exv99wt3c
Exhibit T3C
INDENTURE
Dated as of •, 2008
Among
AINSWORTH LUMBER CO. LTD.,
as Issuer,
the Guarantors named herein
and
The Bank of New York,
as Trustee
14% SENIOR SECURED SECOND LIEN NOTES DUE JUNE 24, 2014
CROSS-REFERENCE TABLE*
|
|
|
|
|
Trust Indenture |
|
Indenture |
Act Section |
|
Section |
|
|
|
|
|
310 |
(a)(1) |
|
7.10 |
|
(a)(2) |
|
7.10 |
|
(a)(3) |
|
N.A. |
|
(a)(4) |
|
N.A. |
|
(a)(5) |
|
7.10 |
|
(b) |
|
7.10 |
|
(c) |
|
N.A. |
311 |
(a) |
|
7.11 |
|
(b) |
|
7.11 |
|
(c) |
|
N.A. |
312 |
(a) |
|
2.05 |
|
(b) |
|
13.03 |
|
(c) |
|
13.03 |
313 |
(a) |
|
7.06 |
|
(b)(1) |
|
N.A. |
|
(b)(2) |
|
7.07 |
|
(c) |
|
7.06;13.02 |
|
(d) |
|
7.06 |
314 |
(a) |
|
4.03;13.02 |
|
(b) |
|
N.A. |
|
(c)(1) |
|
13.04 |
|
(c)(2) |
|
13.04 |
|
(c)(3) |
|
N.A. |
|
(d) |
|
N.A. |
|
(e) |
|
12.05 |
|
(f) |
|
N.A. |
315 |
(a) |
|
7.01 |
|
(b) |
|
7.05;13.02 |
|
(c) |
|
7.01 |
|
(d) |
|
7.01 |
|
(e) |
|
6.14 |
316 |
(a)(last sentence) |
|
2.09 |
|
(a)(1)(A) |
|
6.05 |
|
(a)(1)(B) |
|
6.04 |
|
(a)(2) |
|
N.A. |
|
(b) |
|
6.07 |
|
(c) |
|
2.12; 9.04 |
317 |
(a)(1) |
|
6.08 |
|
(a)(2) |
|
6.12 |
|
(b) |
|
2.04 |
318 |
(a) |
|
13.01 |
|
(b) |
|
N.A. |
|
(c) |
|
13.01 |
|
|
|
N.A. |
|
means not applicable. |
|
* |
|
This Cross-Reference Table is not part of the Indenture. |
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
|
|
|
|
|
|
|
|
ARTICLE 1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
DEFINITIONS AND INCORPORATION BY REFERENCE |
|
|
|
|
|
|
|
|
|
|
|
Section 1.01
|
|
Definitions
|
|
|
1 |
|
Section 1.02
|
|
Other Definitions
|
|
|
30 |
|
Section 1.03
|
|
Incorporation by Reference of Trust Indenture Act
|
|
|
31 |
|
Section 1.04
|
|
Rules of Construction
|
|
|
31 |
|
|
|
|
|
|
|
|
|
|
ARTICLE 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
THE NOTES |
|
|
|
|
|
|
|
|
|
|
|
Section 2.01
|
|
Form and Dating; Terms
|
|
|
32 |
|
Section 2.02
|
|
Execution and Authentication
|
|
|
33 |
|
Section 2.03
|
|
Registrar and Paying Agent
|
|
|
33 |
|
Section 2.04
|
|
Paying Agent to Hold Money in Trust
|
|
|
34 |
|
Section 2.05
|
|
Holder Lists
|
|
|
34 |
|
Section 2.06
|
|
Transfer and Exchange
|
|
|
34 |
|
Section 2.07
|
|
Replacement Notes
|
|
|
38 |
|
Section 2.08
|
|
Outstanding Notes
|
|
|
38 |
|
Section 2.09
|
|
Treasury Notes
|
|
|
38 |
|
Section 2.10
|
|
Temporary Notes
|
|
|
39 |
|
Section 2.11
|
|
Cancellation
|
|
|
39 |
|
Section 2.12
|
|
Defaulted Interest
|
|
|
39 |
|
|
|
|
|
|
|
|
|
|
ARTICLE 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
REDEMPTION |
|
|
|
|
|
|
|
|
|
|
|
Section 3.01
|
|
Notices to Trustee
|
|
|
40 |
|
Section 3.02
|
|
Selection of Notes to Be Redeemed
|
|
|
40 |
|
Section 3.03
|
|
Notice of Redemption
|
|
|
40 |
|
Section 3.04
|
|
Effect of Notice of Redemption
|
|
|
41 |
|
Section 3.05
|
|
Deposit of Redemption Price
|
|
|
41 |
|
Section 3.06
|
|
Notes Redeemed in Part
|
|
|
41 |
|
Section 3.07
|
|
Reserved
|
|
|
42 |
|
Section 3.08
|
|
Mandatory Redemption
|
|
|
42 |
|
Section 3.09
|
|
Offers to Repurchase
|
|
|
42 |
|
-i-
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
|
|
|
|
|
|
|
|
ARTICLE 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
COVENANTS |
|
|
|
|
|
|
|
|
|
|
|
Section 4.01
|
|
Payment of Notes
|
|
|
44 |
|
Section 4.02
|
|
Maintenance of Office or Agency
|
|
|
44 |
|
Section 4.03
|
|
Reports to Holders
|
|
|
44 |
|
Section 4.04
|
|
Compliance Certificate
|
|
|
45 |
|
Section 4.05
|
|
Taxes
|
|
|
46 |
|
Section 4.06
|
|
Stay, Extension and Usury Laws
|
|
|
46 |
|
Section 4.07
|
|
Restricted Payments
|
|
|
46 |
|
Section 4.08
|
|
Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
|
|
|
49 |
|
Section 4.09
|
|
Incurrence of Indebtedness and Issuance of Preferred Stock
|
|
|
50 |
|
Section 4.10
|
|
Asset Sales
|
|
|
53 |
|
Section 4.11
|
|
Transactions with Affiliates
|
|
|
55 |
|
Section 4.12
|
|
Liens
|
|
|
57 |
|
Section 4.13
|
|
Payments for Consent
|
|
|
57 |
|
Section 4.14
|
|
Corporate Existence
|
|
|
57 |
|
Section 4.15
|
|
Change of Control
|
|
|
57 |
|
Section 4.16
|
|
Additional Subsidiary Guarantees
|
|
|
58 |
|
Section 4.17
|
|
Designation of Restricted and Unrestricted Subsidiaries
|
|
|
58 |
|
Section 4.18
|
|
Additional Amounts
|
|
|
58 |
|
Section 4.19
|
|
Limitation on Guarantees by Restricted Subsidiaries
|
|
|
60 |
|
Section 4.20
|
|
Limitation on Business of Steen River Entities
|
|
|
60 |
|
Section 4.21
|
|
Money for Security Payments to Be Held in Trust
|
|
|
60 |
|
Section 4.22
|
|
Maintenance of Properties
|
|
|
61 |
|
Section 4.23
|
|
Maintenance of Insurance
|
|
|
62 |
|
Section 4.24
|
|
Post-Closing Required Mortgages
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
ARTICLE 5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
SUCCESSORS |
|
|
|
|
|
|
|
|
|
|
|
Section 5.01
|
|
Merger, Amalgamation, Consolidation or Sale of Assets
|
|
|
63 |
|
Section 5.02
|
|
Successor Corporation Substituted
|
|
|
63 |
|
|
|
|
|
|
|
|
|
|
ARTICLE 6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
DEFAULTS AND REMEDIES |
|
|
|
|
|
|
|
|
|
|
|
Section 6.01
|
|
Events of Default
|
|
|
64 |
|
Section 6.02
|
|
Acceleration
|
|
|
66 |
|
Section 6.03
|
|
Other Remedies
|
|
|
67 |
|
Section 6.04
|
|
Waiver of Past Defaults
|
|
|
67 |
|
Section 6.05
|
|
Control by Majority
|
|
|
67 |
|
Section 6.06
|
|
Limitation on Suits
|
|
|
67 |
|
Section 6.07
|
|
Rights of Holders of Notes to Receive Payment
|
|
|
68 |
|
Section 6.08
|
|
Collection Suit by Trustee
|
|
|
68 |
|
Section 6.09
|
|
Restoration of Rights and Remedies
|
|
|
68 |
|
Section 6.10
|
|
Rights and Remedies Cumulative
|
|
|
68 |
|
-ii-
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
|
|
|
|
|
|
Section 6.11
|
|
Delay or Omission Not Waiver
|
|
|
69 |
|
Section 6.12
|
|
Trustee May File Proofs of Claim
|
|
|
69 |
|
Section 6.13
|
|
Priorities
|
|
|
69 |
|
Section 6.14
|
|
Undertaking for Costs
|
|
|
70 |
|
|
|
|
|
|
|
|
|
|
ARTICLE 7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TRUSTEE |
|
|
|
|
|
|
|
|
|
|
|
Section 7.01
|
|
Duties of Trustee
|
|
|
70 |
|
Section 7.02
|
|
Rights of Trustee
|
|
|
71 |
|
Section 7.03
|
|
Individual Rights of Trustee
|
|
|
72 |
|
Section 7.04
|
|
Trustee’s Disclaimer
|
|
|
72 |
|
Section 7.05
|
|
Notice of Defaults
|
|
|
72 |
|
Section 7.06
|
|
Reports by Trustee to Holders of the Notes
|
|
|
72 |
|
Section 7.07
|
|
Compensation and Indemnity
|
|
|
73 |
|
Section 7.08
|
|
Replacement of Trustee
|
|
|
73 |
|
Section 7.09
|
|
Successor Trustee by Merger, etc
|
|
|
74 |
|
Section 7.10
|
|
Eligibility; Disqualification
|
|
|
74 |
|
Section 7.11
|
|
Preferential Collection of Claims Against Company
|
|
|
74 |
|
Section 7.12
|
|
Appointment of Co-Trustee
|
|
|
75 |
|
|
|
|
|
|
|
|
|
|
ARTICLE 8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LEGAL DEFEASANCE AND COVENANT DEFEASANCE |
|
|
|
|
|
|
|
|
|
|
|
Section 8.01
|
|
Option to Effect Legal Defeasance or Covenant Defeasance
|
|
|
76 |
|
Section 8.02
|
|
Legal Defeasance and Discharge
|
|
|
76 |
|
Section 8.03
|
|
Covenant Defeasance
|
|
|
76 |
|
Section 8.04
|
|
Conditions to Legal or Covenant Defeasance
|
|
|
77 |
|
Section 8.05
|
|
Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions
|
|
|
78 |
|
Section 8.06
|
|
Repayment to Company
|
|
|
78 |
|
Section 8.07
|
|
Reinstatement
|
|
|
79 |
|
|
|
|
|
|
|
|
|
|
ARTICLE 9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
AMENDMENT, SUPPLEMENT AND WAIVER |
|
|
|
|
|
|
|
|
|
|
|
Section 9.01
|
|
Without Consent of Holders of Notes
|
|
|
79 |
|
Section 9.02
|
|
With Consent of Holders of Notes
|
|
|
80 |
|
Section 9.03
|
|
Compliance with Trust Indenture Act
|
|
|
81 |
|
Section 9.04
|
|
Revocation and Effect of Consents
|
|
|
81 |
|
Section 9.05
|
|
Notation on or Exchange of Notes
|
|
|
82 |
|
Section 9.06
|
|
Trustee to Sign Amendments, etc
|
|
|
82 |
|
-iii-
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
|
|
|
|
|
|
|
|
ARTICLE 10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GUARANTEES |
|
|
|
|
|
|
|
|
|
|
|
Section 10.01
|
|
Subsidiary Guarantee
|
|
|
82 |
|
Section 10.02
|
|
Limitation on Guarantor Liability
|
|
|
84 |
|
Section 10.03
|
|
Execution and Delivery of Subsidiary Guarantee
|
|
|
84 |
|
Section 10.04
|
|
Guarantors May Consolidate, etc., on Certain Terms
|
|
|
85 |
|
Section 10.05
|
|
Releases Following Sale of Assets
|
|
|
86 |
|
Section 10.06
|
|
Subrogation
|
|
|
86 |
|
Section 10.07
|
|
Benefits Acknowledged
|
|
|
86 |
|
|
|
|
|
|
|
|
|
|
ARTICLE 11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
COLLATERAL AND SECURITY |
|
|
|
|
|
|
|
|
|
|
|
Section 11.01
|
|
Collateral Trust Agreement; IR
Collateral Intercreditor Agreement
|
|
|
86 |
|
Section 11.02
|
|
Equal and Ratable Sharing of Collateral by Holders of Parity Lien Debt
|
|
|
87 |
|
Section 11.03
|
|
Ranking of Note Liens
|
|
|
88 |
|
Section 11.04
|
|
Relative Rights
|
|
|
89 |
|
Section 11.05
|
|
Release of Security Interest in Respect of Notes
|
|
|
89 |
|
Section 11.06
|
|
Covenant with Respect to DB Facility Collateral and ML Facility Collateral
|
|
|
90 |
|
Section 11.07
|
|
Compliance with Trust Indenture Act
|
|
|
91 |
|
Section 11.08
|
|
Further Assurances
|
|
|
91 |
|
Section 11.09
|
|
Authorization of Receipt of Funds
by the Trustee under the Security Documents
|
|
|
91 |
|
|
|
|
|
|
|
|
|
|
ARTICLE 12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
SATISFACTION AND DISCHARGE |
|
|
|
|
|
|
|
|
|
|
|
Section 12.01
|
|
Satisfaction and Discharge
|
|
|
92 |
|
Section 12.02
|
|
Application of Trust Money
|
|
|
92 |
|
|
|
|
|
|
|
|
|
|
ARTICLE 13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
MISCELLANEOUS |
|
|
|
|
|
|
|
|
|
|
|
Section 13.01
|
|
Trust Indenture Act Controls
|
|
|
93 |
|
Section 13.02
|
|
Notices
|
|
|
93 |
|
Section 13.03
|
|
Communication by Holders of Notes with Other Holders of Notes
|
|
|
95 |
|
Section 13.04
|
|
Certificate and Opinion as to Conditions Precedent
|
|
|
95 |
|
Section 13.05
|
|
Statements Required in Certificate or Opinion
|
|
|
95 |
|
Section 13.06
|
|
Rules by Trustee and Agents
|
|
|
95 |
|
Section 13.07
|
|
No Personal Liability of Directors, Officers, Employees and Shareholders
|
|
|
96 |
|
Section 13.08
|
|
Governing Law
|
|
|
96 |
|
Section 13.09
|
|
Waiver of Jury Trial
|
|
|
96 |
|
Section 13.10
|
|
Force Majeure
|
|
|
96 |
|
Section 13.11
|
|
No Adverse Interpretation of Other Agreements
|
|
|
96 |
|
Section 13.12
|
|
Successors
|
|
|
96 |
|
Section 13.13
|
|
Agent for Service; Submission to Jurisdiction; Waiver of Immunities
|
|
|
96 |
|
Section 13.14
|
|
Conversion of Currency
|
|
|
97 |
|
-iv-
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
|
|
|
|
|
|
Section 13.15
|
|
Currency Equivalent
|
|
|
98 |
|
Section 13.16
|
|
Severability
|
|
|
98 |
|
Section 13.17
|
|
Counterpart Originals
|
|
|
98 |
|
Section 13.18
|
|
Table of Contents, Headings, etc
|
|
|
98 |
|
|
|
|
|
|
|
|
EXHIBITS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit A
|
|
Form of Note |
|
|
|
|
Exhibit B
|
|
Form of Notation of Guarantor |
|
|
|
|
Exhibit C
|
|
Form of Supplemental Indenture to Be Delivered by Subsequent Guarantors |
|
|
|
|
Exhibit D
|
|
Post-Closing Required Mortgaged Properties |
|
|
|
|
Exhibit E
|
|
Form of Post-Closing Required Mortgages |
|
|
|
|
Exhibit F
|
|
Title Insurance Policies-Amounts |
|
|
|
|
Exhibit G
|
|
Post-Closing Required Mortgages
Forms of Opinion |
|
|
|
|
-v-
INDENTURE dated as of •, 2008 among Ainsworth Lumber Co. Ltd., a British Columbia
corporation (the “Company”), Ainsworth Engineered Corp., Ainsworth Engineered Canada Limited
Partnership, Ainsworth Engineered, LLC and Ainsworth Corp. (each a “Guarantor”), and The Bank of
New York, a New York banking corporation, as Trustee.
The
Company has duly authorized the creation of an issue of
US$596,007,180 aggregate
principal amount of 14% Senior Secured Second Lien Notes due June 24, 2014 (the “Notes”). Each of
the Company and the Guarantors has duly authorized the execution and delivery of this Indenture.
The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and
for the equal and ratable benefit of the Holders of the Notes.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
“Acquired Indebtedness” means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is merged
with or into or became a Subsidiary of such specified Person, whether or not such
Indebtedness is incurred in connection with, or in contemplation of, such other Person
merging with or into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified
Person.
