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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON , 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CARAUSTAR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
NORTH CAROLINA 2631 58-1388387
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
3100 WASHINGTON STREET
AUSTELL, GEORGIA 30001
(770) 948-3101
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
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H. LEE THRASH, III
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
CARAUSTAR INDUSTRIES, INC.
3100 WASHINGTON STREET
AUSTELL, GEORGIA 30106
(770) 948-3101
(Address, including zip code, and telephone number,
including area code, of agent for service)
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WITH COPIES TO:
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<S> <C>
PATRICK S. BRYANT B. ANDREW PICKENS, JR.
ROBINSON, BRADSHAW & HINSON, P.A. FENNEBRESQUE, CLARK, SWINDELL & HAY
101 NORTH TRYON STREET, SUITE 1900 100 NORTH TRYON STREET, SUITE 2900
CHARLOTTE, NORTH CAROLINA 28246 CHARLOTTE, NORTH CAROLINA 28202-4011
(704) 377-2536 (704) 347-3800
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) UNIT(2) PRICE(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Debt Securities........................... $300,000,000 100% $300,000,000 $88,500
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</TABLE>
(1) Or, if Debt Securities are issued in a currency or composite currency other
than United States dollars, the amount in such currency that will result in
an aggregate initial offering price equal to $300,000,000.
(2) Estimated for the sole purpose of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. NEITHER THIS PROSPECTUS NOR ANY
PROSPECTUS SUPPLEMENT IS AN OFFER TO SELL THESE SECURITIES OR A SOLICITATION OF
AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED OCTOBER 9, 1998
PROSPECTUS
$300,000,000
CARAUSTAR INDUSTRIES, INC.
[CARAUSTAR LOGO]
DEBT SECURITIES
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<S> <C>
DEBT SECURITIES-- We are based in Austell,
- We may use this prospectus from time to time to Georgia and primarily
offer unsecured debt in one or more series. manufacture packaging products
- The debt will be issued under the terms of an from recycled paper
indenture, which is described in this The trading symbol for our
prospectus. common stock on the Nasdaq is
- The specific terms of each series of debt "CSAR"
securities issued will be described in detail in We do not expect our debt
a supplement to this prospectus. securities to officially trade
- We may sell debt securities directly to in any public market
purchasers, through underwriters, dealers or
agents or through any combination of these
methods. Before making any investment
- A supplement to this prospectus will name any in our company, you should
underwriters, dealers or agents involved in the consider carefully the risk
sale of our debt securities and describe their factors beginning on page 3
compensation. and read the applicable
We may use this prospectus to offer up to supplement to this prospectus.
$300,000,000 total (or an equivalent amount in a
foreign currency or unit) of debt securities.
</TABLE>
This prospectus may not be used to consummate sales of these debt
securities unless accompanied by a prospectus supplement. The prospectus
supplement may update or change information contained in this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved any of these securities or determined that this
prospectus or any supplement to it is accurate or complete. Any representation
to the contrary is a criminal offense.
, 1998
<PAGE> 3
RISK FACTORS
In addition to the other information contained in this Prospectus, you
should consider carefully the following risk factors before investing in any of
our debt securities.
POSSIBLE FUTURE INCREASES IN RAW MATERIAL COSTS; ECONOMIC CONDITIONS
Our primary raw material is recycled waste paper, which is known in our
industry as "recovered fiber." The cost of recovered fiber has at times
fluctuated greatly because of factors such as shortages or surpluses created by
market or industry conditions. Although in the past we have raised the selling
prices of our products in response to raw material price increases, sometimes
raw material prices have increased so quickly or to such levels that we have
been unable to maintain our operating margins or pass the price increases
through to our customers on a timely basis. We cannot assure you that we will be
able to maintain our margins in the face of raw material price fluctuations or
that we will be able to pass such price changes through to our customers on a
timely basis. Demand for our products generally is dependent upon production
levels and consumer demand, which fluctuate with U.S. and global economic
conditions and cycles. Demand is generally higher during periods of economic
strength and lower during periods of economic weakness or uncertainty. Adverse
economic conditions could have a material adverse effect on us.
ABILITY TO CONTROL GROWTH; EXPANSION AND ACQUISITION RISKS
We intend to increase our production capacity in the next several years.
This strategy involves risks and depends on the availability of funds to permit
us to make capital expenditures and acquisitions. We have made numerous
acquisitions in recent years and actively seek new acquisitions that meet our
criteria. Acquired businesses may not achieve the same levels of revenue, profit
or productivity as our existing locations and may not otherwise perform as we
expect. To make acquisitions, we might incur additional debt, issue additional
stock (which would dilute the relative stock holdings of our existing
shareholders), or both.
Acquisitions also involve special risks. Some of these risks include:
- assumption of unanticipated liabilities and contingencies
- diversion of management's attention
- possible reduction of our reported earnings because of:
, increased goodwill write-offs
, increased interest costs
, issuances of additional securities
, difficulties of integrating acquired businesses
As we grow, we can give no assurance that we will be able to:
- use increased production capacity at our facilities
- identify suitable acquisition candidates
- complete additional acquisitions
- integrate acquired businesses into our operations
ENVIRONMENTAL LIABILITIES OR COSTS
Compliance with the environmental requirements of federal, state and local
governments significantly affects our business. Among other things, these
requirements regulate the
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discharge of materials into the water, air and land and govern the use and
disposal of hazardous substances. Under environmental laws, we can be held
strictly liable if hazardous substances are found on real property we have ever
owned or operated or used as a disposal site. In recent years, we have adopted a
policy of assessing real property for environmental risks prior to purchase. We
are aware of issues regarding hazardous substances at some of our facilities and
one of our disposal sites, and we have put in place a remedial plan at each site
where we believe such a plan is necessary. We regularly make capital and
operating expenditures to stay in compliance with environmental laws. Despite
these compliance efforts, risk of environmental liability is part of the nature
of our business. We cannot assure you that environmental liabilities, including
compliance and remediation costs, will not have a material adverse effect on us
in the future. In addition, future events may lead to additional compliance or
other costs that could have a material adverse effect on us. Such future events
could include changes in, or new interpretations of, existing laws or
enforcement policies or further investigation of the potential health hazards of
certain products or business activities.
HIGHLY COMPETITIVE MARKETS
The manufacture and sale of our products are highly competitive. We compete
with a variety of companies, some of which are larger and have greater resources
than we do. In most of our markets, our competitors are capable of supplying
products that would meet the needs of our customers. We cannot assure you that
we will be able to compete successfully in the future.
DEPENDENCE ON KEY PERSONNEL
We depend on the continued efforts of our executive officers and senior
management. In addition, we depend on the performance and productivity of our
local managers. The loss of executive officers, members of senior management or
key local managers could have a material adverse effect on our operations,
including our ability to establish and maintain customer relationships. We
maintain no key person insurance policies on any of our executive officers or
other senior managers. If we are unable to attract or retain key employees to
perform these services, our business could be materially and adversely affected.
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WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). You may
read and copy (upon the payment of fees prescribed by the SEC) any document that
we file with the SEC at its public reference rooms in Washington, D.C. (450
Fifth Street, N.W. 20549), New York, New York, (7 World Trade Center, Suite 1300
10048) and Chicago, Illinois (500 West Madison Street, Suite 1400 60661). You
may call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our filings are also available to the public on the internet,
through the SEC's EDGAR database. You may access the EDGAR database at the SEC's
web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with them. This means that we can disclose important
financial and other information in our SEC filings by referring you to the
documents containing this information. All information incorporated by reference
is part of this prospectus, unless that information is updated and superseded by
the information contained in this prospectus or by any information filed
subsequently that is incorporated by reference or by any prospectus supplement.
Any prospectus supplement or any information that we subsequently file with the
SEC that is incorporated by reference will automatically update and supersede
any previous information that is part of this prospectus or any prior prospectus
supplement. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of
the Securities Exchange Act of 1934 until we sell all the securities we offer
with this prospectus:
- Annual Report on Form 10-K for the year ended December 31, 1997; and
- Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998 and
June 30, 1998.
This prospectus is part of a registration statement (on Form S-3) we have
filed with the SEC relating to the debt securities. As permitted by SEC rules,
this prospectus does not contain all the information contained in the
registration statement and accompanying exhibits and schedules we file with the
SEC. You may refer to the registration statement, the exhibits and schedules for
more information about us and our debt securities. The registration statement,
exhibits and schedules also are available at the SEC's public reference rooms or
through its EDGAR database on the internet.
You may obtain a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Caraustar Industries, Inc.
3100 Washington Street
Austell, Georgia 30106
Attn: Corporate Secretary
Telephone: (770) 948-3101
You should rely only on the information provided in this prospectus or any
prospectus supplement or that is incorporated by reference. We have not
authorized anyone else to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. Information is accurate only as of the date of the documents
containing the information, unless the information specifically indicates that
another date applies.
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SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in (a) this prospectus under the caption "Risk Factors,"
(b) any applicable prospectus supplement and (c) the documents incorporated by
reference into this prospectus may constitute "forward-looking statements"
within the meaning of federal securities laws. Forward-looking statements are
based on our management's beliefs, assumptions, and expectations of our future
economic performance, taking into account the information currently available to
them. These statements are not statements of historical fact. Forward-looking
statements involve risks and uncertainties that may cause our actual results,
performance or financial condition to be materially different from the
expectations of future results, performance or financial condition we express or
imply in any forward-looking statements. Some of the important factors that
could cause our actual results, performance or financial condition to differ
materially from our expectations are:
- Fluctuations in our raw material prices
- Our ability to identify and complete acquisitions and successfully
integrate the businesses we acquire
- Changes in government regulations, particularly environmental regulations
- Changes in demand for our products
- Changes in the industrial sector or the general domestic or global
economy
- Degree and nature of our competition
- Other factors described in this prospectus, any prospectus supplement or
the documents we file with the SEC and incorporate by reference into this
prospectus
When used in our documents or oral presentations, the words "anticipate,"
"estimate," "expect," "objective," "projection," "forecast," "goal" or similar
words are intended to identify forward-looking statements. We qualify any such
forward-looking statements entirely by these cautionary factors.
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THE COMPANY
Caraustar Industries, Inc.:
- Is a major manufacturer of recycled paperboard and converted paperboard
products
- Manufactures products primarily from recovered fiber, which is derived
from recycled waste paper
- Produces recycled paperboard for internal use and sale to customers in
four principal markets:
- Tubes, cores and composite containers
- Folding cartons
- Gypsum wallboard facing paper
- Miscellaneous other specialty and converted products
- Operates facilities in the U.S., Mexico and the United Kingdom,
including:
- Paperboard mills
- Converting plants, consisting of
- tube and core converting plants
- composite container plants
- specialty converting plants
- Plastics manufacturing plants
- A composite extrusion manufacturing plant
- Paperstock recycling and processing facilities
- Contract manufacturing and packaging plants
- Various special services facilities, including
- transportation
- packaging, engineering and procurement
- industrial adhesives manufacturing
- Has an equity interest as the non-operating partner in a gypsum wallboard
manufacturing plant, which has a related gypsum quarry, a specialty
paperboard converting plant and a tube plant
- Was incorporated in North Carolina in 1980 through the consolidation of 6
corporations in the recycled paperboard industry previously related by
common ownership and administration
Our executive offices are located at 3100 Washington Street, Austell,
Georgia. Our phone number is (770) 948-3101.
THE OFFERING
We may offer and sell from time to time, in one or more series, unsecured
debt securities, which may consist of notes, debentures or other evidences of
indebtedness.
The total initial offering prices of the debt securities we may offer and
sell pursuant to this prospectus and supplements to it will not be greater than
$300,000,000 (or the equivalent amount in a foreign currency or currency unit at
the time of sale). We will offer these securities in amounts, at prices and on
terms that we determine in light of market conditions at the time of sale and
specify in a prospectus supplement.
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PROSPECTUS SUPPLEMENT
The prospectus supplement for each offering of debt securities will contain
specific information and terms for that offering. The prospectus supplement may
also add to, update or change information contained in this prospectus. It is
important for you to consider the information contained in this prospectus and
the prospectus supplement in making your investment decision.
USE OF PROCEEDS
Unless we state otherwise in a prospectus supplement, the net proceeds from
the sale of the debt securities will be added to our general funds and will be
available for general corporate purposes, which may include, but are not limited
to, repayment of debt, working capital, capital expenditures and acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our ratio of earnings to fixed charges for each
of the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------- ----------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges...... 5.91x 7.26x 8.11x 8.39x 6.04x 5.94x
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income from continuing operations before income taxes, minority
interest, reversal of loss on discontinued operations, and cumulative effect of
accounting changes, plus fixed charges, minus equity in income of
less-than-50%-owned entities. Fixed charges consist of interest expense,
amortization of debt issuance costs, and an estimate of the interest cost in
rental expense.
During the periods presented, the Company had no preferred stock
outstanding. Therefore, the ratio of earnings to combined fixed charges and
preference dividends was the same as the ratio of earnings to fixed charges for
each of the periods presented.
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DESCRIPTION OF DEBT SECURITIES
We may issue the debt securities at various times in one or more series
under an indenture between us and the trustee, which is The Bank of New York.
References in this prospectus to the indenture include amendments that may be
made to the indenture from time to time. A copy of the indenture is filed as an
exhibit to the registration statement of which this prospectus is a part.
The following summary sets forth certain general terms and provisions of
the debt securities and the indenture. A prospectus supplement will provide the
particular terms of offered debt securities and will describe the extent, if
any, to which the general terms and provisions described in this prospectus do
not apply to those particular securities. Because this is a summary, it does not
contain all the information that may be important to you. You should read the
entire indenture, including the definitions of certain terms, and the applicable
prospectus supplement before you make any investment decision. Where this
summary or any prospectus supplement refers to particular sections, provisions
or defined terms in the indenture, those sections, provisions or defined terms
are incorporated by reference into this summary or the applicable prospectus
supplement. Section references used in this summary are references to the
indenture.
The covenants in the indenture do not necessarily protect you from a
decline in our credit quality due to highly leveraged or other transactions
involving the Company.
GENERAL
The indenture provides that we may issue separate series of debt securities
from time to time without limitation as to aggregate principal amount. We may
specify a maximum aggregate principal amount for the debt securities of any
series; however, we may increase the specified maximum aggregate principal
amount by resolution of our board of directors. (Section 301). We will determine
certain terms and provisions of the debt securities, including terms relating to
maturity, principal and interest. These terms will not be inconsistent with the
Indenture.
The debt securities will be our direct, unsecured obligations and will rank
on a parity with all of our current and future outstanding unsecured and
unsubordinated indebtedness. Except as described under "Certain Covenants of the
Company," the indenture does not limit us or any of our subsidiaries from
incurring more indebtedness or issuing more securities, and does not contain
financial or similar restrictions on us or any of our subsidiaries. Our rights
and the rights of our creditors, including holders of debt securities, to
participate in any distribution of assets of any of our subsidiaries upon the
subsidiary's liquidation or reorganization or otherwise are effectively
subordinated to the claims of the subsidiary's creditors, except to the extent
that we or any of our creditors may be a creditor of that subsidiary.
We may issue the debt securities of any series in certificated form
registered in the name of the debt security holder. If provided in the
applicable prospectus supplement, the debt securities may be represented in
whole or part by a global security or securities, which will be deposited with,
or on behalf of, The Depository Trust Company, New York, New York or other
successor depository that we may appoint, and registered in the name of the
depositary's nominee. The Depository Trust Company or other depository appointed
by us is referred to in this prospectus as the "depositary." Each debt security
represented by a global security is referred to in this prospectus as a
"book-entry security." See "Book Entry Securities."
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The applicable prospectus supplement relating to each particular series of
offered debt securities will provide the following terms or additional
provisions of the offered debt securities:
- the title and designation of the offered debt securities;
- any limit on the aggregate principal amount of the offered debt
securities;
- the person to whom any interest on an offered debt security is payable,
if other than the person in whose name that security is registered;
- the price (expressed as a percentage of the aggregate principal amount of
offered debt securities) at which the offered debt securities will be
issued;
- the date or dates on which the principal of the offered debt securities
will be payable or the method by which those dates will be determined or
extended;
- the rate or rates (which may be fixed or variable) at which the offered
debt securities will bear interest, if any, or the method of
determination of those rates;
- the basis on which interest will be calculated if other than a 360-day
year consisting of twelve 30-day months;
- the date or dates from which the interest, if any, on the offered debt
securities will accrue or the method of determination of such date or
dates;
- the dates on which the interest, if any, will be payable, or the method
by which those dates will be determined;
- the date on which payment of the interest, if any, will commence, or the
method by which that date will be determined;
- the regular record dates for the interest payment dates, if any, or the
method by which those dates will be determined;
- the place or places where the principal of, and any premium and interest
on, any of the offered debt securities will be payable, where the offered
debt securities may be presented for registration of transfer or
exchange, and where notices and demands to or upon us in respect of the
offered debt securities may be made;
- the periods within or the dates, prices and terms and conditions on which
the offered debt securities may be redeemed, in whole or in part, at our
option, and the manner in which any election by us to redeem the offered
debt securities will be evidenced (if other than by board resolution);
- our obligation or right, if any, to redeem or purchase offered debt
securities pursuant to any sinking fund, amortization or analogous
provisions, or at the option of a holder of debt securities to require
such a redemption or purchase, and the periods within, prices at,
currency (including currency units) in which and the other terms and
conditions upon which the offered debt securities will be redeemed or
purchased, in whole or in part, pursuant to any such obligation;
- the denominations in which any of the offered debt securities will be
issuable, if other than denominations of $1,000 and any integral multiple
thereof;
- if other than the principal amount of the offered debt securities, the
amount of offered debt securities which will be payable upon declaration
of acceleration of the offered debt securities' maturity;
- if other than U.S. dollars, the currency (including composite currencies
or currency units) in which payment of principal of (and premium, if any)
and/or interest on the offered debt securities will be payable (and the
manner in which the equivalent of the
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principal amount in U.S. dollars is to be determined for any purpose,
including for the purpose of determining the principal amount deemed to
be outstanding at any time);
- any currency (including composite currencies or currency units) other
than the stated currency of the offered debt securities in which the
principal of (and premium, if any) and/or interest on the offered debt
securities may, at our or the holders' of debt securities election, be
payable, and the periods within, or the dates on, and terms and
conditions upon which such election may be made and the amount so payable
(or the manner in which such amount is to be determined);
- if the amount of payments of principal of (and premium, if any) and/or
interest on the offered debt securities may be determined with reference
to an index or pursuant to a formula (including by reference to currency
or interest rates), the manner in which such amounts will be determined;
- if the principal amount payable at the stated maturity of any of the
offered debt securities will not be determinable as of any one or more
dates prior to the stated maturity, the amount which will be deemed to be
such principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any maturity
other than the stated maturity or which will be deemed to be outstanding
as of any such date (or, in any such case, the manner in which such
deemed principal amount is to be determined);
- whether any of the offered debt securities will initially be issuable in
whole or in part in the form of a temporary global security representing
those debt securities and provisions for the exchange of such temporary
global security for debt securities in certificated form;
- whether any of the offered debt securities will be issuable in whole or
in part in the form of one or more global securities and, if so, the
respective depositaries for such global securities, the form of any
legend or legends to be borne by any such global security, any
circumstances under which any such global security may be exchanged, in
whole or in part, for debt securities registered, and whether and under
what circumstances any transfer of such global security, in whole or in
part, may be registered, in the names of persons other than the
depositary for such global security or its nominee;
- whether any of the offered debt securities will be subject to certain
optional interest rate reset provisions;
- whether any of the offered debt securities will be subject to certain
optional extension of maturity provisions;
- any addition to or change in the events of default applicable to any of
the offered debt securities and any change in the right of the trustee or
the holders of any of the offered debt securities to declare the
principal amount of any of the offered debt securities due and payable;
- any addition to or change in the covenants in the indenture applicable to
any of the offered debt securities;
- the additions or changes, if any, to the indenture with respect to the
offered debt securities as are necessary to permit or facilitate the
issuance of the offered debt securities in bearer form, registrable or
not registrable as to principal, and with or without interest coupons;
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- our right, if any, to, and the manner in which we may, defease the
offered debt securities or certain covenants under the indenture;
- the appointment of any paying agent for the offered debt securities;
- the terms of any right to convert or exchange the offered debt securities
into any other of our securities or property;
- the terms and conditions, if any, pursuant to which any of the offered
debt securities are secured;
- any restriction or condition on the transferability of the offered debt
securities; and
- any other terms relating to the offered debt securities (which are not
inconsistent with the indenture). (Section 301)
Unless otherwise provided and except with respect to book-entry securities,
the principal of and premium, if any, and interest, if any, on the debt
securities will be payable at the office of our security registrar. However, at
our option, interest may be paid by mailing a check to, or by wire transfer to,
the holders of record of debt securities entitled to receive the interest. We
have appointed the trustee, The Bank of New York, as security registrar.
(Sections 301 and 305)
For a description of payments of principal of, premium, if any, and
interest on, and transfer of, book-entry securities, and exchanges of global
securities representing book-entry securities, see "Book Entry Securities."
At the option of the holder of debt securities, subject to the terms of the
indenture and the limitations applicable to book-entry securities, debt
securities of each series will be exchangeable for other debt securities of the
same series, of any authorized denomination and of a like tenor and aggregate
principal amount. (Section 305)
Unless otherwise indicated in the applicable prospectus supplement and
except with respect to book-entry securities, we will issue the debt securities
only in fully registered form without coupons and in denominations of $1,000 or
any multiple thereof. Subject to the terms of the indenture and the limitations
applicable to global securities, the debt securities may be presented for
exchange as provided above or for registration of transfer (duly endorsed or
with the form of transfer endorsed on the debt securities duly executed) at the
office of the security registrar or at the office of any transfer agent
designated by us for that purpose. No service charge will be made for any
registration of transfer or exchange of offered debt securities, but we may
require payment of an amount sufficient to cover any applicable tax or other
governmental charge. (Sections 301, 302 and 305)
Those transfers or exchanges will be effected when the security registrar
or the transfer agent is satisfied with the documents of title and identity of
the person making the request. The applicable prospectus supplement will name
any transfer agent (in addition to the security registrar) initially designated
by us for any debt securities. (Section 305) We may at any time designate
additional transfer agents or rescind the designation of any transfer agent or
approve a change in the office through which any transfer agent acts, except
that we will be required to maintain a transfer agent in each place of payment
for the debt securities of each series. (Sections 305 and 1002)
We may offer and sell debt securities, including Original Issue Discount
Securities, at a substantial discount below their stated principal amount. The
applicable prospectus supplement may describe the U.S. federal income tax
consequences and other special considerations applicable to debt securities sold
at an original issue discount. "Original Issue Discount
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Security" means any security which provides for the declaration of acceleration
of the maturity of an amount less than the principal amount thereof upon the
occurrence of an event of default and the continuation thereof. (Section 101)
In addition, the applicable prospectus supplement may describe certain
special U.S. federal income tax or other considerations (if any) applicable to
any debt securities which are denominated in a currency or currency unit other
than United States dollars.
