<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 27, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
STONE CONTAINER CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 36-2041256
(State or other jurisdiction (I.R.S. employer
of identification
incorporation or organization) number)
</TABLE>
--------------------------
150 NORTH MICHIGAN AVENUE
CHICAGO, ILLINOIS 60601
(312) 346-6600
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
--------------------------
RANDOLPH C. READ
SENIOR VICE PRESIDENT--
CHIEF FINANCIAL AND PLANNING OFFICER
STONE CONTAINER CORPORATION
150 NORTH MICHIGAN AVENUE
CHICAGO, ILLINOIS 60601
(312) 346-6600
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
--------------------------
COPIES TO:
<TABLE>
<S> <C>
KEVIN F. BLATCHFORD LESLIE T. LEDERER
SIDLEY & AUSTIN STONE CONTAINER CORPORATION
ONE FIRST NATIONAL PLAZA 150 NORTH MICHIGAN AVENUE
CHICAGO, ILLINOIS 60603 CHICAGO, ILLINOIS 60601
</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, 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, please check the following box
and list the Securities Act registration statement number of the 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. / /
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Debt Securities (2)............................... (7) (7) $1,000,000,000 $303,031 (8)
Debt Warrants (3).................................
Common Stock (4)..................................
Preferred Stock (5)...............................
Depositary Shares (6).............................
Stock Warrants....................................
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee. The
aggregate initial public offering price of the securities registered hereby
will not exceed $1,000,000,000 in U.S. dollars or the U.S. dollar equivalent
in foreign currency or currency units.
(2) May be issued at an original issue discount.
(3) Warrants for the purchase of Debt Securities may be offered and sold
separately or together with other Debt Securities.
(4) Includes such presently indeterminable number of shares of Common Stock as
may be issuable from time to time upon conversion of Debt Securities or
Preferred Stock. The Common Stock includes preferred share purchase rights
which, prior to the occurrence of certain events, will not be exercisable or
evidenced separately from the Common Stock.
(5) Includes such presently indeterminable number of shares of Preferred Stock
as may be issuable from time to time upon conversion of Debt Securities.
(6) Such indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. In the event the Registrant
elects to offer to the public fractional interests in shares of the
Preferred Stock registered hereunder, Depositary Receipts will be
distributed to those persons purchasing such fractional interests and such
shares will be issued to the Depositary Bank under the Deposit Agreement.
(7) The amount to be registered and the proposed maximum offering price per unit
have been omitted pursuant to Rule 457(o) under the Securities Act of 1933.
(8) The registration fee has been calculated pursuant to 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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
SUBJECT TO COMPLETION, DATED JANUARY 27, 1997
Z STONE CONTAINER CORPORATION
$1,000,000,000
PREFERRED STOCK, COMMON STOCK, DEPOSITARY SHARES,
STOCK WARRANTS, DEBT SECURITIES, DEBT WARRANTS
------------------
Stone Container Corporation (the "Company") may offer from time to time (i)
its unsecured debt securities (the "Debt Securities"), which may be either
senior (the "Senior Debt Securities") or senior subordinated (the "Senior
Subordinated Debt Securities"), (ii) warrants to purchase Debt Securities (the
"Debt Warrants"), (iii) shares of its common stock, par value $.01 per share
(the "Common Stock"), (iv) shares of preferred stock, par value $.01 per share
(the "Preferred Stock"), which may be issued in the form of depositary shares
evidenced by depositary receipts (the "Depositary Shares"), and (v) warrants to
purchase shares of its Common Stock (the "Stock Warrants"). The Debt Securities,
Debt Warrants, Common Stock, Preferred Stock, Depositary Shares and Stock
Warrants (collectively, the "Securities") may be offered separately or together
and will be offered in amounts, at prices and on terms to be determined at the
time of offering. The Securities offered pursuant to this Prospectus may be
issued in one or more series or issuances and will be limited to $1,000,000,000
initial aggregate public offering price (or the equivalent in foreign currency
or currency units).
The Senior Debt Securities will rank equally in right of payment with all
other Senior Indebtedness (as defined) of the Company. The Senior Subordinated
Debt Securities will be subordinated in right of payment to all Senior
Indebtedness of the Company and senior in right of payment to all Junior
Subordinated Indebtedness (as defined) of the Company.
Certain specific terms of the particular Securities in respect of which this
Prospectus is being delivered (the "Offered Securities") are set forth in the
accompanying Prospectus Supplement (the "Prospectus Supplement"), including,
where applicable, the initial offering price of the Securities, the listing on
any securities exchange, other special terms, and (i) in the case of Debt
Securities, the specific designation, aggregate principal amount, the
denomination, maturity, premium, if any, the rate (which may be fixed or
variable), time and method of calculating payment of interest, if any, the place
or places where principal of, premium, if any, and interest, if any, on such
Debt Securities will be payable, the currency in which principal of, premium, if
any, and interest, if any, on such Debt Securities will be payable, any terms of
redemption at the option of the Company or the holder, any sinking fund
provisions and any terms for conversion into Common Stock, (ii) in the case of
Debt Warrants and Stock Warrants, the Debt Securities and Common Stock,
respectively, for which each such Warrant is exercisable, the exercise price,
duration, detachability and call provisions, (iii) in the case of Common Stock,
the number of shares, the initial public offering price and the other terms of
the offering and sale thereof, and (iv) in the case of Preferred Stock, the
specific title and stated value, any dividend, liquidation, redemption, voting
and other rights and any terms for exchange for Debt Securities or conversion
into Common Stock, and whether interests in the Preferred Stock will be
represented by Depositary Shares. If so specified in the applicable Prospectus
Supplement, Offered Securities may be issued in whole or in part in the form of
one or more temporary or permanent global securities ("Global Securities").
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Company may sell the Securities to or through underwriters or dealers,
and may also sell Securities directly to other purchasers or through agents. See
"Plan of Distribution." The Prospectus Supplement sets forth the names of any
underwriters, dealers or agents involved in the sale of the Offered Securities
in respect of which this Prospectus is being delivered and any applicable fee,
commission or discount arrangements with them.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
------------------------
The date of this Prospectus is , 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements and
other information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: Midwest Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511 and Northeast Regional Office, Seven World Trade
Center, New York, New York 10048. Copies of such material can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Reports, proxy and information
statements and other information concerning the Company may also be inspected at
the offices of The New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005. The Commission maintains a Web site at
http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants, including the Company, that file
electronically with the Commission.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain of the information contained in
the Registration Statement in accordance with the rules and regulations of the
Commission. Reference is hereby made to the Registration Statement and related
exhibits for further information with respect to the Company and the Securities.
Statements contained herein concerning the provisions of any document are not
necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company heretofore filed with the Commission
pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
2. The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996;
3. The Company's Current Reports on Form 8-K dated May 16, 1996, June
28, 1996, July 19, 1996, July 25, 1996 and December 18, 1996; and
4. The Company's Registration Statement on Form 8-A, dated July 27,
1988, as amended by Forms 8, dated August 2, 1990 and June 8, 1996, with
respect to the Series D Rights (as defined herein).
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
offered hereby shall be deemed to be incorporated by reference into this
Prospectus or any Prospectus Supplement and to be a part hereof from the date of
filing of such reports and documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this Prospectus or any
Prospectus Supplement shall be deemed to be modified or superseded for purposes
of this Prospectus or such Prospectus Supplement to the extent that a statement
contained herein, therein or in any other subsequently filed documents which
also is or is deemed to be incorporated by reference in this Prospectus or in
such Prospectus Supplement modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus or any Prospectus
Supplement.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference into this
Prospectus (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents). Requests for such
copies should be directed to: Investor Relations Department, Stone Container
Corporation, 150 North Michigan Avenue, Chicago, Illinois 60601, telephone (312)
346-6600.
This Prospectus and the accompanying Prospectus Supplement include
"forward-looking statements" within the meaning of various provisions of the
Securities Act and the Exchange Act. All statements, other than statements of
historical facts, included or incorporated by reference in this Prospectus and
the Prospectus Supplement that address activities, events or developments that
the Company expects or anticipates will or may occur in the future, including
such things as future capital expenditures (including the amount and nature
2
<PAGE>
thereof), business strategy and measures to implement strategy, competitive
strengths, goals, expansion and growth of the Company's and its subsidiaries'
business and operations, plans, references to future success and other such
matters are forward-looking statements. These statements are based on certain
assumptions and analyses made by the Company in light of its experience and its
perception of historical trends, current conditions and expected future
developments as well as other factors it believes are appropriate in the
circumstances. However, whether actual results and developments will conform
with the Company's expectations and predictions is subject to a number of risks
and uncertainties, including any special considerations included or incorporated
by reference in this Prospectus and any Prospectus Supplement; general economic,
market or business conditions; the opportunities (or lack thereof) that may be
presented to and pursued by the Company and its subsidiaries; competitive
actions by other companies; changes in laws or regulations; and other factors,
many of which are beyond the control of the Company and its subsidiaries.
Consequently, all of the forward-looking statements made in this Prospectus and
any Prospectus Supplement are qualified by these cautionary statements, and
there can be no assurance that the actual results or developments anticipated by
the Company will be realized or, even if substantially realized, that they will
have the expected consequences to or effects on the Company and its subsidiaries
or their business or operations.
3
<PAGE>
THE COMPANY
The Company is a major international pulp and paper company engaged
principally in the production and sale of paper, packaging products and market
pulp. The Company believes that it is the world's largest producer of unbleached
containerboard and kraft paper and the world's largest converter of those
products into corrugated containers and paper bags and sacks. The Company also
believes that it is one of the world's largest paper companies in terms of
annual tonnage, having produced approximately 8.0 million and 7.9 million total
tons of paper and pulp in 1995 and 1994, respectively. The Company produced
approximately 5.0 million and 5.2 million tons of unbleached containerboard and
kraft paper in 1995 and 1994, respectively, which accounted for approximately
63% and 66% of its total tonnage produced for 1995 and 1994, respectively. The
Company had net sales of approximately $7.4 billion and $5.7 billion in 1995 and
1994, respectively, and had net income of $255.5 million in 1995 and a net loss
of $204.6 million in 1994. The Company owns or has an interest in 129
manufacturing facilities in the United States, 30 in Canada, 16 in Germany,
seven each in France and Venezuela, four in Spain, three each in Argentina and
Mexico, two each in Australia, Belgium and the United Kingdom and one each in
Chile, the Netherlands and China. These facilities include 32 mills. A
substantial portion of the assets of the Company have been pledged to secure
certain Senior Indebtedness of the Company. The Company also maintains sales
offices in the United States, Canada, the United Kingdom, Germany, Belgium,
France, Mexico, China and Japan and has forestry operations in Costa Rica and
Venezuela.
PAPERBOARD AND PAPER PACKAGING
The Company believes that its integrated unbleached paperboard and paper
packaging business is the largest in the world with 21 mills and 159 converting
plants located throughout North America and in South America, Europe, Australia
and China. The major products in this business are containerboard and corrugated
containers, which are primarily sold to a broad range of manufacturers of
consumable and durable goods; kraft paper and paper bags and sacks, which are
sold primarily to supermarket chains, retailers of consumer products and, in the
case of multiwall shipping sacks, to the agricultural, chemical and cement
industries; and boxboard and folding cartons, which are sold to manufacturers of
consumable goods and other box manufacturers. The unbleached packaging business
of the Company has an annual capacity of approximately 5.5 million tons and is
more than 80% integrated. In 1995, total sales for the paperboard and paper
packaging business of the Company were approximately $5.4 billion, or
approximately 74% of total consolidated sales.
MARKET PULP
The Company believes it is a major producer of market pulp in North America.
The Company owns and operates four market pulp mills in North America, and holds
a 45% interest (through its 90% owned subsidiary Stone Venepal (Celgar) Pulp,
Inc. ("SVCPI")) in the Celgar mill in Castlegar, British Columbia (the "Celgar
mill"). These five mills have the capacity to produce 1.2 million tons of market
pulp annually and produced 1.1 million tons in 1995 (including 45% of the
production at the Celgar mill). In addition, Stone-Consolidated Corporation
("Stone-Consolidated"), in which the Company has an equity interest of
approximately 47%, owns and operates the Fort Frances, Ontario mill, which has
an annual capacity of approximately 130,000 tons of market pulp. The geographic
diversity of the Company's mills enables the Company to offer its customers a
product mix of bleached northern and southern hardwood and bleached northern
softwood pulp. Market pulp is sold to manufacturers of paper products, including
fine papers, photographic papers, tissue and newsprint.
NEWSPRINT AND UNCOATED GROUNDWOOD PAPER
The Company believes that Stone-Consolidated is the largest producer of
uncoated groundwood paper in North America and one of the two largest in the
world, and the second largest producer and largest marketer of newsprint in the
world, with an annual production capacity of 2.4 million tons of newsprint
(including the Company's newsprint mill in Snowflake, Arizona, the entire
production of which is sold by Stone-Consolidated on a commission basis, and
Boise Cascade Corporation's newsprint mill in DeRidder, Louisiana, the entire
production of which is purchased at a discount and sold by Stone-Consolidated).
Newsprint is marketed to newspaper
4
<PAGE>
publishers and commercial printers. Uncoated groundwood paper is sold for use
primarily in newspaper inserts, retail store advertising fliers, magazines,
telephone directories and as computer paper.
USE OF PROCEEDS
Unless otherwise specified in an accompanying Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities for
general corporate purposes, including working capital, the repayment or
refinancing of indebtedness, future acquisitions and/or capital expenditures.
Pending application of the net proceeds for specific purposes, such proceeds may
be invested in short-term or marketable securities.
RATIOS
The following table sets forth the ratios of earnings to fixed charges and
ratios of earnings to fixed charges and preferred stock dividends of the Company
and its consolidated subsidiaries for the periods indicated.
<TABLE>
<CAPTION>
NINE MONTHS FISCAL YEAR ENDED DECEMBER 31,
ENDED ------------------------------------------
SEPTEMBER 30, 1996 1995 1994 1993 1992
-------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges(a)............................ (b) 2.52 (b) (b) (b)
Ratio of Earnings to Fixed Charges and Preferred Stock
Dividends(a)................................................... (c) 2.45 (c) (c) (c)
<CAPTION>
1991
---------
<S> <C>
Ratio of Earnings to Fixed Charges(a)............................ (b)
Ratio of Earnings to Fixed Charges and Preferred Stock
Dividends(a)................................................... (c)
</TABLE>
- ------------------------
(a) Earnings consist of pre-tax earnings from continuing operations before fixed
charges adjusted for minority interest in consolidated subsidiaries,
preferred stock dividend requirements of a majority owned subsidiary and
undistributed (earnings) losses of non-consolidated subsidiaries. Fixed
charges consist of interest on indebtedness, interest capitalized as part of
fixed assets, amortization of debt expense, rent expense which is deemed
representative of an interest factor and preferred stock dividend
requirements of a majority owned subsidiary for 1991, 1992, 1993 and 1994.
(b) The Company's earnings for the nine months ended September 30, 1996 and the
years ended December 31, 1994, 1993, 1992 and 1991 were insufficient to
cover fixed charges by $114.6 million, $168.1 million, $466.5 million,
$270.1 million and $94.6 million, respectively.
(c) The Company's earnings for the nine months ended September 30, 1996 and the
years ended December 31, 1994, 1993, 1992 and 1991 were insufficient to
cover fixed charges and preferred stock dividends by $120.6 million, $176.2
million, $474.6 million, $277.0 million and $94.6 million, respectively.
CREDIT AGREEMENT
CREDIT AGREEMENT
In October 1994, the Company entered into a certain Credit Agreement which
was amended and restated in March 1996 and further amended in June 1996 and
December 1996 (as amended, the "Credit Agreement"). The Credit Agreement
consists of a $400 million senior secured term loan maturing through April 1,
2000 (the "Initial Term Loan"), $390 million of additional senior secured term
loans maturing through October 1, 2003 (the "Additional Term Loans"), a $560
million senior secured revolving credit facility commitment maturing May 15,
1999. The Credit Agreement also provides for the issuance of letters of credit
which, to the extent utilized, will serve to reduce borrowing availability under
the revolving credit facility of the Credit Agreement. All indebtedness under
the Credit Agreement is secured by a substantial portion of the assets of the
Company.
The following summaries of certain provisions of the Credit Agreement do not
purport to be complete and are subject to, and are qualified in their entirety
by express reference to, all the provisions of the Credit Agreement, including
the definitions therein of certain terms. Certain capitalized terms under this
caption are defined in the Credit Agreement.
5
<PAGE>
MATURITIES AND MANDATORY PREPAYMENTS
The $400 million Initial Term Loan will mature on April 1, 2000. Amounts
outstanding under the Initial Term Loan amortize on a semi-annual basis (April 1
and October 1) based upon the applicable percentage of the principal amount of
the Initial Term Loan. Amortization amounts are .5% of principal amount for the
period from April 1, 1995 through April 1, 1999, 47.5% on October 1, 1999 and
48.0% on April 1, 2000. The $390 million Additional Term Loans will mature on
October 1, 2003. Amounts outstanding under the Additional Term Loans amortize on
a semi-annual basis (April 1 and October 1) based upon the applicable percentage
of the initial principal amount of such Additional Term Loans. Amortization
amounts for the $200 million component of the Additional Term Loans are .5% of
principal amount for the period from April 1, 1996 through October 1, 2002 and
46.5% April 1 and October 1, 2003. Amortizations for the $190 million component
of the Additional Term Loans are .5% of principal amount for the period from
October 1, 1996 through October 1, 2002, 46.5% on April 1, 2003 and 47% on
October 1, 2003. The $560 million revolving credit facility will mature on May
15, 1999.
Mandatory prepayments are required under the Initial Term Loan and
Additional Term Loans under the Credit Agreement as follows: (i) 50% (subject to
performance-related step downs to 25%) of Excess Cash Flow (as defined in the
Credit Agreement) for each fiscal quarter, excluding the first $50 million of
Excess Cash Flow in each fiscal year; (ii) 100% of the net proceeds of (a) the
issuance or incurrence of additional indebtedness (excluding certain specified
refinancings and $400 million (the "Debt Basket") of other debt), and (b)
certain non-ordinary course asset sales (excluding $300 million (the "Asset
Basket") of proceeds from such sales (other than sales of Collateral (as defined
in the Credit Agreement) or collateral under the Credit Agreement pledged to the
lenders under the Credit Agreement (the "Bank Collateral")), in each case for
which substitute collateral is not provided). The lenders under the Credit
Agreement have waived the mandatory prepayment from Excess Cash Flow requirement
for the fiscal quarters ending June 30, 1995 through and including March 31,
1996. Additionally, the Company has no mandatory prepayments under the $190
million portion of the Additional Term Loans until September 30, 1997, and
lenders of approximately 81% of the principal amount of the other term loans
have waived mandatory payments until September 30, 1997. All mandatory
prepayments (except mandatory redemptions related to sales of Bank Collateral)
will be allocated entirely against the Initial Term Loan and Additional Term
Loans amortization in inverse order of maturity. In addition, mandatory
prepayments from sales of Bank Collateral (unless substitute collateral has been
provided) will be allocated pro rata between the Initial Term Loan and
Additional Term Loans (and applied in inverse order of maturity) on the one hand
and the revolving credit facility, on the other, and, in the case of the
revolving credit facility, will result in a corresponding permanent commitment
reduction.
At the Company's request, the holders of loans under the Initial Term Loan
or Additional Term Loans may, acting individually, waive their individual right
to any mandatory prepayment, in which case the amounts otherwise payable to such
holders may be retained by the Company. The cash flow in excess of the required
mandatory repayment, the net proceeds from the Asset Basket, and waived
prepayment obligations may be used for (i) general corporate purposes, (ii)
capital expenditures, acquisitions or investments in excess of annual
limitations (without reducing permitted basket amounts) and (iii) prepayment of
debt securities, however, the net proceeds from the issuance of indebtedness
permitted under the provisions of the Debt Basket may only be used for the
prepayment of debt securities ("Permitted Uses").
The Company is also permitted to voluntarily reduce the unutilized portion
of the revolving credit facility and voluntarily prepay the Initial Term Loan
and Additional Term Loans, with voluntary Initial Term Loan and Additional Term
Loans prepayments to be applied against amortization in inverse order of
maturity. Voluntary prepayments of the Initial Term Loan and Additional Term
Loans must be proportionate with one another.
INTEREST RATES
The Credit Agreement permits the Company to choose among various interest
rate options for the revolving credit facility and the term loans and to specify
the interest rate period to which the interest rate options are to apply,
subject to certain parameters. The applicable interest rate options available to
the Company are: (i) under
6
<PAGE>
the revolving credit facility (a) the higher of (1) Bankers Trust Company's
prime rate and (2) the Federal Funds Effective Rate plus 1/2 of 1% (the
alternative base rate ("ABR")) plus, in the case of (1) or (2), 1 5/8% per annum
or (b) the London Interbank Offered Rate ("LIBOR") plus 2 5/8% per annum; (ii)
under the Initial Term Loan, ABR plus 2 1/8% per annum or LIBOR plus 3 1/8% per
annum; and (iii) under the Additional Term Loans, ABR plus 2 3/8% per annum or
LIBOR plus 3 3/8% per annum. Upon achievement of specified indebtedness ratios
and cash flow coverage ratios or other performance related tests, the interest
rate margins for the revolving credit facility will be reduced. Additionally,
the Company pays a 1/2% commitment fee on the unused portions of the revolving
credit facility but without giving effect to reductions in availability for
letters of credit outstanding. The Company will pay a fee on the outstanding
letters of credit issued under the revolving credit facility at a rate equal to
LIBOR plus 2 1/8% plus any applicable facing fee.
SECURITY
All indebtedness under the Credit Agreement is secured by a substantial
portion of the assets of the Company. Loans and letters of credit under the
Credit Agreement are secured by a mortgage on the following mills and box plants
owned or leased by the Company or its subsidiaries, as well as liens on the
machinery, equipment and inventory located at each mill or box plant. Paper
mills securing indebtedness under the Credit Agreement consist of the Company's
mills located in Snowflake, Arizona; Panama City, Florida; Jacksonville,
Florida; Port Wentworth, Georgia; Florence, South Carolina; Hopewell, Virginia;
Hodge, Louisiana; and Coshocton, Ohio; and box plants securing indebtedness
under the Credit Agreement consist of 45 owned box plants and 32 leased box
plants. The mill in Jacksonville, Florida was added to the Collateral secured
under the Credit Agreement pursuant to an amendment thereto dated as of December
18, 1996. The owned box plants may be released as Collateral if (i) the Company
pledges such owned box plants to secure the issuance of additional indebtedness,
(ii) such additional indebtedness is limited to an aggregate amount of $100
million and has a loan to asset value of 200%, and (iii) the proceeds of any
such additional indebtedness are used to repay indebtedness due prior to May
1999.
COVENANTS
The Credit Agreement contains covenants that include, among other things,
the maintenance of certain financial tests and ratios. Additionally, the term
loan portions of the Credit Agreement provide for mandatory prepayments from
sales of certain assets, certain debt financings and a percentage of excess cash
flow (as defined). The Company's bank lenders, at the Company's optional
request, may at their option, waive the receipt of certain mandatory
prepayments. Any mandatory and voluntary prepayments are allocated against the
term loan amortization in inverse order of maturity. Mandatory prepayments from
sales of collateral, unless replacement collateral is provided, will be applied
ratably to the term loans and revolving credit facility, permanently reducing
the loan commitments under the Credit Agreement. The Credit Agreement also
contains cross-default provisions to the indebtedness of $10 million or more of
the Company and certain of its subsidiaries.
INDEBTEDNESS RATIO
The Company is required to have an indebtedness ratio (ratio of total
consolidated indebtedness to consolidated net worth plus total consolidated
indebtedness, as such terms are defined in the Credit Agreement) not exceeding
the following amounts as of the end of each fiscal quarter ending on a date as
indicated below:
<TABLE>
<S> <C>
FISCAL QUARTER RATIO
December 31, 1994 through March 31, 1998........................................... .85 to 1
June 30, 1998 through September 30, 1998........................................... .83 to 1
December 31, 1998.................................................................. .80 to 1
March 31, 1999..................................................................... .78 to 1
June 30, 1999 and thereafter....................................................... .75 to 1
</TABLE>
At September 30, 1996, the Company's indebtedness ratio was .78 to 1.
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INTEREST COVERAGE RATIO
The Company is required to have an interest coverage ratio (ratio of
earnings before interest, taxes, depreciation and amortization to interest
expense, as such terms are defined in the Credit Agreement) of at least the
following ratios at the end of each fiscal quarter, calculated for the most
recent four fiscal quarters as indicated below:
<TABLE>
<S> <C>
DATE RATIO
December 31, 1996................................................................. 1.00 to 1
March 31, 1997.................................................................... .65 to 1
June 30, 1997..................................................................... .65 to 1
September 30, 1997................................................................ .75 to 1
December 31, 1997................................................................. 1.00 to 1
March 31, 1998.................................................................... 1.00 to 1
June 30, 1998..................................................................... 1.25 to 1
September 30, 1998................................................................ 1.50 to 1
December 31, 1998................................................................. 1.75 to 1
March 31, 1999 and thereafter..................................................... 2.00 to 1
</TABLE>
At September 30, 1996, the Company's interest coverage ratio was 1.95 to 1.
The Credit Agreement further provides that in the event that the Company
fails to maintain an interest coverage ratio as provided above as of the end of
any fiscal quarter ending on September 30, 1997, December 31, 1997, June 30,
1998, September 30, 1998, December 31, 1998 or March 31, 1999, the Company may
satisfy the interest coverage ratio requirements on any two such dates by having
an interest coverage ratio of at least the following ratios at the end of such
fiscal quarter, calculated for the period of such fiscal quarter rather than on
a four-quarter basis:
<TABLE>
<S> <C>
DATE RATIO
September 30, 1997................................................................ 1.00 to 1
December 31, 1997................................................................. 1.25 to 1
June 30, 1998..................................................................... 1.50 to 1
September 30, 1998................................................................ 1.75 to 1
December 31, 1998................................................................. 2.00 to 1
March 31, 1999.................................................................... 2.25 to 1
</TABLE>
RESTRICTIONS AND INVESTMENTS IN SUBSIDIARIES AND GUARANTEES; CROSS-DEFAULTS
The Credit Agreement contains restrictions on investments in
Stone-Consolidated and SVCPI. The Company is also not permitted to guarantee the
indebtedness of Stone-Consolidated or SVCPI and there are restrictions on other
guarantees. There are also restrictions on transactions with affiliates which
are not wholly-owned subsidiaries. Any event of default or default with respect
to the Company's or a Subsidiary's (as defined in the Credit Agreement)
indebtedness for money borrowed having an aggregate principal amount of $10
million or more constitutes an event of default under the Credit Agreement.
RESTRICTIONS ON DIVIDENDS
The Credit Agreement provides that the Company's dividend payments,
distributions or purchases of any class of capital stock of the Company and its
subsidiaries cannot exceed the sum of an amount (the "Dividend Basket") equal to
(i) 75% of the Consolidated Net Income (as defined in the Credit Agreement) of
the Company from October 1, 1994 to the date of payment of such dividends, minus
(ii) 100% of the Consolidated Net Loss (as defined in the Credit Agreement) of
the Company from October 1, 1994 to the date of payment of such dividend, plus
(iii) 100% of any net cash proceeds from sales of common stock or certain
preferred stock of the Company
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from the closing date to the date of payment of such dividends, minus (iv) the
total of certain permitted investments and permitted capital expenditures, which
the Company will be permitted to make in lieu of dividends the Company would be
permitted to pay pursuant to this dividend formula. In addition, the Credit
Agreement permits the Company to pay dividends on its preferred stock
outstanding to the extent permitted by the Company's senior subordinated
indenture dated as of March 15, 1992.
RESTRICTIONS ON INVESTMENTS
The Credit Agreement restricts the amount available for investments to $50
million until the Company reaches an interest coverage ratio of at least 1.25 to
1.
RESTRICTIONS ON INCURRENCE OF INDEBTEDNESS
The Credit Agreement restricts the incurrence of additional indebtedness,
subject to certain exceptions (including the refinancing of existing
indebtedness).
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Debt Securities may be issued from time to time in one or more series
and will constitute either Senior Debt Securities or Senior Subordinated Debt
Securities. Senior Debt Securities will be issued under an Indenture, as
supplemented (the "Senior Debt Securities Indenture"), between the Company and a
trustee to be named prior to the offering of any Senior Debt Securities, as
Trustee (the "Senior Debt Securities Trustee"). The Senior Subordinated Debt
Securities will be issued under an Indenture dated as of March 15, 1992 (the
"Senior Subordinated Debt Securities Indenture"), between the Company and The
Bank of New York, as Trustee (the "Senior Subordinated Debt Securities
Trustee"). The Senior Debt Securities Indenture and the Senior Subordinated Debt
Securities Indenture are referred to herein individually as an "Indenture" and,
collectively, as the "Indentures," and the Senior Debt Securities Trustee and
the Senior Subordinated Debt Securities Trustee are referred to herein
individually as the "Trustee" and collectively as the "Trustees."
The following summaries of certain provisions of the Debt Securities and the
Indentures do not purport to be complete and are subject to, and are qualified
in their entirety by express reference to, all the provisions of the Indentures,
including the definitions therein of certain terms. Certain capitalized terms
under this caption are defined in the Indentures.
GENERAL
The Debt Securities will be unsecured obligations of the Company.
The Indentures do not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provide that Debt Securities may
be issued thereunder from time to time in one or more series.
Reference is made to the Prospectus Supplement relating to the Debt
Securities being offered (the "Offered Debt Securities") for, among other
things, the following terms thereof: (1) the title of the Offered Debt
Securities; (2) the aggregate principal amount of the Offered Debt Securities;
(3) the date or dates on which the Offered Debt Securities will mature; (4) the
rate or rates (which may be fixed or variable) per annum at which the Offered
Debt Securities will bear interest and the date from which such interest will
accrue; (5) the dates on which such interest will be payable and the Regular
Record Dates for such Interest Payment Dates; (6) the dates, if any, on which,
and the price or prices at which, the Offered Debt Securities may, pursuant to
any mandatory or optional sinking fund provisions, be redeemed by the Company
and other detailed terms and provisions of such sinking funds; (7) the terms and
conditions, if any, pursuant to which the Offered Debt Securities are
convertible into Common Stock;
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<PAGE>
and (8) the date, if any, after which, and the price or prices at which, the
Offered Debt Securities may, pursuant to any optional redemption provisions, be
redeemed at the option of the Company or of the Holder thereof and other
detailed terms and provisions of such optional redemption. For a description of
the terms of the Offered Debt Securities, reference must be made to both the
Prospectus Supplement relating thereto and to the description of Debt Securities
set forth herein.
The Senior Debt Securities Indenture contains certain significant
restrictive covenants (the "Covenants"). See "--Particular Terms of the Senior
Debt Securities--Certain Covenants." The Company may offer one or more series of
Senior Debt Securities that contain provisions which could cause some or all of
these Covenants to be amended or modified or replaced (in whole or in part) with
substitute covenants upon the occurrence of certain specified events. For
example, a series of Senior Debt Securities may contain a set of alternative
covenants (the "Revised Covenants") that the Company may agree to at the time of
the offer and sale of such series. These Revised Covenants would become
effective, and the Covenants would be of no further force or effect, upon the
earlier of the time at which (i) the Existing Senior Debt (as defined) has been
repaid in full or (ii) the covenants of all then-outstanding Existing Senior
Debt have been amended such that the Existing Senior Debt covenants are no more
restrictive than the Revised Covenants. "Existing Senior Debt" shall mean the
Company's 12 5/8% Senior Notes due July 15, 1998, 11 7/8% Senior Notes due
December 1, 1998, 9 7/8% Senior Notes due February 1, 2001, 10 3/4% First
Mortgage Notes due October 1, 2002, 11 1/2% Senior Notes due October 1, 2004 and
Rating Adjustable Senior Notes due August 1, 2016 and the 11 1/2% Senior Notes
issued by Stone Container Finance Company of Canada and guaranteed on a senior
basis by the Company. In addition, such series of Senior Debt Securities may
also provide that if at any time after issuance thereof such series were to be
assigned an investment grade rating by a nationally recognized rating agency,
then the Covenants or Revised Covenants, as the case may be, would be of no
further force or effect and thereafter a separate set of alternative covenants
(the "Investment Grade Covenants") appropriate for indebtedness rated investment
grade would become effective, comparable to the provisions of the Company's
Rating Adjustable Senior Notes due 2016. Once effective, the Investment Grade
Covenants would become permanent.
If the Company determines to offer any such series of Senior Debt
Securities, a supplemental indenture to the Senior Debt Securities Indenture
will be required. The terms of any such series of Senior Debt Securities,
including the specified triggering events and the effects thereof under such
Senior Debt Securities and the Senior Debt Securities Indenture (including the
effect on or the replacement of covenant provisions) will be described in the
Prospectus Supplement relating thereto and a copy of the form of the
corresponding supplemental indenture will be filed on a Form 8-K and
incorporated by reference in the Registration Statement of which this Prospectus
is a part.
The Company may also determine to revise certain covenants with respect to
any series of Senior Subordinated Debt Securities at the time of any offering
thereof. Any such revisions will be described in the Prospectus Supplement
relating thereto and the copy of the form of the corresponding supplemental
indenture to the Senior Subordinated Debt Securities Indenture will be filed on
Form 8-K and incorporated by reference in the Registration Statement of which
this Prospectus is a part.
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<PAGE>
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the principal of, and any premium or interest on, the Offered Debt Securities
will be payable, and the Offered Debt Securities will be exchangeable and
transfers thereof will be registrable, at the Place of Payment, provided that,
at the option of the Company, payment of interest may be made by check mailed to
the address of the person entitled thereto as it appears in the Security
Register.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Offered Debt Securities will be issued in United States dollars in fully
registered form, without coupons, in denominations of $1,000 or any integral
multiple thereof. No service charge will be made for any transfer or exchange of
the Offered Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
RANKING
The Senior Debt Securities will rank PARI PASSU in right of payment with all
other Senior Indebtedness (as defined) of the Company. The Senior Subordinated
Debt Securities will (i) be subordinate in right of payment to all existing and
future Senior Indebtedness of the Company, (ii) be senior in right of payment to
all existing and future Junior Subordinated Indebtedness (as defined) and (iii)
rank PARI PASSU in right of payment with all existing and future Senior
Subordinated Indebtedness (as defined).
A substantial portion of the Company's assets currently secure the
borrowings outstanding under the Credit Agreement, which are a component of
Senior Indebtedness. In addition, the Company's 10 3/4% First Mortgage Notes due
October 1, 2002 (the "First Mortgage Notes") are senior secured obligations of
the Company, secured by a first ranking lien on four of the Company's
containerboard mills. At September 30, 1996, the Company had $763.1 million of
term-loan borrowings outstanding under the Credit Agreement, no borrowings
outstanding under the revolving credit facilities available under the Credit
Agreement, and approximately $500 million principal amount of First Mortgage
Notes outstanding.
Any right of the Company to receive assets of any of its subsidiaries upon
their liquidation or reorganization (and the consequent right of the Holders to
participate in the distribution of or proceeds from those assets) will be
effectively subordinated to the claims of such subsidiary's creditors (including
trade creditors and holders of debt issued by such subsidiary), except to the
extent that the Company is itself recognized as a creditor of such subsidiary,
in which case the claims of the Company would still be subordinate to any
security interests in the assets of such subsidiary and any indebtedness of such
subsidiary senior to that held by the Company.
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a Depositary ("Depositary") or its nominee identified in the applicable
Prospectus Supplement. In such a case, one or more Global Securities will be
issued in a denomination or aggregate denomination equal to the portion of the
aggregate principal amount of outstanding Debt Securities of the series to be
represented by such Global Security or Global Securities. Unless and until it is
exchanged in whole or in part for Debt Securities in registered form, a Global
Security may not be registered for transfer or exchange except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any nominee to a successor Depositary or a
nominee of such successor Depositary and except in the circumstances described
in the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Global Security will be
described in the applicable Prospectus Supplement. The Company expects that the
following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Depositary will be represented by a Global
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<PAGE>
Security registered in the name of such Depositary or its nominee. Upon the
issuance of such Global Security, and the deposit of such Global Security with
or on behalf of the Depositary for such Global Security, the Depositary will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such Global Security to
the accounts of institutions that have accounts with such Depositary or its
nominee ("participants"). The accounts to be credited will be designated by the
underwriters or agents of such Debt Securities or, if such Debt Securities are
offered and sold directly by the Company, by the Company. Ownership of
beneficial interests in such Global Security will be limited to participants or
Persons that may hold interests through participants. Ownership of beneficial
interests by participants in such Global Security will be shown on, and the
transfer of that ownership interest will be effected only through, records
maintained by the Depositary or its nominee for such Global Security. Ownership
of beneficial interests in such Global Security by Persons that hold through
participants will be shown on, and the transfer of that ownership interest
within such participant will be effected only through, records maintained by
such participant. The laws of some jurisdictions require that certain purchasers
of securities take physical delivery of such securities in certificated form.
The foregoing limitations and such laws may impair the ability to transfer
beneficial interests in such Global Securities.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Unless otherwise specified in the applicable Prospectus
Supplement, owners of beneficial interests in such Global Security will not be
entitled to have Debt Securities of the series represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of Debt Securities of such series in certificated form and
will not be considered the Holders thereof for any purposes under the applicable
Indenture. Accordingly, each Person owning a beneficial interest in such Global
Security must rely on the procedures of the Depositary and, if such Person is
not a participant, on the procedures of the participant through which such
Person owns its interest, to exercise any rights of a Holder under the
applicable Indenture. The Company understands that under existing industry
practices, if the Company requests any action of Holders or an owner of a
beneficial interest in such Global Security desires to give any notice or take
any action a Holder is entitled to give or take under the applicable Indenture,
the Depositary would authorize the participants to give such notice or take such
action, and participants would authorize beneficial owners owning through such
participants to give such notice or take such action or would otherwise act upon
the instructions of beneficial owners owning through them.
Principal of and any premium and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
PARTICULAR TERMS OF THE SENIOR DEBT SECURITIES
The following description of the Senior Debt Securities sets forth certain
general terms and provisions of the Senior Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Senior Debt
Securities offered by any Prospectus Supplement and the extent, if any, to which
such general provisions may apply to the Senior Debt Securities so offered will
be described in the Prospectus Supplement relating to such Senior Debt
Securities.
CERTAIN COVENANTS
MAINTENANCE OF SUBORDINATED CAPITAL BASE
The Senior Debt Securities Indenture provides that, subject to the exception
described in the third following paragraph, in the event that the Company's
Subordinated Capital Base is less than $1 billion (the "Minimum Subordinated
Capital Base") as at the end of each of any two consecutive fiscal quarters (the
last day of the second such fiscal quarter, a "Deficiency Date"), then, with
respect to Senior Debt Securities of each series, the Company shall, no later
than 60 days after the Deficiency Date (105 days if a Deficiency Date is also
the end of the Company's fiscal year), make an offer to all Holders of Senior
Debt Securities of each such series to purchase (a "Deficiency Offer") 10% of
the principal amount of Senior Debt Securities of each such series originally
issued, or
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<PAGE>
such lesser amount as may be Outstanding at the time such Deficiency Offer is
made (the "Deficiency Offer Amount"), at a purchase price equal to 100% of
principal amount, plus accrued and unpaid interest to the Deficiency Payment
Date (as defined below). Thereafter, semiannually the Company shall make like
Deficiency Offers for the then applicable Deficiency Offer Amount of Senior Debt
Securities of each such series until the Company's Subordinated Capital Base as
at the end of any subsequent fiscal quarter shall be equal to or greater than
the Minimum Subordinated Capital Base. Notwithstanding the foregoing, after any
specified Deficiency Date, the last day of any subsequent fiscal quarter shall
not constitute a Deficiency Date (giving rise to an additional obligation under
the first sentence of this paragraph) unless the Company's Subordinated Capital
Base was equal to or greater than the Minimum Subordinated Capital Base as at
the end of a fiscal quarter that followed such specified Deficiency Date and
preceded such subsequent quarter.
Within 60 days (105 days if the Deficiency Date is also the end of the
Company's fiscal year) following a Deficiency Date, the Company shall mail a
notice to each Holder of Senior Debt Securities of the applicable series in
respect of the Deficiency Offer (which notice shall contain all instructions and
materials necessary to enable such Holders to tender Senior Debt Securities).
Senior Debt Securities tendered pursuant to a Deficiency Offer will be accepted
for payment, in amounts as set forth below, on the date which shall be 20
Business Days from the date such notice is mailed or, if acceptance for payment
and payment is not then lawful, on the earliest subsequent Business Day on which
acceptance for payment and payment is then lawful (a "Deficiency Payment Date").
On a Deficiency Payment Date, the Company shall accept for payment Senior
Debt Securities of each applicable series or portions thereof tendered pursuant
to the Deficiency Offer in an aggregate principal amount equal to the Deficiency
Offer Amount or such lesser principal amount of such Senior Debt Securities as
shall have been tendered, and deposit with the Paying Agent money sufficient to
pay the purchase price of all such Senior Debt Securities or portions thereof so
accepted. If the aggregate principal amount of such Senior Debt Securities
tendered exceeds the Deficiency Offer Amount, the Company shall select the
Senior Debt Securities to be purchased on a pro rata basis to the nearest $1,000
of principal amount. The Paying Agent shall promptly mail or deliver to Holders
of Senior Debt Securities so accepted payment in amounts equal to the purchase
prices therefor, and the Company shall execute and the Trustee shall promptly
authenticate and mail or make available for delivery to such Holders new Senior
Debt Securities of the same series as, and equal in principal amounts to, any
unpurchased portion of the Senior Debt Securities surrendered. The Company will
publicly announce the results of the Deficiency Offer.
Notwithstanding the foregoing, in the event that (1) the making of a
Deficiency Offer by the Company or (2) the purchase of Senior Debt Securities by
the Company in respect of a Deficiency Offer would constitute a default (with
the giving of notice, the passage of time or both) with respect to any Specified
Bank Debt at the time outstanding, then, in lieu of the making of a Deficiency
Offer in the circumstances set forth above, (i) the interest rate on the Senior
Debt Securities of each applicable series shall be reset as of the first day of
the second fiscal quarter following the Deficiency Date (the "Reset Date") to a
rate per annum (the "Reset Rate") equal to the greater of (x) the initial
interest rate as set forth on the face of the Senior Debt Security (the "Initial
Interest Rate") and (y) the sum of (A) 400 basis points and (B) higher of the
Seven Year Treasury Rate and the Ten Year Treasury Rate, (ii) on the first
Interest Payment Date following the Reset Date, the interest rate on the Senior
Debt Securities of each such series, as reset on the Reset Date, shall increase
by 50 basis points, and (iii) the interest rate on the Senior Debt Securities of
each such series shall further increase by an additional 50 basis points on each
succeeding Interest Payment Date. Notwithstanding the foregoing, in no event
shall the interest rate on the Senior Debt Securities of any such series at any
time exceed the Initial Interest Rate by more than 200 basis points.
Once the interest rate on the Senior Debt Securities of any series has been
reset as set forth above, if the Company's Subordinated Capital Base is equal to
or greater than the Minimum Subordinated Capital Base as of the last day of any
fiscal quarter subsequent to the Deficiency Date, interest on the Senior Debt
Securities of each such series shall return to the Initial Interest Rate
effective as of the first day of the second following fiscal quarter; PROVIDED,
HOWEVER, that the interest rate on the Senior Debt Securities of each such
series shall again be adjusted as set forth above if the Company's Subordinated
Capital Base shall thereafter be less than the Minimum Subordinated Capital Base
as at the last day of each of any two consecutive subsequent fiscal quarters and
if the
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making of a Deficiency Offer or the purchase of Senior Debt Securities by the
Company in respect of a Deficiency Offer would, at such time, constitute a
default (with the giving of notice, passage of time or both) with respect to any
Specified Bank Debt at the time outstanding.
The Company shall notify the Trustee of the Reset Rate not later than two
Business Days after the Reset Date in the circumstances set forth in the second
preceding paragraph. Not later than five Business Days after the Trustee has
received such notice from the Company, the Trustee shall mail to each Holder of
Senior Debt Securities of the applicable series such notice setting forth the
Reset Rate. The Company shall notify the Trustee and the Holders of such Senior
Debt Securities promptly when the interest rate on such Debt Securities returns
to the Initial Interest Rate as set forth above.
With respect to any Deficiency Offer, the Company is required to comply with
the requirements of Section 14(e) and Rule 14e-1 under the Exchange Act, if then
applicable.
LIMITATION ON FUTURE INCURRENCE OF INDEBTEDNESS
The Senior Debt Securities Indenture provides that the Company will not, and
will not permit any Restricted Subsidiary to, incur, create, assume, guarantee
or in any other manner become directly or indirectly liable with respect to or
responsible for the payment of, any Indebtedness, except: (1) Permitted
Indebtedness; and (2) Indebtedness of the Company if at the time thereof and
after giving effect thereto the Consolidated Interest Coverage Ratio of the
Company, on a pro forma basis for the four most recent quarters, taken as a
whole (giving effect to (i) such Indebtedness and (ii) the effect on the
Consolidated Cash Flow Available for Fixed Charges of the Company for the then
four most recent full fiscal quarters, taken as a whole, as a result of any
acquisition of a Person acquired by the Company or any Restricted Subsidiary
with the proceeds of such Indebtedness), would be greater than 1.75 to 1.
Without limiting the foregoing, the Company shall not, and shall not permit any
Restricted Subsidiary to, guarantee, or in any other manner become directly or
indirectly liable with respect to or responsible for the payment of,
Indebtedness of any Unrestricted Subsidiary in an amount greater than, for all
guaranties and undertakings of responsibility by the Company and its Restricted
Subsidiaries, 20% of the aggregate amount of Indebtedness of such Unrestricted
Subsidiary.