“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
purposes of this definition, “control”, as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the management or policies
of such Person, whether through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to
be control. For purposes of this definition, the terms “controlling”, “controlled by” and “under
common control with” have correlative meanings.
“Agent” means any Registrar, Paying Agent or co-registrar.
“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial
interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream
that apply to such transfer or exchange.
“Asset Sale” means:
(1) the sale, lease, conveyance or other disposition of any assets or rights, other
than sales of inventory in the ordinary course of business consistent with past practices,
but excluding the Equity Interests or other Investments in Unrestricted Subsidiaries;
provided that the sale, conveyance or other disposition of all or substantially all of the
assets of the Company and its Re-
stricted Subsidiaries taken as a whole will be governed by Sections 4.15 and/or
Sections 5.01 hereof and not by Section 4.10 hereof; and
(2) the issuance of Equity Interests in any of the Company’s Restricted Subsidiaries or
the sale of Equity Interests in any of its Restricted Subsidiaries other than directors’
qualifying shares;
provided that the following items will not be deemed to be Asset Sales:
(1) any single transaction or series of related transactions that involves assets
having a fair market value of less than US$2.5 million;
(2) a transfer of assets between or among the Company and its Wholly Owned Restricted
Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to the Company or to a
Wholly Owned Restricted Subsidiary;
(4) the sale or other disposition of cash or Cash Equivalents, or the sale of accounts
receivable in the ordinary course of business or in connection with the compromise,
settlement or collection thereof;
(5) the disposition of surplus, obsolete, discontinued or worn-out equipment or other
assets no longer used in the ongoing business of the Company and its Restricted
Subsidiaries; and
(6) a sale or other disposition that immediately results in a Permitted Investment or a
Restricted Payment that is permitted by Section 4.07 hereof.
“Assets Held for Sale” means
(1) the lands associated with the Savona facility;
(2) the Lillooet manufacturing facility and associated real property interests and forest licenses;
(3) the Quesnel forest license;
(4) the lands and manufacturing facilities associated with the Abbotsford mill site; and
(5) the Barwick tap line.
“Attributable Debt” in respect of a sale and leaseback transaction means, at the time of
determination, the present value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be extended. Such
present value shall be calculated using a discount rate equal to the rate of interest implicit in
such transaction, determined in accordance with GAAP.
“Bank of Montreal Collateral” means all money on deposit from time to time in any account with
Bank of Montreal designated by it and the Company as a cash collateral account for the benefit
-2-
of Bank of Montreal and all accruals thereto, interest thereon and income and proceeds
therefrom whether such money or account is for Canadian dollars, United States dollars or Euros, in
any case up to a maximum of $53 million.
“Bank of Montreal Facility” means the $50 million commercial letter of credit/guarantee
facility for trade and other creditors, the US$2.5 million foreign exchange and futures contract
facility for currency risk relating to sales and accounts receivable and the $1.5 million corporate
credit card facility, in each case between the Company and Bank of Montreal.
“Bankruptcy Law” means Title 11, U.S. Code, the Bankruptcy and Insolvency Act (Canada) or any
similar United States federal or state law or Canadian federal, provincial or territorial law for
the relief of debtors.
“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that in calculating the beneficial ownership of any particular “person”
(as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to
have beneficial ownership of all securities that such “person” has the right to acquire by
conversion or exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and
“Beneficially Owned” have a corresponding meaning.
“Board of Directors” means:
(1) with respect to a corporation, the board of directors of the corporation;
(2) with respect to a partnership, the Board of Directors of the general partner of the
partnership; and
(3) with respect to any other Person, the board or committee of such Person serving a
similar function.
“Borrowing Base” means, as of any date, an amount equal to:
(1) 85% of the face amount of all accounts receivable owned by the Company and the
Guarantors as of the end of the most recent fiscal quarter preceding such date for which
internal financial statements are available that were not more than 90 days past due; plus
(2) 65% of the book value of all inventory owned by the Company and the Guarantors as
of the end of the most recent fiscal quarter preceding such date for which internal
financial statements are available,
all calculated on a consolidated basis and in accordance with GAAP.
“Business Day” means any day other than a Legal Holiday.
“Buy/Sell Option” means a compulsory offer to purchase or sell an interest in the High Level
Project made pursuant to the High Level Memorandum of Agreement or similar or replacement documents
relating to the High Level Project.
-3-
“Canadian
Legend” means the legend set forth in Section 2.06(g), which is required to be
placed on all Global and Definitive Notes issued under this Indenture.
“Capital Lease Obligation” means, at the time any determination is to be made, the amount of
the liability in respect of a capital lease that would at that time be required to be capitalized
on a balance sheet in accordance with GAAP.
“Capital Stock” means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing Person.
“Cash Equivalents” means:
(1) United States dollars or Canadian dollars;
(2) securities issued or directly and fully guaranteed or insured by the United States
government or the Canadian government or any agency or instrumentality of the United States
government or the Canadian government (provided that the full faith and credit of the United
States or Canada, as applicable, is pledged in support of those securities) having
maturities of not more than six months from the date of acquisition;
(3) certificates of deposit and Eurodollar time deposits with maturities of six months
or less from the date of acquisition, bankers’ acceptances with maturities not exceeding six
months and overnight bank deposits, in each case, with any lender party to a Credit Facility
or U.S. or Canadian commercial bank having capital and surplus in excess of US$500.0 million
and a Thomson Bank Watch Rating of “B” or better;
(4) repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (2) and (3) above entered into with any
financial institution meeting the qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from Moody’s or S&P and in
each case maturing within six months after the date of acquisition; and
(6) money market funds at least 95% of the assets of which constitute Cash Equivalents
of the kinds described in clauses (1) through (5) of this definition.
“Change of Control” means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger, amalgamation or consolidation), in one or a series of related
transactions, of all or
-4-
substantially all of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of
the Exchange Act) other than the Permitted Holders;
(2) the adoption of a plan relating to the liquidation or dissolution of the Company;
(3) the consummation of any transaction (including, without limitation, any merger,
amalgamation or consolidation) the result of which is that any “person” (as defined above in
clause (1)), together with any Affiliates or Related Persons thereof, other than the
Permitted Holders, becomes the Beneficial Owner, directly or indirectly, of at least 50% of
the total voting power of Voting Stock of the Company;
(4) any “person” (as defined above in clause (1)), together with any Affiliates or
Related Persons thereof, other than the Permitted Holders, shall succeed in having a
sufficient number of its nominees elected to the Board of Directors of the Company such that
such nominees, when added to any existing director remaining on the Board of Directors of
the Company after such election who was a nominee of or is an Affiliate or Related Person of
such person, will constitute a majority of the Board of Directors of the Company; or
(5) the Company consolidates or amalgamates with, or merges with or into, any Person,
or any Person consolidates or amalgamates with, or merges with or into, the Company, in any
such event pursuant to a transaction in which any of the outstanding Voting Stock of the
Company or such other Person is converted into or exchanged for cash, securities or other
property, other than any such transaction where the Voting Stock of the Company outstanding
immediately prior to such transaction is converted into or exchanged for Voting Stock (other
than Disqualified Stock) of the surviving or transferee Person constituting a majority of
the outstanding shares of such Voting Stock of such surviving or transferee Person
(immediately after giving effect to such issuance).
“Clearstream” means Clearstream Banking S.A.
“Collateral” means, collectively, (a) the Primary Collateral, (b) the Inventory and
Receivables Collateral, (c) if the requirements set forth in Section 11.05(a) have been satisfied,
the DB Facility Collateral and (d) if the requirements set forth in Section 11.05(b) have been
satisfied, the ML Facility Collateral.
“Collateral
Trust Agreement” means the collateral trust agreement, dated as
of the date hereof, among the Collateral
Trustee and the Primary Collateral Secured Debt Representatives, which will set forth the terms on
which the Collateral Trustee will receive, hold, administer, maintain, enforce and distribute the
proceeds of all Liens upon the Primary Collateral at any time held by it.
“Collateral Trustee” means •
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” of any Person means Capital Stock of such Person that does not rank prior, as
to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding-up of such Person, to shares of Capital Stock of any other
class of such Person.
-5-
“Company” means Ainsworth Lumber Co. Ltd., and any and all successors thereto.
“Company Request” or “Company Order” means a written request or order signed in the name of
the Company by one or more of its Chairman, Chief Executive Officer, President, Chief Financial
Officer, any Vice President, its Treasurer or its Secretary, and delivered to the Trustee.
“Consolidated Cash Flow” means, with respect to any specified Person for any period, the
Consolidated Net Income of such Person for such period plus:
(1) provision for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was deducted in
computing such Consolidated Net Income; plus
(2) consolidated interest expense of such Person and its Restricted Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including, without
limitation, amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers’ acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations), to the extent that any such
expense was deducted in computing such Consolidated Net Income; plus
(3) depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses (excluding any such non-cash expense to the extent that
it represents an accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of such Person and
its Restricted Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in computing such Consolidated Net
Income; minus
(4) non-cash items increasing such Consolidated Net Income for such period, other than
the accrual of revenue in the ordinary course of business,
in each case, on a consolidated basis and determined in accordance with GAAP; provided that, if the
consolidated financial statements of the Company include a minority interest, the amounts in the
foregoing clauses (1) to (4) shall be calculated net of any such amounts included in determining
the minority interest.
Notwithstanding the preceding, the provision for taxes based on the income or profits of, and
the depreciation and amortization and other non-cash expenses of, a Restricted Subsidiary of the
Company will be added to Consolidated Net Income to compute Consolidated Cash Flow of the Company
only to the extent that a corresponding amount would be permitted at the date of determination to
be dividended to the Company by such Restricted Subsidiary without prior governmental approval
(that has not been obtained), and without direct or indirect restriction pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its stockholders.
-6-
“Consolidated Net Income” means, with respect to any specified Person for any period, the
aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or
that is accounted for by the equity method of accounting will be included only to the extent
of the amount of dividends or distributions paid in cash to the specified Person or a
Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted Subsidiary
of that Net Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly, 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 or its
stockholders;
(3) the Net Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition will be excluded; and
(4) the cumulative effect of a change in accounting principles will be excluded.
“Consolidated Net Tangible Assets” means the total amount of assets of any Person on a
consolidated basis, including deferred pension costs, after deducting therefrom (i) all current
liabilities (excluding any indebtedness classified as a current liability), (ii) all goodwill,
trade names, trademarks, patents, unamortized debt discount and financing costs and all other like
intangible assets and (iii) appropriate adjustments on account of minority interests of other
Persons holding shares of the Subsidiaries of such Person, all as set forth in the most recent
balance sheet of such Person and its consolidated Subsidiaries (but, in any event, as of a date
within 150 days of the date of determination) and computed in accordance with generally accepted
accounting principles.
“Corporate Trust Office of the Trustee” shall be at the address of the Trustee specified in
Section 13.02 hereof or such other address as to which the Trustee may give notice to the Company.
“Credit Facilities” means one or more debt facilities or commercial paper facilities
(including the Existing Credit Facility), in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing (including through the sale
of receivables to such lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended, extended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.
“Custodian” means the Trustee, as custodian with respect to the Notes in global form, or any
successor entity thereto.
“DB Facility Agent” means Deutsche Bank Aktiengesellschaft, Frankfurt am Main, as Agent and
Arranger under the Deutsche Bank Facility, together with its successors and assigns in such
capacity.
“DB Facility Collateral” means all right, title and interest of the Company and the Guarantors
in and to the pressing and forming equipment for the second OSB production line located at the
Grande Prairie facility, which assets were financed with the proceeds of the Deutsche Bank
Facility.
-7-
“Default” means any event that is, or with the passage of time or the giving of notice or both
would be, an Event of Default.
“Definitive Note” means a certificated Note registered in the name of the Holder thereof and
issued in accordance with Section 2.06(c) hereof, substantially in the form of Exhibit A
hereto, except that such Note shall not bear the Global Note Legend and shall not have the
“Schedule of Exchanges of Interests in the Global Note” attached thereto.
“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global
form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and
any and all successors thereto appointed as Depositary hereunder and having become such pursuant to
the applicable provision of this Indenture.
“Deutsche Bank Facility” means the Loan Agreement No. 1, dated as of September 7, 2006, among
the Company, Deutsche Bank Luxembourg, S.A., as lender, and the DB Facility Agent, as amended,
extended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from
time to time.
“Disqualified Stock” means any Capital Stock of the Company that, by its terms (or by the
terms of any security into which it is convertible, or for which it is exchangeable, in each case
at the option of the holder of the Capital Stock), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the
option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91
days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital
Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have
the right to require the Company to repurchase such Capital Stock upon the occurrence of a change
of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital
Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with Section 4.07 hereof.
“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire
Capital Stock (but excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).
“Equity Offering” means any public or private issuance or sale of Common Stock of the Company.
“Euroclear” means Euroclear S.A./N.V., as operator of the Euroclear system.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.
“Excluded Primary Collateral Assets” means, collectively:
(1) the Inventory and Receivables Collateral;
(2) all assets constituting the High Level Project;
(3) all
Equity Interests other than the Equity Interests in Steen
River G.P. Ltd. and Steen River Limited Partnership;
-8-
(4) the DB Facility Collateral; provided that, the DB Facility Collateral shall no longer be
an Excluded Primary Collateral Asset if: (a) the Indebtedness under the Deutsche Bank Facility (and
any Permitted Refinancing Indebtedness in respect thereof that is secured by, or has a negative
pledge in respect of, the DB Facility Collateral) has been repaid in full and (b) the requirements
set forth in Section 11.05(a) have not been satisfied at the time of such repayment;
(5) the ML Facility Collateral; provided that, the ML Facility Collateral shall no longer be
an Excluded Primary Collateral Asset if: (a) the Indebtedness under the Merrill Lynch Facility (and
any Permitted Refinancing Indebtedness in respect thereof that is secured by, or has a negative
pledge in respect of, the ML Facility Collateral) has been repaid in full and (b) the requirements
set forth in Section 11.05(b) have not been satisfied at the time of such repayment;
(6) the Bank of Montreal Collateral;
(7) the GE Capital Lease Financed Aircraft;
(8) the
Assets Held for Sale and the proceeds of sale thereof; and
(9) the
First Lien Additional Notes Escrow Account.
“Existing Credit Facility” means the Credit Facility evidenced by that certain Credit and
Guaranty Agreement, dated as of June 26, 2007 (as amended, amended and restated, supplemented or
otherwise modified from time to time), among the Company, the Guarantors, various lenders from time
to time party thereto, Goldman Sachs Credit Partners L.P., as Sole Lead Arranger, Sole Bookrunner
and Syndication Agent, and the Existing Credit Facility Agent.
“Existing Credit Facility Agent” means Goldman Sachs Credit Partners L.P., as Administrative
Agent and Collateral Agent under the Existing Credit Facility, together with its successors and
assigns in such capacity.
“Existing Credit Facility Documents” means, collectively, the documents governing the Existing
Credit Facility and all other agreements governing, securing or related to any Existing Credit
Facility Obligations.
“Existing Credit Facility Obligations” means the Existing Credit Facility (including all
“Obligations” (as defined therein)) and all other Obligations in respect thereof.
“Existing Credit Facility Secured Parties” means the “Secured Parties” (under and as defined
in the Existing Credit Facility Documents).
“Existing Indebtedness” means the Indebtedness of the Company and its Restricted Subsidiaries
in existence on the Issue Date, until such amounts are repaid, other than Indebtedness outstanding
under the Credit Facilities and the First Lien Notes. Without limitation, the Deutsche Bank
Facility, the Merrill Lynch Facility, the Bank of Montreal Facility and the GE Capital Lease shall
be deemed to be Existing Indebtedness.
“First Lien Additional Notes Escrow Account” means the account, in the name of the trustee under the indenture relating to
the First Lien Notes, and the amounts on deposit therein or credited thereto including the gross proceeds from the sale
of additional First Lien Notes, in excess of US$50 million, together with an amount equal to the interest payable with
respect to such additional First Lien Notes for a period of 90 days.
“First Lien Notes” means the Senior Secured First Lien Notes due 2014 of the Company.
“Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the
ratio of the Consolidated Cash Flow of such Person and its Restricted Subsidiaries for such period
to the Fixed Charges of such Person and its Restricted Subsidiaries for such period. In the event
that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees,
repays, repurchases
-9-
or redeems any Indebtedness (other than ordinary working capital borrowings) or issues,
repurchases or redeems Disqualified Stock or preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on
which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the
“Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro forma
effect to such incurrence, assumption, Guarantee, repayment, repurchase or redemption of
Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or preferred stock,
and the use of the proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any of its Restricted
Subsidiaries, including through mergers, amalgamation or consolidations and including any
related financing transactions, during the four-quarter reference period or subsequent to
such reference period and on or prior to the Calculation Date will be given pro forma effect
as if they had occurred on the first day of the four-quarter reference period and
Consolidated Cash Flow for such reference period will be calculated on a pro forma basis in
accordance with Regulation S-X under the Securities Act, but without giving effect to clause
(3) of the proviso set forth in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the Calculation
Date, will be excluded;
(3) the Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the Calculation
Date, will be excluded, but only to the extent that the obligations giving rise to such
Fixed Charges will not be obligations of the specified Person or any of its Restricted
Subsidiaries following the Calculation Date; and
(4) the consolidated interest expense of the specified Person and its Restricted
Subsidiaries attributable to interest on any Indebtedness (whether existing or being
incurred) computed on a pro forma basis and bearing a floating interest rate shall be
computed as if the rate in effect on the Calculation Date (taking into account Hedging
Obligations applicable to such Indebtedness if such agreement has a remaining term in excess
of 12 months or, if shorter, at least equal to the remaining term of such Indebtedness) had
been the applicable rate for the entire period.