CERTAIN COVENANTS OF THE COMPANY
Restrictions on Liens. So long as any debt securities are outstanding, we
will not be permitted to issue, assume or guarantee, and will not permit any
domestic subsidiary to issue, assume or guarantee, any indebtedness secured by a
mortgage, pledge, security interest, lien or encumbrance (referred to in this
section as "liens") of or on any of our or a domestic subsidiary's Principal
Property, or on the shares of stock or debt of any domestic subsidiary, whether
owned now or acquired subsequently. However, this restriction will not apply if
we effectively provide that the debt securities (together, if we determine, with
any of our other indebtedness ranking equally with the debt securities) are
secured by a lien ranking ratably with and equal to (or at our option, prior to)
the secured indebtedness. In any event, the foregoing restriction will not apply
to the following:
- liens on indebtedness existing on the date of the indenture;
- liens on any assets of any corporation existing at the time such
corporation becomes a domestic subsidiary;
- liens on any assets existing at the time we or a domestic subsidiary
acquire those assets;
- liens to secure the payment of all or any part of the purchase price of
those assets upon the acquisition of those assets by us or a domestic
subsidiary;
- liens to secure any indebtedness incurred, assumed or guaranteed by us or
a domestic subsidiary prior to, at the time of, or within 180 days after
an acquisition of assets (or in the case of real property, the completion
of construction (including any improvements on an existing asset) or
commencement of full operation of the asset, whichever is later) which
indebtedness is incurred, assumed or guaranteed for the purpose of
financing all or any part of the purchase price or, in the case of real
property, construction or improvements on the asset. However, in the case
of such an acquisition, construction or improvement, the lien will not
apply to any of our or a domestic subsidiary's Principal Property or
shares of stock or debt of a domestic subsidiary owned prior to the
acquisition, construction or improvement, other than, in the case of any
construction or improvement, any real property on which the property
constructed, or the improvement, is located;
- liens on any assets to secure indebtedness of a domestic subsidiary to us
or to any wholly owned domestic subsidiary;
- liens on any assets of a corporation existing at the time such
corporation is merged into or consolidated with us or a domestic
subsidiary or at the time we or a domestic subsidiary purchase, lease or
otherwise acquire all or substantially all of the assets of a corporation
or firm;
- liens on any of our or a domestic subsidiary's assets in favor of the
United States or any State, or any department, agency or instrumentality
or political subdivision of the United States or any State, or in favor
of any other country, or any political
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subdivision of the United States or any State, to secure partial,
progress, advance or other payments pursuant to any contract or statute
or to secure any indebtedness incurred or guaranteed for the purpose of
financing all or any part of the purchase price (or, in the case of real
property, the cost of construction) of the assets subject to such liens
(including, but not limited to, liens incurred in connection with
pollution control, industrial revenue or similar financings);
- Mechanics', materialmen's, carriers' or similar liens arising in the
ordinary course of business (including in the construction of facilities)
relating to obligations not due or which are being contested;
- liens for taxes not due or being contested, landlords' liens, tenants'
rights under leases, and similar liens not impairing the use or value of
the property involved;
- any extension, renewal or replacement (or successive extensions, renewals
or replacements) in whole or in part of any lien referred to in the
foregoing clauses of this section; provided, however, that the principal
amount of indebtedness secured by such a lien will not exceed the
principal amount of indebtedness so secured at the time of such
extension, renewal or replacement, and that such extension, renewal or
replacement will be limited to all or a part of the assets which secured
the lien so extended, renewed or replaced (plus improvements and
construction on real property); and
- liens not permitted by the foregoing clauses of this section if at the
time of, and after giving effect to, the creation or assumption of any
such lien, the aggregate amount of all of our or the domestic
subsidiaries' indebtedness secured by all of those liens not permitted by
the foregoing clauses of this section, together with the Attributable
Debt relating to Sale and Lease-Back Transactions permitted by the
indenture, does not exceed 15% of Consolidated Net Tangible Assets, as
those terms are defined below. (Section 1008)
The indenture will not restrict us or our subsidiaries from incurring
unsecured indebtedness.
Restrictions on Sale and Lease-Back Transactions. The indenture further
provides that we will not, and will not permit any domestic subsidiary to, lease
any Principal Property, other than with a lease for a term (including renewal
rights) for three years or less, whereby we or the domestic subsidiary sell or
transfer the Principal Property (referred to as a "Sale and Lease-Back
Transaction"), unless:
- we or the domestic subsidiary would, at the time of entering into a Sale
and Lease-Back Transaction, be entitled to incur indebtedness secured by
a lien on the Principal Property to be leased in an amount at least equal
to the Attributable Debt in respect of such Sale and Lease-Back
Transaction without equally and ratably securing the Debt Securities
pursuant to the indenture; or
- we promptly inform the trustee of the transaction, the proceeds of the
sale of the Principal Property to be leased are at least equal to the
fair value of the Principal Property (as determined by our board of
directors), and an amount equal to the net proceeds from the sale of the
Principal Property is applied, within 180 days of the effective date of
the Sale and Lease-Back Transaction, to the purchase or acquisition (or,
in the case of property, the construction) of property or assets or to
the retirement (other than at maturity or pursuant to a mandatory sinking
fund or redemption provision) of debt securities or our or a consolidated
domestic subsidiary's Funded Indebtedness ranking on a parity with or
senior to the debt securities. (Section 1009)
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CONSOLIDATION, MERGER AND SALE OF ASSETS
We may, without the consent of the holders of the debt securities,
consolidate with or merge into any other person or transfer or lease all or
substantially all of our properties or assets to any person or to allow any
other person to consolidate with or merge into us or to transfer or lease all or
substantially all of its properties or assets to us, provided that:
- the successor is a corporation, partnership, trust or other entity
organized and validly existing under the laws of any United States
domestic jurisdiction;
- the successor assumes our obligations on the debt securities under the
indenture;
- immediately after giving effect to the transaction no event of default,
and no event which, after notice or lapse of time or both, would become
an event of default, will have occurred and be continuing;
- we have delivered the certificates and opinions required under the
indenture to the trustee; and
- certain other conditions are met. (Sections 801 and 802)
Applicability of Covenants. Any series of debt securities may provide that
any one or more of the covenants described above will not be applicable to that
series of securities (Section 1010)
Certain Definitions (Section 101). Set forth below are definitions of some
of the terms used in this section of the prospectus.
"Attributable Debt" when used in connection with a Sale and Lease-Back
transaction referred to above, means, as of any particular time, the aggregate
of present values (discounted at a rate per annum equal to the average interest
borne by all outstanding debt securities determined on a weighted average basis
and compounded semi-annually) of our or any of the subsidiaries' obligations for
net rental payments during the remaining term of the lease (including any period
for which a lease has been extended or may, at the option of the lessor, be
extended).
- The term "net rental payments" under any lease of any period means the
sum of the rental and other payments required to be paid in such period
by the lessee, not including, however, any amounts required to be paid by
such lessee (whether or not designated as rental or additional rental) on
account of maintenance and repairs, reconstruction, insurance, taxes,
assessments, water rates or similar charges required to be paid by the
lessee or any amounts required to be paid by the lessee contingent on the
amount of sales, maintenance and repairs, reconstruction, insurance,
taxes, assessments, water rates or similar charges.
"Consolidated Net Tangible Assets" means at any date, the total assets
appearing on our and the subsidiaries' most recently prepared consolidated
balance sheet as of the end of a fiscal quarter, prepared in accordance with
generally accepted accounting principles at the time of calculation, less (a)
all current liabilities as shown on such balance sheet and (b) intangible
assets.
- "Intangible assets" means the value (net of any applicable reserves), as
shown on or reflected in such balance sheet of:
- all trade names, trademarks, licenses, patents, copyrights and
goodwill;
- organizational costs; and
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- deferred charges (other than prepaid items such as insurance, taxes,
interest, commissions, rents and similar items and tangible assets
being amortized); but in no event will the term "intangible assets"
include product development costs.
"domestic subsidiary" means any subsidiary:
- organized and existing under the laws of the United States or any
state, territory or possession thereof, or the Commonwealth of Puerto
Rico,
- the operations of which are substantially conducted in the United
States or its territories or possessions, or in the Commonwealth of
Puerto Rico, or
- a substantial portion of the assets of which are located in the United
States or its territories or possessions or in the Commonwealth of
Puerto Rico.
- A "wholly owned domestic subsidiary" is any domestic subsidiary
all of whose outstanding securities having the voting power to
elect the Board of Directors of the domestic subsidiary
(irrespective of whether or not at the time securities of any
other class or classes of the domestic subsidiary will have or
might have voting power by reason of the happening of any
contingency) are at the time directly or indirectly owned or
controlled by us and/or by one or more wholly owned domestic
subsidiaries.
"Funded Indebtedness" means any indebtedness maturing by its terms more
than one year from the date of its determination, including any indebtedness
renewable or extendible at the option of the obligor to a date later than one
year from the date of its determination.
"indebtedness" means:
- all obligations for borrowed money;
- all obligations evidenced by bonds, debentures, notes or other similar
instruments;
- all obligations in respect of letters of credit or bankers acceptances
or similar instruments (or reimbursement obligations with respect
thereto);
- all obligations to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course
of business;
- all obligations as lessee which are capitalized in accordance with
generally accepted accounting principles at the time of calculation;
and
- all indebtedness of others that we or any of the subsidiaries
guarantee or for which we or any of the subsidiaries are otherwise
responsible or liable (whether by agreement to purchase indebtedness
of, or to supply funds or to invest in, others).
"Principal Property" means any mill, manufacturing plant, building,
structure or other facility (together with the land on which it is erected and
improvements and fixtures comprising a part of it) or other real property
interest located in the United States (all of such facilities or interests that
form an integral part of a single development or operation being considered as
one interest), owned or leased and having a gross book value as of the date of
its determination in excess of 1% of Consolidated Net Tangible Assets, other
than a facility or portion of a facility (i) financed by means of industrial
revenue bonds or (ii) which, as determined in good faith by resolution of our
board of directors, is not of material importance to the total business
conducted by us and our subsidiaries as a whole.
"subsidiary" means any corporation, association or other entity of which at
least a majority of outstanding securities having the voting power to elect a
majority of the board of directors of such entity (irrespective of whether or
not at the time securities of any other class
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or classes of such entity will have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned or
controlled by us, and/or by one or more of our subsidiaries.
EVENTS OF DEFAULT
The indenture defines an "Event of Default" with respect to any series of
debt securities as:
- default in payment of principal of or premium, if any, on any debt
security of that series when due and payable at maturity;
- default for 30 days in payment of interest on any debt security of that
series;
- default in the deposit of any sinking fund payment when due for that
series;
- failure or breach by us in the performance of any other of the covenants
or warranties in the indenture (other than a covenant or warranty
included in the indenture solely for the benefit of a series of debt
securities other than that series) continued for 45 days after we have
been given written notice by the trustee, or we and the trustee have been
given written notice by the holders of at least 25% in aggregate
principal amount of the outstanding debt securities of that series,
specifying the default or breach and requiring it to be remedied and
stating that the notice is a notice of default under the indenture;
- a default under any bond, debenture, note or other evidence of our
indebtedness (including a default with respect to another series of debt
securities) or under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any of
our indebtedness (including the indenture), whether the indebtedness now
exists or is created later, which default will:
- constitute a failure to pay the indebtedness in a principal amount in
excess of $15 million when due and payable at final maturity after the
expiration of any applicable grace period or will have resulted in
indebtedness in a principal amount in excess of $15 million becoming
or being declared due and payable prior to the date on which it would
otherwise have become due and payable, without the indebtedness having
been discharged, or the acceleration having been rescinded or
annulled, within a period of 15 days after there has been given, by
overnight mail or other same day or overnight delivery service which
can provide evidence of delivery, to us by the trustee, or to us and
the trustee by the holders of at least 25% in aggregate principal
amount of the outstanding debt securities of that series, a written
notice specifying the default and requiring us to cause the
indebtedness to be discharged or to cause the acceleration to be
rescinded or annulled and stating that the notice is a notice of
default under the indenture;
- certain events of bankruptcy, insolvency or reorganization; and
- any other event of default with respect to debt securities of that
series. (Section 501)
If any event of default with respect to debt securities of any series at
the time outstanding occurs and is continuing, either the trustee or the holders
of not less than 25% in aggregate principal amount of the outstanding debt
securities of that series may declare the principal amount (or, if the debt
securities of that series are Original Issue Discount Securities, the portion of
the principal amount of the debt securities as may be specified in the terms of
those debt securities) of all debt securities of that series to be due and
payable immediately by a written notice to us (and to the trustee if given by
holders of debt securities), and upon
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that declaration the aggregate principal amount (or specified amount) will
become immediately due and payable. If an event of default described in the
fourth bullet point above or another event of default specified in the last
bullet point above that is applicable to all outstanding debt securities occurs
and is continuing, or an event of default specified in the next to last bullet
point above occurs and is continuing, either the trustee or the holders of not
less than 25% in aggregate principal amount of all the debt securities then
outstanding (treated as one class) may declare the principal amount (or, if any
debt securities are Original Issue Discount Securities, the portion of the
principal amount as may be specified in the terms of those debt securities) of
all the debt securities then outstanding to be due and payable immediately, and
upon any such declaration the principal amount will become immediately due and
payable. Upon certain conditions the declarations may be annulled and past
defaults (except, unless previously cured, a default in payment of principal of
or premium, if any, or interest, if any, on the debt securities of that series
and certain other specified defaults, which cannot be amended without the
consent of the holder of each outstanding debt security of that series) may be
waived by the holders of a majority in aggregate principal amount of the
outstanding debt securities of that series on behalf of the holders of all debt
securities of that series. (Sections 502 and 513)
Reference is made to the prospectus supplement relating to each series of
outstanding debt securities that are Original Issue Discount Securities for the
particular provisions relating to acceleration of the maturity of a portion of
the principal amount of the Original Issue Discount Securities upon the
occurrence and continuation of an event of default.
The trustee is required, within 90 days after the occurrence of a default
with respect to debt securities of any series at the time outstanding, to give
to the holders of the outstanding debt securities of that series notice of the
default actually known to it if not cured or waived. However, except in the case
of default in the payment of principal of or premium, if any, or interest on any
debt security of that series, or in the deposit of any sinking fund payment
which is provided, the trustee will be protected in withholding the notice if
the trustee in good faith determines that the withholding of the notice is in
the interest of the holders of the outstanding debt securities of that series.
In addition, the notice will not be given until 30 days after the occurrence of
a default with respect to outstanding debt securities of any series in the
performance of a covenant in the indenture other than for the payment of the
principal of or premium, if any, or interest on any debt security of that series
or the deposit of any sinking fund payment with respect to the debt securities
of that series. The term default with respect to any series of outstanding debt
securities for the purpose of this provision only means the happening of any of
the events of default specified in the indenture relating to that series of
outstanding debt securities, excluding any grace periods and irrespective of any
notice requirements. (Section 602)
The trustee, subject to its duty during default to act with the required
standard of care, is entitled to be offered indemnity satisfactory to the
trustee in its reasonable judgment by the holders of any series of outstanding
debt securities before exercising any right or power under the indenture at the
request of the holders of that series of debt securities. (Section 603) Subject
to those provisions for the indemnification of the trustee, the holders of a
majority in aggregate principal amount of outstanding debt securities of any
series may direct the time, method and place of conducting any proceeding for
any remedy available to the trustee, or exercising any trust or other power
conferred on the trustee, with respect to the debt securities of that series.
The trustee, however, may decline to act if that direction is contrary to law or
the indenture or may be unduly prejudicial to the holder of outstanding debt
securities not
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joining in the direction. In the case of book-entry securities, the trustee is
required to establish a record date for purposes of determining which holders
are entitled to join in that direction. (Section 512)
No holder of a debt security will have any right to institute any
proceeding with respect to the indenture, or for the appointment of a receiver,
assignee, trustee, liquidator or sequestrator (or other similar official), or
for any other remedy thereunder, unless:
- the holder has previously given to the trustee written notice of a
continuing event of default with respect to the debt securities of that
series;
- holders of at least 25% in aggregate principal amount of the outstanding
debt securities of that series have made a written request to the trustee
to institute the proceeding and the holder or holders have offered
indemnity satisfactory to the trustee in its reasonable judgment; and
- the trustee has failed to institute the proceeding, and has not received
from the holders of a majority in aggregate principal amount of the
outstanding debt securities of that series a direction inconsistent with
that request, within 60 days after the notice, request and offer.
(Section 507)
However, these limitations do not apply to a suit instituted by a holder of
a debt security to enforce payment of the principal of, premium, if any, or
interest on the debt security on or after the applicable due date specified
in the debt security. (Section 508)
We are required to file annually with the trustee a certificate of no
default. (Section 1004)
MODIFICATION OF THE INDENTURE AND WAIVER OF COVENANTS
We and the trustee are permitted to enter into one or more supplemental
indentures without the consent of the holders of any of the debt securities in
order to:
- evidence the succession to us of another person, or successive
successions, and the assumption of our covenants, agreements and
obligations by a successor;
- add to our covenants for the benefit of the holders of debt securities or
to surrender any of our rights or powers;
- add additional events of default;
- add or change any provisions of the indenture to the extent necessary to
facilitate the issuance of debt securities in bearer or uncertificated
form;
- add to, change or eliminate any provision of the indenture in respect of
one or more series of debt securities; however, if the action adversely
affects the interests of any holders of debt securities of any series,
the addition, change or elimination (i) will not apply to any debt
securities created prior to the action and entitled to the benefit of the
provision or modify the rights of any holder of those debt securities, or
(ii) will become effective with respect to that series only when no
security of that series remains outstanding;
- convey, transfer, assign, mortgage or pledge any property to or with the
trustee or to surrender any right or power conferred upon us;
- secure securities pursuant to the terms of the indenture;
- establish the form or terms of debt securities;
- provide for uncertificated securities in addition to certificated
securities;
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- evidence and provide for successor trustees or to add or change any
provisions to the extent necessary to permit or facilitate the
appointment of a separate trustee or trustees for specific series of debt
securities and the administration of trusts pursuant to the indenture;
- cure any ambiguity, to correct any defect or supplement any inconsistent
provisions or to make any other provisions with respect to matters or
questions arising under the indenture, provided that the action does not
adversely affect the interests of the holders of debt securities of any
series;
- supplement any provisions of the indenture necessary to permit or
facilitate the defeasance and discharge of any series of debt securities,
provided that the action does not adversely affect the interests of the
holders of debt securities of that series or any other series;
- comply with the rules or regulations of any securities exchange or
automated quotation system on which any of the debt securities may be
listed or traded; or
- add, change or eliminate any provisions of the indenture as is necessary
or desirable in accordance with any amendments to the Trust Indenture
Act, provided that the action does not adversely affect the rights or
interests of any holder of debt securities. (Section 901)
We and the trustee are permitted, with the consent of the holders of not
less than a majority in principal amount of outstanding debt securities of each
series (treated as one class) affected, to execute supplemental indentures
adding any provisions to or changing or eliminating any of the provisions of the
indenture or modifying the rights of the holders of outstanding debt securities
of that series. However, no supplemental indenture may, without the consent of
the holder of each outstanding debt security affected:
- except to the extent permitted pursuant to the indenture, change the
stated maturity of the principal of, or any installment of principal of
or interest on, any debt security of any series;
- reduce the principal amount of, the premium, if any, or interest on, any
debt security of any series;
- reduce the amount of principal of an Original Issue Discount Security or
any other debt security payable upon acceleration of its maturity;
- change the place or currency of payment of principal of, or any premium
or interest on, any debt security of any series;
- impair the right to institute suit for the enforcement of any payment on
or with respect to any debt security of any series;
- reduce the percentage as stated above of the holders of outstanding debt
securities of any series whose consent is required for any supplemental
indenture or for amendment or waiver of compliance with certain
provisions of the indenture or certain defaults; or
- effect certain other changes. (Section 902)
We are permitted to omit compliance with certain covenants in the indenture
with respect to debt securities of any series upon waiver by the holders of not
less than a majority in principal amount of outstanding debt securities of that
series. (Section 1011)
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In determining whether the holders of the requisite principal amount of the
outstanding debt securities have given or taken any direction, notice, consent,
waiver or other action under the indenture as of any date:
- the principal amount of an Original Issue Discount Security deemed to be
outstanding will be the amount of the principal that would be due and
payable as of that date upon acceleration of the maturity of that
security to that date;
- if, at that date, the principal amount payable at the stated maturity of
a debt security is not determinable (for example, because it is based on
an index), the principal amount of the debt security deemed to be
outstanding as of that date will be an amount determined in the manner
prescribed for that debt security;
- the principal amount of a debt security denominated in one or more
foreign currencies or currency units deemed to be outstanding will be the
U.S. dollar equivalent, determined as of that date in the manner
prescribed for that debt security, of the principal amount of the debt
security (or, in the case of a debt security described in the clauses
above, of the amount so described);
- debt securities owned by us, or any other obligor on the debt securities
or any of their affiliates, will be disregarded and deemed not to be
outstanding; and
- certain debt securities, including those for whose payment or redemption
money has been deposited or set aside in trust for the holders of the
debt securities and those that have been fully defeased pursuant to
Section 1402 of the indenture, will not be deemed to be outstanding.
(Section 101)
Except in certain limited circumstances, we are entitled to set any day as
a record date for the purpose of determining the holders of outstanding debt
securities of any series entitled to give or take any direction, notice,
consent, waiver or other action under the indenture, in the manner and subject
to the limitations provided in the indenture. In certain limited circumstances,
the trustee will be entitled to set a record date for action by holders of debt
securities. If a record date is set for any action to be taken by holders of a
particular series, only the persons who are holders of outstanding debt
securities of that series on the record date may take that action. To be
effective, holders of the requisite principal amount of the debt securities must
take the action within a specified period following the record date. (Section
104)
BOOK-ENTRY SECURITIES
The following description of book-entry securities will apply to any series
of debt securities issued in whole or in part in the form of a global security
or securities, except as otherwise provided in the applicable prospectus
supplement.
Book-entry securities of like tenor and having the same date of original
issue will be represented by one or more global securities. Each global security
representing book-entry securities will be deposited with, or on behalf of, the
depositary. This means that we will not issue certificates to each holder of
those debt securities. The global security will be registered in the name of the
depositary or its nominee.
The Depository Trust Company ("DTC") is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the United States Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act.
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DTC holds securities that its participants ("Participants") deposit with DTC.
