterly and annual reports
and of the information, documents, and other reports (or copies of such portions
of any of the foregoing as the SEC may by rules and regulations prescribe) to be
filed pursuant to Section 13 or 15(d) of the Exchange Act (without regard to
whether the Company is subject to the requirements of such Section 13 or 15(d)
of the Exchange Act); provided that prior to the consummation of the Exchange
Offer and the issuance of the Exchange Notes, the Company (at its own expense)
will mail to the Trustee and Holders in
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accordance with paragraph (b) of this Section 4.08 substantially the same
information that would have been required by the foregoing documents within 15
days of when any such document would otherwise have been required to be filed
with the SEC. Upon qualification of this Indenture under the TIA, the Company
shall also comply with the provisions of TIA Section 314(a).
(b) At the Company's expense, the Company shall cause an annual report if
furnished by it to stockholders generally and each quarterly or other financial
report if furnished by it to stockholders generally to be filed with the Trustee
and mailed to the Holders at their addresses appearing in the register of Notes
maintained by the Registrar at the time of such mailing or furnishing to
stockholders.
(c) The Company shall provide to any Holder any information reasonably
requested by such Holder concerning the Company and the Guarantors (including
financial statements) necessary in order to permit such Holder to sell or
transfer Notes in compliance with Rule 144A under the Securities Act.
SECTION 4.09 Waiver of Stay, Extension
or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.10 Limitation on Restricted Payments.
Neither the Company nor any of its Restricted Subsidiaries shall, directly
or indirectly, (a) declare or pay any dividend or make any distribution (other
than dividends or distributions payable solely in Qualified Capital Stock of the
Company) on or in respect of shares of the Company's Capital Stock to holders of
such Capital Stock, (b) purchase, redeem or otherwise acquire or retire for
value any Capital Stock of the Company, or
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any warrants, rights or options to purchase or acquire shares of any class of
such Capital Stock, other than through the exchange therefor solely of Qualified
Capital Stock of the Company or warrants, rights or options to acquire Qualified
Capital Stock of the Company, (c) make any principal payment on, purchase,
defease, redeem, prepay, decrease or otherwise acquire or retire for value,
prior to any scheduled final maturity, scheduled repayment or scheduled sinking
fund payment, any Indebtedness of the Company that is subordinate or junior in
right of payment to the Notes, or (d) make any Investment (other than Permitted
Investments) in any Person (each of the foregoing prohibited actions set forth
in clauses (a), (b), (c) and (d) being referred to as a "Restricted Payment"),
if at the time of such proposed Restricted Payment or immediately after giving
effect thereto, (i) a Default or an Event of Default has occurred and is
continuing or would result therefrom, or (ii) the Company is not able to Incur
at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.12(b) (as if such Restricted Payment had been made as
of the last day of the Four Quarter Period), or (iii) the aggregate amount of
Restricted Payments (including such proposed Restricted Payment) made subsequent
to the Issue Date (the amount expended for such purposes, if other than in cash,
being the fair market value of such property as determined reasonably and in
good faith by the board of directors of the Company) exceeds or would exceed the
sum of: (x) 50% of the cumulative Consolidated Net Income (or if cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company
during the period (treating such period as a single accounting period)
subsequent to the Issue Date and prior to the date of the making of such
Restricted Payment; and (y) 100% of the aggregate Net Equity Proceeds received
by the Company from any Person (other than from a Subsidiary of the Company)
from the issuance and sale subsequent to the Issue Date of Qualified Capital
Stock of the Company (excluding (A) any Qualified Capital Stock of the Company
paid as a dividend on any Capital Stock of the Company and (B) any Qualified
Capital Stock of the Company with respect to which the purchase price thereof
has been financed directly or indirectly using funds (i) borrowed from the
Company or from any of its Subsidiaries, unless and until and to the extent such
borrowing is repaid, or (ii) contributed, extended, guaranteed or advanced by
the Company or by any of its Subsidiaries (including, without limitation, in
respect of any employee stock ownership or benefit plan)).
Notwithstanding the foregoing, these provisions do not prohibit: (1) the
payment of any dividend or making of any distribution within 60 days after the
date of its declaration if the dividend or distribution would have been
permitted on the date
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of declaration; (2) the acquisition of Capital Stock of the Company or warrants,
rights or options to acquire Capital Stock of the Company either (i) solely in
exchange for shares of Qualified Capital Stock of the Company or warrants,
rights or options to acquire Qualified Capital Stock of the Company, or (ii)
through the application of net proceeds of a substantially concurrent sale for
cash (other than to a Subsidiary of the Company) of shares of Qualified Capital
Stock of the Company or warrants, rights or options to acquire Qualified Capital
Stock of the Company; and (3) the acquisition of any Indebtedness of the Company
that is subordinate or junior in right of payment to the Notes either (i) solely
in exchange for shares of Qualified Capital Stock of the Company, or (ii)
through the application of net proceeds of a substantially concurrent sale for
cash (other than to a Subsidiary of the Company) of (A) shares of Qualified
Capital Stock of the Company or warrants, rights or options to acquire Qualified
Capital Stock of the Company or (B) Refinancing Indebtedness; provided, however,
that in the case of clauses (2) and (3) of this paragraph, no Default or Event
of Default shall have occurred and be continuing at the time of such payment or
as a result thereof. In determining the aggregate amount of Restricted Payments
made subsequent to the Issue Date, amounts expended pursuant to clauses (1) and
(2) shall, in each case, be included in such calculation.
Not later than the date of making any Restricted Payment, the Company shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment complies with this Indenture and setting forth in reasonable detail the
basis upon which the required calculations were computed, which calculations may
be based upon the Company's latest available internal quarterly financial
statements.
SECTION 4.11 Limitation on Transactions
with Affiliates.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into any transaction or series of transactions
with or for the benefit of any of their Affiliates (each an "Affiliate
Transaction"), except in good faith and on terms that are no less favorable to
the Company or such Subsidiary, as the case may be, than those that could have
been obtained in a comparable transaction on an arm's-length basis from a Person
not an Affiliate of the Company or such Subsidiary. All Affiliate Transactions
(and each series of related Affiliate Transactions which are similar or part of
a common plan) involving aggregate payments or other property with a fair market
value in excess of $5 million shall be approved by the board of directors of the
Company, such approval to be evidenced by a Board Resolution
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stating that such board of directors has determined that such transaction
complies with the foregoing provisions. If the Company or any Subsidiary of
the Company enters into an Affiliate Transaction (or a series of related
Affiliate Transactions related to a common plan) that involves an aggregate fair
market value of more than $15 million, the Company or such Subsidiary shall,
prior to the consummation thereof, obtain a favorable opinion as to the fairness
of such transaction or series of related transactions to the Company or the
relevant Subsidiary, as the case may be, from a financial point of view, from an
Independent Financial Advisor and file the same with the Trustee.
Notwithstanding the foregoing, the restrictions set forth in this covenant shall
not apply to customary directors' fees, indemnification and similar
arrangements.
SECTION 4.12 Limitation on Indebtedness.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, Incur any Indebtedness, including,
without limitation, any Acquired Indebtedness (other than Permitted
Indebtedness).
(b) Notwithstanding the foregoing limitations, in addition to Permitted
Indebtedness, the Company may Incur Indebtedness (including, without limitation,
Acquired Indebtedness) and Restricted Subsidiaries of the Company may Incur
Acquired Indebtedness, in each case, if (i) no Default or Event of Default shall
have occurred and be continuing on the date of the proposed Incurrence thereof
or would result as a consequence of such proposed Incurrence and (ii)
immediately after giving effect to such proposed Incurrence, (x) the
Consolidated Fixed Charge Coverage Ratio of the Company is at least equal to 2.0
to 1.0 if such proposed Incurrence is on or prior to December 31, 1998 at least
equal to 2.5 to 1.0 if such proposed Incurrence is after December 31, 1998 and
on or prior to December 31, 1999, and at least equal to 2.75 to 1.0 if such
proposed Incurrence occurs after December 31, 1999 and (y) the Adjusted
Consolidated Net Tangible Assets of the Company are at least equal to 150% of
the aggregate consolidated Indebtedness of the Company.
(c) The Company will not, directly or indirectly, in any event Incur any
Indebtedness which by its terms (or by the terms of any agreement governing such
Indebtedness) is subordinated to any other Indebtedness of the Company ranking
pari passu with the Notes unless such Indebtedness is also by its terms (or by
the terms of any agreement governing such Indebtedness) made expressly
subordinate to the Notes to the same extent and in the same manner as such
Indebtedness is subordinated to such pari passu
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Indebtedness pursuant to any subordination provisions that are most favorable to
the holders of any such pari passu Indebtedness of the Company.
"Permitted Indebtedness" means, without duplication, each of the following:
(i) Indebtedness under the Notes, this Indenture and the Guarantee;
(ii) Commodity Agreements of the Company; provided, however, that such
Commodity Agreements are entered into to reduce the exposure of the Company
and its Restricted Subsidiaries to fluctuations in the prices of
commodities, in each case consistent with past practice of the Company;
(iii) Interest Swap Obligations and Foreign Exchange Obligations of
the Company; provided, however, that such Interest Swap Obligations and
Foreign Exchange Obligations are entered into to protect the Company and
its Restricted Subsidiaries from fluctuations in interest or exchange rates
on Indebtedness Incurred in accordance with this Indenture to the extent
the notional principal amount of such Interest Swap Obligation or Foreign
Exchange Obligation does not exceed the principal amount of the
Indebtedness to which such Obligation relates; and provided, further, that
the Company may enter into Foreign Exchange Obligations to protect the
Company and its Restricted Subsidiaries from fluctuations in exchange rates
related to the operating costs of the Company and its Restricted
Subsidiaries, in each case consistent with past practice of the Company;
(iv) Indebtedness under the Working Capital Facility not to exceed
Cdn.$28 million, less any amounts repaid from Net Cash Proceeds pursuant to
Section 4.16;
(v) Capitalized Lease Obligations and Purchase Money Obligations of
the Company or any Restricted Subsidiary not to exceed $20 million
outstanding at any one time;
(vi) additional Indebtedness Incurred by the Company not to exceed $25
million outstanding at any time;
(vii) Indebtedness of a direct or indirect Restricted Subsidiary of
the Company to the Company or to a direct or indirect wholly owned
Restricted Subsidiary of the Company for so long as such Indebtedness is
held by the Company or a direct or indirect wholly owned Restricted
Subsidiary of the
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Company in each case subject to no Lien held by a Person other than the
Company or a direct or indirect wholly owned Restricted Subsidiary of the
Company; provided that if as of any date any Person other than the Company
or a direct or indirect wholly owned Restricted Subsidiary of the Company
owns or holds any such Indebtedness or holds a Lien in respect of such
Indebtedness, such date shall be deemed the Incurrence of Indebtedness not
constituting Permitted Indebtedness by the issuer of such Indebtedness;
(viii) Indebtedness of the Company to a direct or indirect wholly
owned Restricted Subsidiary of the Company for so long as such Indebtedness
is held by a direct or indirect wholly owned Restricted Subsidiary of the
Company in each case subject to no Lien; provided that (a) any Indebtedness
of the Company to any direct or indirect Restricted Subsidiary of the
Company is unsecured and subordinated, pursuant to a written agreement, to
the Company's obligations under this Indenture and the Notes, and (b) if as
of any date any Person other than a direct or indirect wholly owned
Restricted Subsidiary of the Company owns or holds any such Indebtedness or
any Person holds a Lien in respect of such Indebtedness, such date shall be
deemed the Incurrence of Indebtedness not constituting Permitted
Indebtedness under this clause (viii) by the issuer of such Indebtedness;
(ix) guarantees by Restricted Subsidiaries of the Company of
Indebtedness of the Company (other than Permitted Indebtedness) Incurred on
or after the Issue Date; provided that such Indebtedness was Incurred in
compliance with this Section 4.12; and
(x) Refinancing Indebtedness.
SECTION 4.13 Limitation on Dividend and
Other Payment Restrictions
Affecting Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock; (b) make loans or advances or pay any Indebtedness or other
obligation owed to the Company or to any Restricted Subsidiary of the Company;
or (c) transfer any of its property or assets to the Company or to any
Restricted Subsidiary of the Company (each such encumbrance or restriction in
clause (a),
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(b), or (c) a "Payment Restriction"), except for such encumbrances or
restrictions existing under or by reason of: (1) applicable law; (2) this
Indenture; (3) customary non-assignment provisions of any lease governing a
leasehold interest of any Restricted Subsidiary of the Company; (4) any
instrument governing Acquired Indebtedness Incurred in accordance with paragraph
(b) of Section 4.12; provided that such encumbrance or restriction is not, and
will not be, applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or asset of the Person, becoming
a Restricted Subsidiary of the Company; (5) agreements existing on the Issue
Date to the extent and in the manner such agreements are in effect on the Issue
Date; (6) restrictions imposed by Liens granted pursuant to clauses (v) and
(vii)-(ix) of the definition of Permitted Liens solely to the extent such Liens
encumber the transfer or other disposition of the assets subject to such Liens;
(7) any restriction or encumbrance contained in contracts for the sale of assets
to be consummated in accordance with this Indenture solely in respect of the
assets to be sold pursuant to such contract; or (8) any encumbrance or
restriction contained in Refinancing Indebtedness Incurred to Refinance the
Indebtedness issued, assumed or Incurred pursuant to an agreement referred to in
clause (2), (4) or (5) above; provided that the provisions relating to such
encumbrance or restriction contained in any such Refinancing Indebtedness are no
less favorable to the Company or to the Holders in any material respect in the
reasonable and good faith judgment of the board of directors of the Company than
the provisions relating to such encumbrance or restriction contained in
agreements referred to in such clause (2), (4) or (5).
SECTION 4.14 Prohibition on Incurrence of
Senior Subordinated Indebtedness.
The Company shall not incur or suffer to exist Indebtedness that is senior
in right of payment to the Notes and subordinate in right of payment to any
other Indebtedness of the Company.
SECTION 4.15 Change of Control.
(a) Upon the occurrence of a Change of Control Triggering Event, the
Company will be required to offer to repurchase (the "Change of Control Offer")
all of the outstanding Notes pursuant to the offer described below, at a
purchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of repurchase.