“Fixed Charges” means, with respect to any specified Person and its Restricted Subsidiaries
for any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued, including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in respect of letter of
credit or bankers’ acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations; plus
-10-
(2) the consolidated interest of such Person and its Restricted Subsidiaries that was
capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is Guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person
or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon;
plus
(4) the amount of all payments charged to shareholder’s equity on any “compound
financial instrument” (as described under GAAP) paid, accrued or scheduled to be paid or
accrued during such period; plus
(5) the product of (a) all dividends, whether paid or accrued and whether or not in
cash, on any series of Disqualified Stock or preferred stock of such Person or any of its
Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity
Interests of the Company (other than Disqualified Stock) or to the Company or a Wholly Owned
Restricted Subsidiary of the Company, times (b) a fraction, the numerator of which is one
and the denominator of which is one minus the then current combined federal, provincial,
state and local statutory tax rate of such Person, expressed as a decimal, in each case, on
a consolidated basis and in accordance with GAAP.
“GAAP” means, as of any date of determination, generally accepted accounting principles in
Canada and which are applicable as of any date of determination.
“GE Capital Lease” means the aircraft lease agreement, dated as of September 28, 2006, between
GE Canada Leasing Services Company, as lessor, and the Company, as lessee.
“GE Capital Lease Financed Aircraft” means the 2006 Learjet 45 bearing manufacturer’s serial
number 303 and Transport Canada Registration Mark C-FANS with Honeywell model TFE731-20BR engines
bearing manufacturer’s serial numbers P116729 and P116710 and all replacements therefor together
with all parts, avionics, instruments, finishings, accessions, appurtenances or other equipment of
whatever nature which may from time to time be incorporated in the aircraft and the engines and
also all records, logs, manuals and other materials and data required to be maintained with respect
to the aircraft and the engines pursuant to law and as required by any aviation authority and all
other modification, maintenance, repair, overhaul and use records required by the manufacturers’
maintenance programs and which, when taken together, will provide a complete and continuous history
of all maintenance, overhauls and repairs to the aircraft and the engines from the date of
manufacture thereof.
“Global
Note Legend” means the legend set forth in Section 2.06(f), which is required to be
placed on all Global Notes issued under this Indenture.
“Global Note” means a permanent Global Note, substantially in the form of Exhibit A
attached hereto that bears the Global Note Legend and that has the “Schedule of Exchanges of
Interests in the Global Note” attached thereto, and that is deposited with or on behalf of and
registered in the name of the Depositary, representing Notes.
“Government Securities” means direct obligations of, or obligations guaranteed by, the United
States of America, and the payment for which the United States pledges its full faith and credit.
-11-
“Grant” means Grant Forest Products Inc., an Ontario corporation, any other Person or Persons
who replace Grant and become co-owners of the High Level Project, any successor entity thereto, and
any Affiliate thereof.
“Guarantee” means a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any manner including, without
limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements
in respect thereof, of all or any part of any Indebtedness.
“Guarantors” means any Subsidiary that executes a Subsidiary Guarantee in accordance with the
provisions of this Indenture and its respective successors and assigns.
“Hedging Obligations” means, with respect to any specified Person, the obligations of such
Person under:
(1) interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements; and
(2) other agreements or arrangements designed to protect such Person against
fluctuations in currency exchange rates, commodity prices or interest rates.
“High Level Memorandum of Agreement” means the memorandum of agreement, dated as of December
9, 1999, between the Company and Grant Forest Products Corp., relating to the High Level Project.
“High
Level Project” means the oriented strand board facility, jointly
owned by the Company, or its successor in interest,
and Grant, or its successor in interest, located near High Level, Alberta, together with the
Capital Stock of Footner Forest Products Ltd. and all associated, operating, shareholder
and ownership agreements and rights held by Footner Forest Products Ltd. to harvest logs processed
through such facility pursuant to a deciduous timber allocation issued by the government of
Alberta.
“Holder” means a Person in whose name a Note is registered in the Note Register.
“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person,
whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit
(or reimbursement agreements in respect thereof);
(3) in respect of banker’s acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price of any property,
except any such balance that constitutes an accrued expense or trade payable; or
(6) representing any Hedging Obligations,
-12-
if and to the extent any of the preceding items (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in
accordance with GAAP; provided, however, that Indebtedness shall not include obligations of any
Person (i) arising from the honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently drawn against insufficient funds in the ordinary course of
business, provided that such obligations are extinguished within 15 days of their incurrence, (ii)
resulting from the endorsement of negotiable instruments for collection in the ordinary course of
business and consistent with past business practices and (iii) under stand-by letters of credit to
the extent collateralized by cash or cash equivalents. In addition, the term “Indebtedness”
includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether
or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise
included, the Guarantee by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with
original issue discount; and
(2) the principal amount of the Indebtedness, together with any interest on the
Indebtedness that is more than 30 days past due, in the case of any other Indebtedness.
“Indenture” means this Indenture, as amended or supplemented from time to time.
“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through
a Participant.
“Interest Payment Date” means June 30th and December 30th of each year to Stated Maturity.
“Inventory and Receivables Collateral” means all right, title and interest of the Company and
the Guarantors in and to (a) accounts receivable, (b) inventory, (c) all accounts into which cash,
cheques or other similar payments relating to or constituting payments in respect of accounts
receivable are deposited, (d) all books and records, customer lists, credit files, computer files,
programs, printouts and other computer materials and records relating to any of the foregoing, (e)
all proceeds of the foregoing and (f) all other “Collateral” (as defined in the US Security
Agreement and the Canadian Security Agreement (each as defined in the Existing Credit Facility)).
“Investments” means, with respect to any Person, all direct or indirect investments by such
Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other
obligations), advances or capital contributions (excluding commission, travel and similar advances
to officers and employees made in the ordinary course of business), purchases or other acquisitions
for consideration of Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in accordance with GAAP,
but shall not include trade accounts receivable in the ordinary course of business on credit terms
made generally available to customers of such Person. If the Company or any Subsidiary of the
Company sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of
the Company such that, after giving effect to any such sale or disposition, such Person is no
longer a Subsidiary of the Company, the Company will be deemed to have made an Investment on the
date of any such sale or disposition equal to the fair market value of the Equity Interests of such
Subsidiary not sold or disposed of in an amount determined as provided in Section 4.07(c) hereof.
The acquisition by the Company or any Subsidiary of the Company of a Person that holds an
Investment in a third Person will be deemed to be an Investment by the Company or
-13-
such Subsidiary in such third Person in an amount equal to the fair market value of the
Investment held by the acquired Person in such third Person in an amount determined as provided in
Section 4.07(c) hereof.
“IR Collateral Intercreditor Agreement” means the intercreditor agreement among the Existing
Credit Facility Agent, the Collateral Trustee and the IR Collateral Junior Debt Representatives,
which will set forth the ranking and priorities of Liens on the Inventory and Receivables
Collateral amongst the IR Collateral Secured Parties.
“IR Collateral Junior Debt Representatives” means the Priority Debt Representatives and
the Parity Debt Representatives (other than the Existing Credit Facility Agent).
“IR Collateral Junior Secured Obligations” means the IR Collateral Secured Obligations other
than the Existing Credit Facility Obligations.
“IR Collateral Junior Secured Parties” means the Priority Lien Secured Parties and the Parity
Lien Secured Parties (other than the Existing Credit Facility Secured Parties).
“IR Collateral Parity Lien” means a Lien granted by an IR Collateral Security Document to the
Collateral Trustee upon any Inventory and Receivables Collateral to secure Parity Lien Obligations
(other than the Existing Credit Facility Obligations).
“IR Collateral Priority Lien” means an IR Collateral Priority First Lien and/or an IR
Collateral Priority Second Lien.
“IR Collateral Priority First Lien” means a Lien granted by an IR Collateral Security Document
to the Existing Credit Facility Agent upon any Inventory and Receivables Collateral to secure
Existing Credit Facility Obligations.
“IR Collateral Priority Second Lien” means a Lien granted by an IR Collateral Security
Document to the Collateral Trustee, for the benefit of the Priority Lien Secured Parties, in each
case, upon any Inventory and Receivables Collateral to secure Priority Lien Obligations.
“IR Collateral Secured Debt” means the Existing Credit Facility, Priority Lien Debt and Parity
Lien Debt (other than, in the case of the reference to Parity Lien Debt, the Existing Credit
Facility).
“IR Collateral Secured Debt Documents” means the Existing Credit Facility Documents, the
Priority Lien Documents and the Parity Lien Documents (other than, in the case of the reference to
Parity Lien Documents, the Existing Credit Facility Documents).
“IR Collateral Secured Obligations” means Existing Credit Facility Obligations, Priority Lien
Obligations and Parity Lien Obligations (other than, in the case of the reference to Parity Lien
Obligations, the Existing Credit Facility Obligations).
“IR Collateral Secured Parties” means Existing Credit Facility Secured Parties, Priority Lien
Secured Parties and Parity Lien Secured Parties (other than, in the case of the reference to Parity
Lien Secured Parties, the Existing Credit Facility Secured Parties).
“IR Collateral Security Documents” means the IR Collateral Intercreditor Agreement and one or
more security agreements, pledge agreements, collateral assignments, collateral agency agreements,
control agreements, or other grants or transfers for security
executed and delivered by the Com-
-14-
pany and each Guarantor creating (or purporting to create) a Lien upon Inventory and
Receivables Collateral in favor of (a) the Existing Credit Facility Agent or (b) the Collateral
Trustee, for the benefit of the IR Collateral Secured Parties, in each case, as amended,
supplemented, amended and restated or otherwise modified and in effect from time to time, in
accordance with its terms.
“Issue Date” means the date of original issuance of the Notes.
“Legal Holiday” means a Saturday, a Sunday or a day on which commercial banking institutions
in the City of New York, the City of Toronto, the City of Vancouver or the city of the Corporate
Trust Office of the Trustee are authorized by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on
the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment
for the intervening period.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, hypothec,
security interest or encumbrance of any kind in respect of such asset, whether or not filed,
recorded or otherwise perfected under applicable law, including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other agreement to sell or give
a security interest in and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
“Loss Event” means an expropriation, condemnation or casualty involving an actual or
constructive total loss or agreed or compromised actual or constructive total loss of all or any
portion of the Collateral.
“Merrill Lynch Facility” means the Credit Agreement, dated as of September 29, 2006, among the
Company, the lenders from time to time party thereto and the ML Facility Agent, as amended,
extended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from
time to time.
“ML Facility Agent” means Merrill Lynch Capital Canada Inc., as agent under the Merrill Lynch
Facility, together with its successors and assigns in such capacity.
“ML Facility Collateral” means all right, title and interest of the Company and the Guarantors
in and to the equipment installed as part of the second OSB production line located at the Grande
Prairie facility, the acquisition of which by the Company was financed under the Merrill Lynch
Facility and a trailing funds account established under the Merrill Lynch Facility, together with
all parts, spare parts, renewals, components, replacements, substitutions and alternatives therefor
and thereof, all manufacturer’s and other warranties applicable thereto, all intellectual property
relating thereto, or the use thereof, and all attachments, increases, additions and accessions
thereto, all appliances, instruments, appurtenances, accessories, furnishings, fixtures and other
equipment of whatever nature from time to time incorporated in, or installed in or attached thereto
and all proceeds therefrom (cash and non-cash), including the proceeds of all insurance policies
thereof or other payment as indemnity or compensation for loss of or damage to such property or any
right to such payment and including personal property in any form or fixtures derived directly or
indirectly from any dealing with such property or proceeds therefrom and all deeds, books,
accounts, invoices, letters, papers, chattel paper, documents of title, documents, disks and other
records in any form, electronic or otherwise, evidencing or relating thereto; and all other rights
and benefits in respect thereof; and all other “Collateral” (as defined in the Merrill Lynch
Facility in effect on the Issue Date)
-15-
“Moody’s” means Moody’s Investors Service, Inc.
“Net Income” means, with respect to any specified Person, the net income (loss) of such
Person, determined in accordance with GAAP and before any reduction in respect of preferred stock
dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes on such gain or
loss, realized in connection with: (a) any Asset Sale; or (b) the disposition of any
securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related provision for taxes on
such extraordinary gain or loss.
“Net Proceeds” means, with respect to any Asset Sale or Loss Event, the aggregate cash
proceeds or Cash Equivalents received by the Company or any of its Restricted Subsidiaries in
respect of any Asset Sale (including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting and investment
banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset
Sale, taxes paid or payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements, and amounts required to
be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the
subject of such Asset Sale (other than as described in Section 4.10(b)) and any reserve for
adjustment in respect of the sale price of such asset or assets established in accordance with
GAAP.
“Non-Guarantor
Restricted Subsidiaries” means (i) Steen River Limited
Partnership and Steen River GP Ltd., and (ii) any other North American Restricted Subsidiaries that
collectively do not have total assets in excess of US$3.0 million, and which are designated by the
Board of Directors of the Company as evidenced by a resolution of the Board of Directors delivered
to the Trustee.
“Non-Recourse Debt” means Indebtedness:
(1) as to which neither the Company nor any of its Restricted Subsidiaries (a) provides
credit support of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise,
or (c) constitutes the lender;
(2) no default with respect to which (including any rights that the holders of the
Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would
permit upon notice, lapse of time or both any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to
its stated maturity; and
(3) as to which the lenders have been notified in writing that they will not have any
recourse to the stock or assets of the Company or any of its Restricted Subsidiaries;
except for any limited recourse guarantee solely for the purpose of supporting the pledge by the
Company or any of its Restricted Subsidiaries of the Equity Interests of any Unrestricted
Subsidiaries.
-16-
“North American Restricted Subsidiary” means any Restricted Subsidiary of the Company that was
formed under the laws of the United States or any state of the United States or the District of
Columbia or under the laws of Canada or any province or territory thereof.
“Note Documents” means this Indenture, the Notes, the Subsidiary Guarantees, the Collateral
Trust Agreement, the IR Collateral Intercreditor Agreement, each Parity Debt Sharing Confirmation,
the other Security Documents and all other agreements related thereto.
“Note Obligations” means the Notes and all other Obligations of any obligor under the Note
Documents.
“Notes” means any Note authenticated and delivered under this Indenture. For all purposes of
this Indenture, the term “Notes” shall include any PIK Notes. The Notes and any PIK Notes shall be
treated as a single class for all purposes under this Indenture.
“Obligations” means with respect to any Indebtedness of any Person (collectively, without
duplication):
(1) all debt, financial liabilities and obligations of such Person of whatsoever
nature and howsoever evidenced (including principal, interest, fees, reimbursement
obligations, cash cover obligations, penalties, indemnities and legal and other expenses,
whether due after acceleration or otherwise) to the providers or holders of such
Indebtedness or to any agent, trustee or other representative of such providers or holders
of such Indebtedness under or pursuant to each agreement, document or instrument
evidencing, securing, guaranteeing or relating to such Indebtedness, financial liabilities
or obligations relating to such Indebtedness (including Secured Debt Documents applicable
to such Indebtedness (if any)), in each case, direct or indirect, primary or secondary,
fixed or contingent, now or hereafter arising out of or relating to any such agreement,
document or instrument;
(2) any and all sums advanced by the Collateral Trustee or any other Person in order
to preserve the Collateral or any other collateral securing such Indebtedness or to
preserve the Liens and security interests in the Collateral or any other collateral,
securing such Indebtedness; and
(3) the costs and expenses of collection and enforcement of the obligations referred
to in clauses (1) and (2), including:
(a) the costs and expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on any Collateral or any other
collateral;
(b) the costs and expenses of any exercise by the Collateral Trustee or any
other Person of its rights under the Security Documents or any other security
documents; and
(c) reasonable attorneys’ fees and court costs.
“Offering Memorandum” means the offering memorandum of the Company dated February •, 2008
relating to the sale of the Notes.
-17-
“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial Officer, any Vice
President, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Vice-President of such Person.
“Officers’ Certificate” means a certificate signed on behalf of a Person by two Officers of
such Person, one of whom must be the principal executive officer, the principal financial officer,
the treasurer or the principal accounting officer of such Person that meets the requirements of
Section 13.05 hereof.
“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the
Trustee, that meets the requirements of Section 13.05 hereof. The counsel may be an employee of or
counsel to the Company, or any Restricted Subsidiary.