DTC will keep a computerized record of its Participants (for example, your
broker) whose clients have purchased book-entry securities. The Participant will
then keep a record of its clients who have purchased the book-entry securities.
DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. "Direct
Participants" include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations.
DTC is owned by a number of Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the National Association
of securities Dealers, Inc. Access to DTC's book-entry system is also available
to others, such as securities brokers and dealers, banks and trust companies
that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the SEC.
Upon issuance by us of book-entry securities, purchases of debt securities
under the DTC System must be made by or through Direct Participants, which will
receive a credit for the debt securities on DTC's records. The ownership
interest of each actual purchaser of each debt security (referred to as a
"beneficial owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial owners will not receive written confirmation
from DTC of their purchase, but beneficial owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the beneficial owner entered into the transaction. Transfers of ownership
interests in the debt securities are to be accomplished by entries made on the
books of Participants acting on behalf of beneficial owners. Beneficial owners
will not receive certificates representing their ownership interests in debt
securities, except in the event that use of the book-entry system for the debt
securities is discontinued. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such laws may impair the ability to transfer beneficial interests in such
a global security.
So long as DTC, or its nominee, is the registered owner of the global
security, DTC or its nominee, as the case may be, will be considered the sole
owner or holder of the book-entry securities for all purposes under the
indenture. Except as described in this section, beneficial owners will not be
entitled to have book-entry securities registered in their names, will not
receive or be entitled to receive physical delivery of securities in definitive
form and will not be considered the owners or holders of the securities under
the indenture.
To facilitate subsequent transfers, all debt securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of debt securities with DTC and their registration in the
name of Cede & Co. do not effect any change in beneficial ownership. DTC has no
knowledge of the actual beneficial owners of the debt securities. DTC's records
reflect only the identity of the Direct Participants to whose accounts the debt
securities are credited, which may or may not be the beneficial owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers. Conveyance of notices and other communications by DTC
to Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to beneficial owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect at various times.
22
<PAGE> 23
Neither DTC nor Cede & Co. will consent or vote with respect to debt
securities. Under its usual procedures, DTC mails us an Omnibus Proxy as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
debt securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Payment of principal of and any premium and interest on book-entry
securities represented by any global security registered in the name of or held
by the depositary or its nominee will be made by us through the trustee or
through a paying agent (the "Paying Agent"), which may also be the trustee under
the indenture, to DTC or its nominee. We, the trustee and the Paying Agent will
treat DTC or its nominee as the registered owner and holder of the global
security representing the book-entry securities for all purposes. Accordingly,
we, the trustee and the Paying Agent will have no responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in a global security representing the book-entry
securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
DTC will credit Direct Participants' accounts on the payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on the payable date. Payments
by Participants to beneficial owners will be governed by standing instructions
and customary practices, as in the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, the Paying Agent, or us,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal and interest to DTC is our responsibility or
that of the Paying Agent, disbursement of such payments to Direct Participants
shall be the responsibility of DTC, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect
Participants.
No global security described above may be transferred except as a whole by
the depositary for such global security to a nominee of the depositary or by a
nominee of the depositary to the depositary or another nominee of the
depositary.
Notwithstanding any provision of the indenture or any debt security
described in this prospectus, a global security representing book-entry
securities is exchangeable for certificated debt securities in registered form,
of like tenor and of an equal aggregate principal amount only if:
- the depositary notifies us that it is unwilling or unable to continue as
depositary for the global security or if the depositary ceases to be a
clearing agency registered under the Exchange Act or to be qualified to
act as depositary as required by the indenture;
- we determine in our sole discretion that such global security shall be
exchangeable for certificated debt securities in registered form; or
- an event of default with respect to the debt securities debt securities
has occurred and is continuing. Any global security that is exchangeable
pursuant to the preceding clause will be exchangeable in whole for
certificated debt securities in registered form, of like tenor and of an
equal aggregate principal amount, and, unless otherwise specified in the
applicable prospectus supplement, in denominations of $1,000 and integral
multiples thereof.
23
<PAGE> 24
Such certificated debt securities will be registered in the name or names
of such person or persons as instructed by the depositary to the trustee. It is
expected that such instructions may be based upon directions received by the
depositary from its Participants with respect to ownership of beneficial
interests in such global security.
Except as provided above, no global security representing book-entry
securities will be exchangeable, except for another global security of like
denomination and tenor to be registered in the name of the depositary or its
nominee. Accordingly, to exercise any rights of a holder under the indenture,
each beneficial owner of an interest in the global security must rely on the
procedures of the depositary and, if that person is not a Participant, on the
procedures of the Participant through which such person owns its interest. We
understand that under existing industry practices, in the event that we request
any action of holders of debt securities or a beneficial owner of an interest in
the global security desires to give or take any action that a holder is entitled
to give or take under the indenture, the depositary would authorize the
Participants holding the relevant beneficial interests to give or take such
action, and the Participants would authorize beneficial owners owning through
the Participant to give or take action or would otherwise act upon the
instructions of beneficial owners owning through them.
The information contained in this section regarding DTC and its procedures
is based on publicly available information reviewed by us.
DEFEASANCE OF OFFERED DEBT SECURITIES OR CERTAIN COVENANTS IN CERTAIN
CIRCUMSTANCES
Defeasance and Discharge. The terms of any series of debt securities may
provide that under certain conditions we will be discharged from any and all
obligations in respect of the debt securities of that series (except for certain
obligations to register the transfer or exchange of debt securities, to replace
stolen, lost or mutilated debt securities, to maintain paying agencies and to
hold moneys for payment in trust) upon the deposit with the trustee, in trust
for the benefit of the holders of the debt securities, of money and/or U.S.
government obligations or, in the case of debt securities denominated in foreign
currencies, money and/or foreign government securities which, through the
payment of interest and principal in accordance with their terms, will provide
money in an amount sufficient to pay any installment of principal (and premium,
if any) and interest on, and any mandatory sinking fund payments in respect of,
the debt securities of that series on the stated maturity of the payment in
accordance with the terms of the indenture and the debt securities.
This discharge may only occur if, among other things, we have delivered to
the trustee an opinion of counsel to the effect that we have received from, or
there has been published by, the United States Internal Revenue Service a
ruling, or there has been a change in tax law, in either case to the effect that
holders of the debt securities will not recognize gain or loss for federal
income tax purposes as a result of the deposit, defeasance and discharge and
will be subject to federal income tax on the same amount, in the same manner and
at the same times as would have been the case if the deposit, defeasance and
discharge were not to occur. (Sections 1402 and 1404) This discharge will not be
applicable to any debt securities of that series then listed on any securities
exchange if the provision would cause the debt securities to be de-listed.
(Section 1403)
Defeasance of Certain Covenants. The indenture provides that the terms of
any series of debt securities may provide us with the option of not complying
with certain restrictive
24
<PAGE> 25
covenants described in Sections 1008 and 1009 of the indenture, including any
that may be described in the applicable prospectus supplement. In those
circumstances, the occurrence of certain events of default, which are described
above in the fourth bullet point (with respect to those restrictive covenants)
under "Events of Default," and any that may be described in the applicable
prospectus supplement will be deemed not to be or result in an event of default
with respect to such debt securities. To exercise this option, we will be
required to deposit with the trustee money and/or U.S. government obligations
(or, in the case of debt securities denominated in foreign currencies, money
and/or foreign government securities), which, through the payment of interest
and principal in accordance with their terms, will provide money in an amount
sufficient to pay principal (and premium, if any) and interest on, and any
mandatory sinking fund payments in respect of, the debt securities of such
series on the stated maturity of such payments in accordance with the terms of
the indenture and those debt securities.
We will also be required to deliver to the trustee an opinion of counsel to
the effect that the deposit and related covenant defeasance will not cause the
holders of the debt securities of that series to recognize income, gain or loss
for federal income tax purposes and that such holders will be subject to federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if such deposit and defeasance were not to occur. (Section
1010) In the event we exercise this option and the debt securities of that
series are declared due and payable because of the occurrence of any event of
default, the amount of money and U.S. government obligations or foreign
government securities, as the case may be, on deposit with the trustee will be
sufficient to pay amounts due on the debt securities of that series at the time
of their stated maturity. However, the amount on deposit with the trustee may
not be sufficient to pay amounts due on the debt securities of that series at
the time of the acceleration resulting from the event of default. In that case
we would remain liable for the payments.
The prospectus supplement will state if any defeasance provision will apply
to the offered debt securities.
NOTICES
Notices to holders of debt securities will be given by mail to the
addresses of such holders as they may appear in our security register. (Sections
101 and 106)
TITLE
We, the trustee and any agent of ours or of the trustee may treat the
person in whose name a debt security is registered on the applicable record date
as the owner of the debt security (whether or not the debt security may be
overdue) for the purpose of making payment and for all other purposes. (Section
309)
GOVERNING LAW
The indenture and the debt securities will be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws. (Section 112)
25
<PAGE> 26
TRUSTEE
The trustee may resign or be removed with respect to one or more series of
debt securities and we may appoint a successor trustee to act with respect to
such series. (Section 610) In the event that two or more persons are acting as
trustee with respect to different series of debt securities, each trustee will
be a trustee of a trust under the indenture separate and apart from the trust
administered by any other trustee (Section 611), and any action described in
this prospectus to be taken by the "trustee" may then be taken by each trustee
with respect to, and only with respect to, the one or more series of securities
for which it is trustee.
We maintain customary banking relationships with the trustee. The trustee
also serves as our registrar and transfer agent.
PLAN OF DISTRIBUTION
We may sell our debt securities:
- through agents,
- through underwriters or dealers,
- directly to one or more purchasers, or
- through some combination of these methods.
BY AGENTS
The debt securities may be sold through agents we designate. Except as
otherwise set forth in a prospectus supplement, the agents will agree to use
their reasonable best efforts to solicit purchases for the period of their
appointment.
BY UNDERWRITERS
If underwriters are used in the sale, the underwriters will acquire the
debt securities for their own account. The underwriters may resell the
securities in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The obligations of the underwriters to purchase the securities will be subject
to certain conditions. The underwriters will be obligated to purchase all the
securities of the series offered if any of the securities are purchased. Any
initial public offering price and any discounts or concessions allowed or
re-allowed or paid to dealers may be changed from time to time.
BY DEALERS
If dealers are used in the sale, we will sell the debt securities to the
dealers, as principal. The dealers may then resell the debt securities to the
public at varying prices to be determined by them at the time of sale.
DIRECT SALES
We may also directly sell debt securities. In this case, no underwriters,
dealers or agents would be involved.
26
<PAGE> 27
GENERAL INFORMATION
Underwriters, dealers and agents that participate in the distribution of
the offered securities may be deemed underwriters under the Securities Act of
1933, and any discounts or commissions they receive from us and any profit on
their resale of the debt securities may be treated as underwriting discounts and
commissions under the Securities Act of 1933. Any underwriters, dealers or
agents will be identified and their compensation described in a prospectus
supplement.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act of 1933, or to contribute to payments that the underwriters,
dealers or agents may be required to make.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, us or our subsidiaries in the ordinary course of their
businesses.
Each series of debt securities will be a new issue with no established
trading market. We do not intend to list any of the debt securities on a
national securities exchange or quotation system. It is possible that one or
more underwriters or broker-dealers may make a market in the debt securities,
but will not be obligated to do so and may discontinue any market making at any
time without notice. Therefore, we can give you no assurance as to the existence
or liquidity of a trading market for any of the debt securities.
In connection with an offering of our debt securities, underwriters,
dealers or agents may purchase and sell them in the open market. These
transactions may include stabilizing transactions and purchases to cover
syndicate short positions created in connection with the offering. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or slowing a decline in the market price of the debt securities; and syndicate
short positions involve the sale by the underwriters or agents, as the case may
be, of a greater number of securities than they are required to purchase from us
in the offering. Underwriters also may impose a penalty bid, which means that
the underwriting syndicate may reclaim selling concessions allowed to syndicate
members or other broker dealers who sell securities in the offering for their
account if the syndicate repurchases the securities in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the debt securities, which may be higher than the price that
might otherwise prevail in the open market. These activities, if commenced, may
be discontinued at any time without notice. These transactions may be effected
on any securities exchange on which the debt securities may be listed, in the
over-the-counter market or otherwise.
REGISTRAR AND TRANSFER AGENT
The registrar and transfer agent for the Common Stock is The Bank of New
York, New York, New York.
LEGAL MATTERS
Robinson, Bradshaw & Hinson, P.A., Charlotte North Carolina, will issue an
opinion for us regarding the validity of the debt securities and certain other
legal matters. Russell M. Robinson, II, a shareholder in the firm of Robinson,
Bradshaw & Hinson, P.A., is Chairman of our Board of Directors. Robinson,
Bradshaw & Hinson, P.A. is our principal outside legal counsel. Certain members
of such firm beneficially owned approximately 113,680 shares of
27
<PAGE> 28
our common stock as of the date of this prospectus. Certain legal matters in
connection with the debt securities will be passed on for any underwriters,
dealers and agents named in the prospectus supplement by Fennebresque, Clark,
Swindell & Hay, Charlotte, North Carolina or any other counsel named in the
prospectus supplement.
EXPERTS
The financial statements and schedules incorporated by reference in this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect to such financial statements and schedules, and are
incorporated by reference in reliance upon the authority of such firm as experts
in giving such reports.
28
<PAGE> 29
------------------------------------------------------
------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Risk Factors........................ 3
Where You Can Find More Information;
Incorporation by Reference........ 5
Special Note of Caution Regarding
Forward-Looking Statements........ 6
The Company......................... 7
The Offering........................ 7
Prospectus Supplement............... 8
Use of Proceeds..................... 8
Ratio of Earnings to Fixed
Charges........................... 8
Description of Debt Securities...... 9
Plan of Distribution................ 26
Registrar and Transfer Agent........ 27
Legal Matters....................... 27
Experts............................. 28
</TABLE>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
$300,000,000
CARAUSTAR INDUSTRIES, INC.
[CARAUSTAR LOGO]
Debt Securities
-----------------
PROSPECTUS
-----------------
, 1998
------------------------------------------------------
------------------------------------------------------
<PAGE> 30
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses to be incurred by the Company
in connection with the offering of the Securities, other than underwriting
discounts and commissions. The Company will bear all of such expenses.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 88,500
Accounting fees and expenses*............................... $ 75,000
Legal fees and expenses*.................................... $125,000
Fees and expenses of trustee and counsel*................... $ 15,000
Rating agency fees*......................................... $297,000
Printing and Engraving fees and expenses*................... $100,000
Blue Sky fees and expenses*................................. $ 5,000
Miscellaneous*.............................................. $ 9,500
--------
Total*............................................ $715,000
========
</TABLE>
- ---------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 55-2-02 of the North Carolina Business Corporation Act (the
"Business Corporation Act") enables a corporation in its articles of
incorporation to eliminate or limit, with certain exceptions, the personal
liability of a director for monetary damages for breach of duty as a director.
No such provision is effective to eliminate or limit a director's liability for
(i) acts or omissions that the director at the time of the breach knew or
believed to be clearly in conflict with the best interests of the corporation,
(ii) improper distributions as described in Section 55-8-33 of the Business
Corporation Act, (iii) any transaction from which the director derived an
improper personal benefit or (iv) acts or omissions occurring prior to the date
the exculpatory provision became effective. The Company's articles of
incorporation limit the personal liability of its directors to the fullest
extent permitted by the Business Corporation Act.
Sections 55-8-50 through 55-8-58 of the Business Corporation Act permit a
corporation to indemnify its directors, officers, employees or agents under
either or both a statutory or nonstatutory scheme of indemnification. Under the
statutory scheme, a corporation may, with certain exceptions, indemnify a
director, officer, employee or agent of the corporation who was, is, or is
threatened to be made, a party to any threatened, pending or completed legal
action, suit or proceeding, whether civil, criminal, administrative, or
investigative because of the fact that such person was or is a director,
officer, agent or employee of the corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent of another
corporation or enterprise. This indemnity may include the obligation to pay any
judgment, settlement, penalty, fine (including an excise tax assessed with
respect to an employee benefit plan) or reasonable expenses incurred in
connection with a proceeding (including counsel fees), but no such
indemnification may be granted unless such director, officer, employee or agent
(i) conducted himself in good faith, (ii) reasonably believed (1) that any
action taken in his official capacity with the corporation was in the best
interests of the corporation or (2) that in all other cases his conduct was not
opposed to the corporation's best interests, and (iii) in the case of any
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. Whether a director has met the requisite standard of conduct for the
type of indemnification set forth above is determined by the board of directors,
a committee of directors, special legal counsel or the shareholders in
accordance with Section 55-8-55 of the Business Corporation Act. A corporation
may not indemnify a director under the statutory scheme in connection with a
proceeding by or in the right of the corporation in which a director was
adjudged liable to the corporation or in connection with any other proceeding in
which a director was adjudged liable on the basis of having received an improper
personal benefit.
II-1
<PAGE> 31
In addition to, and notwithstanding the conditions of and limitations on,
the indemnification described above under the statutory scheme, Section 55-8-57
of the Business Corporation Act permits a corporation to indemnify, or agree to
indemnify, any of its directors, officers, employees or agents against liability
and expenses (including counsel fees) in any proceeding (including proceedings
brought by or on behalf of the corporation) arising out of their status as such
or their activities in such capacities, except for any liabilities or expenses
incurred on account of activities that were, at the time taken, known or
believed by the person to be clearly in conflict with the best interests of the
corporation.
Because the Company's bylaws provide for indemnification to the fullest
extent permitted under the Business Corporation Act, the Company may indemnify
its directors, officers, employees and agents in advance with either the
statutory or nonstatutory standard. Sections 55-8-52 and 55-8-56 of the Business
Corporation Act require a corporation, unless its articles of incorporation
provide otherwise, to indemnify a director or officer who has been wholly
successful, on the merits or otherwise, in the defense of any proceeding to
which such director or officer was, or was threatened to be, made a party
because he is or was a director or officer of the corporation. Unless prohibited
by the articles of incorporation, a director or officer also may make
application and obtain court-ordered indemnification if the court determines
that such director or officer is fairly and reasonably entitled to such
indemnification as provided in Sections 55-8-54 and 55-8-56 of the Business
Corporation Act.
Additionally, Section 55-8-57 of the Business Corporation Act authorizes a
corporation to purchase and maintain insurance on behalf of an individual who is
or was a director, officer, employee or agent of the corporation against certain
liabilities incurred by such a person, whether or not the corporation is
otherwise authorized by the Business Corporation Act to indemnify that person.
The Company has purchased and maintains such insurance.
ITEM 21. EXHIBITS.
The following is a list of all the exhibits filed as part of the
Registration Statement. References to the Company mean Caraustar Industries,
Inc.
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- -------
<S> <C> <C>
1.01* -- Form of Underwriting Agreement
2.01 -- Purchase Agreement dated as of June 30, 1998 among the
Company, Caraustar Paperboard Corporation, Tenneco Packing,
Inc. and Tenneco CPI Holding Company
3.01 -- Amended and Restated Articles of Incorporation of the
Company (Incorporated by reference -- Exhibit 3.01 to Annual
Report for 1992 on Form 10-K [SEC File No. 0-20646])
3.02 -- Second Amended and Restated Bylaws of the Company
(Incorporated by reference -- Exhibit 3.02 to Registration
Statement on Form S-4 [SEC File No. 333-29937])
4.01 -- Form of Indenture between the Company and The Bank of New
York, as trustee.
4.02 -- Form of Debt Securities (included in Article Two of Exhibit
4.01).
5.01 -- Opinion of Robinson, Bradshaw & Hinson, P.A.
12.01 -- Computation of Ratio of Earnings to Fixed Changes
23.01 -- Consent of Arthur Andersen LLP
23.02 -- Consent of Robinson, Bradshaw & Hinson, P.A. (included in
Exhibit 5.01)
24.01 -- Power of Attorney (included on the signature pages of the
Registration Statement as initially filed).
25.01 -- Statement of Eligibility of Trustee on Form T-1
</TABLE>
- ---------------
* To be filed by amendment or to be incorporated by reference from a
subsequently filed Form 8-K.
II-2
<PAGE> 32
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that the undertakings in subparts (i) and (ii) above do not
apply if the information required to be included in a post-effective amendment
by such subparts is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference into this registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
II-3
<PAGE> 33
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will
be governed by the final adjudication of such issue.
(6) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Company pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act of 1933 shall be deemed to be part of
this registration statement as of the time it was declared effective.
II-4
<PAGE> 34
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Austell, State of Georgia on October 9
, 1998.
CARAUSTAR INDUSTRIES, INC.
By: /s/ H. LEE THRASH, III
------------------------------------
H. Lee Thrash, III
Vice President and Chief Financial
Officer
POWER OF ATTORNEY
Each of the undersigned hereby constitutes and appoints H. Lee Thrash, III
and Thomas V. Brown, and each of them, with full power to act without the other
and with full power of substitution and resubstitution, his true and lawful
attorneys-in-fact and agents, for him and in his name, place, and stead, in any
and all capacities, to sign on his behalf any and all amendments (including
post-effective amendments and amendments thereto) to this Registration Statement
and any related registration statement (and any amendments thereto) filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Commission, and grants unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises as fully as to all
intents and purposes as he might or could do in person, and hereby ratifies and
confirms all that such attorneys-in-fact or agents, or any of them, or their
substitutes shall lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or amendment thereto has been signed by the following
persons and in the capacities indicated on October 9, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ THOMAS V. BROWN Director, President and Chief Executive
- ----------------------------------------------------- Officer (Principal Executive Officer)
Thomas V. Brown
/s/ H. LEE THRASH, III Director, Vice President and Chief Financial
- ----------------------------------------------------- Officer (Principal Financial Officer and
H. Lee Thrash, III Principal Accounting Officer)
/s/ RUSSELL M. ROBINSON, II Chairman of the Board of Directors
- -----------------------------------------------------
Russell M. Robinson, II
Director
- -----------------------------------------------------
Bob M. Prillaman
/s/ RALPH M. HOLT, JR. Director
- -----------------------------------------------------
Ralph M. Holt, Jr.
/s/ JAMES H. HANCE, JR. Director
- -----------------------------------------------------
James H. Hance, Jr.
</TABLE>
II-5
<PAGE> 35
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
Director
- -----------------------------------------------------
John D. Munford
Director
- -----------------------------------------------------
James E. Rogers
</TABLE>
II-6
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EXHIBIT 2.01
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement"), dated as of June 30, 1998,
is among TENNECO PACKAGING INC., a Delaware corporation ("TPI"), TENNECO CPI
HOLDING COMPANY, a Delaware corporation ("TSub"), CARAUSTAR INDUSTRIES, INC., a
North Carolina corporation ("Caraustar"), and CARAUSTAR PAPERBOARD CORPORATION,
an Ohio corporation ("CSub").