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(b) Within 30 days following the date upon which the Change of Control
Triggering Event occurred, the Company must send, by first class mail, a notice
to each Holder, with a copy to the Trustee, which notice shall govern the terms
of the Change of Control Offer. Such notice will state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes tendered and not withdrawn will be accepted
for payment;
(2) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be no earlier than 30 days nor later than 60
days from the date such notice is mailed, other than as may be required by
law) (the "Change of Control Payment Date"); provided that the Change of
Control Payment Date for the Notes shall be a date subsequent to any
payment dates for the purchase or other repayment of Senior Indebtedness
having similar provisions;
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any
Note accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Note purchased pursuant to a
Change of Control Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day prior to the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the
Change of Control Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of the
Notes the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased;
(7) that Holders whose Notes are purchased only in part will be issued
new Notes in a principal amount equal to the unpurchased portion of the
Notes surrendered; provided that each Note purchased and each new Note
issued shall be in an
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original principal amount of $1,000 or integral multiples thereof; and
(8) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall (i)
accept for payment Notes or portions thereof tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender in
immediately available funds sufficient to pay the purchase price plus accrued
interest, if any, of all Notes so tendered and (iii) deliver to the Trustee
Notes so accepted together with an Officers' Certificate stating the Notes or
portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to the Holders of Notes so accepted payment in an amount equal to
the purchase price plus accrued interest, if any, and the Trustee shall promptly
authenticate and mail to such Holders new Notes equal in principal amount to any
unpurchased portion of the Notes surrendered. Any Notes not so accepted shall
be promptly mailed by the Company to the Holder thereof. For purposes of this
Section 4.15, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Notes pursuant to a Change of
Control Offer shall be returned by the Trustee to the Company.
The Change of Control Offer is required to remain open for at least 20
Business Days and until the close of business on the Change of Control Payment
Date.
(c) A Change of Control Triggering Event requires both the occurrence of a
Change of Control and a Rating Event. A Rating Event will occur if the rating
on the Notes is downgraded by one or more Gradations at any time within a
specified 90-day period (subject to extension under certain circumstances). See
"Change of Control," "Change of Control Triggering Event" and "Rating Event" of
Section 1.01.
(d) If an offer is made to repurchase the Notes pursuant to a Change of
Control Offer, the Company will comply with all tender offer rules under state
and Federal Securities laws, including, but not limited to, Section 14(e) under
the Exchange Act and Rule 14e-1 thereunder, to the extent applicable to such
offer.
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SECTION 4.16 Limitation on Sale of Assets.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate any Asset Sale unless (i) such Asset Sale is for at
least fair market value, (ii) at least 85% of the consideration therefrom
received by the Company or such Restricted Subsidiary is in the form of cash or
Cash Equivalents, and (iii) the Company or such Subsidiary shall apply the Net
Cash Proceeds of such Asset Sale within 180 days of receipt thereof as follows:
(a) to repay any Indebtedness secured by the assets involved in such
Asset Sale together with a concomitant permanent reduction in the amount of
such Indebtedness (including a permanent reduction in committed amounts
therefor in the case of any revolving credit facility so repaid); and
(b) with respect to any Net Cash Proceeds remaining after application
pursuant to the preceding paragraph (a) (the "Available Proceeds Amount"),
the Company shall make an offer to purchase (the "Asset Sale Offer") from
all Holders up to a maximum principal amount (expressed as an integral
multiple of $1,000) of Notes equal to the Available Proceeds Amount at a
purchase price equal to 100% of the principal amount thereof plus accrued
and unpaid interest thereon, if any, to the date of purchase; provided,
that the Company will not be required to apply pursuant to this paragraph
(b) Net Cash Proceeds received from any Asset Sale if, and only to the
extent that, such Net Cash Proceeds are (i) applied to or invested in
Mining Related Assets, within 180 days of such Asset Sale or (ii) applied
on or prior to the date of such Asset Sale, to the purchase, redemption,
payment or other permanent reduction of then outstanding Senior
Indebtedness. If at any time any non-cash consideration received by the
Company or any Restricted Subsidiary of the Company, as the case may be, in
connection with any Asset Sale is converted into or sold or otherwise
disposed of for cash, then such conversion or disposition shall be deemed
to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof
shall be applied in accordance with this Section 4.16. The Company may
defer the Asset Sale Offer until there is an aggregate unutilized Available
Proceeds Amount equal to or in excess of $10 million resulting from one or
more Asset Sales (at which time, the entire unutilized Available Proceeds
Amount, and not just the amount in excess of $10 million, shall be applied
as required pursuant to this paragraph).
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In the event of the transfer of substantially all (but not all) of the
property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.01, the
successor corporation shall be deemed to have sold the properties and assets of
the Company and its Restricted Subsidiaries not so transferred for purposes of
this Section 4.16, and shall comply with the provisions of this Section 4.16
with respect to such deemed sale as if it were an Asset Sale. In addition, the
fair market value of such properties and assets of the Company or its Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this Section 4.16.
Notwithstanding the foregoing, the Company shall not be obligated to
purchase Notes pursuant to an Asset Sale Offer on or prior to the fifth
anniversary of the Issue Date to the extent that such purchase would result in
the aggregate of the principal amount of Notes purchased pursuant thereto or
prior thereto being in excess of 25% of the principal amount of Notes originally
issued; provided, however, that to the extent that the Available Proceeds Amount
is not required to be applied to purchase Notes pursuant to an Asset Sale Offer,
the Company shall apply such proceeds to make an Asset Sale Offer immediately
after the fifth anniversary of the Issue Date.
Notice of an Asset Sale Offer will be mailed to the Holders as shown on the
register of Holders not less than 30 days nor more than 60 days before the
payment date for the Asset Sale Offer, 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 and shall state the following
terms:
(1) that the Asset Sale Offer is being made pursuant to this Section
4.16, that all Notes tendered will be accepted for payment and that Holders
may elect to tender their Notes in whole or in part in integral multiples
of $1,000 principal amount at maturity in exchange for cash; provided,
however, that if the aggregate principal amount of Notes properly tendered
in an Asset Sale Offer plus accrued interest at the expiration of such
offer exceeds the Available Proceeds Amount, the Company shall select the
Notes to be purchased on a pro rata basis (based on amounts tendered);
(2) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be 20 Business Days from the date of
mailing of notice of such Asset Sale Offer, or such longer period as
required by law) (the
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"Proceeds Purchase Date"); provided that the Proceeds Purchase Date for the
Notes shall be a date subsequent to any payment dates for the purchase or
other repayment of Senior Indebtedness having similar provisions;
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any
Note accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest after the Proceeds Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day prior to the Proceeds
Purchase Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the
Proceeds Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Notes the
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased; and
(7) that Holders whose Notes are purchased only in part will be issued
new Notes in a principal amount equal to the unpurchased portion of the
Notes surrendered; provided that each Note purchased and each new Note
issued shall be in an original principal amount of $1,000 or integral
multiples thereof;
On or before the Proceeds Purchase Date, the Company shall (i) accept for
payment Notes or portions thereof tendered pursuant to the Asset Sale Offer
which are to be purchased in accordance with item (b) above, (ii) deposit with
the Paying Agent U.S. Legal Tender in immediately available funds sufficient to
pay the purchase price plus accrued interest, if any, of all Notes to be
purchased and (iii) deliver to the Trustee Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly mail to the Holders of Notes so
accepted payment in an amount equal to the purchase price plus accrued interest,
if
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any. For purposes of this Section 4.16, the Trustee shall act as the Paying
Agent.
Any amounts remaining after the purchase of Notes pursuant to an Asset Sale
Offer shall be returned by the Trustee to the Company.
If an Offer is made to repurchase the Notes pursuant to an Asset Sale
Offer, the Company will and will cause its Subsidiaries to comply with all
tender offer rules under state and Federal securities laws, including, but not
limited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder, to
the extent applicable to such offer.
SECTION 4.17 Limitation on Preferred Stock
of Restricted Subsidiaries.
The Company shall not cause or permit any of its Restricted Subsidiaries to
issue any Preferred Stock (other than to the Company or to a wholly owned
Restricted Subsidiary of the Company) or permit any Person (other than the
Company or a wholly owned Restricted Subsidiary of the Company) to own or hold
any Preferred Stock of any Restricted Subsidiary of the Company or any Lien or
security interest therein.
SECTION 4.18 Limitation on Liens.
The Company shall not, and shall not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or permit or
suffer to exist or remain in effect any Liens (other than Permitted Liens) upon
any properties or assets of the Company or of any of its Restricted Subsidiaries
whether owned on the Issue Date or acquired after the Issue Date, or on any
income or profits therefrom, or assign or otherwise convey any right to receive
income or profits thereon; provided that in addition to creating Permitted Liens
on its properties or assets, (i) the Company may create any Lien upon any of its
properties or assets (including, but not limited to, any Capital Stock of its
Subsidiaries) if the Notes are equally and ratably secured thereby, and (ii) a
Subsidiary Guarantor may create any Lien upon any of its properties or assets
(including, but not limited to, any Capital Stock of its Subsidiaries) if its
Subsidiary Guarantee is equally and ratably secured thereby; and provided,
further, that if (a) the Company creates any Lien on its assets to secure any
Indebtedness of the Company subordinated to the Notes, the Lien securing such
Indebtedness shall be subordinated and junior to the Lien securing the Notes
with the same or lesser priorities as the subordinated Indebtedness shall have
with respect to the Notes, and (b) a
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Guarantor creates any Lien on its assets to secure any Indebtedness of such
Guarantor subordinated to the Notes, the Lien securing such subordinated
Indebtedness shall be subordinated and junior to the Lien securing the Guarantee
of such Guarantor with the same or lesser priorities as the subordinated
Indebtedness shall have with respect to the Guarantee.
SECTION 4.19 Conduct of Business.
The Company and its Restricted Subsidiaries shall not engage in the conduct
of any business other than the Mining Business on a basis congruent with the
conduct of such business as it is conducted on the Issue Date.
SECTION 4.20 Additional Subsidiary Guarantees.
In the event that any Subsidiary, directly or indirectly, guarantees any
Indebtedness of the Company other than the Notes (the "Other Indebtedness"), the
Company shall cause such Subsidiary (an "Additional Guarantor") to concurrently
guarantee (an "Additional Guarantee") the Company's Obligations under this
Indenture and the Notes to the same extent that such Subsidiary guaranteed the
Company's Obligations under the Other Indebtedness (including waiver of
subrogation, if any); provided that if such Other Indebtedness is (i) Senior
Indebtedness, the Additional Guarantee shall be subordinated in right of payment
to the guarantee of such Other Indebtedness on the same basis that the Notes are
subordinated to such Other Indebtedness, (ii) pari passu Indebtedness, the
Additional Guarantee shall be pari passu in right of payment to the guarantee of
such Other Indebtedness, or (iii) subordinated Indebtedness, the Additional
Guarantee shall be senior in right of payment with respect to the guarantee of
the Other Indebtedness; provided, however, that each Additional Guarantor will
be automatically and unconditionally released and discharged from its
obligations under such Additional Guarantee upon the release or discharge of the
guarantee of the Other Indebtedness that resulted in the creation of such
Additional Guarantee, except (i) a discharge or release by, or as a result of,
any payment under the guarantee of such Other Indebtedness by such Additional
Guarantor or (ii) a discharge or release of an initial Guarantee.
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ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01 Mergers, Consolidation
and Sale of Assets.
The Company shall not, in a single transaction or a series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or
otherwise dispose of) all or substantially all of the Company's assets
(determined on a consolidated basis for the Company and the Company's Restricted
Subsidiaries) whether as an entirety or substantially as an entirety to any
Person unless; (i) either (1) the Company shall be the surviving or continuing
corporation or (2) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which acquires
by sale, assignment, transfer, lease, conveyance or other disposition the
properties and assets of the Company and of the Company's Restricted
Subsidiaries substantially as an entirety (the "Surviving Entity") (x) shall be
a corporation organized and validly existing under the laws of the United States
or any State thereof or the District of Columbia or Canada or any province
thereof and (y) shall expressly assume, by supplemental indenture (in form and
substance satisfactory to the Trustee), executed and delivered to the Trustee,
the due and punctual payment of the principal of, and premium, if any, and
interest on all of the Notes and the performance of every covenant of the Notes,
this Indenture and the Registration Rights Agreement on the part of the Company
to be performed or observed; (ii) immediately after giving effect to such
transaction and the assumption contemplated by clause (i)(2)(y) above (including
giving effect to any Indebtedness and Acquired Indebtedness Incurred or
anticipated to be Incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may be, (1)
shall have a Consolidated Net Worth equal to or greater than the Consolidated
Net Worth of the Company immediately prior to such transaction and (2) shall be
able to Incur at least $1.00 of additional Indebtedness pursuant to Section
4.12(b); provided that in determining the Consolidated Fixed Charge Coverage
Ratio of the resulting, transferee or surviving Person, such ratio shall be
calculated as if the transaction (including the Incurrence of Any Indebtedness
or Acquired Indebtedness) took place on the first day of the Four Quarter
Period; (iii) immediately before and immediately after giving effect to such
transaction and the
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assumption contemplated by clause (i)(2)(y) above (including, without
limitation, giving effect to any Indebtedness and Acquired Indebtedness Incurred
or anticipated to be Incurred and any Lien granted in connection with or in
respect of the transaction), no Default and no Event of Default shall have
occurred or be continuing; and (iv) the Company or the Surviving Entity shall
have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture comply with the applicable provisions of this Indenture and that all
conditions precedent in this Indenture relating to such transaction have been
satisfied, which Opinion of Counsel may rely, as to factual matters, upon an
Officers' Certificate.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
Upon any such consolidation, merger, conveyance, lease or transfer in
accordance with the foregoing, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, lease or
transfer is made will succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor had been named as the Company therein, and thereafter (except in
the case of a sale, assignment, transfer, lease, conveyance or other
disposition) the predecessor corporation will be relieved of all further
obligations and covenants under this Indenture and the Notes.