“Parity Debt Representative” means:
|
(1) |
|
in the case of the Notes, the Trustee;
|
|
|
(2) |
|
in the case of the Deutsche Bank Facility (to the extent the
Indebtedness incurred under the Deutsche Bank Facility is Parity Lien Debt (in
accordance with clause (5) of the definition thereof)), the DB Facility Agent;
|
|
|
(3) |
|
in the case of the Existing Credit Facility, the Existing Credit Facility Agent; or |
|
|
(4) |
|
in the case of any other Series of Parity Lien Debt, the
trustee, agent or representative of the holders of such Series of Parity Lien
Debt for such Series of Parity Lien Debt and is appointed as a Parity Debt
Representative (for purposes related to the administration of the security
documents) pursuant to the credit agreement, indenture or other agreement
governing such Series of Parity Lien Debt, and who has become a party to the
Collateral Trust Agreement.
|
“Parity Debt Sharing Confirmation” means, as to any Series of Parity Lien Debt, the written
agreement of the holders of that Series of Parity Lien Debt, as set forth in the credit agreement,
indenture or other agreement governing that Series of Parity Lien Debt, for the enforceable benefit
of all holders of each other existing and future Series of Parity Lien Debt and each existing and
future Parity Debt Representative, that all Parity Lien Obligations will be and are secured equally
and ratably by all Liens at any time granted by the Company or any Guarantor to secure any
Obligations in respect of such Series of Parity Lien Debt, whether or not upon property otherwise
constituting Collateral, that all such Liens will be enforceable by the Collateral Trustee for the
benefit of all holders of Parity Lien Obligations equally and ratably, and that the holders of
Obligations in respect of such Series of Parity Lien Debt are bound by the provisions of the
Collateral Trust Agreement relating to the order of application of proceeds from enforcement of
such Liens, and consent to and direct the Collateral Trustee to perform its obligations under the
Collateral Trust Agreement.
“Parity Lien Debt” means:
|
(1) |
|
the Notes issued under and on the date of the Indenture and any
|
|
|
(2) |
|
any Indebtedness incurred under the Existing Credit Facility;
|
-18-
|
(3) |
|
Hedging Obligations with respect to Parity Lien Debt;
|
|
|
(4) |
|
any other Indebtedness that is permitted to be incurred under
Section 4.09 if the net proceeds are used to refund, refinance, replace,
defease, discharge or otherwise acquire or retire Priority Lien Debt (other
than such refinancing Indebtedness that satisfies the requirements of clause
(2) of the definition of “Priority Lien Debt”) or other Parity Lien Debt; or
|
|
|
(5) |
|
any Indebtedness incurred under the Deutsche Bank Facility
(unless (a) the lenders under the Deutsche Bank Facility consent to an
amendment or waiver of the Deutsche Bank Facility to remove the requirement
that the Obligations under the Deutsche Bank Facility be secured equally and
ratably with the Parity Lien Debt in accordance with Section 11.05(a) or (b)
the Obligations under the Deutsche Bank Facility are otherwise not required to
be secured equally and ratably with the Parity Lien Debt));
|
provided, that, in each case:
|
(i) |
|
on the Issue Date or otherwise on or before the date on which such
Indebtedness is incurred by the Company or the applicable Guarantor,
such Indebtedness is designated by the Company, in an officer’s
certificate delivered to each Parity Debt Representative and the
Collateral Trustee, as Parity Lien Debt for the purposes of this
Indenture, the Collateral Trust Agreement and the IR Collateral
Intercreditor Agreement; provided, that no Obligation or Indebtedness
may be designated as both Priority Lien Debt and Parity Lien Debt;
|
|
|
(ii) |
|
such Indebtedness is governed by an agreement
that includes a Parity Debt Sharing Confirmation; and
|
|
|
(iii) |
|
all requirements set forth in the Collateral
Trust Agreement or the IR Collateral Intercreditor Agreement, as
applicable, as to the confirmation, grant or perfection of the
Collateral Trustee’s Liens to secure such Indebtedness or Obligations
in respect thereof are satisfied (and the satisfaction of such
requirements and the other provisions of this clause (iii) shall be
conclusively established, for purposes of entitling the holders of such
Indebtedness to share equally and ratably with the other holders of
Parity Lien Debt in the benefits and proceeds of the Collateral
Trustee’s Liens on the Collateral, if the Company delivers to the
Collateral Trustee an officer’s certificate in the form required
pursuant to the Collateral Trust Agreement or the IR Collateral
Intercreditor Agreement, as applicable, stating that such requirements
and other provisions have been satisfied and that such Indebtedness is
Parity Lien Debt).
|
“Parity Lien Documents” means, collectively, the Note Documents and the credit agreement,
indenture or other agreement governing each other Series of Parity Lien Debt and all agreements
governing, securing or relating to any Parity Lien Obligations.
-19-
“Parity Lien Obligations” means Parity Lien Debt and all other Obligations in respect thereof.
“Parity Liens” means, collectively, (a) the Primary Collateral Parity Liens, (b) the IR
Collateral Parity Liens, (c) if the requirements set forth in Section 11.05(a) have been satisfied,
any Lien granted to the Collateral Trustee upon any DB Facility Collateral to secure Parity Lien
Obligations and (d) if the requirements set forth in Section 11.05(b) have been satisfied, any Lien
granted to the Collateral Trustee upon any ML Facility Collateral to secure Parity Lien
Obligations.
“Parity Lien Secured Parties” means the holders of Parity Lien Obligations and any Parity Debt
Representatives.
“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who
has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to
DTC, shall include Euroclear and Clearstream).
“Permitted Asset Sale” means any sale, lease, conveyance or other disposition of any property
or assets:
(1) that is all of the Company’s interest in the High Level Project to Grant pursuant
to an exercise of the Buy/Sell Option, at a price, if the Company is the seller, of not less
than the undepreciated book value of the Company’s investment in the High Level Project,
calculated in accordance with GAAP, but without any provision for interest or other costs
incurred in making the investment; or
(2) that is the Assets Held for Sale.
“Permitted Business” means any business that derives a majority of its revenues from the
businesses engaged in by the Company and its Restricted Subsidiaries on the Issue Date and/or
activities that are reasonably similar, ancillary or related to, or a reasonable extension,
development or expansion of, the businesses in which the Company and its Restricted Subsidiaries
were engaged on the Issue Date.
“Permitted Encumbrances” will have the meaning, with respect to each Post-Closing Required
Mortgage, provided in such Post-Closing Required Mortgage.
“Permitted Holder” means (i) each of David Ainsworth, D. Allen Ainsworth and Brian E.
Ainsworth, (ii) the members of the immediate family of each of the persons referred to in clause
(i) above, (iii) any trust created for the benefit of any of the persons referred to in clauses (i)
and (ii) above or (iv) any Person at least 85% of the outstanding Capital Stock of which is owned
by one or more of the persons described in clauses (i), (ii) and (iii) above.
“Permitted Investments” means:
|
(1) |
|
any Investment in the Company or in a Restricted Subsidiary; |
|
|
(2) |
|
any Investment in Cash Equivalents; |
|
|
(3) |
|
any Investment by the Company or any Guarantor in a Person, if as a result of such
Investment:
|
-20-
(i) such Person becomes a Guarantor; or
(ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into, the
Company or a Guarantor;
(4) any Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof;
(5) any acquisition of assets, Capital Stock or other securities solely in exchange for
the issuance of Equity Interests (other than Disqualified Stock) of the Company;
(6) any Investments by the Company or a Restricted Subsidiary received in compromise of
claims, settlements of debts or disputes or satisfaction of judgments relating to
obligations payable to the Company or such Restricted Subsidiary, as the case may be, in its
capacity as trade creditor or from customers, which obligations were incurred in the
ordinary course of business, including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade creditor or customer;
(7) Hedging Obligations in the ordinary course of business and not for speculative
purposes; and
(8) an Investment by the Company or any Restricted Subsidiary in a Permitted Joint
Venture; provided that the aggregate amount of all Investments made pursuant to this clause
(8) does not exceed US$3.0 million at any one time outstanding.
“Permitted Joint Venture” means any joint venture arrangement created by the Company or one of
its Restricted Subsidiaries, the primary purpose of which is to obtain fiber to supply the
operations of the Company or its Restricted Subsidiaries, provided that the Company and its
Restricted Subsidiaries own an equity interest in such arrangement of at least 40% of the Equity
Interests in such arrangement.
“Permitted Liens” means:
(1) Liens to secure Obligations in respect of Indebtedness permitted by Section
4.09(b)(1) hereof on the accounts receivable and inventories (including spare parts) of the
Company and its Restricted Subsidiaries, including the proceeds thereof and all money,
securities and property of the Company and its Restricted Subsidiaries and the proceeds
thereof held by any lender of such indebtedness, and all related books and records and other
intangibles evidencing such collateral;
(2) Liens to secure Obligations in respect of Indebtedness permitted by Section
4.09(b)(2) hereof;
(3) Liens in favor of the Company or the Guarantors;
(4) Liens on property of a Person existing at the time such Person is merged with or
into or amalgamated or consolidated with the Company or any Restricted Subsidiary of the
Company; provided that such Liens were in existence prior to the contemplation of such
merger,
-21-
amalgamation or consolidation and do not extend to any assets other than those of
the Person merged into or consolidated or amalgamated with the Company or the Restricted
Subsidiary;
(5) Liens on property existing at the time of acquisition of the property by the
Company or any Restricted Subsidiary of the Company, provided that such Liens were in
existence prior to the contemplation of such acquisition;
(6) Liens to secure the performance of statutory obligations, surety or appeal bonds,
performance bonds or other obligations of a like nature incurred in the ordinary course of
business;
(7) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by
Section 4.09(b)(5) hereof covering only the assets acquired with such Indebtedness;
(8) Liens existing on the Issue Date other than Liens permitted by clauses (1), (2) and
(7) of this definition;
(9) Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded, provided that any reserve or other appropriate
provision as is required in conformity with GAAP has been made therefor;
(10) Liens securing Hedging Obligations in the ordinary course of business and not for
speculative purposes; provided that (i) such Liens are only secured by property or assets
that secure the Indebtedness subject to the Hedging Obligation or (ii) if such Hedging
Obligations are with one or more parties to Credit Facilities, then secured by the same
collateral as secures the applicable Credit Facilities;
(11) Liens on the Equity Interests of Unrestricted Subsidiaries or Permitted Joint
Ventures securing Indebtedness of such Unrestricted Subsidiaries or Permitted Joint Ventures
not otherwise prohibited by this Indenture;
(12) Liens securing Obligations in respect of Permitted Refinancing Indebtedness
incurred to refinance any secured Indebtedness; provided that the Liens securing such
Permitted Refinancing Indebtedness are not extended to any additional assets or property and
do not change the priority of the Liens relative to other secured Indebtedness;
(13) Liens on the Collateral to secure Obligations in respect of Indebtedness permitted
to be incurred pursuant to the indenture, provided such Liens rank junior to the Liens
securing the Notes;
(14)
A general security agreement between the Company, or its successor in
interest, and Grant, or its successor in interest, securing the
obligations of the Company or its Subsidiaries under the High Level Memorandum of Agreement
or similar documents relating to the High Level Project;
(15) Liens securing Purchase Money Indebtedness; provided, however, that (a) such
Purchase Money Indebtedness shall not exceed the purchase price or other cost of such
property or equipment and shall not be secured by any property or equipment of the Company
or any Restricted Subsidiary of the Company other than the property and equipment so
acquired and (b) the
-22-
Lien securing such Purchase Money Indebtedness shall be created within
90 days of such acquisition;
(16) Liens to secure the Notes and any other Parity Lien Debt (including without
limitation, the Existing Credit Facility); and
(17) Liens on the DB Facility Collateral in favor of the DB Facility Agent, for the
benefit of the lenders under the Deutsche Bank Facility.
“Permitted Prior Liens” means:
(1) with respect to Liens on the Inventory and Receivables Collateral, Liens securing the
Obligations under the Existing Credit Facility; and
(2) with respect to Liens on all Collateral (including, without limitation, the Inventory and
Receivables Collateral):
(a) Liens securing Priority Lien Obligations not exceeding the Priority Lien Cap;
(b) Liens described in clause (8) of the definition of “Permitted Liens;”
(c) Liens described in clauses (1), (4), (5), (7), (12) (to the extent that the Lien
securing the Indebtedness being refinanced was a Permitted Prior
Lien), and in clause (15) of
the definition of “Permitted Liens;” and
(d) Liens that arise by operation of law and are not voluntarily granted, to the
extent entitled by law to priority over the security interests created by the Secured Debt
Documents.
“Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any of its
Restricted Subsidiaries or Disqualified Stock of the Company or preferred stock of Restricted
Subsidiaries of the Company issued in exchange for, or the net proceeds of which are used to
extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of
its Restricted Subsidiaries or Disqualified Stock of the Company or preferred stock of Restricted
Subsidiaries of the Company (other than intercompany Indebtedness, Disqualified Stock or preferred
stock); provided that:
(1) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness, Disqualified Stock or preferred stock extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued interest or dividends on the
Indebtedness, Disqualified Stock or preferred stock and the amount of all expenses and
premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
-23-
(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes or a Subsidiary Guarantee, such
Permitted Refinancing Indebtedness has a final maturity date later than the final maturity
date of, and is subordinated in right of payment to, the Notes or such Subsidiary Guarantee
on terms at least as
favorable to the Holders of the Notes as those contained in the documentation governing
the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or by the Restricted Subsidiary
that is the obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
“Person” means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability company or government or
other entity.
“PIK Notes” has the meaning set forth in Exhibit A hereto.
“PIK Interest” has the meaning set forth in Exhibit A hereto.
“Post-Closing Required Mortgaged Properties” means, collectively, the parcels of real property
identified in Exhibit D hereto.
“Post-Closing Required Mortgage” means, with respect to each Post-Closing Required Mortgaged
Property, a fully executed and notarized mortgage or deed of trust encumbering the applicable
party’s s interest in such Post-Closing Required Mortgaged Property, each such mortgage or deed of
trust to be in substantially the forms of Exhibit E hereto.
“Primary Collateral” means all properties and assets of the Company and the Guarantors, other
than the Excluded Primary Collateral Assets.
“Primary Collateral Parity Lien” means a Lien granted by a Primary Collateral Security
Document to the Collateral Trustee upon any Primary Collateral to secure Parity Lien Obligations.
“Primary Collateral Priority Lien” means a Lien granted by a Primary Collateral Security
Document to the Collateral Trustee, for the benefit of the Priority Lien Secured Parties, upon any
Primary Collateral to secure Priority Lien Obligations.
“Primary Collateral Secured Debt” means Priority Lien Debt and Parity Lien Debt.
“Primary Collateral Secured Debt Documents” means the Priority Lien Documents and the Parity
Lien Documents.
“Primary Collateral Secured Debt Representatives” means each Priority Debt Representative and
each Parity Debt Representative.
“Primary Collateral Secured Obligations” means Priority Lien Obligations and Parity Lien
Obligations.
“Primary Collateral Secured Parties” means Priority Lien Secured Parties and Parity Lien
Secured Parties.
-24-
“Primary Collateral Security Documents” means the Collateral Trust Agreement and one or more
security agreements, mortgages, pledge agreements, collateral assignments, collateral agency
agreements, control agreements, or other grants or transfers for security executed and delivered by
the
Company and each Guarantor creating (or purporting to create) a Lien upon Primary Collateral
in favor of the Collateral Trustee, for the benefit of the Secured Parties, in each case, as
amended, supplemented, amended and restated or otherwise modified and in effect from time to time,
in accordance with its terms.
“Priority Debt Representative” means:
(1) in the case of the First Lien Notes, the Trustee in respect thereof; or
(2) in the case of any other Series of Priority Lien Debt, the Trustee, agent or
representative of the holders of such Series of Priority Lien Debt who maintains the
transfer register for such Series of Priority Lien Debt and is appointed as a Priority Debt
Representative (for purposes related to the administration of the security documents)
pursuant to the credit agreement, indenture or other agreement governing such Series of
Priority Lien Debt, and who has become a party to the Collateral Trust Agreement.
“Priority Debt Sharing Confirmation” means, as to any Series of Priority Lien Debt, the
written agreement of the holders of such Series of Priority Lien Debt, as set forth in the
indenture or other agreement governing such Series of Priority Lien Debt, for the enforceable
benefit of all holders of each other existing and future Series of Priority Lien Debt and each
existing and future Priority Debt Representative, that all Priority Lien Obligations will be and
are secured equally and ratably by all Liens at any time granted by the Company or any Guarantor to
secure any Obligations in respect of such Series of Priority Lien Debt, whether or not upon
property otherwise constituting Collateral, that all such Liens will be enforceable by the
Collateral Trustee for the benefit of all holders of Priority Lien Obligations equally and ratably,
and that the holders of Obligations in respect of such Series of Priority Lien Debt are bound by
the provisions in the Collateral Trust Agreement relating to the order of application of proceeds
from enforcement of such Liens, and consent to and direct the Collateral Trustee to perform its
obligations under the Collateral Trust Agreement.