Background Statement
TSub is a wholly-owned subsidiary of TPI and CSub is a wholly-owned
subsidiary of Caraustar. Pursuant to a Partnership Agreement dated as of July 1,
1996 between CSub and TSub (the "Partnership Agreement"), CSub and TSub are
partners in CPI, a Delaware general partnership ("CPI"). CSub has an 80%
undivided partnership interest and TSub has a 20% undivided partnership interest
in CPI. CSub now desires to purchase from TSub and CSub now desires to sell to
CSub, TSub's 20% undivided partnership in CPI.
Statement of Agreement
In consideration of the premises and the mutual covenants herein
contained, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1.
DEFINED TERMS
When used herein the following terms shall have the respective
meanings provided herein unless the context otherwise requires.
1.1 "Affiliate" means, when used with respect to any Person, any
other Person at the time directly or indirectly controlling, controlled by or
under direct or indirect common control with, such Person. For purposes of this
definition, "control" (including the terms "controlled by" and "under common
control with"), as used with respect to any Person, means the power to direct or
cause the direction of the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities or by contract or
otherwise.
1.2 "Agreement" means this Purchase Agreement, as the same may be
amended or supplemented from time to time, together with the exhibits and
schedules hereto.
1.3 "Encumbrance" means any option, mortgage, pledge, security
interest, lien, liability, claim, contingency, possessory interest, charge,
encumbrance, title retention agreement, device or arrangement (including any
lease in the nature thereof), choate or inchoate tax lien, assessment, covenant,
reservation, right of first refusal, right to acquire, restrictions (whether on
issuance, voting, sale, transfer, disposition or otherwise), whether imposed by
agreement, understanding, law or otherwise, except those arising under
applicable federal or state securities laws.
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1.4 "Knowledge" means with respect to any Person, such Person's
actual knowledge following reasonable inquiry.
1.5 "Liabilities" means all liabilities or obligations of any nature
whatsoever, whether accrued or unaccrued, known or unknown, fixed or contingent,
specifically including any liability or obligation resulting from or relating to
any breach of contract, breach of warranty, tort, infringement, or violation of
law.
1.6 "Person" means any corporation, association, partnership, trust,
organization, business, individual, or governmental body.
ARTICLE 2.
PURCHASE AND TERMS OF PAYMENT
2.1 The Purchase. Upon the terms and subject to the conditions of
this Agreement, TSub hereby sells and assigns to CSub all of TSub's partnership
interest in and to, and all rights to any property of, CPI and all the rights
and obligations of TSub under the Partnership Agreement (the "Partnership
Interest"), in exchange for payment of the Purchase Price (as defined in Section
2.2 below) and CSub will purchase and assume such partnership interest and
rights and obligations of TSub under the Partnership Agreement. All parties to
this Agreement acknowledge that the Purchase Price reflects consideration of a
special allocation to the CSub of 100% of the profits or losses of CPI for all
periods after June 30, 1998 through the termination of CPI. Accordingly, the
books of CPI and the final partnership return prepared as of the date hereof
will reflect the profits and losses accruing to the benefit of both TSub and
CSub through June 30, 1998 in accordance with the Partnership Agreement, with
all profits and losses thereafter allocated to CSub.
2.2 Purchase Price. Upon the terms and subject to the conditions
contained in this Agreement, and in consideration of the sale of the Partnership
Interest, CSub will pay to TSub the following consideration (the "Purchase
Price"):
(a) $1,400,000 by wire transfer on the Closing Date; and
(b) $26,000,000 in purchase money indebtedness, as evidenced by
a note substantially in the same form as the note attached
hereto as Exhibit A, which shall accrue interest on the
unpaid principal balance at the floating 30-day LIBOR rate
applicable to Caraustar's borrowings from Bankers Trust,
with such interest accrued monthly and paid in arrears at
maturity on June 30, 1999. CSub may, without premium or
penalty, at any time and from time to time, prepay all or
any portion of the outstanding principal balance.
2.3 Cash Settlement. At Closing, CPI shall distribute to TSub
the amount of $2,500,000 which will be in full settlement
of all distributions of Net Cash Flow (as defined in the
Partnership Agreement) to TSub through the Closing Date.
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ARTICLE 3.
THE CLOSING
3.1 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on the 30th day of June 1998 or such
later date as the parties may agree ("Closing Date").
3.2 Deliveries at Closing. At the Closing, the parties shall execute
and deliver to each other all the documents necessary to effect the transactions
contemplated in this Agreement.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF TSUB AND TPI
TSub and TPI jointly and severally represent and warrant to CSub, as
of the date hereof:
4.1 Partnership Interest. TSub has good and valid title to the
Partnership Interest, free and clear of any Encumbrance of any kind. No actions
have been taken nor, to the Knowledge of TSub or TPI, omitted to be taken, by
TSub or TPI or any of their representatives or agents, which to the Knowledge of
TSub, might have the effect of imposing or permitting to exist an Encumbrance on
the Partnership Interest or adversely affecting TSub's title to the Partnership
Interest. As a result of the transactions contemplated hereby, CSub will acquire
all of TSub's interest in the Partnership Interest, free and clear of all
Encumbrances or adverse claims. The Partnership Interest will constitute 20% of
the undivided partnership interest in CPI immediately after consummation of the
transactions contemplated in Article 2.
4.2 TSub and TPI.
Each of TSub and TPI is a corporation duly organized, validly
existing and in good standing under the laws of their respective incorporation.
This Agreement constitutes the legal, valid and binding obligation of TSub and
TPI, enforceable against each in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally or the
fact that specific performance is a remedy within the discretion of any court.
4.3 Consent and Approvals; No Violation. No permit, consent, approval
or authorization of, or declaration to or filing with, any governmental or
regulatory authority is required in connection with any respect of the
execution, delivery and performance of this Agreement by either TPI or TSub. The
execution, delivery and performance of this Agreement by each of TPI and TSub
will not (a) conflict with any provision of the Articles of Incorporation or
bylaws of TSub or TPI, (b) result in a default (or give rise to any right of
termination, cancellation or acceleration) or result in the creation of any
lien, condition or restriction upon the Partnership Interest or any assets of
CPI, under any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, agreement, lease or other instrument or obligation to which
either of TSub or TPI is a party, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been obtained, or (c) violate any
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law, statute, rule, regulation, order, writ, injunction or decree of any
federal, state or local governmental authority or agency.
4.4 Actions as Partner. TSub has not incurred on behalf of CPI, or
obligated CPI to, any liabilities or obligations that are not now reflected on
the books and records of CPI.
4.5 Litigation. There are no legal, administrative, arbitration or
other proceedings or governmental investigations pending or, to the Knowledge of
TPI or TSub, threatened against TPI or TSub or any of their Affiliates that
would give any third party the right to enjoin, rescind or condition the
transactions contemplated hereunder.
4.6 Commissions. No broker, finder or other Person is entitled to any
brokerage fee, commission or finder's fee in connection with the transactions
contemplated hereby by reason of any action taken by TSub or TPI.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF CSUB
CSub and Caraustar jointly and severally represent and warrant to TPI
and TSub as follows:
5.1 Organization. Each of CSub and Caraustar is a corporation duly
incorporated, validly existing and in good standing under the laws of their
respective incorporation and each has the requisite power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted, except where the failure to have such power and authority would not,
in the aggregate, have a material adverse effect on the business, operations or
financial condition of CSub.
5.2 Authority Relative to this Agreement. Each of CSub and Caraustar
has the power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by CSub and Caraustar and no other proceedings
on the part of CSub and Caraustar are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by CSub and Caraustar and constitutes the
legal, valid and binding agreement of CSub and Caraustar.
5.3 Consents and Approvals; No Violation. Neither the execution,
delivery and performance of this Agreement by CSub and Caraustar nor the
operation of the business by CSub will (a) conflict with or result in any breach
of any provision of the Articles of Incorporation or bylaws of CSub or
Caraustar, (b) result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, agreement, lease or other instrument or
obligation to which CSub or Caraustar is a party or by which any of its assets
may be bound, except for such defaults (or rights of termination, cancellation
or acceleration) as to which requisite waivers or consents have been obtained,
or (c) violate any law, statute, rule, regulation, order, writ, injunction or
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decree of any federal, state or local governmental authority or agency and which
is applicable to CSub or Caraustar or any of its respective assets.
5.4 Litigation. There are no legal, administrative, arbitration or
other proceedings or governmental investigations pending or, to the Knowledge of
CSub or Caraustar, threatened against CSub or Caraustar, or any of its
Affiliates that would give any third party the right to enjoin, rescind or
condition the transactions contemplated hereunder.
5.5 Commissions. No broker, finder or other Person is entitled to any
brokerage fee, commission or finder's fee in connection with the transactions
contemplated hereby by reason of any action taken by CSub or Caraustar.
ARTICLE 6.
CLOSING CONDITIONS
6.1 Mutual Conditions. Neither party shall be obligated to proceed
with the Closing if, on the Closing Date, either party is subject to any order,
decree or injunction of a court of competent jurisdiction that enjoins or
prohibits the consummation of this Agreement or any Person has instituted a suit
or proceeding that is then pending and seeks to enjoin or prohibit the
transactions contemplated hereby. Any party who is subject to any such order,
decree or injunction or the subject of any such suit or proceeding shall take
any steps within that party's control to cause any such order, decree or
injunction to be modified so as to permit the Closing and to cause any such suit
or proceeding to be dismissed.
6.2 Conditions to the Obligations of TSub and TPI. The obligation of
TSub and TPI to effect the transactions contemplated hereby shall be further
subject to the fulfillment of the following conditions, any one or more of which
may be waived by TSub and TPI:
(a) All representations and warranties of CSub and Caraustar
contained in this Agreement shall be true and correct in all material respects
as of the Closing Date as though made as of such date. CSub and Caraustar shall
have performed and complied in all material respects with all covenants and
agreements contained in this Agreement required to be performed and complied
with by them at or prior to the Closing. TSub shall have received a certificate
to the matters set forth in this Section 6.2 signed on behalf of CSub and
Caraustar by an authorized officer of CSub and Caraustar.
(b) All documents required to have been delivered by CSub to TSub at
or prior to the Closing shall have been delivered by CSub.
(c) CSub and Caraustar shall have delivered to TSub the following
documents executed by CPI:
(i) The CCN Purchase Agreement Amendment, amending the
CCN Purchase Agreement, dated as of July 1, 1996 between TPI and CPI,
substantially in the form as set forth in Exhibit B (the "CCN
Amendment").
(ii) The Double Lined Kraft Brokerage Amendment, amending
the Double Lined Brokerage Agreement, dated as of July 1, 1996,
between TPI and CPI,
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substantially in the form as set forth in Exhibit C (the "Double
Lined Kraft Brokerage Amendment").
(iii) The Mill Procurement Amendment, amending the Mill
Procurement Agreement, dated as of July 1, 1996, between TPI and CPI,
substantially in the form as set forth in Exhibit D (the "Mill
Procurement Amendment").
6.3 Conditions to the Obligations of Buyer. The obligations of CSub
to effect the transactions contemplated hereby shall be further subject to the
fulfillment of the following conditions, any one or more of which may be waived
by CSub:
(a) All representations and warranties of TSub and TPI contained in
this Agreement shall be true and correct in all material respects as of the
Closing Date as though made as of such date. TSub and TPI shall have performed
and complied in all material respects with all covenants and agreements
contained in this Agreement required to be performed and complied with by each
of them respectively at or prior to the Closing. CSub shall have received a
certificate to the matters set forth in this Section 6.3 signed by an authorized
officer of TSub and TPI.
(b) All documents required to have been delivered by TSub and TPI to
CSub at or prior to the Closing shall have been delivered.
(c) The parties shall have obtained any approval required from any
governmental authority, including without limitation, any approval required
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
(d) TSub and TPI shall have delivered to CSub the following documents
executed by TPI:
(i) the CCN Amendment.
(ii) the Double Lined Kraft Brokerage Amendment.
(iii) the Mill Procurement Amendment.
ARTICLE 7.
TERMINATION
7.1 Termination. Notwithstanding anything to the contrary in this
Agreement, the obligations of the parties hereunder may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Closing
Date:
(a) by mutual written consent of all the parties hereto;
(b) by either CSub or TSub, if there shall be any law or regulation
that makes consummation of this Agreement illegal or otherwise prohibited or if
any judgment, injunction, order or decree permanently enjoining a party hereto
from consummating this Agreement is entered and such judgment, injunction, order
or decree shall become final and non-appealable; and
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(c) by either CSub or TSub if the Closing has not occurred by
June 30, 1998.
7.2 Procedure and Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 7.1, the party terminating
this Agreement shall give prompt written notice thereof to the other parties,
and the transactions contemplated hereby shall be abandoned, without further
action by any party. Each filing, application and other submission relating to
the transactions contemplated hereby shall, to the extent practicable, be
withdrawn from the Person to which it was made.
ARTICLE 8.
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
8.1 Survival of Representations. All representations and warranties
made by the parties to this Agreement or pursuant hereto shall survive the
execution of the transactions contemplated hereby, but all claims made by virtue
of such representations and warranties shall be made under this Article 8.
8.2 TSub and TPI's Agreement to Indemnify. Subject to the
limitations, conditions and provisions set forth herein, TPI and TSub agree,
jointly and severally, to indemnify, defend and hold harmless CSub from and
against any and all demands, claims, actions, losses, damages, liabilities,
costs and expenses, including, without limitation, reasonable attorneys' fees,
and expenses of enforcing this Agreement, asserted against, suffered or incurred
by CPI or CSub resulting from facts, conditions or circumstances, the existence
of which constitute a breach of any representation or warranty of TPI or TSub
contained in this Agreement ("CSub's Damages").
8.3 CSub and Caraustar's Agreement to Indemnify.
(a) Indemnification. Subject to the conditions and provisions set
forth herein, CSub and Caraustar hereby agree to indemnify, defend and hold TPI
and TSub harmless from and against (i) all demands, claims, actions, losses,
damages, liabilities, costs and expenses, including, without limitation,
reasonable attorneys' fees, asserted against or incurred by TPI or TSub
resulting from a breach of any representation or warranty of CSub or Caraustar
contained in this Agreement, and (ii) the obligations and liabilities arising
from the activities of CPI asserted or claimed by third parties against TPI or
TSub (collectively the "Sellers' Damages").
(b) Conditions of Indemnification. The obligations and liabilities of
CSub and Caraustar under Section 8.3(a) hereof with respect to claims for
Sellers' Damages resulting from the assertion of liability by third parties
including, without limitation, governmental entities ("Sellers' Claims") shall
be subject to the following terms and conditions:
(iv) Within ten days after receiving notice thereof, TPI
or TSub will give CSub notice of any Sellers' Claims asserted against
or incurred by TPI or TSub and CSub will undertake the defense
thereof by counsel of its own choosing. TPI and TSub may, by counsel,
participate in such proceedings, negotiations or defense, at their
own expense, but CSub shall retain control over such litigation. In
all such cases, TPI and TSub shall give reasonable assistance to
CSub.
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(v) In the event that within ten days after notice of any
such Sellers' Claim, CSub fails to notify TPI of its intention to
defend, TPI will (upon further notice to CSub) have the right to
undertake the defense, compromise or settlement of such Sellers'
Claim. CSub may elect to participate in such proceedings,
negotiations or defense at any time at its own expense. TPI and TSub
shall not settle such Sellers' Claim without the consent of CSub,
which consent shall not be unreasonably withheld.
ARTICLE 9.
MISCELLANEOUS PROVISIONS
9.1 Expenses. Whether or not the transactions contemplated hereby are
consummated, except as otherwise provided herein, CSub will pay all costs and
expenses incurred by CSub in connection with this Agreement and the transactions
contemplated hereby, and TPI and TSub will pay all costs and expenses incurred
by TPI or TSub in connection with this Agreement and the transactions
contemplated hereby. Any cost incurred, with the prior consent of both parties,
for the benefit of both parties in connection with this Agreement shall be borne
by both parties in equal shares.
9.2 Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of all parties hereto with
respect to any of the terms contained herein.
9.3 Waiver of Compliance; Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, representation, warranty, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent shall be given
in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section.
9.4 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given when delivered by hand or by facsimile
transmission or mailed by registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice; provided
that notices of a change of address shall be effective only upon receipt
thereof):
(a) If to TSub or TPI, to:
TENNECO PACKAGING INC.
----------------------------------
1900 Westfield Court
----------------------------------
Lake Forest, Illinois 60045
----------------------------------
Attention: Chief Financial Officer
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(b) If to CSub or Caraustar, to:
-------------------------------
-------------------------------
-------------------------------
-------------------------------
Copies to:
Robinson, Bradshaw & Hinson, P.A.
1900 Independence Center
101 North Tryon Street
Charlotte, North Carolina 28246
Attention: Robert G. Griffin
9.5 Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other party, nor is this
Agreement intended to confer upon any other person except the parties hereto any
rights or remedies hereunder.
9.6 Governing Law; Jurisdiction. This Agreement shall be deemed to be
a contract made under, and for all purposes shall be construed in accordance
with, the internal laws and judicial decisions of the State of Delaware.
9.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.8 Interpretation. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. The rights and remedies of the parties
hereunder are in addition to and not in lieu of the other rights and remedies
they may have at law or in equity, which shall survive and remain available
notwithstanding the expiration of any rights hereunder.
9.9 Entire Agreement. This Agreement, including the Exhibits and
Schedules hereto and the documents delivered pursuant to this Agreement, embody
the entire agreement and understanding of the parties hereto in respect of the
subject matter hereof. The Exhibits and Schedules hereto are an integral part of
this Agreement and are incorporated by reference herein.
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Any item set forth on any schedule shall be considered as having been set forth
on any other schedule to which it may be relevant. This Agreement supersedes all
prior agreements and understandings between the parties with respect to the
transactions contemplated by this Agreement.
9.10 Further Assurances. Subject to the terms and conditions of this
Agreement, each of the parties hereto will use all reasonable efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the sale of the Partnership Interest pursuant to
this Agreement. From time to time after the Closing Date, without further
consideration, TPI and TSub will, at their expense, execute and deliver, or
cause to be executed and delivered, such documents to CSub as CSub may
reasonably request in order more effectively to vest in CSub good title to CPI's
assets. From time to time after the date hereof, without further consideration,
CSub will, at CSub's expense, execute and deliver such documents to TPI and TSub
as they may reasonably request in order more effectively to consummate the sale
of the Partnership Interest pursuant to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective duly authorized officers as of the date first
above written.
TENNECO PACKAGING INC.
By: /s/ Glenn S. Gordon
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TENNECO CPI HOLDING COMPANY
By: /s/ Glenn S. Gordon
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CARAUSTAR INDUSTRIES, INC.
By: /s/ H. Lee Thrash, III
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CARAUSTAR PAPERBOARD
CORPORATION
By: /s/ H. Lee Thrash, III
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EXHIBIT 4.01
CARAUSTAR INDUSTRIES, INC.