Each Guarantor (other than any Guarantor whose Guarantee is to be released
in accordance with the terms of the Guarantee and this Indenture in connection
with any transaction complying with the provisions of Section 4.16) will not,
and the Company will not cause or permit any Guarantor to, consolidate with or
merge with or into any Person other than the Company or any other Guarantors
unless: (i) the entity formed by or surviving any such consolidation or merger
(if other than the Guarantor), or to which sale, lease, conveyance or other
disposition shall have been made, is a corporation organized and existing under
the laws of the United States, any state thereof or the District of Columbia,
or
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under the laws of Canada or any provinces thereof; (ii) such entity assumes
by supplemental indenture all of the obligations of the Guarantor on the
Guarantee; (iii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing; and (iv) immediately
after giving effect to such transaction and the use of any net proceeds
therefrom on a pro forma basis, the Company could satisfy the provisions of
clause (ii) of the first paragraph of this covenant. Any merger or
consolidation of a Guarantor with and into the Company (with the Company being
the surviving entity) or another Guarantor that is a wholly owned Restricted
Subsidiary of the Company need only comply with clause (iv) of the first
paragraph of this covenant.
SECTION 5.02 Successor Corporation Substituted.
Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of the Company in accordance with the foregoing,
the surviving entity shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture and the Notes with
the same effect as if such surviving entity had been named as such; provided
that solely for purposes of computing amounts described in clause (iii) of the
first paragraph of Section 4.10, any such surviving entity to the Company shall
only be deemed to have succeeded to and be substituted for the Company with
respect to periods subsequent to the effective time of such merger,
consolidation, combination or transfer of assets.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01 Events of Default.
An "Event of Default" occurs if:
(1) the Company fails to pay interest on any Note for a period of 30
days or more after such interest becomes due and payable; or
(2) the Company fails to pay the principal on any Note, when such
principal becomes due and payable, at maturity, upon redemption, pursuant
to an Asset Sale Offer or a Change of Control Offer or otherwise; or
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(3) (x) the failure of the Company or any Guarantor to comply with any
of the terms or provisions of Section 5.01 or (y) a default in the
observance or performance of any other covenant or agreement contained in
this Indenture which default continues for a period of 30 days after the
Company receives written notice specifying the default from the Trustee or
from Holders of at least 25% in principal amount of outstanding Notes; or
(4) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness of the Company or of any Restricted Subsidiary of the Company
(or the payment of which is guaranteed by the Company or any Restricted
Subsidiary of the Company) which default (a) is caused by a failure to pay
principal of or premium, if any, or interest on such Indebtedness after any
applicable grace period provided in such Indebtedness on the date of such
default (a "payment default") or (b) results in the acceleration of such
Indebtedness prior to its express 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
(5) one or more judgments in an aggregate amount in excess of $10
million (which are not covered by third-party insurance as to which a
financially sound insurer has not disclaimed coverage) being rendered
against the Company or any of its Subsidiaries and such judgments remain
undischarged, or unstayed or unsatisfied for a period of 60 days after such
judgment or judgments become final and non-appealable; or
(6) the Company or any of its 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, (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, or (e) admits in writing its
inability to pay its debts as they become due;
(7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief against the Company or any Restricted
Subsidiary in an involuntary case,
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(b) appoints a Custodian of the Company or any Restricted
Subsidiary or for all or substantially all of the property of the
Company or any Restricted Subsidiary, or
(c) orders the liquidation of the Company or any Restricted
Subsidiary.
and the order or decree remains unstayed and in effect for 60
consecutive days;
(8) any of the Guarantees cease to be in full force and effect or any
of the Guarantees are declared to be null and void and unenforceable or any
of the Guarantees are found to be invalid or any of the Guarantors denies
its liability under its Guarantee (other than by reason of release of a
Guarantor in accordance with the terms of this Indenture).
Any Event of Default shall not be deemed to have occurred under clause (4) or
(5) until the Trustee shall have received written notice from the Company or any
of the Holders or unless a Trust Officer shall have actual knowledge of such
Event of Default.
SECTION 6.02 Acceleration.
(a) If an Event of Default (other than an Event of Default specified in
Sections 6.01(6) or 6.01(7) above with respect to the Company) occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the then outstanding Notes may declare
the unpaid principal of, premium, if any, and accrued and unpaid interest on,
all the Notes then outstanding to be due and payable, by a notice in writing to
the Company (and to the Trustee, if given by Holders) and upon such declaration
such principal amount, premium, if any, and accrued and unpaid interest will
become immediately due and payable.
(b) If an Event of Default with respect to the Company specified in
Sections 6.01(6) or 6.01(7) above occurs, all unpaid principal of, and premium,
if any, and accrued and unpaid interest on, the Notes then outstanding will ipso
facto become due and payable without any declaration or other act on the part of
the Trustee or any Holder.
(c) The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may rescind an acceleration and its
consequences if all existing Events of Default (other than the nonpayment of
principal of and premium,
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if any, and interest on the Notes which has become due solely by virtue of such
acceleration) have been cured or waived and if the rescission would not conflict
with any judgment or decree. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.
The Holders of a majority in principal amount of the Notes may waive any
existing Default or Event of Default under this Indenture, and its consequences,
except a Default in the payment of the principal of or interest on any Notes or
a Default in respect of any term or provision of the Notes or this Indenture
that cannot be modified or amended without the consent of all Holders.
Holders of the Notes may not enforce this Indenture or the Notes except as
provided in this Indenture and under the TIA. Subject to the provisions of this
Indenture relating to the duties of the Trustee, the Trustee is under no
obligation to exercise any of its rights or powers under this Indenture at the
request, order or direction of any of the Holders, unless such Holders have
offered to the Trustee reasonable indemnity against any and all expense and
liability to which the Trustee, in its discretion, may be exposed. Subject to
all provisions of this Indenture and applicable law, the Holders of a majority
in aggregate principal amount of the then outstanding Notes have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee.
SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, and subject to the
Trustee's right to indemnification, the Trustee may pursue any available remedy
by proceeding at law or in equity to collect the payment of principal of 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 Noteholder 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. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
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SECTION 6.04 Waiver of Past Defaults.
Subject to Sections 2.09, 6.07 and 9.02, the Holders of a majority in
principal amount of the outstanding Notes by written notice to the Trustee may
on behalf of all Holders waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on any
Note as specified in clauses (1) and (2) of Section 6.01. When a Default or
Event of Default is waived, it is cured and ceases to exist.
SECTION 6.05 Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal amount of
the 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, including, without limitation, any remedies provided for
in Section 6.03. Subject to Section 7.01, however, the Trustee may refuse to
follow any direction that the Trustee reasonably believes conflicts with any law
or this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of another Noteholder, or that may involve the Trustee in personal
liability; provided that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
SECTION 6.06 Limitation on Suits.
A Noteholder may not pursue any remedy with respect to this Indenture or
the Notes unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) Holders of at least 25% in principal amount of the outstanding
Notes make a written request to the Trustee to pursue the remedy;
(3) such Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense to be
incurred in compliance with such request;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of satisfactory indemnity; and
(5) during such 60-day period the Holders of a majority in principal
amount of the outstanding Notes do not give the
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Trustee a direction which, in the opinion of the Trustee, is inconsistent
with the request.
A Noteholder may not use this Indenture to prejudice the rights of another
Noteholder or to obtain a preference or priority over such other Noteholder.
SECTION 6.07 Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on a Note, on or after
the respective due dates expressed in such Note, 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 6.08 Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified in
clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Notes for the whole amount of principal and
accrued interest remaining unpaid, together with interest on overdue principal
and, to the extent that payment of such interest is lawful, interest on overdue
installments of interest at the rate set forth in Section 4.01 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 6.09 Trustee May File Proofs of Claim.
The Trustee may 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, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders allowed in any judicial proceedings relating to the Company or any
other obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Noteholder to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Noteholders, to pay to the Trustee any amount due to it for the
reasonable
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compensation, expenses, taxes, disbursements and advances of the Trustee, its
agent and counsel, and any other amounts due the Trustee under Section 7.07. The
Company's payment obligations under this Section 6.09 shall be secured in
accordance with the provisions of Section 7.07 hereunder. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Noteholder 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 Noteholder in any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money or property pursuant to this Article Six,
it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
Fourth: to the Company, the Guarantors or any other obligor on the
Notes, as their interests may appear, or as a court of competent
jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a record date and
payment date for any payment to Noteholders pursuant to this Section 6.10.
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
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
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regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by
a Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than
10% in principal amount of the outstanding Notes.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If a Default or 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 its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(1) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no covenants or obligations shall be implied in
this Indenture against the Trustee.
(2) 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) Notwithstanding anything to the contrary herein contained, the Trustee
may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is
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proved that the Trustee was negligent in ascertaining the pertinent facts.
(3) 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 6.02, 6.04 or 6.05.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or powers
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
SECTION 7.02 Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting 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 consult
with counsel and may require an Officers' Certificate and/or an Opinion of
Counsel, which shall conform to Sections 13.04 and 13.05. 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.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with
due care.
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(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, upon reasonable notice to
the Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney and to consult with the officers and
representatives of the Company, including the Company's accountants and
attorneys.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee security
or indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred by it in compliance with
such request, order or direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(h) The Trustee may exercise any powers hereunder and perform any
duties of it through attorneys (which may but shall not be required to be
employees of the Trustee), accountants, receivers, or other agents employed
by the Trustee, and shall be entitled to pay the reasonable compensation
and expenses of such attorneys, accountants, receivers and agents. Before
being required to take any action, the Trustee may require an Opinion of
Counsel reasonably acceptable to it, which Opinion shall be made available
to the other parties hereto upon request, or a verified certificate of any
party hereto, or both, concerning the proposed action. If it does so in
good faith, the Trustee shall be absolutely protected in relying thereon.
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SECTION 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company, any Subsidiary of the
Company, or their respective Affiliates with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Notes, and it shall not be accountable for the Company's use of
the proceeds from the Notes, and it shall not be responsible for any statement
of the Company in this Indenture or the Notes other than the Trustee's
certificate of authentication on the Notes.
SECTION 7.05 Notice of Default.
If a Default or an Event of Default occurs and is continuing of which the
Trustee has actual knowledge, the Trustee shall mail to each Noteholder notice
of the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal of, or interest on, any Note, including an accelerated
payment and the failure to make payment on the Change of Control Payment Date
pursuant to a Change of Control Offer or on the Proceeds Purchase Date pursuant
to a Net Proceeds Offer and, except in the case of a failure to comply with
Article V hereof, the Trustee may withhold the notice if and so long as its
Board of Directors, the executive committee of its Board of Directors or a
committee of its directors and/or Trust Officers in good faith determines that
withholding the notice is in the interest of the Noteholders.
SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after each May 15, the Trustee shall, to the extent that any
of the events described in TIA Section 313(a) occurred within the previous
twelve months, but not otherwise, mail to each Noteholder a brief report dated
as of such date that complies with TIA Section 313(a). The Trustee also shall
comply with TIA Section Section 313(b), (c) and (d).
A copy of each report at the time of its mailing to Noteholders shall be
mailed to the Company and filed with the SEC and each stock exchange, if any, on
which the Notes are listed.
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The Company shall promptly notify the Trustee if the Notes become listed on
any stock exchange and the Trustee shall comply with TIA Section 313(d).
SECTION 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all advances and reasonable
out-of-pocket expenses incurred or made by it in connection with the performance
of its duties under this Indenture. Such expenses shall include but not be
limited to the reasonable fees and expenses of the Trustee's agents and counsel
(including either in-house counsel or outside counsel).
The Company shall indemnify the Trustee and its agents and employees,
stockholders, directors and officers for, and hold them harmless against, any
loss, liability or expense incurred by them except for such actions to the
extent caused by any negligence, bad faith or willful misconduct on their part,
arising out of or in connection with the administration of the Trustee's duties
under this Indenture including but not limited to the reasonable costs and
expenses (including without limitation reasonable attorneys' fees and expenses)
of defending themselves against any claim or liability in connection with the
exercise or performance of any of their rights, powers or duties hereunder. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. At the Trustee's sole discretion, the
Company shall defend the claim and the Trustee shall cooperate and may
participate in the defense; provided that any settlement of a claim shall be
consented to in writing by the Trustee which consent shall not unreasonably be
withheld. Alternatively, the Trustee may at its option have separate counsel of
its own choosing and the Company shall pay the reasonable fees and expenses of
such counsel; provided that the Company will not be required to pay such fees
and expenses if it assumes the Trustee's defense and there is no conflict of
interest between the Company and the Trustee in connection with such defense as
reasonably determined by the Trustee. The Company need not pay for any
settlement made without its written consent, which consent shall not
unreasonably be withheld. The Company need not reimburse any expense or
indemnify against any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
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To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes. The
Trustee's right to receive payment of any amounts due under this Section 7.07
shall not be subordinate to any other liability or indebtedness of the Company
(even though the Notes may be subordinate to such other liability or
indebtedness).
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(6) or (7) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Company and the Trustee and may appoint a successor Trustee.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) 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 Company shall notify each Holder of such event
and 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 Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, 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
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under this Indenture. A successor Trustee shall mail notice of its succession
to each Noteholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligations under Section 7.07 shall continue for the benefit of
the retiring Trustee.
SECTION 7.09 Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the resulting, surviving or transferee corporation without any further act
shall, if such resulting, surviving or transferee corporation is otherwise
eligible hereunder, be the successor Trustee; provided that such corporation
shall be otherwise qualified and eligible under this Article Seven.
SECTION 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirement of
TIA Section Section 310(a)(1), (2) and (5). The Trustee (or, in the case of a
corporation included in a bank holding company system, the related bank holding
company) shall have a combined capital and surplus of at least $50 million as
set forth in its most recent published annual report of condition. In addition,
if the Trustee is a corporation included in a bank holding company system, the
Trustee, independently of such bank holding company, shall meet the capital
requirements of TIA Section 310(a)(2). The Trustee shall comply with TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities, or certificates of interest or participation in other securities, of
the Company are outstanding, if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met. The provisions of TIA Section 310 shall apply to
the Company, as obligor of the Notes.
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SECTION 7.11 Preferential Collection of
Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
The provisions of TIA Section 311 shall apply to the Company, as obligor on the
Notes.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 Termination of the
Company's Obligations.