“Priority Lien Cap” means $75.0 million.
“Priority Lien Debt” means:
(1) Indebtedness under the indenture in respect of the First Lien Notes issued on the Issue
Date; and
(2) Indebtedness under any indenture (including First Lien Notes) or Credit Facility
that is secured by a Priority Lien, equally and ratably with the other Priority Lien
Obligations, if any that were permitted to be incurred and so secured under each applicable
Secured Debt Document including Permitted Refinancing Indebtedness incurred to extend,
refinance, renew, replace, defease, or refund any First Lien Notes or any other Priority
Lien Debt; provided, in the case of each issue or series of Indebtedness referred to in
this clause (2), that:
(a) on or before the date on which such Indebtedness is incurred by the Company
or the applicable Guarantor such Indebtedness is designated by the Company, in an
Officers’ Certificate delivered to each Priority Debt Representative and the
Collateral Trustee, as “Priority Lien Debt” for the purposes of the Secured Debt
Documents;
-25-
provided, that no Obligation or Indebtedness may be designated as both
Priority Lien Debt and Parity Lien Debt;
(b) such Indebtedness is governed by a credit agreement, an indenture or other
agreement that includes a Priority Debt Sharing Confirmation;
(c) all requirements set forth in the Collateral Trust Agreement or the IR
Collateral Intercreditor Agreement, as applicable, as to the confirmation, grant or
perfection of the Collateral Trustee’s Lien to secure such Indebtedness or
Obligations in respect thereof are satisfied (and the satisfaction of such
requirements and the other provisions of this clause (c) will be conclusively
established if the Company delivers to the Collateral Trustee an Officers’
Certificate stating that such requirements and other provisions have been satisfied
and that such Indebtedness is “Priority Lien Debt”); and
(d) after giving effect to the incurrence of such series of Indebtedness the
aggregate principal amount of Priority Lien Debt does not exceed the Priority Lien
Cap.
“Priority Lien Documents” means, collectively, the indenture and other documents governing the
First Lien Notes and the credit agreement, indenture or other agreement governing any other credit
or debt facility pursuant to which the Priority Lien Debt is incurred and all other agreements governing,
securing or related to any Priority Lien Obligations.
“Priority Lien Obligations” means the Priority Lien Debt and all other Obligations in respect
thereof.
“Priority Liens” means, collectively, (a) the Primary Collateral Priority Liens, (b) the IR
Collateral Priority Liens, (c) if the requirements set forth in Section 11.05(a) have been
satisfied, any Lien granted to the Collateral Trustee upon any DB Facility Collateral to secure
Priority Lien Obligations and (d) if the requirements set forth in Section 11.05(b) have been
satisfied, any Lien granted to the Collateral Trustee upon any ML Facility Collateral to secure
Priority Lien Obligations.
“Priority Lien Secured Party” means the holders of Priority Lien Obligations and any Priority
Debt Representatives.
“Purchase Money Indebtedness” means Indebtedness of the Company and its Restricted
Subsidiaries for the purpose of financing all or any part of the purchase price, or the
installation, construction or improvement, of property (including Capital Stock) or equipment.
“Rating Agencies” means (i) S&P and Moody’s or (ii) if S&P or Moody’s or both of them are not
making ratings of the Notes publicly available, a nationally recognized U.S. rating agency or
agencies, as the case may be, selected by the Company, which will be substituted for S&P or Moody’s
or both, as the case may be.
“Rating Category” means (i) with respect to S&P, any of the following categories (and any
associated “+” or “-” designation): AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent
successor categories); (ii) with respect to Moody’s, any of the following categories (and any
associated “1”, “2” or “3” designation): Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent
successor categories); and (iii) the equivalent of any such categories of S&P or Moody’s used by
another Rating Agency, if applicable.
-26-
“Record Date” for the interest payable on any applicable Interest Payment Date means with
respect to the Notes, June 15th or December 15th (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
“Related Person” of any Person means any other Person directly or indirectly owning (a) 5% or
more of the outstanding Common Stock of such Person (or, in the case of a Person that is not a
corporation, 5% or more of the equity interest in such Person) or (b) 5% or more of the combined
voting power of the Voting Stock of such Person.
“Responsible Officer” means , when used with respect to the Trustee, any officer within the
corporate trust department of the Trustee, including any vice president, assistant vice president,
assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred because of such
person’s knowledge of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.
“Restricted Investment” means an Investment other than a Permitted Investment.
“Restricted Subsidiary” of a Person means any Subsidiary of that Person that is not an
Unrestricted Subsidiary.
“Right
of First Refusal” means the exercise by the Company, or its
successor in interest, of the right to acquire the
interest of Grant, or its successor in interest, in the High Level Project pursuant to the right of first refusal option contained
in the High Level Memorandum of Agreement or similar or replacement documents related to the High
Level Project.
“S&P” means Standard & Poor’s Ratings Services.
“Secured Debt” means the Existing Credit Facility, Priority Lien Debt and Parity Lien Debt.
“Secured Debt Documents” means the Existing Credit Facility Documents, the Priority Lien
Documents and the Parity Lien Documents.
“Secured Debt Representatives” means (a) each Primary Collateral Secured Debt Representative,
(b) each IR Collateral Secured Debt Representative, (c) if the requirements set forth in Section
11.05(a) have been satisfied, the DB Facility Agent and (d) if the requirements set forth in
Section 11.05(b) have been satisfied, the ML Facility Agent
“Secured Obligations” means, collectively, (a) Existing Credit Facility Obligations, (b)
Priority Lien Obligations, (c) Parity Lien Obligations, (d) if the requirements set forth in
Section 11.05(a) have been satisfied, any Obligations of the
Company and the Guarantors under the
Deutsche Bank Facility and (e) if the requirements set forth in Section 11.05(b) have been
satisfied, any Obligations of the Company and the Guarantors under the Merrill Lynch Facility.
“Secured Parties” means the Existing Credit Facility Agent, the Existing Credit Facility
Secured Parties, Priority Lien Secured Parties and Parity Lien Secured Parties.
“Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
-27-
“Security Documents” means the Primary Collateral Security Documents, the IR Collateral
Security Documents and each security document deemed to be a “Security Document” in accordance with
Section 11.05.
“Series of IR Collateral Secured Debt” means, severally, the Existing Credit Facility, each
Series of Priority Lien Debt and each Series of Parity Lien Debt.
“Series of Parity Lien Debt” means, severally, the Notes and each other issue or series of
Parity Lien Debt for which a single transfer register is maintained.
“Series of Primary Collateral Secured Debt” means, severally, each Series of Priority Lien
Debt and each Series of Parity Lien Debt.
“Series of Priority Lien Debt” means, severally, the First Lien Notes and each other issue or
series of Priority Lien Debt for which a single transfer register is maintained.
“Series of Secured Debt” means, severally, (a) each Series of Primary Collateral Secured Debt,
(b) and each Series of IR Collateral Secured Debt, (c) if the requirements set forth in Section
11.05(a) have been satisfied, the Deutsche Bank Facility and (d) if the requirements set forth in
Section 11.05(b) have been satisfied, the Merrill Lynch Facility.
“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as
defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as
such Regulation is in effect on the date hereof.
“Stated Maturity” means, with respect to any installment of interest or principal on any
series of Indebtedness, the date on which the payment of interest or principal was scheduled to be
paid in the original documentation governing such Indebtedness, and will not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
“Subsidiary” means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or Trustees of the
corporation, association or other business entity is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general partners of
which are that Person or one or more Subsidiaries of that Person (or any combination
thereof).
“Subsidiary Guarantee” means the Guarantee of each Guarantor of the Company’s payment
obligations under this Indenture and the Notes, executed pursuant to the terms of this Indenture.
“TIA” means the Trust Indenture Act of 1939 as in effect on the date on which this Indenture
is qualified under the TIA.
-28-
“Trust Monies Account” means an account maintained with the Collateral Trustee or its agent
into which are deposited, by or on behalf of the Company, trust monies derived from releases or
dispositions of Collateral.
“Trustee” means the party named as such above until a successor replaces it in accordance with
the applicable provisions of this Indenture and thereafter means the successor serving hereunder.
“Unrestricted Subsidiary” means any Subsidiary of the Company that is designated by the Board
of Directors as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors of
the Company, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons who are not
Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity
Interests or (b) to maintain or preserve such Person’s financial condition or to cause such
Person to achieve any specified levels of operating results;
(4) has not Guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries; and
(5) has at least one director on its Board of Directors that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries and has at least one
executive officer that is not a director or executive officer of the Company or any of its
Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary will be evidenced
to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to
such designation and an Officers’ Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 hereof. If, at any time, any Unrestricted
Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be incurred as of such date
under Section 4.09 hereof, the Company will be in default of such covenant. The Board of Directors
of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation will only be permitted if (1) such Indebtedness is permitted under the covenant
described under Section 4.09 hereof, calculated on a pro forma basis as if such designation had
occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.
-29-
“U.S.” and “United States” means the United States of America, its territories and
possessions, any state of the United states, and the District of Columbia.
“U.S. Dollar” and “US$” mean United States dollars.
“$” means Canadian dollars.
“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at
the time entitled to vote in the election of the Board of Directors of such Person.
“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the
number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between such date
and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
“Wholly Owned Restricted Subsidiary” of any Person means a Restricted Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of which (other than
directors’ qualifying shares) shall at the time be owned by such Person or by one or more Wholly
Owned Restricted Subsidiaries of such Person or by such Person and one or more Wholly Owned
Restricted Subsidiaries of such Person.
Section 1.02 Other Definitions.
|
|
|
|
|
|
|
Defined in |
Term |
|
Section |
“Additional Amounts” |
|
|
4.18 |
|
“Affiliate Transaction” |
|
|
4.11 |
|
“Asset Sale Offer” |
|
|
4.10 |
|
“Asset Sale Payment” |
|
|
4.10 |
|
“Authentication Order” |
|
|
2.02 |
|
“Canadian Commissions” |
|
|
4.03 |
|
“Canadian Securities Laws” |
|
|
4.03 |
|
“Change of Control Offer |
|
|
4.15 |
|
“Change of Control Payment |
|
|
4.15 |
|
“Covenant Defeasance” |
|
|
8.03 |
|
“DTC” |
|
|
2.03 |
|
“Documentary Taxes” |
|
|
4.18 |
|
“Event of Default” |
|
|
6.01 |
|
“Excess Proceeds” |
|
|
4.10 |
|
“Excluded Holder” |
|
|
4.18 |
|
“Financial Reports” |
|
|
4.03 |
|
“First Currency” |
|
|
13.15 |
|
“incur” |
|
|
4.09 |
|
-30-
|
|
|
|
|
|
|
Defined in |
Term |
|
Section |
“judgment currency” |
|
|
13.14 |
|
“Legal Defeasance” |
|
|
8.02 |
|
“Note Register” |
|
|
2.03 |
|
“Offer Amount” |
|
|
3.09 |
|
“Offer Period” |
|
|
3.09 |
|
“Other Currency” |
|
|
13.15 |
|
“owner” |
|
|
4.18 |
|
“Paying Agent” |
|
|
2.03 |
|
“Payment Default” |
|
|
6.01 |
|
“Permitted Indebtedness” |
|
|
4.09 |
|
“Purchase Date” |
|
|
3.09 |
|
“Registrar” |
|
|
2.03 |
|
“Repurchase Offer” |
|
|
3.09 |
|
“Restricted Payments” |
|
|
4.07 |
|
“Taxes” |
|
|
4.18 |
|
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
“indenture securities” means the Notes;
“indenture security Holder” means a Holder of a Note;
“indenture to be qualified” means this Indenture;
“indenture trustee” or “institutional trustee” means the Trustee; and
“obligor” on the Notes and the Subsidiary Guarantees means the Company and the Guarantors,
respectively, and any successor obligor upon the Notes and the Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA, defined by TIA reference
to another statute or defined by Commission rule under the TIA have the meanings so assigned to
them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with
GAAP;
-31-
(c) “or” is not exclusive;
(d) words in the singular include the plural, and in the plural include the singular;
(e) provisions apply to successive events and transactions;
(f) references to sections of, or rules under, the Securities Act shall be deemed to include
substitute, replacement or successor sections or rules adopted by the Commission from time to time;
(g) unless the context otherwise requires, any reference to an “Article,” “Section” or
“clause” refers to an Article, Section or clause, as the case may be, of this Indenture; and
(h) the words “herein,” “hereof” and “hereunder” and other words of similar import, refer to
this Indenture as a whole and not any particular Article, Section, clause or other subdivision.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating; Terms.
(a) General. The Notes and the Trustee’s certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations, legends or
endorsements required by law, stock exchange rules or usage. Each Note shall be dated the date of
its authentication. The Notes shall be in denominations of US$1.00 and integral multiples thereof.
Each Note shall have an executed Guarantee from the Guarantor endorsed thereon substantially in
the form of Exhibit B hereto.
(b) Global Notes. Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the Global Note Legend and Canadian Legend thereon and
the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in
definitive form shall be substantially in the form of Exhibit A attached hereto (but
without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the
Global Note” attached thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the aggregate principal
amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal
amount of outstanding Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions or payment of PIK Interest through increases to the principal amount of the Global Note. Any endorsement of a Global Note to reflect the
amount of any increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee,
in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.
(c) Terms. The Notes will be issued in an initial aggregate principal amount of
US$596,007,180. The Company may not issue any additional Notes (other than PIK Notes) under the
Indenture.
The terms and provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Indenture and the Company and the Trustee, by their execution and delivery of
this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to
the
-32-
extent any provision of any Note conflicts with the express provisions of this Indenture, the
provisions of this Indenture shall govern and be controlling.
The Notes shall be subject to repurchase by the Company pursuant to an Asset Sale Offer as
provided in Section 4.10 hereof or a Change of Control Offer as provided in Section 4.15 hereof.
The Notes shall not be redeemable, other than as provided in Article 3.
(d) Euroclear and Clearstream Procedures Applicable. The provisions of the “Operating
Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the
“General Terms and Conditions of Clearstream” and “Customer Handbook” of Clearstream shall be
applicable to transfers of beneficial interests in the Notes that are held by Participants through
Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
Two Officers shall execute the Notes on behalf of the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office at the time a Note is
authenticated, the Note shall nevertheless be valid.
A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for
any purpose until authenticated substantially in the form of Exhibit A attached hereto by
the manual or facsimile signature of the Trustee. The signature shall be conclusive evidence that
the Note has been duly authenticated and delivered under this Indenture.
The Trustee shall, upon a Company Order (an “Authentication Order”) on the Issue Date,
authenticate and deliver the Notes. In addition, at any time, from time to time, the Trustee shall
upon an Authentication Order authenticate and deliver any PIK Notes (or increase the principal amount of the Global Note) for an aggregate principal
amount specified in such Authentication Order for such PIK Notes issued hereunder (or for such increase in the principal amount of the Global Note).
The Trustee may appoint an authenticating agent acceptable to the Company to authenticate
Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes authentication by such agent.
An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of
the Company.
Section 2.03 Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be presented for registration
of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for
payment (“Paying Agent”). The Registrar shall keep a register of the Notes (“Note Register”) and
of their transfer and exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying
Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar
without prior notice to any Holder. The Company shall notify the Trustee in writing of the name
and address of any Agent not a party to this Indenture. If the Company fails to appoint or
maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any Guarantor may
act as Paying Agent or Registrar.
-33-
The Company initially appoints The Depository Trust Company (“DTC”) to act as Depositary with
respect to the Global Notes.
The Company initially appoints the Trustee to act as the Paying Agent and Registrar for the
Notes and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by
the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will
notify the Trustee of any default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The
Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a Restricted
Subsidiary) shall have no further liability for the money. If the Company or a Restricted
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of all Holders and shall otherwise comply with TIA
Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at
least seven Business Days before each Interest Payment Date and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of the Holders of Notes and the Company shall otherwise comply
with TIA Section 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. Except as otherwise set forth in this
Section 2.06, a Global Note may be transferred in whole and not in part only to a nominee of the
Depositary, or to a successor Depositary or a nominee of such successor Depositary. A beneficial
interest in a Global Note may not be exchanged for a Definitive Note unless (i) the Depositary (x)
notifies the Company that it is unwilling or unable to continue as Depositary for such Global Note
or (y) has ceased to be a clearing agency registered under the Exchange Act, and in either case, a
successor Depositary is not appointed by the Company within 120 days, (ii) in the case of a Global
Note held for an account of Euroclear or Clearstream, Euroclear or Clearstream, as the case may be,
(A) is closed for business for a continuous period of 14 days (other than by reason of statutory or
other holidays) or (B) announces an intention permanently to cease business or does in fact do so,
(iii) the Company is required by law to exchange
Global Notes for Definitive Notes and the Company delivers a written notice to the Trustee to
such effect, (iv) there shall have occurred and be continuing an Event of Default with respect to
the Notes or (v) a request for certificates has been made upon 60 days’ prior written notice given
to the Trustee in accordance with the Depositary’s customary procedures and a copy of such notice
has been received by the Company from the Trustee. Upon the occurrence of any of the preceding
events in (i) to (v) above, Definitive Notes delivered in exchange for any Global Note or
beneficial interest therein will be registered in the names, and shall be issued in such
denominations as the Depositary (in accordance with its customary procedures) shall instruct the
Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in
Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in
-34-
lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10
hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note, except
for Definitive Notes issued subsequent to any of the preceding events in (i) to (v) above or
pursuant to Section 2.06(c) hereof. A Global Note may not be exchanged for another Note other than
as provided in this Section 2.06(a); however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b) and (c) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer
and exchange of beneficial interests in the Global Notes shall be effected through the Depositary,
in accordance with the provisions of this Indenture and the Applicable Procedures. Transfers of
beneficial interests in the Global Notes also shall require compliance with either subparagraph (i)
or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as
applicable:
(i) Transfer of Beneficial Interests in the Global Notes. Beneficial interests
in any Global Note may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described in this Section
2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes.