RESTRICTIONS ON DIVIDENDS
The Senior Debt Securities Indenture provides that the Company will not, and
will not permit any Subsidiary of the Company to, directly or indirectly, (1)
declare or pay any dividend or make any distribution, in cash or otherwise, in
respect of any shares of Capital Stock of the Company or to the holders of
Capital Stock of the Company as such (other than dividends or distributions
payable in shares of Capital Stock of the Company, other than Redeemable Stock)
or (2) purchase, redeem or otherwise acquire or retire for value any of the
Capital Stock of the Company or options, warrants or other rights to acquire any
such Capital Stock, other than acquisitions of Capital Stock or such options,
warrants or other rights by any Subsidiary of the Company from the Company (any
such transaction included in clause (1) or (2), a "Restricted Payment") if (i)
at the time of such Restricted Payment and after giving effect thereto, (a) an
Event of Default shall have occurred and be continuing with respect to any
series of the Senior Debt Securities or (b) the Consolidated Net Worth of the
Company shall be less than $750 million; or if (ii) after giving effect to such
Restricted Payment, the aggregate amount expended subsequent to November 1,
1991, for all such Restricted Payments (the amount of any Restricted Payment, if
other than cash, to be the fair market value of such payment as determined by
the Board of Directors of the Company, whose reasonable determination shall be
conclusive and evidenced by a Board Resolution) exceed the algebraic sum of (w)
a number calculated as follows: (A) if the aggregate Consolidated Net Income of
the Company earned on a cumulative basis during the period subsequent to
September 30, 1991 through the end of the last fiscal quarter that is prior to
the declaration of any such dividend or distribution or the giving of notice of
such purchase, redemption or other acquisition or retirement and for which such
financial information is then available, is a positive number, then 100% of such
positive number, and (B) if the aggregate Consolidated Net Income of the Company
earned on a cumulative basis during the period subsequent to September 30, 1991
through the end of the last fiscal quarter that is prior to the declaration of
any such dividend or distribution or the giving of notice of
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such purchase, redemption or other acquisition or retirement and for which such
financial information is then available, is a negative number, then 100% of such
negative number, (x) the aggregate net cash proceeds received by the Company
from the issuance and sale, other than to a Subsidiary of the Company,
subsequent to November 1, 1991, of Capital Stock (including Capital Stock issued
upon the conversion of, or in exchange for, securities other than Capital Stock
and options, warrants or other rights to acquire Capital Stock, but excluding
Redeemable Stock), (y) the aggregate net cash proceeds received by the Company
from the issuance and sale, other than to a Subsidiary of the Company, of
Indebtedness of the Company that is converted into Capital Stock of the Company
subsequent to November 1, 1991, and (z) $300 million; PROVIDED, HOWEVER, that
the retirement of any shares of the Company's Capital Stock by exchange for, or
out of the proceeds of the substantially concurrent sale of, other shares of
Capital Stock of the Company other than Redeemable Stock shall not constitute a
Restricted Payment. If all of the conditions to the declaration of a dividend or
distribution that are described above are satisfied at the time such dividend or
distribution is declared, then such dividend or distribution may be paid or made
within sixty days after such declaration even if the payment of such dividend,
the making of such distribution or the declaration thereof would not have been
permitted at any time after such declaration.
LIMITATION ON FUTURE LIENS AND GUARANTIES
Pursuant to the terms of the Senior Debt Securities Indenture, if the
Company or any Subsidiary shall create, incur, assume or suffer to exist any
Lien upon any of the assets of the Company or a Subsidiary of the Company
(whether such assets are owned November 1, 1991 or thereafter acquired) as a
security for (1) any Indebtedness or other obligation (whether unconditional or
contingent) of the Company that ranks PARI PASSU with the Senior Debt Securities
or any Indebtedness or other obligation (whether unconditional or contingent) of
a Subsidiary of the Company, the Company will secure or will cause such
Subsidiary to guarantee and secure the Outstanding Senior Debt Securities
equally and ratably with (or, at the option of the Company, prior to) such
Indebtedness or other obligation, so long as such Indebtedness or other
obligation shall be so secured, or (2) any Subordinated Indebtedness, the
Company will secure the Outstanding Senior Debt Securities prior to such
Subordinated Indebtedness, so long as such Subordinated Indebtedness shall be so
secured; PROVIDED, HOWEVER, that this covenant does not apply in the case of
Permitted Liens or Liens granted by any Unrestricted Subsidiary to secure
Indebtedness or other obligations of itself or of any Person other than the
Company and its Restricted Subsidiaries.
In addition, pursuant to the terms of the Senior Debt Securities Indenture,
the Company will not guarantee the Indebtedness of any Subsidiary and will not
permit any Subsidiary to guarantee (i) any Indebtedness of the Company that
ranks PARI PASSU with the Senior Debt Securities, (ii) any Indebtedness of a
Subsidiary of the Company or (iii) any Subordinated Indebtedness; PROVIDED,
HOWEVER, that this paragraph does not apply to (1) any guaranty by a Subsidiary
if such Subsidiary also guarantees the Senior Debt Securities on a PARI PASSU
basis with respect to guaranties of Indebtedness described in clauses (i) and
(ii) and on a senior basis with respect to guaranties of Indebtedness described
in clause (iii); (2) any guaranty existing on November 1, 1991 or any extension
or renewal of such guaranty to the extent such extension or renewal is for the
same or a lesser amount; (3) any guaranty which constitutes Indebtedness
permitted by clause (v) or (vi) of the definition of Permitted Indebtedness
granted by a Person permitted to incur such Indebtedness; (4) any guaranty by
the Company of Indebtedness of a Restricted Subsidiary, PROVIDED that (A)
incurrence of such Indebtedness of the Restricted Subsidiary is not prohibited
by the Senior Debt Securities Indenture and (B)(x) such guaranty constitutes
Indebtedness of the Company incurred as Permitted Indebtedness pursuant to
clause (vii) or (viii) of the definition of Permitted Indebtedness (it being
understood that, for purposes of determining Permitted Indebtedness, any such
guaranty shall be deemed to constitute Indebtedness separate from, and, in
addition to, Indebtedness of a Restricted Subsidiary which is so guaranteed) or
(y) immediately prior to and (on a pro forma basis) after granting such
guaranty, the Company would be permitted to incur an additional dollar of
Indebtedness (not constituting Permitted Indebtedness) under the restrictions
described in "Limitation on Future Incurrence of Indebtedness" above; (5) any
guaranty by an Unrestricted Subsidiary of Indebtedness or other obligations of
any Person other than the Company and its Restricted Subsidiaries; (6) any
guaranty by the Company or any Subsidiary of
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Indebtedness or other obligations constituting Indebtedness permitted by clause
(i)(a) of the definition of Permitted Indebtedness; (7) any guaranty by the
Company of Indebtedness of any Restricted Subsidiary outstanding on November 1,
1991 which is not subordinated to any Indebtedness of such Restricted
Subsidiary, and any renewal, extension or refinancing of such Indebtedness
permitted by the Senior Debt Securities Indenture; (8) any guaranty by the
Company of Indebtedness of any Restricted Subsidiary that is organized under the
laws of a jurisdiction other than the United States or any subdivision thereof,
PROVIDED that the incurrence of such Indebtedness of such Restricted Subsidiary
is not prohibited by the Senior Debt Securities Indenture; (9) any guaranty by a
Restricted Subsidiary that is organized under the laws of a jurisdiction other
than the United States or any subdivision thereof of the Indebtedness of any of
its Subsidiaries that is a Restricted Subsidiary and that is organized under the
laws of a jurisdiction other than the United States or any subdivision thereof,
PROVIDED that incurrence of such Indebtedness of such Restricted Subsidiary is
not prohibited by the Senior Debt Securities Indenture; (10) any guaranty by the
Company or a Subsidiary of Indebtedness or other obligations in a principal
amount not exceeding $250,000; (11) any guaranty in the form of an endorsement
of negotiable instruments for deposit or collection and similar transactions;
(12) any guaranty arising under or in connection with performance bonds,
indemnity bonds, surety bonds or commercial letters of credit not exceeding $25
million in aggregate principal amount from time to time outstanding; (13) any
guaranty by a Subsidiary of Indebtedness or other obligations of another
Subsidiary in effect at the time of such guarantor becoming a Subsidiary and not
created in contemplation thereof; or (14) any guaranty by the Company or a
Restricted Subsidiary of any Interest Swap Obligation, Currency Agreement or
Commodities Agreement relating to Indebtedness that is guaranteed pursuant to
another clause of this paragraph.
LIMITATION ON ASSET DISPOSITIONS
The Senior Debt Securities Indenture provides that so long as any of the
Senior Debt Securities are Outstanding, (i) the Company will not, and will not
permit any Restricted Subsidiary to, make any Asset Disposition unless the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Disposition at least equal to the fair
market value for the assets sold or otherwise disposed of (which shall be
determined in good faith (x) in the case of dispositions of assets having a fair
market value of $10 million or more, by the Board of Directors of the Company,
whose reasonable determination shall be conclusive and evidenced by a Board
Resolution, or (y) in the case of dispositions of assets having a fair market
value of less than $10 million but not less than $5 million, an officer of the
Company, whose reasonable determination shall be conclusive and evidenced by a
certificate of such officer) and (ii) the Company will apply the aggregate net
proceeds in excess of $300 million received by the Company or any Restricted
Subsidiary from all Asset Dispositions occurring subsequent to November 1, 1991
(but excluding for purposes of this clause (ii), whether before or after the
receipt of net proceeds in excess of $300 million, (1) the net proceeds of any
Asset Disposition or series of related Asset Dispositions where the net proceeds
are less than $5 million and (2) the first $25 million of net proceeds in each
fiscal year without taking into account any amount excluded pursuant to (1)) as
follows: (a) to the payment or prepayment of any Senior Indebtedness within six
months of such Asset Disposition, or (b) to investment in the business of the
Company and its Restricted Subsidiaries (including, without limitation, by
acquiring equity, other than Redeemable Stock, of the transferee of such Asset
Disposition) within six months of such Asset Disposition or, if such investment
is with respect to a project to be completed within a period greater than six
months from such Asset Disposition, then within the period of time necessary to
complete such project; PROVIDED, HOWEVER, that (x) in the case of applications
contemplated by clause (b), the Board of Directors has, within such six-month
period, adopted in good faith a resolution committing such excess proceeds to
such investment, (y) except as provided in the next sentence, none of such
excess proceeds shall be used to make any Restricted Payment or any payment in
respect of Subordinated Indebtedness and (z) to the extent not applied in
accordance with clauses (a) or (b) above, or if after being so applied there
remain excess net proceeds in an amount greater than $10 million, the Company
shall make a pro rata offer to all Holders to purchase Senior Debt Securities at
100% of principal amount, plus accrued and unpaid interest to the Asset
Disposition Payment Date (as defined below), up to an aggregate principal amount
equal to such excess net proceeds (the "Asset Disposition Offer Amount"). If
after being applied in accordance with clauses (a), (b) and (z) above there
remain excess net proceeds, the Company
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will apply such excess net proceeds to the general corporate purposes of the
Company or any Subsidiary of the Company. An offer to purchase Senior Debt
Securities required to be made pursuant to this covenant is an "Asset
Disposition Offer" and the date on which the purchase of Debt Securities
relating to any such Asset Disposition Offer is to be made is an "Asset
Disposition Payment Date."
Notwithstanding the foregoing, to the extent the Company or any of its
Restricted Subsidiaries receives securities or other non-cash property or assets
as proceeds of an Asset Disposition (other than equity in the transferee not
constituting Redeemable Stock), the Company shall not be required to make any
application required by the preceding paragraph until it receives cash proceeds
from a sale, repayment, exchange, redemption or retirement of or extraordinary
dividend or return of capital on such non-cash property, except that if and to
the extent the sum of all cash proceeds plus the fair market value of equity
(other than Redeemable Stock) in the transferee of such Asset Disposition
received at the time of such Asset Disposition is less than 70% of the fair
market value of the total proceeds of such Asset Disposition (with such fair
market value determined and evidenced in the same manner as stated in clause (i)
of the preceding paragraph), the amount of such deficiency (the "Deficiency
Amount") shall be applied as required by the preceding paragraph as if received
at the time of the Asset Disposition. Any amounts deferred pursuant to the
preceding sentence shall be applied in accordance with the preceding paragraph
when cash proceeds are thereafter received from a sale, repayment, exchange,
redemption or retirement of or extraordinary dividend or return of capital on
such non-cash property; PROVIDED, HOWEVER, that the Company shall not be
required to apply with respect to any equity interest in a transferee an amount
exceeding the fair market value attributable to such equity interest at the time
of the Asset Disposition; and PROVIDED, FURTHER, that if a Deficiency Amount was
applied pursuant to the exception contained in the preceding sentence, then once
the cumulative amount of applications made pursuant to the preceding paragraph
and this paragraph (including any Deficiency Amount) equals 100% of the fair
market value of the total proceeds of the Asset Disposition at the time of such
Asset Disposition, cash proceeds thereafter received from a sale, repayment,
exchange, redemption or retirement of or extraordinary dividend or return of
capital on such non-cash property shall not be required to be applied in
accordance with the preceding paragraph except to the extent such cash proceeds
exceed the Deficiency Amount.
Notice of an Asset Disposition Offer shall be mailed on behalf of the
Company by the Trustee to all Holders of Senior Debt Securities at their last
registered addresses not less than 30 days nor more than 60 days before the
Asset Disposition Payment Date, which shall be a date not more than 210 days
after the Asset Disposition giving rise to such Asset Disposition Offer. The
Asset Disposition Offer shall remain open from the time of the mailing of such
notice until not more than 5 Business Days before the Asset Disposition Payment
Date.
On the Asset Disposition Payment Date, the Company shall accept for payment
Senior Debt Securities or portions thereof tendered pursuant to the Asset
Disposition Offer in an aggregate principal amount equal to the Asset
Disposition Offer Amount or such lesser amount of Senior Debt Securities as
shall have been tendered, and deposit with the Paying Agent money sufficient to
pay the purchase price of all Senior Debt Securities or portions thereof so
accepted. If the aggregate principal amount of Senior Debt Securities tendered
exceeds the Asset Disposition Offer Amount, the Company shall select the Senior
Debt Securities to be purchased on a pro rata basis to the nearest $1,000 of
principal amount. The Paying Agent shall promptly mail or deliver to Holders of
Senior Debt Securities so accepted payment in an amount equal to the purchase
price, and the Company shall execute and the Trustee shall promptly authenticate
and mail or make available for delivery to such Holders a new Senior Debt
Security of the applicable series and equal in principal amount to any
unpurchased portion of the Senior Debt Security surrendered. The Company will
publicly announce the results of the Asset Disposition Offer.
The Company may not make an Asset Disposition Offer required under Section
1009 of the Company's 1991 Indenture (as hereinafter defined), the Company's
1994 Indentures (as hereinafter defined) or the Company's 1996 Indentures (as
hereinafter defined) in connection with a disposition of assets other than the
Collateral (as defined in the First Mortgage Note Indenture) unless the Company
shall have made an Asset Disposition Offer under the Senior Debt Securities
Indenture (and in respect of certain other Senior Indebtedness in accordance
with the following sentence) on a PRO RATA basis (in an aggregate amount equal
to the amount to be offered pursuant to the Asset Disposition Offer under the
1991 Indenture, the 1994 Indentures and the 1996 Indentures
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(and in accordance with Section 1009(g) of the 1994 Indentures and of the 1996
Indentures)) the closing date of which is prior to six months after the asset
disposition triggering the obligations of the Company under the 1991 Indenture,
the 1994 Indentures and/or the 1996 Indentures, as the case may be.
Notwithstanding the previous sentence, if on or after the date of the Senior
Debt Securities Indenture, the Company issues any Senior Indebtedness containing
a requirement that an offer be made to repurchase such Senior Indebtedness under
the same circumstances and in the same manner as provided in the Senior Debt
Securities Indenture, then (i) the Company may apply the Asset Disposition Offer
Amount (before any adjustment pursuant to this sentence) to the PRO RATA
purchase of Securities tendered hereunder and the Senior Indebtedness tendered
thereunder and (ii) the Asset Disposition Offer Amount available to repurchase
the Securities shall be reduced by the amount applied to the purchase of such
Senior Indebtedness; PROVIDED that this sentence shall only apply to (i) Senior
Indebtedness issued on or after the date of the Senior Debt Securities Indenture
that explicitly permits the PRO RATA purchase of Securities as described herein
and refers to the "Limitation on Asset Dispositions" covenant and any
Indebtedness outstanding at the date of the Senior Debt Securities Indenture
that is amended to explicitly permit the PRO RATA purchase of Securities as
described herein and refers to the "Limitation on Asset Dispositions" covenant.
In the event that the First Mortgage Notes are refinanced through a public or
private offering of Indebtedness constituting debt securities and the amount of
such refinancing Indebtedness is no greater than the principal amount of the
10 3/4% First Mortgage Notes due 2002 of the Company outstanding as of the date
of such refinancing, the Company need not comply with the requirement of the
first paragraph of this subsection in respect of an Asset Disposition involving
the collateral securing such Indebtedness (other than collateral granted in
respect of such Indebtedness pursuant to a negative pledge or similar provision
contained in the indenture or similar instrument relating to such Indebtedness)
to the extent that such compliance would constitute a default under such
indenture or similar instrument.
With respect to any Asset Disposition Offer, the Company intends to comply
with the requirements of Section 14(e) and Rule 14e-1 under the Exchange Act, if
applicable.
RESTRICTIONS ON MERGERS AND CONSOLIDATIONS AND SALES OF ASSETS
The Senior Debt Securities Indenture provides that the Company shall not
consolidate with, merge with or into any other corporation (whether or not the
Company shall be the surviving corporation), or sell, assign, transfer or lease
all or substantially all of its properties and assets as an entirety or
substantially as an entirety to any Person or group of affiliated Persons, in
one transaction or a series of related transactions, unless: (1) either the
Company shall be the continuing Person or the Person (if other than the Company)
formed by such consolidation or with which or into which the Company is merged
or the Person (or group of affiliated Persons) to which all or substantially all
the properties and assets of the Company are sold, assigned, transferred or
leased is a corporation (or constitute corporations) organized under the laws of
the United States or any State thereof or the District of Columbia and expressly
assumes, by an indenture supplemental to the Senior Debt Securities Indenture,
all the obligations of the Company under the Senior Debt Securities and the
Senior Debt Securities Indenture; (2) immediately before and after giving effect
to such transaction, no Event of Default, and no Default, with respect to the
Senior Debt Securities shall have occurred and be continuing; (3) immediately
after giving effect to such transaction on a pro forma basis, but prior to any
purchase accounting adjustments resulting from the transaction, the Consolidated
Net Worth of the Company (or of the surviving, consolidated or transferee entity
if the Company is not continuing, treating such entity as the Company for
purposes of determining Consolidated Net Worth) shall be at least equal to the
Consolidated Net Worth of the Company immediately before such transaction; (4)
immediately after giving effect to such transaction the Company (or the
surviving, consolidated or transferee entity if the Company is not continuing,
but treating such entity as the Company for purposes of making such
determination) would be permitted to incur an additional dollar of Indebtedness
(not constituting Permitted Indebtedness) immediately prior to such transaction
under the covenant contained in the Senior Debt Securities Indenture restricting
the incurrence of Indebtedness; PROVIDED, HOWEVER, that this clause (4) shall be
inapplicable if (a) such transaction would result in the occurrence of a Change
of Control or (b) immediately prior to giving effect to such transaction, the
Company would not be permitted to incur an additional dollar of Indebtedness
(not constituting Permitted Indebtedness) under such covenant, and immediately
after giving effect to such transaction on a pro
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forma basis (but prior to any purchase accounting adjustments resulting from the
transaction), the Consolidated Interest Coverage Ratio of the Company (or the
surviving, consolidated or transferee entity if the Company is not continuing,
treating such entity as the Company for purposes of determining the Consolidated
Interest Coverage Ratio) shall be at least equal to the Consolidated Interest
Coverage Ratio of the Company immediately before such transaction; and (5) the
Company shall have delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and
such supplemental indenture comply with the Senior Debt Securities Indenture.
Notwithstanding the foregoing, if clause (4) of the preceding sentence is
inapplicable by reason of clause (b) of the proviso thereto, and at the date
three months after the consummation of such transaction the rating ascribed to
the Senior Debt Securities of any series by Standard and Poor's Corporation or
Moody's Investors Service, Inc. shall be lower than the rating ascribed to the
Senior Debt Securities of any series prior to the public announcement of such
transaction, then the Company shall make an offer for the Senior Debt Securities
of each series at the same price and following the same procedures and
obligations as required with respect to a Change of Control (as if such date
three months after the giving effect to such transaction were the "Change of
Control Date"). See "Limitation on Future Incurrence of Indebtedness" above and
"Change of Control" below.
If, upon any consolidation or merger, or upon any sale, assignment, transfer
or lease, as provided in the preceding paragraph, any material property of the
Company or any Restricted Subsidiary or any shares of Capital Stock or
Indebtedness of any Restricted Subsidiary, owned immediately prior thereto,
would thereupon become subject to any Lien securing any indebtedness for
borrowed money of, or guaranteed by, such other corporation or Person (other
than any Permitted Lien), the Company, prior to such consolidation, merger,
sale, assignment, transfer or lease, will secure the due and punctual payment of
the principal of, and premium, if any, and interest on the Senior Debt
Securities of each series then Outstanding (together with, if the Company shall
so determine, any other Indebtedness of, or guaranteed by, the Company or any
Restricted Subsidiary and then existing or thereafter created) equally and
ratably with (or, at the option of the Company, prior to) the Indebtedness
secured by such Lien.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control (the "Change of Control Date")
and subject to the requirements of the next succeeding sentence, each Holder
shall have the right to require that the Company repurchase such Holder's Senior
Debt Securities pursuant to the offer described below (the "Change of Control
Offer") at a purchase price equal to 101% of the aggregate principal amount of
such Senior Debt Securities plus accrued and unpaid interest, if any, to the
date of such repurchase. If such repurchase would constitute an event of default
under Specified Bank Debt, then, prior to giving the notice to Holders provided
below, the Senior Debt Securities Indenture requires the Company to (1) repay in
full in cash such Specified Bank Debt or (2) obtain the requisite consent of
holders of such Specified Bank Debt to permit the repurchase of Senior Debt
Securities without giving rise to an event of default under such Specified Bank
Debt.
Promptly upon satisfaction of either one of the obligations, if then
applicable, described above, the Company shall mail a notice to each Holder of
Senior Debt Securities of each applicable series and the Trustee in respect of
the Change of Control Offer (which notice shall contain all instructions and
materials necessary to enable such Holders to tender Senior Debt Securities).
All Senior Debt Securities of each applicable series tendered will be accepted
for payment on a date (the "Change of Control Payment Date") which shall be no
earlier than 30 days nor later than 40 days from the date such notice is mailed,
but in any event prior to the date on which any Subordinated Indebtedness is
paid pursuant to the terms of a provision similar to the Change of Control Offer
covenant.
On the Change of Control Payment Date, the Company shall accept for payment
Senior Debt Securities of each applicable series or portions thereof tendered
pursuant to the Change of Control Offer, and deposit with the Paying Agent money
sufficient to pay the purchase price of all Senior Debt Securities of each
applicable series or portions thereof so accepted. The Paying Agent shall
promptly mail or deliver to the Holder of Senior Debt Securities of each
applicable series so accepted payment in an amount equal to the purchase price,
and the
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Trustee shall promptly authenticate and mail or make available for delivery to
such Holder a new Senior Debt Security of the same series as, and equal in
principal amount to, any unpurchased portion of the Senior Debt Security
surrendered. The Company will publicly announce the results of the Change of
Control Offer.
Whether a Change of Control has occurred depends entirely on the
accumulation of Common Stock of the Company and on certain changes in the
composition of the Company's Board of Directors. As a result, the Company can
enter into certain highly leveraged transactions, including certain
recapitalizations, mergers or stock repurchases, that would not result in the
application of the Change of Control provisions. With respect to any Change of
Control Offer, the Company shall comply with the requirements of Section 14(e)
and Rule 14e-1 under the Exchange Act, if then applicable.
RANKING OF SENIOR DEBT SECURITIES
The payment of the principal of, interest on and any other amounts due on
Subordinated Indebtedness will be subordinated in right of payment to the prior
payment in full of the Senior Debt Securities. The Senior Debt Securities are
senior to the Company's $150 million aggregate principal amount of 10 3/4%
Senior Subordinated Notes due June 15, 1997, $125 million aggregate principal
amount of 11% Senior Subordinated Notes due August 15, 1999, $200 million
aggregate principal amount of 10 3/4% Senior Subordinated Debentures due April
1, 2002, $59 million aggregate principal amount of 8 7/8% Convertible Senior
Subordinated Notes due July 15, 2000, and $45 million aggregate principal amount
of 6 3/4% Convertible Subordinated Debentures due February 15, 2007.
EVENTS OF DEFAULT AND NOTICE THEREOF
The following are Events of Default under the Senior Debt Securities
Indenture with respect to Senior Debt Securities of any series: (1) failure to
pay interest on any Senior Debt Securities of that series when due, continued
for 30 days; (2) failure to pay the principal of (or premium, if any, on) any
Senior Debt Securities of that series when due and payable at Maturity, upon
redemption, upon repurchase pursuant to a Deficiency Offer as described under
"Maintenance of Subordinated Capital Base" above, pursuant to an Asset
Disposition Offer as described under "Change of Control" above or otherwise; (3)
failure to observe or perform any other covenant, warranty or agreement
contained in the Senior Debt Securities of that series or in the Senior Debt
Securities Indenture (other than a covenant, agreement or warranty included in
the Senior Debt Securities Indenture solely for the benefit of Senior Debt
Securities other than that series), continued for a period of 60 days after
notice has been given to the Company by the Trustee or Holders of at least 25%
in aggregate principal amount of the Outstanding Senior Debt Securities of that
series; (4) failure to pay at final maturity, or acceleration of, Indebtedness
of the Company having an aggregate principal amount of not less than $25 million
(or, if less, the least amount contained in any similar provision of an
instrument governing any outstanding Subordinated Indebtedness of the Company,
but in no event less than $10 million), unless cured within 15 days after notice
has been given to the Company by the Trustee or Holders of at least 25% in
aggregate principal amount of the Outstanding Senior Debt Securities of that
series; (5) the entering against the Company of one or more judgments or decrees
involving an aggregate liability of $25 million or more unless vacated,
discharged, satisfied or stayed within 30 days of the entering of such judgments
or decrees; (6) certain events of bankruptcy, insolvency or reorganization
relating to the Company; and (7) any other Event of Default with respect to
Senior Debt Securities of that series specified in the Prospectus Supplement
relating thereto.
The Senior Debt Securities Indenture provides that the Trustee shall, within
30 days after the occurrence of any Default or Event of Default with respect to
Senior Debt Securities of any series, give the Holders of Senior Debt Securities
of that series notice of all uncured Defaults or Events of Default known to it
(the term "Default" to include the events specified above without grace or
notice); PROVIDED, HOWEVER, that, except in the case of an Event of Default or a
Default in payment on any Senior Debt Securities of any series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or 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 Senior Debt Securities of that series.
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If an Event of Default with respect to Senior Debt Securities of any series
(other than due to event of bankruptcy, insolvency or reorganization) occurs and
is continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Outstanding Senior Debt Securities of that series, by notice in
writing to the Company (and to the Trustee if given by the Holders of at least
25% in aggregate amount of Senior Debt Securities of that series), may declare
the unpaid principal of and accrued interest to the date of acceleration on all
the Outstanding Senior Debt Securities of that series to be due and payable
immediately and, upon any such declaration, the Senior Debt Securities of that
series shall become immediately due and payable.
If an Event of Default occurs due to bankruptcy, insolvency or
reorganization, all unpaid principal (without premium) of and accrued interest
on the Outstanding Senior Debt Securities of any series ipso facto becomes
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder of any Senior Debt Security of that series.
Any such declaration with respect to Senior Debt Securities of any series
may be annulled and past Events of Default and Defaults (except, unless
theretofore cured, an Event of Default or a Default, in payment of principal of
or interest on the Senior Debt Securities of that series) may be waived by the
Holders of a majority of the principal amount of the Outstanding Senior Debt
Securities, upon the conditions provided in the Senior Debt Securities
Indenture.
The Senior Debt Securities Indenture provides that the Company will
periodically file statements with the Trustee regarding compliance by the
Company with certain of the covenants thereof and specifying any Event of
Default or Defaults with respect to Senior Debt Securities of any series in
performing such covenants of which the signers may have knowledge.
MODIFICATION OF SENIOR DEBT SECURITIES INDENTURE; WAIVER
The Senior Debt Securities Indenture may be modified by the Company and the
Trustee without the consent of any Holders with respect to certain matters,
including (i) to cure any ambiguity, defect or inconsistency or to correct or
supplement any provision which may be inconsistent with any other provision of
the Senior Debt Securities Indenture and (ii) to make any change that does not
materially adversely affect the interests of any Holder of Senior Debt
Securities of any series. In addition, under the Senior Debt Securities
Indenture, certain rights and obligations of the Company and the rights of
Holders of the Senior Debt Securities may be modified by the Company and the
Trustee with the written consent of the Holders of at least a majority in
principal amount of the Outstanding Senior Debt Securities of each series
affected thereby; but no extension of the maturity of any Senior Debt Securities
of any series, reduction in the interest rate or extension of the time for
payment of interest, change in the optional redemption or repurchase provisions
in a manner adverse to any Holder of Senior Debt Securities of any series, other
modification in the terms of payment of the principal of or interest on any
Senior Debt Securities of any series, or reduction of the percentage required
for modification, will be effective against any Holder of any Outstanding Senior
Debt Security of any series affected thereby without his consent. The Senior
Debt Securities Indenture does not limit the aggregate amount of Senior Debt
Securities of the Company which may be issued thereunder.
The Holders of a majority in principal amount of the Outstanding Senior Debt
Securities of any series may on behalf of the Holders of all Senior Debt
Securities of that series waive, insofar as that series is concerned, compliance
by the Company with certain restrictive covenants of the Senior Debt Securities
Indenture. The Holders of not less than a majority in principal amount of the
Outstanding Senior Debt Securities of any series may on behalf of the Holders of
all Senior Debt Securities of that series waive any past Event of Default or
Default under the Senior Debt Securities Indenture with respect to that series,
except an Event of Default or a Default in the payment of the principal of or
premium, if any, or any interest on any Senior Debt Security of that series or
in respect of a provision which under the Senior Debt Securities Indenture
cannot be modified or amended without the consent of the Holder of each
Outstanding Senior Debt Security of that series affected.
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SATISFACTION AND DISCHARGE OF SENIOR DEBT SECURITIES INDENTURE; DEFEASANCE
The Company may terminate its substantive obligations in respect of Senior
Debt Securities of any series by delivering all Outstanding Senior Debt
Securities of that series to the Trustee for cancellation and paying all sums
payable by it on account of principal of and interest on all Senior Debt
Securities of that series or otherwise. The Company may terminate its
substantive obligations in respect of Senior Debt Securities of any series
(except for its obligations to pay the principal of (and premium, if any, on)
and the interest on the Senior Debt Securities of any series) by (i) depositing
with the Trustee, under the terms of an irrevocable trust agreement, money or
United States Government Obligations sufficient to pay all remaining
indebtedness on the Senior Debt Securities of that series, (ii) delivering to
the Trustee either an Opinion of Counsel or a ruling directed to the Trustee
from the Internal Revenue Service to the effect that the Holders of the Senior
Debt Securities of that series will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and termination of
obligations, and (iii) complying with certain other requirements set forth in
the Senior Debt Securities Indenture. In addition, the Company may terminate all
of its substantive obligations in respect of Senior Debt Securities of any
series (including its obligations to pay the principal of (and premium, if any,
on) and interest on the Senior Debt Securities of any series) by (i) depositing
with the Trustee, under the terms of an irrevocable trust agreement, money or
United States Government Obligations sufficient to pay all remaining
indebtedness on the Senior Debt Securities of that series, (ii) delivering to
the Trustee either a ruling directed to the Trustee from the Internal Revenue
Service to the effect that the Holders of the Senior Debt Securities of that
series will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and termination of obligations or an Opinion of
Counsel, based upon such a ruling or a change in the applicable federal tax law
since the date of the Senior Debt Securities Indenture, to such effect, and
(iii) complying with certain other requirements set forth in the Senior Debt
Securities Indenture.
THE TRUSTEE
Prior to the issuance of any Senior Debt Securities under the Senior Debt
Securities Indenture the Company will engage a qualified trustee to serve as
Trustee under the Senior Debt Securities Indenture. Any such Trustee will be an
"eligible trustee" under the Trust Indenture Act of 1939, as amended.
CERTAIN DEFINITIONS
For purposes of the Senior Debt Securities Indenture, certain defined terms
have the following meanings:
"11 1/2% NOTES" means the Company's 11 1/2% Senior Notes due 2004.
"11 1/2% NOTE INDENTURE" means the indenture dated as of October 12, 1994
between the Company and The Bank of New York, as Trustee, relating to the
11 1/2% Notes, as amended and supplemented to the date hereof and, unless
otherwise indicated, from time to time after the date hereof.
"1991 INDENTURE" means the indenture dated as of November 1, 1991 between
the Company and The Bank of New York, as Trustee, as amended and supplemented.
References to Indebtedness issued under the 1991 Indenture shall include any
Indebtedness issued thereunder.
"1994 INDENTURES" means (i) the 11 1/2% Note Indenture and (ii) the First
Mortgage Note Indenture. References to Indebtedness issued under the 1994
Indentures shall include any Indebtedness issued thereunder.
"1996 INDENTURES"means (i) the Rating Adjustable Note Indenture and (ii) the
SCFC Note Indenture. References to Indebtedness issued under the 1996 Indentures
shall include any Indebtedness issued thereunder.
"ACQUIRING PERSON" means any Person or group (as defined in Section 13(d)(3)
of the Exchange Act) who or which, together with all affiliates and associates
(as defined in Rule 12b-2 under the Exchange Act), becomes the beneficial owner
of shares of Common Stock of the Company having more than 50% of the total
number of votes that may be cast for the election of directors of the Company;
PROVIDED, HOWEVER, that an Acquiring Person shall not include (i) the Company,
(ii) any Subsidiary of the Company, (iii) any employee benefit plan of the
Company or
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any Subsidiary of the Company or any entity holding Common Stock of the Company
for or pursuant to the terms of any such plan, (iv) any descendant of Joseph
Stone or the spouse of any such descendant, the estate of any such descendant or
the spouse of any such descendant, any trust or other arrangement for the
benefit of any such descendant or the spouse of any such descendant or any
charitable organization established by any such descendant or the spouse of any
such descendant (collectively, the "Stone Family"), or (v) any group which
includes any member or members of the Stone Family and a majority of the Common
Stock of the Company held by such group is beneficially owned by such member or
members. Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to more than 50% or more of the Common
Stock of the Company then outstanding; PROVIDED, HOWEVER, that if a Person shall
become the beneficial owner of more than 50% or more of the Common Stock of the
Company then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the beneficial owner of any
additional shares of Common Stock of the Company, then such Person shall be
deemed to be an "Acquiring Person."
"ASSET DISPOSITION" means any sale, transfer, sale-leaseback or other
disposition of (i) shares of Capital Stock of a Restricted Subsidiary (other
than directors' qualifying shares) or (ii) property or assets of the Company or
any Restricted Subsidiary (other than a sale, transfer or other disposition of
Receivables and other assets or property described in clause (vi) of the
definition of Permitted Liens pursuant to a Receivables sale constituting
Indebtedness pursuant to clause (ii) of the definition thereof; PROVIDED,
HOWEVER, that an Asset Disposition shall not include any sale, transfer,
sale-leaseback or other disposition (a) of Collateral (as defined in the First
Mortgage Note Indenture while the First Mortgage Notes are outstanding), (b) by
a Restricted Subsidiary to the Company or to another Restricted Subsidiary or by
the Company to a Restricted Subsidiary, (c) of defaulted Receivables for
collection or (d) in the ordinary course of business, but shall include any
sale, transfer, sale-leaseback or other disposition by the Company or a
Restricted Subsidiary to an Unrestricted Subsidiary of the shares, property or
assets referred to in clauses (i) and (ii). The designation by the Company of a
Subsidiary of the Company as an "Unrestricted Subsidiary" shall constitute an
Asset Disposition of such Subsidiary's property and assets net of its
liabilities, unless the transfer of property and assets to such Subsidiary has
previously constituted an Asset Disposition.
"CHANGE OF CONTROL" means any event by which (i) an Acquiring Person has
become such or (ii) Continuing Directors cease to comprise a majority of the
members of the Board of Directors of the Company.
"CONSOLIDATED AMORTIZATION EXPENSE" means, for any period, the amortization
expense of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED CASH FLOW AVAILABLE FOR FIXED CHARGES" means, for any period,
(a) the sum of the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) Consolidated Income Tax Expense, (iv)
Consolidated Depreciation Expense, (v) Consolidated Amortization Expense and
(vi) other non-cash items reducing Consolidated Net Income, minus (b) non-cash
items increasing Consolidated Net Income, all as determined on a consolidated
basis for the Company and its Restricted Subsidiaries in accordance with GAAP.
"CONSOLIDATED DEPRECIATION EXPENSE" means, for any period, the depreciation
expense of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED FREE CASH FLOW" means, for any period, (a) the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Depreciation Expense and (iii) Consolidated Amortization Expense, MINUS (b) the
sum of (i) Restricted Payments (as defined under the subsection entitled
"Dividend Restrictions" above) during such period, (ii) net reduction during
such period in Indebtedness of the Company and its Restricted Subsidiaries
(other than as a result of Asset Dispositions, Collateral Asset Dispositions (as
defined in the First Mortgage Note Indenture) or Collateral Loss Events (as
defined in the First Mortgage Note Indenture)) and (iii) the excess (but not the
deficit) of capital expenditures of the Company and its Restricted Subsidiaries
for such period not financed pursuant to clause (vi) of the definition of
Permitted Indebtedness over Consolidated Depreciation Expense.
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"CONSOLIDATED INCOME TAX EXPENSE" means, for any period, the aggregate of
the income tax expense of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, for any period, the ratio of
(i) Consolidated Cash Flow Available for Fixed Charges to (ii) Consolidated
Interest Expense.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the interest expense
(including the interest component of all Capitalized Lease Obligations and the
earned discount or yield with respect to a Receivables sale constituting
Indebtedness) of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; PROVIDED, HOWEVER,
that, with respect to revolving credit, revolving Receivables purchases or other
similar arrangements, the interest expense in respect thereof for any period
shall be the PRO FORMA interest expense attributable to all amounts committed
during such period under such revolving credit, revolving Receivables purchases
or other similar arrangements, whether or not such amounts were actually
outstanding during such period, in accordance with the terms thereof, in each
case on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or loss) of
the Company and its Restricted Subsidiaries on a consolidated basis for such
period taken as a single accounting period, determined in accordance with GAAP;
PROVIDED, HOWEVER, that: (a) there shall be excluded therefrom (i) the net
income (or loss) of any Person (other than the Company) which is not a
Restricted Subsidiary, except to the extent of the amount of dividends or other
distributions actually paid in cash or tangible property or tangible assets
(such property or assets to be valued at their fair market value net of any
obligations secured thereby) to the Company or any of its Restricted
Subsidiaries by such Person during such period, (ii) except to the extent
includable pursuant to the foregoing clause (i), the net income (or loss) of any
Person accrued prior to the date it becomes a Restricted Subsidiary or is merged
into or consolidated with the Company or any of its Restricted Subsidiaries or
that Person's property or assets are acquired by the Company or any of its
Restricted Subsidiaries, (iii) the net income of any Restricted Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
by that Restricted Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary and (iv) the excess (but not the deficit), if any, of (x)
any gain which must be treated as an extraordinary item under GAAP or any gain
realized upon the sale or other disposition of any asset that is not sold in the
ordinary course of business or of any Capital Stock of a Restricted Subsidiary
over (y) any loss which must be treated as an extraordinary item under GAAP or
any loss realized upon the sale or other disposition of any asset that is not
sold in the ordinary course of business or of any Capital Stock of a Restricted
Subsidiary; and (b) there shall be included therein the amount of cash realized
by the Company or any of its Restricted Subsidiaries during such period on
account of dividends or other distributions theretofore paid in other than cash
or tangible property or tangible assets by a Person which is not a Restricted
Subsidiary.
"CONSOLIDATED NET WORTH" means the amount which at any date of
determination, in conformity with GAAP consistently applied, would be set forth
under the caption "stockholders' equity" (or any like caption) on the
consolidated balance sheet of the Company and its Restricted Subsidiaries,
exclusive of amounts attributable to Redeemable Stock (at such times as no
Indebtedness is outstanding under the 1991 Indenture, excluding the effects of
foreign currency translation adjustments). If the Company has changed one or
more of the accounting principles used in the preparation of Its financial
statements because of a change mandated by the Financial Accounting Standards
Board or its successor, then Consolidated Net Worth shall mean the Consolidated
Net Worth the Company would have had if the Company had continued to use those
generally accepted accounting principles employed on November 1, 1991.
"CONTINENTAL GUARANTY" means the Guaranty dated as of October 7, 1983
between The Continental Group, Inc. and the Company, as amended from time to
time.
"CONTINUING DIRECTOR" means any member of the Board of Directors, while such
person is a member of such Board of Directors, who is not an Acquiring Person,
or an affiliate or associate of an Acquiring Person or a
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representative of an Acquiring Person or of any such Affiliate or associate and
who (a) was a member of the Board of Directors prior to November 1, 1991, or (b)
subsequently becomes a member of such Board of Directors and whose nomination
for election or election to such Board of Directors was or is recommended or
approved by resolution of a majority of the Continuing Directors or who is
included as a nominee in a proxy statement of the Company distributed when a
majority of such Board of Directors consists of Continuing Directors.
"CREDIT AGREEMENTS" means (i) the credit agreement, dated as of March 1,
1989, by and among the Company, the financial institutions signatory thereto,
Bankers Trust Company, as agent for such financial institutions, and Citibank,
N.A., Chemical Bank (as successor by merger to Manufacturers Hanover Trust
Company) and The First National Bank of Chicago, as co-agents for such financial
institutions, as amended, modified, refinanced (including, without limitation,
by the New Credit Agreement) or extended from time to time, (ii) the credit
agreement, dated as of March 1, 1989, by and among Stone Canada, the financial
institutions signatory thereto, Bankers Trust Company, as agent for such
financial institutions, and Citibank, N.A., Chemical Bank (as successor by
merger to Manufacturers Hanover Trust Company) and The First National Bank of
Chicago, as co-agents for such financial institutions, as amended, modified,
refinanced (including, without limitation, by the New Credit Agreement) or
extended from time to time and (iii) the revolving credit agreement, dated as of
March 1, 1989, by and among Stone Canada, the financial institutions signatory
thereto, BT Bank of Canada, as administrative agent, The Bank of Nova Scotia, as
payment agent, and Bankers Trust Company, as collateral agent, as amended,
modified, refinanced (including, without limitation, by the New Credit
Agreement) or extended from time to time.
"FIRST MORTGAGE NOTES" means the Company's 10 3/4% First Mortgage Notes due
2002.
"FIRST MORTGAGE NOTE INDENTURE" means the indenture dated as of October 12,
1994 between the Company and Norwest Bank Minnesota, National Association, as
Trustee, relating to the First Mortgage Notes, as amended and supplemented.
"GAAP" means generally accepted accounting principles, as in effect as of
November 1, 1991 in the United States of America, set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
is approved by a significant segment of the accounting profession.
"INDEBTEDNESS" means (without duplication), with respect to any Person, (i)
any obligation of such Person to pay the principal of, premium, if any, interest
on, penalties, reimbursement or indemnification amounts, fees, expenses or other
amounts relating to any indebtedness, and any other liability, contingent or
otherwise, of such Person (A) for borrowed money or the deferred purchase price
of property or services (excluding trade payables and payables, indebtedness,
obligations and other liabilities of the Company to any Restricted Subsidiary or
of any Restricted Subsidiary to the Company or to any other Restricted
Subsidiary), whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof; (B) for any letter of credit
for the account of such Person supporting other obligations of such Person
described in this definition; or (C) for the payment of money relating to a
Capitalized Lease Obligation; (ii) the unrecovered investment of a purchaser
(other than the Company or any of its Restricted Subsidiaries) of such Person's
Receivables pursuant to a Receivables purchase facility or otherwise (whether or
not characterized as a sale of such Receivables or a secured loan, but excluding
any disposition of Receivables in connection with a disposition of fixed assets
or a business of such Person and any disposition of defaulted Receivables for
collection), together with any obligation of such Person to pay any discount,
interest, fees, indemnification amounts, penalties, recourse on account of the
uncollectability of Receivables, expenses or other amounts in connection
therewith; (iii) any obligation of another Person (other than a Restricted
Subsidiary of such Person) of the kind described in the preceding clause (i) or
(ii), which the Person has guaranteed or which is otherwise its legal liability;
(iv) any obligation of another Person (other than a Restricted Subsidiary of
such Person) of the kind described in the preceding clause (i) or (ii) secured
by a Lien to which the property or assets of such Person are subject, whether or
not the obligation secured thereby shall have been assumed by or shall otherwise
be such Person's legal liability; and (v) any renewals, extensions or refundings
of any of the foregoing described in any of the preceding clauses (i), (ii),
(iii) and (iv). The "amount" or "principal
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amount" of Indebtedness of any Person at any date, as used herein, shall be the
outstanding principal amount at such date of all unconditional Indebtedness, the
maximum principal amount of any contingent Indebtedness or the unrecovered
purchaser's investment in a sale of Receivables, in each case at such date and
without taking into account any premium, interest, penalties, reimbursement or
indemnification amounts, fees, expenses or other amounts (other than principal
or unrecovered purchaser's investment) in respect thereof; PROVIDED, HOWEVER,
that (y) with respect to Indebtedness described in clause (iv) above, the amount
of Indebtedness shall be the lesser of (a) the amount of the Indebtedness of
such other Person that is secured by the property or assets of such Person and
(b) the fair market value of the property or assets securing such Indebtedness,
and (z) with respect to revolving credit, revolving Receivables purchases or
other similar arrangements, the amount of Indebtedness thereunder shall be the
amounts of such commitments as of the date of determination.
"NEW CREDIT AGREEMENT" means the credit agreement, dated as of October 12,
1994, by and among the Company, the financial institutions signatory thereto and
Bankers Trust Company, as agent for such financial institutions, as amended,
modified, refinanced or extended from time to time, including without
limitation, as amended and restated as of March 22, 1996.
"ORDINARY COURSE OF BUSINESS LIENS" means, with respect to any Person,
(i) Liens for taxes, assessments, governmental charges, levies or claims
not yet delinquent or being contested in good faith;
(ii) statutory Liens of landlords, carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen or other like Liens arising in the ordinary
course of business (including the construction of facilities) or deposits to
obtain the release of such Liens;
(iii) Liens in connection with workers' compensation, unemployment insurance
and other similar legislation;
(iv) zoning restrictions, licenses, easements, rights-of-way and other
similar charges or encumbrances or restrictions not interfering in any material
respect with the business of such Person or any of its Subsidiaries;
(v) Liens securing such Person's obligations with respect to commercial
letters of credit;
(vi) Liens to secure public or statutory obligations of such Person;
(vii) judgment and attachment Liens against such Person not giving rise to a
Default under the Debt Securities of any series or Liens created by or existing
from any litigation or legal proceeding against such Person which is currently
being contested in good faith by such Person in appropriate proceedings;
(viii) leases or subleases granted to other Persons or existing on property
acquired by such Persons;
(ix) Liens encumbering property or assets of such Person under construction
arising from progress or partial payments;
(x) Liens encumbering customary initial deposits and margin accounts and
other Liens securing obligations arising out of Interest Swap Obligations,
Currency Agreements and Commodities Agreements, in each case of the type
typically securing such obligations; PROVIDED, HOWEVER, that if such Interest
Swap Obligations, Currency Agreements and Commodities Agreements relate to
Indebtedness not incurred in violation of the Senior Debt Securities Indenture,
such Lien may also cover the property and assets securing the Indebtedness to
which such Interest Swap Obligations, Currency Agreements and Commodities
Agreements relate;
(xi) Liens encumbering deposits made to secure obligations arising from
public, statutory, regulatory, contractual or warranty requirements or
obligations of such Person or its Subsidiaries (not constituting Indebtedness);
(xii) Liens arising from filing UCC financing statements regarding leases or
consignments;
(xiii) purchase money Liens securing payables (not constituting
Indebtedness) arising from the purchase by such Person or any of its Affiliates
of any equipment or goods in the ordinary course of business;
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(xiv) Liens arising out of consignment or similar arrangement for the sale
of goods entered into by such Person or any of its Subsidiaries in the ordinary
course of business;
(xv) Liens in the ordinary course of business granted by such Person to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, or progress payments, performance and
return-of-money bonds and other similar obligations (not constituting
Indebtedness);
(xvi) Liens in favor of collecting banks constituting a right of set-off,
revocation, refund or chargeback with respect to money or instruments of the
Company or any Subsidiary on deposit with or in the possession of such bank; and
(xvii)Liens in favor of customs and revenue authorities.