The Company may terminate the Guarantors' and its obligations under the
Notes and this Indenture, except those obligations referred to in the
penultimate paragraph of this Section 8.01, if all Notes previously
authenticated and delivered (other than destroyed, lost or stolen Notes which
have been replaced or paid or Notes for whose payment U.S. Legal Tender has
theretofore been deposited with the Trustee or the Paying Agent in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company, as provided in Section 8.05) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it hereunder, or if:
(a) either (i) pursuant to Article Three, the Company shall have given
notice to the Trustee and mailed a notice of redemption to each Holder of
the redemption of all of the Notes under arrangements satisfactory to the
Trustee for the giving of such notice or (ii) all Notes have otherwise
become due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the benefit
of the Holders for that purpose, U.S. Legal Tender in such amount as is
sufficient without consideration of reinvestment of such interest, to pay
principal of, premium, if any, and interest on the outstanding Notes to
maturity or redemption; provided that the Trustee shall have been
irrevocably instructed to apply such U.S. Legal Tender to the payment of
said principal,
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premium, if any, and interest with respect to the Notes and, provided,
further, that from and after the time of deposit, the money deposited shall
not be subject to the rights of holders of Senior Indebtedness pursuant to
the provisions of Article Ten;
(c) no Default or Event of Default with respect to this Indenture or
the Notes shall have occurred and be continuing on the date of such deposit
or shall occur as a result of such deposit and such deposit will not result
in a breach or violation of, or constitute a default under, any other
instrument to which the Company is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it
hereunder; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's obligations under
the Notes and this Indenture have been complied with. Such Opinion of
Counsel shall also state that such satisfaction and discharge does not
result in a default under the Working Capital Facility (if then in effect)
or any other agreement or instrument then known to such counsel that binds
or affects the Company.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 7.07, 8.05 and 8.06 shall survive
until the Notes are no longer outstanding pursuant to the last paragraph of
Section 2.08. After the Notes are no longer outstanding, the Company's
obligations in Sections 7.07, 8.05 and 8.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's and the Guarantors'
obligations under the Notes, the Guarantees and this Indenture except for those
surviving obligations specified above.
SECTION 8.02 Legal Defeasance and
Covenant Defeasance.
(a) The Company may, at its option by Board Resolution of the Board of
Directors of the Company, at any time, elect to have either paragraph (b) or (c)
below be applied to all outstanding Notes (determined in accordance with Section
2.08) upon compliance with the conditions set forth in Section 8.03.
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(b) Upon the Company's exercise under paragraph (a) hereof of the option
applicable to this paragraph (b), the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.03, be deemed to
have been discharged from its obligations with respect to all outstanding Notes
on the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company 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 8.04 hereof and the other Sections of this Indenture
referred to in (i) and (ii) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), and Holders of the Notes and any amounts deposited
under Section 8.03 hereof shall cease to be subject to any obligations to, or
the rights of, any holder of Senior Indebtedness under Article Ten or otherwise,
except for the following provisions, which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in Section 8.04 hereof,
and as more fully set forth in such Section, payments in respect of the
principal of and interest on such Notes when such payments are due, (ii) the
Company's obligations with respect to such Notes under Article Two and Section
4.02 hereof, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's obligations in connection therewith and (iv)
this Article Eight. Subject to compliance with this Article Eight, the Company
may exercise its option under this paragraph (b) notwithstanding the prior
exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the option
applicable to this paragraph (c), the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.03 hereof, be released from its
obligations under the covenants contained in Sections 4.10 through 4.20 and
Article Five hereof with respect to the outstanding Notes 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) and Holders of the Notes and any amounts deposited under Section 8.03
hereof shall cease to be subject to
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any obligations to, or the rights of, any holder of Senior Indebtedness or
Guarantor Senior Indebtedness under Article Ten or Article Twelve or otherwise.
For this purpose, such Covenant Defeasance means that, with respect to the
outstanding Notes, the Company 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 to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event or Default under Section
6.01(3) hereof, but, except as specified above, the remainder of this Indenture
and such Notes shall be unaffected thereby. In addition, upon the Company's
exercise under paragraph (a) hereof of the option applicable to this paragraph
(c), subject to the satisfaction of the conditions set forth in Section 8.03
hereof, Sections 6.01(3), 6.01(4) and 6.01(5) shall not constitute Events of
Default.
SECTION 8.03 Conditions to Legal Defeasance
or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.02(b) or 8.02(c) hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, U.S. Legal Tender or U.S. Government
Obligations, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of and interest on the Notes on
the stated date for payment thereof or on the applicable redemption date,
as the case may be, of such principal or installment of principal of or
interest on the Notes; provided that the Trustee shall have received an
irrevocable written order from the Company instructing the Trustee to apply
such U.S. Legal Tender or the proceeds of such U.S. Government Obligations
to said payments with respect to the Notes;
(b) in the case of an election under Section 8.02(b) hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Indenture,
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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 Holders of the 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 8.02(c) hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the 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 or Event of Default or event which with notice or lapse
of time or both would become a Default or an Event of Default with respect
to the Notes shall have occurred and be continuing on the date of such
deposit (other than a Default or Event of Default resulting from the
incurrence of Indebtedness all or a portion of the proceeds of which will
be used to defease the Notes pursuant to this Article Eight concurrently
with such incurrence) or insofar as Sections 6.01(6) and 6.01(7) hereof are
concerned, at any time in the period ending on the 91st day after the date
of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of or constitute a default under this Indenture or any
other material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
is bound;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company;
(g) the Company 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
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Legal Defeasance or the Covenant Defeasance have been complied with; and
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (i) the trust funds will not be subject to any
rights of any holders of Indebtedness of the Company other than the Notes,
and (ii) assuming no intervening bankruptcy or insolvency of the Company
between the date of deposit and the 91st day following the deposit and that
no Holder is an insider of the Company, after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable Bankruptcy Law.
SECTION 8.04 Application of Trust Money.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or U.S.
Government Obligations deposited with it pursuant to Article Eight, and shall
apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of principal of and
interest on the Notes. The Trustee shall be under no obligation to invest said
U.S. Legal Tender or U.S. Government Obligations except as it may agree with the
Company.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.03 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.
Anything in this Article Eight to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the Company's request
any U.S. Legal Tender or U. S. Government Obligations held by it as provided in
Section 8.03 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.05 Repayment to the Company or the
Guarantors.
Subject to Article Eight, the Trustee and the Paying Agent shall promptly
pay to the Company, or if deposited with the Trustee by any Guarantor, to such
Guarantor, upon request any
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excess U.S. Legal Tender or U.S. Government Obligations held by them at any time
and thereupon shall be relieved from all liability with respect to such money.
The Trustee and the Paying Agent shall pay to the Company, or if deposited with
the Trustee by any Guarantor, to such Guarantor, upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years; provided that the Trustee or such Paying Agent, before being required to
make any payment, may at the expense of the Company cause to be published once
in a newspaper of general circulation in the City of New York notice that such
money remains unclaimed and that after a date specified therein which shall be
at least 30 days from the date of such publication or mailing any unclaimed
balance of such money then remaining will be repaid to the Company or a
Guarantor. After payment to the Company or a Guarantor, as the case may be,
Noteholders entitled to such money must look to the Company for payment as
general creditors unless an applicable law designates another Person.
SECTION 8.06 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with Article Eight by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and each Guarantor's obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Article Eight until such time as the Trustee or Paying Agent is
permitted to apply all such U.S. Legal Tender or U.S. Government Obligations in
accordance with Article Eight; provided that if the Company or any Guarantor, as
the case may be, has made any payment of interest on or principal of any Notes
because of the reinstatement of its obligations, the Company or any Guarantor,
as the case may be, shall be subrogated to the rights of the Holders of such
Notes to receive such payment from the U.S. Legal Tender or U.S. Government
Obligations held by the Trustee or Paying Agent.
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ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01 Without Consent of Holders.
The Company and the Guarantors, when authorized by a Board Resolution, and
the Trustee, together, may amend or supplement this Indenture or the Notes or
Guarantees without notice to or consent of any Noteholder:
(1) to cure any ambiguity, defect or inconsistency; provided that such
amendment or supplement does not, in the opinion of the Trustee, adversely
affect the rights of any Holder in any material respect;
(2) to comply with Article Five;
(3) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(4) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(5) to make any change that would provide any additional benefit or
rights to the Noteholders or that does not adversely affect the rights of
any Noteholder;
(6) to provide for issuance of the Exchange Notes, which will have
terms substantially identical in all material respects to the Initial Notes
(except that the transfer restrictions contained in the Initial Notes will
be modified or eliminated, as appropriate), and which will be treated
together with any outstanding Initial Notes, as a single issue of
securities; or
(7) to make any other change that does not, in the opinion of the
Trustee, adversely affect in any material respect the rights of any
Noteholders hereunder;
provided that the Company has delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 9.01.
Upon the request of the Company accompanied by a resolution of the Board of
Directors of the Company and each of the
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Guarantors, as the case may be, authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company and
the Guarantors in the execution of any amended or supplemental Indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
SECTION 9.02 With Consent of Holders.
Subject to Section 6.07 and Section 9.07, the Company and the Guarantors,
when authorized by a Board Resolution, and the Trustee, together, with the
written consent of the Holder or Holders of at least a majority in aggregate
principal amount of the outstanding Notes, may amend or supplement this
Indenture, the Notes or the Guarantees, without notice to any other Noteholders.
Subject to Section 6.07, the Holder or Holders of a majority in aggregate
principal amount of the outstanding Notes may waive compliance by the Company
with any provision of this Indenture or the Notes without notice to any other
Noteholder. No amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, shall, without the consent of each Holder of each Note affected
thereby:
(1) reduce the amount of Notes whose Holders must consent to an
amendment;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any Notes;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Notes, or change the date on which any Notes may
be subject to redemption or repurchase, or reduce the redemption or
repurchase price therefor;
(4) make any Notes payable in money other than that stated in the
Notes;
(5) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Note on or after the due date thereof or to bring suit to enforce such
payment, permitting holders of a majority in principal amount of Notes
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to waive Defaults or Events of Default, other than ones with respect to the
payment of principal of or interest on the Notes, or relating to certain
amendments of this Indenture;
(6) amend, modify or change in any material respect the obligation of
the Company to make or consummate a Change of Control Offer in the event of
a Change of Control or make and consummate a Net Proceeds Offer in respect
of any Asset Sale that has been consummated or modify any of the
provisions or definitions with respect thereto;
(7) modify Article Ten or Article Twelve or the definitions used in
Article Ten or Article Twelve to adversely affect the Holders of the Notes
in any material respect; or
(8) release any Guarantor that is a Significant Subsidiary of the
Company from any of its obligations under its Guarantee or this Indenture
otherwise than in accordance with the terms of this Indenture.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
Upon the request of the Company accompanied by a resolution of the Board of
Directors of the Company and each of the Guarantors, as the case may be,
authorizing the execution of any such amended or supplemental Indenture, 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 7.02 hereof, the Trustee shall join with the
Company and the Guarantors in the execution of such amended or supplemental
Indenture unless such amended or supplemental Indenture 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 amended or supplemental Indenture.
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SECTION 9.03 Effect on Senior Indebtedness and
Guarantor Senior Indebtedness.
No amendment of this Indenture shall adversely affect the rights of any
holder of Senior Indebtedness or Guarantor Senior Indebtedness under Article
Ten or Article Twelve of this Indenture, without the consent of such holder.
SECTION 9.04 Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect.
SECTION 9.05 Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent to it
by a Holder 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 notation of the consent is not made on any Note. Subject
to the following paragraph, any such Holder or subsequent Holder may revoke the
consent as to such Holder's Note or portion of such Note by notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Notes have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Noteholder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; provided that any such waiver shall not impair or
affect the right of any Holder to receive
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payment of principal of and interest on a Note, on or after the respective due
dates expressed in such Note, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.
SECTION 9.06 Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Any such
notation or exchange shall be made at the sole cost and expense of the Company.
Failure to make the appropriate notation or issue a new Note shall not affect
the validity and effect of such amendment, supplement or waiver.
SECTION 9.07 Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article Nine; provided that the Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this Indenture. The Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel and an Officers' Certificate each stating that the execution
of any amendment, supplement or waiver authorized pursuant to this Article Nine
is authorized or permitted by this Indenture. Such Opinion of Counsel shall not
be an expense of the Trustee.
ARTICLE TEN
SUBORDINATION
SECTION 10.01 Notes Subordinated to
Senior Indebtedness.
The Company covenants and agrees, and the Trustee and each Holder of the
Notes, by its acceptance thereof, likewise covenants and agrees, that all Notes
shall be issued subject to the provisions of this Article Ten; and the Trustee
and each Person holding any Note, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees that the payment
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of all Obligations on the Notes by the Company shall, to the extent and in the
manner herein set forth, be subordinated and junior in right of payment to the
prior payment in full in cash or Cash Equivalents of all Obligations on the
Senior Indebtedness, and that the subordination is for the benefit of, and shall
be enforceable directly by, the holders of Senior Indebtedness, and that each
holder of Senior Indebtedness whether now outstanding or hereafter created,
incurred, assumed or guaranteed shall be deemed to have acquired Senior
Indebtedness in reliance upon the covenants and provisions contained in this
Indenture and the Notes.
SECTION 10.02 No Payment on Notes in
Certain Circumstances.