TO
THE BANK OF NEW YORK,
Trustee
INDENTURE
Dated as of _____ ___, 1998
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TABLE OF CONTENTS
Page
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ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION..................................................................... 1
Section 101. Definitions.......................................................... 1
Section 102. Compliance Certificates and Opinions................................. 8
Section 103. Form of Documents Delivered to Trustee............................... 9
Section 104. Acts of Holders; Record Dates........................................ 10
Section 105. Notices, Etc., to Trustee and Company................................ 12
Section 106. Notice to Holders; Waiver............................................ 12
Section 107. Conflict with Trust Indenture Act.................................... 12
Section 108. Effect of Headings and Table of Contents............................. 12
Section 109. Successors and Assigns............................................... 13
Section 110. Separability Clause.................................................. 13
Section 111. Benefits of Indenture................................................ 13
Section 112. Governing Law........................................................ 13
Section 113. Legal Holidays....................................................... 13
ARTICLE TWO SECURITY FORMS................................................................ 13
Section 201. Forms Generally...................................................... 13
Section 202. Form of Face of Security............................................. 14
Section 203. Form of Reverse of Security.......................................... 16
Section 204. Additional Provisions Required in Global Security.................... 21
Section 205. Form of Trustee's Certificate of Authentication...................... 21
ARTICLE THREE THE SECURITIES.............................................................. 22
Section 301. Amount Unlimited; Issuable in Series................................. 22
Section 302. Denominations........................................................ 25
Section 303. Execution, Authentication, Delivery and Dating....................... 25
Section 304. Temporary Securities................................................. 27
Section 305. Registration, Registration of Transfer and Exchange.................. 27
Section 306. Mutilated, Destroyed, Lost and Stolen Securities..................... 29
Section 307. Payment of Interest; Interest Rights Preserved; Optional Interest
Rate............................................................ 30
Section 308. Optional Extension of Maturity....................................... 32
Section 309. Persons Deemed Owners................................................ 33
Section 310. Cancellation......................................................... 33
Section 311. Computation of Interest.............................................. 33
Section 312. CUSIP Numbers........................................................ 34
ARTICLE FOUR SATISFACTION AND DISCHARGE................................................... 34
Section 401. Satisfaction and Discharge of Indenture.............................. 34
Section 402. Application of Trust Money; Indemnification.......................... 35
ARTICLE FIVE REMEDIES..................................................................... 36
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Section 501. Events of Default.................................................... 36
Section 502. Acceleration of Maturity; Rescission and Annulment................... 38
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee...... 39
Section 504. Trustee May File Proofs of Claim..................................... 40
Section 505. Trustee May Enforce Claims Without Possession of Securities.......... 41
Section 506. Application of Money Collected....................................... 41
Section 507. Limitation on Suits.................................................. 41
Section 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest........................................................ 42
Section 509. Restoration of Rights and Remedies................................... 42
Section 510. Rights and Remedies Cumulative....................................... 42
Section 511. Delay or Omission Not Waiver......................................... 42
Section 512. Control by Holders................................................... 42
Section 513. Waiver of Past Defaults.............................................. 43
Section 514. Undertaking for Costs................................................ 44
Section 515. Waiver of Usury, Stay or Extension Laws.............................. 44
ARTICLE SIX THE TRUSTEE................................................................... 44
Section 601. Certain Duties and Responsibilities.................................. 44
Section 602. Notice of Defaults................................................... 45
Section 603. Certain Rights of Trustee............................................ 46
Section 604. Not Responsible for Recitals or Issuance of Securities............... 47
Section 605. May Hold Securities.................................................. 47
Section 606. Money Held in Trust.................................................. 47
Section 607. Compensation and Reimbursement....................................... 47
Section 608. Disqualification; Conflicting Interests.............................. 47
Section 609. Corporate Trustee Required; Eligibility.............................. 48
Section 610. Resignation and Removal; Appointment of Successor.................... 48
Section 611. Acceptance of Appointment by Successor............................... 49
Section 612. Merger, Conversion, Consolidation or Succession to Business.......... 50
Section 613. Preferential Collection of Claims Against Company.................... 50
Section 614. Appointment of Authenticating Agent.................................. 54
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND
COMPANY......................................................... 55
Section 701. Company to Furnish Trustee Names and Addresses of Holders............ 55
Section 702. Preservation of Information; Communications to Holders............... 56
Section 703. Reports by Trustee................................................... 57
Section 704. Reports by Company................................................... 58
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR
LEASE........................................................... 59
Section 801. Company May Consolidate, Etc., Only on Certain Terms................. 59
Section 802. Successor Substituted................................................ 59
ARTICLE NINE SUPPLEMENTAL INDENTURES...................................................... 60
Section 901. Supplemental Indentures Without Consent of Holders................... 60
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Section 902. Supplemental Indentures with Consent of Holders...................... 62
Section 903. Execution of Supplemental Indentures................................. 63
Section 904. Effect of Supplemental Indentures.................................... 63
Section 905. Conformity with Trust Indenture Act.................................. 64
Section 906. Reference in Securities to Supplemental Indentures................... 64
ARTICLE TEN COVENANTS..................................................................... 64
Section 1001. Payment of Principal, Premium and Interest.......................... 64
Section 1002. Maintenance of Office or Agency..................................... 64
Section 1003. Money for Securities Payments to Be Held in Trust................... 65
Section 1004. Statement by Officers as to Default................................. 66
Section 1005. Existence........................................................... 66
Section 1006. Maintenance of Properties........................................... 66
Section 1007. Payment of Taxes and Other Claims................................... 66
Section 1008. Limitations on Liens................................................ 66
Section 1009. Limitations on Sale and Lease-Back.................................. 68
Section 1010. Waiver of Certain Covenants......................................... 69
Section 1011. Applicability of Covenants.......................................... 69
ARTICLE ELEVEN REDEMPTION OF SECURITIES................................................... 69
Section 1101. Applicability of Article............................................ 69
Section 1102. Election to Redeem; Notice to Trustee............................... 69
Section 1103. Selection by Trustee of Securities to Be Redeemed................... 70
Section 1104. Notice of Redemption................................................ 70
Section 1105. Deposit of Redemption Price......................................... 71
Section 1106. Securities Payable on Redemption Date............................... 71
Section 1107. Securities Redeemed in Part......................................... 71
ARTICLE TWELVE SINKING FUNDS.............................................................. 72
Section 1201. Applicability of Article............................................ 72
Section 1202. Satisfaction of Sinking Fund Payments with Securities............... 72
Section 1203. Redemption of Securities for Sinking Fund........................... 72
ARTICLE THIRTEEN REPAYMENT AT THE OPTION OF THE HOLDERS................................... 73
Section 1301. Applicability of Article............................................ 73
Section 1302. Repayment of Securities............................................. 73
Section 1303. Exercise of Option.................................................. 73
Section 1304. When Securities Presented for Repayment Become Due and
Payable......................................................... 73
Section 1305. Securities Repaid in Part........................................... 74
ARTICLE FOURTEEN DEFEASANCE AND COVENANT DEFEASANCE....................................... 74
Section 1401. Company's Option to Effect Defeasance or Covenant
Defeasance...................................................... 74
Section 1402. Defeasance and Discharge............................................ 74
Section 1403. Covenant Defeasance................................................. 75
Section 1404. Conditions to Defeasance or Covenant Defeasance..................... 75
</TABLE>
- iii -
<PAGE> 5
<TABLE>
<S> <C> <C>
Section 1405. Acknowledgment of Discharge By Trustee.............................. 77
Section 1406. Deposited Money and U.S. Government Obligations to Be Held
in Trust; Miscellaneous Provisions.............................. 77
Section 1407. Reinstatement....................................................... 78
</TABLE>
- iv -
<PAGE> 6
INDENTURE, dated as of _____ ___, 1998, between Caraustar Industries,
Inc., a corporation duly organized and existing under the laws of the State of
North Carolina (herein called the "Company"), having its principal office at
3100 Washington Street, Austell, Georgia 30001, and The Bank of New York, a
national banking association duly organized and existing under the laws of the
United States, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of such
computation; and
(4) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
<PAGE> 7
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt", when used in connection with a sale and lease-back
transaction referred to herein shall mean, as of any particular time, the
aggregate of present values (discounted at a rate per annum equal to the average
interest borne by all Outstanding Securities determined on a weighted average
basis and compounded semi-annually) of the obligations of the Company or any
Subsidiary for net rental payments during the remaining term of the lease
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended). The term "net rental payments" under any
lease of any period shall mean the sum of the rental and other payments required
to be paid in such period by the lessee thereunder, not including, however, any
amounts required to be paid by such lessee (whether or not designated as rental
or additional rental) on account of maintenance and repairs, reconstruction,
insurance, taxes, assessments, water rates or similar charges required to be
paid by such lessee thereunder or any amounts required to be paid by such lessee
thereunder contingent upon the amount of sales, maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates or similar charges.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of the Company to which authority to act on behalf of the Board of Directors has
been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
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<PAGE> 8
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Net Tangible Assets" means, at any date, the total assets
appearing on the most recently prepared consolidated balance sheet of the
Company and its Subsidiaries as of the end of a fiscal quarter of the Company,
prepared in accordance with generally accepted accounting principles, less (a)
all current liabilities as shown on such balance sheet and (b) intangible
assets. "Intangible assets" means the value (net of any applicable reserves), as
shown on or reflected in such balance sheet of: (i) all trade names, trademarks,
licenses, patents, copyrights and goodwill; (ii) organizational costs; and (iii)
deferred charges (other than prepaid items such as insurance, taxes, interest,
commissions, rents and similar items and tangible assets being amortized); but
in no event shall the term "intangible assets" include product development
costs.
"Corporate Trust Office" means the principal office of the Trustee in
_____________, _________________, at which at any particular time its corporate
trust business shall be administered.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1403.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1402.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary for such series by the Company
pursuant to Section 301, which Person shall be a clearing agency registered
under the Securities Exchange Act of 1934, as amended; and if at any time there
is more than one such Person, 'Depositary' as used with respect to the
Securities of any series shall mean the Depositary with respect to the
Securities of such series.
"Domestic Subsidiary" means any Subsidiary (a) organized and existing
under the laws of the United States or any state, territory or possession
thereof, or the Commonwealth of Puerto Rico, (b) the operations of which are
substantially conducted in the United States or its territories or possessions,
or in the Commonwealth of Puerto Rico, or (c) a substantial portion of the
assets of which are located in the United States or its territories or
possessions, or in the Commonwealth of Puerto Rico. A "wholly owned Domestic
Subsidiary" is any Domestic Subsidiary of which all Outstanding securities
having the voting power to elect the Board of
3
<PAGE> 9
Directors of such Domestic Subsidiary (irrespective of whether or not at the
time securities of any other class or classes of such Domestic Subsidiary shall
have or might have voting power by reason of the happening of any contingency)
are at the time directly or indirectly owned or controlled by the Company, or by
one or more wholly owned Domestic Subsidiaries, or by the Company and one or
more wholly owned Domestic Subsidiaries.
"Event of Default" has the meaning specified in Section 501.
"Expiration Date" has the meaning specified in Section 104.
"Foreign Currency" means a currency or cash issued by the government of
any country other than the United States of America or units based on or
relating to such currencies (including European Currency Units) (such units,
including European Currency Units, being hereinafter referred to as 'composite
currencies' or 'basket currencies').
"Foreign Government Securities" means, with respect to Securities of any
series that are denominated in a Foreign Currency, noncallable (i) direct
obligations of the government that issued such Foreign Currency for the payment
of which obligations its full faith and credit is pledged or (ii) obligations of
a Person controlled or supervised by and acting as an agency or instrumentality
of such government, the payment of which obligations is unconditionally
guaranteed as a full faith and credit obligation of such government.
"Funded Indebtedness" means any Indebtedness maturing by its terms more
than one year from the date of the determination thereof, including any
Indebtedness renewable or extendible at the option of the obligor to a date
later than one year from the date of the determination thereof.
"Global Security" or "Global Securities" means a Security or Securities,
as the case may be, in the form prescribed in Section 204 evidencing all or part
of a series of Securities, issued to the Depositary for such series or its
nominee, and registered in the name of such Depositary or nominee.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means (i) all obligations for borrowed money, (ii) all
obligations evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations in respect of letters of credit or bankers acceptances or
similar instruments (or reimbursement obligations with respect thereto), (iv)
all obligations to pay the deferred purchase price of property or services,
except trade accounts payable arising in the ordinary course of business, (v)
all obligations as lessee which are capitalized in accordance with generally
accepted accounting principles, and (vi) all Indebtedness of others guaranteed
by the Company or any of its subsidiaries or for which the Company or any of its
subsidiaries is otherwise responsible or liable (whether by agreement to
purchase indebtedness of, or to supply funds or to invest in, others).
4
<PAGE> 10
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 501(4).
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Optional Reset Date" has the meaning specified in Section 307(b).
"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Original Stated Maturity" has the meaning specified in Section 308.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made;
5
<PAGE> 11
(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid obligations
of the Company; provided, however, that in determining whether the
Holders of the requisite principal amount of the Outstanding Securities
have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, as of any date (i) the principal amount of
an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be
due and payable as of the date of such determination upon acceleration
of the Maturity thereof to such date, pursuant to Section 502, (ii) if,
as of such date, the principal amount payable at the Stated Maturity of
a Security is not determinable (for example, because it is based on an
index), the principal amount of such Security deemed to be outstanding
as of such date will be an amount determined in the manner prescribed
for such Security, (iii) the principal amount of a Security denominated
in one or more Foreign Currencies or currency units shall be the U.S.
dollar equivalent, determined in the manner provided as contemplated by
Section 301 on the date of original issuance of such Security, of the
principal amount (or, in the case of a Security described in clause (i)
or (ii) above, the U.S. dollar equivalent of the amount determined as
provided in such clause above) of such Security, and (iv) Securities
owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded
and deemed not to be Outstanding, except that, in determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities
which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other
obligor; and
(iv) Securities as to which Defeasance has been effected pursuant
to Section 1402.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
6
<PAGE> 12
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means any mill, manufacturing plant, building,
structure or other facility (together with the land on which it is erected and
improvements and fixtures comprising a part thereof) or other real property
interest located in the United States (all such facilities or interests forming
an integral part of a single development or operation being considered as one
interest), owned or leased and having a gross book value as of the date of its
determination in excess of 1% of Consolidated Net Tangible Assets, other than a
facility or portion thereof (i) financed by means of industrial revenue bonds or
(ii) which, as determined in good faith by resolution of the Board of Directors
of the Company, is not of material importance to the total business conducted by
the Company and its Subsidiaries taken as a whole.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Repayment Date" means, when used with respect to any Security to be
repaid at the option of the Holder, the date fixed for such repayment by or
pursuant to this Indenture.
"Reset Notice" has the meaning specified in Section 307(b).
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
7
<PAGE> 13
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsequent Interest Period" has the meaning specified in Section
307(b).
"Subsidiary" means any corporation, association or other entity of which
at least a majority of Outstanding securities have the voting power to elect a
majority of the Board of Directors of such entity (irrespective of whether or
not at the time securities of any other class or classes of such entity shall
have or might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly owned or controlled by the Company, or by
one or more of the Subsidiaries, or by the Company and one or more Subsidiaries.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a Trustee hereunder, and if at any time there
is more than one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"U.S. Government Obligations" has the meaning specified in Section 1404.
"United States" means the United States of America excluding its
territories and possessions, but including the Commonwealth of Puerto Rico.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Yield to Maturity" means the yield to maturity, computed at the time of
issuance of a Security (or, if applicable, at the most recent redetermination of
interest on such Security) and as set forth in such Security in accordance with
generally accepted United States bond yield computation principles.
Section 102. Compliance Certificates and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such
8
<PAGE> 14
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(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 each such individual, the
individual has made such examination or investigation as is necessary to
enable such individual 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, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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<PAGE> 15
Section 104. Acts of Holders; Record Dates. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given, made or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders of Securities of any series entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by Holders of
Securities of such series. If not set by the Company prior to the first
solicitation of a Holder of Securities of such series made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. Notwithstanding the foregoing, the Company may not set a record date
for, and the provisions of this paragraph shall not apply with respect to, the
giving or making of any notice, declaration, request or direction referred to in
the next paragraph. If any record date is set pursuant to this paragraph, the
Holders of Outstanding Securities of the relevant series on such record date,
and no other Holders, shall be entitled to take the relevant action, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Company, at its own expense, shall cause notice
of such
10
<PAGE> 16
record date, the proposed action by Holders and the applicable Expiration Date
to be given to the Trustee in writing and to each Holder of Securities of the
relevant series in the manner set forth in Section 106.
(d) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.
(e) With respect to any record date set pursuant to this Section, the
party hereto which sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities of the relevant series in the manner
set forth in Section 106, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto which set such record date shall be deemed to
have initially designated the 180th day after such record date as the Expiration
Date with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.
(f) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
(g) The ownership of Securities shall be proved by the Security
Register.
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<PAGE> 17
(h) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
Section 105. Notices, Etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Officer, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the
Company.
Section 106. Notice to Holders; Waiver. Where this Indenture provides
for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date
(if any), and not earlier than the earliest date (if any), prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act. If any provision of this
Indenture limits, qualifies or conflicts with a provision of the Trust Indenture
Act that is required under such Act to be a part of and govern this Indenture,
the latter provision shall control. If any provision of this Indenture modifies
or excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
Section 108. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
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<PAGE> 18
Section 109. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
Section 110. Separability Clause. In case any provision in this
Indenture or in the Securities 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 111. Benefits of Indenture. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
Section 112. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 113. Legal Holidays. In any case where any Interest Payment
Date, Redemption Date or Stated Maturity of any Security shall not be a Business
Day at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities (other than a provision of the Securities of any
series which specifically states that such provision shall apply in lieu of this
Section)) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally. The Securities of each series shall be in
substantially the form set forth in this Article, or in such other form as shall
be established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with applicable tax laws or the rules of any securities exchange or automated
quotation system on which the Securities of such series may be listed or traded
or the Depositary therefor or as may, consistently herewith, be determined by
the officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
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<PAGE> 19
The definitive Securities shall be typewritten, printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner
permitted by the rules of any securities exchange or automated quotation system
on which the Securities of such series may be listed or traded, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Face of Security. (If applicable, insert the
following legend, or such other legend as may be required by the Internal
Revenue Code or the regulations thereunder:
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES
INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT
ON THIS SECURITY IS ____% OF ITS PRINCIPAL AMOUNT, THE ISSUE DATE IS
___________, 19__ [,] [AND] THE YIELD TO MATURITY IS _____% [, THE METHOD USED
TO DETERMINE THE YIELD IS _______________ AND THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT APPLICABLE TO THE SHORT ACCRUAL PERIOD OF ____________, 19__ TO
______________________, 19__ IS ___% OF THE PRINCIPAL AMOUNT OF THIS SECURITY.]
CARAUSTAR INDUSTRIES, INC.
(Title of Security)
No. _____ $_______________
CUSIP NO.______
Caraustar Industries, Inc., a corporation duly organized and existing
under the laws of the State of North Carolina (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ______________, or
registered assigns, the principal sum of ____________ Dollars on
__________________ [if the Security is to bear interest prior to Maturity,
insert --, and to pay interest thereon from ______________ or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on __________ and ____________ in each year, commencing
____________, at the rate of ___% per annum, until the principal hereof is paid
or made available for payment [if applicable, insert --, and (to the extent that
the payment of such interest shall be legally enforceable) at the rate of ___%
per annum on any overdue principal and premium and on any overdue installment of
interest] [if applicable, insert --, provided that any principal and premium,
and any such installment of interest, which is overdue shall bear interest at
the rate of _____% per annum (to the extent permitted by applicable law), from
the dates such amounts are due until they are paid or made available for
payment, and such interest shall be payable on demand]. [If applicable, insert
- -- The amount of interest payable for any period shall be computed on the basis
of twelve 30-day months and a 360-day year. The amount of interest payable for
any partial period shall be computed on the basis of a 360-day year of twelve
30-day months and the days elapsed in any partial month. In the event that any
date on which interest is payable on this Security is not a Business Day, then a
payment of the interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay) with the same force and effect as if made on the date
the payment was originally payable. A
14
<PAGE> 20
"Business Day" shall mean, when used with respect to any Place of Payment, each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.]. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the _____________ or ____________
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such Regular Record
Date and may either be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the Securities of
this series may be listed or traded, and upon such notice as may be required by
such exchange or automated quotation system, all as more fully provided in said
Indenture).
[If the Security is not to bear interest prior to Maturity, insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium of this
Security shall bear interest at the rate of ____% per annum (to the extent that
the payment of such interest shall be legally enforceable), which shall accrue
from the date of such default in payment to the date payment of such principal
has been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the rate of ____% per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such demand for payment to the date payment of such
interest has been made or duly provided for, and such interest shall also be
payable on demand.)
Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in __________________, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts [if applicable, insert --;
provided, however, that at the option of the Company payment of interest may be
made (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register, or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated in writing by the Person entitled thereto as specified in the
Security Register].
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
15
<PAGE> 21
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: CARAUSTAR INDUSTRIES, INC.
-----------------------------------
By
---------------------------------
Attest:
- -----------------------------------
Section 203. Form of Reverse of Security. This Security is one of a duly
authorized issue of securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture, dated as of
_____________ (herein called the "Indenture", which term shall have the meaning
assigned to it in such instrument), between the Company and _____________, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [if applicable, insert -- limited in aggregate
principal amount to $___________].
[If applicable, insert -- The Securities of this series are subject to
redemption.]
[If applicable, insert -- The interest rate (or the spread or spread
multiplier used to calculate such interest rate, if applicable) on this Security
may be reset by the Company on ____________ (each an "Optional Reset Date"). The
Company may exercise such option with respect to this Security by notifying the
Trustee of such exercise at least 50 but not more than 60 days prior to an
Optional Reset Date for this Security. Not later than 40 days prior to each
Optional Reset Date, the Trustee shall transmit, in the manner provided for in
Section 106 of the Indenture, to the Holder of this Security a notice (the
"Reset Notice") indicating whether the Company has elected to reset the interest
rate (or the spread or spread multiplier used to calculate such interest rate,
if applicable), and if so (i) such new interest rate (or such new spread or
spread multiplier, if applicable) and (ii) the provisions, if any, for
redemption during the period from such Optional Reset Date to the next Optional
Reset Date or if there is no such next Optional Reset Date, to the Stated
Maturity of this Security (each such period a "Subsequent Interest Period"),
including the date or dates on which or the period or periods during which and
the price or prices at which such redemption may occur during the Subsequent
Interest Period.
Notwithstanding the foregoing, not later than 20 days prior to the
Optional Reset Date, the Company may, at its option, revoke the interest rate
(or the spread or spread multiplier used to calculate such interest rate, if
applicable) provided for in the Reset Notice and establish an interest rate (or
a spread or spread multiplier used to calculate such interest rate, if
applicable)
16
<PAGE> 22
that is higher than the interest rate (or the spread or spread multiplier, if
applicable) provided for in the Reset Notice, for the Subsequent Interest Period
by causing the Trustee to transmit, in the manner provided for in Section 106 of
the Indenture, notice of such higher interest rate (or such higher spread or
spread multiplier, if applicable) to the Holder of this Security. Such notice
shall be irrevocable. All Securities of this series with respect to which the
interest rate (or the spread or spread multiplier used to calculate such
interest rate, if applicable) is reset on an Optional Reset Date, and with
respect to which the Holders of such Securities have not tendered such
Securities for repayment (or have validly revoked any such tender) pursuant to
the next succeeding paragraph, will bear such higher interest rate (or such
higher spread or spread multiplier, if applicable).
The Holder of this Security will have the option to elect repayment by
the Company of the principal of this Security on each Optional Reset Date at a
price equal to the principal amount hereof plus interest accrued to such
Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the
Holder must follow the procedures set forth in Article Thirteen of the Indenture
for repayment at the option of Holders except that the period for delivery or
notification to the Trustee shall be at least 25 but not more than 35 days prior
to such Optional Reset Date and except that, if the Holder has tendered this
Security for repayment pursuant to the Reset Notice, the Holder may, by written
notice to the Trustee, revoke such tender or repayment until the close of
business on the tenth day before such Optional Reset Date.]
[If applicable, insert -- The Stated Maturity of this Security may be
extended at the option of the Company for _______________ (each an "Extension
Period") up to but not beyond ____________ (the "Final Maturity"). The Company
may exercise such option with respect to this Security by notifying the Trustee
of such exercise at least 50 but not more than 60 days prior to the Stated
Maturity of this Security in effect prior to the exercise of such option (the
"Original Stated Maturity"). If the Company exercises such option, the Trustee
shall transmit, in the manner provided for in Section 106 of the Indenture, to
the Holder of this Security not later than 40 days prior to the Original Stated
Maturity a notice (the "Extension Notice") indicating (i) the election of the
Company to extend the Maturity, (ii) the new Stated Maturity, (iii) the interest
rate applicable to the Extension Period and (iv) the provisions, if any, for
redemption during such Extension Period. Upon the Trustee's transmittal of the
Extension Notice, the Stated Maturity of this Security shall be extended
automatically and, except as modified by the Extension Notice and as described
in the next paragraph, this Security will have the same terms as prior to the
transmittal of such Extension Notice.
Notwithstanding the foregoing, not later than 20 days before the
Original Stated Maturity of this Security, the Company may, at its option,
revoke the interest rate provided for in the Extension Notice and establish a
higher interest rate for the Extension Period by causing the Trustee to
transmit, in the manner provided for in Section 106, notice of such higher
interest rate to the Holder of this Security. Such notice shall be irrevocable.
All Securities of this series with respect to which the Stated Maturity is
extended will bear such higher interest rate.