"PERMITTED EXISTING INDEBTEDNESS OF AN ACQUIRED PERSON" means Indebtedness
of any Person (which may be assumed or guaranteed by, or may otherwise become
the legal liability of, the Company or any Restricted Subsidiary with or into
which such Person is merged or consolidated) existing at the time such Person
becomes a Restricted Subsidiary, or is merged with or into or consolidated with
the Company or one of its Restricted Subsidiaries, so long as such Indebtedness
was not created in anticipation of or as a result of such Person becoming a
Restricted Subsidiary or of such merger or consolidation, and any Indebtedness
to the extent exchanged for, or the net proceeds of which are used to refinance,
redeem or defease, such Indebtedness (or any extension, renewal or refinancing
thereof), or to finance any costs incurred in connection with such exchange,
refinancing, redemption or defeasance; PROVIDED, HOWEVER, that the proceeds of
such Indebtedness shall be used to so refinance, redeem or defease the
Indebtedness within 12 months of the incurrence of such subsequent Indebtedness.
"PERMITTED INDEBTEDNESS" means (i)(a) any Indebtedness in a principal amount
not exceeding the principal amount outstanding or committed under the Credit
Agreements (including any letter of credit facility thereunder) as of November
1, 1991 PLUS two hundred fifty million dollars ($250,000,000), and LESS the sum
of (x) proceeds from the sale of all Indebtedness under the 1991 Indenture
issued from time to time that are applied to repay Indebtedness under the Credit
Agreements and (y) the proceeds from the sale of the 11 1/2% Notes, the First
Mortgage Notes, Indebtedness under the 1996 Indentures and the Senior Debt
Securities of any series; (b) any Indebtedness in a principal amount not
exceeding 80% of the aggregate face amount of Receivables of the Company and its
Restricted Subsidiaries (measured as of the latest date as of which information
regarding Receivables is available) and constituting Indebtedness described in
clause (ii) of the definition of Indebtedness or outstanding pursuant to any
other revolving credit facility; (c) any Indebtedness under the 1991 Indenture
issued prior to the date of the Senior Debt Securities Indenture the proceeds of
which have been used to repay Indebtedness under the Credit Agreements within
five Business Days after such issuance (and any subsequent Indebtedness the
proceeds of which are used to refinance such Indebtedness) and (d) the First
Mortgage Notes, the 11 1/2% Notes, Indebtedness under the 1996 Indentures and
the Senior Debt Securities of any series (and any subsequent Indebtedness the
proceeds of which are used to refinance such Indebtedness); PROVIDED, HOWEVER,
that:
(1) the aggregate principal amount permitted to be outstanding under
clause (a) shall be reduced by the aggregate amount of any repayments or
prepayments of any Senior Indebtedness (other than the 11 1/2% Notes, the
First Mortgage Notes, any Senior Debt Securities of any series and
Indebtedness issued under the 1991 Indenture or the 1996 Indentures) out of
the proceeds of Asset Dispositions as described under "LIMITATION ON ASSET
DISPOSITIONS" above and, thereafter, shall be increased if, at the end of
the fourth consecutive complete fiscal quarter after the initial reduction
pursuant to this clause (1) or at any anniversary of the end of such fourth
fiscal quarter, the Consolidated Free Cash Flow of the Company for the
preceding four quarters has been zero or greater, in which event the amount
of the increase shall be the amount by which the consolidated capital
expenditures of the Company and its Restricted Subsidiaries not financed by
Indebtedness referred to in clause (vi) of this definition during such
four-quarter period exceeds Consolidated Depreciation Expense for such
period (provided any such increase shall be made only to the extent all such
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reductions occurring prior to the four fiscal quarters for which such
calculation of Consolidated Free Cash Flow has been made exceed all prior
increases pursuant to this clause (1));
(2) (A) the aggregate amount permitted to be incurred under clause (a)
shall be reduced by the principal amount outstanding under the New Credit
Agreement on the date of the Senior Debt Securities Indenture net of
subsequent reductions thereof, and (B) the aggregate amount permitted to be
incurred under clause (b) shall be reduced by the principal amounts
outstanding under the Master Trust Indenture and Security Agreement among
Stone Receivable Corporation, Marine Midland Bank, as trustee, and Bankers
Trust Company, as administrative agent (the "SRC Master Trust Indenture");
(3) the Permitted Indebtedness contemplated by this clause (i) may be
incurred by the Company and, in the case of Permitted Indebtedness
constituting Indebtedness under clause (ii) of the definition of
Indebtedness, by the Company or any Restricted Subsidiary; and
(4) any Restricted Subsidiary in the Stone Canada Group may incur,
assume or guarantee any Indebtedness under clauses (i)(a) and (i)(b) above
under any revolving credit facilities of Restricted Subsidiaries in the
Stone Canada Group entered into pursuant to this clause (i), for which the
aggregate amount committed thereunder does not exceed two hundred million
dollars ($200,000,000), to finance the working capital of Restricted
Subsidiaries in the Stone Canada Group;
(ii) Permitted Subordinated Indebtedness;
(iii) Permitted Refinancing Indebtedness;
(iv) Permitted Stone Canada Indebtedness;
(v) Permitted Existing Indebtedness of an Acquired Person;
(vi) Indebtedness incurred for the purpose of acquiring Capital Stock of
another Person, or assets comprising a business or line of business or
intangible assets or acquiring, constructing or improving fixed assets, in each
case related primarily to, or used in connection with, the paper or forest
products businesses and which (a) constitutes all or a portion of (but not more
than) the purchase price of such Capital Stock or assets (such purchase price
including any Indebtedness assumed or repaid in connection with such purchase)
or the cost of construction or improvement of such assets (together with any
transaction costs relating to such purchase, construction or improvement), (b)
is incurred prior to, at the time of or within 270 days after the acquisition,
construction or improvement of such assets for the purpose of financing the
purchase price of such Capital Stock or assets or the cost of construction or
improvement thereof (together with any transaction costs relating to such
purchase, construction or improvement) and (c) is the direct or guaranteed
obligation of any of (1) the Company, (2) a Restricted Subsidiary formed for the
purpose of acquiring such Capital Stock or assets (and having no material assets
other than assets to be used for such acquisition), (3) any Person comprised
within the acquired assets or (4) in the case of the construction or improvement
of fixed assets, the Restricted Subsidiary which will own such assets, or any
extension, renewal or refinancing of such Indebtedness; PROVIDED, HOWEVER, that
the amount so extended, renewed or refinanced shall not exceed the principal
amount outstanding on the date of such extension, renewal or refinancing, PLUS
costs incurred in connection with any such extension, renewal or refinancing (it
being understood that any fixed assets included within capital expenditures
which increased Indebtedness permitted under clause (i) of the definition of
Permitted Indebtedness pursuant to clause (1) to the proviso to such clause may
not be financed pursuant to this clause (vi));
(vii) Indebtedness in an aggregate principal amount not to exceed three
hundred million dollars ($300,000,000) at any one time outstanding; PROVIDED,
HOWEVER, that no Restricted Subsidiary may incur Indebtedness under this clause
(vii) to the extent that after the incurrence of such Indebtedness the sum
(without duplication) of (x) all Indebtedness of Restricted Subsidiaries
incurred under this clause (vii), PLUS (y) Indebtedness and other obligations
then secured pursuant to clause (xii) of the definition of Permitted Liens, PLUS
(z) the amount of Indebtedness that was not incurred pursuant to clause (i)(b)
of this definition and is secured pursuant to clause (vi) of the definition of
Permitted Liens shall not exceed three hundred million dollars ($300,000,000);
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(viii) Indebtedness of the Company in an aggregate principal amount not to
exceed two hundred fifty million dollars ($250,000,000) at any one time
outstanding;
(ix) any Interest Swap Obligation, Currency Agreement or Commodities
Agreement relating to Indebtedness that was not incurred in violation of the
terms of the Senior Debt Securities Indenture; and
(x) Indebtedness to finance an increase in the working capital of any Person
or Persons that (a) are organized under the laws of a jurisdiction other than
the United States or any subdivision thereof and (b) became Restricted
Subsidiaries after November 1, 1991; PROVIDED, HOWEVER, that Indebtedness
pursuant to this clause (x) is the obligation of the Company or such Person or
Persons.
"PERMITTED LIENS" means, with respect to any Person,
(i) Ordinary Course of Business Liens;
(ii) Liens upon property or assets acquired or constructed by such Person or
any Affiliate after November 1, 1991 or constituting improvements after November
1, 1991 to property or assets; PROVIDED, HOWEVER, that (a) any such Lien is
created solely for the purpose of securing Indebtedness representing, or
incurred to finance or refinance, the purchase price (such purchase price
including any Indebtedness assumed or repaid in connection with such purchase)
or cost of construction of the property or assets subject thereto or of such
improvement, (b) the principal amount of the Indebtedness secured by such Lien
does not exceed 100% of such purchase price or cost (together with any
transaction costs relating to such purchase, construction or improvement), (c)
such Lien does not extend to or cover any other property or assets other than
such property, assets, improvement and any other improvements thereon (or, in
the case of any construction or improvement, any substantially unimproved real
property on which the property is constructed or the improvement is located) and
(d) the occurrence of such Indebtedness is permitted by clause (vi) of the
definition of Permitted Indebtedness;
(iii) Liens securing obligations with respect to letters of credit (other
than commercial letters of credit) to the extent the obligations supported by
such letters of credit may be secured without violating the limitation on lien
described under "LIMITATION ON FUTURE LIENS AND GUARANTEES;"
(iv) Liens covering property subject to any Capitalized Lease Obligation or
other lease which was not entered into in violation of the Senior Debt
Securities Indenture securing the interest of the lessor or other Person under
such Capitalized Lease Obligation or other lease;
(v) Liens securing obligations to a trustee pursuant to the compensation and
indemnity provisions of any indenture (including the Senior Debt Securities
Indenture) and Liens securing obligations to a trustee or agent with respect to
collateral for any Indebtedness;
(vi) Liens created in connection with a disposition of Receivables (whether
or not characterized as a sale of such Receivables or a secured loan) not
prohibited by the Senior Debt Securities Indenture on (a) such Receivables, (b)
collateral securing such Receivables, (c) goods or services, the sale, lease or
furnishing of which gave rise to such Receivables, (d) books and records
relating to such Receivables, (e) agreements or arrangements supporting or
securing such Receivables and (f) incidental property and assets relating to any
of the foregoing; PROVIDED, HOWEVER, that the aggregate amount at any time of
Indebtedness that is secured pursuant to this clause (vi) and was not incurred
pursuant to clause (i)(b) of the definition of Permitted Indebtedness, shall at
no time exceed (x) three hundred million dollars ($300,000,000) LESS (y) the sum
of Indebtedness and other obligations then secured pursuant to clause (xii) of
this definition PLUS the then outstanding principal amount of Indebtedness of
Restricted Subsidiaries incurred under clause (vii) of the definition of
Permitted Indebtedness (and not secured pursuant to this clause (vi) or such
clause (xii));
(vii) Liens upon property or assets of the Company created in substitution
and exchange for a Permitted Lien upon other property or assets of the Company
or any of its Subsidiaries and Liens upon property or assets of any Subsidiaries
of the Company created in substitution and exchange for a Permitted Lien upon
other property or assets of any Subsidiaries of the Company; PROVIDED, HOWEVER,
that (a) such Permitted Lien is released contemporaneously with the creation of
the Lien in substitution therefor, (b) the fair market value of the property or
assets
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with respect to the Lien so released is substantially the same as the fair
market value of the property or assets subject to the Lien created in
substitution therefor and (c) no Lien may be placed on property or assets of the
Company or a Restricted Subsidiary in substitution and exchange for a Lien upon
property or assets of an Unrestricted Subsidiary;
(viii) Liens upon property or assets of a Subsidiary of a Person securing
Indebtedness of such Person or of such Subsidiary, which Liens are created in
substitution and exchange for an outstanding pledge by such Person of a majority
of the Capital Stock of such Subsidiary for the purpose of securing such
Indebtedness (or a guaranty in respect thereof); PROVIDED, HOWEVER, that if the
property and assets of such Subsidiary to be subjected to such Liens have a fair
market value in excess of twenty-five million dollars ($25,000,000), such
Subsidiary shall have guaranteed the obligations of the Company in respect of
the Senior Debt Securities and, if requested by the Trustee, such Subsidiary
shall have waived all its rights of subrogation and reimbursement from the
Company in connection with such guaranty;
(ix) Liens upon any property or assets (a) existing at the time of
acquisition thereof by the Company or any Subsidiary, (b) of a Person existing
at the time such Person is merged with or into or consolidated with the Company
or any Subsidiary of the Company or existing at the time of a sale or transfer
of any such property or assets of such Person to the Company or any Subsidiary
of the Company or (c) of a Person existing at the time such Person becomes a
Subsidiary of the Company; PROVIDED, HOWEVER, that such Liens shall not have
been created in contemplation of such sale, merger, consolidation, transfer or
acquisition;
(x) Liens existing at November 1, 1991;
(xi) (a) Liens upon any property or assets of the Company and its Restricted
Subsidiaries securing Indebtedness under the Credit Agreements in a principal
amount not exceeding the principal amount outstanding or committed under the
Credit Agreements (including any letter of credit facility, but without
duplication with respect to commitments for loans the use of proceeds of which
is restricted to repayment of other Indebtedness under the Credit Agreements) as
of November 1, 1991 LESS (y) the proceeds from the sale of all Indebtedness
under the 1991 Indenture issued from time to time that are or have been applied
to repay Indebtedness under the Credit Agreements and PLUS (z) two hundred fifty
million dollars ($250,000,000) and (b) Liens securing Indebtedness permitted by
clause (i) of the definition of Permitted Indebtedness upon property or assets
that as of November 1, 1991 secured the Credit Agreements or the SRC Master
Trust Indenture;
(xii) Liens securing Indebtedness or other obligations of the Company and
its Restricted Subsidiaries not to exceed an aggregate principal amount of three
hundred fifty million dollars ($350,000,000) LESS, at any time, the sum of (y)
the then outstanding principal amount of Indebtedness of Restricted Subsidiaries
incurred under clause (vii) of the definition of Permitted Indebtedness (and not
secured pursuant to this clause (xii) or clause (vi) of this definition) PLUS
(z) the amount of Indebtedness secured pursuant to clause (vi) of this
definition and not incurred pursuant to clause (i)(b) of the definition of
Permitted Indebtedness;
(xiii) Liens upon property or assets of a Subsidiary securing Indebtedness
or other obligations owing to the Company;
(xiv) Liens on proceeds of any property or assets subject to a Lien
permitted by the other clauses of this definition;
(xv) any equal and ratable Lien that is granted pursuant to the Continental
Guaranty and that relates to a Lien that otherwise constitutes a Permitted Lien;
(xvi) Liens on property or assets used to defease Indebtedness that was not
incurred in violation of the Senior Debt Securities Indenture;
(xvii)Liens on property or assets of any Restricted Subsidiary organized
under the laws of a jurisdiction other than the United States or any subdivision
thereof securing Indebtedness of such Restricted Subsidiary outstanding as of
November 1, 1991 (or any extension, renewal or refinancing thereof);
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(xviii)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 (i) through (xvii) (covering the same property and assets as
such Lien); and
(xix) Permitted Collateral Liens (as defined in the First Mortgage Note
Indenture);
PROVIDED, HOWEVER, that no Lien described in any of the foregoing clauses other
than clause (xi)(a) shall encumber the rights of the Company with respect to
Indebtedness, obligations and other liabilities owed to the Company by any
Restricted Subsidiary or to any Restricted Subsidiary by the Company or another
Restricted Subsidiary.
"PERMITTED REFINANCING INDEBTEDNESS" means Indebtedness of (i) the Company
to the extent exchanged for, or the net proceeds of which are used to refinance,
redeem or defease, Indebtedness of the Company or any Restricted Subsidiary (or
any extension, renewal or refinancing thereof) outstanding at the time of
incurrence of such subsequent Indebtedness, or to finance any costs incurred in
connection with any such exchange, refinancing, redemption or defeasance, (ii) a
Restricted Subsidiary to the extent exchanged for, or the net proceeds of which
are used to refinance, redeem or defease, Indebtedness of such Restricted
Subsidiary (or any extension, renewal or refinancing thereof) outstanding at the
time of incurrence of such subsequent Indebtedness, or to finance any costs
incurred in connection with any such exchange, refinancing, redemption or
defeasance, or (iii) the Company or a Restricted Subsidiary to the extent
exchanged for, or the net proceeds of which are used to refinance, redeem or
defease, any then outstanding industrial revenue or development bonds that were
outstanding at November 1, 1991 (or any extension, renewal or refinancing
thereof), or to finance any costs incurred in connection with such exchange,
refinancing or defeasance; PROVIDED, HOWEVER, that, in the case of (i), (ii) or
(iii), the proceeds of such Indebtedness shall be used to so refinance, redeem
or defease the Indebtedness within 12 months of the incurrence of such
subsequent Indebtedness; and PROVIDED, FURTHER, that the only Indebtedness which
may be subject to exchange, refinancing, redemption, or defeasance pursuant to
clause (i), (ii) or (iii) of this definition shall be Indebtedness outstanding
as of November 1, 1991 (other than Indebtedness under the Credit Agreements,
Subordinated Indebtedness and Indebtedness under lines of credit) or any
extension, renewal or refinancing thereof, and Indebtedness that was incurred
after November 1, 1991 and before the date of the Senior Debt Securities
Indenture (other than solely as Permitted Indebtedness under the 1991 Indenture)
or is incurred after the date of the Senior Debt Securities Indenture (other
than solely as Permitted Indebtedness).
"PERMITTED STONE CANADA INDEBTEDNESS" means Indebtedness of the Company or a
Restricted Subsidiary in the Stone Canada Group outstanding pursuant to lines of
credit in an aggregate principal amount not to exceed one hundred million
dollars ($100,000,000), (of which not more than Canadian sixty million dollars
(Cn.$60,000,000) may be owed by Restricted Subsidiaries in the Stone Canada
Group) at any one time outstanding or pursuant to any extension, renewal or
refinancing of such outstanding amount PLUS any costs incurred in connection
with any such extension, renewal or refinancing; PROVIDED, HOWEVER, that the
aggregate principal amount permitted to be incurred under this definition shall
be reduced by the principal amount under lines of credit outstanding on the date
of the Senior Debt Securities Indenture net of subsequent repayments or
reductions thereof.
"PERMITTED SUBORDINATED INDEBTEDNESS" means (i) Subordinated Indebtedness of
the Company to the extent exchanged for, or the net proceeds of which are used
to refinance, redeem or defease, then outstanding Subordinated Indebtedness of
the Company that was outstanding at November 1, 1991 (or any extension, renewal
or refinancing thereof), or to finance any costs incurred in connection with any
such exchange, refinancing, redemption or defeasance; PROVIDED, HOWEVER, that
(a) such Subordinated Indebtedness does not have a shorter weighted average life
than that then remaining for, or a maturity earlier than that of, the
Indebtedness so exchanged, refinanced, redeemed or defeased, EXCEPT that in the
case of any exchange, such Subordinated Indebtedness may have a maturity that is
earlier (but not more than six months earlier) than that of the Indebtedness so
exchanged, PROVIDED that the Subordinated Indebtedness shall have the same or a
longer weighted average life than that then remaining for the Indebtedness so
exchanged and (b) in the case of refinancings, redemptions or defeasances, the
proceeds of such Subordinated Indebtedness shall be used to so refinance, redeem
or defease the Indebtedness within 12 months of the incurrence of such
subsequent Subordinated
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Indebtedness; and (ii) Indebtedness of the Company in an aggregate principal
amount not to exceed two hundred fifty million dollars ($250,000,000) at any one
time outstanding, so long as such Indebtedness (a) constitutes Subordinated
Indebtedness and (b) does not have (A) a weighted average life that is shorter
than that then remaining for (1) the Company's 9 7/8% Senior Notes due 2001 then
outstanding, (2) the 11 1/2% Notes then outstanding or (3) the Senior Debt
Securities of any series then Outstanding or (B) a maturity that is earlier than
the latest maturity of (1) the Company's 9 7/8% Senior Notes due 2001 then
outstanding, (2) the 11 1/2% Notes then outstanding or (3) the Senior Debt
Securities of any series then Outstanding.
"RATING ADJUSTABLE NOTES" means the Company's Rating Adjustable Senior Notes
due 2016.
"RATING ADJUSTABLE NOTE INDENTURE" means the indenture dated as of July 24,
1996, as amended and supplemented by the First Supplemental Indenture dated July
24, 1996, between the Company and The Bank of New York, as Trustee, relating to
the Rating Adjustable Notes, as amended and supplemented to the date hereof and,
unless otherwise indicated, from time to time after the date hereof.
"RECEIVABLES" means receivables, chattel paper, instruments, documents or
intangibles evidencing or relating to the right to payment of money.
"REDEEMABLE STOCK" means, with respect to any Person, any Capital Stock that
by its terms or otherwise is required to be redeemed or purchased by such Person
or any of its Subsidiaries prior to 30 days after the latest maturity date of
the Senior Debt Securities of any series then Outstanding, or is redeemable or
subject to mandatory purchase or similar put rights at the option of the Holder
thereof at any time prior to 30 days after the latest maturity date of the
Senior Debt Securities of any series then Outstanding, or any security which is
convertible or exchangeable into a security which has such provisions.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"SCFC" means Stone Container Finance Company of Canada, a wholly-owned
subsidiary of the Company constituted under the laws of Canada.
"SCFC NOTES" means the 11 1/2% Senior Notes due 2006 issued by SCFC and
guaranteed on a senior basis by the Company.
"SCFC NOTE INDENTURE" means the indenture dated as of August 16, 1996 among
SCFC, the Company, as guarantor, and The Bank of New York, as Trustee, relating
to the SCFC Notes, as amended and supplemented to the date hereof and, unless
otherwise indicated, from time to time after the date hereof.
"SENIOR INDEBTEDNESS" means the principal of, interest on and other amounts
due on (i) Indebtedness of the Company, whether outstanding on the date of the
Senior Debt Securities Indenture or thereafter created, incurred, assumed or
guaranteed by the Company, on or prior to the date of the Senior Debt Securities
Indenture, in compliance with the 1991 Indenture and thereafter in compliance
with the Senior Debt Securities Indenture (including, without limitation, the
11 1/2% Notes, the First Mortgage Notes, the Rating Adjustable Senior Notes, the
SCFC Notes and the Senior Debt Securities of any series), (ii) obligations of
the Company related to the termination of Interest Swap Obligations, Currency
Agreements or Commodities Agreements pertaining to Indebtedness described under
clause (i) above and (iii) principal of or interest on the Senior Debt
Securities. Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness shall not include: (a) Subordinated Indebtedness, (b) Indebtedness
of or amounts owed by the Company for compensation to employees, for goods or
materials purchased in the ordinary course of business or for services or (c)
Indebtedness of the Company to a Subsidiary of the Company.
"SEVEN YEAR TREASURY RATE" means the arithmetic average (rounded to the
nearest basis point) of the weekly average per annum yield to maturity values
adjusted to constant maturities of seven years, for the Rate Determination
Period as determined from the yield curves of the most actively traded
marketable United States Treasury fixed interest rate securities (x) constructed
daily by the United States Treasury Department (i) as published by the Federal
Reserve Board in its Statistical Release H.15 (519), "Selected Interest Rates,"
which weekly average yield
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to maturity values currently are set forth in such Statistical Release under the
caption "U.S. Government Securities -- Treasury Constant Maturities -- 7 Year"
or (ii) if said Statistical Release H.15 (519) is not then published, as
published by the Federal Reserve Board in any release comparable to its
Statistical Release H.15 (519) or (iii) if the Federal Reserve Board shall not
be publishing a comparable release, as published in any official publication or
release of any other United States Government Department or agency, or (y) if
the United States Treasury Department shall not then be constructing such yield
curves, then as constructed by the Federal Reserve Board or any other United
States Government Department or agency and published as set forth in (x) above.
However, if the Seven Year Treasury Rate cannot be determined as provided above,
then the Seven Year Treasury Rate shall mean the arithmetic average (rounded to
the nearest basis point) of the per annum yields to maturity for each Business
Day during the Rate Determination Period of all of the issues of actively
trading issues of non-interest bearing United States Treasury fixed interest
rate securities with a maturity of not less than 81 months nor more than 87
months from such Business Day (1) as published in THE WALL STREET JOURNAL or (2)
if THE WALL STREET JOURNAL shall cease such publication, based on average asked
prices (or yields) as quoted by each of three United States Government
securities dealers of recognized national standing selected by the Company.
"SPECIFIED BANK DEBT" means (i) all Indebtedness and other monetary
obligations owing under the New Credit Agreement or any credit facilities with
the banks signatory to the New Credit Agreement (or with banks affiliated with
such banks), so long as such facilities are related to the New Credit Agreement;
and (ii) Indebtedness owing as of the date of the Senior Debt Securities
Indenture or thereafter to banks or other financial institutions under credit
facilities which may in the future refinance, refund, replace, supplement or
succeed (regardless of any gaps in time) the New Credit Agreements or the
facilities referenced in clause (i) hereof (including extensions and
restructurings and the inclusion of additional or different or substitute
lenders), so long as (a) the aggregate principal amount outstanding (including
available amounts under committed revolving credit or similar working capital
facilities, letter of credit facilities and other commitments to provide credit)
of such Indebtedness is at least equal to the principal of all publicly issued
Senior Indebtedness (including without limitation, Indebtedness under the 1991
Indenture, the 1994 Indentures and the 1996 Indentures) then outstanding (it
being understood that Indebtedness described in clause (i) above and issues of
Indebtedness having a principal amount lower than set forth in clause (b) below
shall not be included in this amount), (b) Indebtedness outstanding under each
particular credit facility has a principal amount outstanding (including
available amounts under committed revolving credit or similar working capital
facilities, letter of credit facilities and other commitments to provide credit)
of at least $25 million and (c) such Indebtedness constitutes Senior
Indebtedness.
"STONE CANADA GROUP" means Stone Canada and its Restricted Subsidiaries
existing as of the date of the Senior Debt Securities Indenture.
"SUBORDINATED CAPITAL BASE" means the sum of (i) the Consolidated Net Worth
and (ii) to the extent not included in clause (i) above, the amounts (without
duplication) relating to (a) the principal amount of Subordinated Indebtedness
incurred after November 1, 1991 which is unsecured and which does not have at
the time of incurrence of such Subordinated Indebtedness a weighted average life
that is shorter than the weighted average life remaining for the then
outstanding Indebtedness under the 1991 Indenture issued prior to the date of
the Senior Debt Securities Indenture, or if less than $200 million of such
Indebtedness is outstanding, the 11 1/2% Notes then outstanding, or if less than
$100 million of such Indebtedness is outstanding, the then Outstanding Senior
Debt Securities of any series, or a maturity that is earlier than the maturity
of any of the then outstanding Indebtedness under the 1991 Indenture, or if less
than $200 million of such Indebtedness is outstanding, the 11 1/2% Notes then
outstanding, or if less than $100 million of such Indebtedness is outstanding,
the then Outstanding Senior Debt Securities of any series, (b) redeemable stock
of the Company that does not constitute Redeemable Stock and (c) the principal
amount of the 11 1/2% Senior Subordinated Securities due September 1, 1999 of
the Company or any Subordinated Indebtedness exchanged for, or the net proceeds
of which are used to refinance, redeem or defease, such 11 1/2% Senior
Subordinated Notes due September 1, 1999 pursuant to clause (ii) of the
definition of "Permitted Indebtedness", that, in the case of clauses (a), (b)
and (c), as at the date of determination, in conformity with GAAP consistently
applied, would be set forth on the consolidated balance sheet of the Company and
its Restricted Subsidiaries.
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"SUBORDINATED INDEBTEDNESS" means indebtedness of the Company (whether
outstanding on the date of the Senior Debt Securities Indenture or thereafter
created, incurred, assumed or guaranteed by the Company) which, pursuant to the
terms of the instrument creating or evidencing the same, is subordinate to the
Senior Debt Securities in right of payment or in rights upon liquidation.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation of which
at least a majority in interest of the outstanding Capital Stock having by the
terms thereof voting power under ordinary circumstances to elect directors of
such corporation, irrespective of whether or not at the time stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency, is at the time, directly or
indirectly, owned or controlled by such Person, or by one or more corporations a
majority in interest of such stock of which is similarly owned or controlled, or
by such Person and one or more other corporations a majority in interest of such
stock of which is similarly owned or controlled or (ii) any other Person (other
than a corporation) in which such Person, directly or indirectly, at the date of
determination thereof, has at least a majority equity ownership interest
"TEN YEAR TREASURY RATE" means the arithmetic average (rounded to the
nearest basis point) of the weekly average per annum yield to maturity values
(adjusted to constant maturities of ten years, for the Rate Determination Period
as determined from the yield curves of the most actively traded marketable
United States Treasury fixed interest rate securities (x) constructed daily by
the United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15 (519), "Selected Interest Rates," which
weekly average yield to maturity values currently are set forth in such
Statistical Release under the caption "U.S. Government Securities -- Treasury
Constant Maturities -- 10 Year" or (ii) if said Statistical Release H.15 (519)
is not then published, as published by the Federal Reserve Board in any release
comparable to its Statistical Release H.15 or (iii) if the Federal Reserve Board
shall not be publishing a comparable release, as published in any official
publication or release of any other United States Government Department or
agency, or (y) if the United States Treasury Department shall not then be
constructing such yield curves, then as constructed by the Federal Reserve Board
or any other United States Government Department or agency and published as set
forth in (x) above. However, if the Ten Year Treasury Rate cannot be determined
as provided above, then the Ten Year Treasury Rate shall mean the arithmetic
average (rounded to the nearest basis point) of the per annum yields to maturity
for each Business Day during the Rate Determination Period of all of the issues
of actively trading issues of non-interest bearing United States Treasury fixed
interest rate securities with a maturity of not less then 117 months nor more
than 123 months from such Business Day (1) as published in THE WALL STREET
JOURNAL or (2) if THE WALL STREET JOURNAL shall cease such publication, based on
average asked prices (or yields) as quoted by each of three United States
Government securities dealers of recognized national standing selected by the
Company.
"UNRESTRICTED SUBSIDIARY" means a Subsidiary of the Company which has been
designated as an "Unrestricted Subsidiary" for purposes of the Senior Debt
Securities Indenture by the Company and (a) at least 20% of whose common stock
is held by one or more Persons (other than the Company and its Affiliates) which
acquired such common stock in a BONA FIDE transaction for fair value and (b) at
least 10% of whose total capitalization at the time of designation is in the
form of common stock or at least 15% of the fair market value of whose assets at
such time shall have been contributed by such Person. An Unrestricted Subsidiary
may be designated to be a Restricted Subsidiary only if, at the time of such
designation, all Indebtedness and Liens of such Subsidiary could be incurred
under the Senior Debt Securities Indenture.
PARTICULAR TERMS OF THE SENIOR
SUBORDINATED DEBT SECURITIES
The following description of the Senior Subordinated Debt Securities sets
forth the general terms and provisions of the Senior Subordinated Debt
Securities to which any Prospectus Supplement may relate. The particular terms
of the Senior Subordinated Debt Securities offered by any Prospectus Supplement
and the extent, if any, to which such general provisions may apply to the Senior
Subordinated Debt Securities so offered will be described in the Prospectus
Supplement relating to such Senior Subordinated Debt Securities.
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CERTAIN COVENANTS
MINIMUM NET WORTH INTEREST RATE ADJUSTMENT
The Senior Subordinated Debt Securities Indenture requires that if a series
of Senior Subordinated Debt Securities so provides and if the Company's Net
Worth is below $500 million (the "Minimum Net Worth") as at the end of any two
consecutive fiscal quarters (the last day of the second such fiscal quarter, the
"Failure Date"), then (i) the interest rate on the Senior Subordinated Debt
Securities shall be reset as of the first day of the second fiscal quarter
following the Failure Date (the "Reset Date") to a rate per annum (the "Reset
Rate") equal to the greater of (x) the initial interest rate as set forth on the
cover page of the respective Prospectus Supplement (the "Initial Interest Rate")
or (y) the sum of (A) the basis points specified in the respective Prospectus
Supplement for purposes of this reset provision and (B) the highest of the
treasury rates specified in the respective Prospectus Supplement for purposes of
this reset provision, (ii) on the first Interest Payment Date following the
Reset Date, the interest rate on the Senior Subordinated Debt Securities, as
reset on the Reset Date, shall increase by 50 basis points, and (iii) the
interest rate on the Senior Subordinated Debt Securities shall further increase
by an additional 50 basis points on each succeeding Interest Payment Date.
Notwithstanding anything in the foregoing, in no event shall the interest rate
on the Senior Subordinated Debt Securities at any time exceed the Initial
Interest Rate by more than 200 basis points. However, if the Company's Net Worth
is equal to or above the Minimum Net Worth as of the last day of any fiscal
quarter subsequent to the Failure Date, then the interest rate on the Senior
Subordinated Debt Securities shall return to the Initial Interest Rate effective
as of the first day of the second following fiscal quarter. If the Company's Net
Worth shall thereafter be less than the Minimum Net Worth as of the last day of
any two consecutive subsequent fiscal quarters, then the interest rate on the
Senior Subordinated Debt Securities shall again be adjusted as provided in this
paragraph.
If a Reset Rate has been established for a series of Senior Subordinated
Debt Securities, it will be described in the Prospectus Supplement relating to
such Senior Subordinated Debt Securities.
RESTRICTIONS ON DIVIDENDS
The Senior Subordinated Debt Securities Indenture provides that the Company
will not, and will not permit any subsidiary of the Company to, directly or
indirectly, (1) declare or pay any dividend or make any distribution, in cash or
otherwise, in respect of any shares of capital stock of the Company or to the
holders of capital stock of the Company as such (other than dividends or
distributions payable in shares of capital stock of the Company, other than
Redeemable Stock) or (2) purchase, redeem or otherwise acquire or retire for
value any of the capital stock of the Company or options, warrants or other
rights to acquire any such capital stock, other than acquisitions of capital
stock or such options, warrants or other rights by any subsidiary of the Company
from the Company (any such transaction included in clause (1) or (2) a
"Restricted Payment") if (i) at the time of such Restricted Payment and after
giving effect thereto, (a) an Event of Default shall have occurred and be
continuing with respect to any series of the Senior Subordinated Debt Securities
or (b) the Net Worth of the Company shall be less than $750 million; or if (ii)
after giving effect to such Restricted Payment, the aggregate amount expended
subsequent to the date of the Senior Subordinated Debt Securities Indenture for
all such Restricted Payments (the amount of any Restricted Payment, if other
than cash, to be the fair market value of such payment as determined by the
Board of Directors of the Company, whose reasonable determination shall be
conclusive and evidenced by a Board Resolution) exceeds the algebraic sum of (w)
a number calculated as follows: (A) if the aggregate Consolidated Net Income of
the Company earned on a cumulative basis during the period subsequent to
December 31, 1991 through the end of the last fiscal quarter that is prior to
the declaration of any such dividend or distribution or the giving of notice of
such purchase, redemption or other acquisition or retirement and for which such
financial information is then available, is a positive number, then 100% of such
positive number, and (B) if the aggregate Consolidated Net Income of the Company
earned on a cumulative basis during the period subsequent to December 31, 1991
through the end of the last fiscal quarter that is prior to the declaration of
any such dividend or distribution or the giving of notice of such purchase,
redemption or other acquisition or retirement and for which such financial
information is then available, is a negative number, then 100% of such negative
number, (x) the aggregate net cash proceeds received by the Company from the
issuance and sale, other than to a subsidiary of
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the Company, subsequent to the date of the Senior Subordinated Debt Securities
Indenture, of capital stock (including capital stock issued upon the conversion
of, or in exchange for, securities other than capital stock and options,
warrants or other rights to acquire capital stock, but excluding Redeemable
Stock), (y) the aggregate net cash proceeds received by the Company from the
issuance and sale, other than to a subsidiary of the Company, of Indebtedness of
the Company that is converted into capital stock of the Company subsequent to
the date of the Senior Subordinated Debt Securities Indenture, and (z) $300
million; PROVIDED, HOWEVER, that the retirement of any shares of the Company's
capital stock by exchange for, or out of the proceeds of the substantially
concurrent sale of, other shares of capital stock of the Company other than
Redeemable Stock shall not constitute a Restricted Payment. If all of the
conditions to the declaration of a dividend or distribution that are described
above are satisfied at the time such dividend or distribution is declared, then
such dividend or distribution may be paid or made within sixty days after such
declaration even if the payment of such dividend, the making of such
distribution or the declaration thereof would not have been permitted at any
time after such declaration.
RESTRICTIONS ON MERGERS AND CONSOLIDATIONS AND SALES OF ASSETS
The Senior Subordinated Debt Securities Indenture provides that the Company
shall not consolidate with, merge with or into any other corporation (whether or
not the Company shall be the surviving corporation), or sell, assign, transfer
or lease all or substantially all of its properties and assets as an entirety or
substantially as an entirety to any Person or group of affiliated Persons, in
one transaction or a series of related transactions, unless: (1) either the
Company shall be the continuing Person or the Person (if other than the Company)
formed by such consolidation or with which or into which the Company is merged
or the Person (or group of affiliated Persons) to which all or substantially all
the properties and assets of the Company are sold, assigned, transferred or
leased is a corporation (or constitute corporations) organized under the laws of
the United States or any State thereof or the District of Columbia and expressly
assumes, by indentures supplemental to the Senior Subordinated Debt Securities
Indenture, all the obligations of the Company under the Senior Subordinated Debt
Securities and the Senior Subordinated Debt Securities Indenture; (2)
immediately before and after giving effect to such transaction or series of
related transactions, no Event of Default, and no Default, with respect to the
Senior Subordinated Debt Securities, shall have occurred and be continuing; (3)
immediately after giving effect to such transaction or series of related
transactions on a pro forma basis, but prior to any purchase accounting
adjustments resulting from the transaction or series of related transactions,
the Net Worth of the Company (or of the surviving, consolidated or transferee
entity if the Company is not continuing) shall be at least equal to the Net
Worth of the Company immediately before such transaction or series of related
transactions; and (4) the Company shall have delivered to the Senior
Subordinated Debt Securities Trustee an Officer's Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or sale, assignment,
transfer or lease and such supplemental indentures comply with the Senior
Subordinated Debt Securities Indenture.
CHANGE IN CONTROL
Upon the occurrence of a Change in Control (the "Change in Control Date")
and subject to the requirements of the next succeeding sentence, each Holder of
Senior Subordinated Debt Securities shall have the right, at the Holder's
option, to require the Company to purchase all or any part (PROVIDED that the
principal amount must be $1,000 or an integral multiple thereof) of such
Holder's Senior Subordinated Debt Securities pursuant to the offer described
below (the "Change in Control Offer") at a purchase price equal to 101% of the
principal amount of such Senior Subordinated Debt Securities plus accrued and
unpaid interest, if any, to the date of such purchase. It shall be a condition
precedent to such right of any Holder to require the purchase of any such Senior
Subordinated Debt Securities that prior thereto, and prior to giving the notice
to Holders provided below, the Company shall have first (1) repaid in full in
cash all Specified Bank Debt or (2) obtained the requisite consent of holders of
such Specified Bank Debt to permit the purchase of such Senior Subordinated Debt
Securities.
Promptly upon satisfaction of either one of the conditions precedent
described above, the Company shall mail a notice (which notice shall contain all
instructions and materials necessary to enable Holders to tender Senior
Subordinated Debt Securities) to each Holder of Senior Subordinated Debt
Securities of each applicable
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series. All Senior Subordinated Debt Securities of each applicable series
tendered will be accepted for payment on a date which shall be no earlier than
30 days nor later than 40 days from the date such notice is mailed (the "Change
in Control Payment Date").
On the Change in Control Payment Date, the Company shall accept for payment
Senior Subordinated Debt Securities of each applicable series or portions
thereof tendered pursuant to the Change in Control Offer, and deposit with the
applicable Paying Agent money sufficient to pay the purchase price of all Senior
Subordinated Debt Securities of each applicable series or portions thereof so
accepted. The applicable Paying Agent shall promptly mail or deliver to the
Holder of Senior Subordinated Debt Securities of each applicable series so
accepted payment in an amount equal to the purchase price, and the Senior
Subordinated Debt Securities Trustee shall promptly authenticate and mail or
make available for delivery to such Holder a new Senior Subordinated Debt
Security of the same series as, and equal in principal amount to, any
unpurchased portion of the Senior Subordinated Debt Security surrendered. The
Company will publicly announce the results of the Change in Control Offer.
Whether a Change in Control has occurred depends entirely on the
accumulation of Common Stock of the Company and on certain changes in the
composition of the Company's Board of Directors. As a result, the Company can
enter into certain highly leveraged transactions, including certain
recapitalizations, mergers or stock repurchases, that would not result in the
application of the Change in Control provisions. With respect to any Change in
Control Offer, the Company intends to comply with the requirements of Section
14(e) and Rule 14e-1 under the Exchange Act, if then applicable.
The Change in Control purchase feature of the Senior Subordinated Debt
Securities may in certain circumstances make more difficult or discourage a
takeover of the Company and, thus, the removal of incumbent management. The
Change in Control purchase feature, however, is not the result of management's
knowledge of any specific effort to accumulate shares of Common Stock or to
obtain control of the Company by means of a merger, tender offer, solicitation
or otherwise, or part of a plan by management to adopt a series of anti-takeover
provisions. Instead, the Change in Control purchase feature is a standard term
contained in other similar debt offerings. Change in control provisions are also
contained in the Credit Agreement and other indentures.
If a Change in Control were to occur, there can be no assurance that the
required condition precedent to a Holder's right to require the purchase of the
Senior Subordinated Debt Securities will be satisfied. In addition, there can be
no assurance that the Company would have sufficient funds to pay the required
purchase price for all the Senior Subordinated Debt Securities tendered by the
Holders thereof. The Company's ability to purchase the Senior Subordinated Debt
Securities tendered upon a Change in Control may be limited by the terms of its
then-existing borrowing and other agreements. The subordination provisions of
the Senior Subordinated Debt Securities Indenture may limit the ability of the
Company to purchase the Senior Subordinated Debt Securities if an event of
default has occurred with respect to the Senior Indebtedness.
As of September 30, 1996, the Company had approximately $1.3 billion of
commitments for Specified Bank Debt.
Other provisions of the Senior Subordinated Debt Securities Indenture may be
applicable in the event of a highly leveraged transaction by the Company. See
"-- Certain Covenants -- Restrictions on Mergers and Consolidations and Sales of
Assets" and "-- Certain Covenants -- Minimum Net Worth Interest Rate
Adjustment." The Board of Directors of the Company may not unilaterally waive
these provisions.
For purposes of the Senior Subordinated Debt Securities Indenture, the
definitions of "Change in Control," "Acquiring Person," "Continuing Director"
and "Specified Bank Debt" have identical meanings as the definitions used in the
Senior Debt Securities Indenture except for references to the specific Debt
Securities being issued and the applicable Indenture. See "Description of Debt
Securities -- Particular Terms of the Senior Debt Securities -- Certain
Definitions."
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EVENTS OF DEFAULT AND NOTICE THEREOF
The following are Events of Default under the Senior Subordinated Debt
Securities Indenture with respect to the Senior Subordinated Debt Securities of
any series: (1) failure to pay interest on any Senior Subordinated Debt
Securities of that series when due, continued for 30 days; (2) failure to pay
the principal of (or premium, if any, on) any Senior Subordinated Debt
Securities of that series when due and payable at Maturity, upon redemption or
otherwise; (3) failure to observe or perform any other covenant, warranty or
agreement contained in the Senior Subordinated Debt Securities of that series or
in the Senior Subordinated Debt Securities Indenture (other than a covenant,
agreement or warranty included in the Senior Subordinated Debt Securities
Indenture solely for the benefit of Senior Subordinated Debt Securities of a
series other than that series), continued for a period of 60 days after notice
has been given to the Company by the Senior Subordinated Debt Securities Trustee
or Holders of at least 25% in aggregate principal amount of the Outstanding
Senior Subordinated Debt Securities of that series; (4) failure to pay at final
maturity, or acceleration of, Indebtedness of the Company having an aggregate
principal amount of not less than $25 million, unless cured within 15 days after
notice has been given to the Company by the Senior Subordinated Debt Securities
Trustee or Holders of at least 25% in aggregate principal amount of the
Outstanding Senior Subordinated Debt Securities of that series; (5) the entering
against the Company of one or more judgments or decrees involving an aggregate
liability of $25 million or more unless vacated, discharged, satisfied or stayed
within 30 days of the entering of such judgments or decrees; (6) certain events
of bankruptcy, insolvency or reorganization relating to the Company; and (7) any
other Event of Default with respect to Senior Subordinated Debt Securities of
that series specified in the Prospectus Supplement relating thereto.
The Senior Subordinated Securities Debt Indenture provides that the Senior
Subordinated Debt Securities Trustee shall, within 30 days after the occurrence
of any Default or Event of Default with respect to Senior Subordinated Debt
Securities of any series issued under the Senior Subordinated Debt Securities
Indenture, give the Holders of Senior Subordinated Debt Securities of that
series notice of all uncured Defaults or Events of Default known to it (the term
"Default" to include the events specified above without grace or notice);
PROVIDED, HOWEVER, that, except in the case of an Event of Default or a Default
in payment on any Senior Subordinated Debt Securities of any series, the Senior
Subordinated Debt Securities Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or
directors or responsible officers of the Senior Subordinated Debt Securities
Trustee in good faith determine that the withholding of such notice is in the
interest of the Holders of the Senior Subordinated Debt Securities of that
series.
If an Event of Default with respect to the Senior Subordinated Debt
Securities of any series (other than due to events of bankruptcy, insolvency or
reorganization) occurs and is continuing, the Senior Subordinated Debt
Securities Trustee or the Holders of at least 25% in aggregate principal amount
of the Outstanding Debt Securities of that series, by notice in writing to the
Company (and to the Senior Subordinated Debt Securities Trustee if given by the
Holders of at least 25% in aggregate principal amount of the Senior Subordinated
Debt Securities of that series), may declare the unpaid principal of and accrued
interest to the date of acceleration on all the Outstanding Senior Subordinated
Debt Securities of that series to be due and payable immediately and, upon any
such declaration, the Senior Subordinated Debt Securities of that series shall
become immediately due and payable.
If an Event of Default occurs due to bankruptcy, insolvency or
reorganization, all unpaid principal (without premium) of and accrued interest
on the Outstanding Senior Subordinated Debt Securities of any series IPSO FACTO
becomes immediately due and payable without any declaration or other act on the
part of the Senior Subordinated Debt Securities Trustee or any Holder of any
Senior Subordinated Debt Security of that series.