(a) No direct or indirect payment by or on behalf of the Company of
principal of, premium, if any, or interest on, the Notes whether pursuant to the
terms of the Notes or upon acceleration or otherwise shall be made if, at the
time of such payment, there exists a default in the payment of all or any
portion of principal of, premium, if any, or interest on, any Senior
Indebtedness with a principal amount in excess of $5.0 million (and the Trustee
has received written notice thereof), and such default shall not have been cured
or waived or the benefits of this sentence waived by or on behalf of the holders
of Senior Indebtedness. In addition, during the continuance of any other event
of default with respect to any Designated Senior Indebtedness pursuant to which
the maturity thereof may be accelerated, upon the occurrence of (x) receipt by
the Trustee of written notice from the holders of a majority of the outstanding
principal amount of the Designated Senior Indebtedness or their Representatives,
or (y) if such event of default results from the acceleration of the Notes, no
such payment may be made by the Company upon or in respect of the Notes for a
period ("Payment Blockage Period") commencing on the earlier of the date of
receipt of such notice or the date of such acceleration and ending 179 days
thereafter (unless such Payment Blockage Period shall be terminated by written
notice to the Trustee from the holders of a majority of the outstanding
principal amount of such Designated Senior Indebtedness or their Representatives
who delivered such notice). Notwithstanding anything herein to the contrary, in
no event will a Payment Blockage Period extend beyond 179 days from the date on
which such Payment Blockage Period was commenced. Not more than one Payment
Blockage Period may be commenced with respect to the Notes during any period of
360 consecutive days. For all purposes of this paragraph, no event of default
which existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness initiating
such Payment Blockage Period shall be, or be made, the basis for the
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commencement of a second Payment Blockage Period by the holders of such
Designated Senior Indebtedness or their Representatives whether or not within a
period of 360 consecutive days unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days (it being
acknowledged that any subsequent action, or any breach of any financial
covenants for a period commencing after the date of commencement of such Payment
Blockage Period that, in either case, would give rise to an event of default
pursuant to any provisions under which an event of default previously existed or
was continuing shall constitute a new event of default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets or securities of the Company of any kind or character,
whether in cash, property or securities, shall be received by the Trustee or the
Holders or any Paying Agent (or, if the Company is acting as its own Paying
Agent, money for any such payment or distribution shall be segregated or held in
trust) on account of principal of, premium, if any, or interest on, the Notes
before all Senior Indebtedness is paid in full, such payment or distribution
shall be received and held in trust by the Trustee or such Holder or Paying
Agent for the benefit of the holders of the Senior Indebtedness, or their
respective Representatives, ratably according to the respective amounts of
Senior Indebtedness held or represented by each, and shall be paid over or
delivered to the holders of the Senior Indebtedness remaining unpaid to the
extent necessary to make payment in full of all Senior Indebtedness remaining
unpaid after giving effect to all concurrent payments and distributions to or
for the holders of such Senior Indebtedness. The Trustee shall be entitled to
rely on information regarding amounts then due and owing on the Senior
Indebtedness, if any, received from the holders of Senior Indebtedness (or their
Representatives) or, if such information is not received from such holders or
their Representatives, from the Company and only amounts included in the
information provided to the Trustee shall be paid to the holders of Senior
Indebtedness.
Nothing contained in this Article Ten shall limit the right of the Trustee
or the Holders of Notes to take any action to accelerate the maturity of the
Notes pursuant to Section 6.02 or to pursue any rights or remedies hereunder;
provided that all Senior Indebtedness thereafter due or declared to be due shall
first be paid in full in cash or Cash Equivalents before the Holders are
entitled to receive any payment of any kind or character with respect to
Obligations on the Notes.
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SECTION 10.03 Payment Over of Proceeds
upon Dissolution, Etc.
(a) Upon any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to creditors upon any
total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of the Company
or in a bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to the Company or its property, whether voluntary or
involuntary, all Obligations due or to become due upon all Senior Indebtedness
shall first be paid in full in cash or Cash Equivalents, or such payment duly
provided for to the satisfaction of the holders of Senior Indebtedness, before
any payment or distribution of any kind or character is made on account of any
Obligations on the Notes, or for the acquisition of any of the Notes for cash or
property or otherwise. Upon any such dissolution, winding-up, liquidation,
reorganization, receivership or similar proceeding, any payment or distribution
of assets of the Company of any kind or character, whether in cash, property or
securities, to which the Holders of the Notes or the Trustee under this
Indenture would be entitled, except for the provisions hereof, shall be paid by
the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the Holders or
by the Trustee under this Indenture if received by them, directly to the holders
of Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of Senior Indebtedness
remaining unpaid until all such Senior Indebtedness has been paid in full in
cash or Cash Equivalents after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of Senior Indebtedness.
(b) To the extent any payment of Senior Indebtedness (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Senior Indebtedness or part thereof originally
intended to be
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satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by any Holder when such payment or
distribution is prohibited by Section 10.03(a), such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Indebtedness (pro rata to such holders on the basis of
the respective amount of Senior Indebtedness held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of Senior
Indebtedness remaining unpaid until all such Senior Indebtedness has been paid
in full in cash or Cash Equivalents, after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of such Senior
Indebtedness.
(d) The consolidation of the Company with, or the merger of the Company
with or into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of all or substantially all of its
assets, to another corporation upon the terms and conditions provided in Article
Five hereof and as long as permitted under the terms of the Senior Indebtedness
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, assume the Company's obligations
hereunder in accordance with Article Five hereof.
SECTION 10.04 Payments May Be Paid Prior
to Dissolution.
Nothing contained in this Article Ten or elsewhere in this Indenture shall
prevent (i) the Company, except under the conditions described in Sections 10.02
and 10.03, from making payments at any time for the purpose of making payments
of principal of and interest on the Notes, or from depositing with the Trustee
any moneys for such payments, or (ii) in the absence of actual knowledge by the
Trustee that a given payment would be prohibited by Section 10.02 or 10.03, the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of, and interest on, the Notes to the Holders
entitled thereto unless at least two Business Days prior to the date upon which
such payment would otherwise become due and
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payable a Trust Officer shall have actually received the written notice provided
for in the second sentence of Section 10.02(a) or in Section 10.07 (provided
that, notwithstanding the foregoing, such application shall otherwise be subject
to the provisions of the first sentence of Section 10.02(a) and Section 10.03).
The Company shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
SECTION 10.05 Subrogation.
Subject to the payment in full in cash or Cash Equivalents of all Senior
Indebtedness, the Holders of the Notes shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Indebtedness
until the Notes shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the Holders by
virtue of this Article Ten which otherwise would have been made to the Holders
shall, as between the Company and the Holders of the Notes, be deemed to be a
payment by the Company to or on account of the Senior Indebtedness, it being
understood that the provisions of this Article Ten are and are intended solely
for the purpose of defining the relative rights of the Holders of the Notes, on
the one hand, and the holders of the Senior Indebtedness, on the other hand.
SECTION 10.06 Obligations of the Company
Unconditional.
Nothing contained in this Article Ten or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the Holders, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders the
principal of and any interest on the Notes as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect
the relative rights of the Holders and creditors of the Company other than the
holders of the Senior Indebtedness, nor shall anything herein or therein prevent
the Holder of any Note or the Trustee on its behalf from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
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SECTION 10.07 Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article Ten.
Regardless of anything to the contrary contained in this Article Ten or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any default or event of default with respect to any Senior
Indebtedness or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing from the Company, or from a holder of Senior Indebtedness or a
Representative therefor, and, prior to the receipt of any such written notice,
the Trustee shall be entitled to assume (in the absence of actual knowledge to
the contrary) that no such facts exist.
In the event that the Trustee determines in good faith that any evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article Ten, and if such evidence is not furnished the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such person to receive such payment.
SECTION 10.08 Reliance on Judicial Order or
Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Notes shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or upon a certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution, delivered to
the Trustee or the Holders of the Notes, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Ten.
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SECTION 10.09 Trustee's Relation to
Senior Indebtedness.
The Trustee and any agent of the Company or the Trustee shall be entitled
to all the rights set forth in this Article Ten with respect to any Senior
Indebtedness which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Senior Indebtedness and
nothing in this Indenture shall deprive the Trustee or any such agent of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Ten, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness.
Whenever a distribution is to be made or a notice given to holders or
owners of Senior Indebtedness, the distribution may be made and the notice may
be given to their Representative, if any.
SECTION 10.10 Subordination Rights Not Impaired
by Acts or Omissions of the Company
or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness to
enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee, without incurring responsibility to the
Trustee or the Holders of the Notes and without impairing or releasing the
subordination provided in this Article Ten or the obligations hereunder of the
Holders of the Notes to the holders of the Senior Indebtedness, do any one or
more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Indebtedness, or
otherwise amend or supplement in any manner Senior Indebtedness, or any
instrument
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evidencing the same or any agreement under which Senior Indebtedness is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) release any
Person liable in any manner for the payment or collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.
SECTION 10.11 Noteholders Authorize Trustee To
Effectuate Subordination of Notes.
Each Holder of Notes, by its acceptance of them, authorizes and expressly
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate, as between the holders of Senior Indebtedness and the
Holders of Notes, the subordination provided in this Article Ten, and appoints
the Trustee its attorney-in-fact for such purposes, including, in the event of
any dissolution, winding-up, liquidation or reorganization of the Company
(whether in bankruptcy, insolvency, receivership, reorganization or similar
proceedings or upon an assignment for the benefit of creditors or otherwise)
tending towards liquidation of the business and assets of the Company, the
filing of a claim for the unpaid balance of its Notes and accrued interest in
the form required in those proceedings.
If the Trustee does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Senior Indebtedness or
their Representative are or is hereby authorized to have the right to file and
are or is hereby authorized to file an appropriate claim for and on behalf of
the Holders of said Notes. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Indebtedness or their
Representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee or the holders of Senior Indebtedness or their Representative to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 10.12 This Article Ten Not To
Prevent Events of Default.
The failure to make a payment on account of principal of or interest on the
Notes by reason of any provision of this Article Ten will not be construed as
preventing the occurrence of an Event of Default.
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SECTION 10.13 Trustee's Compensation
Not Prejudiced.
Nothing in this Article Ten will apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01 Unconditional Guarantee.
Each Guarantor hereby unconditionally, jointly and severally, guarantees,
subject to Article Twelve, to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, that: (i) the
principal of and interest on the Notes will be promptly paid in full when due,
subject to any applicable grace period, whether at maturity, by acceleration or
otherwise and interest on the overdue principal, if any, and interest on any
interest, to the extent lawful, of the Notes and all other obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (ii) in case of any extension of time of payment or renewal of any Notes or
of any such other obligations, the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, subject
to any applicable grace period, whether at stated maturity, by acceleration or
otherwise, subject, however, in the case of clauses (i) and (ii) above, to the
limitations set forth in Section 11.05. Each Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, 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 Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in the Notes, this Indenture and in this Guarantee. If any Holder or
the Trustee is required by any court or otherwise to return to the Company, any
Guarantor, or any
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custodian, trustee, liquidator or other similar official acting in
relation to the Company or any Guarantor, any amount paid by the Company or any
Guarantor to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor further agrees that, as between each Guarantor, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six for
the purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article Six, such obligations (whether or not due and payable)
shall forthwith become due and payable by each Guarantor for the purpose of
this Guarantee.
SECTION 11.02 Subordination of Guarantee.
The obligations of each Guarantor to the Holders of Notes and to the
Trustee pursuant to the Guarantee and this Indenture are expressly subordinate
and subject in right of payment to the prior payment in full of all Guarantor
Senior Indebtedness of such Guarantor, to the extent and in the manner provided
in Article Twelve.
SECTION 11.03 Severability.
In case any provision of this Guarantee 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 11.04 Release of a Guarantor.
Upon (i) the release by the lenders under the Working Capital Facility,
related documents and future refinancings thereof of all guarantees of a
Guarantor and all Liens on the property or assets of said Guarantor relating to
such Indebtedness or (ii) the sale or disposition (whether by merger, stock
purchase, asset sale or otherwise) of a Guarantor (or all or substantially all
its assets) to an entity which is not a Subsidiary of the Company and which sale
or disposition is otherwise in compliance with the terms of this Indenture, such
Guarantor shall be deemed released from all obligations under this Article
Eleven without any further action required on the part of the Trustee or any
Holder; provided, however, that any such termination shall occur only to the
extent that all obligations of such Guarantor under the Working Capital Facility
and all of its guarantees of, and under all of its pledges
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of assets or other security interests which secure, such Indebtedness of the
Company or the Guarantor shall also terminate upon such release, sale or
transfer.
The Trustee shall execute an appropriate instrument delivered by the
Company evidencing such release upon receipt of a request by the Company
accompanied by an Officers' Certificate and Opinion of Counsel certifying as to
the compliance with this Section 11.04. Any Guarantor not so released remains
liable for the full amount of principal of and interest on the Notes as provided
in this Article Eleven.
SECTION 11.05 Limitation of Subsidiary
Guarantor's Liability.
Each Guarantor and, by its acceptance hereof, each Holder hereby confirms
that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law.
To effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor (including, but not limited
to, the Guarantor Senior Indebtedness of such Guarantor) and after giving effect
to any collections from or payments made by or on behalf of any other Guarantor
in respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 11.07, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
SECTION 11.06 Guarantors May Consolidate,
Etc., on Certain Terms.
(a) Nothing contained in this Indenture or in any of the Notes shall
prevent any consolidation or merger of a Guarantor with or into the Company or
another Guarantor that is a Wholly Owned Restricted Subsidiary of the Company or
shall prevent any sale of assets or conveyance of the property of a Guarantor as
an entirety or substantially as an entirety, to the Company or another Guarantor
that is a Wholly Owned Restricted Subsidiary of the Company. Upon any such
consolidation, merger, sale or conveyance, the Guarantee given by such Guarantor
shall no longer have any force or effect.
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(b) Except as set forth in Article Four and Article Five hereof, nothing
contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into a corporation or
corporations other than the Company or another Guarantor (whether or not
affiliated with the Guarantor) or shall prevent any sale of assets or conveyance
of the property of a Guarantor as an entirety or substantially as an entirety,
to a corporation or corporations other than the Company or another Guarantor
(whether or not affiliated with the Guarantor); provided, however, that, subject
to Sections 11.04 and 11.06(a), (i) immediately after such transaction and
giving effect thereto, such transaction does not (a) violate any covenants set
forth herein or (b) result in a Default or Event of Default under this Indenture
that is continuing, (ii) upon any such consolidation, merger, sale or
conveyance, the Guarantee of such Guarantor set forth in this Article Eleven,
and the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by such Guarantor, shall be
expressly assumed (in the event that the Guarantor is not the surviving
corporation in the merger), by supplemental indenture satisfactory in form to
the Trustee and in compliance with Section 9.07, executed and delivered to the
Trustee, by the corporation formed by such consolidation, or into which the
Guarantor shall have merged, or by the corporation that shall have acquired such
property, and (iii) in the event that such Guarantor is not the surviving
corporation in the merger, such surviving corporation shall be a corporation
organized and existing under the laws of the United States or any State thereof
or the District of Columbia. In the case of any such consolidation, merger,
sale or conveyance and upon the assumption by the successor corporation, by
supplemental indenture executed and delivered to the Trustee and satisfactory in
form to the Trustee of the due and punctual performance of all of the covenants
and conditions of this Indenture to be performed by the Guarantor, such
successor corporation shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor.