If the Company extends the Maturity of this Security, the Holder will
have the option to elect repayment of this Security by the Company on the
Original Stated Maturity at a price equal to the principal amount hereof, plus
interest accrued to such date. In order to obtain repayment on the Original
Stated Maturity once the Company has extended the Maturity hereof, the Holder
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<PAGE> 23
hereof must follow the procedures set forth in Article Thirteen of the Indenture
for repayment at the option of Holders, except that the period for delivery or
notification to the Trustee shall be at least 25 but not more than 35 days prior
to the Original Stated Maturity and except that, if the Holder has tendered this
Security for repayment pursuant to an Extension Notice, the Holder may, by
written notice to the Trustee, revoke such tender for repayment until the close
of business on the tenth day before the Original Stated Maturity.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ___________ in any year commencing with the year _____________ and ending
with the year __________ through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal amount, and (2)] at any
time [if applicable insert -- on or after ______________, 19__], as a whole or
in part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [on or before
_________________, ___%, and if redeemed] during the 12-month period beginning
_____________ of the years indicated,
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
---- ----- ---- -----
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to ______% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ___________ in any
year commencing with the year _______ and ending with the year ________ through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time (on or
after _____________), as a whole or in part, at the election of the Company, at
the Redemption Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in the
table below: If redeemed during the 12-month period beginning ____________ of
the years indicated,
<TABLE>
<CAPTION>
Redemption Price Redemption Price For
For Redemption Redemption Otherwise
Through Operation Than Through Operation
Year of the Sinking Fund of the Sinking Fund
---- ------------------- -------------------
<S> <C> <C>
</TABLE>
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<PAGE> 24
and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the Company may
not, prior to _______________, redeem any Securities of this series as
contemplated by (Clause (2) of) the preceding paragraph as a part of, or in
anticipation of, any refunding operation by the application, directly or
indirectly, of moneys borrowed having an interest cost to the Company
(calculated in accordance with generally accepted financial practice) of less
than ___% per annum.]
[If applicable, insert -- The sinking fund for this series provides for
the redemption on _______ in each year beginning with the year __________ and
ending with the year ___________ of (not less than $___________ ("mandatory
sinking fund") and not more than) $__________ aggregate principal amount of
Securities of this series. Securities of this series acquired or redeemed by the
Company otherwise than through (mandatory) sinking fund payments may be credited
against subsequent (mandatory) sinking fund payments otherwise required to be
made (in the inverse order in which they become due).]
[If the Security is subject to redemption of any kind, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
[If the Security is not an Original Issue Discount Security, insert --If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[The Indenture contains provisions for Defeasance at any time of [the
entire indebtedness of this Security] [or] [certain restrictive covenants and
Events of Default with respect to this Security] [, in each case] upon
compliance with certain conditions set forth in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, [the] [an amount of] principal of the Securities of this series may
be declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to --insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]
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<PAGE> 25
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee indemnity satisfactory to the Trustee
in its reasonable judgment, and the Trustee shall not have received from the
Holders of a majority in principal amount of Securities of this series at the
time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
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<PAGE> 26
The Securities of this series are issuable only in registered form
without coupons in denominations of $________ and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
Section 204. Additional Provisions Required in Global Security. Any
Global Security issued hereunder shall, in addition to the provisions contained
in Sections 202 and 203, bear a legend in substantially the following form:
"THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE
FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY."
Section 205. Form of Trustee's Certificate of Authentication. The
Trustee's certificates of authentication shall be in substantially the following
form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated:____________ THE BANK OF NEW YORK,
, As Trustee
--------------------------
By
------------------------------------
Authorized Officer
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ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate or
in a Company Order, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series or in a Company Order,
(1) the title and designation of the Securities of the series
(which shall distinguish the Securities of the series from Securities of
any other series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906 or 1107
and except for any Securities which, pursuant to Section 303, are deemed
never to have been authenticated and delivered hereunder); provided,
however, that the authorized aggregate principal amount of such series
may be increased above such amount by a Board Resolution to such effect;
(3) the Person to whom any interest on a Security of the series
shall be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities of
the series is payable, or the method by which such date or dates shall
be determined or extended;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, or the method by which such rate or rates shall
be determined, the date or dates from which such interest shall accrue,
or the method by which such date or dates shall be determined, the
Interest Payment Dates on which any such interest shall be payable and
the Regular Record Date for any interest payable on any Interest Payment
Date, or the method by which such date or dates shall be determined, and
the basis upon which interest shall be calculated if other than that of
a 360-day year of twelve 30-day months;
(6) the place or places where the principal of and any premium
and interest on Securities of the series shall be payable, the place or
places where the Securities of such series may be presented for
registration of transfer or exchange, and the place or places where
notices and demands to or upon the Company in respect of the Securities
of such series may be made;
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(7) the period or periods within or the date or dates on which,
the price or prices at which and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in part, at the
option of the Company and, if other than by a Board Resolution, the
manner in which any election by the Company to redeem the Securities
shall be evidenced;
(8) the obligation or the right, if any, of the Company to redeem
or purchase any Securities of the series pursuant to any sinking fund,
amortization or analogous provisions or at the option of a Holder
thereof and the period or periods within which, the price or prices at
which, the currency or currencies (including currency unit or units) in
which and the terms and conditions upon which Securities of the series
shall be redeemed or purchased, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(10) the currency, currencies or currency units in which payment
of the principal of and any premium and interest on any Securities of
the series shall be payable if other than the currency of the United
States of America and the manner of determining the equivalent thereof
in the currency of the United States of America for purposes of the
definition of "Outstanding" in Section 101;
(11) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with
reference to an index or pursuant to a formula (including by reference
to currency or interest rates), the manner in which such amounts shall
be determined;
(12) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Company or a Holder thereof, in one or more currencies or currency units
other than that or those in which the Securities are stated to be
payable, the currency, currencies or currency units in which payment of
the principal of and any premium and interest on Securities of such
series as to which such election is made shall be payable, the period or
the periods within or the date or dates on which and the terms and
conditions upon which such election is to be made and the amount so
payable (or the manner in which such amount shall be determined);
(13) the percentage of the principal amount at which such
Securities will be issued and, if other than the principal amount
thereof, the portion of the principal amount of Securities of the series
which shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 502 or the method by which such portion
shall be determined;
(14) if the principal amount payable at the Stated Maturity of
any Securities of the series will not be determinable as of any one or
more dates prior to the Stated Maturity, the amount which shall be
deemed to be the principal amount of such Securities as of any such date
for any purpose thereunder or hereunder, including the principal amount
thereof which shall be due and payable upon any Maturity other than
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the Stated Maturity or which shall be deemed to be Outstanding as of any
date prior to the Stated Maturity (or, in any such case, the manner in
which such amount deemed to be the principal amount shall be
determined);
(15) if applicable, that the Securities of the series, in whole
or any specified part, shall not be defeasible or shall be defeasible in
a manner varying from Section 1402 and Section 1403 and, if other than
by a Board Resolution, the manner in which any election by the Company
to defease such Securities shall be evidenced;
(16) whether the Securities of the series, or any portion
thereof, shall initially be issuable in the form of a temporary Global
Security representing all or such portion of the Securities of such
series and provisions for the exchange of such temporary Global Security
for definitive Securities of such series;
(17) if applicable, that any Securities of the series, or any
portion thereof, shall be issuable in whole or in part in the form of
one or more Global Securities and, in such case, the respective
Depositaries for such Global Securities, the form of any legend or
legends which shall be borne by any such Global Security in addition to
or in lieu of that set forth in Section 204 and any circumstances in
addition to or in lieu of those set forth in Clause (2) of the last
paragraph of Section 305 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any
transfer of such Global Security in whole or in part may be registered,
in the name or names of Persons other than the Depositary for such
Global Security or a nominee thereof;
(18) whether Article Fourteen shall apply to the Securities of
such series; and
(19) if applicable, that the Securities of the series, in whole
or any specified part, shall be subject to the optional interest reset
provisions of Section 307(b);
(20) if applicable, that the Securities of the series, in whole
or any specified part, shall be subject to the optional extension of
maturity provisions of Section 308;
(21) any addition to or change in the Events of Default which
applies to any Securities of the series and any change in the right of
the Trustee or the requisite Holders of such Securities to declare the
principal amount thereof due and payable pursuant to Section 502;
(22) any addition to or change in the covenants set forth in
Article Ten which applies to Securities of the series;
(23) the additions or changes, if any, to this Indenture with
respect to the Securities of such series as shall be necessary to permit
or facilitate the issuance of the Securities of such series in bearer
form, registrable or not registrable as to principal, and with or
without interest coupons;
(24) the appointment of any Paying Agent or Agents for the
Securities of such series;
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(25) the terms of any right to convert or exchange Securities of
such series into any other securities or property of the Company, and
the additions or changes, if any, to this Indenture with respect to the
Securities of such series to permit or facilitate such conversion or
exchange;
(26) the terms and conditions, if any, pursuant to which the
Securities of the series are secured;
(27) any restriction or condition on the transferability of the
Securities of such series; and
(28) any other terms of the Securities of such series (which
terms shall not be inconsistent with the provisions of this Indenture,
except as permitted by Section 901(5)).
All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided herein or in or
pursuant to the Board Resolution referred to above and (subject to Section 303)
set forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
If any of the terms of the Securities of such series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate or Company Order setting forth the terms of the series.
Section 302. Denominations. The Securities of each series shall be
issuable only in registered form without coupons and only in such denominations
as shall be specified as contemplated by Section 301. In the absence of any such
provisions with respect to the Securities of any series, the Securities of such
series shall be issuable in denominations of $1,000 and any integral multiple
thereof.
Section 303. Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Vice Chairman of the Board, its Chief Executive Officer, its
President or one of its Vice Presidents. The signature of any of these officers
on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any Series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established in or
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<PAGE> 31
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this
Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in conformity with the provisions of this
Indenture; and
(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company enforceable in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate or Company
Order otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the time of authentication of each Security of such series if such
documents are delivered at or prior to the authentication upon original issuance
of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 310, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
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Section 304. Temporary Securities. Pending the preparation of definitive
Securities of any series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities of such
series in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount and tenor. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes collectively
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities and of transfers of Securities. The Trustee is hereby appointed
"Security Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided. If any indenture supplemental hereto refers to
any transfer agents (in addition to the Security Registrar) initially designated
by the Company with respect to any series of Securities, the Company may at any
time rescind the designation of any such transfer agent or approve a change in
the location through which any such transfer agent acts, provided that the
Company maintains a transfer agent in each Place of Payment for such series. The
Company may at any time designate additional transfer agents with respect to any
series of Securities.
Upon surrender for registration of transfer of any Security of any
series at the office or agency of the Company in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of a like
aggregate principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
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All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
Neither the Trustee nor the Company shall be required, pursuant to the
provisions of this Section, (A) to issue, register the transfer of or exchange
any Securities of any series (or of any series and specified tenor, as the case
may be) during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of any such Securities selected for
redemption under Section 1103 and ending at the close of business on the day of
such mailing, or (B) to register the transfer of or exchange any Security so
selected for redemption, in whole or in part, except, in the case of any
Security to be redeemed in part, any portion not to be redeemed.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:
(1) Each Global Security authenticated under this Indenture shall
be registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security
shall constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities
registered, and no transfer of a Global Security in whole or in part may
be registered, in the name of any Person other than the Depositary for
such Global Security or a nominee thereof unless (A) such Depositary (i)
has notified the Company that it is unwilling or unable to continue as
Depositary for such Global Security or (ii) at any time has ceased to be
a clearing agency registered under the Exchange Act of 1934, as amended,
in each case, unless the Company has approved a successor Depositary
within 90 days, (B) there shall have occurred and be continuing an Event
of Default with respect to the Securities, (C) the Company in its sole
discretion determines that such Global Security will be so exchangeable
or transferable or (D) there shall exist such circumstances, if any, in
addition to or in lieu of the foregoing as have been specified for this
purpose as contemplated by Section 301.
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(3) Subject to Clause (2) above, any exchange of a Global
Security for other Securities may be made in whole or in part, and all
Securities issued in exchange for a Global Security or any portion
thereof shall be registered in such names as the Depositary for such
Global Security shall direct.
(4) Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security or
any portion thereof, whether pursuant to this Section, Section 304, 306,
906 or 1107 or otherwise, shall be authenticated and delivered in the
form of, and shall be, a Global Security, unless such Security is
registered in the name of a Person other than the Depositary for such
Global Security or a nominee thereof.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security is surrendered to the Trustee together with such security or
indemnity as may be required by the Company or the Trustee to save each of them
harmless, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same series and of like tenor
and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding. If, after the delivery of such new Security,
a bona fide purchaser of the original Security in lieu of which such new
Security was issued presents for payment or registration such original Security,
the Trustee shall be entitled to recover such new Security from the party to
whom it was delivered or any party taking therefrom, except a bona fide
purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Company and the Trustee in connection therewith.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of counsel to the Company and of the
Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
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The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved; Optional
Interest Rate.
(a) Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest in respect of Securities of such series, except that, unless
otherwise provided in the Securities of such series, interest payable on the
Stated Maturity of the principal of a Security shall be paid to the Person to
whom principal is paid. The initial payment of interest on any Security of any
series which is issued between a Regular Record Date and the related Interest
Payment Date shall be payable as provided in such Security or in the Board
Resolution pursuant to Section 301 with respect to the related series of
Securities. Except in the case of a Global Security, at the option of the
Company, interest on any series of Securities may be paid (i) by check mailed to
the address of the Person entitled thereto as it shall appear on the Security
Register of such series or (ii) by wire transfer in immediately available funds
at such place and to such account as designated in writing by the Person
entitled thereto as specified in the Security Register of such series.
Any Paying Agents will be identified in a supplemental indenture hereto.
The Company may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent; however, the Company at all times will be
required to maintain a Paying Agent in each Place of Payment for each series of
Securities.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, any interest on any Security of any series which is
payable, but is not timely paid, punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease
to be payable to the Holder on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company,
at its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series in
respect of which interest is in default (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security of
such series and the date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
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than 10 days prior to the date of the proposed payment and not less than
10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Securities of such series at his address as it appears
in the Security Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities)
are registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange or automated quotation
system on which such Securities may be listed or traded, and upon such
notice as may be required by such exchange or automated quotation
system, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall
be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
(b) The provisions of this Section 307(b) may be made applicable to any
series of Securities pursuant to Section 301 (with such modifications, additions
or substitutions as may be specified pursuant to such Section 301). The interest
rate (or the spread or spread multiplier used to calculate such interest rate,
if applicable) on any Security of such series may be reset by the Company on the
date or dates specified on the face of such Security (each an "Optional Reset
Date"). The Company may exercise such option with respect to such Security by
notifying the Trustee of such exercise at least 50 but not more than 60 days
prior to an Optional Reset Date for such Security. Not later than 40 days prior
to each Optional Reset Date, the Trustee shall transmit, in the manner provided
for in Section 106, to the Holder of any such Security a notice (the "Reset
Notice") indicating whether the Company has elected to reset the interest rate
(or the spread or spread multiplier used to calculate such interest rate, if
applicable), and if so (i) such new interest rate (or such new spread or spread
multiplier, if applicable) and (ii) the provisions, if any, for redemption
during the period from such Optional Reset Date to the next Optional Reset Date
or if there is no such next Optional Reset Date, to the Stated Maturity of such
Security (each such period a "Subsequent Interest Period"), including the date
or dates on which or the period or periods during which and the price or prices
at which such redemption may occur during the Subsequent Interest Period.
Notwithstanding the foregoing, not later than 20 days prior to the
Optional Reset Date, the Company may, at its option, revoke the interest rate
(or the spread or spread multiplier used to calculate such interest rate, if
applicable) provided for in the Reset Notice and establish an
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interest rate (or a spread or spread multiplier used to calculate such interest
rate, if applicable) that is higher than the interest rate (or the spread or
spread multiplier, if applicable) provided for in the Reset Notice, for the
Subsequent Interest Period by causing the Trustee to transmit, in the manner
provided for in Section 106, notice of such higher interest rate (or such higher
spread or spread multiplier, if applicable) to the Holder of such Security. Such
notice shall be irrevocable. All Securities with respect to which the interest
rate (or the spread or spread multiplier used to calculate such interest rate,
if applicable) is reset on an Optional Reset Date, and with respect to which the
Holders of such Securities have not tendered such Securities for repayment (or
have validly revoked any such tender) pursuant to the next succeeding paragraph,
will bear such higher interest rate (or such higher spread or spread multiplier,
if applicable).
The Holder of any such Security will have the option to elect repayment
by the Company of the principal of such Security on each Optional Reset Date at
a price equal to the principal amount thereof plus interest accrued to such
Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the
Holder must follow the procedures set forth in Article Thirteen for repayment at
the option of Holders except that the period for delivery or notification to the
Trustee shall be at least 25 but not more than 35 days prior to such Optional
Reset Date and except that, if the Holder has tendered any Security for
repayment pursuant to the Reset Notice, the Holder may, by written notice to the
Trustee, revoke such tender or repayment until the close of business on the
tenth day before such Optional Reset Date.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 308. Optional Extension of Maturity. The provisions of this
Section 308 may be made applicable to any series of Securities pursuant to
Section 301 (with such modifications, additions or substitutions as may be
specified pursuant to such Section 301). The Stated Maturity of any Security of
such series may be extended at the option of the Company for the period or
periods specified on the face of such Security (each an "Extension Period") up
to but not beyond the date (the "Final Maturity") set forth on the face of such
Security. The Company may exercise such option with respect to any Security by
notifying the Trustee of such exercise at least 50 but not more than 60 days
prior to the Stated Maturity of such Security in effect prior to the exercise of
such option (the "Original Stated Maturity"). If the Company exercises such
option, the Trustee shall transmit, in the manner provided for in Section 106,
to the Holder of such Security not later than 40 days prior to the Original
Stated Maturity a notice (the "Extension Notice") indicating (i) the election of
the Company to extend the Maturity, (ii) the new Stated Maturity, (iii) the
interest rate applicable to the Extension Period and (iv) the provisions, if
any, for redemption during such Extension Period. Upon the Trustee's transmittal
of the Extension Notice, the Stated Maturity of such Security shall be extended
automatically
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and, except as modified by the Extension Notice and as described in the next
paragraph, such Security will have the same terms as prior to the transmittal of
such Extension Notice.
Notwithstanding the foregoing, not later than 20 days before the
Original Stated Maturity of such Security, the Company may, at its option,
revoke the interest rate provided for in the Extension Notice and establish a
higher interest rate for the Extension Period by causing the Trustee to
transmit, in the manner provided for in Section 106, notice of such higher
interest rate to the Holder of such Security. Such notice shall be irrevocable.
All Securities with respect to which the Stated Maturity is extended will bear
such higher interest rate.
If the Company extends the Maturity of any Security, the Holder will
have the option to elect repayment of such Security by the Company on the
Original Stated Maturity at a price equal to the principal amount thereof, plus
interest accrued to such date. In order to obtain repayment on the Original
Stated Maturity once the Company has extended the Maturity thereof, the Holder
must follow the procedures set forth in Article Thirteen for repayment at the
option of Holders, except that the period for delivery or notification to the
Trustee shall be at least 25 but not more than 35 days prior to the Original
Stated Maturity and except that, if the Holder has tendered any Security for
repayment pursuant to an Extension Notice, the Holder may, by written notice to
the Trustee, revoke such tender for repayment until the close of business on the
tenth day before the Original Stated Maturity.
Section 309. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of and any premium and (subject to Section 307) any interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
Section 310. Cancellation. All Securities surrendered for payment,
redemption, registration of transfer or exchange or for credit against any
sinking fund payment shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of as
directed by a Company Order.
Section 311. Computation of Interest. Except as otherwise specified as
contemplated by Section 301 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months and interest on the Securities of each series for any
partial period shall be computed on the basis of a 360-day year of twelve 30-day
months and the number of days elapsed in any partial month.
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Section 312. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee in writing of any change in "CUSIP" numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture. This Indenture
shall upon Company Request cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on demand and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in
Section 306 and (ii) Securities for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have
been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year of the date of deposit,
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company, or
(iv) are deemed paid and discharged pursuant to
Article Fourteen, as applicable,
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and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest to the date of such
deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, or if money or obligations shall have been deposited with or
received by the Trustee pursuant to Article Fourteen, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
Section 402. Application of Trust Money; Indemnification. (a) Subject to
provisions of the last paragraph of Section 1003, all money deposited with the
Trustee pursuant to Section 401, all money and U.S. Government Obligations or
Foreign Government Securities deposited with the Trustee pursuant to Article
Fourteen and all money received by the Trustee in respect of U.S. Government
Obligations or Foreign Government Securities deposited with the Trustee pursuant
to Article Fourteen, shall be held in trust and applied by it, in accordance
with the provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal and any premium and interest for whose payment such money has been
deposited with the Trustee or to make mandatory sinking fund payments or
analogous payments as contemplated by Article Fourteen.
(b) The Company shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against U.S. Government
Obligations or Foreign Government Securities deposited pursuant to Article
Fourteen, or the interest and principal received in respect of such obligations,
other than any payable by or on behalf of Holders.
(c) The Trustee shall deliver or pay to the Company from time to time
upon Company Request any U.S. Government Obligations or Foreign Government
Securities or money held by it as provided in Article Fourteen which, in the
opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Trustee, are then in excess of the amount thereof which then would have been
required to be deposited for the purpose for which such Obligations or Foreign
Government Securities or money were deposited or received. This provision shall
not authorize the sale by the Trustee of any U.S. Government Obligations or
Foreign Government Securities held under this Indenture.
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ARTICLE FIVE
REMEDIES
Section 501. Events of Default. "Event of Default", wherever used herein
with respect to Securities of any series, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security of
that series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and
as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of series of
Securities other than that series), and continuance of such default or
breach for a period of 45 days after there has been given, by registered
or certified mail, to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) a default under any bond, debenture, note or other evidence
of the Indebtedness of the Company (including a default with respect to
Securities of any series other than that series) or 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
(including this Indenture), whether such Indebtedness now exists or
shall hereafter be created, which default shall constitute a failure to
pay such Indebtedness in a principal amount in excess of $15 million
when due and payable at final maturity, after the expiration of any
applicable grace period with respect thereto or shall have resulted in
such Indebtedness in a principal amount in excess of $15 million
becoming or being declared due and payable prior to the date on which it
would otherwise have become due and payable, without such Indebtedness
having been discharged, or such acceleration having been rescinded or
annulled, within a period of 15 days after there shall have been
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given, by overnight mail or other same day or overnight delivery service
which can provide evidence of delivery, to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities of that series
a written notice specifying such default and requiring the Company to
cause such Indebtedness to be discharged or cause such acceleration to
be rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
(6) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(7) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or
the consent by it to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by the Company in furtherance of any such action; or
(8) any other Event of Default provided with respect to
Securities of that series.
Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 501 with respect to Securities of a series all or part of which is
represented by a Global Security, the Trustee shall establish a record date for
determining Holders of Outstanding Securities of such series entitled to join in
such Notice of Default, which record date shall be at the close of business on
the day the Trustee receives such Notice of Default. The Holders on such record
date, or their duly designated proxies, and only such Persons, shall be entitled
to join in such Notice of Default, whether or not such Holders remain Holders
after such record date; provided, that unless Holders of at least 25% in
principal amount of the Outstanding Securities of such series, or their proxies,
shall have joined in such Notice of Default prior to the applicable Expiration
Date, such Notice of Default shall automatically and without further action
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by any Holder be cancelled and of no further effect. Nothing in this paragraph
shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of
such applicable Expiration Date, a new Notice of Default identical to a Notice
of Default which has been cancelled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 501.