Any such declaration with respect to Senior Subordinated Debt Securities of
any series may be annulled and past Events of Default and Defaults (except,
unless theretofore cured, an Event of Default or a Default, in payment of
principal of or interest on the Debt Securities of that series) may be waived by
the Holders of a majority of the principal amount of the Outstanding Senior
Subordinated Debt Securities of that series, upon the conditions provided in the
Senior Subordinated Debt Securities Indenture.
The Senior Subordinated Debt Securities Indenture provides that the Company
shall periodically file statements with the Senior Subordinated Debt Securities
Trustee regarding compliance by the Company with certain of
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the respective covenants thereof and shall specify any Event of Default or
Defaults with respect to Senior Subordinated Debt Securities of any series, in
performing such covenants, of which the signers may have knowledge.
MODIFICATION OF THE SENIOR SUBORDINATED DEBT SECURITIES INDENTURE; WAIVER
The Senior Subordinated Debt Securities Indenture may be modified by the
Company and the Senior Subordinated Debt Securities Trustee without the consent
of any Holders with respect to certain matters, including (i) to cure any
ambiguity, defect or inconsistency or to correct or supplement any provision
which may be inconsistent with any other provision of the Senior Subordinated
Debt Securities Indenture and (ii) to make any change that does not materially
adversely affect the interests of any Holder of Senior Subordinated Debt
Securities of any series issued under the Senior Subordinated Debt Securities
Indenture. In addition, under the Senior Subordinated Debt Securities Indenture,
certain rights and obligations of the Company and the rights of Holders of the
Senior Subordinated Debt Securities may be modified by the Company and the
Senior Subordinated Debt Securities Trustee with the written consent of the
Holders of at least a majority in aggregate principal amount of the Outstanding
Senior Subordinated Debt Securities of each series affected thereby; but no
extension of the maturity of any Senior Subordinated Debt Securities of any
series, reduction in the interest rate or extension of the time for payment of
interest, change in the optional redemption or repurchase provisions in a manner
adverse to any Holder of Senior Subordinated Debt Securities of any series
issued under the Senior Subordinated Debt Securities Indenture, other
modification in the terms of payment of the principal of, or interest on, any
Senior Subordinated Debt Securities of any series, or reduction of the
percentage required for modification, will be effective against any Holder of
any Outstanding Senior Subordinated Debt Security of any series issued under the
Senior Subordinated Debt Securities Indenture and affected thereby without his
consent. The Senior Subordinated Debt Securities Indenture does not limit the
aggregate amount of Senior Subordinated Debt Securities of the Company which may
be issued thereunder.
The Holders of a majority in aggregate principal amount of the Outstanding
Senior Subordinated Debt Securities of any series may on behalf of the Holders
of all Senior Subordinated Debt Securities of that series waive, insofar as that
series is concerned, compliance by the Company with certain restrictive
covenants of the Senior Subordinated Debt Securities Indenture. The Holders of
not less than a majority in aggregate principal amount of the Outstanding Senior
Subordinated Debt Securities of any series may on behalf of the Holders of all
Senior Subordinated Debt Securities of that series waive any past Event of
Default or Default under the Senior Subordinated Debt Securities Indenture with
respect to that series, except an Event of Default or a Default in the payment
of the principal of, or premium, if any, or any interest on any Senior
Subordinated Debt Securities of that series or in respect of a provision which
under the Senior Subordinated Debt Securities Indenture cannot be modified or
amended without the consent of the Holder of each Outstanding Senior
Subordinated Debt Security of that series affected.
DEFEASANCE
The Company may terminate its substantive obligations in respect of Senior
Subordinated Debt Securities of any series (except for its obligations to pay
the principal of (and premium, if any, on) and the interest on the Senior
Subordinated Debt Securities of that series) by (i) depositing with the Senior
Subordinated Debt Securities Trustee, under the terms of an irrevocable trust
agreement, money or United States Government Obligations sufficient to pay all
remaining indebtedness on the Senior Subordinated Debt Securities of that
series, (ii) delivering to the Senior Subordinated Debt Securities Trustee
either an Opinion of Counsel or a ruling directed to the Senior Subordinated
Debt Securities Trustee from the Internal Revenue Service to the effect that the
Holders of the Senior Subordinated Debt Securities of that series will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and termination of obligations, and (iii) complying with certain
other requirements set forth in the Senior Subordinated Debt Securities
Indenture. In addition, the Company may terminate all of its substantive
obligations in respect of Senior Subordinated Debt Securities of any series
(including its obligations to pay the principal of (and premium, if any, on) and
interest on the Senior Subordinated
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Debt Securities of that series) by (i) depositing with the Senior Subordinated
Debt Securities Trustee, under the terms of an irrevocable trust agreement,
money or United States Government Obligations sufficient to pay all remaining
indebtedness on the Senior Subordinated Debt Securities of that series, (ii)
delivering to the Senior Subordinated Debt Securities Trustee either a ruling
directed to the Senior Subordinated Debt Securities Trustee from the Internal
Revenue Service to the effect that the Holders of the Senior Subordinated Debt
Securities of that series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and termination of obligations
or an Opinion of Counsel, based upon such a ruling or a change in the applicable
federal tax law since the date of the Senior Subordinated Debt Securities
Indenture, to such effect, and (iii) complying with certain other requirements
set forth in the Senior Subordinated Debt Securities Indenture.
THE TRUSTEE
The Bank of New York is the Trustee under the Senior Subordinated Debt
Securities Indenture.
The Company maintains normal commercial banking relations with The Bank of
New York, which is also a lender under the Credit Agreement and the trustee
under certain indentures of the Company.
CERTAIN DEFINITIONS
For purposes of the Senior Subordinated Debt Securities Indenture, certain
defined terms have the following meanings:
"CONSOLIDATED NET INCOME" of the Company means, for any period for which the
determination thereof is to be made, the net income (or loss) of the Company and
its subsidiaries on a consolidated basis for such period taken as a single
accounting period, determined in accordance with GAAP; PROVIDED that there shall
be excluded therefrom (i) the net income (or loss) of any person (a "joint
venture") in which any other person (other than the Company or any of its
subsidiaries) has a joint equity interest, except to the extent of the amount of
dividends or other distributions actually paid to the Company or any of its
subsidiaries by such joint venture during such period, (ii) except to the extent
includable pursuant to the foregoing clause or , the net income (or loss) of any
person accrued prior to the date it becomes a subsidiary of the Company or is
merged into or consolidated with the Company or any of its subsidiaries or that
person's assets are acquired by the Company or any of its subsidiaries, (iii)
the net income of any subsidiary of the Company to the extent that the
declaration or payment of dividends or similar distributions by that subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that subsidiary, and (iv) the excess (but
not the deficit), if any, of (x) any gain which must be treated as an
extraordinary item under GAAP or any gain realized upon the sale or other
disposition of any asset that is not sold in the ordinary course of business or
of any capital stock of the Company or a subsidiary of the Company over (y) any
loss which must be treated as an extraordinary item under GAAP or any loss
realized upon the sale or other disposition of any asset that is not sold in the
ordinary course of business or of any capital stock of the Company or a
subsidiary of the Company.
"INDEBTEDNESS" means, with respect to any person, (i) any obligation of such
person to pay the principal of, premium, if any, interest on (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company, whether or not a claim for such
post-petition interest is allowed in such proceeding), penalties, reimbursement
or indemnification amounts, fees, expenses or other amounts relating to any
indebtedness and any other liability, contingent or otherwise, of such person
(A) for borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), (B) evidenced
by a note, debenture or similar instrument (including a purchase money
obligation) given in connection with the acquisition of any property or assets
(other than inventory or similar property acquired in the ordinary course of
business), including securities, (C) for goods, materials or services purchased
in the ordinary course of business, (D) for any letter of credit or performance
bond in favor of such person, or (E) for the payment of money relating to a
Capitalized Lease Obligation; (ii) any liability of others of the kind described
in the preceding clause (i), which the person has guaranteed or which is
otherwise its legal liability; (iii) any obligation secured by a
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Lien to which the property or assets of such person are subject, whether or not
the obligations secured thereby shall have been assumed by or shall otherwise be
such person's legal liability; and (iv) any and all deferrals, renewals,
extensions and refunding of, or amendments, modifications or supplements to, any
liability of the kind described in any of the preceding clauses (i), (ii) or
(iii). The amount of Indebtedness of any person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above, plus the maximum amount of any contingent obligations as described above,
in each case at such date.
"JUNIOR SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company
(whether outstanding on the date of the Senior Subordinated Debt Securities
Indenture or thereafter created, incurred, assumed or guaranteed by the Company)
which, pursuant to the terms of the instrument creating or evidencing the same,
is subordinate in right of payment to the Senior Indebtedness and the Senior
Subordinated Indebtedness.
"NET WORTH" means the amount which, in conformity with GAAP would be set
forth under the caption "stockholders' equity" (or any like caption) on the
consolidated balance sheet of the Company, exclusive of amounts attributable to
Redeemable Stock. If the Company has changed one or more of the accounting
principles used in the preparation of its financial statements, because of a
change mandated by the Financial Accounting Standards Board, then Net Worth
shall mean the Net Worth the Company would have had if the Company had continued
to use those generally accepted accounting principles employed at December 31,
1991.
"SENIOR INDEBTEDNESS" means the principal of, interest on and other amounts
due on (i) Indebtedness of the Company, whether outstanding on the date of the
Senior Subordinated Debt Securities Indenture or thereafter created, incurred,
assumed or guaranteed by the Company in compliance with the Senior Subordinated
Debt Securities Indenture, for money borrowed from banks or other financial
institutions, including, without limitation, money borrowed under the Credit
Agreements and any refinancings or refundings thereof; (ii) Indebtedness of the
Company, whether outstanding on the dates of the Senior Subordinated Debt
Securities Indenture or thereafter created, incurred, assumed or guaranteed by
the Company in compliance with the Senior Subordinated Debt Securities
Indenture, which is not Senior Subordinated Indebtedness or Junior Subordinated
Indebtedness; and (iii) Indebtedness of the Company under interest rate swaps,
caps or similar hedging agreements and foreign exchange contracts, currency
swaps or similar agreements. Notwithstanding anything to the contrary in the
foregoing, Senior Indebtedness shall not include: (a) Indebtedness of or amounts
owed by the Company for compensation to employees, or for goods or materials
purchased in the ordinary course of business, or for services, or (b)
Indebtedness of the Company to a subsidiary of the Company.
"SENIOR SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company
(whether outstanding on the date of the Senior Subordinated Debt Securities
Indenture or thereafter created, incurred, assumed or guaranteed by the Company)
which, pursuant to the terms of the instrument creating or evidencing the same,
is subordinate in right of payment to the Senior Indebtedness and senior in
right of payment to the Junior Subordinated Indebtedness.
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DESCRIPTION OF DEBT WARRANTS
The Company may issue, together with other Securities or separately, Debt
Warrants for the purchase of Debt Securities. Each series of Debt Warrants will
be issued under separate Debt Warrant Agreements (each a "Debt Warrant
Agreement") to be entered into between the Company and a bank or trust company,
as Debt Warrant Agent (the "Debt Warrant Agent"), all as set forth in the
Prospectus Supplement relating to Debt Warrants in respect of which this
Prospectus is being delivered. The Debt Warrant Agent will act solely as an
agent of the Company in connection with the Debt Warrants of such series and
will not assume any obligations or relationship of agency or trust for or with
any holders or beneficial owners of Debt Warrants. If Debt Warrants are issued,
copies of the forms of Debt Warrant Agreements and the Warrant Certificates
representing Debt Warrants (the "Debt Warrant Certificates") will be filed on a
Form 8-K and incorporated by reference in the Registration Statement of which
this Prospectus is a part, and the following summary is qualified in its
entirety by reference to such documents, and the Prospectus Supplement relating
to such Debt Warrants, including the definition therein of certain capitalized
terms not defined herein.
GENERAL
Reference is made to the Prospectus Supplement for the terms of Debt
Warrants in respect of which this Prospectus is being delivered, the Debt
Warrant Agreement relating to such Debt Warrants and the Debt Warrant
Certificates representing such Debt Warrants, including the following: (1) the
designation, aggregate principal amount and terms of the Debt Securities
purchasable upon exercise of such Debt Warrants and the procedures and
conditions relating to the exercise of such Debt Warrants; (2) the designation
and terms of any related Debt Securities with which such Debt Warrants are
issued and the number of such Debt Warrants issued with each such Debt Security;
(3) the date, if any, on and after which such Debt Warrants and the related Debt
Securities will be separately transferable; (4) the principal amount of Debt
Securities purchasable upon exercise of each Debt Warrant and the price at which
such principal amount of Debt Securities may be purchased upon such exercise;
(5) the date on which the right to exercise such Debt Warrants shall commence
and the date on which such right shall expire (the "Expiration Date"); (6) if
the Debt Securities purchasable upon exercise of such Debt Warrants are original
issue discount Debt Securities, a discussion of federal income tax
considerations applicable thereto; and (7) whether the Debt Warrants represented
by the Debt Warrant Certificates will be issued in registered or bearer form,
and, if registered, where they may be transferred and registered.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Debt Warrant Agent or any other office
indicated in the Prospectus Supplement relating thereto. Prior to the exercise
of their Debt Warrants, holders of Debt Warrants will not have any of the rights
of holders of the Debt Securities purchasable upon such exercise and will not be
entitled to payments of principal (and premium, if any) or interest, if any, on
the Debt Securities purchasable upon such exercise.
EXERCISE OF DEBT WARRANTS
Each Debt Warrant will entitle the holder to purchase for cash such
principal amount of Debt Securities at such exercise price as shall in each case
be set forth in, or to be determinable as set forth in, the Prospectus
Supplement relating to the Debt Warrants offered thereby. Debt Warrants may be
exercised at any time up to the close of business on the Expiration Date set
forth in the applicable Prospectus Supplement. After the close of business on
the Expiration Date, unexercised Debt Warrants will become void.
Debt Warrants may be exercised as set forth in the Prospectus Supplement
relating to the Debt Warrants in respect of which this Prospectus is being
delivered. Upon receipt of payment and the Debt Warrant Certificate properly
completed and duly executed at the corporate trust office of the Debt Warrant
Agent or any other office indicated in the Prospectus Supplement, the Company
will, as soon as practicable, forward the Debt Securities purchasable upon such
exercise. If less than all of the Debt Warrants represented by such Debt Warrant
Certificate are exercised, a new Debt Warrant Certificate will be issued for the
remaining amount of Debt Warrants.
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DESCRIPTION OF CAPITAL STOCK
The Company may issue, separately or together with or upon the conversion of
or exchange for other Securities, Common Stock and Preferred Stock, all as set
forth in the accompanying Prospectus Supplement relating to the Common Stock or
Preferred Stock in respect of which this Prospectus is being delivered. The
following summaries do not purport to be complete and are subject to the
detailed provisions of the Company's restated certificate of incorporation (the
"Certificate of Incorporation"), including the Certificate of Designation for
the Series E Cumulative Convertible Exchangeable Preferred Stock (the "Series E
Preferred Stock"), and the Company's By-Laws, as amended (the "By-Laws"). These
statements do not purport to be complete, or to give full effect to the
provisions of statutory or common law, and are subject to, and are qualified in
their entirely by reference to, the terms of the Certificate of Incorporation,
the Certificate of Designation of the Series E Preferred Stock and the By-Laws.
The Certificate of Incorporation authorizes the issuance of a total of 210
million shares of all classes of stock, of which 10 million may be shares of
preferred stock, par value $.01 per share, and 200 million may be shares of the
Common Stock, par value $.01 per share. At December 31, 1996, approximately 99.3
million shares of Common Stock were outstanding and 4.6 million shares of Series
E Preferred Stock were outstanding. In addition, 2 million shares of Series D
Junior Participating Preferred Stock, par value $.01 per share, of the Company
(the "Series D Preferred Stock") have been authorized and reserved for issuance
in connection with the Series D Rights described below.
COMMON STOCK
GENERAL
Subject to the rights of the holders of any shares of the Company's
preferred stock which may at the time be outstanding, holders of the Common
Stock are entitled to receive, to the extent permitted by law, such dividends as
may be declared from time to time by the Board of Directors out of funds legally
available therefor.
Each holder of Common Stock is entitled to one vote for each share of Common
Stock registered in such holder's name on the books of the Company on all
matters submitted to a vote of stockholders. Except as otherwise provided by
law, the holders of shares of the Common Stock vote as one class. The holders of
shares of the Common Stock have cumulative voting rights under the Certificate
of Incorporation such that in all elections for directors, each holder entitled
to vote thereat is entitled to as many votes as is equal to the number of votes
which such holder would be entitled to cast for the election of directors with
respect to such holder's shares multiplied by the number of directors to be
elected, and such holder may cast all of such votes for a single director or may
distribute them among any two or more of them as such holder may see fit.
LIQUIDATION RIGHTS AND OTHER PROVISIONS
The Company has granted its lenders security interests in a substantial
portion of the Company's assets under the Credit Agreement and other debt
agreements. See "Credit Agreement" and "Description of Debt Securities --
Ranking." Subject to the prior rights of creditors and the holders of any
preferred stock which may be outstanding from time to time, the holders of the
Common Stock are entitled to share pro rata in the distribution of any remaining
assets in the event of liquidation, dissolution or winding up of the Company.
The shares of Common Stock are not liable to any calls or assessments and have
no conversion rights or redemption or sinking fund provisions. The Transfer
Agent and Registrar for the Common Stock is The First National Bank of Chicago.
CHANGE IN CONTROL
The Certificate of Incorporation and the Rights Agreement dated July 25,
1988, as amended (the "Rights Agreement"), between the Company and First Chicago
Trust Company of New York, as Rights Agent and the successor to The First
National Bank of Chicago, contain certain provisions (described below) that
could make more difficult or discourage a change in control of the Company. Such
provisions are designed to discourage
43
<PAGE>
situations in which the Company is forced to accept a proposal for the takeover
of the Company without ample time to evaluate the proposal and appropriate
alternatives and to encourage anyone contemplating a business combination with
the Company to negotiate directly with the Company on a fair and equitable
basis.
SERIES D RIGHTS
Each share of Common Stock has associated with it one preferred share
purchase right (the "Series D Right') permitting the holder to purchase
approximately one-hundredth of a share of the Company's Series D Preferred Stock
at an exercise price of $130 per share, subject to certain adjustments. The
terms of the Series D Rights are set forth in the Rights Agreement.
The Series D Rights are not exercisable and are transferable only with the
related Common Stock certificates. The Series D Rights become exercisable and
separately transferable ten days after a person or group (excluding certain
entities including members of the Stone family) acquires 15% or more of the
outstanding shares of the Common Stock (subject to a limited exception for
certain inadvertent acquisitions) or ten business days after a person or group
(excluding certain entities including members of the Stone family) announces a
tender offer or exchange offer that would, if completed, result in ownership by
such person or group of 15% or more of the outstanding shares of the Common
Stock. Thereafter, the Series D Rights will trade separately from the Common
Stock.
After the Series D Rights become exercisable, if a person or group
(excluding certain entities including members of the Stone family) acquires 15%
or more of the outstanding shares of the Common Stock and the Company is
acquired in a merger or other business combination transaction, each Series D
Right will entitle its holder (other than the acquiring person or group) to
purchase, at the Series D Right's then-current exercise price, a number of the
acquiring company's shares of common stock having a market value at that time of
twice the Series D Right's then-current exercise price. In addition, in the
event that a person or group (excluding certain entities including members of
the Stone family) acquires 15% or more of the outstanding shares of the Common
Stock, each holder of a Series D Right (other than the acquiring person or
group) will be entitled to purchase the number of shares of the Common Stock
having a market value of twice the then-current exercise price of the Series D
Right. In the event that the number of shares of Common Stock authorized but not
outstanding or reserved for issuance for purposes other than upon the exercise
of the Rights are not sufficient to permit the exercise in full of the Rights,
the Company is required to substitute other securities or consideration
therefor.
Under certain circumstances, the Series D Rights may be redeemed at a price
of $.01 per Series D Right. The Company may pay the redemption price in cash,
shares of Common Stock or any other form of consideration deemed appropriate by
the Board of Directors of the Company. The Series D Rights will expire in August
1998, unless earlier redeemed by the Company.
The Rights Agreement generally provides that a Series D Right will be issued
in connection with each share of Common Stock (i) issued prior to the earliest
of the Distribution Date (as defined in the Rights Agreement) or the redemption,
exchange or expiration of the Series D Rights or (ii) issued at certain other
times pursuant to certain options, warrants or convertible securities.
SUPERMAJORITY VOTE REQUIREMENTS
The Certificate of Incorporation provides that the affirmative vote of the
holders of at least 66 2/3% of the voting power of the then outstanding shares
of capital stock of the Company entitled to vote generally in the election of
directors (the "Voting Stock") is required to authorize (a) any merger or
consolidation of the Company with or into any other corporation (other than a
Subsidiary of the Company) or (b) the sale (other than to the Company or its
Subsidiaries) of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole. For purposes of this paragraph, a "Subsidiary" is
any corporation more than 50% of the voting securities of which are owned by the
Company.
44
<PAGE>
PREFERRED STOCK
GENERAL
The Certificate of Incorporation authorizes the Company's Board of
Directors, without first obtaining approval of the holders of Common Stock or
any series of preferred stock, to provide for the issuance of any or all shares
of the preferred stock in one or more series, and to fix the voting powers, full
or limited, and the designations, preferences and relative, participating,
optional or other special rights, and any qualifications, limitations or
restrictions thereof, applicable to the shares to be included in any such series
as may be permitted by the General Corporation Law of the State of Delaware.
The specific terms of any Preferred Stock being offered will be described in
the Prospectus Supplement relating to such Preferred Stock. If Preferred Stock
of any series is offered by the Company, a copy of the Certificate of
Designation will be filed on a Form 8-K and incorporated by reference in the
Registration Statement of which this Prospectus is a part. The following summary
of certain provisions of the Preferred Stock are subject to, and are qualified
in their entirety by reference to, the Certificate of Incorporation and the
Certificate of Designation relating to the particular series of Preferred Stock.
Reference is made to the Prospectus Supplement relating to the Preferred Stock
offered thereby for specific terms, including the following: (1) the title and
stated value of such Preferred Stock; (2) the number of shares of such Preferred
Stock offered, the liquidation preference per share and the initial offering
price of such Preferred Stock; (3) the dividend rate(s), period(s) and/or
payment date(s) or method(s) of calculation thereof applicable to such Preferred
Stock; (4) the date from which dividends on such Preferred Stock shall
accumulate, if applicable; (5) the procedures for any auction and remarketing,
if any, for such Preferred Stock; (6) the provisions for a sinking fund, if any,
for such Preferred Stock; (7) the provisions for redemption, if applicable, of
such Preferred Stock; (8) any listing of such Preferred Stock on any securities
exchange; (9) the terms and conditions, if applicable, upon which such Preferred
Stock will be convertible into or exchangeable for Common Stock, and whether at
the option of the holder thereof or the Company; (10) the relative ranking and
preferences of such Preferred Stock as to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of the Company; (11) any
limitations on issuance of any Preferred Stock ranking senior to or on a parity
with such Preferred Stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Company; (12) any other specific
terms, preferences, rights (including, without limitation, voting rights),
limitations or restrictions of such Preferred Stock; and (13) a discussion of
federal income tax considerations applicable to such Preferred Stock.
SERIES E PREFERRED STOCK
There were 4.6 million shares of Series E Preferred Stock authorized and
outstanding at December 31, 1996. The Series E Preferred Stock is entitled to
cumulative cash preferential dividends of $1.75 per share, per annum, payable
quarterly, and has a liquidation preference of $25 per share plus accrued and
unpaid dividends. Unless full cumulative dividends on the Series E Preferred
Stock have been paid or payment has been provided for, no dividends (other than
dividends in shares of Common Stock or other capital stock ranking junior to the
Series E Preferred Stock in the payment of dividends) shall be paid or declared
and set aside for payment or other distribution made upon the Common Stock or
any other capital stock of the Company ranking junior or on a parity with the
Series E Preferred Stock as to dividends.
The Series E Preferred Stock is exchangeable, in whole but not in part, at
the option of the Company, on any dividend date, for the Company's 7%
Convertible Subordinated Exchange Debentures due February 15, 2007 (the
"Exchange Debentures") at an exchange rate of $25 principal amount of Exchange
Debentures for each share of Series E Preferred Stock so exchanged. The Exchange
Debentures entitle the holders thereof to convert the Exchange Debentures into
shares of Common Stock.
The Series E Preferred Stock is redeemable by the Company, in whole but not
in part, at $26.50 per share, if redeemed prior to February 15, 1997, and
thereafter at prices declining to $25 per share on and after February 15, 2002,
together with accrued and unpaid dividends to the date of redemption. The Series
E Preferred Stock, unless previously exchanged or redeemed by the Company, is
convertible at the option of the holder thereof at any time
45
<PAGE>
into shares of Common Stock at a conversion price of $33.94 per share (as of the
date hereof) subject to adjustment under certain conditions.
If the Company fails to pay any six quarterly dividends on the Series E
Preferred Stock, then the holders of the Series E Preferred Stock, voting
together as a class with all other outstanding classes or series of preferred
stock ranking junior to or on a parity with the Series E Preferred Stock and
entitled to vote thereon, have the right to elect two directors to be added to
the Company's Board of Directors. Such voting rights continue until all
dividends in arrears on such stock have been paid or provided for. Without the
approval of at least two-thirds of the outstanding shares of Series E Preferred
Stock, the Company may not issue any capital stock ranking senior to the Series
E Preferred Stock as to payment of dividends or in distribution of assets upon
liquidation or make any change which adversely affects the preferences, rights
or powers of the Series E Preferred Stock.
DEPOSITARY SHARES
GENERAL
The Company may, at its option, elect to offer fractional shares of
Preferred Stock, rather than full shares of Preferred Stock. In the event such
option is exercised, the Company will issue to the public receipts for
Depositary Shares, each of which will represent a fraction (to be set forth in
the Prospectus Supplement relating to a particular series of Preferred Stock) of
a share of a particular series of Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
the Company and a bank or trust company selected by the Company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000 (the "Depositary Bank"). Subject to the terms of the
Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Preferred Stock represented
by such Depositary Share, to all the rights and preferences of the Preferred
Stock represented thereby (including dividend, voting, redemption and
liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. The specific terms
of any Depositary Shares being offered will be described in the Prospectus
Supplement relating to such Depositary Shares. If Depositary Shares are issued,
copies of the forms of Deposit Agreement and Depositary Receipt will be filed on
a Form 8-K and incorporated by reference in the Registration Statement of which
this Prospectus is a part, and the following summary is qualified in its
entirety by reference to such documents and the Prospectus Supplement relating
to such Depositary Shares.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary Bank may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Company's expense.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of the Depositary Receipts to the Depositary Bank, the owner
of the Depositary Shares evidenced thereby is entitled to delivery at such
office of the number of whole shares of Preferred Stock represented by such
Depositary Shares. If the Depositary Receipts delivered by the holder evidence a
number of Depositary Shares in excess of the number of Depositary Shares
representing the number of whole shares of Preferred Stock to be withdrawn, the
Depositary Bank will deliver to such holder at the same time a new Depositary
Receipt evidencing such excess number of Depositary Shares. Owners of Depositary
Shares will be entitled to receive only whole shares of Preferred Stock. In no
event will fractional shares of Preferred Stock (or cash in lieu thereof) be
distributed by the Depositary Bank. Consequently, a holder of a Depositary
Receipt
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<PAGE>
representing fractional shares of Preferred Stock would be able to liquidate his
position only by sale to a third party (in a public trading market transaction,
if available, or otherwise), unless the Depositary Shares are redeemed by the
Company or converted by the holder.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary Bank will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
number of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Depositary Bank will
distribute property by it to the record holders of Depositary Shares entitled
thereto, unless the Depositary Bank determines that it is not feasible to make
such distribution, in which case the Depositary Bank may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
of such holders.
REDEMPTION OF DEPOSITARY SHARES
If a series of Preferred Stock represented by Depositary Shares is subject
to redemption, the Depositary Shares will be redeemed from the proceeds received
by the Depositary Bank resulting from the redemption, in whole or in part, of
such series of Preferred Stock held by the Depositary Bank. The redemption price
per Depositary Share will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of Preferred Stock. Whenever
the Company redeems shares of Preferred Stock held by the Depositary Bank, the
Depositary Bank will redeem as of the same redemption date the number of
Depositary Shares representing the shares of Preferred Stock so redeemed. If
fewer than all the Depositary Shares are to be redeemed, the Depositary Shares
to be redeemed will be selected by lot or pro rata as may be determined by the
Depositary Bank.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of a series of
Preferred Stock are entitled to vote, the Depositary Bank will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares relating to such Preferred Stock. Each record holder of such
Depositary Shares on the record date (which will be the same date as the record
date for the Preferred Stock) will be entitled to instruct the Depositary Bank
as to the exercise of the voting rights pertaining to the amount of Preferred
Stock represented by such holder's Depositary Shares. The Depositary Bank will
endeavor insofar as practicable, to vote the amount of Preferred Stock
represented by such Depositary Shares in accordance with such instructions, and
the Company will agree to take all action which may be deemed necessary by the
Depositary Bank in order to enable the Depositary Bank to do so. The Depositary
Bank may abstain from voting shares of Preferred Stock to the extent it does not
receive specific instructions from the holders of Depositary Shares representing
such Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary Bank. However, any amendment that
materially and adversely alters the rights of the holders of Depositary Shares
will not be effective unless such amendment has been approved by the holders of
at least a majority of the Depositary Shares then outstanding. The Deposit
Agreement may be terminated by the Company or the Depositary Bank only if (i)
all outstanding Depositary Shares have been redeemed or (ii) there has been a
final distribution in respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution has
been distributed to the holders of Depositary Receipts.
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<PAGE>
CHARGES OF DEPOSITARY BANK
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary Bank in connection with the initial deposit
of the Preferred Stock and any redemption of the Preferred Stock. Holders of
Depositary Receipts will pay other transfer and other taxes and governmental
charges and such other charges, including a fee for the withdrawal of shares of
Preferred Stock upon surrender of Depositary Receipts, as are expressly provided
in the Deposit Agreement to be for their accounts.
MISCELLANEOUS
The Depositary Bank will forward to holders of Depository Receipts all
reports and communications from the Company that are delivered to the Depositary
Bank and that the Company is required to furnish to the holders of Preferred
Stock.
Neither the Depositary Bank nor the Company will be liable if it is
prevented or delayed by law or any circumstance beyond its control in performing
its obligations under the Deposit Agreement. The obligations of the Company and
the Depositary Bank under the Deposit Agreement will be limited to performance
in good faith of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceeding in respect of any Depositary Shares or
Preferred Stock unless satisfactory indemnity is furnished. They may rely upon
written advice of counsel or accountants, or upon information provided by
persons presenting Preferred Stock for deposit, holders of Depositary Receipts
or other persons believed to be competent and on documents believed to be
genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY BANK
The Depositary Bank may resign at any time by delivering to the Company
notice of its election to do so, and the Company may at any time remove the
Depositary Bank, any such resignation or removal to take effect upon the
appointment of a successor Depositary Bank and its acceptance of such
appointment. Such successor Depositary Bank must be appointed within 60 days
after delivery of the notice of resignation or removal and must be a bank or
trust company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
DESCRIPTION OF STOCK WARRANTS
The Company may issue, together with other securities or separately, Stock
Warrants for the purchase of Common Stock. Each series of Stock Warrants will be
issued under separate Stock Warrant Agreements (each a "Stock Warrant
Agreement") to be entered into between the Company and a bank or trust company,
as Stock Warrant Agent (the "Stock Warrant Agent"), all as set forth in the
Prospectus Supplement relating to Stock Warrants in respect of which this
Prospectus is being delivered. The Stock Warrant Agent will act solely as an
agent of the Company in connection with the Stock Warrants of such series and
will not assume any obligations or relationship of agency or trust for or with
any holders or beneficial owners of Stock Warrants. If Stock Warrants are
issued, copies of the forms of Stock Warrant Agreements and the Warrant
Certificates representing Stock Warrants (the "Stock Warrant Certificates") will
be filed on a Form 8-K and incorporated by reference in the Registration
Statement of which this Prospectus is a part, and the following summary is
qualified in its entirety by reference to such documents, and the Prospectus
Supplement relating to such Stock Warrants, including the definitions therein of
certain capitalized terms not defined herein.
GENERAL
Reference is made to the Prospectus Supplement for the terms of Stock
Warrants in respect of which this Prospectus is being delivered, the Stock
Warrant Agreement relating to such Stock Warrants and the Stock Warrant
Certificates representing such Stock Warrants, including the following: (1) the
offering price of such Stock Warrants, if any; (2) the procedures and conditions
relating to the exercise of such Stock Warrants; (3) the number
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<PAGE>
of shares of Common Stock purchasable upon exercise of each Stock Warrant and
the initial price at which such shares may be purchased upon exercise; (4) the
date on which the right to exercise such Stock Warrants shall commence and the
date on which such right shall expire (the "Expiration Date"); (5) a discussion
of federal income tax considerations applicable to the exercise of Stock
Warrants; (6) call provisions of such Stock Warrants, if any; and (7) any other
terms of the Stock Warrants. The shares of Common Stock issuable upon the
exercise of the Stock Warrants will, when issued in accordance with the Stock
Warrant Agreement, be fully paid and nonassessable.
Prior to the exercise of their Stock Warrants, holders of Stock Warrants
will not have any of the rights of holders of the Common Stock purchasable upon
such exercise, and will not be entitled to any dividend payments on the Common
Stock purchasable upon such exercise.
EXERCISE OF STOCK WARRANTS
Each Stock Warrant will entitle the holder to purchase for cash such number
of shares of Common Stock at such exercise price as shall in each case be set
forth in, or be determinable as set forth in, the Prospectus Supplement relating
to the Stock Warrants offered thereby. Unless otherwise specified in the
applicable Prospectus Supplement, Stock Warrants may be exercised at any time up
to the close of business on the Expiration Date set forth in the applicable
Prospectus Supplement. After the close of business on the Expiration Date,
unexercised Stock Warrants will become void.
Stock Warrants may be exercised as set forth in the Prospectus Supplement
relating to the Stock Warrants in respect of which this Prospectus is being
delivered. Upon receipt of payment and the Stock Warrant Certificates properly
completed and duly executed at the corporate trust office of the Stock Warrant
Agent or any other office indicated in the Prospectus Supplement, the Company
will, as soon as practicable, forward a certificate representing the number of
shares of Common Stock purchasable upon such exercise. If less than all of the
Stock Warrants represented by such Stock Warrant Certificate are exercised, a
new Stock Warrant Certificate will be issued for the remaining amount of Stock
Warrants.
ANTIDILUTION PROVISIONS
Unless otherwise specified in the applicable Prospectus Supplement, the
exercise price payable and the number of shares purchasable upon the exercise of
each Stock Warrant will be subject to adjustment in certain events, including
(1) the issuance of a stock dividend to holders of Common Stock or a
combination, subdivision or reclassification of Common Stock; (2) the issuance
of rights, warrants or options to all holders of Common Stock entitling the
holders thereof to purchase Common Stock for an aggregate consideration per
share less than the current market price per share of the Common Stock; or (3)
any distribution by the Company to the holders of its Common Stock of evidences
of indebtedness of the Company or of assets (excluding cash dividends or
distributions payable out of capital surplus and dividends and distributions
referred to in (1) above).
PLAN OF DISTRIBUTION
The Company may sell Securities to or through underwriters or dealers, and
also may sell Securities directly to one or more other purchasers or through
agents. The Prospectus Supplement sets forth the names of any underwriters or
agents involved in the sale of the Securities and any applicable commissions or
discounts.
Underwriters, dealers or agents may offer and sell the Securities from time
to time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. In connection with the
sale of Securities, underwriters or agents may be deemed to have received
compensation from the Company in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of the Securities
for whom they may act as agent. Underwriters or agents may sell the Securities
to or through dealers and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters or commissions from
the purchasers for whom they may act as agent.
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<PAGE>
The Offered Securities, other than the Common Stock, when first issued, will
have no established trading market. Any underwriters or agents to or through
whom such Securities are sold by the Company for public offering and sale may
make a market in such Securities, but such underwriters or agents will not be
obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
any such Securities.
If so indicated in the Prospectus Supplement, the Company may authorize
underwriters, dealers or other persons acting as the Company's agents to solicit
offers by certain institutions to purchase Securities from the Company pursuant
to delayed delivery contracts providing for payment and delivery on a future
date. The obligations of any purchaser under any such contract will be subject
to the condition that the purchase of the Securities shall not at the time of
delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject. Such contracts will be subject only to those conditions
set forth in the Prospectus Supplement and the Prospectus Supplement will set
forth the commission payable for solicitation of such contracts.
Any underwriters, dealers or agents participating in the distribution of
Securities may be deemed to be underwriters under the Securities Act, and any
discounts and commissions received by them and any profit realized by them on
resale of the Securities may be deemed to be underwriting discounts and
commissions under the Securities Act. Underwriters, dealers or agents may be
entitled, under agreements entered into with the Company, to indemnification
against or contribution toward certain civil liabilities, including liabilities
under the Securities Act.
Offers to purchase Securities may be solicited directly by the Company and
sales thereof may be made by the Company directly to institutional investors and
others. The terms of any such sales, including the terms of any bidding or
auction process, if utilized, will be described in the Prospectus Supplement
relating thereto.
VALIDITY OF THE SECURITIES
The validity of the issuance of the securities offered hereby will be passed
upon for the Company by Leslie T. Lederer, Vice President, Secretary and Counsel
of the Company. As of January 13, 1997, Mr. Lederer was the beneficial owner of
5,961 shares of Common Stock and 7,295 restricted shares and held options to
purchase 46,996 additional shares.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1995 have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
50
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth expenses in connection with the distribution
of the securities being registered, other than underwriting discounts and
commissions. All amounts are estimated, except for the SEC Filing Fee.
<TABLE>
<CAPTION>
SEC Filing Fee............................................................ $ 303,031
<S> <C>
Printing.................................................................. 100,000
Accounting Fees........................................................... 100,000
Legal Fees and Expenses................................................... 100,000
Blue Sky Fees and Expenses................................................ 10,000
Trustees Fees and Expenses................................................ 25,000
Miscellaneous............................................................. 11,969
---------
Total................................................................... $ 650,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 145 ("Section 145") of the Delaware General
Corporation Law of the State of Delaware (the "Delaware GCL") which provides for
indemnification of directors and officers in certain circumstances.
In accordance with Section 102(b)(7) of the Delaware GCL, the Company's
Restated Certificate of Incorporation, (the "Certificate of Incorporation")
provides that directors shall not be personally liable for monetary damages for
breaches of their fiduciary duty as directors except for (i) breaches of their
duty of loyalty to the Company or its stockholders, (ii) acts or omissions not
in good faith or which involve intentional misconduct or knowing violations of
law, (iii) under Section 174 of the Delaware GCL (unlawful payment of dividends)
or (iv) transactions from which a director derives an improper personal benefit.
The Certificate of Incorporation provides for indemnification of directors
and officers to the full extent provided by the Delaware GCL, as amended from
time to time. It states that the indemnification provided therein shall not be
deemed exclusive. The Company may maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of the Company, or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Company would have the power to
indemnify him against such expense, liability or loss, under the provisions of
the Delaware GCL.
The Underwriting Agreements, forms of which will be filed and incorporated
by reference pursuant to a Current Report on Form 8-K in connection with the
offering of Securities, may provide for indemnification of directors and
officers of the Company against certain liabilities. Similar indemnification
provisions were contained in underwriting agreements executed in connection with
prior offerings and sales of securities by the Company.
Pursuant to Section 145 and the Certificate of Incorporation, the Company
maintains directors' and officers' liability insurance coverage.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- --------- ------------------------------------------------------------------------------------------------------------------
<S> <C>
*1(a) Form of Underwriting Agreement.
4(a) Restated Certificate of Incorporation of the Company, filed as Exhibit 3(a) to the Company's Registration
Statement on Form S-1, Registration Number 33-54769, is hereby incorporated by reference.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- --------- ------------------------------------------------------------------------------------------------------------------
4(b) By-laws of the Company, as amended October 2, 1995, filed as Exhibit 3 to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1995, is hereby incorporated by reference.
<S> <C>
4(c) Specimen certificate representing Common Stock, $.01 par value, filed as Exhibit 4(a) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1987, is hereby incorporated by reference.
4(d) Certificate of Designation for the Series D Junior Participating Preferred Stock, filed as Exhibit 3(b) to the
Company's Annual Report on Form 10-K for the year ended December 31, 1991, is hereby incorporated by reference.
4(e) Certificate of Increase of Series D Junior Participating Preferred Stock dated July 1, 1993, filed as Exhibit 4(f)
to the Company's Registration Statement on Form S-3, Registration No. 33-66086, filed on July 5, 1993, is hereby
incorporated by reference.
4(f) Certificate of Designation for the $1.75 Series E Cumulative Convertible Exchangeable Preferred Stock, filed as
Exhibit 3(c) to the Company's Annual Report on Form 10-K for the year ended December 31, 1991, is hereby
incorporated by reference.
4(g) Specimen certificate representing the $1.75 Series E Cumulative Convertible Exchangeable Preferred Stock, filed as
Exhibit 4(g) to the Company's Registration Statement on Form S-3, Registration Number 33-45374, is hereby
incorporated by reference.
4(h) Rights Agreement dated as of July 25, 1988 between the Company and The First National Bank of Chicago, filed as
Exhibit 1 to the Company's Registration Statement on Form 8-A dated July 27, 1988, is hereby incorporated by
reference.
4(i) Amendment to Rights Agreement dated as of July 23, 1990 between the Company and The First National Bank of
Chicago, filed as Exhibit 1A to the Company's Form 8 dated August 2, 1990 amending the Company's Registration
Statement on Form 8-A dated July 27, 1988, is hereby incorporated by reference.
4(j) Amendment to Rights Agreement dated as of May 16, 1996 between the Company and First Chicago Trust Company of New
York, filed as Exhibit 1 to the Company's Form 8 dated June 8, 1996 amending the Company's Registration
Statement on Form 8 dated August 2, 1990 amending the Company's Registration Statement on Form 8-A dated July
27, 1988, as amended, is hereby incorporated by reference.
4(k) Amended and Restated Credit Agreement ("Credit Agreement") dated as of March 22, 1996 among the Company, the
financial institutions signatory thereto, Bankers Trust Company, as Agent (the "Agent"), and Bank of America
National Trust & Savings Association, The Bank of New York, The Bank of Nova Scotia, Caisse Nationale de Credit
Agricole, Chemical Bank, The Chase Manhattan Bank, N.A., Dresdner Bank AG-Chicago and Grand Cayman Branches, The
First National Bank of Chicago, The Long-Term Credit Bank of Japan, Ltd., NationsBank of North Carolina, N.A.,
The Sumitomo Bank, Ltd., Chicago Branch and The Toronto-Dominion Bank, as Co-Agents (the "Co-Agents"), filed as
Exhibit 4(e) to the Company's Annual Report on Form 10-K for the year ended December 31, 1995, is hereby
incorporated by reference.
4(l) First Amendment of Credit Agreement dated as of June 20, 1996 among the Company, the financial institutions
signatory thereto and Bankers Trust Company, as Agent (the "Agent"), filed as Exhibit 4(s) to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1996, is hereby incorporated by reference.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- --------- ------------------------------------------------------------------------------------------------------------------
4(m) Second Amendment of Credit Agreement dated as of December 18, 1996 among the Company, the financial institutions
signatory thereto and Bankers Trust Company, as Agent (the "Agent"), filed as Exhibit 4 to the Company's Current
Report on Form 8-K dated December 18, 1996, is hereby incorporated by reference.
<S> <C>
4(n) Indenture dated as of July 24, 1996 between the Company and The Bank of New York, as Trustee, relating to the
Rating Adjustable Senior Notes due 2016, filed as Exhibit 4.1 to the Company's Registration Statement on Form
S-4, Registration Number 333-12155, is hereby incorporated by reference.
4(o) First Supplemental Indenture dated July 24, 1996 between the Company and The Bank of New York, as Trustee,
relating to the Rating Adjustable Senior Notes due 2016, filed as Exhibit 4.2 to the Company's Registration
Statement on Form S-4, Registration Number 333-12155, is hereby incorporated by reference.
4(p) Indenture dated as of October 12, 1994 between the Company and Norwest Bank Minnesota, N.A., as Trustee, relating
to the 10 3/4 percent First Mortgage Notes due October 1, 2002, filed as Exhibit 4(b) to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1994, is hereby incorporated by reference.
4(q) Indenture dated as of October 12, 1994 between the Company and The Bank of New York, as Trustee, relating to the
11 1/2 percent Senior Notes due October 1, 2004, filed as Exhibit 4(c) to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1994, is hereby incorporated by reference.
4(r) Indenture dated as of February 15, 1992 between the Company and The Bank of New York, as Trustee, relating to the
Company's 6 3/4% Convertible Subordinated Debentures due February 15, 2007, filed as Exhibit 4(p) to the
Company's Registration Statement on Form S-3, Registration Number 33-45978, is hereby incorporated by reference.
4(s) Senior Subordinated Indenture dated as of March 15, 1992 between the Company and The Bank of New York, as Trustee,
filed as Exhibit 4(a) to the Company's Registration Statement on Form S-3, Registration Number 33-46764, is
hereby incorporated by reference.
4(t) Form of Senior Subordinated Debt Securities (included in Exhibit 4(s) to this Registration Statement).
4(u) Indenture dated as of June 15, 1993 between the Company and Norwest Bank Minnesota, National Association, as
Trustee, relating to the Company's 8 7/8% Convertible Senior Subordinated Notes due 2000, filed as Exhibit 4(a)
to the Company's Registration Statement on Form S-3, Registration Number 33-66086, is hereby incorporated by
reference.
4(v) Indenture dated as of November 1, 1991 between the Company and the Bank of New York, as Trustee, relating to the
Company's Senior Debt Securities, filed as Exhibit 4(u) to the Company's Registration Statement on Form S-3,
Registration Number 33-45374, is hereby incorporated by reference.
4(w) First Supplemental Indenture dated as of June 23, 1993 between the Company and The Bank of New York, as Trustee,
relating to the Indenture dated as of November 1, 1991 between the Company and The Bank of New York, as Trustee,
filed as Exhibit 4(aa) to the Company's Registration Statement on Form S-3, Registration Number 33-66086, is
hereby incorporated by reference.
4(x) Second Supplemental Indenture dated as of February 1, 1994 between the Company and The Bank of New York, as
Trustee, relating to the Indenture dated as of November 1, 1991, as amended, filed as Exhibit 4.2 to the
Company's Current Report on Form 8-K, dated January 24, 1994, is hereby incorporated by reference.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- --------- ------------------------------------------------------------------------------------------------------------------
4(y) Master Trust Indenture and Security Agreement dated as of March 14, 1995 among Stone Receivables Corporation, the
Company, as Servicer, Marine Midland Bank, as Trustee, and Bankers Trust Company, as Administrative Agent,
relating to the accounts receivable securitization program, filed as Exhibit 4(o) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1995, is hereby incorporated by reference.