In connection with all transfers and exchanges of beneficial interests that are not subject
to Section 2.06(b)(i) above, the transferor of such beneficial interest must deliver to the
Registrar either (A) (1) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2) instructions given
in accordance with the Applicable Procedures containing information regarding the
Participant account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an
amount equal to the beneficial interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above. Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Notes contained in this Indenture and the Notes
or otherwise applicable under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Note(s) pursuant to Section 2.06(i) hereof.
-35-
(c) Transfer or Exchange of Beneficial Interests in Global Notes for Definitive Notes.
If any holder of a beneficial interest in a Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Definitive Note, then, upon the occurrence of any of the
preceding events in Sections 2.06(a)(i) — (v) and satisfaction of the conditions set forth in
Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the Person designated in
the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section 2.06(c) shall be registered in
such name or names and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests in Global
Notes. A Holder of a Definitive Note may exchange such Note for a beneficial interest in a
Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of
a beneficial interest in a Global Note at any time. Upon receipt of a request for such an exchange
or transfer, the Trustee shall cancel the applicable Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the Global Notes.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a
Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section
2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or surrender to the
Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized
in writing.
(f) Global Note Legend. Each Global Note shall bear a legend in substantially the
following form:
“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV)
THIS GLOBAL NOTE MAY BE TRANSFERRED
TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.”
-36-
(g) Canadian Legend. Until [that date which is four months and a day after the settlement date,] each Global Note or Definitive Note, as applicable, shall bear a
legend in substantially the following form:
“UNLESS PERMITTED UNDER APPLICABLE SECURITIES LEGISLATION IN CANADA, THE
HOLDER OF THIS NOTE MUST NOT TRADE THIS NOTE IN CANADA BEFORE [insert the
date that is 4 months and a day after the distribution date of the Notes.] ”
(h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial
interests in a particular Global Note have been exchanged for Definitive Notes or a particular
Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global
Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11
hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial
interest in another Global Note or for Definitive Notes, the principal amount of Notes represented
by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note, such other Global
Note shall be increased accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Global Notes and Definitive Notes upon the Company’s order or at the
Registrar’s request.
(ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or
to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05
hereof).
(iii) Neither the Registrar nor the Company shall be required to register the transfer of or
exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any
Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any registration of transfer or
exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to register the transfer of or to exchange
any Notes during a period beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to exchange any Note so selected for
redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to
register the transfer of or to exchange a Note between a record date and the next succeeding
Interest Payment Date.
-37-
(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any
Agent and the Company may deem and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if
any) and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or
the Company shall be affected by notice to the contrary.
(vii) Upon surrender for registration of transfer of any Security at the office or agency of
the Company designated pursuant to Section 4.02, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or transferees, one or more
replacement Notes of any authorized denomination or denominations of a like aggregate principal
amount.
(viii) At the option of the Holder, Notes may be exchanged for other Notes of any authorized
denomination or denominations of a like aggregate principal amount upon surrender of the Notes to
be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so
surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the replacement Global Notes and Definitive Notes which the Holder making the exchange is
entitled to in accordance with the provisions of Section 2.02 hereof.
(ix) All certifications, certificates and Opinions of Counsel required to be submitted to the
Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note, the Company shall issue
and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if
the Trustee’s requirements are met. If required by the Trustee or the Company, an indemnity bond
must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of
them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a
Note.
Every replacement Note is an additional obligation of the Company and shall be entitled to all
of the benefits of this Indenture equally and proportionately with all other Notes duly issued
hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the Trustee except for
those canceled by it, those delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof, and those described
in this Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to
be outstanding and interest on it ceases to accrue.
-38-
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof)
holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date,
then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease
to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of Notes have concurred in
any direction, waiver or consent, Notes owned by the Company, or by any Affiliate of the Company,
shall be considered as though not outstanding, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that
a Responsible Officer of the Trustee knows are so owned shall be so disregarded. Notes so owned
which have been pledged in good faith shall not be disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent
with respect to the Notes and that the pledgee is not the Company or any obligor upon the Notes or
any Affiliate of the Company or of such other obligor.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company may prepare and the
Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary
Notes shall be substantially in the form of certificated Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate
definitive Notes in exchange for temporary Notes.
Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to
all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this
Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and
Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and shall dispose of
cancelled Notes (subject to the record retention requirement of the Exchange Act). Certification
of the disposal of all cancelled Notes shall be delivered to the Company. The Company may not issue new Notes to replace Notes
that it has paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall pay the defaulted
interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in each case at the
rate provided in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note 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
-39-
trust for the benefit of the Persons
entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or
cause to be fixed each such special record date and payment date; provided that no such special
record date shall be less than 10 days prior to the related payment date for such defaulted
interest. The Trustee shall promptly notify the Company of such special record date. At least 15
days before the special record date, the Company (or, upon the written request of the Company, the
Trustee in the name and at the expense of the Company) shall mail or cause to be mailed,
first-class postage prepaid, to each Holder a notice at his or her address as it appears in the
Note Register that states the special record date, the related payment date and the amount of such
interest to be paid.
Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note
delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of
any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Note.
ARTICLE 3
REDEMPTION
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to paragraph 5 of the Notes, it shall furnish
to the Trustee, at least 30 days but not more than 60 days before a redemption date, an Officers’
Certificate setting forth (i) the paragraph or subparagraph of such Note pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of the Notes to be
redeemed and (iv) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any
time, the Trustee shall select the Notes to be redeemed or purchased among the Holders of the Notes
in compliance with the requirements of the principal national securities exchange, if any, on which
the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or by such other
method the Trustee considers fair and appropriate. In the event of partial redemption by lot, the
particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than
30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not
previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes selected for redemption
and, in the case of any Note selected for partial redemption, the principal amount thereof to be
redeemed. Notes and portions of Notes selected shall be in amounts of US$1.00 or whole multiples
of US$1.00; no Notes of US$1.00 or less can be redeemed in part, except that if all of the Notes of
a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if
not a multiple of US$1.00, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption.
Section 3.03 Notice of Redemption.
Subject to Section 3.09 hereof, the Company shall mail or cause to be mailed by first class
mail notices of redemption at least 30 days but not more than 60 days before the redemption date to
each Holder of Notes to be redeemed at its registered address, except that redemption notices may
be
-40-
mailed more than 60 days prior to a redemption date if the notice is issued in connection with
Article 8 or Article 11 hereof. Notices of redemption may not be conditional.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is to be redeemed in part only, the portion of the principal amount of that
Note that is to be redeemed and that, after the redemption date upon surrender of such Note, a new
Note or Notes in principal amount equal to the unredeemed portion of the original Note representing
the same indebtedness to the extent not redeemed will be issued in the name of the Holder of the
Notes upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the
redemption price;
(f) that, unless the Company defaults in making such redemption payment, interest on Notes
called for redemption ceases to accrue on and after the redemption date;
(g) the paragraph or subparagraph of the Notes pursuant to which the Notes called for
redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of the CUSIP number, if
any, listed in such notice or printed on the Notes.
At the Company’s request, the Trustee shall give the notice of redemption in the Company’s
name and at its expense; provided that the Company shall have delivered to the Trustee, at least 35
days prior to the redemption date, an Officers’ Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided in the preceding
paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the redemption price.
Subject to Section 3.05 hereof, on and after the redemption date, interest ceases to accrue on
Notes or portions of Notes called for redemption.
Section 3.05 Deposit of Redemption Price.
One Business Day prior to the redemption date, the Company shall deposit with the Trustee or
with the Paying Agent money sufficient to pay the redemption price of and accrued and unpaid
interest on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly
return to the Company any money deposited with the Trustee or the Paying Agent by the Company in
excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on,
all Notes to be redeemed.
-41-
If the Company complies with the provisions of the preceding paragraph, on and after the
redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for
redemption. If a Note is redeemed on or after a Record Date but on or prior to the related
Interest Payment Date, then any accrued and unpaid interest shall be paid to the Person in whose
name such Note was registered at the close of business on such Record Date. If any Note called for
redemption shall not be so paid upon surrender for redemption because of the failure of the Company
to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption date until such principal is paid, and to the extent lawful on any interest accrued to
the redemption date not paid on such unpaid principal, in each case at the rate provided in the
Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall issue and, upon the
Company’s written request, the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the Note surrendered
representing the same indebtedness to the extent not redeemed; provided that each new Note will be
in a principal amount of US$1.00 or an integral multiple of US$1.00.
Section 3.07 Reserved.
Section 3.08 Mandatory Redemption.
The Company shall not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
Section 3.09 Offers to Repurchase.
(a) In the event that, pursuant to Section 4.10 or 4.15 hereof, the Company shall be required
to commence an Asset Sale Offer or a Change of Control Offer, as the case may be, (each, a
“Repurchase Offer”), it shall follow the procedures specified below.
(b) The Repurchase Offer shall remain open for a period of 20 Business Days following its
commencement and no longer, except to the extent that a longer period is required by applicable law
(the “Offer Period”). No later than five Business Days after the termination of the Offer Period
(the “Purchase Date”), the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 or 4.15, as applicable, (the “Offer Amount”) or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Repurchase Offer.
Payment for any Notes so purchased shall be made in the same manner as interest payments are made.
(c) If the Purchase Date is on or after a Record Date and on or before the related Interest
Payment Date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Repurchase Offer.
(d) Upon the commencement of a Repurchase Offer, the Company shall send, by first class mail,
a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all
instructions and materials necessary to enable such Holders to tender Notes pursuant to the
Repurchase Offer. The Repurchase Offer shall be made to all Holders. The notice, which shall
govern the terms of the Repurchase Offer, shall state:
-42-
(i) that the Repurchase Offer is being made pursuant to this Section 3.09 and Section
4.10 or 4.15, as applicable, the length of time the Repurchase Offer shall remain open and
that all Notes properly tendered will be accepted for payment. If the Repurchase Offer is a
Change of Control Offer made pursuant to Section 4.15 such notice shall describe the
transaction or transactions that constitute the Change of Control;
(ii) the Offer Amount, the Asset Sale Payment or Change of Control Payment, as
applicable, and the Purchase Date;
(iii) that any Note not tendered or accepted for payment shall continue to accrue
interest;
(iv) that, unless the Company defaults in making such payment, any Note accepted for
payment pursuant to the Repurchase Offer shall cease to accrue interest after the Purchase
Date;
(v) that Holders electing to have a Note purchased pursuant to a Repurchase Offer may
elect to have Notes purchased in integral multiples of US$1.00 only;
(vi) that Holders electing to have a Note purchased pursuant to any Repurchase Offer
shall be required to surrender the Note, with the form entitled “Option of Holder to Elect
Purchase” on the reverse of the Note completed, or transfer by book-entry transfer, to the
Company, a depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(vii) that Holders shall be entitled to withdraw their election if the Company, the
depositary or the Paying Agent, as the case may be, receives, not later than the expiration
of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note purchased;
(viii) that, if the aggregate principal amount of Notes surrendered by Holders exceeds
the Offer Amount required pursuant to Section 4.10, the Company shall select the Notes to be
purchased pursuant to Section 3.02 (with such adjustments as may be deemed appropriate by
the Company so that only Notes in denominations of US$1.00, or integral multiples thereof,
shall be purchased); and
(ix) that Holders whose Notes were purchased only in part shall be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer) representing the same indebtedness to the extent not
repurchased.
(e) On or before the Purchase Date, the Company shall, to the extent lawful, (1) accept for
payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof
tendered pursuant to the Repurchase Offer, or if less than the Offer Amount has been tendered, all
Notes tendered, (2) deposit with the Paying Agent an amount equal to the Offer Amount plus premium,
if any, and any accrued and unpaid interest in respect of all Notes, or portions thereof, properly
tendered, and (3) deliver or cause to be delivered to the Trustee the Notes properly accepted
together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions
of Notes being purchased by the Company in accordance with the terms of this Section 3.09.
-43-
(f) The Company, the Depositary or the Paying Agent, as the case may be, shall promptly (but
in any case not later than five days after the Purchase Date) mail or deliver to each tendering
Holder an amount equal to the purchase price of the Notes properly tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the
Trustee, upon written request from the Company shall authenticate and mail or deliver (or cause to
be transferred by book entry) such new Note to such Holder in a principal amount equal to any
unpurchased portion of the Note surrendered representing the same indebtedness to the extent not
repurchased. Any Note not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce the results of the Repurchase Offer on or as
soon as practicable after the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase pursuant to this
Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium, if any, and interest on
the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if other than the Company, a
Subsidiary or an Affiliate thereof, holds as of 2:00 p.m. Eastern Time on the due date money
deposited by the Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. PIK Interest shall be considered paid on
the date due if the Trustee is directed on or prior to such date to issue PIK Notes or to increase
the principal amount of the applicable Notes in an amount equal to the amount of the PIK Interest.
The Company shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then
applicable interest rate on the Notes to the extent lawful; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest (without regard to any applicable grace period) at the same rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan in the City of New York an office or
agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the 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.
The Company may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan
in the City of
-44-
New York for such purposes. The Company shall 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.
The Company and the Guarantors, each hereby designate the Corporate Trust Office of the
Trustee as one such office or agency of the Company and such Guarantors, as the case may be, in
accordance with Section 2.03 hereof.
Section 4.03 Reports to Holders.
So long as any Notes are outstanding:
(a) if the Company is subject to the reporting requirements under the securities laws of
Canada or any province thereof (“Canadian Securities Laws”) and is required to file information
with one or more securities commissions in Canada (the ''Canadian Commissions’’), the Company will
furnish to the Trustee (and the Holders of the Notes and beneficial owners of the Notes, to the
extent not otherwise available on the Canadian System for Electronic Document Analysis and
Retrieval, or SEDAR), within 15 days after the due date prescribed by the Canadian Securities Laws:
(i) all quarterly and annual financial information and reports that the Company is
required to file with the Canadian Commissions under applicable Canadian Securities Laws;
and
(ii) all material change reports that the Company is required to file with the Canadian
Commissions under applicable Canadian Securities Laws; and
will hold a quarterly conference call to discuss the quarterly and annual information in the
foregoing reports no later than five business days from the release thereof; and
(b) if the Company is not subject to the reporting requirements under Canadian Securities
Laws or is otherwise not required to file information with the Canadian Commissions, the Company
will (i) furnish to the Trustee, the Holders, and, upon request, to beneficial owners of the Notes
a copy of all of the financial information and reports referred to in subclauses (i) and (ii) of
clause (a) above (the “Financial Reports”) within 15 days after the date such information and
reports would be due if the Company was subject to the reporting requirements under Canadian
Securities Laws; (ii) hold a quarterly conference call to discuss the quarterly and annual
information contained in the Financial Reports no later than five Business Days from the time the
Company furnishes such information to the Trustee; (iii) no fewer than three Business Days prior to
the date of the conference call required to be held in accordance with clause (ii) above, issue a
press release to the appropriate wire services for broad dissemination in the United States and
Canada announcing the time and date of such conference call and directing the beneficial owners of
the Notes, prospective investors and securities analysts to contact the investor relations office
of the Company to obtain the Financial Reports and information on how to access such conference
call; and (iv) either (x) maintain an unrestricted public website on which the Financial Reports
and conference call access details are posted; (y) maintain a non-public website to which
beneficial owners of the Notes, prospective investors and securities analysts are given access and
to which the Financial Reports and conference call access details are posted or (z) distribute via
electronic mail such Financial Reports and conference call details to beneficial owners of the
Notes, prospective investors and securities analysts who request to receive such distributions.
(c) The Company will use its commercially reasonable efforts to remain a reporting
issuer, within the meaning of Canadian Securities Laws, in good standing in a
jurisdiction of Canada until at least December 31, 2010.
-45-
(d) For so long as any Notes remain outstanding, the Company will furnish to Holders of the
Notes and to prospective investors, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
Section 4.04 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year
ending after the Issue Date, a certificate from the principal executive officer, principal
financial officer or principal accounting officer stating that a review of the activities of the
Company and its Restricted Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and further stating, as to
each such Officer signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every condition and covenant contained in this
Indenture and is not in default in the performance or observance of any of the terms, provisions,
covenants and conditions of this Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she may have knowledge
and what action the Company is taking or proposes to take with respect thereto).