Section 502. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount (or, if any of the Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified in the terms thereof) of
all of the Securities of that series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) shall
become immediately due and payable. If (a) an Event of Default specified in
Section 501(4) or another Event of Default under Section 501(8) which is common
to all Outstanding series of Securities occurs and is continuing or (b) an Event
of Default specified in Section 501(6) or 501(7) occurs and is continuing, then
in every such case, the Trustee or the Holders of not less than 25% in aggregate
principal amount of all the Securities then Outstanding hereunder (treated as
one class), by a notice in writing to the Company (and to the Trustee if given
by Holders) may declare the principal amount (or, if any Securities are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms thereof) of all the Securities then Outstanding to be due
and payable immediately, and upon any such declaration such principal amount (or
specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, subject to Section 508, the Holders of a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than by
such declaration of acceleration and any interest thereon at the
rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
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(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of any declaration of acceleration, or
rescission and annulment thereof, with respect to Securities of a series all or
part of which is represented by a Global Security, the Trustee shall establish a
record date for determining Holders of Outstanding Securities of such series
entitled to join in such declaration of acceleration, or rescission and
annulment, as the case may be, which record date shall be at the close of
business on the day the Trustee receives such declaration of acceleration, or
rescission and annulment, as the case may be. The Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
join in such declaration of acceleration, or rescission and annulment, as the
case may be, whether or not such Holders remain Holders after such record date;
provided, that unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having been obtained prior to the applicable Expiration
Date, such declaration of acceleration, or rescission and annulment, as the case
may be, shall automatically and without further action by any Holder be
cancelled and of no further effect. Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving, after expiration of such applicable
Expiration Date, a new declaration of acceleration, or rescission or annulment
thereof, as the case may be, that is identical to a declaration of acceleration,
or rescission or annulment thereof, which has been cancelled pursuant to the
proviso to the preceding sentence, in which event a new record date shall be
established pursuant to the provisions of this Section 502.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof, the Company
will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on
such Securities for principal and any premium and interest and, to the
extent that payment of such interest shall be legally enforceable,
interest on any overdue principal and premium and on any overdue
interest, at the rate or rates prescribed therefor in such Securities,
and, in addition thereto, 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.
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If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
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Section 505. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 506. Application of Money Collected. Any money or property
collected or to be applied by the Trustee with respect to a series of Securities
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money on
account of principal or any premium or interest, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and any premium
and interest, respectively; and
THIRD: To the payment of the remainder, if any, to the Company
or any other Person or Persons entitled thereto.
Section 507. Limitation on Suits. No Holder of any Security of any
series shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver, assignee,
trustee, liquidator or sequestrator (or other similar official) or for any other
remedy hereunder, unless, subject to Section 508,
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee security
or indemnity satisfactory to the Trustee in its reasonable judgment
against the costs, expenses and liabilities to be incurred in compliance
with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
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(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest. Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) any interest on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 510. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Securities to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
Section 512. Control by Holders. The Holders of not less than a majority
in principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising
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any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture;
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and
(3) subject to the provisions of Section 601, the Trustee shall
have the right to decline to follow such direction if a Responsible
Officer or Officers of the Trustee shall, in good faith, determine that
the proceeding so directed is contrary to applicable law or this
Indenture or may be unduly prejudicial to the Holders of Outstanding
Securities not joining in such direction.
Upon receipt by the Trustee of any such direction with respect to
Securities of a series all or part of which is represented by a Global Security,
the Trustee shall establish a record date for determining Holders of Outstanding
Securities of such series entitled to join in such direction, which record date
shall be at the close of business on the day the Trustee receives such
direction. The Holders on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to join in such direction, whether or
not such Holders remain Holders after such record date; provided, that unless
such majority in principal amount shall have been obtained prior to the
applicable Expiration Date, such direction shall automatically and without
further action by any Holder be cancelled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such applicable Expiration Date, a new direction identical
to a direction which has been cancelled pursuant to the provisions to the
preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 512.
Section 513. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series waive any past
default hereunder with respect to such series and its consequences, except a
default
(1) in the payment of the principal of or any premium or interest
on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
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The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive any past default
hereunder. If a record date is fixed, the Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to waive any
default hereunder, whether or not such Holders remain Holders after such record
date; provided, that unless such majority in principal amount shall have been
obtained prior to the date which is 90 days after such record date, any such
waiver previously given shall automatically and without further action by any
Holder be cancelled and of no further effect.
Section 514. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Security by this acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities of any series, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Security on or after the
Stated Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
Section 515. Waiver Stay or Extension Laws. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all 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.
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
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(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; but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series, determined as provided in Section
512, relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with respect to
the Securities of such series; and
(4) 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.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
(e) The duties and responsibilities of the Trustee otherwise shall be as
provided by the Trust Indenture Act.
Section 602. Notice of Defaults. Within 90 days after the occurrence of
any default hereunder with respect to the Securities of any series, the Trustee
shall transmit by mail to all Holders of Securities of such series, as their
names and addresses appear in the Security Register, notice of such default
hereunder known to the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest on any Security of such
series or in the
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payment of any sinking fund instalment with respect to Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interest of the Holders of Securities
of such series; and provided, further, that in the case of any default of the
character specified in Section 501(4) or (5) with respect to Securities of such
series, no such notice to Holders shall be given until at least 45 days and 15
days, respectively, after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to Securities of
such series.
Section 603. Certain Rights of Trustee. Subject to the provisions of
Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity
satisfactory to the Trustee in its reasonable judgment against the
costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness 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 to examine the books, records and
premises of the Company, personally or by agent or attorney; and
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(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder.
Section 604. Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
Section 605. May Hold Securities. The Trustee, any Authenticating Agent,
any Paying Agent, any Security Registrar or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Securities and, subject to Sections 608 and 613, may otherwise deal with the
Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
Section 606. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement. The Company agrees
(1) to pay to the Trustee from time to time such compensation as
shall be agreed in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including
the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
Section 608. Disqualification; Conflicting Interests. If the Trustee has
or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Indenture.
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Section 609. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder which shall be a Person that is eligible pursuant
to the Trust Indenture Act to act as such and has a combined capital and surplus
of at least $50,000,000. If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
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(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any Series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any Series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series to all
Holders of Securities of such series in the manner provided in Section 106. Each
notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor. (a) In case of the
appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with
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respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue to be vested in
the retiring Trustee, and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) and (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 612. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Company. (a)
Subject to Subsection (b) of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Company
within three months prior to a default, as defined in Subsection (c) of this
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities and the
holders of other indenture securities, as defined in Subsection (c) of this
Section:
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(1) an amount equal to any and all reductions in the amount due
and owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such three months' period and
valid as against the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (2) of this Subsection, or from the exercise of
any right of set-off which the Trustee could have exercised if a
petition in bankruptcy had been filed by or against the Company upon the
date of such default; and
(2) all property received by the Trustee in respect of any claims
as such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three
months' period, or an amount equal to the proceeds of any such property,
if disposed of, subject, however, to the rights, if any, of the Company
and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of
any such claim by any Person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim
by the Trustee to a third Person, and (iii) distributions made in cash,
securities or other property in respect of claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable
State law;
(B) to realize, for its own account, upon any property held by it
as security for any such claim, if such property was so held prior to
the beginning of such three months' period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by its as
security for any such claim, if such claim was created after the
beginning of such three months' period and such property was received as
security therefor simultaneously with the creation thereof, and if the
Trustee shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause to believe
that a default, as defined in Subsection (c) of this Section, would
occur within three months; or
(D) to receive payment on any claim referred to in paragraph (B)
or (C), against the release of any property held as security for such
claim as provided in paragraph (B) or (C), as the case may be, to the
extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three months' period for property held as security
at the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
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If the Trustee shall be required to account, the funds and property held
in such special account and the proceeds thereof shall be apportioned among the
Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on account
of the receipt by it from the Company of the funds and property in such special
account and before crediting to the respective claims of the Trustee and the
Holders and the holders of other indenture securities dividends on claims filed
against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
form the funds and property so held in such special account. As used in this
paragraph, with respect to any claim the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, whether such distribution is made in cash, securities or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion among the Trustee, the Holders and the holders of
other indenture securities, in accordance with the provisions of this paragraph,
the funds and property held in such special account and proceeds thereof, or
(ii) in lieu of such apportionment, in whole or in part, to give to the
provisions of this paragraph due consideration in determining the fairness of
the distributions to be made to the Trustee and the Holders and the holders of
other indenture securities with respect to their respective claims, in which
event it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for any
such claim, or to make a specific allocation of such distributions as between
the secured and unsecured portions of such claims, or otherwise to apply the
provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of
such three months' period shall be subject to the provisions of this Subsection
as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three months' period, it
shall be subject to the provision of this Subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account, if such Trustee had
continued as Trustee, occurred after the beginning of such three months'
period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of this
Section a creditor relationship arising from:
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(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year
or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the Holders at
the time and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction, as defined in Subsection (c) of
this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; and
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange,
acceptances or obligations which fall within the classification of
self-liquidating paper, as defined in Subsection (c) of this Section.
(c) For the purposes of this Section only:
(1) the term "default" means any failure to make payment in full
of the principal of or interest on any of the Securities or upon the
other indenture securities when and as such principal or interest
becomes due and payable;
(2) the term "other indenture securities" means securities upon
which the Company is an obligor outstanding under any other indenture
(i) under which the Trustee is also trustee, (ii) which contains
provisions substantially similar to the provisions of this Section, and
(iii) under which a default exists at the time of the apportionment of
the funds and property held in such special account;
(3) the term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand;
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(4) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation;
(5) the term "Company" means any obligor upon the Securities; and
(6) the term "Federal Bankruptcy Act" means the Bankruptcy Act or
Title 11 of the United States Code.
Section 614. Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue and upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 306, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
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An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
The Bank of New York,
As Trustee
By ,
--------------------------------
As Authenticating Agent
By
--------------------------------
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than [ ] and [ ] in each year, a
list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of the preceding [ ] or [ ], as the case
may be, and
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(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided in the Trust
Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made that is
required by the Trust Indenture Act.
(b) If three or more Holders (herein referred to as "applicants") apply
in writing to the Trustee, and furnish to the Trustee reasonable proof that each
such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Indenture or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit,
then the Trustee shall, within five business days after the receipt of such
application, at its election, either
(i) afford such applicants access to the information preserved at
the time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of
Holders whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 702(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appear in the information preserved
at the time by the Trustee in accordance with Section 702(a) a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect
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that, in the opinion of the Trustee, such mailing would be contrary to the best
interest of the Holders or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if,
after the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so declaring, the
Trustee shall mail copies of such material to all such Holders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
Section 703. Reports by Trustee. (a) Within 60 days after ________ of
each year commencing with the year _____, the Trustee shall transmit by mail to
all Holders, as their names and addresses appear in the Security Register, a
brief report dated as of such ______ with respect to:
(1) its eligibility under Section 609 and its qualifications
under Section 608, or in lieu thereof, if to the best of its knowledge
it has continued to be eligible and qualified under said Sections, a
written statement to such effect;
(2) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof)
made by the Trustee (as such) which remain unpaid on the date of such
report, and for the reimbursement of which it claims or may claim a lien
or charge, prior to that of the Securities, on any property or funds
held or collected by it as Trustee, except that the Trustee shall not be
required (but may elect) to report such advances if such advances so
remaining unpaid aggregate not more than 1/2 of 1% of the principal
amount of the Securities Outstanding on the date of such report;
(3) the amount, interest rate and maturity date of all other
indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of
such report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 613(b)(2), (3),
(4) or (6);
(4) the property and funds, if any, physically in the possession
of the Trustee as such on the date of such report;
(5) any additional issue of Securities which the Trustee has not
previously reported; and
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(6) any action taken by the Trustee in the performance of its
duties hereunder which it has not previously reported and which in its
opinion materially affects the Securities, except action in respect of a
default, notice of which has been or is to be withheld by the Trustee in
accordance with Section 602.
(b) The Trustee shall transmit by mail to all Holders, as their names
and addresses appear in the Security Register, a brief report with respect to
the character and amount of any advances (and if the Trustee elects so to state,
the circumstances surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to Subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this instrument) for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities, on property or funds
held or collected by it as Trustee and which it has not previously reported
pursuant to this Subsection, except that the Trustee shall not be required (but
may elect) to report such advances if such advances remaining unpaid at any time
aggregate 10% or less of the principal amount of the Securities Outstanding at
such time, such report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
Section 704. Reports by Company. The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended; or, if the
Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the Trustee
and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended, in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules
and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
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(3) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1)
and (2) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain Terms. The
Company shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, and the Company shall not permit any Person to consolidate with or merge
into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a
corporation, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of and any premium and interest on all the Securities and the
performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or
a Subsidiary as a result of such transaction as having been incurred by
the Company or such Subsidiary at the time of such transaction, no Event
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company would
become subject to a mortgage, pledge, lien, security interest or other
encumbrance which would not be permitted by this Indenture, the Company
or such successor Person, as the case may be, shall take such steps as
shall be necessary effectively to secure the Securities equally and
ratably with (or prior to) all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
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Section 802. Successor Substituted. Upon any consolidation of the
Company with, or merger of the Company into, any other Person or any conveyance,
transfer or lease of the properties and assets of the Company substantially as
an entirety in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall 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 Person had been named as the Company herein,
and thereafter, except in the case of any such conveyance, transfer or lease,
the predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities.
Such successor Person may cause to be signed, and may issue either in
its own name or in the name of the Company, any or all of the Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor Person
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication pursuant to such
provisions and any Securities which such successor Person thereafter shall cause
to be signed and delivered to the Trustee on its behalf for the purpose pursuant
to such provisions. All the Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Securities theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders. Without
the consent of any Holders, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) to evidence the succession of another Person to the Company,
or successive successions, and the assumption by any such successor of
the covenants, agreements and obligations of the Company herein and in
the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of
such series) or to surrender any right or power herein conferred upon
the Company; or
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(3) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such additional
Events of Default are to be for the benefit of less than all series of
Securities, stating that such additional Events of Default are expressly
being included solely for the benefit of such series), provided,
however, that in respect of any such additional Events of Default such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the
Trustee upon such default or may limit the right of the Holders of a
majority in aggregate principal amount of that or those series of
Securities to which such additional Events of Default apply to waive
such default; or
(4) to add to or change any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
issuance of Securities in bearer form, registrable or not registrable as
to principal, and with or without interest coupons, or to permit or
facilitate the issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that
if such action adversely affects the interests of any Holders of
Securities of any series, any such addition, change or elimination (i)
shall neither (A) apply to any Security of any series created prior to
the execution of such supplemental indenture and entitled to the benefit
of such provision nor (B) modify the rights of the Holder of any such
Security with respect to such provision or (ii) shall become effective
only when there is no such Security Outstanding; or
(6) to convey, transfer, assign, mortgage or pledge any property
to or with the Trustee or to surrender any right or power herein
conferred upon the Company; or
(7) to secure the Securities pursuant to the requirements of
Section 1008 or otherwise; or
(8) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(9) to provide for uncertificated securities in addition to
certificated securities; or
(10) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611(b); or
(11) to cure any ambiguity, to correct any defect or supplement
any provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action
pursuant to this clause (11) shall not adversely affect the interests of
the Holders of Securities of any series; or
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(12) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the Defeasance
and discharge of any series of Securities pursuant to Sections 401, 1402
and 1403; provided that any such action shall not adversely affect the
interests of the holders of Securities of such series or any other
series of Securities; or
(13) to comply with the rules or regulations of any securities
exchange or automated quotation system on which any of the Securities
may be listed or traded; or
(14) to add to, change or eliminate any of the provisions of this
Indenture as shall be necessary or desirable in accordance with any
amendments to the Trust Indenture Act, provided that such action does
not adversely affect the rights or interests of any Holder of
Securities.
Section 902. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series affected by such supplemental indenture
treated as one class, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) except to the extent permitted by Section 307(b) or Section
308 or otherwise specified in the form or terms of the Securities of any
series as permitted by Sections 201 and 301 with respect to extending
the Stated Maturity of any Security of such series, change the Stated
Maturity of the principal of, or any installment of principal of or
interest on, any Security of any series, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 502, or
change any Place of Payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any amendment or waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
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(3) modify any of the provisions of this Section, Section 513 or
Section 1010, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, provided, however, that this clause shall not be deemed to
require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section and
Section 1010, or the deletion of this proviso, in accordance with the
requirements of Sections 611 and 901; or
(4) if the Securities of any series are convertible or
exchangeable into any other securities or property of the Company, make
any change that adversely affects the right to convert or exchange any
Security of such series (except as permitted by Section 901) or decrease
the conversion or exchange rate or increase the conversion price of any
such Security of such series, or
(5) if the Securities of any series are secured, change the terms
and conditions pursuant to which the Securities of such series are
secured in a manner adverse to the Holders of the secured Securities of
such series.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes;
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and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act.
Section 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest. The Company
covenants and agrees for the benefit of each series of Securities that it will
duly and punctually pay the principal of and any premium and interest on the
Securities of that series in accordance with the terms of the Securities and
this Indenture.
Section 1002. Maintenance of Office or Agency. The Company will maintain
in each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company
initially appoints the Trustee, acting through its Corporate Trust Office, as
its agent for said purpose. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the 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
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
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Section 1003. Money for Securities Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent with respect to any series
of Securities, it will, on or before each due date of the principal of or any
premium or interest on any of the Securities of that series, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal and any premium and interest so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay the principal or any premium or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
or any premium or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal or any premium or interest on the Securities of
that series; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money,
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and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in New York, New York,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
Section 1004. Statement by Officers as to Default. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, an Officers' Certificate, stating whether
or not to the best knowledge of the signers thereof the Company is in default in
the performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
Section 1005. Existence. Subject to Article Eight, the Company will do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.
Section 1006. Maintenance of Properties. The Company will cause all
Principal Properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the operation or maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Subsidiary and
not disadvantageous in any material respect to the Holders.
Section 1007. Payment of Taxes and Other Claims. The Company will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary; 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.
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Section 1008. Limitations on Liens. So long as any Securities are
Outstanding, the Company will not issue, assume or guarantee, and will not
permit any Domestic Subsidiary to issue, assume or guarantee, any Indebtedness
which is secured by a mortgage, pledge, security interests, lien or encumbrance
(any mortgage, pledge, security interest, lien or encumbrance being hereinafter
in this Article referred as a "lien" or "liens") of or upon any Principal
Property of the Company or any such Domestic Subsidiary, or upon the shares of
stock or Indebtedness of any Domestic Subsidiary, in each case whether now owned
or hereafter acquired, without effectively providing that the Securities
(together with, if the Company shall so determine, any other Indebtedness of the
Company ranking equally with the Securities) shall be equally and ratably
secured by a lien ranking ratably with and equal to (or at the Company's option
prior to) such secured Indebtedness; provided, however, that the foregoing
restriction shall not apply to:
(a) liens on Indebtedness existing on the date of this Indenture;
(b) liens on any assets of any corporation existing at the time
such corporation becomes a Domestic Subsidiary;
(c) liens on any assets existing at the time of acquisition of
such assets by the Issuer or a Domestic Subsidiary, or liens to secure
the payment of all or any part of the purchase price of such assets upon
the acquisition of such assets by the Company or a Domestic Subsidiary
or to secure any Indebtedness incurred, assumed or guaranteed by the
Company or a Domestic Subsidiary prior to, at the time of, or within 180
days after such acquisition (or in the case of real property, the
completion of construction (including any improvements on an existing
asset) or commencement of full operation of such asset, whichever is
later) which Indebtedness is incurred, assumed or guaranteed for the
purpose of financing all or any part of the purchase price thereof or,
in the case of real property, construction or improvements thereon;
provided, however, that in the case of any such acquisition,
construction or improvement, the lien shall not apply to any Principal
Property or shares of stock or Indebtedness of a Domestic Subsidiary
theretofore owned by the Company or a Domestic Subsidiary, other than,
in the case of any such construction or improvement, any real property
on which the property so constructed, or the improvement, is located;
(d) liens on any assets to secure Indebtedness of a Subsidiary to
the Company or to any wholly owned Domestic Subsidiary;
(e) liens on any assets of a corporation existing at the time
such corporation is merged into or consolidated with the Company or a
Domestic Subsidiary or at the time of a purchase, lease or other
acquisition of the assets of a corporation or firm as an entirety or
substantially as an entirety by the Company or a Domestic Subsidiary;
(f) liens on any assets of the Company or a Domestic Subsidiary
in favor of the United States of America or any State thereof, or any
department, agency or instrumentality or political subdivision of the
United States of America or any State thereof, or in favor of any other
country, or any political subdivision thereof, to secure partial,
progress, advance or other payments pursuant to any contract or statute
or to secure any Indebtedness incurred or guaranteed for the purpose of
financing all or any part of the purchase price (or, in the case of real
property, the cost of construction) of the assets subject to such liens
(including, but not limited to, liens incurred in connection with
pollution control, industrial revenue or similar financings);
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(g) Mechanics', materialmen's, carriers' or similar liens arising
in the ordinary course of business (including in the construction of
facilities) relating to obligations not due or which are being
contested;
(h) liens for taxes not due or being contested, landlords' liens,
tenants' rights under leases, and similar liens not impairing the use of
value of the property involved;
(i) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any lien
referred to in the foregoing clauses (a) to (h), inclusive; provided,
however, that the principal amount of Indebtedness secured thereby shall
not exceed the principal amount of Indebtedness so secured at the time
of such extension, renewal or replacement, and that such extension,
renewal or replacement shall be limited to all or a part of the assets
which secured the lien so extended, renewed or replaced (plus
improvements and construction on real property);
(j) liens not permitted by clauses (a) through (i) above if at
the time of, and after giving effect to, the creation or assumption of
any such lien, the aggregate amount of all Indebtedness of the Company
and its Domestic Subsidiaries secured by all such liens not so permitted
by clauses (a) through (i) above together with the Attributable Debt in
respect of Sale and Lease-Back Transactions permitted by paragraph (a)
of Section 1009 do not exceed 15% of Consolidated Net Tangible Assets.
Notwithstanding any other provision contained herein, this Indenture
will not restrict the Company or its Subsidiaries from incurring unsecured
Indebtedness.