<S> <C>
4(z) Series 1995-1 Supplement dated as of March 14, 1995 to the Master Trust Indenture and Security Agreement dated as
of March 14, 1995, among Stone Receivables Corporation, the Company, as Servicer, Marine Midland Bank, as
Trustee, and Bankers Trust Company, as Administrative Agent, relating to the accounts receivable securitization
program, filed as Exhibit 4(p) to the Company's Annual Report on Form 10-K for the year ended December 31, 1995,
is hereby incorporated by reference.
4(aa) Form of Senior Debt Securities Indenture.
4(bb) Form of Senior Debt Securities (included in Exhibit 4(aa) to this Registration Statement).
Indentures with respect to other long-term debt, none of which exceeds 10 percent of the total assets of the
Company and its subsidiaries on a consolidated basis, are not attached. (The Registrant agrees to furnish a copy
of such documents to the Commission upon request.)
4(cc) Guaranty dated October 7, 1983 between the Company and The Continental Group, Inc., filed as Exhibit 4(h) to the
Company's Registration Statement on Form S-3, Registration Number 33-36218, is hereby incorporated by reference.
4(dd) Amendment No. 1 to Guaranty, dated as of June 1, 1996, among Continental Holdings, Inc., Continental Group, Inc.
and the Company, filed as Exhibit 4(r) to the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1996, is hereby incorporated by reference.
*4(ee) Form of Certificate of Designations of Preferred Stock.
*4(ff) Form of Deposit Agreement, including form of Depositary Receipt.
*4(gg) Form of Debt Warrant Agreement, including form of Debt Warrant Certificate.
*4(hh) Form of Stock Warrant Agreement, including form of Stock Warrant Certificate.
5 Opinion of Leslie T. Lederer, Vice President, Secretary and Counsel of the Company.
12(a) Computation of Ratios of Earnings to Fixed Charges.
12(b) Computation of Ratios of Earnings to Fixed Charges and Preferred Stock Dividends.
23(a) Consent of Price Waterhouse.
23(b) Consent of Leslie T. Lederer (included in Exhibit 5 to this Registration Statement).
24 Powers of Attorney.
25(a) T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York relating to the Senior
Subordinated Debt Securities, filed as Exhibit 26(b) to the Registrant's Registration Statement on Form S-3,
Registration Number 33-45978, filed on March 4, 1992, is hereby incorporated by reference.
</TABLE>
- ------------------------
* To be filed, if necessary, subsequent to the effectiveness of this
Registration Statement and incorporated by reference pursuant to a Current
Report on Form 8-K in connection with the offering of Securities.
II-4
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(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 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(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 paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
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) That, 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 registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(6) That, for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
(b) 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
Securities Act of 1933 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
II-5
<PAGE>
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, 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.
(c) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Securities and Exchange Commission under
Section 305(b)(2) of the Trust Indenture Act.
II-6
<PAGE>
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 caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Chicago and the State of Illinois on the 27th day of January, 1997.
STONE CONTAINER CORPORATION
By: _LESLIE T. LEDERER_________________
Leslie T. Lederer
VICE PRESIDENT, SECRETARY AND
COUNSEL
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on January 27, 1997 by the
following persons in the capacities indicated:
<TABLE>
<S> <C>
* Chairman of the Board of Directors and President
- -------------------------------------- (Chief Executive Officer)
Roger W. Stone
* Senior Vice President--Chief Financial and Planning Officer
- -------------------------------------- (Chief Financial Officer)
Randolph C. Read
* Senior Vice President, Administration and Corporate
- -------------------------------------- Controller (Principal Accounting Officer)
Thomas P. Cutilletta
*
- -------------------------------------- Director
William F. Aldinger, III
*
- -------------------------------------- Director
Richard A. Giesen
*
- -------------------------------------- Director
James J. Glasser
*
- -------------------------------------- Director
Jack M. Greenberg
*
- -------------------------------------- Director
George D. Kennedy
</TABLE>
II-7
<PAGE>
<TABLE>
<S> <C>
*
- -------------------------------------- Director
Howard C. Miller, Jr.
*
- -------------------------------------- Director
John D. Nichols
*
- -------------------------------------- Director
Jerry K. Pearlman
*
- -------------------------------------- Director
Richard J. Raskin
*
- -------------------------------------- Director
Alan Stone
*
- -------------------------------------- Director
Avery J. Stone
*
- -------------------------------------- Director
Ira N. Stone
*
- -------------------------------------- Director
James H. Stone
* By: LESLIE T. LEDERER
---------------------------------
Leslie T. Lederer
(ATTORNEY-IN-FACT)
</TABLE>
II-8
<PAGE>
Exhibit 4(aa)
STONE CONTAINER CORPORATION,
as Issuer
TO
____________________,
as Trustee
-----------
Indenture
Dated as of ______________, 1997
----------
<PAGE>
STONE CONTAINER CORPORATION
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of _____________, 1997
Trust Indenture Indenture Section
Act Section
Section 310(a)(1)...........................................................609
(a)(2)....................................................................609
(a)(3).........................................................Not Applicable
(a)(4).........................................................Not Applicable
(a)(5)....................................................................609
(b)..................................................................608, 610
(c)...........................................................Not Applicable
Section 311(a)..............................................................613
(b).......................................................................613
(b)(2).........................................................703(a), 703(b)
Section 312(a)......................................................701, 702(a)
(b)....................................................................702(b)
(c)....................................................................702(c)
Section 313(a)...........................................................703(a)
(b)....................................................................703(b)
(c)............................................................703(a), 703(b)
(d)....................................................................703(b)
Section 314(a)(1)...........................................................704
(a)(2)..................................................................704
(a)(3)..................................................................704
(a)(4).................................................................1011
(b).........................................................Not Applicable
(c)(1)....................................................................102
(c)(2)....................................................................102
(c)(3).........................................................Not Applicable
(d)............................................................Not Applicable
(e).......................................................................102
(f)............................................................Not Applicable
Section 315(a)...........................................................601(a)
(b)...............................................................602, 703(a)
(c)....................................................................601(b)
(d)....................................................................601(c)
(d)(1).........................................................601(a), 601(c)
(d)(2).................................................................601(c)
(d)(3).................................................................601(c)
(e).......................................................................514
<PAGE>
Section 316(a)..............................................................101
(a)(1)(A).................................................................512
(a)(1)(B)............................................................502, 513
(a)(2).........................................................Not Applicable
(b).......................................................................508
Section 317(a)(1)...........................................................503
(a)(2)....................................................................504
(b)......................................................................1003
(c)....................................................................104(c)
Section 318(a)..............................................................107
- -----------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of this Indenture.
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE
Definitions and Other Provisions
of General Application....................................................1
SECTION 101. DEFINITIONS.................................................1
11 1/2% Notes........................................................2
11 1/2% Note Indenture...............................................2
1991 Indenture.......................................................2
1994 Indentures......................................................2
1996 Indentures......................................................2
Acquiring Person.....................................................2
Act..................................................................3
Affiliate............................................................3
Agent................................................................3
Asset Disposition....................................................3
Asset Disposition Offer..............................................3
Asset Disposition Offer Amount.......................................3
Asset Disposition Payment Date.......................................3
Authenticating Agent.................................................4
Authority............................................................4
Bankruptcy Law.......................................................4
Board of Directors...................................................4
Board Resolution.....................................................4
Business Day.........................................................4
Capital Stock........................................................4
Capitalized Lease Obligation.........................................4
Change of Control....................................................4
Change of Control Date...............................................4
Change of Control Offer..............................................4
Change of Control Payment Date.......................................4
Commission...........................................................4
Commodities Agreement................................................5
Company..............................................................5
Company Request......................................................5
Company Order........................................................5
Consolidated Amortization Expense....................................5
Consolidated Cash Flow Available for Fixed Charges...................5
Consolidated Depreciation Expense....................................5
Consolidated Free Cash Flow..........................................5
Consolidated Income Tax Expense......................................6
i
<PAGE>
Consolidated Interest Coverage Ratio.................................6
Consolidated Interest Expense........................................6
Consolidated Net Income..............................................6
Consolidated Net Worth...............................................7
Continental Guaranty.................................................7
Continuing Director..................................................7
Corporate Trust Office...............................................7
corporation..........................................................7
covenant defeasance..................................................7
Credit Agreements....................................................7
Currency Agreement...................................................8
Custodian............................................................8
Default..............................................................8
Defaulted Interest...................................................8
defeasance...........................................................8
Deficiency Amount....................................................8
Deficiency Date......................................................8
Deficiency Offer.....................................................8
Deficiency Offer Amount..............................................8
Deficiency Payment Date..............................................8
Depository...........................................................8
dollars..............................................................9
$....................................................................9
Event of Default.....................................................9
Exchange Act.........................................................9
First Mortgage Notes.................................................9
First Mortgage Note Indenture........................................9
Five Year Treasury Rate..............................................9
GAAP................................................................10
Holder..............................................................10
Securityholder......................................................10
Indebtedness........................................................10
Indenture...........................................................11
Initial Interest Rate...............................................11
interest............................................................11
Interest Payment Date...............................................11
Interest Swap Obligations...........................................11
Lien................................................................11
Maturity............................................................11
Minimum Subordinated Capital Base...................................11
New Credit Agreement................................................12
Officer.............................................................12
Officer's Certificate...............................................12
ii
<PAGE>
Opinion of Counsel..................................................12
Ordinary Course of Business Liens...................................12
Original Issue Discount Security....................................13
Outstanding.........................................................14
Paying Agent........................................................14
Permitted Existing Indebtedness of an Acquired Person...............15
Permitted Indebtedness..............................................15
Permitted Liens.....................................................17
Permitted Refinancing Indebtedness..................................20
Permitted Stone Canada Indebtedness.................................21
Permitted Subordinated Indebtedness.................................21
Person..............................................................22
Place of Payment....................................................22
Predecessor Security................................................22
Rate Determination Period...........................................22
Rating Adjustable Notes.............................................22
Rating Adjustable Note Indenture....................................22
Receivables.........................................................22
Redeemable Stock....................................................22
Redemption Date.....................................................23
Redemption Price....................................................23
Register............................................................23
Registrar...........................................................23
Registered Security.................................................23
Regular Record Date.................................................23
Reset Date..........................................................23
Reset Rate..........................................................23
Responsible Officer.................................................23
Restricted Payment..................................................23
Restricted Subsidiary...............................................23
SCFC................................................................23
SCFC Notes..........................................................24
SCFC Note Indenture.................................................24
SRC Master Trust Indenture..........................................24
Securities..........................................................24
Senior Indebtedness.................................................24
Seven Year Treasury Rate............................................24
Special Record Date.................................................25
Specified Bank Debt.................................................25
Stated Maturity.....................................................25
Stone Canada........................................................25
Stone Canada Group..................................................25
Subordinated Capital Base...........................................26
iii
<PAGE>
Subordinated Indebtedness...........................................26
Subsidiary..........................................................26
Ten Year Treasury Rate..............................................26
Trustee.............................................................27
Trust Indenture Act.................................................27
Two Year Treasury Rate..............................................27
U.S. Government Obligations.........................................28
Unrestricted Subsidiary.............................................28
Vice President......................................................28
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.......................28
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.....................29
SECTION 104. ACTS OF HOLDERS............................................30
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY......................31
SECTION 106. NOTICE TO HOLDERS; WAIVER..................................31
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT..........................32
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS...................32
SECTION 109. SUCCESSORS AND ASSIGNS.....................................32
SECTION 110. SEPARABILITY CLAUSE........................................32
SECTION 111. BENEFITS OF INDENTURE......................................32
SECTION 112. GOVERNING LAW..............................................32
SECTION 113. LEGAL HOLIDAYS.............................................32
SECTION 114. NO RECOURSE AGAINST OTHERS.................................33
SECTION 115. INCORPORATION BY REFERENCE TO TRUST INDENTURE ACT..........33
ARTICLE TWO
Security Forms...........................................................34
SECTION 201. FORMS GENERALLY............................................34
SECTION 202. FORM OF FACE OF SECURITY...................................34
SECTION 203. FORM OF REVERSE OF SECURITY................................37
SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION............45
SECTION 205. SECURITIES IN GLOBAL FORM..................................46
SECTION 206. CUSIP NUMBER...............................................46
SECTION 207. FORM OF LEGEND FOR SECURITIES IN GLOBAL FORM...............47
ARTICLE THREE
The Securities...........................................................47
SECTION 301. AMOUNT UNLIMITED: ISSUABLE IN SERIES.......................47
SECTION 302. DENOMINATIONS..............................................49
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.............49
SECTION 304. TEMPORARY SECURITIES.......................................51
SECTION 305. REGISTRATION, TRANSFER AND EXCHANGE........................52
iv
<PAGE>
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES...........54
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.............55
SECTION 308. PERSONS DEEMED OWNERS......................................56
SECTION 309. CANCELLATION...............................................56
SECTION 310. COMPUTATION OF INTEREST....................................57
ARTICLE FOUR
Satisfaction and Discharge...............................................57
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE....................57
SECTION 402. APPLICATION OF TRUST MONEY.................................58
ARTICLE FIVE
Remedies.................................................................58
SECTION 501. EVENTS OF DEFAULT..........................................58
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.........61
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE....................................................61
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM...........................62
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.................................................63
SECTION 506. APPLICATION OF MONEY COLLECTED.............................63
SECTION 507. LIMITATION ON SUITS........................................64
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.......................................64
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.........................65
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.............................65
SECTION 511. DELAY OR OMISSION NOT WAIVER...............................65
SECTION 512. CONTROL BY HOLDERS.........................................65
SECTION 513. WAIVER OF PAST DEFAULTS....................................66
SECTION 514. UNDERTAKING FOR COSTS......................................66
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS...........................67
ARTICLE SIX
The Trustee..............................................................67
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEE.........67
SECTION 602. NOTICE OF DEFAULTS.........................................67
SECTION 603. CERTAIN RIGHTS OF TRUSTEE..................................68
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.....69
SECTION 605. MAY HOLD SECURITIES........................................69
SECTION 606. MONEY HELD IN TRUST........................................69
SECTION 607. COMPENSATION AND REIMBURSEMENT.............................69
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS....................70
v
<PAGE>
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY....................70
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR..........71
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.....................72
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS...................................................74
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY..........74
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT........................74
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company........................76
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS..76
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.....76
SECTION 703. REPORTS BY TRUSTEE.........................................77
SECTION 704. REPORTS BY COMPANY.........................................77
ARTICLE EIGHT
Consolidation, Merger, Lease, Sale or Transfer...........................78
SECTION 801. WHEN COMPANY MAY MERGE, ETC................................78
SECTION 802. SECURITIES TO BE SECURED IN CERTAIN EVENTS.................79
SECTION 803. OFFICER'S CERTIFICATE; OPINION OF COUNSEL..................80
SECTION 804. SUCCESSOR CORPORATION SUBSTITUTED..........................80
ARTICLE NINE
SUPPLEMENTS TO THE INDENTURE ............................................80
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.........80
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS............82
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.......................83
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES..........................83
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT........................83
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.........83
ARTICLE TEN
Covenants................................................................84
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST................84
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY...........................84
SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.........85
SECTION 1004. CORPORATE EXISTENCE.......................................86
SECTION 1005. PAYMENT OF TAXES AND OTHER CLAIMS.........................86
SECTION 1006. RESTRICTION ON DIVIDENDS..................................87
SECTION 1007. LIMITATION ON FUTURE LIENS AND GUARANTIES.................88
vi
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SECTION 1008. LIMITATION ON FUTURE INCURRENCE OF INDEBTEDNESS...........89
SECTION 1009. LIMITATION ON ASSET DISPOSITIONS..........................90
SECTION 1010. MAINTENANCE OF PROPERTIES.................................94
SECTION 1011. COMPLIANCE CERTIFICATES...................................94
SECTION 1012. WAIVER OF STAY, EXTENSION OR USURY LAWS...................95
SECTION 1013. CHANGE OF CONTROL.........................................96
SECTION 1014. WAIVER OF CERTAIN COVENANTS...............................97
ARTICLE ELEVEN
Maintenance of Subordinated Capital Base.................................98
SECTION 1101. MAINTENANCE OF SUBORDINATED CAPITAL BASE..................98
SECTION 1102. ALTERNATIVE INTEREST RATE ADJUSTMENT.....................100
ARTICLE TWELVE
Redemption of Securities................................................101
SECTION 1201. APPLICABILITY OF ARTICLE.................................101
SECTION 1202. ELECTION TO REDEEM; NOTICE TO TRUSTEE....................101
SECTION 1203. SELECTION BY TRUSTEE OF THE SECURITIES TO BE REDEEMED....102
SECTION 1204. NOTICE OF REDEMPTION.....................................102
SECTION 1205. DEPOSIT OF REDEMPTION PRICE..............................103
SECTION 1206. SECURITIES PAYABLE ON REDEMPTION DATE....................103
SECTION 1207. SECURITIES REDEEMED IN PART..............................104
ARTICLE THIRTEEN
SINKING FUNDS...........................................................104
SECTION 1301. APPLICABILITY OF ARTICLE.................................104
SECTION 1302. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES....104
SECTION 1303. REDEMPTION OF SECURITIES FOR SINKING FUND................105
ARTICLE FOURTEEN
Defeasance And Covenant Defeasance......................................105
SECTION 1401. APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT
DEFEASANCE OR COVENANT DEFEASANCE........................105
SECTION 1402. DEFEASANCE AND DISCHARGE.................................105
SECTION 1403. COVENANT DEFEASANCE......................................106
SECTION 1404. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE..........106
SECTION 1405. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS....................108
- ----------------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of this Indenture.
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INDENTURE, dated as of ____________, 1997, between STONE CONTAINER
CORPORATION, a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office at
Chicago, Illinois, and ____________________, a ________________ corporation, as
Trustee (herein called the "Trustee") having its Corporate Trust office at
______________________________________ _____, United States of America.
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 (as hereinafter defined) thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the Securities
or of any 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 GAAP;
(4) the word "including" (and with correlative meaning "include")
means including, without limiting the generality of, any description preceding
such term; and
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(5) 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.
Certain terms, used principally in Article Six, are defined in that
Article.
"11 1/2% Notes" means the Company's 11-1/2% Senior Notes due 2004.
"11 1/2% Note Indenture" means the indenture dated as of October 12, 1994
between the Company and The Bank of New York, as Trustee, relating to the
11 1/2% Notes, as amended and supplemented to the date hereof and, unless
otherwise indicated, from time to time after the date hereof.
"1991 Indenture" means the indenture dated as of November 1, 1991 between
the Company and The Bank of New York, as Trustee, as amended and supplemented to
the date hereof and, unless otherwise indicated, from time to time after the
date hereof. References herein to Indebtedness issued under the 1991 Indenture
shall include any Indebtedness issued thereunder both before and after the date
hereof.
"1994 Indentures" means (i) the 11 1/2% Note Indenture and (ii) the First
Mortgage Note Indenture. References herein to Indebtedness issued under the
1994 Indentures shall include any Indebtedness issued thereunder both before and
after the date hereof.
"1996 Indentures" means (i) the Rating Adjustable Note Indenture and (ii)
the SCFC Note Indenture. References to Indebtedness issued under the 1996
Indentures shall include any Indebtedness issued thereunder.
"Acquiring Person" means any Person or group (as defined in Section
13(d)(3) of the Exchange Act) who or which, together with all affiliates and
associates (as defined in Rule 12b-2 under the Exchange Act), becomes the
beneficial owner of shares of common stock of the Company having more than 50%
of the total number of votes that may be cast for the election of directors of
the Company; PROVIDED, HOWEVER, that an Acquiring Person shall not include (i)
the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan
of the Company or any Subsidiary of the Company or any entity holding common
stock of the Company for or pursuant to the terms of any such plan, (iv) any
descendant of Joseph Stone or the spouse of any such descendant, the estate of
any such descendant or the spouse of any such descendant, any trust or other
arrangement for the benefit of any such descendant or the spouse of any such
descendant or any charitable organization established by any such descendant or
the spouse of any such descendant (collectively, the "Stone Family"), or (v) any
group which includes any member or members of the Stone Family and a majority of
the common stock of the Company held by such group is beneficially owned by such
member or members. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of common stock by the
Company which, by reducing the number of shares
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outstanding, increases the proportionate number of shares beneficially owned by
such Person to more than 50% or more of the common stock of the Company then
outstanding; PROVIDED, HOWEVER, that if a Person shall become the beneficial
owner of more than 50% or more of the common stock of the Company then
outstanding by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the beneficial owner of any additional
shares of common stock of the Company, then such Person shall be deemed to be an
"Acquiring Person."
"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.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Disposition" means any sale, transfer, sale-leaseback or other
disposition of (i) shares of Capital Stock of a Restricted Subsidiary (other
than directors' qualifying shares) or (ii) property or assets of the Company or
any Restricted Subsidiary (other than a sale, transfer, sale-leaseback or other
disposition of Receivables and other assets or property described in clause (vi)
of the definition of Permitted Liens pursuant to a Receivables sale constituting
Indebtedness pursuant to clause (ii) of the definition thereof); PROVIDED,
HOWEVER, that an Asset Disposition shall not include any sale, transfer,
sale-leaseback or other disposition (a) of Collateral (as defined in the First
Mortgage Note Indenture while the First Mortgage Notes are outstanding), (b) by
a Restricted Subsidiary to the Company or to another Restricted Subsidiary or by
the Company to a Restricted Subsidiary, (c) of defaulted Receivables for
collection or (d) in the ordinary course of business, but shall include any
sale, transfer, sale-leaseback or other disposition by the Company or a
Restricted Subsidiary to an Unrestricted Subsidiary of the shares, property or
assets referred to in clauses (i) and (ii). The designation by the Company of a
Subsidiary of the Company as an "Unrestricted Subsidiary" shall constitute an
Asset Disposition of such Subsidiary's property and assets net of its
liabilities, unless the transfer of property and assets to such Subsidiary has
previously constituted an Asset Disposition.
"Asset Disposition Offer" shall have the meaning provided in Section
1009(c).
"Asset Disposition Offer Amount" shall have the meaning provided in Section
1009(a).
"Asset Disposition Payment Date" shall have the meaning provided in Section
1009(c).
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"Authenticating Agent" means any Person authorized by the Trustee to act on
behalf of the Trustee to authenticate Securities.
"Authority" means any federal, state, municipal or local government or
quasi-governmental agency or authority.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Board of Directors" means the board of directors of the Company; PROVIDED,
HOWEVER, that when the context refers to actions or resolutions of the Board of
Directors, then the term "Board of Directors" shall also mean any duly
authorized committee of the Board of Directors of the Company or Officer
authorized to act with respect to any particular matter to exercise the power of
the Board of Directors of the Company.
"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 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 regulation to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, warrants, rights, options or other equivalents
(however designated) of capital stock or any other equity interest of such
Person, including each class of common stock and preferred stock.
"Capitalized Lease Obligation" means, in respect of any Person, an
obligation to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of Indebtedness represented by such obligation shall be the capitalized
amount of such obligation determined in accordance with such principles.
"Change of Control" means any event by which (i) an Acquiring Person has
become such or (ii) Continuing Directors cease to comprise a majority of the
members of the Board of Directors of the Company.
"Change of Control Date", "Change of Control Offer" and "Change of Control
Payment Date" shall have the respective meanings provided in Section 1013.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this
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Indenture 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.
"Commodities Agreement" of any Person means any forward contract, option or
futures contract or similar agreement or arrangement designed to protect such
Person or any of its Subsidiaries from fluctuations in the price of, or shortage
of supply of, commodities.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"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 President or
a Vice President, and by its Treasurer, an Assistant Treasurer, its Controller,
an Assistant Controller, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Amortization Expense" means, for any period, the amortization
expense of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Cash Flow Available for Fixed Charges" means, for any period,
(a) the sum of the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) Consolidated Income Tax Expense, (iv)
Consolidated Depreciation Expense, (v) Consolidated Amortization Expense and
(vi) other non-cash items reducing Consolidated Net Income, MINUS (b) non-cash
items increasing Consolidated Net Income, all as determined on a consolidated
basis for the Company and its Restricted Subsidiaries in accordance with GAAP.
"Consolidated Depreciation Expense" means, for any period, the depreciation
expense of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Free Cash Flow" means, for any period, (a) the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Depreciation Expense and (iii) Consolidated Amortization Expense, MINUS (b) the
sum of (i) Restricted Payments during such period, (ii) net reduction during
such period in Indebtedness of the Company and its Restricted Subsidiaries
(other than as a result of Asset Dispositions, Collateral Asset Dispositions (as
defined in the First Mortgage Note Indenture) or Collateral Loss Events (as
defined in the First Mortgage Note Indenture)) and (iii) the excess (but not the
deficit) of capital expenditures of the Company and its Restricted Subsidiaries
for such period not financed pursuant to clause (vi) of the definition of
Permitted Indebtedness over Consolidated Depreciation Expense.
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"Consolidated Income Tax Expense" means, for any period, the aggregate of
the income tax expense of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio" means, for any period, the ratio of
(i) Consolidated Cash Flow Available for Fixed Charges to (ii) Consolidated
Interest Expense.
"Consolidated Interest Expense" means, for any period, the interest expense
(including the interest component of all Capitalized Lease Obligations and the
earned discount or yield with respect to a Receivables sale constituting
Indebtedness) of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; PROVIDED, HOWEVER,
that, with respect to revolving credit, revolving Receivables purchases or other
similar arrangements, the interest expense in respect thereof for any period
shall be the PRO FORMA interest expense attributable to all amounts committed
during such period under such revolving credit, revolving Receivables purchases
or other similar arrangements, whether or not such amounts were actually
outstanding during such period, in accordance with the terms thereof, in each
case on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income (or loss)
of the Company and its Restricted Subsidiaries on a consolidated basis for such
period taken as a single accounting period, determined in accordance with GAAP;
PROVIDED, HOWEVER, that: (a) there shall be excluded therefrom (i) the net
income (or loss) of any Person (other than the Company) which is not a
Restricted Subsidiary, EXCEPT to the extent of the amounts of dividends or other
distributions actually paid in cash or tangible property or tangible assets
(such property or assets to be valued at their fair market value net of any
obligations secured thereby) to the Company or any of its Restricted
Subsidiaries by such Person during such period, (ii) EXCEPT to the extent
includable pursuant to the foregoing clause (i), the net income (or loss) of any
Person accrued prior to the date it becomes a Restricted Subsidiary or is merged
into or consolidated with the Company or any of its Restricted Subsidiaries or
that Person's property or assets are acquired by the Company or any of its
Restricted Subsidiaries, (iii) the net income of any Restricted Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
by that Restricted Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary and (iv) the excess (but not the deficit), if any, of (x)
any gain which must be treated as an extraordinary item under GAAP or any gain
realized upon the sale or other disposition of any asset that is not sold in the
ordinary course of business or of any Capital Stock of a Restricted Subsidiary
over (y) any loss which must be treated as an extraordinary item under GAAP or
any loss realized upon the sale or other disposition of any asset that is not
sold in the ordinary course of business or of any Capital Stock of a Restricted
Subsidiary; and (b) there shall be included therein the amount of cash realized
by the Company or any of its Restricted Subsidiaries during such period on
account of dividends or other distributions
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theretofore paid in other than cash or tangible property or tangible assets by a
Person which is not a Restricted Subsidiary.
"Consolidated Net Worth" means the amount which at any date of
determination, in conformity with GAAP consistently applied, would be set forth
under the caption "stockholders' equity" (or any like caption) on a consolidated
balance sheet of the Company and its Restricted Subsidiaries, exclusive of
amounts attributable to Redeemable Stock (at such time as no Indebtedness is
outstanding under the 1991 Indenture, excluding the effects of foreign currency
translation adjustments). If the Company has changed one or more of the
accounting principles used in the preparation of its financial statements
because of a change mandated by the Financial Accounting Standards Board or its
successor, then Consolidated Net Worth shall mean the Consolidated Net Worth the
Company would have had if the Company had continued to use those generally
accepted accounting principles employed on November 1, 1991.
"Continental Guaranty" means the Guaranty dated as of October 7, 1983
between The Continental Group, Inc. and the Company, as amended from time to
time.
"Continuing Director" means any member of the Board of Directors, while
such person is a member of such Board of Directors, who is not an Acquiring
Person, or an Affiliate or associate of an Acquiring Person or a representative
of an Acquiring Person or of any such Affiliate or associate and who (a) was a
member of the Board of Directors prior to November 1, 1991, or (b) subsequently
became or becomes a member of such Board of Directors and whose nomination for
election or election to such Board of Directors was or is recommended or
approved by resolution of a majority of the Continuing Directors or who was or
is included as a nominee in a proxy statement of the Company distributed when a
majority of such Board of Directors consists of Continuing Directors.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date hereof is located at 101 Barclay Street, New York, New
York, 10286, United States of America.
"corporation" includes corporations, associations, companies, business
trusts and limited partnerships.
"covenant defeasance" has the meaning specified in Section 1403.
"Credit Agreements" means (i) the credit agreement, dated as of March 1,
1989, by and among the Company, the financial institutions signatory thereto,
Bankers Trust Company, as agent for such financial institutions, and Citibank,
N.A., Chemical Bank (as successor by merger to Manufacturers Hanover Trust
Company) and The First National Bank of Chicago, as co-agents for such financial
institutions, as amended, modified, refinanced (including,
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without limitation, by the New Credit Agreement) or extended from time to time,
(ii) the credit agreement, dated as of March 1, 1989, by and among Stone Canada,
the financial institutions signatory thereto, Bankers Trust Company, as agent
for such financial institutions, and Citibank, N.A., Chemical Bank (as successor
by merger to Manufacturers Hanover Trust Company) and The First National Bank of
Chicago, as co-agents for such financial institutions, as amended, modified,
refinanced (including, without limitation, by the New Credit Agreement) or
extended from time to time and (iii) the revolving credit agreement, dated as of
March 1, 1989, by and among Stone Canada, the financial institutions signatory
thereto, BT Bank of Canada, as administrative agent, The Bank of Nova Scotia, as
payment agent, and Bankers Trust Company, as collateral agent, as amended,
modified, refinanced (including, without limitation, by the New Credit
Agreement) or extended from time to time.
"Currency Agreement" of any Person means any foreign exchange contract,
currency swap agreement, forward currency contract, option or futures contract
or other similar agreement or arrangement, and any renewal or extension thereof,
designed to protect such Person or any of its Subsidiaries against fluctuations
in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"defeasance" has the meaning specified in Section 1402.
"Deficiency Amount" shall have the meaning provided in Section 1009(b).
"Deficiency Date" shall have the meaning provided in Section 1101(a).
"Deficiency Offer" shall have the meaning provided in Section 1101(a).
"Deficiency Offer Amount" shall have the meaning provided in Section
1101(a).
"Deficiency Payment Date" shall have the meaning provided in Section
1101(c)(2).
"Depository" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more permanent global
Securities, the Person designated as Depository by the Company pursuant to
Section 301, until a successor Depository shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Depository" shall mean
or include each Person who is then a Depository hereunder, and if at
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any time there is more than one such Person, "Depository" shall mean the
Depository with respect to the Securities of that series.
"dollars" and "$" means lawful money of the United States of America.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended
from time to time, and the rules and regulations promulgated thereunder.
"First Mortgage Notes" means the Company's 10-3/4% First Mortgage Notes due
2002.
"First Mortgage Note Indenture" means the indenture dated as of October 12,
1994 between the Company and Norwest Bank Minnesota, National Association, as
Trustee, relating to the First Mortgage Notes, as amended and supplemented to
the date hereof and unless otherwise indicated, from time to time after the date
hereof.
"Five Year Treasury Rate" means the arithmetic average (rounded to the
nearest basis point) of the weekly average per annum yield to maturity values
adjusted to constant maturities of five years, for the Rate Determination Period
as determined from the yield curves of the most actively traded marketable
United States Treasury fixed interest rate securities (x) constructed daily by
the United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15(519), "Selected Interest Rates," which
weekly average yield to maturity values currently are set forth in such
Statistical Release under the caption "U.S. Government Securities-Treasury
Constant Maturities-5 Year" or (ii) if said Statistical Release H.15(519) is not
then published, as published by the Federal Reserve Board in any release
comparable to its Statistical Release H.15(519) or (iii) if the Federal Reserve
Board shall not then be publishing a comparable release, as published in any
official publication or release of any other United States Government Department
or agency or (y) if the United States Treasury Department shall not then be
constructing such yield curves, then as constructed by the Federal Reserve Board
or any other United States Government Department or agency and published as set
forth in (x) above. However, if the Five Year Treasury Rate cannot be
determined as provided above, then the Five Year Treasury Rate shall mean the
arithmetic average (rounded to the nearest basis point) of the per annum yields
to maturity for each Business Day during the Rate Determination Period of all of
the issues of actively trading issues of non-interest bearing United States
Treasury fixed interest rate securities with a maturity of not less than 57
months nor more than 63 months from such Business Day (1) as published in THE
WALL STREET JOURNAL or (2) if THE WALL STREET JOURNAL shall cease such
publication, based on average asked prices (or yields) as quoted by each of
three United States Government securities dealers of recognized national
standing selected by the Company.
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"GAAP" means generally accepted accounting principles, as in effect as of
November 1, 1991 in the United States of America, set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
is approved by a significant segment of the accounting profession.
"Holder" or "Securityholder" means a Person in whose name a Security is
registered in the Register.
"Indebtedness" means (without duplication), with respect to any Person, (i)
any obligation of such Person to pay the principal of, premium, if any, interest
on, penalties, reimbursement or indemnification amounts, fees, expenses or other
amounts relating to any indebtedness, and any other liability, contingent or
otherwise, of such Person (A) for borrowed money or the deferred purchase price
of property or services (excluding trade payables and payables, indebtedness,
obligations and other liabilities of the Company to any Restricted Subsidiary or
of any Restricted Subsidiary to the Company or to any other Restricted
Subsidiary), whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof; (B) for any letter of credit
for the account of such Person supporting other obligations of such Person
described in this definition; or (C) for the payment of money relating to a
Capitalized Lease Obligation; (ii) the unrecovered investment of a purchaser
(other than the Company or any of its Restricted Subsidiaries) of such Person's
Receivables pursuant to a Receivables purchase facility or otherwise (whether or
not characterized as a sale of such Receivables or a secured loan, but excluding
any disposition of Receivables in connection with a disposition of fixed assets
or a business of such Person and any disposition of defaulted Receivables for
collection), together with any obligation of such Person to pay any discount,
interest, fees, indemnification amounts, penalties, recourse on account of the
uncollectability of Receivables, expenses or other amounts in connection
therewith; (iii) any obligation of another Person (other than a Restricted
Subsidiary of such Person) of the kind described in the preceding clause (i) or
(ii), which the Person has guaranteed or which is otherwise its legal liability;
(iv) any obligation of another Person (other than a Restricted Subsidiary of
such Person) of the kind described in the preceding clause (i) or (ii) secured
by a Lien to which the property or assets of such Person are subject, whether or
not the obligation secured thereby shall have been assumed by or shall otherwise
be such Person's legal liability; and (v) any renewals, extensions or refundings
of any of the foregoing described in any of the preceding clauses (i), (ii),
(iii) and (iv). The "amount" or "principal amount" of Indebtedness of any
Person at any date, as used herein, shall be the outstanding principal amount at
such date of all unconditional Indebtedness, the maximum principal amount of any
contingent Indebtedness or the unrecovered purchaser's investment in a sale of
Receivables, in each case at such date and without taking into account any
premium, interest, penalties, reimbursement or indemnification amounts, fees,
expenses or other amounts (other than principal or unrecovered purchaser's
investment) in respect thereof; PROVIDED, HOWEVER, that (y) with respect to
Indebtedness described in clause (iv) above, the amount of
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Indebtedness shall be the lesser of (a) the amount of the Indebtedness of such
other Person that is secured by the property or assets of such Person and (b)
the fair market value of the property or assets securing such Indebtedness, and
(z) with respect to revolving credit, revolving Receivables purchases or other
similar arrangements, the amount of Indebtedness thereunder shall be the amounts
of such commitments as of the date of determination.
"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 and shall
include the terms of particular series of Securities established as contemplated
by Section 301.
"Initial Interest Rate", when used with respect to any Security, means the
initial rate of interest to be borne by such Security as stated on the face
thereof.
"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.
"Interest Swap Obligations" of any Person means the obligations of such
Person pursuant to any interest rate swap agreement, interest rate collar
agreement, forward rate agreement, interest rate cap insurance, option or
futures contract or other similar agreement or arrangement, and any renewal or
extension thereof, designed to protect such Person or any of its Subsidiaries
against fluctuations in interest rates or to permit the exchange of fixed rate
obligations of such Person for floating rate obligations and entered into the
ordinary course of financial management of the Company and not for speculative
purposes.
"Lien" means any mortgage, pledge, security interest, adverse claim (as
defined in Section 8.302(2) of the New York Uniform Commercial Code),
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof, any filing or
agreement to file a financing statement as debtor under the Uniform Commercial
Code or any similar statute other than to reflect ownership by a third party of
property leased to the Company or any of its Subsidiaries under a lease which is
not in the nature of a conditional sale or title retention agreement).
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of the 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.
"Minimum Subordinated Capital Base" shall have the meaning provided in
Section 1101(a).
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"New Credit Agreement" means the credit agreement, dated as of October 12,
1994, by and among the Company, the financial institutions signatory thereto and
Bankers Trust Company, as agent for such financial institutions, as amended,
modified, refinanced or extended from time to time, including without
limitation, as amended and restated as of March 22, 1996.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer or the Secretary of the
Company.
"Officer's Certificate" means a certificate signed by an Officer and
delivered to the Trustee that shall comply with Sections 102 and 103.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company, and who shall be reasonably acceptable
to the Person entitled to receive such opinion.
"Ordinary Course of Business Liens" means, with respect to any Person,
(i) Liens for taxes, assessments, governmental charges, levies or claims
not yet delinquent or being contested in good faith;
(ii) statutory Liens of landlords, carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen or other like Liens arising in the ordinary
course of business (including the construction of facilities) or deposits to
obtain the release of such Liens;
(iii) Liens in connection with workers' compensation, unemployment
insurance and other similar legislation;
(iv) zoning restrictions, licenses, easements, rights-of-way and other
similar charges or encumbrances or restrictions not interfering in any material
respect with the business of such Person or any of its Subsidiaries;
(v) Liens securing such Person's obligations with respect to commercial
letters of credit;
(vi) Liens to secure public or statutory obligations of such Person;
(vii) judgment and attachment Liens against such Person not giving rise to
a Default under the Securities of any series or Liens created by or existing
from any litigation or legal proceeding against such Person which is currently
being contested in good faith by such Person in appropriate proceedings;
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(viii) leases or subleases granted to other Persons or existing on
property acquired by such Persons;
(ix) Liens encumbering property or assets of such Person under
construction arising from progress or partial payments;
(x) Liens encumbering customary initial deposits and margin accounts and
other Liens securing obligations arising out of Interest Swap Obligations,
Currency Agreements and Commodities Agreements, in each case of the type
typically securing such obligations; PROVIDED, HOWEVER, that if such Interest
Swap Obligations, Currency Agreements and Commodities Agreements relate to
Indebtedness not incurred in violation of this Indenture, such Lien may also
cover the property and assets securing the Indebtedness to which such Interest
Swap Obligations, Currency Agreements and Commodities Agreements relate;
(xi) Liens encumbering deposits made to secure obligations arising from
public, statutory, regulatory, contractual or warranty requirements or
obligations of such Person or its Subsidiaries (not constituting Indebtedness);
(xii) Liens arising from filing UCC financing statements regarding leases
or consignments;
(xiii) purchase money Liens securing payables (not constituting
Indebtedness) arising from the purchase by such Person or any of its Affiliates
of any equipment or goods in the ordinary course of business;
(xiv) Liens arising out of consignment or similar arrangements for the
sale of goods entered into by such Person or any of its Subsidiaries in the
ordinary course of business;
(xv) Liens in the ordinary course of business granted by such Person to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, or progress payments, performance and
return-of-money bonds and other similar obligations (not constituting
Indebtedness);
(xvi) Liens in favor of collecting banks constituting a right of set-off,
revocation, refund or chargeback with respect to money or instruments of the
Company or any Subsidiary on deposit with or in the possession of such bank; and
(xvii) Liens in favor of customs and revenue authorities.
"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.
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"Outstanding", when used with respect to Securities or Securities of any
series, means, as of the date of determination, all such Securities theretofore
authenticated and delivered under this Indenture, EXCEPT:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities, or portions thereof, 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;
(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; and
(iv) Securities which have been defeased pursuant to Section 1402;
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, (a) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be that portion of the principal amount
thereof that could be declared to be due and payable upon the occurrence of an
Event of Default and the continuation thereof pursuant to the terms of such
Original Issue Discount Security as of the date of such determination, and (b)
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.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company. The Company may act as Paying Agent with respect to any Securities
issued hereunder.
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"Permitted Existing Indebtedness of an Acquired Person" means Indebtedness
of any Person (which may be assumed or guaranteed by, or may otherwise become
the legal liability of, the Company or any Restricted Subsidiary with or into
which such Person is merged or consolidated) existing at the time such Person
becomes a Restricted Subsidiary, or is merged with or into or consolidated with
the Company or one of its Restricted Subsidiaries, so long as such Indebtedness
was not created in anticipation of or as a result of such Person becoming a
Restricted Subsidiary or of such merger or consolidation, and any Indebtedness
to the extent exchanged for, or the net proceeds of which are used to refinance,
redeem or defease, such Indebtedness (or any extension, renewal or refinancing
thereof), or to finance any costs incurred in connection with such exchange,
refinancing, redemption or defeasance; PROVIDED, HOWEVER, that the proceeds of
such Indebtedness shall be used to so refinance, redeem or defease the
Indebtedness within 12 months of the incurrence of such subsequent Indebtedness.
"Permitted Indebtedness" means (i)(a) any Indebtedness in a principal
amount not exceeding the principal amount outstanding or committed under the
Credit Agreements (including any letter of credit facility thereunder) as of
November 1, 1991 PLUS two hundred fifty million dollars ($250,000,000), and
LESS the sum of (x) proceeds from the sale of all Indebtedness under the 1991
Indenture issued from time to time that are applied to repay Indebtedness under
the Credit Agreements and (y) the proceeds from the sale of the 111/2% Notes,
the First Mortgage Notes, the Rating Adjustable Notes, the SCFC Notes and the
Securities of any series; (b) any Indebtedness in a principal amount not
exceeding 80% of the aggregate face amount of Receivables of the Company and its
Restricted Subsidiaries (measured as of the latest date as of which information
regarding Receivables is available) and constituting Indebtedness described in
clause (ii) of the definition of Indebtedness or outstanding pursuant to any
other revolving credit facility; (c) any Indebtedness under the 1991 Indenture
issued prior to the date hereof the proceeds of which have been used to repay
Indebtedness under the Credit Agreements within five Business Days after such
issuance (and any subsequent Indebtedness the proceeds of which are used to
refinance such Indebtedness) and (d) the First Mortgage Notes, the 111/2% Notes,
the Rating Adjustable Notes, the SCFC Notes and the Securities of any series
(and any subsequent Indebtedness the proceeds of which are used to refinance
such Indebtedness); PROVIDED, HOWEVER, that:
(1) the aggregate principal amount permitted to be outstanding
under clause (a) shall be reduced by the aggregate amount of any
repayments or prepayments of any Senior Indebtedness (other than the
111/2% Notes, the First Mortgage Notes, the Rating Adjustable Notes,
the SCFC Notes, any Securities of any series and Indebtedness issued
under the 1991 Indenture) out of the proceeds of Asset Dispositions as
described in and required by Section 1009 hereof after November 1,
1991, and, thereafter, shall be increased if, at the end of the fourth
consecutive complete fiscal quarter after the initial reduction
pursuant to this clause (1) or at any anniversary of the end of such
fourth fiscal quarter, the Consolidated Free Cash Flow of the Company
for the preceding four quarters has been zero or greater, in which
event the amount of the
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increase shall be the amount by which the consolidated capital expenditures
of the Company and its Restricted Subsidiaries not financed by Indebtedness
referred to in clause (vi) of this definition during such four-quarter
period exceeds Consolidated Depreciation Expense for such period (provided
any such increase shall be made only to the extent all such reductions
occurring prior to the four fiscal quarters for which such calculation of
Consolidated Free Cash Flow has been made exceed all prior increases
pursuant to this clause (1));
(2) (A) the aggregate amount permitted to be incurred under
clause (a) shall be reduced by the principal amount outstanding under
the New Credit Agreement on the date hereof net of subsequent
reductions thereof, and (B) the aggregate amount permitted to be
incurred under clause (b) shall be reduced by the principal amounts
outstanding under the Master Trust Indenture and Security Agreement
among Stone Receivable Corporation, Marine Midland Bank, as trustee,
and Bankers Trust Company, as administrative agent (the "SRC Master
Trust Indenture");
(3) the Permitted Indebtedness contemplated by this clause (i)
may be incurred by the Company and, in the case of Permitted
Indebtedness constituting Indebtedness under clause (ii) of the
definition of Indebtedness, by the Company or any Restricted
Subsidiary; and
(4) any Restricted Subsidiary in the Stone Canada Group may
incur, assume or guarantee any Indebtedness under clauses (i)(a) and
(i)(b) above under any revolving credit facilities of Restricted
Subsidiaries in the Stone Canada Group entered into pursuant to this
clause (i), for which the aggregate amount committed thereunder does
not exceed two hundred million dollars ($200,000,000), to finance the
working capital of Restricted Subsidiaries in the Stone Canada Group;
(ii) Permitted Subordinated Indebtedness;
(iii) Permitted Refinancing Indebtedness;
(iv) Permitted Stone Canada Indebtedness;
(v) Permitted Existing Indebtedness of an Acquired Person;
(vi) Indebtedness incurred for the purpose of acquiring Capital Stock of
another Person, or assets comprising a business or line of business or
intangible assets or acquiring, constructing or improving fixed assets, in each
case related primarily to, or used in connection with, the paper or forest
products businesses and which (a) constitutes all or a portion of (but not more
than) the purchase price of such Capital Stock or assets (such purchase price
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including any Indebtedness assumed or repaid in connection with such purchase)
or the cost of construction or improvement of such assets (together with any
transaction costs relating to such purchase, construction or improvement), (b)
is incurred prior to, at the time of or within 270 days after the acquisition,
construction or improvement of such assets for the purpose of financing the
purchase price of such Capital Stock or assets or the cost of construction or
improvement thereof (together with any transaction costs relating to such
purchase, construction or improvement) and (c) is the direct or guaranteed
obligation of any of (1) the Company, (2) a Restricted Subsidiary formed for the
purpose of acquiring such Capital Stock or assets (and having no material assets
other than assets to be used for such acquisition), (3) any Person comprised
within the acquired assets or (4) in the case of the construction or improvement
of fixed assets, the Restricted Subsidiary which will
own such assets, or any extension, renewal or refinancing of such Indebtedness;
PROVIDED, HOWEVER, that the amount so extended, renewed or refinanced shall not
exceed the principal amount outstanding on the date of such extension, renewal
or refinancing, PLUS costs incurred in connection with any such extension,
renewal or refinancing (it being understood that any fixed assets included
within capital expenditures which increased Indebtedness permitted under clause
(i) of the definition of Permitted Indebtedness pursuant to clause (1) to the
proviso to such clause may not be financed pursuant to this clause (vi));
(vii) Indebtedness in an aggregate principal amount not to exceed three
hundred million dollars ($300,000,000) at any one time outstanding; PROVIDED,
HOWEVER, that no Restricted Subsidiary may incur Indebtedness under this clause
(vii) to the extent that after the incurrence of such Indebtedness the sum
(without duplication) of (x) all Indebtedness of Restricted Subsidiaries
incurred under this clause (vii), PLUS (y) Indebtedness and other obligations
then secured pursuant to clause (xii) of the definition of Permitted Liens, PLUS
(z) the amount of Indebtedness that was not incurred pursuant to clause (i)(b)
of this definition and is secured pursuant to clause (vi) of the definition of
Permitted Liens shall not exceed three hundred million dollars ($300,000,000);
(viii) Indebtedness of the Company in an aggregate principal amount not to
exceed two hundred fifty million dollars ($250,000,000) at any one time
outstanding;
(ix) any Interest Swap Obligation, Currency Agreement or Commodities
Agreement relating to Indebtedness that was not incurred in violation of the
terms of this Indenture; and
(x) Indebtedness to finance an increase in the working capital of any
Person or Persons that (a) are organized under the laws of a jurisdiction other
than the United States or any subdivision thereof and (b) became Restricted
Subsidiaries after November 1, 1991; PROVIDED, HOWEVER, that Indebtedness
pursuant to this clause (x) is the obligation of the Company or such Person or
Persons.