(b) When any Default or Event of Default has occurred and is continuing under this Indenture,
or if the Trustee or the holder of any other evidence of Indebtedness of the Company or any
Subsidiary gives any notice or takes any other action with respect to a claimed Default or Event of
Default, the Company shall as soon as practicable (and, in any event, within 10 days after the
Company’s knowledge thereof) deliver to the Trustee by registered or certified mail or by facsimile
transmission an Officers’ Certificate specifying such event and what action the Company proposes to
take with respect thereto.
Section 4.05 Taxes.
The Company shall pay, and shall cause each of its Restricted Subsidiaries to pay, prior to
delinquency, all material taxes, assessments, and governmental levies except such as are contested
in good faith and by appropriate negotiations or proceedings or where the failure to effect such
payment is not adverse in any material respect to the Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it shall not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any
stay, extension or usury law wherever enacted, now or at any time hereafter in force, that 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 shall not, by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
Section 4.07 Restricted Payments.
(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly:
(i) declare or pay any dividend or make any other payment or distribution on account of
the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without
-46-
limitation, any payment in connection with any merger, amalgamation or consolidation
involving the Company or any of its Restricted Subsidiaries) or to the direct or indirect
holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity Interests (other
than Disqualified Stock) of the Company or to the Company or a Restricted Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value (including, without
limitation, in connection with any merger, amalgamation or consolidation involving the
Company) any Equity Interests of the Company or any direct or indirect parent of the
Company;
(iii)
make any payment on or with respect to, or purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness that is subordinated to the Notes or the
Subsidiary Guarantees, except a payment of interest or principal at the Stated Maturity
thereof or any payment on Indebtedness permitted under Section 4.09(b)(7) hereof;
(iv)
make any payment on or with respect to principal, or purchase, redeem, defease or otherwise
acquire or retire for value the Company’s Senior Unsecured Floating Rate Notes due October
1, 2010, 7.25% Senior Unsecured Notes due October 1, 2012, Senior Unsecured Floating Rate
Notes due April 1, 2013 or either class of 6.75% Senior
Unsecured Notes due March 15, 2014 except through the incurrence of Permitted Refinancing
Indebtedness permitted under Section 4.09(b)(6) hereof, provided that the Company may
purchase, redeem, defease or otherwise acquire or retire for value up to US$5.0 million
aggregate principal amount of such securities with cash or Cash Equivalents; or
(v) make any Restricted Investment (all such payments and other actions set forth in
these clauses (i) through (v) above being collectively referred to as “Restricted
Payments”),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a
consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro
forma effect thereto as if such Restricted Payment had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to Section 4.09(a) hereof;
(3) such Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Company and its Restricted Subsidiaries after March 1, 2008 (excluding
Restricted Payments permitted by clauses (2), (3), (5), (6) and (7)(ii) of Section 4.07(b)
hereof), is less than the sum, without duplication, of:
(i) 50% of the Consolidated Net Income of the Company for the period (taken as
one accounting period) beginning on March 1, 2008 to the end of the Company’s most
recently ended fiscal quarter for which internal financial statements are available
at the time of such Restricted Payment (or, if such Consolidated Net Income for such
period is a deficit, less 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds received by the Company since
March 1, 2008 as a contribution to its common equity capital or from the issue or
sale of
-47-
Equity Interests of the Company (other than Disqualified Stock) or from the
issue or sale of convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been converted into or
exchanged for such Equity Interests (other than Equity Interests (or Disqualified
Stock or debt securities) sold to a Subsidiary of the Company), plus
(iii) to the extent that any Restricted Investment that was made after March 1,
2008 is sold for cash or otherwise liquidated or repaid for cash or, in the case of
a Restricted Investment that is a Guarantee, released, the lesser of (A) the cash
return of capital with respect to such Restricted Investment (less the cost of
disposition, if any) and (B) the initial amount of such Restricted Investment, less,
in the case of a Guarantee, any amounts paid under such Guarantee, plus
(iv) to the extent that any Unrestricted Subsidiary of the Company is
redesignated as a Restricted Subsidiary after March 1, 2008, the lesser of (A) the
fair market value of the Company’s Investment in such Subsidiary as of the date of
such redesignation and (B) such fair market value as of the date on which such
Subsidiary was originally designated as an Unrestricted Subsidiary, and
(4) the amount of such Restricted Payment (excluding Restricted Payments permitted by
Sections 4.07(b)(2), (3), (5), (6) and (7)(ii)) together with all prior Restricted Payments
after the Issue Date, is not greater than $20 million.
(b) So long as no Default has occurred and is continuing or would be caused thereby, Section
4.07(a) hereof will not prohibit:
(1) the payment of any dividend within 60 days after the date of declaration of the
dividend, if at the date of declaration the dividend payment would have complied with the
provisions of this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any
subordinated Indebtedness of the Company or any Restricted Subsidiary or of any Equity
Interests of the Company in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary of the Company) of,
Equity Interests of the Company (other than Disqualified Stock); provided that the amount of
any such net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition will be excluded from clause (3)(ii) of Section
4.07(a) hereof;
(3) the defeasance, redemption, repurchase or other acquisition of subordinated
Indebtedness of the Company or any Restricted Subsidiary with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of the Company that is not a
Wholly Owned Restricted Subsidiary to the holders of its Equity Interests on a pro rata
basis;
(5) an Investment by the Company that increases the ownership interest of the Company
in the High Level Project out of the net cash proceeds of the substantially concurrent sale
(other than from or to a Subsidiary or from or to an employee stock ownership plan financed
by loans from the Company or a Subsidiary of the Company) of Equity Interests (other than
Dis-
-48-
qualified Stock) of the Company; provided that the amount of any such net cash proceeds
that are utilized for any such Investment will be excluded from clause (3)(ii) of Section
4.07(a) hereof;
(6) cashless repurchases of Equity Interests deemed to occur upon the exercise of stock
options; and
(7) payments of (i) dividends on, and (ii) the repurchase, redemption or acquisition at
the scheduled maturity, scheduled repayment or scheduled sinking fund date of, Disqualified
Stock, the incurrence of which was permitted by this Indenture.
(c) The amount of all Restricted Payments (other than cash) will be the fair market value on
the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or
issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. The fair market value of any assets or securities that are required to be valued by this
covenant will be determined by the Board of Directors whose resolution with respect thereto will be
delivered to the Trustee. The Board of Directors’ determination must be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of national standing in
Canada or the United States if the fair market value exceeds US$10.0 million. Not later than the
date of making any Restricted Payment, other than a Restricted Payment under clauses (2), (3), (4)
and (6) of Section 4.07(b) hereof, which, together with any Restricted Payments not previously
reported pursuant to this sentence, exceeds US$2.0 million, the Company will deliver to the Trustee
an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the
basis upon which the calculations required by this Section 4.07 were computed, together with a copy
of any fairness opinion or appraisal required by this Indenture.
|
|
|
Section 4.08 |
|
Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. |
(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, create or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock to the Company
or any of its Restricted Subsidiaries, or with respect to any other interest or
participation in, or measured by, its profits, or pay any indebtedness owed to the Company
or any of its Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its Restricted Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any of its Restricted
Subsidiaries.
(b) Notwithstanding the foregoing, Section 4.08(a) will not apply to encumbrances or
restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit Facilities (provided that,
with respect to Credit Facilities, such encumbrances and restrictions are not materially
more restrictive, taken as a whole, than customary provisions in comparable financings) and
any amendments, modifications, restatements, renewals, increases, supplements, refundings,
replacements or
refinancings of those agreements, provided that the amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or refinancings of
such instrument are
-49-
no more restrictive, taken as a whole, with respect to such dividend and
other payment restrictions than those contained in such agreement on the Issue Date or in
such Credit Facilities;
(2) the Note Documents or any other instrument governing debt securities of the Company
incurred in compliance with Section 4.09 hereof that are no more restrictive, taken as a
whole, than those contained in the Note Documents;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness was incurred or such Capital Stock was issued in
connection with or in contemplation of such acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person, other than the
Person, or the property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred;
(5) customary non-assignment provisions in leases entered into in the ordinary course
of business;
(6) purchase money obligations and Capital Lease Obligations for property acquired in
the ordinary course of business that impose restrictions on that property of the nature
described in Section 4.08(a)(3) hereof;
(7) any agreement for the sale or other disposition of Capital Stock or assets of a
Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending its
sale or other disposition;
(8) Permitted Refinancing Indebtedness, provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are no more restrictive, taken
as a whole, than those contained in the agreements governing the Indebtedness being
refinanced;
(9) Liens securing Indebtedness otherwise permitted to be incurred under Section 4.12
hereof that limit the right of the debtor to dispose of the assets subject to such Liens;
(10) restrictions on cash or other deposits imposed by customers under contracts
entered into in the ordinary course of business;
(11) restrictions contained in agreements between Grant and the Company or a Restricted
Subsidiary with respect to the High Level Project, as extended, amended, restated, modified
or replaced from time to time on terms that are no more restrictive, taken as a whole, than
those contained in such agreements as of the Issue Date; and
(12) provisions with respect to the disposition or distribution of assets or property
in Permitted Joint Venture agreements.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly
-50-
liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness
(including Acquired Indebtedness), and the Company will not issue any Disqualified Stock and will
not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that the Company or any Guarantor may incur Indebtedness (including Acquired Indebtedness)
(provided, that if such Indebtedness is secured by a Lien on the Collateral, such Lien ranks junior
in priority to the Lien securing the Notes), or the Company may issue Disqualified Stock and any
Guarantor may issue shares of preferred stock, if the Fixed Charge Coverage Ratio for the Company’s
most recently ended four full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock or preferred stock is issued would have been at least 2.0 to 1, determined on a
pro forma basis (including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or the Disqualified Stock or preferred stock had been
issued, as the case may be, at the beginning of such four-quarter period.
(b) Notwithstanding the foregoing, Section 4.09(a) hereof will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) the incurrence by the Company or any of the Guarantors of Indebtedness and letters
of credit under Credit Facilities, in an aggregate principal amount at any one time
outstanding under this clause (1) (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and the Guarantors
thereunder) not to exceed the greater of:
(i) $50.0 million less the aggregate amount of all Net Proceeds of Asset Sales
(other than with respect to Assets Held for Sale) applied by the Company or any of
its Restricted Subsidiaries since the Issue Date to repay term Indebtedness under a
Credit Facility or to repay revolving credit Indebtedness and effect a corresponding
commitment reduction under a Credit Facility, in each case, pursuant to Section 4.10
hereof; or
(ii) the amount of the Borrowing Base as of the date of such incurrence;
(2) the incurrence by the Company or any of the Guarantors of Priority Lien Debt,
including the First Lien Notes, in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause
(2), not to exceed US$75.0 million at any one time outstanding;
(3) the incurrence by the Company and its Restricted Subsidiaries of Existing
Indebtedness;
(4) the incurrence by the Company or any of the Guarantors of the Notes, the PIK Notes
and any related Subsidiary Guarantees;
(5) the incurrence by the Company or any Restricted Subsidiary of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money obligations,
in each case, incurred for the purpose of financing all or any part of the purchase price
or cost of construction or improvement of property, plant or equipment used in the business
of the Company or such Restricted Subsidiary, in an aggregate principal amount, including
all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (5), not to exceed, at any time outstanding,
the greater of (i) US$10.0 million and (ii) 2% of the Consolidated Net Tangible Assets of
the Company;
-51-
(6) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund,
refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted
by this Indenture to be incurred under clause (a) of Section 4.09 hereof or clause (2), (3),
(4), or (14) of this Section 4.09(b);
(7) the incurrence by the Company of Indebtedness to, or the issuance of Disqualified
Stock to, any Wholly Owned Restricted Subsidiary of the Company or the incurrence by any
Restricted Subsidiary of the Company of Indebtedness to, or the issuance of preferred stock
to, the Company or any Wholly Owned Restricted Subsidiary of the Company; provided, however,
that:
(i) such Indebtedness owing by the Company or a Guarantor to a Wholly Owned
Restricted Subsidiary of the Company must be expressly subordinated to the prior
payment in full in cash of all Obligations with respect to the Notes, in the case of
the Company, or the Subsidiary Guarantee, in the case of a Guarantor; and
(ii) (A) any subsequent issuance or transfer of Equity Interests that results
in any such Indebtedness, Disqualified Stock or preferred stock being held by a
Person other than the Company or a Wholly Owned Restricted Subsidiary of the Company
and (B) any sale or other transfer of any such Indebtedness, Disqualified Stock or
preferred stock to a Person that is not either the Company or a Wholly Owned
Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an
incurrence of such Indebtedness or issuance of Disqualified Stock or preferred stock
by the Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging
Obligations in the ordinary course of business and not for speculative purposes;
(9) the guarantee by the Company or any of the Guarantors of Indebtedness of the
Company or a Guarantor of the Company that was permitted to be incurred by another provision
of this Section 4.09;
(10) the accrual of interest, the accretion or amortization of original issue discount,
the payment of interest on any Indebtedness in the form of additional Indebtedness with the
same terms, and the payment of dividends on Disqualified Stock or preferred stock in the
form of additional shares of the same class of Disqualified Stock or preferred stock will
not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or
preferred stock for purposes of this Section 4.09; provided, in each such case, that the
amount thereof is included in the Fixed Charges of the Company as accrued;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness in respect of statutory obligations, bid, performance, surety and appeal bonds
and trade and standby letters of credit, in each case entered into in the ordinary course of business
and consistent with past practice;
(12) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees,
indemnities or obligations in respect of purchase price adjustments in connection with the
acquisition or disposition of assets, including, without limitation, Equity Interests, in
accordance with the provisions of this Indenture;
-52-
(13) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness to fund a purchase by the Company or a Restricted Subsidiary of Grant’s
interest in the High Level Project pursuant to a Right of First Refusal initiated by Grant
or the Buy/Sell Option; provided that (i) (x) the Company or such Restricted Subsidiary has
accepted an offer from any Person, other than the Company or a Restricted Subsidiary, to
purchase the interest in the High Level Project that is acquired from Grant at a concurrent
closing for an amount not less than the purchase price payable to Grant; and (y) such
Indebtedness is repaid in full at such concurrent closing from the transfer of the interest
in the High Level Project purchased from Grant at such closing; or (ii) there shall not have
been a decrease in the rating of the Notes by any Rating Agency by one or more Rating
Categories that occurs within 90 days (which period shall be extended so long as the rating
of the Notes is under publicly announced consideration for a possible downgrade by any
Rating Agency) after the date of the later of (A) notice to the public or the Rating
Agencies of the intention of the Company or any of its Restricted Subsidiaries to incur
Indebtedness to fund such a purchase or (B) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness to fund such a purchase and, in any event, the Notes
shall not have a rating below CCC+ by S&P or equivalent rating by any other Rating Agency;
and
(14) the incurrence by the Company or any of its Restricted Subsidiaries of additional
Indebtedness (provided that if such Indebtedness is secured by a Lien on Collateral, such
Lien ranks junior in priority to the Lien securing the Notes) in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (14), not to exceed US$50.0 million.
(c) The Company will not, and will not permit any Guarantor to, incur any Indebtedness
(including Permitted Indebtedness) that is contractually subordinated in right of payment to any
other Indebtedness of the Company or such Guarantor unless such Indebtedness is also contractually
subordinated in right of payment to the Notes or the applicable Subsidiary Guarantee on
substantially identical terms; provided, however, that Indebtedness of the Company or a Guarantor
will not be deemed to be contractually subordinated in right of payment to any other Indebtedness
of the Company or such Guarantor solely by virtue of being unsecured.
(d) For purposes of determining compliance with this Section 4.09, in the event that an item
of proposed Indebtedness meets the criteria of more than one of the categories of Permitted
Indebtedness described in clauses (1) through (14) of Section 4.09(b) hereof, or is entitled to be
incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of
Indebtedness or later reclassify all or a portion of such item of Indebtedness in any manner that
complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on
which Notes are first issued and authenticated under this Indenture will be deemed to have been
incurred pursuant to the category of Permitted Indebtedness described in Section 4.09(b)(1) hereof.
(e) The
Company may not incur Priority Lien Debt, other than up to
US$50 million of First Lien Notes issued on
the Issue Date, and may not incur Indebtedness under Section 4.09(b)(14) until such time as the
requirements set forth in Section 4.24 hereto have been met; provided that the Company may issue up
to US$25 million of additional First Lien Notes if (i) it deposits the gross proceeds into an escrow
account upon the terms set forth in the indenture relating to the
First Lien Notes and (ii) the issue of such additional First
lien Notes is permitted under Section 4.09(b)(2).
-53-
Section 4.10 Asset Sales.