Section 1009. Limitations on Sale and Lease-Back. The Company agrees
that it will not, and will not permit any Subsidiary to, enter into any
arrangement with any person providing for the leasing by the Company or a
Domestic Subsidiary of any Principal Property, other than any such arrangement
involving a lease for a term, including renewal rights, for not more than 3
years, whereby such property or asset has been or is to be sold or transferred
by the Company or any Domestic Subsidiary to such person (herein referred to as
a "Sale and Lease-Back Transaction"), unless:
(a) the Company or such Domestic Subsidiary would, at the time of
entering into a Sale and Lease-Back Transaction, be entitled to incur
Indebtedness secured by a lien on the Principal Property to be leased in
an amount at least equal to the Attributable Debt in respect of such
Sale and Lease-Back Transaction without equally and ratably securing the
Securities pursuant to Section 1008; or
(b) (i) the Company promptly informs the Trustee of such
Transaction, (ii) the proceeds of the sale of the Principal Property to
be leased are at least equal to the fair value of such property or
assets (as determined by Board of Directors of the Company) and (iii) an
amount equal to the net proceeds from the sale of the Principal Property
so leased are applied, within 180 days of the effective date of such
Sale and Lease-Back Transaction to the purchase or acquisition (or, in
the case of property, the construction) of property or assets or to the
retirement (other than at maturity or pursuant to a mandatory sinking
fund or redemption provision) of Securities or of Funded Indebtedness
of the Company or a consolidated Domestic Subsidiary ranking on a parity
with or senior to the Securities.
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Section 1010. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 1005 to 1009, inclusive, with respect to the Securities of any series
if before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive compliance with any
covenant or condition hereunder. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to waive any such compliance, whether or not such Holders remain
Holders after such record date; provided, that unless the Holders of at least a
majority in principal amount of the Outstanding Securities of such series shall
have waived such compliance prior to the date which is 90 days after such record
date, any such waiver previously given shall automatically and without further
action by any Holder be cancelled and of no further effect.
Section 1011. Applicability of Covenants. Any series of Securities may
provide, as contemplated by Section 301, that any one or more of the covenants
set forth in Sections 1008, 1009 and 1010 and Article Fourteen shall not be
applicable to the Securities of such series.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article. Securities of any series which
are redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
301 for Securities of any series) in accordance with this Article.
Section 1102. Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Securities shall be evidenced by a Board Resolution or in
another manner specified as contemplated by Section 301 for such Securities. In
case of any redemption at the election of the Company of less than all the
Securities of any series, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate and an Opinion
of Counsel evidencing compliance with such restriction.
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Section 1103. Selection by Trustee of Securities to Be Redeemed. If less
than all the Securities of any series are to be redeemed (unless all of the
Securities of such series and of a specified tenor are to be redeemed or unless
such redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Securities of that series or
any integral multiple thereof) of the principal amount of Securities of such
series of a denomination larger than the minimum authorized denomination for
Securities of that series. If less than all of the Securities of such series and
of a specified tenor are to be redeemed (unless such redemption affects only a
single Security), the particular Securities to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously called
for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
Section 1104. Notice of Redemption. Notice of redemption shall be given
by first-class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Securities to be redeemed,
at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial
redemption of any Securities, the principal amounts) of the particular
Securities to be redeemed,
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(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after said
date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price. Prior to 12:00 noon New York
City time on any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
Section 1107. Securities Redeemed in Part. Any Security which is to be
redeemed only in part shall be surrendered at a Place of Payment therefor (with,
if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing), and
the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities of
the same series and of like tenor, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered. If a Global
Security is so surrendered, such new Security so issued shall be a new Global
Security.
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ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 301 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.
Section 1202. Satisfaction of Sinking Fund Payments with Securities. The
Company (1) may deliver Outstanding Securities of a series (other than any
previously called for redemption) and (2) may apply as a credit Securities of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Securities of such series required to be made pursuant to the terms of such
Securities as and to the extent provided for by the terms of such series;
provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 1203. Redemption of Securities for Sinking Fund. Not less than
45 days prior to each sinking fund payment date for any series of Securities,
the Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms of that series, the portion thereof, if any, which is to be satisfied by
payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to Section 1202 and
will also deliver to the Trustee any Securities to be so delivered. Not less
than 30 days before each such sinking fund payment date the Trustee shall select
the Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
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ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF THE HOLDERS
Section 1301. Applicability of Article. Repayment of securities of any
series before their Stated Maturity at the option of Holders thereof shall be
made in accordance with the terms of such Securities and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
Section 1302. Repayment of Securities. Securities of any series subject
to repayment in whole or in part at the option of the Holders thereof will,
unless otherwise provided in the terms of such Securities, be repaid at a price
equal to the principal amount thereof, together with interest and/or premium, if
any, thereon accrued to the Repayment Date specified in or pursuant to the terms
of such Securities. The Company covenants that on or before the Repayment Date
it will deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money sufficient to pay the principal (or, if so
provided by the terms of the Securities of any series, a percentage of the
principal) of, the premium, if any, and (except if the Repayment Date shall be
an Interest Payment Date) accrued interest on, all the Securities or portions
thereof, as the case may be, to be repaid on such date.
Section 1303. Exercise of Option. Securities of any series subject to
repayment at the option of the Holders thereof will contain an "Option to Elect
Repayment" form on the reverse of such Securities. To be repaid at the option of
the Holder, any Security so providing for such repayment, with the "Option to
Elect Repayment" form on the reverse of such Security duly completed by the
Holder (or by the Holder's attorney duly authorized in writing), must be
received by the Company at the Place of Payment therefor specified in the terms
of such Security (or at such other place or places of which the Company shall
from time to time notify the Holders of such Securities) not earlier than 45
days nor later than 30 days prior to the Repayment Date. If less than the entire
principal amount of such Security is to be repaid in accordance with the terms
of such Security, the principal amount of such Security to be repaid, in
increments of the minimum denomination for Securities of such series, the
premium, if any, to be paid, and the denomination or denominations of the
Security or Securities to be issued to the Holder for the portion of the
principal amount of such Security surrendered that is not to be repaid, must be
specified. The principal amount of any Security providing for repayment at the
option of the Holder thereof may not be repaid in part if, following such
repayment, the unpaid principal amount of such Security would be less than the
minimum authorized denomination of Securities of the series of which such
Security to be repaid is a part. Except as otherwise may be provided by the
terms of any Security providing for repayment at the option of the Holder
thereof and as provided in Sections 307(b) and 308, exercise of the repayment
option by the Holder shall be irrevocable unless waived by the Company.
Section 1304. When Securities Presented for Repayment Become Due and
Payable. If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing,
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cease to bear interest. Upon surrender of any such Security for repayment in
accordance with such provisions, the principal amount of such Security so to be
repaid shall be paid by the Company, together with accrued interest and/or
premium, if any, to the Repayment Date; provided, however, that installments of
interest, if any, whose Stated Maturity is on or prior to the Repayment Date
shall be payable (but without interest thereon, unless the Company shall default
in the payment thereof) to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If the principal amount of any Security surrendered for repayment shall
not be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
Section 1305. Securities Repaid in Part. Upon surrender of any Security
which is to be repaid in part only, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder of such Security, without service
charge and at the expense of the Company, a new Security or Securities of the
same series, of any authorized denomination specified by the Holder, in an
aggregate principal amount equal to and in exchange for the portion of the
principal of such Security so surrendered which is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
Section 1401. Company's Option to Effect Defeasance or Covenant
Defeasance. The Company may elect, at its option at any time, to have Section
1402 or Section 1403 applied to any Securities or any series of Securities, as
the case may be, (unless designated pursuant to Section 301 as not being
defeasible pursuant to such Section 1402 or 1403), in accordance with any
applicable requirements provided pursuant to Section 301 and upon compliance
with the conditions set forth below in this Article. Any such election shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities.
Section 1402. Defeasance and Discharge. Upon the Company's exercise of
its option (if any) to have this Section applied to any Securities or any series
of Securities, as the case may be, the Company shall be deemed to have been
discharged from its obligations with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 1404 are
satisfied (referred to herein as "Defeasance"). For this purpose, such
Defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by such Securities and to have satisfied all
its other obligations under such Securities and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), subject to the following
which shall survive until otherwise terminated or discharged hereunder: (1) the
rights of Holders of such Securities to receive, solely from the trust fund
described in Section 1404 and as more fully set forth in such Section, payments
in respect of the principal of and any
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premium and interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 304, 305, 306, 1002
and 1003, (3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (4) this Article. Subject to compliance with this Article, the
Company may exercise its option (if any) to have this Section applied to any
Securities notwithstanding the prior exercise of its option (if any) to have
Section 1403 applied to such Securities.
Section 1403. Covenant Defeasance. Upon the Company's exercise of the
above option applicable to this Section, the Company shall be released from its
obligations under Sections 801, 1008 and 1009 (and any covenant applicable to
such Securities that are determined pursuant to Section 301 to be subject to
this provision) and the occurrence of an event specified in Section 501(4)
(with respect to any of Sections 801, 1008 or 1009) (and any other Event of
Default applicable to such Securities that are determined pursuant to Section
301 to be subject to this provision) shall not be deemed to be an Event of
Default with respect to the Outstanding Securities of such series on and after
the date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and such Securities shall thereafter be deemed not to be
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with
Sections 801, 1008 and 1009 (and such other covenant), but shall continue to be
deemed "Outstanding" for all other purposes hereunder. For this purpose, such
Covenant Defeasance means that, with respect to the Outstanding Securities of
such series, 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 Section or
such other covenant whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or such other covenant or by reason of any
reference in any such Section or such other covenant to any other provision
herein or in any other document, but the remainder of this Indenture and such
Securities shall be unaffected thereby.
Section 1404. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to the application of Section 1402 or Section
1403 to any Securities or any series of Securities, as the case may be:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefits of the Holders of
such Securities, (A) money in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide,
not later than one day before the due date of any payment, money in an
amount, or (C) a combination thereof, in each case sufficient, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or any such other qualifying trustee) to pay and discharge, the
principal of and any premium and interest on such Securities on the
respective Stated Maturities, in accordance with the terms of this
Indenture and such Securities. As used herein, "U.S. Government
Obligation" means (x) any security which is (i) a direct obligation of
the United States of America for the payment of which the full faith and
credit of the United States of America is pledged or (ii) an obligation
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case (i) or (ii), is not
75
<PAGE> 81
callable or redeemable at the option of the issuer thereof, and (y) any
depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any U.S. Government
Obligation which is specified in clause (x) above and held by such bank
for the account of the holder of such depositary receipt, or with
respect to any specific payment of principal of or interest on any U.S.
Government Obligation which is so specified and held, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal or interest
evidenced by such depositary receipt.
(2) In the event of an election to have Section 1402 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating 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
instrument, there has been a change in the applicable federal income tax
law, in either case (A) or (B) to the effect that, and based thereon
such opinion shall confirm that, the Holders of such Securities will not
recognize gain or loss for federal income tax purposes as a result of
the deposit, Defeasance and discharge to be effected with respect to
such Securities and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would be the case if
such deposit, Defeasance and discharge were not to occur.
(3) In the event of an election to have Section 1403 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities will not recognize gain or loss for
federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be
subject to federal income tax on the same amount, in the same manner and
at the same times as would be the case if such deposit and Covenant
Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities
exchange, will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to such Securities or any
other Securities shall have occurred and be continuing at the time of
such deposit or, with regard to any such event specified in Sections
501(6) and (7), at any time on or prior to the 90th day after the date
of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the meaning
of such Act).
76
<PAGE> 82
(7) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other
material agreement or instrument to which the Company is a party or by
which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in
the trust arising from such deposit constituting an investment company
within the meaning of the Investment Company Act unless such trust shall
be registered under such Act or exempt from registration thereunder.
(9) The Company shall have delivered to the Trustee an agreement
whereby the Company irrevocably agrees to forfeit its right, if any, (A)
to reset the interest rate of such Securities pursuant to Section 307(b)
and (B) to extend the Stated Maturity of such Securities pursuant to
Section 308.
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have
been complied with.
Section 1405. Acknowledgment of Discharge By Trustee. Subject to Section
1407 below and after the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in Section 1404, as the case may be, relating to the
Defeasance or satisfaction and discharge of this Indenture have been complied
with, the Trustee upon request of the Company shall acknowledge in writing the
Defeasance or the satisfaction and discharge, as the case may be, of this
Indenture and the discharge of the Company's obligations under this Indenture.
Section 1406. Deposited Money and U.S. Government Obligations to Be Held
in Trust; Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 1003, all money and U.S. Government Obligations (including
the proceeds thereof) deposited with the Trustee or other qualifying trustee
(solely for purposes of this Section and Section 1406, the Trustee and any such
other trustee are referred to collectively as the "Trustee") pursuant to Section
1404 in respect of any Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal and any premium and interest, but money so held
in trust need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1404 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 Outstanding Securities.
77
<PAGE> 83
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1404 with
respect to any Securities 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 which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.
Section 1407. Reinstatement. If the Trustee or the Paying Agent is
unable to apply any money in accordance with this Article with respect to any
Securities by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the obligations under this Indenture and such Securities from which the Company
has been discharged or released pursuant to Section 1402 or 1403 shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article with respect to such Securities, until such time as the Trustee or
Paying Agent is permitted to apply all money held in trust pursuant to Section
1405 with respect to such Securities in accordance with this Article; provided,
however, that if the Company makes any payment of principal of or any premium or
interest on any such Security following such reinstatement of its obligations,
the Company shall be subrogated to the rights (if any) of the Holders of such
Securities to receive such payment from the money so held in trust.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
78
<PAGE> 84
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
CARAUSTAR INDUSTRIES, INC.
By
------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Attest:
- -------------------------
THE BANK OF NEW YORK
By
------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Attest:
- -------------------------
79
<PAGE> 85
STATE OF_____________________)
) ss.:
COUNTY OF____________________)
On the __ day of ___________, ____, before me personally came
____________________, to me known, who, being by me duly sworn, did depose and
say that he is _______________________ of Caraustar Industries, Inc., one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
__________________________________________
Notary Public My Commission Expires_______
STATE OF_____________________)
) ss.:
COUNTY OF____________________)
On the ____ day of ___________, ____, before me personally came
__________________, to me known, who, being by me duly sworn, did depose and say
that he is ________________________ of ____________________, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
__________________________________________
80
<PAGE> 86
STATE OF_____________________)
) ss.:
COUNTY OF____________________)
On the ____ day of ___________, 1998, before me personally came
__________________, to me known, who, being by me duly sworn, did depose and say
that he is ________________________ of ____________________, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
_________________________
STATE OF_____________________)
) ss.:
COUNTY OF____________________)
On the __ day of _______, ____, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he is _______________________ of The Bank of New York, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
__________________________________
[Notary Public Seal]
81
<PAGE> 1
EXHIBIT 5.01
[ROBINSON, BRADSHAW & HINSON, P.A. LETTERHEAD]
101 North Tryon Street, Suite 1900
Charlotte, North Carolina 28246
Telephone (704) 377-2536
Fax (704) 378-4000
October 9, 1998
Caraustar Industries, Inc.
3100 Washington Street
Austell, Georgia 30001
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-3 (the "Registration
Statement") of Caraustar Industries, Inc., a North Carolina corporation (the
"Company"), filed with the Securities and Exchange Commission on the date hereof
for the purpose of registering under the Securities Act of 1933, as amended (the
"Act"), up to $300,000,000 of debt securities ("Debt Securities") for issuance
by the Company from time to time in one or more series.
For purposes of rendering the opinions expressed herein, we have
examined and relied on the Amended and Restated Articles of Incorporation of the
Company, the Second Amended and Restated Bylaws of the Company, the form of
Indenture (the "Indenture") between the Company and The Bank of New York, as
trustee (the "Trustee"), which has been filed as an exhibit to the Registration
Statement, and records of proceedings of the Board of Directors of the Company
and other Company records, together with applicable certificates of public
officials and other documents, that we have deemed necessary to reach the
opinions expressed herein. In making the foregoing examinations, we have assumed
the genuineness of all signatures on original documents, the authenticity,
accuracy and completeness of all documents submitted to us as originals, and the
conformity to original documents of all copies submitted to us. We are familiar
with the proceedings taken and proposed to be taken by the Company in
connection with the authorization and issuance of the Debt Securities, and for
purposes of this opinion have assumed that such proceedings will be timely
completed.
Based solely upon the foregoing, subject to the comments and exceptions
hereinafter stated, it is our opinion that: Upon the taking of appropriate
corporate action by the Company; the due execution and delivery by the parties
thereto of the Indenture and each amendment of or supplement to the Indenture,
assuming that the Indenture is consistent with the form thereof filed as an
exhibit to the Registration Statement; the qualification of the Indenture under
the Trust Indenture Act of 1939; the due execution of the Debt Securities on
behalf of the Company; the due authentication of the Debt Securities by the
relevant Trustee under the Indenture; and the sale and delivery at and receipt
of the price, and in accordance with, the terms set forth in the Registration
Statement and the supplement or supplements to the Prospectus included therein,
the Debt Securities will be duly and validly authorized, legally issued and will
be valid and binding obligations of the Company, entitled to the benefits of the
Indenture, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and subject to general principal of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
The opinions expressed herein are contingent upon the Registration
Statement, as may be amended, becoming effective under the Act and the Company's
Amended and Restated Articles of Incorporation and Second Amended and Restated
Bylaws not being further amended prior to the issuance of the Debt Securities.
For purposes of rendering the opinions expressed herein, we have
assumed that the laws of the State of New York, which has been chosen as the
governing law under the Indenture, are the same as the laws of the State of
North Carolina, and we express no opinion as to the laws of any jurisdiction
other than the laws of the State of North Carolina and the federal laws of the
United States of America, in each case as in effect on the date hereof.
We hereby consent to the filing of this opinion as an exhibit to said
Registration Statement and to being named therein and in the prospectus that
constitutes a part thereof as attorneys who will pass upon certain legal matters
in connection with the validity of the Shares. In giving such consent, we do not
hereby admit we are in the category of persons whose consent is required under
Section 7 of the Act.
This opinion is being delivered to you and the opinion expressed herein
is solely for your benefit in connection with the transactions contemplated
hereby, and this opinion may not be relied upon by any other person or for any
other purpose and is not to be used, circulated, quoted or otherwise disclosed.
<PAGE> 2
Very truly yours,
ROBINSON, BRADSHAW & HINSON, P.A.
/s/ Patrick S. Bryant
--------------------------------------------
Patrick S. Bryant
<PAGE> 1
EXHIBIT 12.01
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Six Months
Year Ended December 31, Ended
1993 1994 1995 1996 1997 June 30, 1998
------- ------- ------- --------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income from continuing operations before
income taxes, minority interest,
reversal of loss on discontinued
operations and cumulative effect
of accounting changes $42,471 $57,560 $69,100 $ 95,230 $ 83,388 $ 43,722
Equity in income of less-than-50%-owned entities -- -- -- (104) (40) (67)
Fixed charges 8,657 9,194 9,716 12,865 16,536 8,836
------- ------- ------- --------- -------- --------
Earnings $51,128 $66,754 $78,816 $ 107,991 $ 99,884 $ 52,491
======= ======= ======= ========= ======== ========
Fixed Charges:
Interest expense (A) $ 6,822 $ 6,870 $ 6,955 $ 10,698 $ 14,111 $ 7,689
Amortization of debt issuance costs 169 169 116 348 -- --
Estimate of the interest cost within rental
expense 1,666 2,155 2,645 1,819 2,425 1,147
------- ------- ------- --------- -------- --------
Fixed charges $ 8,657 $ 9,194 $ 9,716 $ 12,865 $ 16,536 $ 8,836
======= ======= ======= ========= ======== ========
Ratio of earnings of fixed charges 5.91 7.26 8.11 8.39 6.04 5.94
======= ======= ======= ========= ======== ========
</TABLE>
(A)- The Company has guaranteed one half of the $61 million revolving credit
loan facility of its 50%-owned joint venture with Temple-Inland Forest
Products Corporation, Standard Gypsum LLC. On June 30, 1998, $7 million
was outstanding under the facility bearing interest at a weighted
average of approximately 6%. Fixed charges related to this facility are
not included in the computation above.
<PAGE> 1
EXHIBIT 23.01
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-3 of our
reports dated January 29, 1998 included in Caraustar Industries, Inc.'s Form
10-K for the year ended December 31, 1997, and to all references to our firm
included in or made a part of this registration statement.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
October 7, 1998
<PAGE> 1
EXHIBIT 25.01
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
CARAUSTAR INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
North Carolina 58-1388387
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
3100 Washington Street
Austell, Georgia 30001
(Address of principal executive offices) (Zip code)
----------------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the 2 Rector Street,
State of New York New York, N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza,
New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 30th day of September, 1998.
THE BANK OF NEW YORK
By: /s/ MARY BETH A. LEWICKI
--------------------------------
Name: MARY BETH A. LEWICKI
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE> 5
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1998,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................. $ 6,397,993
Interest-bearing balances .......... 1,138,362
Securities:
Held-to-maturity securities ........ 1,062,074
Available-for-sale securities ...... 4,167,240
Federal funds sold and Securities pur-
chased under agreements to resell... 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................36,538,242
LESS: Allowance for loan and
lease losses ..............631,725
LESS: Allocated transfer risk
reserve..........................0
Loans and leases, net of unearned
income, allowance, and reserve 35,906,517
Assets held in trading accounts ...... 2,145,149
Premises and fixed assets (including
capitalized leases) ................ 663,928
Other real estate owned .............. 10,895
Investments in unconsolidated
subsidiaries and associated
companies .......................... 237,991
Customers' liability to this bank on
acceptances outstanding ............ 992,747
Intangible assets .................... 1,072,517
Other assets ......................... 1,643,173
-----------
Total assets ......................... $55,830,236
===========
LIABILITIES
Deposits:
In domestic offices ................ $24,849,054
Noninterest-bearing ......10,011,422
Interest-bearing .........14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 15,319,002
Noninterest-bearing .........707,820
Interest-bearing .........14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase. 1,906,066
Demand notes issued to the U.S.
Treasury ........................... 215,985
Trading liabilities .................. 1,591,288
Other borrowed money:
With remaining maturity of one year
or less .......................... 1,991,119
With remaining maturity of more than
one year through three years...... 0
With remaining maturity of more than
three years ...................... 25,574
Bank's liability on acceptances exe-
cuted and outstanding .............. 998,145
Subordinated notes and debentures .... 1,314,000
Other liabilities .................... 2,421,281
-----------
Total liabilities .................... 50,631,514
-----------
EQUITY CAPITAL
Common stock ......................... 1,135,284
Surplus .............................. 731,319
Undivided profits and capital
reserves ........................... 3,328,050
Net unrealized holding gains
(losses) on available-for-sale
securities ......................... 40,198
Cumulative foreign currency transla-
tion adjustments ................... ( 36,129)
-----------
Total equity capital ................. 5,198,722
-----------
Total liabilities and equity
capital ............................ $55,830,236
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi )
Alan R. Griffith ) Directors
J. Carter Bacot )