"Permitted Liens" means, with respect to any Person,
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(i) Ordinary Course of Business Liens;
(ii) Liens upon property or assets acquired or constructed by such Person
or any Affiliate after November 1, 1991 or constituting improvements after
November 1, 1991 to property or assets; PROVIDED, HOWEVER, that (a) any such
Lien is created solely for the purpose of securing Indebtedness representing, or
incurred to finance or refinance, the purchase price (such purchase price
including any Indebtedness assumed or repaid in connection with such purchase)
or cost of construction of the property or assets subject thereto or of such
improvement, (b) the principal amount of the Indebtedness secured by such Lien
does not exceed 100% of such purchase price or cost (together with any
transaction costs relating to such purchase, construction or improvement), (c)
such Lien does not extend to or cover any other property or assets other than
such property, assets, improvement and any other improvements thereon (or, in
the case of any construction or improvement, any substantially unimproved real
property on which the property is constructed or the improvement is located) and
(d) the occurrence of such Indebtedness is permitted by clause (vi) of the
definition of Permitted Indebtedness;
(iii) Liens securing obligations with respect to letters of credit (other
than commercial letters of credit) to the extent the obligations supported by
such letters of credit may be secured without violating Section 1007 hereof;
(iv) Liens covering property subject to any Capitalized Lease Obligation
or other lease which was not entered into in violation of this Indenture
securing the interest of the lessor or other Person under such Capitalized Lease
Obligation or other lease;
(v) Liens securing obligations to a trustee pursuant to the compensation
and indemnity provisions of any indenture (including this Indenture) and Liens
securing obligations to a trustee or agent with respect to collateral for any
Indebtedness;
(vi) Liens created in connection with a disposition of Receivables
(whether or not characterized as a sale of such Receivables or a secured loan)
not prohibited by this Indenture on (a) such Receivables, (b) collateral
securing such Receivables, (c) goods or services, the sale, lease or furnishing
of which gave rise to such Receivables, (d) books and records relating to such
Receivables, (e) agreements or arrangements supporting or securing such
Receivables and (f) incidental property and assets relating to any of the
foregoing; PROVIDED, HOWEVER, that the aggregate amount at any time of
Indebtedness that is secured pursuant to this clause (vi) and was not incurred
pursuant to clause (i)(b) of the definition of Permitted Indebtedness, shall at
no time exceed (x) three hundred million dollars ($300,000,000) LESS (y) the sum
of Indebtedness and other obligations then secured pursuant to clause (xii) of
this definition PLUS the then outstanding principal amount of Indebtedness of
Restricted Subsidiaries incurred under clause (vii) of the definition of
Permitted Indebtedness (and not secured pursuant to this clause (vi) or such
clause (xii));
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(vii) Liens upon property or assets of the Company created in substitution
and exchange for a Permitted Lien upon other property or assets of the Company
or any of its Subsidiaries and Liens upon property or assets of any Subsidiaries
of the Company created in substitution and exchange for a Permitted Lien upon
other property or assets of any Subsidiaries of the Company; PROVIDED, HOWEVER,
that (a) such Permitted Lien is released contemporaneously with the creation of
the Lien in substitution therefor, (b) the fair market value of the property or
assets with respect to the Lien so released is substantially the same as the
fair market value of the property or assets subject to the Lien created in
substitution therefor and (c) no Lien may be placed on property or assets of the
Company or a Restricted Subsidiary in substitution and exchange for a Lien upon
property or assets of an Unrestricted Subsidiary;
(viii) Liens upon property or assets of a Subsidiary of a Person securing
Indebtedness of such Person or of such Subsidiary, which Liens are created in
substitution and exchange for an outstanding pledge by such Person of a majority
of the Capital Stock of such Subsidiary for the purpose of securing such
Indebtedness (or a guaranty in respect thereof); PROVIDED , HOWEVER, that if the
property and assets of such Subsidiary to be subjected to such Liens have a fair
market value in excess of twenty-five million dollars ($25,000,000), such
Subsidiary shall have guaranteed the obligations of the Company in respect of
the Securities and, if requested by the Trustee, such Subsidiary shall have
waived all its rights of subrogation and reimbursement from the Company in
connection with such guaranty;
(ix) Liens upon any property or assets (a) existing at the time of
acquisition thereof by the Company or any Subsidiary, (b) of a Person existing
at the time such Person is merged with or into or consolidated with the Company
or any Subsidiary of the Company or existing at the time of a sale or transfer
of any such property or assets of such Person to the Company or any Subsidiary
of the Company or (c) of a Person existing at the time such Person becomes a
Subsidiary of the Company; PROVIDED, HOWEVER, that such Liens shall not have
been created in contemplation of such sale, merger, consolidation, transfer or
acquisition;
(x) Liens existing at November 1, 1991;
(xi) (a) Liens upon any property or assets of the Company and its
Restricted Subsidiaries securing Indebtedness under the Credit Agreements in a
principal amount not exceeding the principal amount outstanding or committed
under the Credit Agreements (including any letter of credit facility, but
without duplication with respect to commitments for loans the use of proceeds of
which is restricted to repayment of other Indebtedness under the Credit
Agreements) as of November 1, 1991 LESS (y) the proceeds from the sale of all
Indebtedness under the 1991 Indenture issued from time to time that are or have
been applied to repay Indebtedness under the Credit Agreements and PLUS (z) two
hundred fifty million dollars ($250,000,000) and (b) Liens securing Indebtedness
permitted by clause (i) of the definition of Permitted Indebtedness upon
property or assets that as of November 1, 1991 secured the Credit Agreements or
the SRC Master Trust Indenture;
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(xii) Liens securing Indebtedness or other obligations of the Company and
its Restricted Subsidiaries not to exceed an aggregate principal amount of three
hundred fifty million dollars ($350,000,000) LESS, at any time, the sum of (y)
the then outstanding principal amount of Indebtedness of Restricted Subsidiaries
incurred under clause (vii) of the definition of Permitted Indebtedness (and not
secured pursuant to this clause (xii) or clause (vi) of this definition) PLUS
(z) the amount of Indebtedness secured pursuant to clause (vi) of this
definition and not incurred pursuant to clause (i)(b) of the definition of
Permitted Indebtedness;
(xiii) Liens upon property or assets of a Subsidiary securing Indebtedness
or other obligations owing to the Company;
(xiv) Liens on proceeds of any property or assets subject to a Lien
permitted by the other clauses of this definition;
(xv) any equal and ratable Lien that is granted pursuant to the
Continental Guaranty and that relates to a Lien that otherwise constitutes a
Permitted Lien;
(xvi) Liens on property or assets used to defease Indebtedness that was
not incurred in violation of this Indenture;
(xvii) Liens on property or assets of any Restricted Subsidiary organized
under the laws of a jurisdiction other than the United States or any subdivision
thereof securing Indebtedness of such Restricted Subsidiary outstanding as of
November 1, 1991 (or any extension, renewal or refinancing thereof);
(xviii) 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 (i) through (xvii) (covering the same property and assets as
such Lien); and
(xix) Permitted Collateral Liens (as defined in the First Mortgage Note
Indenture);
PROVIDED, HOWEVER, that no Lien described in any of the foregoing clauses other
than clause (xi)(a) shall encumber the rights of the Company with respect to
Indebtedness, obligations and other liabilities owed to the Company by any
Restricted Subsidiary or to any Restricted Subsidiary by the Company or another
Restricted Subsidiary.
"Permitted Refinancing Indebtedness" means Indebtedness of (i) the Company
to the extent exchanged for, or the net proceeds of which are used to refinance,
redeem or defease, Indebtedness of the Company or any Restricted Subsidiary (or
any extension, renewal or refinancing thereof) outstanding at the time of
incurrence of such subsequent Indebtedness, or to finance any costs incurred in
connection with any such exchange, refinancing, redemption or defeasance, (ii) a
Restricted Subsidiary to the extent exchanged for, or the net proceeds of which
are used to refinance, redeem or defease, Indebtedness of such Restricted
Subsidiary (or
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any extension, renewal or refinancing thereof) outstanding at the time of
incurrence of such subsequent Indebtedness, or to finance any costs incurred in
connection with any such exchange, refinancing, redemption or defeasance, or
(iii) the Company or a Restricted Subsidiary to the extent exchanged for, or the
net proceeds of which are used to refinance, redeem or defease, any then
outstanding industrial revenue or development bonds that were outstanding at
November 1, 1991 (or any extension, renewal or refinancing thereof), or to
finance any costs incurred in connection with such exchange, refinancing or
defeasance; PROVIDED, HOWEVER, that, in the case of (i), (ii) or (iii), the
proceeds of such Indebtedness shall be used to so refinance, redeem or defease
the Indebtedness within 12 months of the incurrence of such subsequent
Indebtedness; and PROVIDED, FURTHER, that the only Indebtedness which may be
subject to exchange, refinancing, redemption, or defeasance pursuant to clause
(i), (ii) or (iii) of this definition shall be Indebtedness outstanding as of
November 1, 1991 (other than Indebtedness under the Credit Agreements,
Subordinated Indebtedness and Indebtedness under lines of credit) or any
extension, renewal or refinancing thereof, and Indebtedness that was incurred
after November 1, 1991 and before the date hereof (other than solely as
Permitted Indebtedness under the 1991 Indenture) or is incurred after the date
hereof (other than solely as Permitted Indebtedness).
"Permitted Stone Canada Indebtedness" means Indebtedness of the Company or
a Restricted Subsidiary in the Stone Canada Group outstanding pursuant to lines
of credit in an aggregate principal amount not to exceed one hundred million
dollars ($100,000,000), (of which not more than Canadian sixty million dollars
(Cn.$60,000,000) may be owed by Restricted Subsidiaries in the Stone Canada
Group) at any one time outstanding or pursuant to any extension, renewal or
refinancing of such outstanding amount PLUS any costs incurred in connection
with any such extension, renewal or refinancing; PROVIDED, HOWEVER, that the
aggregate principal amount permitted to be incurred under this definition shall
be reduced by the principal amount under lines of credit outstanding on the date
hereof net of subsequent repayments or reductions thereof.
"Permitted Subordinated Indebtedness" means (i) Subordinated Indebtedness
of the Company to the extent exchanged for, or the net proceeds of which are
used to refinance, redeem or defease, then outstanding Subordinated Indebtedness
of the Company that was outstanding at November 1, 1991 (or any extension,
renewal or refinancing thereof), or to finance any costs incurred in connection
with any such exchange, refinancing, redemption or defeasance; PROVIDED,
HOWEVER, that (a) such Subordinated Indebtedness does not have a shorter
weighted average life than that then remaining for, or a maturity earlier than
that of, the Indebtedness so exchanged, refinanced, redeemed or defeased, EXCEPT
that in the case of any exchange, such Subordinated Indebtedness may have a
maturity that is earlier (but not more than six months earlier) than that of the
Indebtedness so exchanged, PROVIDED that the Subordinated Indebtedness shall
have the same or a longer weighted average life than that then remaining for the
Indebtedness so exchanged and (b) in the case of refinancings, redemptions or
defeasances, the proceeds of such Subordinated Indebtedness shall be used to so
refinance, redeem or defease the Indebtedness within 12 months of the incurrence
of such subsequent
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Subordinated Indebtedness; and (ii) Indebtedness of the Company in an
aggregate principal amount not to exceed two hundred fifty million dollars
($250,000,000) at any one time outstanding, so long as such Indebtedness (a)
constitutes Subordinated Indebtedness and (b) does not have (A) a weighted
average life that is shorter than that then remaining for (1) the Company's
9 7/8% Senior Notes due 2001 then outstanding, (2) the 11 1/2% Notes then
outstanding or (3) the Securities of any series then Outstanding or (B) a
maturity that is earlier than the latest maturity of (1) the Company's 9 7/8%
Senior Notes due 2001 then outstanding, (2) the 11 1/2% Notes then
outstanding or (3) the Securities of any series then Outstanding.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to Securities of any series,
means The City of New York or any other place or places where the principal of
(and premium, if any) and interest on the Securities of that series are payable
as specified as contemplated by Section 301.
"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.
"Rate Determination Period" means the four full weeks ending on the seventh
Business Day prior to a Reset Date.
"Rating Adjustable Notes" means the Company's Rating Adjustable Senior
Notes due 2016.
"Rating Adjustable Note Indenture" means the indenture dated as of July 24,
1996, as amended and supplemented by the First Supplemental Indenture dated July
24, 1996, between the Company and The Bank of New York, as Trustee, relating to
the Rating Adjustable Notes, as amended and supplemented to the date hereof and,
unless otherwise indicated, from time to time after the date hereof.
"Receivables" means receivables, chattel paper, instruments, documents or
intangibles evidencing or relating to the right to payment of money.
"Redeemable Stock" means, with respect to any Person, any Capital Stock
that by its terms or otherwise is required to be redeemed or purchased by such
Person or any of its Subsidiaries prior to 30 days after the latest maturity
date of the then Outstanding Securities of any series, or is redeemable or
subject to mandatory purchase or similar put rights at the
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option of the Holder thereof at any time prior to 30 days after the latest
maturity date of the then Outstanding Securities of any series, or any security
which is convertible or exchangeable into a security which has such provisions.
"Redemption Date", when used with respect to any Security of any series 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 of any series to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Register" and "Registrar" have the respective meanings specified in
Section 305.
"Registered Security" means any Security issued hereunder and registered in
the Register.
"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.
"Reset Date" means a date on which the interest rate on the Securities of
the applicable series shall be reset pursuant to Section 1102(a).
"Reset Rate" shall have the meaning provided in Section 1102(a).
"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 senior 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.
"Restricted Payment" shall have the meaning provided in Section 1006.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"SCFC" means Stone Container Finance Company of Canada, a wholly owned
subsidiary of the Company constituted under the laws of Canada.
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"SCFC Notes" means the 11 1/2 Senior Notes due 2006 issued by SCFC and
guaranteed on a senior basis by the Company.
"SCFC Note Indenture" means the indenture dated as of August 16, 1996 among
SCFC, the Company, as guarantor, and The Bank of New York, as Trustee, relating
to the SCFC Notes, as amended and supplemented to the date hereof and, unless
otherwise indicated, from time to time after the date hereof.
"SRC Master Trust Indenture" has the meaning specified in clause (2) of the
proviso to clause (i) of the definition of Permitted Indebtedness.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Security authenticated and delivered under this
Indenture.
"Senior Indebtedness" means the principal of, interest on and other amounts
due on (i) Indebtedness of the Company, whether outstanding on the date hereof
or thereafter created, incurred, assumed or guaranteed by the Company, on or
prior to the date hereof in compliance with the 1991 Indenture and thereafter in
compliance with Section 1008 hereof (including, without limitation, the 11 1/2%
Notes, the First Mortgage Notes, the Rating Adjustable Notes, the SCFC Notes and
the Securities of any series), (ii) obligations of the Company related to the
termination of Interest Swap Obligations, Currency Agreements or Commodities
Agreements pertaining to Indebtedness described under clause (i) above and (iii)
principal of or interest on the Securities. Notwithstanding anything to the
contrary in the foregoing, Senior Indebtedness shall not include: (a)
Subordinated Indebtedness, (b) Indebtedness of or amounts owed by the Company
for compensation to employees, for goods or materials purchased in the ordinary
course of business or for services or (c) Indebtedness of the Company to a
Subsidiary of the Company.
"Seven Year Treasury Rate" means the arithmetic average (rounded to the
nearest basis point) of the weekly average per annum yield to maturity values
adjusted to constant maturities of seven years, for the Rate Determination
Period as determined from the yield curves of the most actively traded
marketable United States Treasury fixed interest rate securities (x) constructed
daily by the United States Treasury Department (i) as published by the Federal
Reserve Board in its Statistical Release H.15 (519), "Selected Interest Rates,"
which weekly average yield to maturity values currently are set forth in such
Statistical Release under the caption "U.S. Government Securities--Treasury
Constant Maturities--7 Year" or (ii) if said Statistical Release H.15 (519) is
not then published, as published by the Federal Reserve Board in any release
comparable to its Statistical Release H.15 (519) or (iii) if the Federal Reserve
Board shall not be publishing a comparable release, as published in any official
publication or release of any other United States Government Department or
agency, or (y) if the United States Treasury Department shall not then be
constructing such yield curves, then as constructed by the Federal Reserve Board
or any other United States Government Department or agency and published as set
forth in (x) above. However, if the Seven Year Treasury Rate
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cannot be determined as provided above, then the Seven Year Treasury Rate shall
mean the arithmetic average (rounded to the nearest basis point) of the per
annum yields to maturity for each Business Day during the Rate Determination
Period of all of the issues of actively trading issues of non-interest bearing
United States Treasury fixed interest rate securities with a maturity of not
less than 81 months nor more than 87 months from such Business Day (1) as
published in THE WALL STREET JOURNAL or (2) if THE WALL STREET JOURNAL shall
cease such publication, based on average asked prices (or yields) as quoted by
each of three United States Government secJanuary 20, 1997urities dealers of
recognized national standing selected by the Company.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Specified Bank Debt" means (i) all Indebtedness and other monetary
obligations owing under the New Credit Agreement or any credit facilities with
the banks signatory to the New Credit Agreement (or with banks affiliated with
such banks), so long as such facilities are related to the New Credit Agreement;
and (ii) Indebtedness owing as of the date hereof or hereafter to banks or other
financial institutions under credit facilities which may in the future
refinance, refund, replace, supplement or succeed (regardless of any gaps in
time) the New Credit Agreements or the facilities referenced in clause (i)
hereof (including extensions and restructurings and the inclusion of additional
or different or substitute lenders), so long as (a) the aggregate principal
amount outstanding (including available amounts under committed revolving credit
or similar working capital facilities, letter of credit facilities and other
commitments to provide credit) of such Indebtedness is at least equal to the
principal of all publicly issued Senior Indebtedness (including without
limitation, Indebtedness under the 1991 Indenture, the 1994 Indentures and the
1996 Indentures) then outstanding (it being understood that Indebtedness
described in clause (i) above and issues of Indebtedness having a principal
amount lower than set forth in clause (b) below shall not be included in this
amount), (b) Indebtedness outstanding under each particular credit facility has
a principal amount outstanding (including available amounts under committed
revolving credit or similar working capital facilities, letter of credit
facilities and other commitments to provide credit) of at least twenty-five
million dollars ($25,000,000) and (c) such Indebtedness constitutes Senior
Indebtedness.
"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
any installment of principal or interest is due and payable.
"Stone Canada" means Stone Container (Canada) Inc., a company organized
under the Canadian Business Corporations Act.
"Stone Canada Group" means Stone Canada and its Restricted Subsidiaries
existing as of the date hereof.
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"Subordinated Capital Base" means the sum of (i) the Consolidated Net Worth
and (ii) to the extent not included in clause (i) above, the amounts (without
duplication) relating to (a) the principal amount of Subordinated Indebtedness
incurred after November 1, 1991 which is unsecured and which does not have at
the time of incurrence of such Subordinated Indebtedness a weighted average life
that is shorter than the weighted average life remaining for the then
outstanding Indebtedness under the 1991 Indenture issued prior to the date
hereof, or if less than two hundred million dollars ($200,000,000) of such
Indebtedness is outstanding, the 11 1/2% Notes then outstanding, or if less than
one hundred million dollars ($100,000,000) of such Indebtedness is outstanding,
the then Outstanding Securities of any series, or a maturity that is earlier
than the maturity of any of the then outstanding Indebtedness under the 1991
Indenture, or if less than two hundred million dollars ($200,000,000) of such
Indebtedness is outstanding, the 11 1/2% Notes then outstanding, or if less than
one hundred million dollars ($100,000,000) of such Indebtedness is outstanding,
the then Outstanding Securities of any series, (b) redeemable stock of the
Company that does not constitute Redeemable Stock and (c) the principal amount
of the 11 1/2% Senior Subordinated Securities due September 1, 1999 of the
Company or any Subordinated Indebtedness exchanged for, or the net proceeds of
which are used to refinance, redeem or defease, such 11 1/2% Senior Subordinated
Notes due September 1, 1999 pursuant to clause (ii) of the definition of
"Permitted Indebtedness", that, in the case of clauses (a), (b) and (c), as at
the date of determination, in conformity with GAAP consistently applied, would
be set forth on the consolidated balance sheet of the Company and its Restricted
Subsidiaries.
"Subordinated Indebtedness" means Indebtedness of the Company (whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed by the Company) which, pursuant to the terms of the instrument
creating or evidencing the same, is subordinate to the Securities in right of
payment or in rights upon liquidation.
"Subsidiary" means, with respect to any Person, (i) any corporation of
which at least a majority in interest of the outstanding Capital Stock having by
the terms thereof voting power under ordinary circumstances to elect directors
of such corporation, irrespective of whether or not at the time stock of any
other class or classes of such corporation shall have or might have voting power
by reason of the happening of any contingency, is at the time, directly or
indirectly, owned or controlled by such Person, or by one or more corporations a
majority in interest of such stock of which is similarly owned or controlled, or
by such Person and one or more other corporations a majority in interest of such
stock of which is similarly owned or controlled or (ii) any other Person (other
than a corporation) in which such Person, directly or indirectly, at the date of
determination thereof, has at least a majority equity ownership interest.
"Ten Year Treasury Rate" means the arithmetic average (rounded to the
nearest basis point) of the weekly average per annum yield to maturity values
(adjusted to constant maturities of ten years, for the Rate Determination Period
as determined from the yield curves of the most actively traded marketable
United States Treasury fixed interest rate securities (x)
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constructed daily by the United States Treasury Department (i) as published by
the Federal Reserve Board in its Statistical Release H.15 (519), "Selected
Interest Rates," which weekly average yield to maturity values currently are set
forth in such Statistical Release under the caption "U.S. Government
Securities--Treasury Constant Maturities -- 10 Year" or (ii) if said Statistical
Release H.15 (519) is not then published, as published by the Federal Reserve
Board in any release comparable to its Statistical Release H.15 or (iii) if the
Federal Reserve Board shall not be publishing a comparable release, as published
in any official publication or release of any other United States Government
Department or agency, or (y) if the United States Treasury Department shall not
then be constructing such yield curves, then as constructed by the Federal
Reserve Board or any other United States Government Department or agency and
published as set forth in (x) above. However, if the Ten Year Treasury Rate
cannot be determined as provided above, then the Ten Year Treasury Rate shall
mean the arithmetic average (rounded to the nearest basis point) of the per
annum yields to maturity for each Business Day during the Rate Determination
Period of all of the issues of actively trading issues of non-interest bearing
United States Treasury fixed interest rate securities with a maturity of not
less then 117 months nor more than 123 months from such Business Day (1) as
published in THE WALL STREET JOURNAL or (2) if THE WALL STREET JOURNAL shall
cease such publication, based on average asked prices (or yields) as quoted by
each of three United States Government securities dealers of recognized national
standing selected by the Company.
"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 amended, as
in force at the date as of which this Indenture was executed; PROVIDED, HOWEVER,
that in the event that such Act 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.
"Two Year Treasury Rate" means the arithmetic average (rounded to the
nearest basis point) of the weekly average per annum yield to maturity values
adjusted to constant maturities of two years, for the Rate Determination Period
as determined from the yield curves of the most actively traded marketable
United States Treasury fixed interest rate securities (x) constructed daily by
the United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15 (519), "Selected Interest Rates," which
weekly average yield to maturity values currently are set forth in such
Statistical Release under the caption "U.S. Government Securities -- Treasury
Constant Maturities -- 2 Years" or (ii) if said Statistical Release H.15 (519)
is not then published, as published by the Federal Reserve Board in any release
comparable to its Statistical Release H.15 (519) or (iii) if the Federal Reserve
Board shall not be publishing a comparable release, as published in any official
publication or
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release of any other United States Government Department or agency, or (y) if
the United States Treasury Department shall not then be constructing such yield
curves, then as constructed by the Federal Reserve Board or any other United
States Government Department or agency and published as set forth in (x) above.
However, if the Two Year Treasury Rate cannot be determined as provided above,
then the Two Year Treasury Rate shall mean the arithmetic average (rounded to
the nearest basis point) of the per annum yields to maturity for each Business
Day during the Rate Determination Period of all of the issues of actively
trading issues of non-interest bearing United States Treasury fixed interest
rate securities with a maturity of not less than 21 months nor more than 27
months from such Business Day (1) as published in THE WALL STREET JOURNAL or (2)
if THE WALL STREET JOURNAL shall cease such publication, based on average asked
prices (or yields) as quoted by each of three United States Government
securities dealers of recognized national standing selected by the Company.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which 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 the United States of
America the timely payment of which is unconditionally guaranteed by the full
faith and credit of the United States of America which, in either case, are not
callable or redeemable at the option of the issuer thereof or otherwise subject
to prepayment.
"Unrestricted Subsidiary" means a Subsidiary of the Company which has been
designated as an "Unrestricted Subsidiary" for purposes of this Indenture by the
Company and (i) at least 20% of whose common stock is held by one or more
Persons (other than the Company and its Affiliates) which acquired such common
stock in a BONA FIDE transaction for fair value and (ii) at least 10% of whose
total capitalization at the time of designation is in the form of common stock
or at least 15% of the fair market value of whose assets at such time shall have
been contributed by such Persons. An Unrestricted Subsidiary may be designated
to be a Restricted Subsidiary only if, at the time of such designation, all
Indebtedness and Liens of such Subsidiary could be incurred under this
Indenture.
"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".
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 Officer's 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 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
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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, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, 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 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 his 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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SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given 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 agents 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 or any such
instrument or writing may be proved by the affidavit or a witness of such
execution or by a certificate of a notary public or other Person 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 ownership of Registered Securities shall be proved by the
Register.
(d) 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 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.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company
may, at its option, by or pursuant to a Board Resolution, fix in advance a
record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but
the Company shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act (including revocation thereof) may be given before or
after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes
of determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction,
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notice, consent, waiver or other Act, and for that purpose the Outstanding
Securities shall be computed as of such record date; PROVIDED that no such
authorization, agreement or consent by the Holders on such record date shall
be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
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, 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
Indenture, attention: Secretary or at any other address previously furnished in
writing to the Trustee by the Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture or any Security provides for notice to Holders of any
event, such notice shall be deemed sufficiently given (unless otherwise herein
or in such Security 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 Register, not later than the latest date, and not earlier than
the earliest date, 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 or the validity of the
proceedings to which such notice relates. Where this Indenture or any Security
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.
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Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act (including, without limitation,
Sections 310 through 317, inclusive, of the Trust Indenture Act in accordance
with Section 318(c) thereof), such required 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 shall 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.
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 (other than the choice of law provisions) of the State
of New York.
SECTION 113. LEGAL HOLIDAYS.
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In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security, or any other payment date, including, without
limitation, any Asset Disposition Payment Date or Change of Control Payment
Date, shall not be a Business Day, then (notwithstanding any other provision of
this Indenture or of the Securities) payment of interest or principal (and
premium, if any) need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity or other
payment date, PROVIDED that no interest shall accrue for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity or other
payment date, as the case may be.
SECTION 114. NO RECOURSE AGAINST OTHERS.
Directors, officers, employees or stockholders, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture, or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder, by accepting
a Security, waives and releases all such liability. Such waivers and releases
are part of the consideration for the issuance of the Securities.
SECTION 115. INCORPORATION BY REFERENCE TO TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust Indenture Act,
the provision is incorporated by reference in and made a part of this Indenture.
The following Trust Indenture Act terms incorporated by reference in this
Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities, if any.
All other Trust Indenture Act terms used or incorporated by reference in
this Indenture that are defined by the Trust Indenture Act, defined by Trust
Indenture Act reference to another statute or defined by Commission rule have
the meanings assigned to them therein.
ARTICLE TWO
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SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The Securities of each series shall be substantially in 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 the rules of any
securities exchange 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.
The Trustee's certificates of authentication shall be in substantially the
form set forth in this Article.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, 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 THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT - FOR
PURPOSES OF SECTION 1272 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), THE ISSUE PRICE (AS DEFINED IN TREASURY REGULATION SECTION
1.1273-2(a)(1)) OF THIS SECURITY IS _______________, THE AMOUNT OF ORIGINAL
ISSUE DISCOUNT (AS DEFINED IN SECTION 1273(a)(1) OF THE CODE AND TREASURY
REGULATION 1.1273-1(a)) WITH RESPECT TO THIS SECURITY IS __________, THE ISSUE
DATE (AS DEFINED IN SECTION 1275(a)(2) OF THE CODE AND TREASURY REGULATION
SECTION 1.1273-2(a)(2)) OF THIS SECURITY IS __________ AND THE YIELD TO MATURITY
(AS DEFINED IN TREASURY REGULATION SECTION 1.1272-1(b)(i)) OF THIS SECURITY IS
__________.] [IF THE SECURITY IS SUBJECT TO THE RULES OF TREASURY REGULATION
SECTION 1.1275-4(b), INSERT - THE COMPARABLE YIELD (AS DEFINED IN TREASURY
REGULATION SECTION 1.1275-4(b)(4)) OF THIS SECURITY IS __________ AND THE
PROJECTED PAYMENT SCHEDULE (AS DEFINED IN TREASURY REGULATION SECTION
1.1275-4(b)(4)) WITH RESPECT TO THIS SECURITY IS AS FOLLOWS:
______________________________.]
34
<PAGE>
STONE CONTAINER CORPORATION
-----------------------------------
Number R $
---------- -------------
STONE CONTAINER CORPORATION, a corporation duly organized and existing
under the laws of Delaware (herein called the "Company," which term includes any
successor corporation 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 __________ of each year (commencing _______________), at the rate of ____%
per annum, until the principal hereof is paid or made available for payment.]
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, preceding such Interest Payment Date. Any
such interest not so punctually paid or duly provided for will 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
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, 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 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.]
35
<PAGE>
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 the Borough of Manhattan,
The City of New York in dollars; [IF APPLICABLE, INSERT - PROVIDED, HOWEVER,
that at the option of the Company, payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the 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.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
STONE CONTAINER CORPORATION
By:
------------------------
[CORPORATE SEAL]
Attest:
- ----------------------
36
<PAGE>
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 _____________, 1996 (as amended or
supplemented from time to time, the "Indenture"), between the Company and ____
________________, as trustee (the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and each of the Holders and of the terms
upon which the Securities are, and are to be, authenticated and delivered. All
terms used in this Security which are not defined herein shall have the meanings
assigned to them in the Indenture. This Security is one of the series
designated on the face hereof [, limited in principal amount to $__________].
[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 [on or after _____________,
_____________], 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,
Redemption Redemption
Year Price Year Price
---- ---------- ---- ----------
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
37
<PAGE>
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 a 12-month period beginning __________________ of the years
indicated,
Redemption Price
For Redemption Redemption Price for
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ------------- -------------------
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.]
[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.]
[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.]
38
<PAGE>
In the event of redemption of this Security in part only, a new Security or
Securities of this series 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,-If any 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.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY,--If an Event of
Default with respect to Securities of this series shall occur and be continuing,
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.]
[The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) the Company's
obligations under the Indenture and this Security (other than its obligations to
pay principal of (and premium, if any) and interest on the Securities and
certain other provisions of the Indenture) and the related Events of Default,
upon compliance by the Company with certain conditions set forth therein, which
provisions apply to this Security.]
Except as set forth below, as provided in the Indenture, in the event that
the Company's Subordinated Capital Base is less than one billion dollars
($1,000,000,000) (the "Minimum Subordinated Capital Base") as at the end of each
of any two consecutive fiscal quarters (the last day of the second such fiscal
quarter, a "Deficiency Date"), then the Company shall, no later than 60 days
after the Deficiency Date (105 days if a Deficiency Date is also the end of the
Company's fiscal year), make an offer to all Holders of the Securities of this
series to purchase (a "Deficiency Offer") 10% of the principal amount of the
Securities of this series originally issued, or such lesser amount as may be
Outstanding at the time such Deficiency Offer is made (the "Deficiency Offer
Amount"), at a purchase price equal to 100% of principal amount, plus accrued
and unpaid interest to the Deficiency Payment Date. Thereafter, semi-annually
the Company shall make like Deficiency Offers for the then applicable Deficiency
Offer Amount of the Securities of this series until the Company's Subordinated
Capital Base as at the end of any subsequent fiscal quarter shall be equal to or
greater than the Minimum Subordinated Capital Base. Notwithstanding the
foregoing, after any specified Deficiency Date, the last day of any subsequent
fiscal quarter shall not constitute a Deficiency Date (giving rise to an
additional obligation under the first sentence of this paragraph) unless the
Company's Subordinated Capital Base was equal to or greater than the
39
<PAGE>
Minimum Subordinated Capital Base as at the end of a fiscal quarter that
followed such specified Deficiency Date and preceded such subsequent quarter.
Notwithstanding the foregoing, as provided in the Indenture, in the event
that (1) the making of a Deficiency Offer by the Company or (2) the purchase of
Securities of this series by the Company in respect of a Deficiency Offer would
constitute a default (with the giving of notice, the passage of time or both)
with respect to any Specified Bank Debt at the time outstanding, then, in lieu
of the making of a Deficiency Offer in the circumstances set forth above, (i)
the interest rate on the Securities of this series shall be reset as of the
first day of the second fiscal quarter following the Deficiency Date (the "Reset
Date") to a rate per annum (the "Reset Rate") equal to the greater of (x) the
Initial Interest Rate and (y) the sum of (A) 400 basis points and (B) the higher
of the Seven Year Treasury Rate and the Ten Year Treasury Rate, (ii) on the
first Interest Payment Date following the Reset Date, the interest rate on the
Securities of this series, as reset on the Reset Date, shall increase by fifty
(50) basis points, and (iii) the interest rate on the Securities of this series
shall further increase by an additional fifty (50) basis points on each
succeeding Interest Payment Date; PROVIDED, HOWEVER, that notwithstanding
clauses (i), (ii) or (iii) above, in no event shall the interest rate to be
borne by the Securities of this series at any time exceed the Initial Interest
Rate by more than two hundred (200) basis points. Once the interest rate on the
Securities of this series has been reset as set forth above, as provided in the
Indenture, if the Company's Subordinated Capital Base is equal to or greater
than the Minimum Subordinated Capital Base as of the last day of any fiscal
quarter subsequent to the Deficiency Date, interest on the Securities of this
series shall return to the Initial Interest Rate effective as of the first day
of the second following fiscal quarter.
The Indenture also provides that upon the occurrence of a Change of
Control, subject to the satisfaction of certain substantial conditions precedent
set forth in the Indenture, each Holder shall have the right to require that the
Company repurchase such Holder's Securities in whole or in part at a price equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest, if any, to the date of such repurchase.
The Indenture contains provisions for (i) defeasance of certain of the
Company's obligations (including covenants) under the Indenture and (ii)
satisfaction and discharge of the Indenture upon compliance by the Company with
certain conditions set forth therein, which provisions apply to this Security.
The Indenture imposes certain limitations on the ability of the Company and
its Restricted Subsidiaries to, among other things, make certain Restricted
Payments, create and incur Indebtedness and create or suffer to exist certain
Liens (other than Permitted Liens). The Indenture imposes limitations on the
ability of the Company to merge or consolidate with any other Person or sell,
assign, transfer or lease all or substantially all of its properties or assets.
All such covenants and limitations are subject to a number of important
qualifications and exceptions. The Company must report periodically to the
Trustee on compliance with the covenants in the Indenture.
40
<PAGE>
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 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 representing at least 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 at least a majority
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 defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Security shall bind such Holder and 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.
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 premium, if any) 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 registrable in the 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 premium, if any) 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
Registrar duly executed by the Holder hereof, such Holder's attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same Stated Maturity and aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of one thousand dollars ($1,000) 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 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 by the Holder 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.
41
<PAGE>
Directors, officers, employees or stockholders, as such, of the Company
shall not have any liability for any obligations of the Company under this
Security or the Indenture, or for any claim based on, in respect of or by reason
of, such obligations or their creation. Each Holder, by accepting a Security,
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of this Security.
[IF APPLICABLE, INSERT - Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures ("CUSIP"), the Company
has caused CUSIP numbers to be printed on the Securities of this series as a
convenience to the Holders of the Securities of this series. No representation
is made as to the correctness or accuracy of such numbers as printed on the
Securities of this series and reliance may be placed only on the other
identification numbers printed hereon.]
42
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
(Insert assignee's social security or tax I.D. number)
(Print or type assignee's name, address and zip code)
and irrevocably appoint ___________________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him or her.
Dated: Your Signature:
----------------- --------------------------------
(Sign exactly as your name appears on
the other
side of this Security)
Signature Guaranty:
--------------------------------------------
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
43
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to elect to have all or any portion of this Security purchased
by the Company pursuant to Section 1009 ("Asset Disposition Offer"), Section
1013 ("Change of Control Offer") or Section 1101 ("Deficiency Offer") of the
Indenture, check the applicable boxes:
" Section 1009: " Section 1013: " Section 1101:
in whole " in whole " in whole "
in part " in part " in part "
amount to be amount to be amount to be
purchased: $ purchased: $ purchased: $
------ ------ ------
Dated: Your Signature:
-------------- -------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature Guaranty:
--------------------------------------------
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
Social Security Number or Taxpayer Identification Number:
---------
44
<PAGE>
SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
Dated:
------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
________________________
AS TRUSTEE
By
---------------------
AUTHORIZED SIGNATORY
45
<PAGE>
SECTION 205. SECURITIES IN GLOBAL FORM.
If Securities of a series are issuable in global form, as contemplated by
Section 301, then, notwithstanding the provisions of Section 302, any such
Security shall represent such of the Outstanding Securities of such series as
shall be specified therein and may provide that it shall represent the aggregate
amount of Outstanding Securities from time to time endorsed thereon and that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges, redemptions
and repurchases. Any endorsement of a Security in global form to reflect the
amount, or any increase or decrease in the amount, of Outstanding Securities
represented thereby shall be made in such manner and upon instructions given by
such Person or Persons as shall be specified therein or in the Company Order to
be delivered to the Trustee pursuant to Section 303 or Section 304. Subject to
the provisions of Section 303 and, if applicable, Section 304, the Trustee shall
deliver and redeliver any Security in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or 304 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel.
The provisions of Section 309 shall apply to any Security represented by a
Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with written instructions (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby.
Notwithstanding the provisions of Sections 201 and 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided in the
preceding paragraph, the Company, the Trustee and any agent of the Company and
the Trustee shall treat a Person as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security as shall be
specified in a written statement of the Holder of such permanent global
Security.
SECTION 206. CUSIP NUMBER.
The Company in issuing Securities of any series may use a "CUSIP" number, and if
so, the Trustee may use the CUSIP number in notices of redemption or exchange as
a convenience to Holders of such series; PROVIDED, that any such notice may
state that no representation is made as to the correctness or accuracy of the
CUSIP number printed on the notice or on the Securities of such series, and that
reliance may be placed only on the other
46
<PAGE>
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 will
promptly notify the Trustee of any change in the CUSIP number of any series of
Securities.
SECTION 207. FORM OF LEGEND FOR SECURITIES IN GLOBAL FORM.
Any Security in global form authenticated and delivered hereunder shall
bear a legend in substantially the following form:
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
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 from time to time in one or more series.
There shall be established in or pursuant to a Board Resolution, and set forth
in an Officer's Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish the
Securities of the series from all other Securities);
(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
47
<PAGE>
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of the series pursuant to Sections 304,
305, 306, 906 or 1207);
(3) the date or dates on which the principal of the Securities of the
series is payable;
(4) the rate or rates at which the Securities of the series shall bear
interest, if any, the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest shall be payable and the Regular
Record Date for the interest payable on any Interest Payment Date and the basis
points and United States Treasury rate(s) to be used in calculating the Reset
Rate;
(5) the place or places where the principal of (and premium, if any) and
interest on Securities of the series shall be payable;
(6) the period or periods within 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, pursuant to any sinking fund or
otherwise;
(7) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the period or periods within which, the
price or prices at 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, and, where applicable, the obligation of the Company to select the
Securities to be redeemed;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be issuable;
(9) 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;
(10) additional Events of Default with respect to Securities of the series,
if any, other than those set forth herein;
48
<PAGE>
(11) the application, if any, of either or both of Section 1402 and Section
1403 to the Securities of the series;
(12) if other than the Trustee, the identity of the Registrar and any
Paying Agent; and
(13) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to such
Board Resolution and set forth in such Officer's Certificate or in any such
indenture supplemental hereto.
If any of the terms of the 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 Officer's
Certificate setting forth, or providing the manner for determining, the terms of
the Securities of such series.
SECTION 302. DENOMINATIONS.
The Securities of each series shall be issuable in fully registered form
without coupons 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 President or one of its Vice Presidents, under its corporate
seal reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile. The seal of the Company may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on the
Securities. Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect the validity or
enforceability of any Security that has been duly authenticated and delivered by
the Trustee.
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.
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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 make such Securities available for
delivery. If the form or terms of the Securities of the series have been
established in or 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 Sections 315(a)
through (d) of the Trust Indenture Act) 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;
(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 against the Company in accordance with
their terms, except to the extent enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforcement of creditors' rights generally and by the effect of
general principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law); and
(d) that no consent, approval, authorization, order, registration or
qualification of or with any court or any governmental agency or body having
jurisdiction over the Company is required for the execution and delivery of such
Securities by the Company, except such as have been obtained (except that no
opinion need be expressed as to the securities laws of any state).
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, or in the written opinion of
counsel to the Trustee (which counsel may be an employee of the Trustee) such
authentication may not lawfully be made or would involve the Trustee in personal
liability.
Notwithstanding the provisions of Section 301 and of the immediately
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be
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necessary to deliver the Officer's Certificate otherwise required pursuant to
Section 301 or the Company Order and Opinion of Counsel otherwise required
pursuant to the immediately 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.
If the Company shall establish pursuant to Section 301 that the Securities
of a series are to be issued in the form of one or more global Securities, then
the Company shall execute and the Trustee shall, in accordance with this Section
and the Company Order with respect to the authentication and delivery of such
series, authenticate and deliver one or more global Securities that (i) shall be
in an aggregate amount equal to the aggregate principal amount specified in such
Company Order, (ii) shall be registered in the name of the Depository therefor
or its nominee, and (iii) shall be made available for delivery by the Trustee to
such Depository or pursuant to such Depository's instructions.
Unless otherwise provided for in the form of Security, 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 and is entitled to the
benefits of this Indenture.
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 make
available for delivery, temporary Securities which are printed, lithographed,
typewritten, mimeographed, or otherwise produced, in any authorized
denomination, substantially in the tenor of the definitive Securities 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 conclusively evidenced by their execution of such Securities.
In the case of Securities of any series, such temporary Securities may be
in global form, representing all or a portion of the Outstanding Securities of
such series.
Except in the case of temporary Securities in global form (which shall be
exchanged in accordance with the provisions of Section 305), 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
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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 make
available for delivery in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations and of like
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.
If temporary Securities of any series are issued in global form, any such
temporary global Security shall, unless otherwise provided therein, be delivered
to the office of a Depository for credit to the respective accounts of the
beneficial owners of such Securities (or to such other accounts as they may
direct).
SECTION 305. REGISTRATION, 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 "Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities and for registration of transfers of Securities. The Trustee is
hereby appointed "Registrar" for the purpose of registering Notes and transfers
of Securities as herein provided.
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 make available
for delivery, 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 Stated Maturity.
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 Stated Maturity, 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 make available for delivery, the Securities which the
Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the beneficial owners of interests in a
permanent global Security are entitled to exchange such interests for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified and as subject to the conditions contemplated by
Section 301, then without unnecessary delay but in any event not later than the
earliest date on which such interests may be so exchanged, the Company shall
deliver to
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the Trustee definitive Securities of that series in aggregate principal amount
equal to the principal amount of such permanent global Security, executed by the
Company. On or after the earliest date on which such interests may be so
exchanged, such permanent global Securities shall be surrendered from time to
time by the Depository and in accordance with instructions given to the Trustee
and the Depository (which instructions shall be in writing but need not comply
with Section 102 or be accompanied by an Opinion of Counsel), as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose, to be exchanged, in whole or in part, for
definitive Securities of the same series without charge. The Trustee shall
authenticate and make available for delivery, in exchange for each portion of
such surrendered permanent global Security, a like aggregate principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor as the portion of such permanent global Security to be exchanged which
shall be in the form of the Securities of such series; PROVIDED, HOWEVER, that
no such exchanges may occur during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities of
that series selected for redemption under Section 1203 and ending at the close
of business on the day of such mailing. Promptly following any such exchange in
part, such permanent global Security shall be returned by the Trustee to the
Depository or such other Depository referred to above in accordance with the
written instructions of the Company referred to above. If a Security in the
form specified for such series is issued in exchange for any portion of a
permanent global Security after the close of business at the office or agency
where such exchange occurs on (i) any Regular Record Date and before the opening
of business at such office or agency on the relevant Interest Payment Date, or
(ii) any Special Record Date and before the opening of business at such office
or agency on the related proposed date for payment of interest or Defaulted
Interest, as the case may be, such interest or Defaulted Interest will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of such Security in the form specified for such series, but
will be payable on such Interest Payment Date or proposed date for payment, as
the case may be, only to the Person to whom interest in respect of such portion
of such permanent global Security is payable in accordance with the provisions
of this Indenture.
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.
Unless otherwise provided in the Securities to be transferred or exchanged,
no service charge shall be made for any registration of transfer or exchange of
Securities, but the
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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 1207 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1203 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and upon its request 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 the Trustee (i) evidence of
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 upon its request 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.
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.
No service charge shall be made for the issuance of any new Security under
this Section, but 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 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.
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 such Security (or one or more Predecessor Securities) is registered at the
close of business on the Record Date for such interest.
Any interest on any Security of any series which is payable, but is not
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 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,
and any interest payable on Defaulted Interest, to the Persons in whose
names the Securities of such series (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 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
such Holder's address as it appears in the 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).