SECTION 11.07 Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Notes or any other
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Guarantor's obligations with respect to the Guarantee. "Adjusted Net Assets" of
such Guarantor at any date shall mean the lesser of the amount by which (x) the
fair value of the property of such 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 the Guarantee, of such Guarantor at such
date and (y) the present fair saleable value of the assets of such Guarantor at
such date exceeds the amount that will be required to pay the probable liability
of such Guarantor on its debts including, without limitation, Guarantor Senior
Indebtedness (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date and after giving effect to any collection from
any Subsidiary of such Guarantor in respect of the obligations of such
Subsidiary under the Guarantee), excluding debt in respect of the Guarantee of
such Guarantor, as they become absolute and matured.
SECTION 11.08 Waiver of Subrogation.
Until all Obligations are paid in full each Guarantor hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
the Company that arise from the existence, payment, performance or enforcement
of such Guarantor's obligations under the Guarantees and this Indenture,
including, without limitation, any right of subrogation, reimbursement,
exoneration, indemnification, and any right to participate in any claim or
remedy of any Holder of Notes against the Company, whether or not such claim,
remedy or right arises in equity, or under contract, statute or common law,
including, without limitation, the right to take or receive from the Company,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim or other rights. If any
amount shall be paid to any Guarantor in violation of the preceding sentence and
the Notes shall not have been paid in full, such amount shall have been deemed
to have been paid to such Guarantor for the benefit of, and held in trust for
the benefit of, the Holders of the Notes, and shall, subject to the provisions
of Section 11.02, Article Ten and Article Twelve, forthwith be paid to the
Trustee for the benefit of such Holders to be credited and applied upon the
Notes, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set forth in this Section 11.08 is knowingly made in contemplation of
such benefits.
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SECTION 11.09 Execution of Guarantee.
To evidence their guarantee to the Holders set forth in this Article
Eleven, the Guarantors hereby agree to execute the Guarantees in substantially
the form included in Exhibit A and Exhibit B, which shall be endorsed on each
Note ordered to be authenticated and delivered by the Trustee. Each Guarantor
hereby agrees that its Guarantee set forth in this Article Eleven shall remain
in full force and effect notwithstanding any failure to endorse on each Note a
notation of such Guarantee. Each such Guarantee shall be signed on behalf of
each Guarantor by two Officers, or an Officer and an Assistant Secretary or one
Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to such Guarantee prior to the authentication of the Note
on which it is endorsed, and the delivery of such Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of such
Guarantee on behalf of such Guarantor. Such signatures upon the Guarantees may
be by manual or facsimile signature of such officers and may be imprinted or
otherwise reproduced on the Guarantees, and in case any such officer who shall
have signed the Guarantees shall cease to be such officer before the Note on
which such Guarantee is endorsed shall have been authenticated and delivered by
the Trustee or disposed of by the Company, such Note nevertheless may be
authenticated and delivered or disposed of as though the person who signed the
Guarantees had not ceased to be such officer of the Guarantor.
SECTION 11.10 Waiver of Stay, Extension
or Usury Laws.
Each Guarantor covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive each such Guarantor from performing its
Guarantee as contemplated herein, wherever enacted, now or at any time hereafter
in force, or which may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) each such Guarantor
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
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ARTICLE TWELVE
SUBORDINATION OF GUARANTEE OBLIGATIONS
SECTION 12.01 Guarantee Obligations Subordinated
to Guarantor Senior Indebtedness.
Each Guarantor covenants and agrees, and the Trustee and each Holder of the
Notes, by its acceptance thereof, likewise covenants and agrees, that all
Guarantees shall be issued subject to the provisions of this Article Twelve; and
the Trustee and each Person holding any Note, whether upon original issue or
upon transfer, assignment or exchange thereof, accepts and agrees that the
payment of all Obligations on the Notes pursuant to the Guarantees by any
Guarantor shall, to the extent and in the manner herein set forth, be
subordinated and junior in right of payment to the prior payment in full in cash
or Cash Equivalents of all Obligations on the Guarantor Senior Indebtedness of
such Guarantor; that the subordination is for the benefit of, and shall be
enforceable directly by, the holders of Guarantor Senior Indebtedness, and that
each holder of Guarantor Senior Indebtedness whether now outstanding or
hereafter created, incurred, assumed or guaranteed shall be deemed to have
acquired Guarantor Senior Indebtedness in reliance upon the covenants and
provisions contained in this Indenture, the Notes and the Guarantees.
SECTION 12.02 No Payment on Notes in
Certain Circumstances.
(a) No direct or indirect payment by or on behalf of any Guarantor with
respect to any obligations on the Guarantee whether pursuant to the terms of the
Guarantee or upon acceleration or otherwise shall be made if, at the time of
such payment, there exists a default in the payment of all or any portion of
principal of, premium, if any, or interest on, any Guarantor Senior Indebtedness
with a principal amount in excess of $5.0 million (and the Trustee has received
written notice thereof), and such default shall not have been cured or waived or
the benefits of this sentence waived by or on behalf of the holders of such
Guarantor Senior Indebtedness. In addition, during the continuance of any other
event of default with respect to any Designated Senior Indebtedness (which
Designated Senior Indebtedness is also Guarantor Senior Indebtedness of such
Guarantor) pursuant to which the maturity thereof may be accelerated, upon the
occurrence of (x) receipt by the Trustee of written notice from the holders of a
majority of the outstanding principal amount of the Designated Senior
Indebtedness or their Representatives, or (y) if such event
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of default results from the acceleration of the Notes, no such payment may be
made by the Guarantor upon or in respect of the Guarantee of such Guarantor for
a period ("Payment Blockage Period") commencing on the earlier of the date of
receipt of such notice or the date of such acceleration and ending 179 days
thereafter (unless such Payment Blockage Period shall be terminated by written
notice to the Trustee from the holders of a majority of the outstanding
principal amount of such Designated Senior Indebtedness or their Representatives
who delivered such notice). Notwithstanding anything herein to the contrary, in
no event will a Payment Blockage Period extend beyond 179 days from the date on
which such Payment Blockage Period was commenced. Not more than one Payment
Blockage Period may be commenced with respect to the Notes during any period of
360 consecutive days. For all purposes of this paragraph, no event of default
which existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness initiating
such Payment Blockage Period shall be, or be made, the basis for the
commencement of a second Payment Blockage Period by the holders of such
Designated Senior Indebtedness or their Representatives whether or not within a
period of 360 consecutive days unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days (it being
acknowledged that any subsequent action, or any breach of any financial
covenants for a period commencing after the date of commencement of such Payment
Blockage Period that, in either case, would give rise to an event of default
pursuant to any provisions under which an event of default previously existed or
was continuing shall constitute a new event of default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets or securities of the Guarantor of any kind or character,
whether in cash, property or securities, shall be received by the Trustee or the
Holders or any Paying Agent (or, if the Company is acting as its own Paying
Agent, money for any such payment or distribution shall be segregated or held in
trust) on account of principal of, premium, if any, or interest on, the
Guarantee of such Guarantor before all Guarantor Senior Indebtedness is paid in
full, such payment or distribution shall be received and held in trust by the
Trustee or such Holder or Paying Agent for the benefit of the holders of the
Senior Indebtedness, or their respective Representatives, ratably according to
the respective amounts of Guarantor Senior Indebtedness held or represented by
each, and shall be paid over or delivered to the holders of the Guarantor Senior
Indebtedness remaining unpaid to the extent necessary to make payment in full of
all Guarantor Senior Indebtedness remaining unpaid after giving
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effect to all concurrent payments and distributions to or for the holders of
such Guarantor Senior Indebtedness. The Trustee shall be entitled to rely on
information regarding amounts then due and owing on the Guarantor Senior
Indebtedness, if any, received from the holders of Guarantor Senior Indebtedness
(or their Representatives) or, if such information is not received from such
holders or their Representatives, from the Guarantors and only amounts included
in the information provided to the Trustee shall be paid to the holders of
Guarantor Senior Indebtedness.
Nothing contained in this Article Twelve shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Section 6.02 or to pursue any rights or remedies
hereunder; provided that all Guarantor Senior Indebtedness thereafter due or
declared to be due shall first be paid in full in cash or Cash Equivalents
before the Holders are entitled to receive any payment of any kind or character
with respect to Obligations on the Guarantees.
SECTION 12.03 Payment Over of Proceeds
upon Dissolution, Etc.
(a) Upon any payment or distribution of assets of any Guarantor of any kind
or character, whether in cash, property or securities, to creditors upon any
total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of such
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or other
similar proceeding relating to such Guarantor or its property, whether voluntary
or involuntary, all Obligations due or to become due upon all Guarantor Senior
Indebtedness of such Guarantor shall first be paid in full in cash or Cash
Equivalents, or such payment duly provided for to the satisfaction of the
holders of such Guarantor Senior Indebtedness, before any payment or
distribution of any kind or character is made on account of any Obligations on
the Guarantee of such Guarantor. Upon any such dissolution, winding-up,
liquidation, reorganization, receivership or similar proceeding, any payment or
distribution of assets of any Guarantor of any kind or character, whether in
cash, property or securities, to which the Holders of the Notes or the Trustee
under this Indenture would be entitled, except for the provisions hereof, shall
be paid by such Guarantor or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
Holders or by the Trustee under this Indenture if received by them, directly to
the holders of Guarantor Senior Indebtedness of such Guarantor (pro rata to such
holders on the basis of the respective amounts of such Guarantor Senior
Indebtedness held by such holders) or their respective
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Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Guarantor Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of such
Guarantor Senior Indebtedness remaining unpaid until all such Guarantor Senior
Indebtedness has been paid in full in cash or Cash Equivalents after giving
effect to any concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Indebtedness.
(b) To the extent any payment of such Guarantor Senior Indebtedness
(whether by or on behalf of such Guarantor, as proceeds of security or
enforcement of any right of setoff or otherwise) is declared to be fraudulent or
preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, such
Guarantor Senior Indebtedness or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of such Guarantor of any kind or character, whether in
cash, property or securities, shall be received by any Holder when such payment
or distribution is prohibited by Section 12.03(a), such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of such Guarantor Senior Indebtedness (pro rata to such holders
on the basis of the respective amount of such Guarantor Senior Indebtedness held
by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Guarantor Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to the payment of such Guarantor Senior Indebtedness remaining
unpaid until all such Guarantor Senior Indebtedness has been paid in full in
cash or Cash Equivalents, after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such Guarantor
Senior Indebtedness.
(d) The consolidation of any Guarantor with, or the merger of any Guarantor
with or into, another corporation or the liquidation or dissolution of any
Guarantor following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Section 11.06 hereof and as long as permitted under the terms of
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the Guarantor Senior Indebtedness of such Guarantor shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, assume such Guarantor's obligations hereunder in
accordance with Section 11.06 hereof.
SECTION 12.04 Payments May Be Paid Prior
to Dissolution.
Nothing contained in this Article Twelve or elsewhere in this Indenture
shall prevent (i) a Guarantor, except under the conditions described in Sections
12.02 and 12.03, from making payments at any time for the purpose of making
payments in respect of its Guarantee, or from depositing with the Trustee any
moneys for such payments, or (ii) in the absence of actual knowledge by the
Trustee that a given payment would be prohibited by Section 12.02 or 12.03, the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments in respect of the Notes to the Holders entitled thereto
unless at least two Business Days prior to the date upon which such payment
would otherwise become due and payable a Trust Officer shall have actually
received the written notice provided for in the second sentence of Section
12.02(a) or in Section 12.07 (provided that, notwithstanding the foregoing, such
application shall otherwise be subject to the provisions of the first sentence
of Section 12.02(a) and Section 12.03). A Guarantor shall give prompt written
notice to the Trustee of any dissolution, winding-up, liquidation or
reorganization of such Guarantor.
SECTION 12.05 Subrogation.
Subject to the payment in full in cash or Cash Equivalents of all Guarantor
Senior Indebtedness of a Guarantor, the Holders of the Guarantee of such
Guarantor shall be subrogated to the rights of the holders of Guarantor Senior
Indebtedness of such Guarantor to receive payments or distributions of cash,
property or securities of such Guarantor applicable to such Guarantor Senior
Indebtedness until the Notes shall be paid in full; and, for the purposes of
such subrogation, no such payments or distributions to the holders of such
Guarantor Senior Indebtedness by or on behalf of such Guarantor or by or on
behalf of the Holders by virtue of this Article Twelve which otherwise would
have been made to the Holders shall, as between such Guarantor and the Holders
of the Notes, be deemed to be a payment by such Guarantor to or on account of
such Guarantor Senior Indebtedness, it being understood that the provisions of
this Article Twelve are and are intended solely for the purpose of
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defining the relative rights of the Holders of the Notes, on the one hand, and
the holders of the Guarantor Senior Indebtedness, on the other hand.
SECTION 12.06 Obligations of the Subsidiary
Guarantors Unconditional.
Nothing contained in this Article Twelve or elsewhere in this Indenture or
in the Notes or the Guarantees is intended to or shall impair, as among the
Guarantors, its creditors other than the holders of Guarantor Senior
Indebtedness, and the Holders, the obligation of the Guarantors, which is
absolute and unconditional, to pay to the Holders all amounts due and payable
under the Guarantees as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders and creditors of the Guarantors other than the holders of
the Guarantor Senior Indebtedness, nor shall anything herein or therein prevent
the Holder of any Note or the Trustee on its behalf from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, in respect of cash, property or securities of the
Guarantors received upon the exercise of any such remedy.
SECTION 12.07 Notice to Trustee.
The Guarantors shall give prompt written notice to the Trustee of any fact
known to the Guarantors which would prohibit the making of any payment to or by
the Trustee in respect of the Notes and the Guarantees pursuant to the
provisions of this Article Twelve. Regardless of anything to the contrary
contained in this Article Twelve or elsewhere in this Indenture, the Trustee
shall not be charged with knowledge of the existence of any default or event of
default with respect to any Guarantor Senior Indebtedness or of any other facts
which would prohibit the making of any payment to or by the Trustee unless and
until the Trustee shall have received notice in writing from the Guarantors, or
from a holder of Guarantor Senior Indebtedness or a Representative therefor,
and, prior to the receipt of any such written notice, the Trustee shall be
entitled to assume (in the absence of actual knowledge to the contrary) that no
such facts exist.
In the event that the Trustee determines in good faith that any evidence is
required with respect to the right of any Person as a holder of Guarantor Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article Twelve, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of
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Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article Twelve, and if
such evidence is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such person to receive such
payment.