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(2) The Company may make payment of any Defaulted Interest, and any
interest payable on Defaulted Interest, on the Securities of any series in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, 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 Predecessor Security.
SECTION 308. 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 premium, if any) and
(subject to Section 307) 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.
None of the Company, the Trustee or any agent of the Company or the Trustee
shall have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interest of a
Security in global form, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interest. Notwithstanding the
foregoing, with respect to any Security in global form, nothing herein shall
prevent the Company or the Trustee or any agent of the Company or the Trustee,
from giving effect to any written certification, proxy or other authorization
furnished by the Depository (or its nominee), as a Holder, with respect to such
Security in global form or impair, as between the Depository and owners of
beneficial interests in such Security in global form, the operation of customary
practices governing the exercise of the right of the Depository (or its nominee)
as holder of such Security in global form.
SECTION 309. 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 canceled by it. The Company may at any time deliver to
the Trustee for cancellation any Security previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the Trustee. No
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Securities shall be authenticated in lieu of or in exchange for any of the
Securities canceled as provided in this Section, except as expressly permitted
by this Indenture. All canceled Securities shall be held by the Trustee and may
be destroyed (and, if so destroyed, certification of their destruction shall be
delivered to the Company, unless, by a Company Order, the Company shall direct
that canceled Securities be returned to it).
SECTION 310. COMPUTATION OF INTEREST.
Except 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.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), when the Trustee, upon Company Request and at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either:
(A) all Outstanding Securities theretofore authenticated and issued
hereunder (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, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving
of notice
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of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (B)(i), (ii) or (iii) above, has 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
premium, if any) and interest to the date of such deposit (in the case of
Securities which have become due and payable) or 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 Officer's Certificate and
an Opinion of Counsel, each stating that all conditions precedent provided for
herein 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 Company to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to clause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 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 premium, if
any) and interest for whose payment such money has been deposited with or
received by the Trustee.
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 to be
effected by operation of law or pursuant
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to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) the Company defaults in the payment of interest on any Security of
that series when such interest becomes due and payable and the default continues
for a period of 30 days; or
(2) the Company defaults in the payment of the principal of (or premium,
if any, on) any Security of that series when the same becomes due and payable at
Maturity, upon redemption (including redemptions under Article Twelve), upon
repurchases pursuant to a Deficiency Offer as described in Article Eleven,
pursuant to an Asset Disposition Offer as described in Section 1009, pursuant to
a Change of Control Offer as described in Section 1013 or otherwise; or
(3) the Company fails to observe or perform any of its other covenants,
warranties or agreements in the Securities of that series or this Indenture
(other than a covenant, agreement 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 the failure to observe or perform
continues for the period and after the notice specified in the next to last
paragraph of this Section; or
(4)(i) the Company fails to pay at final maturity the principal of any
Indebtedness of the Company, whether such Indebtedness now exists or shall
hereafter be created and an aggregate principal amount of not less than
twenty-five million dollars ($25,000,000) (or, if less, the least amount
contained in any similar provision of an instrument governing any outstanding
Subordinated Indebtedness of the Company, but in no event less than ten million
dollars ($10,000,000)) or more of such Indebtedness is outstanding or (ii) an
event or events of default, as defined in any one or more mortgages, indentures,
agreements or instruments under which there may be issued, or by which there may
be secured or evidenced, any Indebtedness of the Company, whether such
Indebtedness now exists or shall hereafter be created, shall happen and shall
result in Indebtedness in an aggregate amount of not less than twenty-five
million dollars ($25,000,000) (or, if less, the least amount contained in any
similar provision of an instrument governing any outstanding Subordinated
Indebtedness of the Company, but in no event less than ten million dollars
($10,000,000)) or more becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable, and such
acceleration shall not have been rescinded or annulled (or if such acceleration
shall not have been rescinded or annulled, such Indebtedness shall not have been
discharged), within a period of 15 days after there shall have been given to the
Company by the Trustee or to the Company by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities of that series a
written notice specifying such event or events of default and requiring the
Company to cause such acceleration to be rescinded or annulled or to cause such
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Indebtedness to be discharged and stating that such notice is a "Notice of
Default" hereunder; or
(5) one or more judgments or decrees shall be entered against the Company
involving, individually or in the aggregate, a liability of twenty-five million
dollars ($25,000,000) or more and a sufficient number of such judgments or
decrees shall not have been vacated, discharged, satisfied or stayed pending
appeal within 30 days from the entry thereof so as to bring the aggregate
liability in respect thereof below the twenty-five million dollar ($25,000,000)
threshold; or
(6) the Company pursuant to or within the meaning of any Bankruptcy Law
(i) commences a voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (ii) consents to the entry of a judgment, decree or order for
relief against it in an involuntary case or proceeding under any Bankruptcy Law,
(iii) consents to or acquiesces in the institution of bankruptcy or insolvency
proceedings against it, (iv) applies for, consents to or acquiesces in the
appointment of or taking possession by a Custodian of the Company or for any
material part of its property, (v) makes a general assignment for the benefit of
its creditors or (vi) takes any corporate action in furtherance of or to
facilitate, conditionally or otherwise, any of the foregoing; or
(7)(i) a court of competent jurisdiction enters a judgment, decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any Bankruptcy Law which shall (A) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect of the
Company, (B) appoint a Custodian of the Company or for any material part of its
property or (C) order the winding-up or liquidation of its affairs, and such
judgment, decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or (ii) any bankruptcy or insolvency petition or application
is filed, or any bankruptcy or insolvency proceeding is commenced against the
Company and such petition, application or proceeding is not dismissed within 90
days; or (iii) any warrant of attachment is issued against any material portion
of the property of the Company which is not released within 90 days of service;
or
(8) any other Event of Default provided with respect to Securities of that
series.
A Default under clause (3) above is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series notify the Company of the Default and the
Company does not cure the Default within 60 days after receipt of the notice.
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default." When a Default under clause (3) above is
cured within such 60-day period, it ceases.
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The Company shall file with the Trustee written notice of the occurrence of
any Default or Event of Default within five (5) business days of an Officer
becoming aware of any such Default or Event of Default.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to Securities of any series (other than
an Event of Default specified in clause (6) or (7) of Section 501) occurs and is
continuing, the Trustee by notice in writing to the Company, or the Holders of
at least 25% in aggregate principal amount of the Outstanding Securities of that
series by notice in writing to the Company and the Trustee, may declare the
unpaid principal of and accrued interest to the date of acceleration (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) on all
the Outstanding Securities of that series to be due and payable immediately and,
upon any such declaration, the Outstanding Securities of that series (or
specified principal amount) shall become and be immediately due and payable.
If an Event of Default specified in clause (6) or (7) of Section 501
occurs, all unpaid principal (without premium) of and accrued interest on the
Outstanding Securities (or specified principal amount) shall IPSO FACTO become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder of any Security.
Upon payment of all such principal and interest, all of the Company's
obligations under the Securities of that series and (upon payment of the
Securities of all series) this Indenture shall terminate, EXCEPT obligations
under Section 607.
The Holders representing at least a majority in principal amount of the
Outstanding Securities of that series by notice to the Trustee may rescind an
acceleration and its consequences if (i) all existing Events of Default, other
than the nonpayment of the principal and interest of the Securities of that
series that has become due solely by such declaration of acceleration, have been
cured or waived, (ii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal that has
become due otherwise than by such declaration of acceleration have been paid,
(iii) the rescission would not conflict with any judgment or decree of a court
of competent jurisdiction and (iv) all payments due to the Trustee and any
predecessor Trustee under Section 607 have been made.
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 of any
series when such interest becomes due and payable and such default continues for
a period of 30 days, or
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(2) default is made in the payment of the principal of (or premium, if
any, on) any Security of any series 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 premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) 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.
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, either for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted therein, or to secure 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,
(1) 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
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of the Trustee, its agent and counsel) and of the Holders allowed in such
judicial proceedings, and
(2) 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.
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 collected by the Trustee pursuant to this Article in respect of
Securities of any series 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 premium, if any) or interest, upon presentation of the
Securities in respect of which moneys have been collected 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
applicable to such series;
Second: To the payment of the amounts then due and unpaid for principal of
(and premium, if any) and interest on the Securities of such series in respect
of which or for the benefit of which such money has been collected, ratably,
without preference or priority of any
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kind, according to the amounts due and payable on such Securities of such series
for principal (and premium, if any) and interest, respectively; and
Third: To the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 506. At least fifteen (15) days before such
record date, the Trustee shall mail to each Holder and the Company a notice that
states the record date, the payment date and the amount to be paid.
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 or trustee, or for any other remedy hereunder,
unless:
(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 reasonable
indemnity 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
(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 Holders of Securities of
any series 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 such Holders of Securities of the affected series.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST.
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Notwithstanding any other provision of this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
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 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 of 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 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
any trust or power conferred on the Trustee, with respect to the Securities of
such series, PROVIDED that:
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(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 Section 601, the Trustee need not take any action which
might involve the Trustee in personal liability or be unduly prejudicial to the
Holders not joining therein.
SECTION 513. WAIVER OF PAST DEFAULTS.
Holders representing not less than a majority in principal amount of the
Outstanding Securities of any series may by written notice to the Trustee on
behalf of the Holders of all Securities of such series waive any Default or
Event of Default with respect to such series and its consequences, except a
Default or Event of Default
(1) in respect of the payment of the principal of (or premium, if any) or
interest on any Security of such series, or
(2) in respect of a covenant or other 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 or Event of Default shall cease to exist
and shall be deemed to have been cured, for every purpose of this Indenture and
the Securities of such series; but no such waiver shall extend to any subsequent
or other Default or Event of Default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security by
such Holder's 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
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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 OF 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 OF THE TRUSTEE.
(a) Except during the continuance of an Event of Default, the Trustee's
duties and responsibilities under this Indenture shall be governed by Section
315(a) of the Trust Indenture Act.
(b) In case an Event of Default has occurred and is continuing, and is
actually known to the Trustee, the Trustee shall exercise the rights and power
vested in it by this Indenture and shall use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(c) None of the provisions of Section 315(d) of the Trust Indenture Act
shall be excluded from this Indenture.
(d) No implied covenants or obligations shall be read into this Indenture
against the Trustee.
SECTION 602. NOTICE OF DEFAULTS.
Within 30 days after the occurrence of any Default or Event of Default with
respect to Securities of any series, the Trustee shall give to all Holders of
Securities of such series, as their names and addresses appear in the Register,
notice of such Default or Event of Default actually known to the Trustee, unless
such Default or Event of Default shall have been cured or waived; PROVIDED,
HOWEVER, that, except in the case of a Default or Event of Default in the
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payment of the principal of (or premium, if any) or interest on any Security of
such series or in the payment of any sinking fund installment 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
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.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of the Trust Indenture Act:
(1) 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;
(2) 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;
(3) 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 Officer's Certificate;
(4) the Trustee may consult with counsel of its selection 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;
(5) 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 reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(6) prior to the occurrence of an Event of Default with respect to the
Securities of any series and after the curing or waiving of all such Events of
Default which may have occurred, 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, approval or other paper or document, or the books and records of the
Company, unless requested in writing to do so by the Holders of a majority in
principal
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amount of the Outstanding Securities of any series; PROVIDED, HOWEVER, that if
the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is
not, in the opinion of the Trustee, reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such costs, expenses or liabilities as a condition
to so proceeding; the reasonable expense of every such investigation shall be
paid by the Company or, if paid by the Trustee, shall be repaid by the Company
upon demand;
(7) 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; and
(8) the Trustee shall not be required 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 its rights or power, 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.
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. Neither the Trustee nor any
Authenticating Agent shall 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 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, Registrar or such other
agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder (including amounts held by the
Trustee as Paying Agent) 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 upon in writing
with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
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The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation 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, damage, claim or expense, including taxes (other than taxes
based upon or determined or measured by the income of the Trustee), 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.
The Trustee shall have a claim prior to the Securities as to all property
and funds held by it hereunder for any amount owing it or any predecessor
Trustee pursuant to this Section 607, except with respect to funds held in trust
for the benefit of the Holders.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(6) or Section 501(7), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section 607 shall survive the termination of this
Indenture and the resignation or removal of the Trustee.
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS.
The Trustee shall be disqualified only where such disqualification is
required by Section 310(b) of the Trust Indenture Act.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be eligible to
act as Trustee under Section 310(a)(1) of the Trust Indenture Act having a
combined capital and surplus of at least fifty million dollars ($50,000,000)
subject to supervision or examination by federal or State authority, to the
extent there is such an institution eligible and willing to serve. If such
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corporation 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 corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. Neither the Company nor any Affiliate
of the Company may serve as Trustee. 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 one or more 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:
(i) the Trustee shall fail to comply with Section 310(b) of the
Trust Indenture Act after written request therefor by the
Company or by any Holder of a Security who has been a BONA
FIDE Holder for at least six months; or
(ii) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by
the Company or by such Holder of a Security who has been a
BONA FIDE Holder for at least six months; or
(iii) 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;
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then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 315(e) of the
Trust Indenture Act, 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, subject to any stay of such removal entered in accordance with Section
310(b) of the Trust Indenture Act.
(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 with respect to such
Securities. 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,
subject to Section 514 hereof, 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 by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses appear in the
Register. 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
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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, subject
to its Lien, if any, provided for in Section 607.
(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 (i) 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, (ii)
if the retiring Trustee is not retiring with 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
(iii) 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
subsection (a) or (b) above, 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 and the Trust Indenture Act.
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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,
conversation 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 and the
Trust Indenture Act, 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.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated therein.
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
At any time when any of the Securities remain Outstanding 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, and subject to the
direction of, the Trustee to authenticate Securities of such series issued 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 fifty million
dollars ($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
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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 to 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.
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 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 Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
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 alternate
certificate of authentication in the following form:
Dated:
------------------------
This is one of the Securities of the series designated therein referred to
the within-mentioned Indenture.
____________________________
AS TRUSTEE
By:
-------------------------------------
AS AUTHENTICATING AGENT
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By:
-------------------------------------
AUTHORIZED SIGNATORY
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:
(1) semi-annually, not later than January 1 and July 1 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 December 15 or June 15, as the case
may be, and
(2) 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;
PROVIDED, HOWEVER, that so long as the Trustee is the Registrar, no such list
shall be required to be furnished.
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 Registrar. The
Trustee may destroy any list furnished to it as provided in Section 701 upon
receipt of a new list so furnished.
(b) Holders of Securities may communicate as provided in Section 312(b) of
the Trust Indenture Act with other Holders with respect to their rights under
this Indenture or under the Securities, and the Trustee shall comply with its
obligations under such Section 312(b).
(c) Each 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
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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 May 15 of each year commencing with the year
1997, the Trustee shall transmit by mail to all Holders of Securities as
provided in Section 313(c) of the Trust Indenture Act, a brief report dated as
of such May 15, if required by and in compliance with Section 313(a) of the
Trust Indenture Act.
(b) The Trustee shall comply with Sections 313(b) and 313(c) of the Trust
Indenture Act.
(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 the
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 Exchange Act; 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, within
the earlier of (a) the same 15 days after the Company would have been required
to file with the Commission under the preceding clause and (b) the date which it
is required to so file under the 1991 Indenture so long as any Indebtedness is
outstanding thereunder, 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 Exchange Act 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;
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(3) transmit by mail to all Holders, as their names and addresses appear
in the Register, (a) concurrently with furnishing the same to its stockholders,
the Company's annual report to stockholders, containing certified financial
statements, and any other financial reports which the Company generally
furnishes to its stockholders, and (b) within 30 days after the filing thereof
with the Trustee, such summaries of any other 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; and
(4) furnish to the Trustee, on or before May 1 of each year, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture. For purposes
of this paragraph, such compliance shall be determined without regard to any
period of grace or requirement of notice provided under this Indenture. Such
certificate need not comply with Section 102.
ARTICLE EIGHT
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER
SECTION 801. WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate with, or merge with or into any other
corporation (whether or not the Company shall be the surviving corporation), or
sell, assign, transfer or lease all or substantially all of its properties and
assets as an entirety or substantially as an entirety to any Person or group of
affiliated Persons, in one transaction or a series of related transactions,
unless:
(1) either the Company shall be the continuing Person or the Person (if
other than the Company) formed by such consolidation or with which or into which
the Company is merged or the Person (or group of affiliated Persons) to which
all or substantially all the properties and assets of the Company as an entirety
are sold, assigned, transferred or leased is a corporation (or constitute
corporations) organized and existing under the laws of the United States of
America or any State thereof or the District of Columbia and expressly assumes,
by an indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of the Company under the
Securities and this Indenture;
(2) immediately before and after giving effect to such transaction or
series of related transactions, no Event of Default, and no Default, shall have
occurred and be continuing;
(3) immediately after giving effect to such transaction or series of
related transactions on a PRO FORMA basis, but prior to any purchase accounting
adjustments resulting from the
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transaction or series of related transactions, the Consolidated Net Worth of the
Company (or of the surviving, consolidated or transferee entity if the Company
is not continuing, treating such entity as the Company for purposes of
determining Consolidated Net Worth) shall be at least equal to the Consolidated
Net Worth of the Company immediately before such transaction or series of
related transactions; and
(4) immediately after giving effect to such transaction or series of
related transactions, the Company (or the surviving, consolidated or transferee
entity if the Company is not continuing, but treating such entity as the Company
for purposes of making such determination) would be permitted to incur an
additional dollar of Indebtedness (not constituting Permitted Indebtedness)
immediately prior to such transaction or series of related transactions under
Section 1008; PROVIDED, HOWEVER,that this subsection (4) shall be inapplicable
if (a) such transaction or series of related transactions would result in the
occurrence of a Change of Control or (b) immediately prior to giving effect to
such transaction or series of related transactions, the Company would not be
permitted to incur an additional dollar of Indebtedness (not constituting
Permitted Indebtedness) under Section 1008, and immediately after giving effect
to such transaction or series of related transactions on a PRO FORMA basis, but
prior to any purchase accounting adjustments resulting from the transaction or
series of related transactions, the Consolidated Interest Coverage Ratio of the
Company (or the surviving, consolidated or transferee entity if the Company is
not continuing, treating such entity as the Company for purposes of determining
Consolidated Interest Coverage Ratio) shall be at least equal to the
Consolidated Interest Coverage Ratio of the Company immediately before such
transaction or series of related transactions; and PROVIDED, FURTHER, that
notwithstanding the foregoing, if this subsection (4) in inapplicable by reason
of clause (b) of the first proviso to this subsection, and at the date three
months after the consummation of such transaction or series of related
transactions the rating ascribed to the Securities of any series by Standard &
Poor's Corporation or Moody's Investors Service, Inc. shall be lower than the
rating ascribed to the Securities of any series prior to the public announcement
of such transaction or series of related transactions, then the Company shall
make an offer for the Securities of each series at the same price and following
the same procedures and obligations as required with respect to a Change of
Control pursuant to Section 1013 (as if such date three months after the giving
effect to such transaction or series of related transactions were the Change of
Control Date).
SECTION 802. SECURITIES TO BE SECURED IN CERTAIN EVENTS.
If, upon any consolidation or merger, or upon any sale, assignment,
transfer or lease as provided in Section 801, any material property of the
Company or any Restricted Subsidiary or any shares of Capital Stock or
Indebtedness of any Restricted Subsidiary, owned immediately prior thereto,
would thereupon become subject to any Lien securing any indebtedness for
borrowed money of, or guaranteed by, such other corporation or Person (other
than any Permitted Lien), the Company, prior to such consolidation, merger,
sale, assignment, transfer or lease, will by indenture supplemental hereto
secure the due and
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punctual payment of the principal of, and premium, if any, and interest on the
Securities then Outstanding (together with, if the Company shall so determine,
any other Indebtedness of, or guaranteed by, the Company or any Restricted
Subsidiary and then existing or thereafter created) equally and ratably with
(or, at the option of the Company, prior to) the Indebtedness secured by such
Lien.
SECTION 803. OFFICER'S CERTIFICATE; OPINION OF COUNSEL.
The Company shall deliver to the Trustee prior to the proposed
transaction(s) covered by Section 801 an Officer's Certificate and an Opinion of
Counsel, each stating that the transaction(s) and such supplemental indenture
comply with this Indenture and that all conditions precedent to the consummation
of the transaction(s) under this Indenture have been met.
SECTION 804. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation by the Company with or merger by the Company into
any other corporation or any lease, sale, assignment or transfer of all or
substantially all of the property and assets of the Company in accordance with
Section 801, the successor corporation formed by such consolidation or into
which the Company is merged or the successor corporation or affiliated group of
corporations to which such lease, sale, assignment or transfer 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
corporation or corporations had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor corporation or
corporations shall be relieved of all obligations and covenants under this
Indenture and the Securities and in the event of such conveyance or transfer,
except in the case of a lease, any such predecessor corporation may be dissolved
and liquidated.
ARTICLE NINE
SUPPLEMENTS TO THE INDENTURE
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without notice to or 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, subject to Section 1003, enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
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(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants 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 or in the Securities conferred upon the Company; or
(3) to add any additional Events of Default with respect to all or any
series of Securities; 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
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental Indenture which is entitled to the benefit of such provision;
or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) 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;
(9) to cure any ambiguity, defect or inconsistency or to correct or
supplement any provision herein which may be inconsistent with any other
provision herein; or
(10) to comply with the requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the Trust Indenture Act;
or
(11) to make any change that does not materially adversely affect the
interests of the Holders of Securities of any series.
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Upon request of the Company, accompanied by a Board Resolution authorizing
the execution of any such supplemental indenture, and upon receipt by the
Trustee of the documents described in (and subject to the last sentence of)
Section 903, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the written consent of Holders representing at least a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee
shall, subject to Section 903, 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) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof or extend the time for payment 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 the Place of Payment where, or the coin or currency in
which, any Security or any premium or the interest thereon is payable, or impair
the right to institute a 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
waiver of compliance with certain provisions of this Indenture or Defaults or
Events of Default hereunder and their consequences provided for in this
Indenture, or
(3) change the repurchase provisions (including those contained in Article
Eleven, Section 1009, Section 1013) or redemption provisions (including those
contained in Article Twelve) hereof in a manner adverse to such Holder, or
(4) subordinate in right of payment, or otherwise subordinate, the
Securities to any other Indebtedness; or
(5) modify any of the provisions of this Section, Section 513 or Section
1014, except to increase any such percentage or to provide that certain other
provisions of this
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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 1014, or the deletion of this proviso, in accordance with the
requirements of Sections 611(b) and 901(10).
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.
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.
The Trustee shall sign any supplemental indenture authorized pursuant to
this Article, subject to the last sentence of this Section 903. 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 Officer's 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; 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 as then in effect.
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
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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 the Holders of each
series of Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities of that series in accordance
with the terms of the Securities of that series and this Indenture. An
installment of principal or interest shall be considered paid on the date it is
due if the Trustee or Paying Agent holds by 12:00 noon New York City time on
that date dollars designated for and sufficient to pay the installment and is
not prohibited from paying such money to the Holders of Securities of that
series pursuant to the terms of 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 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
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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.
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 (and premium, if any) 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 premium, if any) or 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 (and premium, if
any) or interest on any Securities of that series, deposit with a Paying Agent a
sum sufficient to pay the principal (and premium, if any) 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 to so 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 (and
premium, if any) 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 (and premium, if any) 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.
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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 (and premium, if any)
or interest on any Security of any series and remaining unclaimed for one year
after such principal (and premium, if any) 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, 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. CORPORATE 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 and that of each of its Restricted Subsidiaries and the rights
(charter and statutory), licenses and franchises of the Company and its
Restricted Subsidiaries; PROVIDED, HOWEVER, that (a) the Company shall not be
required to preserve any such right, license or franchise or the corporate
existence of any of its Restricted Subsidiaries if the Board of Directors, or
the board of directors of the Restricted Subsidiary concerned, as the case may
be, shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company or any of its Restricted Subsidiaries and
that the loss thereof is not materially disadvantageous to the Holders and (b)
nothing herein contained shall prevent any Restricted Subsidiary of the Company
from liquidating or dissolving, or merging into, or consolidating with the
Company (PROVIDED that the Company shall be the continuing or surviving
corporation) or with any one or more Restricted Subsidiaries of the Company if
the Board of Directors or the board of directors of the Restricted Subsidiary
concerned, as the case may be, shall so determine.
SECTION 1005. 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 material taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or property of the Company or any
Restricted Subsidiary and (2) all lawful claims against the Company or any
Restricted Subsidiary for labor, materials and supplies which in the case of
either clause (1) or (2) of this Section, if unpaid, might by law become a
material Lien upon the property of the Company or any Restricted Subsidiary;
PROVIDED, HOWEVER, that neither the Company nor any Restricted Subsidiary shall
be required to pay or discharge or cause to be
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paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1006. RESTRICTION ON DIVIDENDS.
The Company will not, and will not permit any Subsidiary of the Company to,
directly or indirectly, (1) declare or pay any dividend or make any
distribution, in cash or otherwise, in respect of any shares of Capital Stock of
the Company or to the holders of Capital Stock of the Company as such (other
than dividends or distributions payable in shares of Capital Stock of the
Company (other than Redeemable Stock)) or (2) purchase, redeem or otherwise
acquire or retire for value any of the Capital Stock of the Company or options,
warrants or other rights to acquire any such Capital Stock, other than
acquisitions of Capital Stock or such options, warrants or other rights by any
Subsidiary of the Company from the Company (any such transaction included in
clause (1) or (2) being hereafter collectively referred to as a "Restricted
Payment") if (i) at the time of such Restricted Payment and after giving effect
thereto, (a) an Event of Default shall have occurred and be continuing with
respect to any series of Securities or (b) the Consolidated Net Worth of the
Company shall be less than seven hundred fifty million dollars ($750,000,000);
or if (ii) after giving effect to such Restricted Payment, the aggregate amount
expended subsequent to November 1, 1991, for all such Restricted Payments (the
amount of any Restricted Payment, if other than cash, to be the fair market
value of such payment as determined by the Board of Directors of the Company,
whose reasonable determination shall be conclusive and evidenced by a Board
Resolution) exceeds the algebraic sum of (w) a number calculated as follows:
(A) if the aggregate Consolidated Net Income of the Company earned on a
cumulative basis during the period subsequent to September 30, 1991 through the
end of the last fiscal quarter that is prior to the declaration of any such
dividend or distribution or the giving of notice of such purchase, redemption or
other acquisition or retirement and for which such financial information is then
available, is a positive number, then 100% of such positive number, and (B) if
the aggregate Consolidated Net Income of the Company earned on a cumulative
basis during the period subsequent to September 30, 1991 through the end of the
last fiscal quarter that is prior to the declaration of any such dividend or
distribution or the giving of notice of such purchase, redemption or other
acquisition or retirement and for which such financial information is then
available, is a negative number, then 100% of such negative number, (x) the
aggregate net cash proceeds received by the Company from the issuance and sale,
other than to a Subsidiary of the Company, subsequent to November 1, 1991, of
Capital Stock (including Capital Stock issued upon the conversion of, or in
exchange for, securities other than Capital Stock and options, warrants or other
rights to acquire Capital Stock, but excluding Redeemable Stock), (y) the
aggregate net cash proceeds originally received by the Company from the issuance
and sale, other than to a Subsidiary of the Company, of Indebtedness of the
Company that is converted into Capital Stock of the Company subsequent to
November 1, 1991, and (z) three hundred million dollars ($300,000,000);
PROVIDED, HOWEVER, that the retirement of any shares of the Company's Capital
Stock by exchange for, or out of the proceeds of the substantially concurrent
sale of, other shares of Capital Stock of the Company other than Redeemable
Stock
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shall not constitute a Restricted Payment. If all of the conditions to the
declaration of a dividend or distribution set out in this Section are satisfied
at the time such dividend or distribution is declared, then such dividend or
distribution may be paid or made within sixty days after such declaration even
if the payment of such dividend, the making of such distribution or the
declaration thereof would not have been permitted under this Section at any time
after such declaration.
SECTION 1007. LIMITATION ON FUTURE LIENS AND GUARANTIES.
(a) If the Company or any Subsidiary of the Company shall create, incur,
assume or suffer to exist any Lien upon any of the assets of the Company or a
Subsidiary of the Company (whether such assets are owned at November 1, 1991 or
thereafter acquired) as security for (i) any Indebtedness or other obligation
(whether unconditional or contingent) of the Company that ranks PARI PASSU with
the Securities or any Indebtedness or other obligation (whether unconditional or
contingent) of a Subsidiary of the Company, the Company will secure or will
cause such Subsidiary to guarantee and secure the Outstanding Securities equally
and ratably with (or, at the option of the Company, prior to) such Indebtedness
or other obligation, so long as such Indebtedness or other obligation shall be
so secured, or (ii) any Subordinated Indebtedness, the Company will secure the
Outstanding Securities prior to such Subordinated Indebtedness, so long as such
Subordinated Indebtedness shall be so secured; PROVIDED, HOWEVER, that this
subsection shall not apply in the case of Permitted Liens or Liens granted by
any Unrestricted Subsidiary to secure Indebtedness or other obligations of
itself or of any Person other than the Company and its Restricted Subsidiaries.
(b) The Company will not guarantee the Indebtedness of any Subsidiary of
the Company and will not permit any such Subsidiary to guarantee (i) any
Indebtedness of the Company that ranks PARI PASSU with the Securities, (ii) any
Indebtedness of a Subsidiary of the Company or (iii) any Subordinated
Indebtedness; PROVIDED, HOWEVER, that this subsection shall not apply to (1) any
guaranty by a Subsidiary if such Subsidiary also guarantees the Securities on a
PARI PASSU basis with respect to guaranties of Indebtedness described in clause
(i) and (ii) and on a senior basis with respect to guaranties of Indebtedness
described in clause (iii); (2) any guaranty existing on November 1, 1991 or any
extension or renewal of such guaranty to the extent such extension or renewal is
for the same or a lesser amount; (3) any guaranty which constitutes Indebtedness
permitted by clause (v) or (vi) of the definition of Permitted Indebtedness
granted by a Person permitted to incur such Indebtedness; (4) any guaranty by
the Company of Indebtedness of a Restricted Subsidiary, PROVIDED that (A)
incurrence of such Indebtedness of the Restricted Subsidiary is not prohibited
by this Indenture and (B) (x) such guaranty constitutes Indebtedness of the
Company incurred as Permitted Indebtedness pursuant to clause (vii) or (viii) of
the definition of Permitted Indebtedness (it being understood that, for purposes
of determining Permitted Indebtedness, any such guaranty shall be deemed to
constitute Indebtedness separate from, and, in addition to, Indebtedness of a
Restricted Subsidiary which is so guaranteed) or (y) immediately prior to and
(on a PRO FORMA basis) after granting such guaranty, the Company would be
permitted to incur an additional dollar of
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Indebtedness (not constituting Permitted Indebtedness) under Section 1008; (5)
any guaranty by an Unrestricted Subsidiary of Indebtedness or other obligations
of any Person other than the Company and its Restricted Subsidiaries; (6) any
guaranty by the Company or any Subsidiary of Indebtedness or other obligations
constituting Indebtedness permitted by clause (i)(a) of the definition of
Permitted Indebtedness in a principal amount not exceeding the principal amount
outstanding or committed under the Credit Agreements (including any letter of
credit facility, but without duplication with respect to commitments for loans
the use of proceeds of which is restricted to repayment of other Indebtedness
under the Credit Agreements) as of November 1, 1991, PLUS two hundred fifty
million dollars ($250,000,000) and LESS the proceeds from the sale of all
Indebtedness under the 1991 Indenture issued from time to time applied to repay
Indebtedness under the Credit Agreements; (7) any guaranty by the Company of
Indebtedness of any Restricted Subsidiary outstanding on November 1, 1991 which
is not subordinated to any Indebtedness of such Restricted Subsidiary, and any
renewal, extension or refinancing of such Indebtedness permitted by this
Indenture; (8) any guaranty by the Company of Indebtedness of any Restricted
Subsidiary that is organized under the laws of a jurisdiction other than the
United States or any subdivision thereof, PROVIDED that the incurrence of such
Indebtedness of such Restricted Subsidiary is not prohibited by this Indenture;
(9) any guaranty by a Restricted Subsidiary that is organized under the laws of
a jurisdiction other than the United States or any subdivision thereof of the
Indebtedness of any of its Subsidiaries that is a Restricted Subsidiary and that
is organized under the laws of a jurisdiction other than the United States or
any subdivision thereof, provided that incurrence of such Indebtedness of such
Restricted Subsidiary is not prohibited by this Indenture; (10) any guaranty by
the Company or a Subsidiary of the Company of Indebtedness or other obligations
in a principal amount not exceeding two hundred fifty thousand dollars
($250,000); (11) any guaranty in the form of an endorsement of negotiable
instruments for deposit or collection and similar transactions; (12) any
guaranty arising under or in connection with performance bonds, indemnity bonds,
surety bonds, or commercial letters of credit not exceeding twenty-five million
dollars ($25,000,000) in aggregate principal amount from time to time
outstanding; (13) any guaranty by a Subsidiary of the Company of Indebtedness or
other obligations of another Subsidiary in effect at the time of such guarantor
becoming a Subsidiary and not created in contemplation thereof; or (14) any
guaranty by the Company or a Restricted Subsidiary of any Interest Swap
Obligation, Currency Agreement or Commodities Agreement relating to Indebtedness
that is guaranteed pursuant to another clause of this subsection.
SECTION 1008. LIMITATION ON FUTURE INCURRENCE OF INDEBTEDNESS.
The Company will not, and will not permit any Restricted Subsidiary to,
incur, create, assume, guarantee or in any other manner become directly or
indirectly liable with respect to or responsible for the payment of any
Indebtedness except: (1) Permitted Indebtedness; and (2) Indebtedness of the
Company if at the time thereof and after giving effect thereto the Consolidated
Interest Coverage Ratio of the Company, on a PRO FORMA basis for the then four
most recent full fiscal quarters, taken as a whole (giving effect to (i) such
Indebtedness and (ii) the effect on the Consolidated Cash Flow Available for
Fixed Charges of the Company for the
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then four most recent full fiscal quarters, taken as a whole, as a result of any
acquisition of a Person acquired by the Company or any Restricted Subsidiary
with the proceeds of such Indebtedness), would be greater than 1.75 to 1.
Without limiting the foregoing, the Company shall not, and shall not permit any
Restricted Subsidiary to, guarantee, or in any other manner become directly or
indirectly liable with respect to or responsible for the payment of,
Indebtedness of any Unrestricted Subsidiary in an amount greater than, for all
guaranties and undertakings of responsibility by the Company and its Restricted
Subsidiaries, 20% of the aggregate amount of Indebtedness of such Unrestricted
Subsidiary.
SECTION 1009. LIMITATION ON ASSET DISPOSITIONS.
(a) So long as any of the Securities are Outstanding, (i) the Company will
not, and will not permit any Restricted Subsidiary to, make any Asset
Disposition unless (except as otherwise permitted in the last sentence of
subsection (g) below) the Company (or the Restricted Subsidiary, as the case may
be) receives consideration at the time of such Asset Disposition at least equal
to the fair market value for the assets sold or otherwise disposed of (which
shall be as determined in good faith (x) in the case of dispositions of assets
having a fair market value of ten million dollars ($10,000,000) or more, by the
Board of Directors, whose reasonable determination shall be conclusive and
evidenced by a Board Resolution, or (y) in the case of dispositions of assets
having a fair market value of less than ten million dollars ($10,000,000) but
not less than five million dollars ($5,000,000), an Officer of the Company,
whose reasonable determination shall be conclusive and evidenced by a
certificate of such Officer) and (ii) the Company will apply the aggregate net
proceeds in excess of three hundred million dollars ($300,000,000) received by
the Company or any Restricted Subsidiary from all Asset Dispositions occurring
subsequent to November 1, 1991 (but excluding for purposes of this clause (ii),
whether before or after the receipt of net proceeds in excess of three hundred
million dollars ($300,000,000), (1) the net proceeds of any Asset Disposition or
series of related Asset Dispositions where the net proceeds are less than five
million dollars ($5,000,000) and (2) the first twenty-five million dollars
($25,000,000) of net proceeds in each fiscal year without taking into account
any amount excluded pursuant to (1)) as follows: (A) to the payment or
prepayment of any Senior Indebtedness within six months of such Asset
Disposition, or (B) to investment in the business of the Company and its
Restricted Subsidiaries (including, without limitation, by acquiring equity,
other than Redeemable Stock, of the transferee of such Asset Disposition) within
six months of such Asset Disposition or, if such investment is with respect to a
project to be completed within a period greater than six months from such Asset
Disposition, then within the period of time necessary to complete such project;
PROVIDED, HOWEVER, that (x) in the case of applications contemplated by clause
(B), the Board of Directors has, within such six-month period, adopted in good
faith a resolution committing such excess proceeds to such investment, (y)
EXCEPT as provided in the next sentence, none of such excess proceeds shall be
used to make any Restricted Payment or any payment in respect of Subordinated
Indebtedness and (z) to the extent not applied in accordance with clauses (A) or
(B) above, or if after being so applied there remain excess net proceeds in an
amount greater than ten million dollars ($10,000,000), the Company shall make
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a PRO RATA offer to all Holders to purchase Securities at 100% of principal
amount, plus accrued and unpaid interest to the Asset Disposition Payment Date,
up to an aggregate principal amount equal to such excess net proceeds (as
adjusted pursuant to subsection (g) of this Section, the "Asset Disposition
Offer Amount"). If after being applied in accordance with clauses (A), (B) and
(z) above there remain excess net proceeds, the Company will apply such excess
net proceeds to the general corporate purposes of the Company or any Subsidiary
of the Company.
(b) Notwithstanding subsection (a) of this Section, to the extent the
Company or any of its Restricted Subsidiaries receives securities or other
non-cash property or assets as proceeds of an Asset Disposition (other than
equity in the transferee not constituting Redeemable Stock), the Company shall
not be required to make any application required by subsection (a) of this
Section until it receives cash proceeds from a sale, repayment, exchange,
redemption or retirement of or extraordinary dividend or return of capital on
such non-cash property, EXCEPT that if and to the extent the sum of all cash
proceeds plus the fair market value of equity (other than Redeemable Stock) in
the transferee of such Asset Disposition received at the time of such Asset
Disposition is less than 70% of the fair market value of the total proceeds of
such Asset Disposition (with such fair market value determined and evidenced in
the same manner as stated in clause (i) of subsection (a) of this Section), the
amount of such deficiency (the "Deficiency Amount") shall be applied as required
by subsection (a) of this Section as if received at the time of the Asset
Disposition. Any amounts deferred pursuant to the preceding sentence shall be
applied in accordance with subsection (a) of this Section when cash proceeds are
thereafter received from a sale, repayment, exchange, redemption or retirement
of or extraordinary dividend or return of capital on such non-cash property;
PROVIDED, HOWEVER, that the Company shall not be required to apply with respect
to any equity interest in a transferee an amount exceeding the fair market value
attributable to such equity interest at the time of the Asset Disposition; and
PROVIDED, FURTHER, that if a Deficiency Amount was applied pursuant to the
exception contained in the preceding sentence, then once the cumulative amount
of applications made pursuant to subsections (a) and (b) of this Section
(including any Deficiency Amounts) equals 100% of the fair market value of the
total proceeds of the Asset Disposition at the time of such Asset Disposition,
cash proceeds thereafter received from a sale, repayment, exchange, redemption
or retirement of or extraordinary dividend or return of capital on such non-cash
property shall not be required to be applied in accordance with subsection (a)
of this Section EXCEPT to the extent such cash proceeds exceed the Deficiency
Amount.
(c) An offer to purchase Securities required to be made pursuant to this
Section is referred to as an "Asset Disposition Offer" and the date on which the
purchase of Securities relating to any such Asset Disposition Offer is to be
made is referred to as the "Asset Disposition Payment Date."
(d) The Company shall provide the Trustee with notice of an Asset
Disposition Offer and with all information required to accompany the notice
described in (e) below, at least 45
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days before any such Asset Disposition Payment Date and at least 10 days before
the notice of any Asset Disposition Offer is mailed to Holders.
(e) Notice of an Asset Disposition Offer described in this Section shall
be mailed on behalf of the Company by the Trustee to all Holders at their last
registered addresses not less than 30 days nor more than 60 days before the
Asset Disposition Payment Date, which shall be a date not more than 210 days
after the Asset Disposition giving rise to such Asset Disposition Offer. The
Asset Disposition Offer shall remain open from the time of the mailing of such
notice until not more than five Business Days before the Asset Disposition
Payment Date. The notice shall state:
(1) that the Asset Disposition Offer is being made pursuant to this
Section and the reason for the Asset Disposition Offer;
(2) the purchase price and the Asset Disposition Payment Date;
(3) the aggregate principal amount of Securities initially subject to
the Asset Disposition Offer Amount and, if applicable, a
description of the adjustment mechanisms describe in subsection
(g) of this Section;
(4) the name and address of the Paying Agent and the Trustee and that
Securities must be surrendered to the Paying Agent to collect the
purchase price;
(5) that any of the Securities not tendered or accepted for payment
will continue to accrue interest;
(6) that any Security accepted for payment pursuant to the Asset
Disposition Offer shall cease to accrue interest after the Asset
Disposition Payment Date;
(7) that each Holder electing to have a Security purchased pursuant
to an Asset Disposition Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Security completed, to the Paying
Agent at the address specified in the notice prior to the close
of business on the fifth Business Day prior to the Asset
Disposition Payment Date;
(8) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on
the third Business Day preceding the Asset Disposition Payment
Date, a telegram, telex, facsimile transmission or letter setting
forth: the name of the Holder, the principal amount of the
Security the Holder delivered for purchase,
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the certificate number of the Security the Holder delivered and a statement that
such Holder is withdrawing his election to have the Security purchased; and
(9) that Holders whose Securities are purchased only in part will be
issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(f) On the Asset Disposition Payment Date, the Company shall (i) accept
for payment Securities or portions thereof tendered pursuant to the Asset
Disposition Offer in an aggregate principal amount equal to the Asset
Disposition Offer Amount or such lesser amount of Securities as shall have been
tendered, (ii) on or before 12:00 noon New York City time, deposit with the
Paying Agent money sufficient to pay the purchase price of all Securities or
portions thereof so accepted, and (iii) deliver or cause to be delivered to the
Trustee Securities so accepted together with an Officer's Certificate stating
the Securities or portions thereof accepted by the Company. If the aggregate
principal amount of Securities tendered exceeds the Asset Disposition Offer
Amount, the Company shall select the Securities to be purchased on a PRO RATA
basis to the nearest one thousand dollars ($1,000) of principal amount. The
Paying Agent shall promptly mail or deliver to Holders of Securities so accepted
payment in an amount equal to the purchase price, and the Company shall execute
and the Trustee shall promptly authenticate and mail or make available for
delivery to such Holders a new Security of the applicable series and equal in
principal amount to any unpurchased portion of the Security surrendered. Any
Securities not so accepted shall be promptly mailed or made available for
delivery to the Holder thereof. The Company will publicly announce the results
of the Asset Disposition Offer on or as soon as practicable after the Asset
Disposition Payment Date. For purposes of this Section, the Trustee or its
agent shall act as the Paying Agent.
(g) The Company shall not make an "Asset Disposition Offer" (as defined)
required under Section 1009 of the 1991 Indenture, the 1994 Indentures or the
1996 Indentures in connection with a disposition of assets other than the
Collateral (as defined in the First Mortgage Note Indenture) unless the Company
shall have made an Asset Disposition Offer hereunder (and in respect of certain
other Senior Indebtedness in accordance with the following sentence) on a PRO
RATA basis (in an aggregate amount equal to the amount to be offered pursuant to
the Asset Disposition Offer under the 1991 Indenture, the 1994 Indentures and
the 1996 Indentures (and in accordance with Section 1009(g) of the 1994
Indentures)) the closing date of which is prior to six months after the asset
disposition triggering the obligations of the Company under the 1991 Indenture,
the 1994 Indentures and/or the 1996 Indentures, as the case may be.
Notwithstanding the previous sentence, if on or after the date hereof, the
Company issues any Senior Indebtedness (including the Securities) containing a
requirement that an offer be made to repurchase such Senior Indebtedness under
the same circumstances and in the same manner (including the prescribed time
periods hereof) provided in this Section 1009, then (i) the Company may apply
the Asset Disposition Offer Amount (before any adjustment pursuant to this
sentence) to the PRO RATA purchase of Securities tendered hereunder
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and the Senior Indebtedness tendered thereunder and (ii) the Asset Disposition
Offer Amount available to repurchase the Securities shall be reduced by the
amount applied to the purchase of such Senior Indebtedness; PROVIDED that this
sentence shall only apply to (i) Senior Indebtedness issued on or after the date
hereof that explicitly permits the PRO RATA purchase of Securities as described
herein and refers to this Section 1009(g) and any Indebtedness outstanding at
the date of this Indenture that is amended to explicitly permit the PRO RATA
purchase of Securities as described herein and refers to this Section 1009(g).
In the event that the First Mortgage Notes are refinanced through a public or
private offering of Indebtedness constituting debt securities and the amount of
such refinancing Indebtedness is no greater than the principal amount of the
103/4% First Mortgage Notes due 2002 of the Company outstanding as of the date
of such refinancing, the Company need not comply with subsection (a) of this
Section 1009 in respect of an Asset Disposition involving the collateral
securing such Indebtedness (other than collateral granted in respect of such
Indebtedness pursuant to a negative pledge or similar provision contained in the
indenture or similar instrument relating to such Indebtedness) to the extent
that such compliance would constitute a default under such indenture or similar
instrument.
SECTION 1010. MAINTENANCE OF PROPERTIES.
The Company will cause all material properties used or useful in the
conduct of its business or the business of any of its Subsidiaries to be
maintained and kept in good condition, repair and working order (normal wear and
tear excepted) 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, or disposing of any of them, if such discontinuance or disposal
is, in the judgment of the Board of Directors or of the board of directors of
the Subsidiary concerned, as the case may be, desirable in the conduct of the
business of the Company or any Subsidiary of the Company and not materially
disadvantageous to the Holders.
SECTION 1011. COMPLIANCE CERTIFICATES.
(a) The Company shall deliver to the Trustee within 90 days after the end
of each fiscal year of the Company (which fiscal year currently ends on December
31), an Officer's Certificate stating whether or not the signer knows of any
Default or Event of Default by the Company that occurred prior to the end of the
fiscal year and is then continuing. If the signer does know of such a Default
or Event of Default, the certificate shall describe each such Default or Event
of Default and its status and the specific section or sections of this Indenture
in connection with which such Default or Event or Default has occurred. The
Company shall also promptly notify the Trustee in writing should the Company's
fiscal year be changed so
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that the end thereof is on any date other than the date on which the Company's
fiscal year currently ends.
(b) The Company shall deliver to the Trustee as soon as practicable but in
any event not later than 45 days after the end of each fiscal quarter an
Officer's Certificate setting forth the Company's Subordinated Capital Base for
purposes of this Section 1011. The Trustee may conclusively rely on the
Officer's Certificate for such purposes.