SECTION 12.08 Reliance on Judicial Order or
Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Guarantors referred to in
this Article Twelve, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Notes shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or upon a certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution, delivered to
the Trustee or the Holders of the Notes, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the
Guarantor Senior Indebtedness and other Indebtedness of the Guarantors, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article Twelve.
SECTION 12.09 Trustee's Relation to Guarantor
Senior Indebtedness.
The Trustee and any agent of the Guarantors or the Trustee shall be
entitled to all the rights set forth in this Article Twelve with respect to any
Guarantor Senior Indebtedness which may at any time be held by it in its
individual or any other capacity to the same extent as any other holder of
Guarantor Senior Indebtedness and nothing in this Indenture shall deprive the
Trustee or any such agent of any of its rights as such holder.
With respect to the holders of Guarantor Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Twelve, and no implied covenants
or obligations with respect to the holders of Guarantor Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness.
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Whenever a distribution is to be made or a notice given to holders or
owners of Guarantor Senior Indebtedness, the distribution may be made and the
notice may be given to their Representative, if any.
SECTION 12.10 Subordination Rights Not Impaired by
Acts or Omissions of the Subsidiary
Guarantors or Holders of Guarantor
Senior Indebtedness.
No right of any present or future holders of any Guarantor Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Guarantors or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Guarantors with the terms of this
Indenture, regardless of any knowledge thereof which any such holder may have or
otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Guarantor Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article Twelve or the
obligations hereunder of the Holders of the Notes to the holders of the
Guarantor Senior Indebtedness, do any one or more of the following: (i) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Guarantor Senior Indebtedness, or otherwise amend or supplement in any
manner Guarantor Senior Indebtedness, or any instrument evidencing the same or
any agreement under which Guarantor Senior Indebtedness is outstanding; (ii)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Guarantor Senior Indebtedness; (iii) release any Person
liable in any manner for the payment or collection of Guarantor Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Guarantors and any other Person.
SECTION 12.11 Noteholders Authorize Trustee To
Effectuate Subordination of Guarantee
Obligations.
Each Holder of the Notes and the Guarantees by its acceptance of them
authorizes and expressly directs the Trustee on its behalf to take such action
as may be necessary or appropriate to effectuate, as between the holders of
Guarantor Senior Indebtedness and the Holders, the subordination provided in
this
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Article Twelve, and appoints the Trustee its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of any Guarantor, the filing of a claim for the unpaid
balance of its Notes and accrued interest in the form required in those
proceedings.
If the Trustee does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Guarantor Senior
Indebtedness or their Representative are or is hereby authorized to have the
right to file and are or is hereby authorized to file an appropriate claim for
and on behalf of the Holders of said Notes. Nothing herein contained shall be
deemed to authorize the Trustee or the holders of Guarantor Senior Indebtedness
or their Representative to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee or the holders of Guarantor Senior Indebtedness or their Representative
to vote in respect of the claim of any Holder in any such proceeding.
SECTION 12.12 This Article Twelve Not To
Prevent Events of Default.
The failure to make a payment in respect of the Guarantees by reason of any
provision of this Article Twelve will not be construed as preventing the
occurrence of an Event of Default.
SECTION 12.13 Trustee's Compensation
Not Prejudiced.
Nothing in this Article Twelve will apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
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ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01 TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
SECTION 13.02 Notices.
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
IF TO THE COMPANY OR THE GUARANTORS:
Royal Oak Mines Inc.
5501 Lakeview Drive
Kirkland, WA 98033
Attn: Chief Financial Officer
WITH COPIES TO:
Lang Michener
B.C.E. Place, P.O. Box 747,
Suite 2500
181 Bay Street
Toronto, Ontario, Canada M5J 2T7
Attn: David A. Knight, Esq.
IF TO THE TRUSTEE:
Mellon Bank, F.S.B.
1111 Third Avenue, Suite 2230
Seattle, WA 98101
Attention: Corporate Trust Department
IF TO THE PAYING AGENT (WITH A COPY TO THE TRUSTEE)
Mellon Securities Trust Company
120 Broadway, 13th Floor
New York, NY 10271
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Each of the Company, the Guarantors and the Trustee by written notice to
each other such Person may designate additional or different addresses for
notices to such Person. Any notice or communication to the Company, the
Guarantors or the Trustee shall be deemed to have been given or made as of the
date so delivered if personally delivered; when answered back, if telexed; when
receipt is acknowledged, if faxed; and five (5) calendar days after mailing if
sent by registered or certified mail, postage prepaid (except that a notice of
change of address shall not be deemed to have been given until actually received
by the addressee). Failure to deliver "copies" as noted above shall not affect
the sufficiency of a notice to the Company, Trustee or Paying Agent.
Any notice or communication mailed to a Noteholder shall be mailed to him
by first class mail or other equivalent means at his address as it appears on
the registration books of the Registrar and shall be sufficiently given to him
if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 13.03 Communications by Holders
with Other Holders.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Guarantors, the Trustee, the Registrar and any other Person shall
have the protection of TIA Section 312(c).
SECTION 13.04 Certificate and Opinion as
to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Company, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
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(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with.
SECTION 13.05 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 the Officers' Certificate
required by Section 4.06, 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 reasonably 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 each such
Person, such condition or covenant has been complied with.
SECTION 13.06 Rules by Trustee, Paying
Agent, Registrar.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Noteholders. The Paying
Agent or Registrar may make reasonable rules for its functions.
SECTION 13.07 Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment is a
Saturday, a Sunday or a day on which banking institutions in New York, New York
or at such place of payment are not required to be open. If a payment date is a
Legal Holiday at such place, payment may be made at such 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 13.08 GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE.
SECTION 13.09 No Adverse Interpretation
of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 13.10 No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such, of the
Company, the Guarantors or of the Trustee shall not have any liability for any
obligations of the Company under the Notes or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creations.
Each Noteholder by accepting a Note waives and releases all such liability.
Such waiver and release are part of the consideration for the issuance of the
Notes.
SECTION 13.11 Successors.
All agreements of the Company and the Guarantors in this Indenture, the
Notes and the Guarantees shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 13.12 Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together shall represent the same
agreement.
SECTION 13.13 Severability.
In case any one or more of the provisions in this Indenture or in the Notes
shall be held invalid, illegal or unenforceable, in any respect for any reason,
the validity, legality and enforceability of any such provision in every other
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respect and of the remaining provisions shall not in any way be affected or
impaired thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
Issuer:
ROYAL OAK MINES INC.
By: /s/ M. K. Witte
------------------------------
Name: M. K. Witte
Title: Chairman and CEO
Guarantor:
KEMESS MINES INC.
By: /s/ M. K. Witte
------------------------------
Name: M. K. Witte
Title: Chairman and CEO
Trustee:
MELLON BANK, F.S.B.,
as Trustee
By: /s/ Robert R. Meyers
------------------------------
Name:
Title:
126
EXHIBIT A
CUSIP No.: [ ]
ROYAL OAK MINES INC.
11% SENIOR SUBORDINATED NOTE DUE 2006
No. $
ROYAL OAK MINES INC., an ontario, Canada corporation (the "Company," which
term includes any successor entity), for value received promises to pay to
or registered assigns, the principal sum of Dollars,
on August 15, 2006.
Interest Payment Dates: February 15 and August 15.
Record Dates: February 1 and August 1.
Reference is made to the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has 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.
ROYAL OAK MINES INC.
By:
------------------------------
Name:
Title:
Dated:
Certificate of Authentication
This is one of the 11% Senior Subordinated Notes due 2006 referred to in
the within-mentioned Indenture.
MELLON BANK, F.S.B.,
as Trustee
Dated: By:
------------------------------
Authorized Signatory
A-1
127
(REVERSE OF SECURITY)
11% SENIOR SUBORDINATED NOTE DUE 2006
1. Interest. ROYAL OAK MINES INC., an Ontario, Canada corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from August 12, 1996. The Company will pay interest semi-annually in arrears on
each Interest Payment Date, commencing February 15, 1997. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes plus 2% per annum and on overdue installments of interest (without regard
to any applicable grace periods) to the extent lawful.
2. Method of Payment. The Company shall pay interest on the Notes (except
defaulted interest) to the Persons who are the registered Holders at the close
of business on the Record Date immediately preceding the Interest Payment Date
even if the Notes are cancelled on registration of transfer or registration of
exchange after such Record Date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by its check payable in such U.S. Legal Tender.
The Company may deliver any such interest payment to the Paying Agent or to a
Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, Mellon Bank, F.S.B. (the
"Trustee") will act as Registrar and Mellon Securities Trust Co., a New York
chartered trust company, will act as Paying Agent. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders.
4. Indenture and Guarantees. The Company issued the Notes under an
Indenture, dated as of August 12, 1996 (the "Indenture"), among the Company, the
Guarantor (as defined in the Indenture) and the Trustee. This Note is one of a
duly authorized issue of Initial Notes of the Company designated as its 11%
Senior Subordinated Notes due 2006 (the "Initial Notes"). The Notes are limited
in aggregate principal amount to $175,000,000. Payment on each Note is
guaranteed on a senior subordinated basis by the Guarantors pursuant to Article
Eleven of the Indenture. The Notes include the Initial Notes and the Exchange
Notes, as defined below, issued in exchange for the Initial Notes pursuant to
the Indenture.
A-2
128
The Initial Notes and the Exchange Notes are treated as a single class of
securities under the Indenture. 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 Section Section 77aaa-77bbbb)
(the "TIA"), 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 of
Notes are referred to the Indenture and said Act for a statement of them. The
Notes are general unsecured obligations of the Company.
5. Subordination. The Notes are subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full in cash or Cash Equivalents of all Senior Indebtedness of the Company,
whether outstanding on the date of the Indenture or thereafter incurred. The
Guarantee in respect of the Notes is subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full in cash or Cash Equivalents of all Guarantor Senior Indebtedness of the
Guarantor, whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed or guaranteed. Each Holder by his acceptance hereof
agrees to be bound by such provisions and authorizes and expressly directs the
Trustee, on his behalf, to take such action as may be necessary or appropriate
to effectuate the subordination provided for in the Indenture and appoints the
Trustee his attorney-in-fact for such purposes.
6. Redemption.
(a) Optional Redemption. The Notes will be redeemable, at the Company's
option, in whole at any time or in part from time to time, on and after August
15, 2001, upon not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on August 15 of the year set
forth below, plus, in each case, accrued and unpaid interest thereon, if any, to
the date of redemption:
A-3
129
Year Percentage
- ---- ----------
2001 ................................ 105.500%
2002 ................................ 103.667
2003 ................................ 101.833
2004 and thereafter ................. 100.000%
(b) Optional Redemption upon Public Equity Offerings. At any time, or from
time to time, prior to August 15, 1999, the Company may, at its option, use the
net proceeds of one or more Public Equity Offerings of the Company to redeem up
to 35% of the aggregate principal amount of Notes at the following redemption
prices (expressed as percentages of the principal amount) if redeemed during the
twelve-month period commencing on August 15 of the year set forth below, plus,
in each case, accrued interest thereon to the date of redemption:
Year Percentage
- ---- ----------
1996 ................................ 111.000%
1997 ................................ 109.778%
1998 ................................ 108.556%
In order to effect the foregoing redemption with the net proceeds of any
Public Equity Offering, the Company shall make such redemption on or prior to
120 days after the receipt of such net proceeds.
(c) Optional Redemption upon Changes to Certain Canadian Laws. The Notes
are redeemable, as a whole but not in part, at the option of the Company at any
time upon not less than 30 nor more than 60 days notice at a redemption price
equal to 100% of the aggregate principal amount so redeemed, plus accrued and
unpaid interest thereon to the date of redemption, if the Company has become or
would become obligated to pay, on the next date on which any amount would be
payable under or with respect to the Notes, any additional amounts ("Additional
Amounts") as a result of any change in, or amendment to, the laws (or any
regulations promulgated thereunder including changes to withholding tax laws) of
Canada (or any political subdivision or taxing authority thereof or therein), or
any change in, or amendment to, any official position regarding the application
or interpretation of such laws or regulations, which change or amendment is
announced or becomes effective on or after August 5, 1996.
7. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
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Except as set forth in the Indenture, if monies for the redemption of the
Notes called for redemption shall have been deposited with the Paying Agent for
redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
8. Offers to Purchase. Sections 4.15 and 4.16 of the Indenture provide
that, after certain Asset Sales (as defined in the Indenture) and upon the
occurrence of a Change of Control (as defined in the Indenture), and subject to
further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. Registration Rights. Pursuant to the Registration Rights Agreement
among the Company, the Guarantor and the Holders of the Initial Notes, the
Company will be obligated to consummate an exchange offer pursuant to which the
Holder of this Note shall have the right to exchange this Note for the Company's
Series B 11% Senior Subordinated Notes due 2006 (the "Exchange Notes"), which
have been registered under the Securities Act, in like principal amount and
having terms identical in all material respects to the Initial Notes. The
Holders of the Initial Notes shall be entitled to receive certain additional
interest payments in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.
10. Denominations; Transfer; Exchange. The Notes are in registered form,
without coupons, in denominations of $1,000 and integral multiples of $1,000. A
Holder shall register the transfer of or exchange of 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 certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption.
11. Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
12. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
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13. Discharge Prior to Redemption or Maturity. If the Company at any time
deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
14. Amendment; Supplement; Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the written consent
of the Holders of at least a majority in aggregate principal amount of the Notes
then outstanding, and any existing Default or Event of Default or noncompliance
with any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Notes in addition to or in place of
certificated Notes, or comply with Article Five of the Indenture or make any
other change that does not adversely affect in any material respect the rights
of any Holder of a Note.
15. Restrictive Covenants. The Indenture imposes certain covenants that
limit the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, pay dividends or make certain other
restricted payments, consummate certain asset sales, enter into certain
transactions with Affiliates, incur Indebtedness that is subordinated in right
of payment to any Senior Indebtedness and senior in right of payment to the
Notes, incur liens, impose restrictions on the ability of a subsidiary to pay
dividends or make certain payments to the Company and its Restricted
Subsidiaries, merge or consolidate with any other person or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of the
assets of the Company or its Restricted Subsidiaries. Such limitations are
subject to a number of important qualifications and exceptions. The Company
must annually report to the Trustee on compliance with such limitations.
16. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
17. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as provided
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in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of Notes notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of such Holders.
18. Trustee Dealings with 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 Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.