(c) The Company shall deliver to the Trustee within 90 days after the end
of each fiscal year a written statement by the Company's independent certified
public accountants stating (i) that their audit examination has included a
review of the terms of this Indenture and the Securities as they relate to
accounting matters and (ii) whether, in connection with their audit examination,
any Default has come to their attention and if such a Default has come to their
attention, specifying the nature and period of existence thereof and the
specific section or sections of this Indenture in connection with which such
Default has occurred; PROVIDED, that without any restriction as to the scope of
the audit examination, such independent certified public accountants shall not
be liable by reason of the failure to obtain knowledge of such Default that
would not be disclosed in the course of an audit examination conducted in
accordance with generally accepted auditing standards.
(d) The Company shall deliver to the Trustee forthwith upon becoming aware
of a Default or Event of Default (but in no event later than 10 days after the
occurrence of each Default or Event of Default that is continuing), an Officer's
Certificate setting forth the details of such Default or Event of Default and
the action that the Company proposes to take with respect thereto and the
specific section or sections of this Indenture in connection with which such
Default or Event of Default has occurred.
SECTION 1012. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim,
and will actively resist any and all efforts to be compelled to take the benefit
or advantage of, any stay or extension law or any usury law or other law, which
would prohibit or forgive the Company from paying all or any portion of the
principal of and/or interest on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
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SECTION 1013. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control (the "Change of Control
Date") and subject to the requirements of the next succeeding sentence, each
Holder shall have the right to require that the Company repurchase such Holder's
Securities in whole or in part pursuant to the offer described in subsection (b)
below (the "Change of Control Offer") at a purchase price equal to 101% of the
aggregate principal amount of such Securities plus accrued and unpaid interest,
if any, to the date of such repurchase. If such repurchase would constitute an
event of default under Specified Bank Debt, then, prior to giving the notice to
Holders provided in subsection (b) below, the Company shall (i) repay in full in
cash such Specified Bank Debt or (ii) obtain the requisite consent of holders of
such Specified Bank Debt to permit the repurchase of Securities without giving
rise to an event of default under such Specified Bank Debt.
(b) Promptly upon satisfaction of either one of the obligations, if then
applicable, set forth in clause (i) or (ii) of subsection (a) above, the Company
shall mail a notice to each Holder of Securities of each applicable series and
the Trustee in respect of the Change of Control Offer (which notice shall
contain all instructions and materials necessary to enable such Holders to
tender Securities) stating:
(1) that the Change of Control Offer is being made pursuant to this
Section and that all Securities properly tendered will be
accepted for payment;
(2) the purchase price and the purchase date (which shall be no
earlier than 30 days nor later than 40 days from the date such
notice is mailed, but in any event prior to the date on which any
Subordinated Indebtedness is paid pursuant to the terms of a
provision similar to this Section) (the "Change of Control
Payment Date");
(3) the name and address of the Paying Agent and the Trustee and that
the Securities must be surrendered to the Paying Agent to collect
the purchase price;
(4) that any Security not tendered will continue to accrue interest;
(5) that any Security accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(6) that each Holder electing to have a Security purchased pursuant
to a Change of Control Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Security completed, to the Paying
Agent at the address specified in
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the notice prior to the close of business on the Business Day prior to the
Change of Control Payment Date;
(7) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on
the third Business Day preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the
Security the Holder delivered for purchase, the certificate
numbers of the Security the Holder delivered and a statement that
such Holder is withdrawing his election to have such Security
purchased; and
(8) that Holders whose Securities are purchased only in part will be
issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
On or before 12:00 noon New York City time on the Change of Control Payment
Date, the Company shall (i) accept for payment Securities of each applicable
series or portions thereof tendered pursuant to the Change of Control Offer,
(ii) deposit with the Paying Agent money sufficient to pay the purchase price of
all Securities of each applicable series or portions thereof so accepted and
(iii) deliver or cause to be delivered to the Trustee Securities so accepted,
together with an Officer's Certificate stating the aggregate principal amount of
the Securities or portions thereof so accepted by the Company. The Paying Agent
shall promptly mail or deliver to the Holder of Securities of each applicable
series so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail or make available for delivery to
such Holder a new Security of the same series as, and equal in principal amount
to, any unpurchased portion of the Security surrendered. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date. For purposes of this
Section, the Trustee or its agent shall act as the Paying Agent.
If a Change of Control has occurred but a Change of Control Offer is not
permitted to be made, the Company shall mail a notice of such Change of Control
to each Holder within 30 days following a Change of Control Date.
The Company shall comply with any applicable tender offer rules (including,
without limitation, any applicable requirements of Rule 14e-1 under the Exchange
Act) and any other legal requirements in the event that a Change of Control
Offer is made under the circumstances described in this Section 1013.
SECTION 1014. WAIVER OF CERTAIN COVENANTS.
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The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1006, 1007, 1008 and 1009 with
respect to the Securities of any series, if before the time for such compliance
Holders representing 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.
ARTICLE ELEVEN
MAINTENANCE OF SUBORDINATED CAPITAL BASE
SECTION 1101. MAINTENANCE OF SUBORDINATED CAPITAL BASE.
(a) Subject to the terms of Section 1102, in the event that the Company's
Subordinated Capital Base is less than one billion dollars ($1,000,000,000) (the
"Minimum Subordinated Capital Base") as at the end of each of any two
consecutive fiscal quarters (the last day of the second such fiscal quarter, a
"Deficiency Date"), then, with respect to Securities of each series, the Company
shall, no later than 60 days after the Deficiency Date (105 days if a Deficiency
Date is also the end of the Company's fiscal year), make an offer to all Holders
of Securities of each such series to purchase (a "Deficiency Offer") 10% of the
principal amount of Securities of each such series originally issued, or such
lesser amount as may be Outstanding at the time such Deficiency Offer is made
(the "Deficiency Offer Amount"), at a purchase price equal to 100% of principal
amount, plus accrued and unpaid interest to the Deficiency Payment Date.
(b) Thereafter, semi-annually the Company shall make like Deficiency
Offers for the then applicable Deficiency Offer Amount of Securities of each
such series until the Company's Subordinated Capital Base as at the end of any
subsequent fiscal quarter shall be equal to or greater than the Minimum
Subordinated Capital Base. Notwithstanding the foregoing, after any specified
Deficiency Date, the last day of any subsequent fiscal quarter shall not
constitute a Deficiency Date (giving rise to an additional obligation under
subsection (a) of this Section) unless the Company's Subordinated Capital Base
was equal to or greater than the Minimum Subordinated Capital Base as at the end
of a fiscal quarter that followed such specified Deficiency Date and preceded
such subsequent quarter.
(c) Within 60 days (105 days if a Deficiency Date is also the end of the
Company's fiscal year) following a Deficiency Date, the Company shall mail a
notice to each Holder of Securities of the applicable series in respect of the
Deficiency Offer (which notice shall contain all instructions and materials
necessary to enable such Holders to tender Securities) stating:
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(1) that the Deficiency Offer is being made pursuant to this Section
and the reason for the Deficiency Offer;
(2) the purchase price and the purchase date, which shall be 20
Business Days from the date such notice is mailed or, if
acceptance for payment and payment is not then lawful, on the
earliest subsequent Business Day on which acceptance for payment
and payment is then lawful (a "Deficiency Payment Date");
(3) the aggregate principal amount of Securities subject to the
Deficiency Amount;
(4) the name and address of the Paying Agent and the Trustee and that
Securities must be surrendered to the Paying Agent to collect the
purchase price;
(5) that any Securities not tendered or accepted for payment will
continue to accrue interest;
(6) that any Security accepted for payment pursuant to the Deficiency
Offer shall cease to accrue interest after the Deficiency Payment
Date;
(7) that each Holder electing to have a Security purchased pursuant
to a Deficiency Offer will be required to surrender the Security,
with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Security completed, to the Paying Agent at the
address specified in the notice prior to the close of business on
the Business Day prior to the Deficiency Payment Date;
(8) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on
the third Business Day preceding the Deficiency Payment Date, a
telegram, telex, facsimile transmission or letter setting forth:
the name of the Holder, the principal amount of the Security the
Holder delivered for purchase, the certificate number of the
Security the Holder delivered and a statement that such Holder is
withdrawing his election to have the Security purchased; and
(9) that Holders whose Securities are purchased only in part will be
issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(d) On a Deficiency Payment Date, the Company shall (i) accept for payment
Securities of each applicable series or portions thereof tendered pursuant to
the Deficiency
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Offer in an aggregate principal amount equal to the Deficiency Offer Amount or
such lesser principal amount of such Securities as shall have been tendered,
(ii) on or before 12:00 noon New York City time, deposit with the Paying Agent
money sufficient to pay the purchase price of all such Securities or portions
thereof so accepted, and (iii) deliver, or cause to be delivered to the Trustee,
Securities or portions thereof so accepted together with an Officer's
Certificate stating the Securities or portions thereof accepted by the Company.
If the aggregate principal amount of such Securities tendered exceeds the
Deficiency Offer Amount, the Company shall select the Securities to be purchased
on a PRO RATA basis to the nearest one thousand dollars ($1,000) of principal
amount. The Paying Agent shall promptly mail or make available for delivery to
Holders of Securities so accepted payment in amounts equal to the purchase
prices therefor, and the Company shall execute and the Trustee shall promptly
authenticate and mail or make available for delivery to such Holders new
Securities of the same series as, and equal in principal amounts to, any
unpurchased portion of the Securities surrendered. Any Securities not so
accepted shall be promptly mailed or made available for delivery to the Holder
thereof. The Company will publicly announce the results of the Deficiency Offer
on or as soon as practicable after the Deficiency Payment Date. For purposes of
this Section, the Trustee or its agent shall act as the Paying Agent.
(e) The Company shall comply with and applicable tender offer rules
(including, without limitation, any applicable requirements of Rule 14e-1 under
the Exchange Act) and any other legal requirements in the event that a
Deficiency Offer is made under the circumstances described in this Section 1101.
SECTION 1102. ALTERNATIVE INTEREST RATE ADJUSTMENT.
(a) Notwithstanding the terms of Section 1101, in the event that (1) the
making of a Deficiency Offer by the Company or (2) the purchase of Securities by
the Company in respect of a Deficiency Offer would constitute a default (with
the giving of notice, the passage of time or both) with respect to any Specified
Bank Debt at the time outstanding, then, in lieu of the making of a Deficiency
Offer in the circumstances set forth in Section 1101, (i) the interest rate on
the Securities of the applicable series shall be reset as of the first day of
the second fiscal quarter following the Deficiency Date (the "Reset Date") to a
rate per annum (the "Reset Rate") equal to the greater of (x) the Initial
Interest Rate and (y) the sum of (A) 400 basis points and (B) the higher of the
Seven Year Treasury Rate and the Ten Year Treasury Rate, (ii) on the first
Interest Payment Date following the Reset Date, the interest rate on the
Securities of such series, as reset on the Reset Date, shall increase by fifty
(50) basis points, and (iii) the interest rate on the Securities of such series
shall further increase by an additional fifty (50) basis points on each
succeeding Interest Payment Date; PROVIDED, HOWEVER, that in no event shall the
interest rate on the Securities of such series at any time exceed the Initial
Interest Rate by more than two hundred (200) basis points.
(b) Once the interest rate on the Securities of any series has been reset
pursuant to subsection (a) of this Section, if the Company's Subordinated
Capital Base is equal to or
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greater than the Minimum Subordinated Capital Base as of the last day of any
fiscal quarter subsequent to the Deficiency Date, interest on the Securities of
each such series shall return to the Initial Interest Rate effective as of the
first day of the second following fiscal quarter; PROVIDED, HOWEVER, that the
interest rate on the Securities of each such series shall again be adjusted in
accordance with subsection (a) of this Section if the Company's Subordinated
Capital Base shall thereafter be less than the Minimum Subordinated Capital Base
as at the last day of any two consecutive subsequent fiscal quarters and if the
making of a Deficiency Offer or the purchase of Securities by the Company in
respect of a Deficiency Offer would, at such time, constitute a default (with
the giving of notice, the passage of time, or both) with respect to any
Specified Bank Debt at the time outstanding.
(c) The Company shall notify the Trustee of the Reset Rate not later than
two Business Days after the Reset Date in the circumstances set forth in
subsection (a) of this Section. Not later than five Business Days after the
Trustee has received such notice from the Company, the Trustee shall mail to
each Holder of Securities of the applicable series such notice setting forth the
Reset Rate. Commencing on the Reset Date, the Securities shall bear interest
(as determined in accordance with clauses (i), (ii) and (iii) of subsection (a)
of this Section) until the date on which such interest rate returns to the
Initial Interest Rate pursuant to subsection (b) of this Section. The Company
shall notify the Trustee and the Holders of such Securities promptly when the
interest rate on such Securities returns to the Initial Interest Rate pursuant
to subsection (b) of this Section. Failure of the Company or the Trustee to
give, or failure of a Holder to receive, such notices shall not in any event
affect the validity of the proceedings of the adjustment of the interest to be
borne by such Securities effective on the Reset Date of the Company's
obligations hereunder.
ARTICLE TWELVE
REDEMPTION OF SECURITIES
SECTION 1201. 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 1202. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any of the Securities of any series
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company of less than all the Securities, the Company shall, at
least 45 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 and of the principal amount of Securities of such series to be
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redeemed. The Company shall deliver to the Trustee an Officer's Certificate, a
Board Resolution authorizing the redemption and an Opinion of Counsel with
respect to the due authorization of such redemption and to the effect that such
redemption is being made in accordance with this Indenture and the Securities.
SECTION 1203. SELECTION BY TRUSTEE OF THE SECURITIES TO BE REDEEMED.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 90 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption or submitted for repurchase
pursuant to Sections 1009 and 1013, substantially PRO RATA, by lot or by any
other method as the Trustee considers fair and appropriate and that complies
with the requirements of the principal national securities exchange, if any, on
which such Securities are listed, 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; provided that in case the
Securities of such series have different terms and maturities, the Securities to
be redeemed shall be selected by the Company and the Company shall give notice
thereof to the Trustee.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Security selected for partial
redemption, the principal amount thereof to be redeemed.
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 Security redeemed or to be redeemed only in part, to the portion of
the principal amount of such Security which has been or is to be redeemed.
SECTION 1204. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 45 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at the address of such Holder
appearing in the Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price (including the amount of accrued and unpaid
interest to be paid);
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(3) the name and address of the Paying Agent and the Trustee and that the
Securities must be surrendered to the Paying Agent to collect the Redemption
Price;
(4) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Securities to be redeemed and that, on or
after the Redemption Date, upon surrender of any Security to be redeemed in
part, a new Security in principal amount equal to the unredeemed portion thereof
will be issued;
(5) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security or portion thereof to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after said date;
(6) that the redemption is for a sinking fund, if such is the case; and
(7) the CUSIP number, if any, of the Securities to be redeemed.
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 1205. DEPOSIT OF REDEMPTION PRICE.
Prior to 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 or
portions thereof which are to be redeemed on that date.
SECTION 1206. 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 or portions thereof shall cease to bear interest.
Upon surrender of any such Security for redemption in accordance with said
notice, such Security or portion thereof shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date;
PROVIDED, HOWEVER, that 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 Regular Record Dates or Special Record Dates according
to their terms and the provisions of Section 305.
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If any Security or portion thereof called for redemption shall not be so
paid upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 1207. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be surrendered at
an office or agency of the Company 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 Stated Maturity, 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.
ARTICLE THIRTEEN
SINKING FUNDS
SECTION 1301. 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 1302. 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 1302. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (1) may deliver Securities of a series (other than any
Securities 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 provided for by the terms of such
series; provided that such Securities
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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 1303. 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 Officer's
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 1302 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 1203 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 1204. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1206 and 1207.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT DEFEASANCE OR
COVENANT DEFEASANCE.
If pursuant to Section 301 provision is made for either or both of (a)
defeasance of the Securities of a series under Section 1402 or (b) covenant
defeasance of the Securities of a series under Section 1403, then the provisions
of such Section or Sections, as the case may be, together with the other
provisions of this Article, shall be applicable to the Securities of such
series, and the Company may at its option by Board Resolution, at any time, with
respect to the Securities of such series, elect to have either Section 1402 (if
applicable) or Section 1403 (if applicable) be applied to the Outstanding
Securities of such series upon compliance with the applicable conditions set
forth below in this Article.
SECTION 1402. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of the option provided in Section 1401 to
defease the Outstanding Securities of a particular series, the Company shall be
discharged from its obligations with respect to the Outstanding Securities of
such series on the date the applicable conditions set forth in Section 1404 are
satisfied (hereinafter, "defeasance"). Defeasance shall
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mean that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities of such series 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); PROVIDED, HOWEVER, that the following rights, obligations, powers,
trusts, duties and immunities shall survive until otherwise terminated or
discharged hereunder: (A) the rights of Holders of Outstanding Securities of
such series to receive, solely from the trust fund provided for in Section 1404,
payments in respect of the principal of (and premium, if any) and interest on
such Securities when such payments are due, (B) the Company's obligations with
respect to such Securities under Sections 304, 305, 306, 1002 and 1003 (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and (D)
this Article. Subject to compliance with this Article, the Company may exercise
its option with respect to defeasance under this Section 1402 notwithstanding
the prior exercise of its option with respect to covenant defeasance under
Section 1403 in regard to the Securities of such series.
SECTION 1403. COVENANT DEFEASANCE.
Upon the Company's exercise of the option provided in Section 1401 to
obtain a covenant defeasance with respect to the Outstanding Securities of a
particular series, the Company shall be released from its obligations under this
Indenture (except its obligations under Sections 306, 506, 509, 610, 1001, 1002,
1011 and 1012) with respect to the Outstanding Securities of such series on and
after the date the applicable conditions set forth in Section 1404 are satisfied
(hereinafter, "covenant defeasance"). Covenant defeasance shall mean 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 this Indenture (except its obligations under Sections
306, 506, 509, 610, 1001, 1002, 1011 and 1012), whether directly or indirectly
by reason of any reference elsewhere herein or by reason of any reference to any
other provision herein or in any other document, and such omission to comply
shall not constitute an Event of Default under Section 501(3) with respect to
Outstanding Securities of such series, and the remainder of this Indenture and
of the Securities of such series shall be unaffected thereby.
SECTION 1404. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to defeasance under Section 1402 and
covenant defeasance under Section 1403 with respect to the Outstanding
Securities of a particular series:
(1) the Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of Section 609
who shall agree to comply with the provisions of this Article applicable to it),
under the terms of an irrevocable trust agreement in form and substance
reasonably satisfactory to such Trustee, as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (A) dollars
in an amount,
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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 the due date of any payment, money in an amount, or (C)
a combination thereof, in each case sufficient, after payment of all federal,
state and local taxes or other charges or assessments in respect thereof payable
by the Trustee, 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
other qualifying trustee) to pay and discharge, (i) the principal of (and
premium, if any, on) and each installment of principal of (and premium, if any)
and interest on the Outstanding Securities of such series on the Stated Maturity
of such principal or installment of principal or interest and (ii) any mandatory
payments applicable to the Outstanding Securities of such series on the day on
which such payments are due and payable in accordance with the terms of this
Indenture and of such Securities.
(2) No Default or Event of Default with respect to the Securities of such
series shall have occurred and be continuing on the date of such deposit or
shall occur as a result of such deposit, and no Default or Event of Default
under clause (6) or (7) of Section 501 hereof shall occur and be continuing, at
any time during the period ending on the 91st day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied until the
expiration of such period).
(3) Such deposit, defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(4) Such defeasance or covenant defeasance shall not cause the Securities
of such series then listed on any national securities exchange registered under
the Exchange Act to be delisted.
(5) In the case of an election with respect to Section 1402, the Company
shall have delivered to the Trustee either (A) a ruling directed to the Trustee
received from the Internal Revenue Service to the effect that the Holders of the
Outstanding Securities of such series will not recognize income, gain or loss
for federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance had not occurred or
(B) an Opinion of Counsel, based on such ruling or on a change in the applicable
federal income tax law since the date of this Indenture, in either case to the
effect that, and based thereon such opinion shall confirm that, the Holders of
the Outstanding Securities of such series will not recognize income, gain or
loss for federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner and a the
same times as would have been the case if such defeasance had not occurred.
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(6) In the case of an election with respect to Section 1403, the Company
shall have delivered to the Trustee an Opinion of Counsel or a ruling directed
to the Trustee received from the Internal Revenue Service to the effect that the
Holders of the Outstanding Securities of such series will not recognize income,
gain or loss for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such covenant
defeasance had not occurred.
(7) Such defeasance or covenant defeasance shall be effected in compliance
with any additional terms, conditions or limitations which may be imposed on the
Company in connection therewith pursuant to Section 301.
(8) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1402 or
the covenant defeasance under Section 1403 (as the case may be) have been
complied with.
SECTION 1405. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003, all money
and Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
1405, the "Trustee") pursuant to Section 1404 in respect of the Outstanding
Securities of a particular series 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 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 premium, if any) and interest, but such
money 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 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 the Outstanding Securities of such series.
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 Government Obligations held by it as provided in Section 1404 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
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be deposited for the purpose for which such money or U.S. Government Obligations
were deposited.
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This Indenture 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.
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.
STONE CONTAINER CORPORATION
By:
------------------------
Name:
Title:
[SEAL]
Attest:
- ----------------------------
Name:
Title:
________________________
as Trustee
By:
-------------------------------
Name:
Title:
[CORPORATE SEAL]
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STATE OF ILLINOIS )
) SS.:
COUNTY OF COOK )
On the ____ day of __________, 1996, before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that (s)he is _______________ of ________________________, one of the parties
described in and which executed the foregoing instrument; that (s)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 (s)he signed his/her name thereto by like authority.
-------------------------------
My commission expires:
<PAGE>
STATE OF ILLINOIS )
) SS.:
COUNTY OF COOK )
On the ____ day of __________, 1996, before me personally came
____________, to me known, who, being by me duly sworn, did depose and say that
(s)he is _______________________ of Stone Container Corporation, one of the
parties described in and which executed the foregoing instrument; that (s)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 (s)he signed his/her name thereto by
like authority.
-------------------------------
My commission expires:
<PAGE>
<PAGE>
[LOGO] STONE CONTAINER CORPORATION
LESLIE T. LEDERER 150 North Michigan Avenue
Vice President, Corporate Secretary Chicago, Illinois 60601-7568
and Counsel
312 580-4624
January 24, 1997
Stone Container Corporation
150 North Michigan Avenue
Chicago, Illinois 60601
Re: $1 Billion Aggregate Initial
Offering Price of Securities
----------------------------
Ladies and Gentlemen:
I refer to the Registration Statement on Form S-3 (the "Registration
Statement") being filed by Stone Container Corporation, a Delaware corporation
(the "Company"), with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), relating to the
registration of $1,000,000,000 aggregate initial offering price of (i) unsecured
debt securities ("Debt Securities"), (ii) warrants to purchase Debt Securities
("Debt Warrants"), (iii) shares of common stock, $.01 par value per share
("Common Stock"), (iv) shares of preferred stock, $.01 par value per share
("Preferred Stock"), which may be issued in the form of depositary shares
("Depositary Shares") evidenced by depositary receipts ("Depositary Receipts"),
and (v) warrants to purchase shares of Common Stock ("Stock Warrants", and
collectively with the Debt Securities, Debt Warrants, Common Stock, Preferred
Stock and Depositary Shares, the "Securities"). The Securities were authorized
for issuance, offering and sale by the Board of Directors of the Company by
resolutions duly adopted on January 14, 1997 (the "Resolutions"). The
Securities may be offered separately or as part of units with other Securities,
in series, in amounts, at prices and on other terms set forth or to be set forth
in the Registration Statement and any amendments thereto and in the prospectus
contained in the Registration Statement (the "Prospectus") and one or more
supplements thereto (each a "Prospectus Supplement"), and the Securities may be
convertible into Common Stock or other Securities. All capitalized terms not
otherwise defined herein have the meaning set forth in the Registration
Statement.
<PAGE>
Stone Container Corporation
January 24, 1997
Page 2
The Debt Securities specified as Senior Debt Securities in the
applicable Prospectus Supplement will be issued under an Indenture, to be filed
prior to the issuance of such Senior Debt Securities and incorporated by
reference into the Registration Statement pursuant to a Current Report on Form
8-K, to be entered into by the Company and a trustee to be named by the Company
(such Indenture, as amended or supplemented from time to time, the "Senior Debt
Securities Indenture"). The Debt Securities specified as Senior Subordinated
Debt Securities in the applicable Prospectus Supplement will be issued under an
Indenture between the Company and The Bank of New York, as Trustee, dated as of
March 15, 1992 (such Indenture, as amended or supplemented from time to time,
the "Senior Subordinated Debt Securities Indenture"). Each series of Debt
Warrants will be issued under a warrant agreement (each a "Debt Warrant
Agreement"), to be filed prior to the issuance of such Debt Warrants and
incorporated by reference into the Registration Statement pursuant to a Current
Report on Form 8-K, to be entered into by the Company and a warrant agent or
agents to be named by the Company. Each series of Depositary Shares will be
issued under a deposit agreement (each a "Deposit Agreement"), to be filed prior
to the issuance of such Depositary Shares and incorporated by reference into the
Registration Statement pursuant to a Current Report on Form 8-K, to be entered
into by the Company and a depositary or depositaries to be named by the Company.
Each series of Stock Warrants will be issued under a warrant agreement (each a
"Stock Warrant Agreement"), to be filed prior to the issuance of such Stock
Warrants and incorporated by reference into the Registration Statement pursuant
to a Current Report on Form 8-K, to be entered into by the Company and a warrant
agent or agents to be named by the Company.
I am familiar with the proceedings to date with respect to the
proposed issuance and sale of the Securities, and have examined such records,
documents and questions of law, and satisfied myself as to such matters of fact,
as I have considered relevant and necessary as a basis for this opinion. I have
assumed the authenticity of all documents submitted to me as originals, the
genuineness of all signatures, the legal capacity of all natural persons and the
conformity with the original documents of any copies thereof submitted to me for
my examination.
Based on the foregoing and subject to the qualifications set forth
below, I am of the opinion that:
<PAGE>
Stone Container Corporation
January 24, 1997
Page 3
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware.
2. Each series of Senior Debt Securities will be legally issued and
binding obligations of the Company when (i) the Registration Statement, as
finally amended, shall have become effective under the Act, (ii) the Senior Debt
Securities Indenture, including any necessary supplemental indenture, shall have
been qualified under the Trust Indenture Act of 1939, as amended, (iii) each of
the Senior Debt Securities Indenture and any necessary supplemental indenture to
the Senior Debt Securities Indenture shall have been duly authorized, executed
and delivered by the Company and the trustee thereunder, (iv) the terms of such
series of Senior Debt Securities shall have been established and approved in
accordance with the Resolutions, as contemplated by the Registration Statement,
any applicable Prospectus Supplement and the Senior Debt Securities Indenture,
(v) a Prospectus Supplement with respect to such series of Senior Debt
Securities shall have been filed (or transmitted for filing) with the Commission
pursuant to Rule 424(b) of the Act, and (vi) such series of Senior Debt
Securities shall have been duly executed and authenticated as provided in the
Senior Debt Securities Indenture and duly delivered to the purchasers thereof
against payment of the agreed consideration therefor in accordance with the
applicable underwriting, purchase or similar agreement.
3. Each series of Senior Subordinated Debt Securities will be
legally issued and binding obligations of the Company when (i) the Registration
Statement, as finally amended, shall have become effective under the Act, (ii)
any necessary supplemental indenture to the Senior Subordinated Debt Securities
Indenture shall have been duly authorized, executed and delivered by the Company
and the trustee thereunder, (iii) the terms of such series of Senior
Subordinated Debt Securities shall have been established and approved in
accordance with the Resolutions, as contemplated by the Registration Statement,
any applicable Prospectus Supplement and the Senior Subordinated Debt Securities
Indenture, (iv) a Prospectus Supplement with respect to such series of Senior
Subordinated Debt Securities shall have been filed (or transmitted for filing)
with the Commission pursuant to Rule 424(b) of the Act, and (v) such series of
Senior Subordinated Debt Securities shall have been duly executed and
authenticated as provided in the Senior Subordinated Debt Securities Indenture
and duly delivered to the
<PAGE>
Stone Container Corporation
January 24, 1997
Page 4
purchasers thereof against payment of the agreed consideration therefor in
accordance with the applicable underwriting, purchase or similar agreement. I
have assumed for purposes of this paragraph 3 that the Senior Subordinated Debt
Securities Indenture has been duly authenticated, executed and delivered by the
Senior Subordinated Debt Securities Trustee.
4. Each series of Debt Warrants will be legally issued and binding
obligations of the Company when (i) the Registration Statement, as finally
amended, shall have become effective under the Act, (ii) a Debt Warrant
Agreement relating to such series of Debt Warrants shall have been duly
authorized, executed and delivered by the Company and the warrant agent or
agents thereunder, (iii) the terms of such series of Debt Warrants shall have
been established and approved in accordance with the Resolutions, as
contemplated by the Registration Statement, any applicable Prospectus Supplement
and the Debt Warrant Agreement, (iv) a Prospectus Supplement with respect to
such series of Debt Warrants shall have been filed (or transmitted for filing)
with the Commission pursuant to Rule 424(b) of the Act, and (v) such series of
Debt Warrants shall have been duly executed and authenticated or countersigned
as provided in the Debt Warrant Agreement and duly delivered to the purchasers
thereof against payment of the agreed consideration therefor in accordance with
the applicable underwriting, purchase or similar agreement.
5. Each series of Preferred Stock will be legally issued, fully paid
and non-assessable when (i) the Registration Statement, as finally amended,
shall have become effective under the Act, (ii) the terms of such series of
Preferred Stock shall have been established and approved in accordance with the
Resolutions, as contemplated by the Registration Statement and any applicable
Prospectus Supplement, (iii) a Certificate of Designations setting forth the
terms of such series of Preferred Stock shall have been executed, acknowledged,
filed and recorded and shall have become effective in accordance with Section
103 of the General Corporation Law of the State of Delaware, (iv) a Prospectus
Supplement with respect to such series of Preferred Stock shall have been filed
(or transmitted for filing) with the Commission pursuant to Rule 424(b) of the
Act, and (v) certificates representing such series of Preferred Stock shall have
been duly executed, countersigned and registered and duly delivered to the
purchasers thereof against payment of the agreed consideration therefor (but not
less than the par value)
<PAGE>
Stone Container Corporation
January 24, 1997
Page 5
in accordance with the applicable underwriting, purchase or similar agreement.
6. Each series of Depositary Shares will be legally issued and
binding obligations of the Company when (i) the Registration Statement, as
finally amended, shall have become effective under the Act, (ii) a Deposit
Agreement relating to such series of Depositary Shares shall have been duly
authorized, executed and delivered by the Company and the depositary or
depositaries thereunder, (iii) the terms of such series of Depositary Shares
shall have been established and approved in accordance with the Resolutions, as
contemplated by the Registration Statement, any applicable Prospectus Supplement
and the Deposit Agreement, (iv) shares of Preferred Stock of the applicable
series have been duly deposited with the depositary under the Deposit Agreement,
(v) a Prospectus Supplement with respect to such series of Depositary Shares
shall have been filed (or transmitted for filing) with the Commission pursuant
to Rule 424(b) of the Act, and (vi) the Depositary Receipts evidencing such
series of Depositary Shares shall have been duly executed and authenticated or
countersigned as provided in the Deposit Agreement and duly delivered to the
purchasers thereof against a payment of the agreed consideration therefor in
accordance with the applicable underwriting, purchase or similar agreement.
7. The Common Stock will be legally issued, fully paid and non-
assessable when (i) the Registration Statement, as finally amended, shall have
become effective under the Act, (ii) the issuance and sale of the Common Stock
shall have been approved in accordance with the Resolutions, as contemplated by
the Registration Statement and any applicable Prospectus Supplement, (iii) a
Prospectus Supplement with respect to such shares of Common Stock shall have
been filed (or transmitted for filing) with the Commission pursuant to Rule
424(b) of the Act, and (iv) certificates representing the Common Stock shall
have been duly executed, countersigned and registered and duly delivered to the
purchasers thereof against payment of the agreed consideration therefor (but not
less than the par value) in accordance with the applicable underwriting,
purchase or similar agreement.
8. Each series of Stock Warrants will be legally issued and binding
obligations of the Company when (i) the Registration Statement, as finally
amended, shall have become effective under the Act, (ii) a Stock Warrant
Agreement relating
<PAGE>
Stone Container Corporation
January 24, 1997
Page 6
to such series of Stock Warrants shall have been duly authorized, executed and
delivered by the Company and the warrant agent or agents thereunder, (iii) the
terms of such series of Stock Warrants shall have been established and approved
in accordance with the Resolutions, as contemplated by the Registration
Statement, any applicable Prospectus Supplement and the Stock Warrant Agreement,
(iv) a Prospectus Supplement with respect to such series of Stock Warrants shall
have been filed (or transmitted for filing) with the Commission pursuant to Rule
424(b) of the Act, and (v) such series of Stock Warrants shall have been duly
executed and authenticated or countersigned as provided in the Stock Warrant
Agreement and duly delivered to the purchasers thereof against payment of the
agreed consideration therefor in accordance with the applicable underwriting,
purchase or similar agreement.
The opinions set forth in paragraphs 2, 3, 4, 6 and 8 are subject to
the qualification that enforceability may be limited by (i) applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws of general applicability relating to or affecting the enforcement
of creditors' rights, (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law), (iii) any
requirement that a claim with respect to any security denominated in other than
U.S. dollars (or a judgment denominated in other than U.S. dollars in respect of
such claim) be converted into U.S. dollars at a rate of exchange prevailing on a
date determined in accordance with applicable law and (iv) governmental
authority to limit, delay or prohibit the making of payments outside of the
United States or in a foreign currency or currency unit.
For purposes of rendering the opinions set forth in paragraphs 2
through 8, I have also assumed that, (i) the Registration Statement remains
effective during the offer and sale of the particular Securities, (ii) that the
sales of all Securities are within the aggregate dollar limitation set forth in
the first paragraph hereof, and (iii) at the time of the issuance, sale and
delivery of each Security: (x) the authorization of the Securities by the
Company will not have been modified or rescinded, and there will not have
occurred any change in law affecting the validity, legally binding character or
enforceability of the Securities; and (y) the issuance, sale and delivery of
such Security, the terms of such Security and compliance by the Company with the
terms of such Security will not violate any applicable law, any agreement or
instrument then
<PAGE>
Stone Container Corporation
January 24, 1997
Page 7
binding upon the Company or any restriction imposed by any court or governmental
body having jurisdiction over the Company.
For the purposes of this opinion, I have assumed that there will be no
changes in the laws currently applicable to the Company and that such laws will
be the only laws applicable to the Company.
I do not find it necessary for the purposes of this opinion to cover,
and accordingly express no opinion as to, the application of the securities or
blue sky laws of any jurisdiction to offers or sales of any Securities.
This opinion is limited to the General Corporation law of the State of
Delaware. For purposes of rendering the opinions contained in paragraphs 2, 3,
4, 6 and 8 as to the enforceability of the Senior Debt Securities, Senior
Subordinated Debt Securities, Debt Warrants, Depositary Shares and Stock
Warrants, respectively, that the substantive laws of the State of New York are
identical to the substantive laws of the State of Illinois.
I hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the use of my name under the caption "Validity of
the Securities" in the Prospectus and to the use of my name in any Prospectus
Supplement relating to the Registration Statement reviewed and approved by me
prior to the distribution of such Prospectus Supplement and the filing thereof
with the Commission. In giving such consent, I do not thereby admit that I am
within the category of persons whose consent is required by Section 7 of the Act
or the related rules promulgated by the Commission.
Very truly yours,
/s/ Leslie T. Lederer
Leslie T. Lederer
Vice President, Secretary
and Counsel
<PAGE>
EXHIBIT 12(A)
STONE CONTAINER CORPORATION
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE
YEAR ENDED DECEMBER 31, MONTHS ENDED
------------------------------------------------------ SEPTEMBER 30,
(IN MILLIONS) 1991 1992 1993 1994 1995 1996
- ------------------------------------------------------------ --------- --------- --------- --------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Income (loss) before extraordinary charges and cumulative
effects of accounting changes............................. $ (49.1) $ (169.9) $ (319.2) $ (128.8) $ 444.5 $ (36.5)
Income tax provision (credit)............................... 31.1 (59.4) (147.7) (35.5) 320.9 (22.1)
Minority interest in consolidated subsidiaries.............. 5.8 5.3 3.6 1.2 29.3 (1.5)
Preferred stock dividend requirements of majority owned
subsidiary................................................ (5.9) (4.7) (5.7) (9.4) -- --
Undistributed (earnings) loss of non-consolidated
subsidiaries.............................................. 5.4 6.0 13.3 9.1 (9.0) (44.9)
Capitalized interest........................................ (81.9) (47.4) (10.8) (4.7) (13.2) (9.6)
--------- --------- --------- --------- ---------- -------
$ (94.6) $ (270.1) $ (466.5) $ (168.1) $ 772.5 $ (114.6)
--------- --------- --------- --------- ---------- -------
--------- --------- --------- --------- ---------- -------
Fixed charges:
Interest charges (expensed and capitalized), amortization
of debt discount and debt fees on all indebtedness...... $ 479.7 $ 433.5 $ 437.5 $ 460.7 $ 473.5 $ 317.5
Interest cost portion of rental expenses (33 1/3%)........ 26.8 27.8 27.4 29.1 35.4 26.8
Preferred stock dividend requirements of majority owned
subsidiary.............................................. 5.9 4.7 5.7 9.4 -- --
--------- --------- --------- --------- ---------- -------
Total fixed charges..................................... $ 512.4 $ 466.0 $ 470.6 $ 499.2 $ 508.9 $ 344.3
--------- --------- --------- --------- ---------- -------
--------- --------- --------- --------- ---------- -------
Earnings before income taxes, undistributed (earnings) loss
of non-consolidated subsidiaries, minority interest and
fixed charges (excluding capitalized interest)............ $ 417.8 $ 195.9 $ 4.1 $ 331.1 $ 1,281.4 $ 229.7
--------- --------- --------- --------- ---------- -------
--------- --------- --------- --------- ---------- -------
Ratio of earnings to fixed charges.......................... (E) (D) (C) (B) 2.52 (A)
--------- --------- --------- --------- ---------- -------
--------- --------- --------- --------- ---------- -------
</TABLE>
- ------------------------
(A) The Company's earnings for the nine months ended September 30, 1996 were
insufficient to cover fixed charges by $114.6 million.
(B) The Company's earnings for the year ended December 31, 1994 were
insufficient to cover fixed charges by $168.1 million. Earnings for 1994
included a non-recurring pretax gain of $22.0 million relating to an
involuntary conversion at the Company's Panama City, Florida pulp and
paperboard mill. If such a nonrecurring event had not occurred, earnings
would have been insufficient to cover the fixed charges by $190.1 million.
(C) The Company's earnings for the year ended December 31, 1993 were
insufficient to cover fixed charges by $466.5 million. Earnings for 1993
included a non-recurring pretax gain of $35.4 million from the sale of the
Company's 49 percent equity interest in Empaques de Carton Titan, S.A. If
such a non-recurring event had not occurred, earnings would have been
insufficient to cover fixed charges by $501.9 million.
(D) The Company's earnings for the year ended December 31, 1992 were
insufficient to cover fixed charges by $270.1 million.
(E) The Company's earnings for the year ended December 31, 1991 were
insufficient to cover fixed charges by $94.6 million. Earnings for 1991
included a non-recurring pretax gain of $41.8 million associated with the
settlement and termination of a Canadian supply contract and a non-recurring
pretax gain of $17.5 million relating to an involuntary conversion at the
Company's Missoula, Montana mill. If such nonrecurring events had not
occurred, earnings would have been insufficient to cover the fixed charges
by $153.9 million.
<PAGE>
EXHIBIT 12(B)
STONE CONTAINER CORPORATION
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
NINE
YEAR ENDED DECEMBER 31, MONTHS ENDED
------------------------------------------------------ SEPTEMBER 30,
(IN MILLIONS) 1991 1992 1993 1994 1995 1996
- ------------------------------------------------------------ --------- --------- --------- --------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Income (loss) before extraordinary charges and cumulative
effects of accounting changes............................. $ (49.1) $ (169.9) $ (319.2) $ (128.8) $ 444.5 $ (36.5)
Income tax provision (credit)............................... 31.1 (59.4) (147.7) (35.5) 320.9 (22.1)
Minority interest in consolidated subsidiaries.............. 5.8 5.3 3.6 1.2 29.3 (1.5)
Preferred stock dividend requirements of majority owned
subsidiary................................................ (5.9) (4.7) (5.7) (9.4) -- --
Undistributed (earnings) loss of non-consolidated
subsidiaries.............................................. 5.4 6.0 13.3 9.1 (9.0) (44.9)
Capitalized interest........................................ (81.9) (47.4) (10.8) (4.7) (13.2) (9.6)
--------- --------- --------- --------- ---------- -------
$ (94.6) $ (270.1) $ (466.5) $ (168.1) $ 772.5 $ (114.6)
--------- --------- --------- --------- ---------- -------
--------- --------- --------- --------- ---------- -------
Fixed charges:
Interest charges (expensed and capitalized), amortization
of debt discount and debt fees on all indebtedness...... $ 479.7 $ 433.5 $ 437.5 $ 460.7 $ 473.5 $ 317.5
Interest cost portion of rental expenses (33 1/3%)........ 26.8 27.8 27.4 29.1 35.4 26.8
Preferred stock dividend requirements of majority owned
subsidiary.............................................. 5.9 4.7 5.7 9.4 -- --
--------- --------- --------- --------- ---------- -------
Total fixed charges..................................... $ 512.4 $ 466.0 $ 470.6 $ 499.2 $ 508.9 $ 344.3
--------- --------- --------- --------- ---------- -------
--------- --------- --------- --------- ---------- -------
Earnings before income taxes, undistributed (earnings) loss
of non-consolidated subsidiaries, minority interest and
fixed charges (excluding capitalized interest)............ $ 417.8 $ 195.9 $ 4.1 $ 331.1 $ 1,281.4 $ 229.7
--------- --------- --------- --------- ---------- -------
--------- --------- --------- --------- ---------- -------
Preferred dividend requirements............................. $ -- $ 6.9 $ 8.1 $ 8.1 $ 8.1 $ 6.0
--------- --------- --------- --------- ---------- -------
Ratio of pretax income to net income........................ -- -- -- -- 1.74 --
--------- --------- --------- --------- ---------- -------
Preferred dividend factor................................... $ -- $ 6.9 $ 8.1 $ 8.1 $ 14.1 $ 6.0
Total fixed charges......................................... 512.4 466.0 470.6 499.2 508.9 344.3
--------- --------- --------- --------- ---------- -------
Total fixed charges and preferred stock dividends........... $ 512.4 $ 472.9 $ 478.7 $ 507.3 $ 523.0 $ 350.3
--------- --------- --------- --------- ---------- -------
--------- --------- --------- --------- ---------- -------
Ratio of earnings to combined fixed charges and preferred
stock dividends........................................... (E) (D) (C) (B) 2.45 (A)
--------- --------- --------- --------- ---------- -------
--------- --------- --------- --------- ---------- -------
</TABLE>
- ------------------------
(A) The Company's earnings for the nine months ended September 30, 1996 were
insufficient to cover fixed charges and preferred stock dividends by $120.6
million.
(B) The Company's earnings for the year ended December 31, 1994 were
insufficient to cover fixed charges and preferred stock dividends by $176.2
million. Earnings for 1994 included a non-recurring pretax gain of $22.0
million relating to an involuntary conversion at the Company's Panama City,
Florida pulp and paperboard mill. If such a nonrecurring event had not
occurred, earnings would have been insufficient to cover the fixed charges
by $198.2 million.
(C) The Company's earnings for the year ended December 31, 1993 were
insufficient to cover fixed charges and preferred stock dividends by $474.6
million. Earnings for 1993 included a non-recurring pretax gain of $35.4
<PAGE>
million from the sale of the Company's 49 percent equity interest in
Empaques de Carton Titan, S.A. If such a non-recurring event had not
occurred, earnings would have been insufficient to cover fixed charges and
preferred stock dividends by $510.0 million.
(D) The Company's earnings for the year ended December 31, 1992 were
insufficient to cover fixed charges and preferred stock dividends by $277.0
million.
(E) The Company's earnings for the year ended December 31, 1991 were
insufficient to cover fixed charges by $94.6 million. Earnings for 1991
included a non-recurring pretax gain of $41.8 million associated with the
settlement and termination of a Canadian supply contract and a non-recurring
pretax gain of $17.5 million relating to an involuntary conversion at the
Company's Missoula, Montana mill. If such nonrecurring events had not
occurred, earnings would have been insufficient to cover the fixed charges
by $153.9 million.
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Stone
Container Corporation of our report dated February 5, 1996 appearing on
page 30 of Stone Container Corporation's Annual Report on Form 10-K for the
year ended December 31, 1995. We also consent to the incorporation by
reference of our report on the Financial Statement Schedule, which appears on
page 55 in such Annual Report on Form 10-K. We also consent to the reference
to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
- ------------------------
PRICE WATERHOUSE LLP
Chicago, Illinois
January 21, 1996
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 12th day
of January, 1997.
/s/Roger W. Stone
--------------------------------
Roger W. Stone
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 14th day
of January, 1997.
/s/Randolph C. Read
--------------------------------
Randolph C. Read
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 14th day
of January, 1997.
/s/Thomas P. Cutilletta
--------------------------------
Thomas P. Cutilletta
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 14th day
of January, 1997.
/s/William F. Aldinger, III
--------------------------------
William F. Aldinger, III
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 14th day
of January, 1997.
/s/Richard A. Giesen
--------------------------------
Richard A. Giesen
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 13th day
of January, 1997.
/s/James J. Glasser
--------------------------------
James J. Glasser
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 14th day
of January, 1997.
/s/Jack M. Greenberg
--------------------------------
Jack M. Greenberg
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 12th day
of January, 1997.
/s/George D. Kennedy
--------------------------------
George D. Kennedy
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 14th day
of January, 1997.
/s/Howard C. Miller, Jr.
--------------------------------
Howard C. Miller, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 14th day
of January, 1997.
/s/John D. Nichols
--------------------------------
John D. Nichols
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 15th day
of January, 1997.
/s/Jerry K. Pearlman
--------------------------------
Jerry K. Pearlman
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 13th day
of January, 1997.
/s/Richard J. Raskin
--------------------------------
Richard J. Raskin
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 21st day
of January, 1997.
/s/Alan Stone
--------------------------------
Alan Stone
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 14th day
of January, 1997.
/s/Avery J. Stone
--------------------------------
Avery J. Stone
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 13th day
of January, 1997.
/s/Ira N. Stone
--------------------------------
Ira N. Stone
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Roger W. Stone, Randolph C. Read and
Leslie T. Lederer, and each of them, the undersigned's true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign a registration statement on Form S-3 relating to equity
securities (and Stockholder Rights) and debt securities of Stone Container
Corporation, and any and all amendments (including post-effective amendments) to
such registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and any documents relating to the qualification or registration
under state Blue Sky or securities laws of such securities, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or the substitute or substitutes of
said attorneys-in-fact and agents or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has signed his name this 14th day
of January, 1997.
/s/James H. Stone
--------------------------------
James H. Stone