19. No Recourse Against Others. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
20. Authentication. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
21. Governing Law. The Laws of the State of New York shall govern this
Note and the Indenture, without regard to principles of conflict of laws.
22. Abbreviations and Defined Terms. Customary abbreviations may be used
in the name of a Holder of a Note 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).
23. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders 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.
24. Indenture. Each Holder, by accepting a Note, agrees to be bound by all
of the terms and provisions of the Indenture, as the same may be amended from
time to time.
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The Company will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: Royal Oak Mines Inc., 5501 Lakeview
Drive, Kirkland, WA 98033, Attn: Chief Financial Officer.
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[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]
SENIOR GUARANTEE
KEMESS MINES INC. (the "Guarantor"), has unconditionally guaranteed on a
senior subordinated basis (such guarantee by the Guarantor being referred to
herein as the "Guarantee") (i) the due and punctual payment of the principal of
and interest on the Notes, whether at maturity, by acceleration or otherwise,
the due and punctual payment of interest on the overdue principal and interest,
if any, on the Notes, to the extent lawful, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms set forth in Article Eleven and Article Twelve of the
Indenture and (ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of the Guarantor to the Holders and to the Trustee pursuant
to the Guarantee and the Indenture are expressly set forth and are expressly
subordinated and subject in right of payment to the prior payment in full of all
Guarantor Senior Indebtedness of such Guarantor, to the extent and in the manner
provided, in Article Eleven and Article Twelve of the Indenture, and reference
is hereby made to such Indenture for the precise terms of the Guarantees therein
made.
No past, present or future stockholder, officer, director, employee or
incorporator, as such, of any of the Guarantors shall have any liability under
the Guarantee of such Guarantor by reason of such person's status as
stockholder, officer, director, employee or incorporator. Each Holder of a Note
by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Guarantee.
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The Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.
KEMESS MINES INC.
By:
------------------------------
Name:
Title:
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ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ______________________________________ , agent to
transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: Signed:
------------------------- ------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
----------------------------------------
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) December 1, 1999, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
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[Check One]
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities
Act; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) ___ outside the United states to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act; or
(5) ___ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(6) ___ pursuant to an effective registration statement under the Securities
Act; or
(7) ___ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4), (5) or (7) is checked,
the Company or the Trustee may require, prior to registering any such transfer
of the Notes, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
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If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.17 of the Indenture shall have been satisfied.
Date: Signed:
------------------------- ------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
----------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Date: Signed:
------------------------- ------------------------------
NOTICE: To be executed by an
executive officer
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[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.15 or Section 4.16 of the Indenture, check the appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$
--------------------
Dated:
-------------------- ------------------------------------
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee:
------------------------------------------------
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EXHIBIT B
CUSIP No.:
ROYAL OAK MINES INC.
SERIES B 11% SENIOR SUBORDINATED NOTE DUE 2006
No. $
ROYAL OAK MINES INC., an Ontario, Canada corporation (the "Company," which
term includes any successor entity), for value received promises to pay to
or registered assigns, the principal sum
of Dollars, on August 15, 2006.
Interest Payment Dates: February 15 and August 15.
Record Dates: February 1 and August 1.
Reference is made to the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has 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.
ROYAL OAK MINES INC.
By:
------------------------------
Name:
Title:
Dated:
Certificate of Authentication
This is one of the Series B 11% Senior Subordinated Notes due 2006
referred to in the within-mentioned Indenture.
MELLON BANK, F.S.B.,
as Trustee
Dated: By:
------------------------------
Authorized Signatory
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(REVERSE OF SECURITY)
SERIES B 11% SENIOR SUBORDINATED NOTE DUE 2006
1. Interest. ROYAL OAK MINES INC., an Ontario, Canada corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from August 12, 1996. The Company will pay interest semi-annually in arrears on
each Interest Payment Date, commencing February 15, 1997. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes plus 2% per annum and on overdue installments of interest (without regard
to any applicable grace periods) to the extent lawful.
2. Method of Payment. The Company shall pay interest on the Notes (except
defaulted interest) to the Persons who are the registered Holders at the close
of business on the Record Date immediately preceding the Interest Payment Date
even if the Notes are cancelled on registration of transfer or registration of
exchange after such Record Date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by its check payable in such U.S. Legal Tender.
The Company may deliver any such interest payment to the Paying Agent or to a
Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, Mellon Bank, F.S.B. (the
"Trustee") will act as Paying Agent and Mellon Securities Trust Co., a New York
chartered trust company, will act as Paying Agent. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders.
4. Indenture and Guarantees. The Company issued the Notes under an
Indenture, dated as of August 12, 1996 (the "Indenture"), among the Company, the
Guarantors (as defined in the Indenture) and the Trustee. This Note is one of a
duly authorized issue of Exchange Notes of the Company designated as its Series
B 11% Senior Subordinated Notes due 2006 (the "Exchange Notes"). The Notes are
limited in aggregate principal amount to $175,000,000. Payment on each Note is
guaranteed on a senior subordinated basis by the Guarantors pursuant to Article
Eleven of the Indenture. The Notes include the Initial Notes (the 11% Senior
Subordinated Notes due 2006) and the Exchange Notes, issued in exchange for the
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Initial Notes pursuant to the Indenture. The Initial Notes and the Exchange
Notes are treated as a single class of securities under the Indenture.
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 Section Section 77aaa-77bbbb) (the "TIA"), 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 of Notes are referred to the
Indenture and said Act for a statement of them. The Notes are general unsecured
obligations of the Company.
5. Subordination. The Notes are subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full in cash or Cash Equivalents of all Senior Indebtedness of the Company,
whether outstanding on the date of the Indenture or thereafter incurred. The
Guarantee in respect of the Notes is subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full in cash or Cash Equivalents of all Guarantor Senior Indebtedness of the
Guarantor, whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed or guaranteed. Each Holder by his acceptance hereof
agrees to be bound by such provisions and authorizes and expressly directs the
Trustee, on his behalf, to take such action as may be necessary or appropriate
to effectuate the subordination provided for in the Indenture and appoints the
Trustee his attorney-in-fact for such purposes.
6. Redemption.
(a) Optional Redemption. The Notes will be redeemable, at the Company's
option, in whole at any time or in part from time to time, on and after August
15, 2001, upon not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on August 15 of the year set
forth below, plus, in each case, accrued and unpaid interest thereon, if any, to
the date of redemption:
Year Percentage
- ---- ----------
2001 .............................. 105.500%
2002 .............................. 103.667
2003 .............................. 101.833
2004 and thereafter ............... 100.000%
(b) Optional Redemption upon Public Equity Offerings. At any time, or from
time to time, prior to August 15, 1999, the Company may, at its option, use the
net proceeds of one or more Public Equity Offerings of the Company to redeem up
to 35% of the aggregate principal amount of Notes at the following redemption
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prices (expressed as percentages of the principal amount) if redeemed during the
twelve-month period commencing on August 15 of the year set forth below, plus,
in each case, accrued interest thereon to the date of redemption:
Year Percentage
- ---- ----------
1996 ............................... 111.000%
1997 ............................... 109.778%
1998 ............................... 108.556%
In order to effect the foregoing redemption with the net proceeds of any
Public Equity Offering, the Company shall make such redemption on or prior to
120 days after the receipt of such net proceeds.
(c) Optional Redemption upon Changes to Certain Canadian Laws. The Notes
are redeemable, as a whole but not in part, at the option of the Company at any
time upon not less than 30 nor more than 60 days notice at a redemption price
equal to 100% of the aggregate principal amount so redeemed, plus accrued and
unpaid interest thereon to the date of redemption, if the Company has become or
would become obligated to pay, on the next date on which any amount would be
payable under or with respect to the Notes, any additional amounts ("Additional
Amounts") as a result of any change in, or amendment to, the laws (or any
regulations promulgated thereunder including changes to withholding tax laws) of
Canada (or any political subdivision or taxing authority thereof or therein), or
any change in, or amendment to, any official position regarding the application
or interpretation of such laws or regulations, which change or amendment is
announced or becomes effective on or after August 5, 1996.
7. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of the
Notes called for redemption shall have been deposited with the Paying Agent for
redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
8. Offers to Purchase. Sections 4.15 and 4.16 of the Indenture provide
that, after certain Asset Sales (as defined in
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the Indenture) and upon the occurrence of a Change of Control (as defined in the
Indenture), and subject to further limitations contained therein, the Company
will make an offer to purchase certain amounts of the Notes in accordance with
the procedures set forth in the Indenture.
9. Denominations; Transfer; Exchange. The Notes are in registered form,
without coupons, in denominations of $1,000 and integral multiples of $1,000. A
Holder shall register the transfer of 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 certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange of any Notes or portions thereof selected for redemption.
10. Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity. If the Company at any time
deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
13. Amendment; Supplement; Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the written consent
of the Holders of at least a majority in aggregate principal amount of the Notes
then outstanding, and any existing Default or Event of Default or noncompliance
with any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Notes in addition to or in place of
certificated Notes, or comply with Article Five of the Indenture or make any
other change that does not adversely affect in any material respect the rights
of any Holder of a Note.
14. Restrictive Covenants. The Indenture imposes certain covenants that
limit the ability of the Company and its
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Restricted Subsidiaries to, among other things, incur additional Indebtedness,
pay dividends or make certain other restricted payments, consummate certain
asset sales, enter into certain transactions with Affiliates, incur Indebtedness
that is subordinated in right of payment to any Senior Indebtedness and senior
in right of payment to the Notes, incur liens, impose restrictions on the
ability of a subsidiary to pay dividends or make certain payments to the Company
and its Restricted Subsidiaries, merge or consolidate with any other person or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the assets of the Company or its Restricted Subsidiaries.
Such limitations are subject to a number of important qualifications and
exceptions. The Company must annually report to the Trustee on compliance with
such limitations.
15. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
16. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of Notes notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
17. Trustee Dealings with 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 Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.
18. No Recourse Against Others. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
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19. Authentication. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
20. Governing Law. The Laws of the State of New York shall govern this
Note and the Indenture, without regard to principles of conflict of laws.
21. Abbreviations and Defined Terms. Customary abbreviations may be used
in the name of a Holder of a Note 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).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders 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.
23. Indenture. Each Holder, by accepting a Note, agrees to be bound by
all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: Royal Oak Mines Inc., 5501 Lakeview
Drive, Kirkland, WA 98033, Attn: Chief Financial Officer.
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[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]
SENIOR GUARANTEE
KEMESS MINES INC. (the "Guarantor") has unconditionally guaranteed on a
senior subordinated basis (such guarantee by each Guarantor being referred to
herein as the "Guarantee") (i) the due and punctual payment of the principal of
and interest on the Notes, whether at maturity, by acceleration or otherwise,
the due and punctual payment of interest on the overdue principal and interest,
if any, on the Notes, to the extent lawful, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms set forth in Article Eleven and Article Twelve of the
Indenture and (ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of the Guarantor to the Holders and to the Trustee pursuant
to the Guarantee and the Indenture are expressly set forth and are expressly
subordinated and subject in right of payment to the prior payment in full of all
Guarantor Senior Indebtedness of such Guarantor, to the extent and in the manner
provided, in Article Eleven and Article Twelve of the Indenture, and reference
is hereby made to such Indenture for the precise terms of the Guarantee therein
made.
No past, present or future stockholder, officer, director, employee or
incorporator, as such, of any of the Guarantors shall have any liability under
the Guarantee of such Guarantor by reason of such person's status as
stockholder, officer, director, employee or incorporator. Each Holder of a Note
by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Guarantee.
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The Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.
KEMESS MINES INC.
By:
------------------------------
Name:
Title:
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ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _________________________________ , agent to transfer
this Note on the books of the Company. The agent may substitute another to act
for him.
Date: Signed:
------------------------- ------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
----------------------------------------
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[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.15 or Section 4.16 of the Indenture, check the appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$___________________
Dated:
------------------------- ------------------------------------
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee:
-------------------------------------
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Exhibit C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
___________, ____
Mellon Bank, F.S.B.
1111 Third Avenue, Suite 2230
Seattle, WA 98101
Attention: Corporate Trust Department
Re: Royal Oak Mines Inc.
11% Senior Subordinated Notes due 2006
--------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of 11% Senior Subordinated Notes
due 2006 (the "Notes") of Royal Oak Mines Inc. (the "Company"), we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated August 5, 1996 relating to the Notes and such other
information as we deem necessary in order to make our investment decision.
We acknowledge that we have read and agreed to the matters stated on pages
(i)-(iv) of the Offering Memorandum and in the section entitled "Transfer
Restrictions" of the Offering Memorandum, including the restrictions on
duplication and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Notes (as described in the Offering Memorandum) and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities
Act").
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered
or sold except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell or otherwise transfer any Notes
prior to the date which is three years after the original issuance of the
Notes, we will do so
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152
only (i) to the Company or any of its subsidiaries, (ii) inside the United
States in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act), (iii) inside the United States to an institutional
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the
Trustee (as defined in the Indenture relating to the Notes), a signed
letter containing certain representations and agreements relating to the
restrictions on transfer of the Notes, (iv) outside the United States in
accordance with Rule 904 of Regulation S under the Securities Act, (v)
pursuant to the exemption from registration provided by Rule 144 under the
Securities Act (if available), or (vi) pursuant to an effective
registration statement under the Securities Act, and we further agree to
provide to any person purchasing any of the Notes from us a notice advising
such purchaser that resales of the Notes are restricted as stated herein.
4. We are not acquiring the Notes for or on behalf of, and will not
transfer the Notes to, any pension or welfare plan (as defined in Section 3
of the Employee Retirement Income Security Act of 1974), except as
permitted in the section entitled "Transfer Restrictions" of the Offering
Memorandum.
5. We understand that, on any proposed resale of any Notes, we will
be required to furnish to the Trustee and the Company such certification,
legal opinions and other information as the Trustee and the Company may
reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Notes purchased by
us will bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or their investment, as the case may be.
7. We are acquiring the Notes purchased by us for our account or for
one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a
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153
copy hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
By:
------------------------------
Name:
Title:
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Exhibit D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
______________, ____
Mellon Bank, F.S.B.
1111 Third Avenue, Suite 2230
Seattle, WA 98101
Attention: Corporate Trust Department
Re: Royal Oak Mines Inc. (the "Company")
11% Senior Subordinated
Notes due 2006 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $___________ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
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(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
------------------------------
Authorized Signature
D-2