(a) The Company will not, and will not permit any of its Restricted Subsidiaries to,
consummate an Asset Sale, except that the Company may make and may permit a Restricted Subsidiary
to make a Permitted Asset Sale, provided that:
(1) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of the Asset Sale at least equal to the fair market value of the
assets sold or otherwise disposed of; and
(2) all of the consideration received in the Permitted Asset Sale by the Company or
such Restricted Subsidiary is in the form of (A) cash, or (B) Cash Equivalents.
(b) Within 360 days after the receipt of any Net Proceeds from a Permitted Asset Sale, the
Company or such Restricted Subsidiary may apply those Net Proceeds at its option:
(1)
to repay Indebtedness or cash collateralize letters of credit under the Existing Credit Facility or any other Credit
Facility, as required by the Existing Credit Facility or such other Credit Facility;
(2) to repay Priority Lien Obligations or Parity Lien Obligations;
(3) to acquire all or substantially all of the assets of, or a majority of the Voting
Stock of, a Person engaged in a Permitted Business that will become on the date of
acquisition a Guarantor;
(4) to make a capital expenditure; or
(5) to acquire other long-term assets that are used or useful in a Permitted Business.
Pending the final application of any such Net Proceeds, the Company or such Restricted
Subsidiary may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds
in any manner that is not prohibited by this Indenture. In the case of clauses (1) and (2) of this
paragraph (b), the Collateral Trustee’s Liens in the applicable Collateral will be released in
accordance with the provisions of the Collateral Trust Agreement in accordance with Section 11.05.
(c) Within 360 days after the receipt of any Net Proceeds from a Loss Event, the Company or
the applicable Restricted Subsidiary may apply any Net Proceeds, at its option:
(1) to repay Indebtedness under the Existing Credit Facility or any other Credit
Facility or Existing Indebtedness, as required by the Existing Credit Facility or such other
Credit Facility or Existing Indebtedness (in which case, the Collateral Trustee’s Liens in
the applicable Collateral will be released in accordance with the provisions of the Collateral Trust
Agreement in accordance with Section 11.05);
(2) to acquire all or substantially all of the assets of, or a majority of the Voting
Stock of, a Person engaged in a Permitted Business that will become on the date of
acquisition a Guarantor;
(3) to make a capital expenditure; or
-54-
(4) to acquire other long-term assets that are used or useful in a Permitted Business.
Pending
the final application of any such Net Proceeds, the Company or such Restricted
Subsidiary may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds
in any manner that is not prohibited by this Indenture.
(d) Any Net Proceeds from a Permitted Asset Sale described in Section 4.10(b) hereof that are
not applied or invested as provided herein, will constitute “Excess Proceeds”.
(1)
The Company may use Excess Proceeds to make at any time, and when the aggregate
amount of Excess Proceeds exceeds US$10.0 million the Company will make an offer to purchase
(an “Asset Sale Offer”) to all holders of First Lien Notes and all holders of other Priority
Lien Obligations containing provisions similar to those set forth in
this Indenture with
respect to offers to purchase or redeem such indebtedness with the proceeds of sales of
Collateral.
(2)
To the extent, after the application of Trust Monies pursuant to the preceding
sentence, there are additional Excess Proceeds, the Company may use Excess Proceeds to make
at any time, and when the aggregate amount of Excess Proceeds exceeds US$10.0 million the
Company will make an Asset Sale Offer to all Holders of Notes and all holders of other
Parity Lien Obligations containing provisions similar to those set
forth in this Indenture
with respect to offers to purchase or redeem such indebtedness with the proceeds of sales of
Collateral.
(e) The offer price in any Asset Sale Offer will be equal to 100% of the principal amount plus
accrued and unpaid interest to the date of purchase, and will be payable in cash. If the aggregate
principal amount of First Lien Notes and all holders of other Priority Lien Obligations, in the
case of Clause (1), above, or Notes and other Parity Lien Obligations in the case of Clause (2)
above, tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will
select the First Lien Notes and other Priority Lien Obligations, or Notes and such other Parity
Lien Obligations, as applicable, to be purchased on a pro rata basis based on the principal amount
of First Lien Notes and other Priority Lien Obligations, or Notes and other Parity Lien Debt, as
applicable, tendered. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will
be reset at zero.
(f) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent those laws and regulations are
applicable in connection with each repurchase of First Lien Notes and Notes pursuant to an Asset
Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with
Sections 3.09 or 4.10 hereof, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations hereunder by virtue of such
conflict.
Section 4.11 Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, make any
payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate
(each, an “Affiliate Transaction”), unless:
(1) the Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that could have been obtained in a comparable
transaction by the Company or such Restricted Subsidiary with an unrelated Person; and
-55-
(2) the Company delivers to the Trustee:
(i) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of US$5.0 million, a
resolution of the Board of Directors set forth in an Officers’ Certificate
certifying that such Affiliate Transaction complies with this Section 4.11 and that
such Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors; and
(ii) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of US$15.0 million, an
opinion issued by an accounting, appraisal or investment banking firm of national
standing in Canada or the United States stating that such Affiliate Transaction is
on terms that are no less favorable to the Company or the relevant Restricted
Subsidiary than those that could have been obtained in a comparable transaction by
the Company or such Restricted Subsidiary with an unrelated person.
(b) The following items will not be deemed to be Affiliate Transactions and, therefore, will
not be subject to the provisions of Section 4.11(a) hereof:
(1) compensation, employment or indemnification agreements or arrangements (including
stock options) entered into by the Company or any of its Restricted Subsidiaries in the
ordinary course of business of the Company or such Restricted Subsidiary;
(2) transactions between or among the Company and/or its Restricted Subsidiaries;
provided that any transaction with a Restricted Subsidiary that is not a Wholly Owned
Restricted Subsidiary shall be in the ordinary course of business and on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary than those that could
have been obtained in a comparable transaction by the Company or such Restricted Subsidiary
with an unrelated Person;
(3) payment of reasonable directors fees to Persons who are not otherwise Affiliates of
the Company;
(4) sales of Equity Interests (other than Disqualified Stock) to Affiliates of the
Company;
(5) Permitted Investments or Restricted Payments that are permitted by Section 4.07
hereof;
(6) the pledge of Equity Interests of Unrestricted Subsidiaries to support the
Indebtedness thereof;
(7) transactions undertaken pursuant to contractual obligations in existence on the
Issue Date and disclosed in the Offering Memorandum, as extended, renewed, amended,
restated, modified or replaced from time to time on terms no less favorable, taken as a
whole, to the Company or the relevant Restricted Subsidiary than such contractual
obligations in existence on the Issue Date;
(8) transactions between or among the Company and/or its Restricted Subsidiaries and
Grant relating to the High Level Project in the ordinary course of business of the Company
or any such Restricted Subsidiary and on terms that are no less favorable to the Company or
the
-56-
relevant Restricted Subsidiary than those that could have been obtained in a comparable
transaction by the Company or such Restricted Subsidiary with an unrelated Person;
(9) any purchase or sale by the Company made pursuant to the Buy/Sell Option or the
Right of First Refusal; and
(10) transactions between or among the Company and/or its Restricted Subsidiaries and a
Permitted Joint Venture on terms that are no less favorable to the Company or the relevant
Restricted Subsidiary than those that could have been obtained in a comparable transaction
by the Company or such Restricted Subsidiary with an unrelated Person.
Section 4.12 Liens.
The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume or suffer to exist any Lien of any kind securing Indebtedness or
Attributable Debt on any property or assets owned on the Issue Date or after the Issue Date, other
than Permitted Liens.
Section 4.13 Payments for Consent.
The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, pay or cause to be paid any consideration, to or for the benefit of any Holder of Notes
for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of
this Indenture or the Notes unless such consideration is offered to be paid to all Holders of the
Notes and is paid to all Holders of the Notes that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver or agreement.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to time) of the Company
or any such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses and
franchises of the Company and its Restricted Subsidiaries; provided that the Company shall not be
required to preserve any such right, license or franchise, or the corporate, partnership or other
existence of any of its Restricted Subsidiaries, if the Company in good faith shall determine that
the preservation thereof is no longer desirable in the conduct of the business of the Company and
its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Notes.
Section 4.15 Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall make an offer (a “Change of
Control Offer”) to each Holder to repurchase all or any part (equal to US$1.00 or an integral
multiple thereof) of each Holder’s Notes at a purchase price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest thereon, to the date of repurchase (the
“Change of Control Payment”) subject to the rights of Holders on a record date to receive interest
due on the relevant interest payment date; provided that the Company will not be obligated to make
an offer or repurchase Notes in the event that it has given notice of its exercise of its rights to
redeem all of the Notes as described above in Article 3 hereof.
-57-
(b) Within 10 days following a Change of Control, the Company will mail a notice to each
Holder describing the transaction or transactions that constitute the Change of Control and
offering to repurchase Notes on a date specified in the notice, which date will be no earlier than
30 days and no later than 60 days from the date the notice is mailed, pursuant to the procedures
required by Section 3.09 hereof and described in the notice. Any Change of Control Offer shall be
made in accordance with Section 3.09 hereof. The Company shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the repurchase of Notes as a
result of a Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with Sections 3.09 or 4.15 of this Indenture, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have breached its obligations
hereunder by virtue of such conflict.
(c) Notwithstanding anything to the contrary in this Section 4.15, the Company shall not be
required to make a Change of Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.15 and Section 3.09 hereof and all other provisions of
this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes
properly tendered and not withdrawn under the Change of Control Offer.
Section 4.16 Additional Subsidiary Guarantees.
If (i) the Company or any of its Restricted Subsidiaries acquires or creates a North American
Restricted Subsidiary, other than a Non-Guarantor Restricted Subsidiary, after the Issue Date or
(ii) the aggregate amount of assets held by all Non-Guarantor Restricted Subsidiaries exceeds
US$3.0 million, then that newly acquired or created Subsidiary, in the case of clause (i), will
become a Guarantor, and in the case of clause (ii), such of the Non-Guarantor Restricted
Subsidiaries will become a Guarantor as is necessary so that after giving effect to the issuance of
such guarantees, the remaining Non-Guarantor Restricted Subsidiaries will have aggregate assets of
less than US$3.0 million. In each case, such Restricted Subsidiary shall execute a guarantee and
supplemental indenture in the form of Exhibit B and Exhibit C hereto, become party
to the other Note Documents, as applicable and deliver to the Trustee an Opinion of Counsel within
10 Business Days of the date on which it was acquired or created, or required to become a
Guarantor, as the case may be, to the effect that such supplemental indenture has been duly
authorized and constitutes a valid, binding and enforceable obligation of such Restricted
Subsidiary; provided, however, that all Subsidiaries that have properly been designated as
Unrestricted Subsidiaries in
accordance with this Indenture for so long as they continue to constitute Unrestricted
Subsidiaries will not have to comply with this Section 4.16.
Section 4.17 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted Subsidiary of the Company
to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted
Subsidiary is designated as an Unrestricted Subsidiary, the aggregate fair market value of all
outstanding Investments owned by the Company and its Restricted Subsidiaries in the Subsidiary
properly designated shall be deemed to be an Investment made as of the time of the designation and
shall reduce the amount available for Restricted Payments under Section 4.07(a) hereof or Permitted
Investments. That designation shall only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
In addition, no such designation may be made unless the proposed Unrestricted Subsidiary does not
own any Capital Stock in any Restricted Subsidiary that is not simultaneously subject to
designation as an Unrestricted Subsidiary. The
-58-
Board of Directors of the Company may redesignate
any Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a
Default.
Section 4.18 Additional Amounts.
(a) All amounts paid or credited by the Company under or with respect to the Notes, or by any
Guarantor pursuant to the Subsidiary Guarantees, will be made free and clear of and without
withholding or deduction for or on account of any present or future tax, duty, levy, impost,
assessment or other governmental charge (including penalties, interest and other liabilities or
expenses related thereto) imposed or levied by or on behalf of the Government of Canada or of any
province or territory thereof or by any authority or agency therein or thereof having power to tax
(hereinafter, the “Taxes”), unless the Company or such Guarantor, as the case may be, is required
to withhold or deduct any amount for or on account of Taxes by law or by the interpretation or
administration thereof. If the Company or any Guarantor is required to withhold or deduct any
amount for or on account of Taxes from any amount paid or credited under or with respect to the
Notes or the Subsidiary Guarantees, the Company or such Guarantor will pay such additional amounts
(the “Additional Amounts”) as may be necessary so that the net amount received by each owner of a
beneficial interest in the Notes (an “owner” for the purposes of this Section 4.18) (including
Additional Amounts) after such withholding or deduction (including any withholding or deduction in
respect of Additional Amounts) will not be less than the amount such owner would have received if
such Taxes had not been withheld or deducted; provided, however, that no Additional Amounts will be
payable with respect to a payment or credit made to an owner (to the extent this proviso applies to
such owner, an “Excluded Holder”) (or to a Holder on behalf of an Excluded Holder) (i) with which
the Company or such Guarantor does not deal at arm’s length (within the meaning of the Income Tax
Act (Canada)) at the time of making such payment, (ii) which is subject to such Taxes by reason of
such owner being connected with Canada or any province or territory thereof otherwise than solely
by reason of the owner’s activity in connection with purchasing the Notes, by the mere holding of
Notes or by reason of the receipt of payments thereunder or the enforcement of the Holder’s or
owner’s rights thereunder, (iii) which failed to duly and timely comply with a timely request of
the Company to provide information, documents, certification or other evidence concerning such
owner’s nationality, residence, entitlement to treaty benefits, identity or connection with Canada
or any political subdivision or authority thereof, if and to the extent that due and timely
compliance with such request would have resulted in the
reduction or elimination of any Taxes as to which Additional Amounts would have otherwise been
payable to such owner or Holder on behalf of such owner of Notes but for this clause (iii), (iv)
which is a fiduciary, a partnership or not the beneficial owner of any payment or credit on a Note,
if and to the extent that any beneficiary or settler of such fiduciary, any partner in such
partnership or the beneficial owner of such payment (as the case may be) would not have been
entitled to receive Additional Amounts with respect to such payment if such beneficiary, settler,
partner or beneficial owner had been the Holder of its respective interest in such Note or (v) any
combination of the foregoing numbered clauses of this proviso. The Company or such Guarantor will
also (a) make such withholding or deduction and (b) remit the full amount deducted or withheld to
the relevant authority in accordance with and in the time required under applicable law.
(b) The Company or the Guarantor will furnish the Holders of the Notes, within 30 days after
the date the payment of any Taxes is due pursuant to applicable law, evidence of such payment by
the Company or such Guarantor. In the event that the Company or the Guarantor fails to remit any
Taxes in respect of which Additional Amounts are payable, the Company or the Guarantor will
indemnify and hold harmless each owner of a beneficial interest in the Notes (other than an
Excluded Holder or owner to the extent that such owner has already received Additional Amounts in
respect of the relevant payment or credit) and will, upon written request of a Holder on behalf of
an owner (other than an Excluded Holder), reimburse each such Holder or owner for the amount of (i)
any Taxes so levied or im-
-59-
posed and paid by such Holder or owner as a result of payments or credits
made under or with respect to the Notes or the Subsidiary Guarantees, and (ii) any Taxes so levied
or imposed with respect to any reimbursement under the foregoing clause (i) but excluding any such
Taxes on the net income of such Holder or owner so that the net amount received by such Holder or
owner (net of payments made under or with respect to the Notes or Subsidiary Guarantees) after such
reimbursement will not be less than the net amount the Holder or owner would have received if Taxes
on such reimbursement had not been imposed.
(c) At least 30 days prior to each date on which any payment under or with respect to the
Notes is due and payable, if the Company or any Guarantor will be obligated to pay Additional
Amounts with respect to such payment, the Company or such Guarantor will deliver to the Trustee an
Officers’ Certificate stating the fact that such Additional Amounts will be payable and the amounts
so payable and will set forth such other information necessary to enable the Trustee to pay such
Additional Amounts to Holders or owners on the payment date. Whenever in this Indenture there is
mentioned, in any context, the payment of principal, premium, if any, redemption price, Change of
Control Payment, Asset Sale Payment, interest or any other amount payable under or with respect to
any Note, such mention shall be deemed to include mention of the payment of Additional Amounts to
the extent that, in such context, Additional Amounts are, were or would be payable in respect
thereof.
(d) The Company or a Guarantor will pay any present or future stamp, court, documentary or
other similar Taxes, charges or levies that arise in any taxing jurisdiction from the execution,
delivery or registration of, or enforcement of rights under, the Notes, this Indenture, any
Subsidiary Guarantee or any related document (“Documentary Taxes”).
(e) The obligation to pay any Additional Amounts (and any associated reimbursement) and
Documentary Taxes under the terms and conditions described above will survive any termination,
defeasance or discharge of this Indenture.
Section 4.19 Limitation on Guarantees by Restricted Subsidiaries.
If any Restricted Subsidiary of the Company that is not a Guarantor directly or indirectly
Guarantees the payment of any Indebtedness of the Company or a Guarantor, that Restricted
Subsidiary will become a Guarantor and execute a guarantee and supplemental indenture in the form
of Exhibit B and Exhibit C hereto, become party to the other Note Documents, as
applicable and deliver to the Trustee an Opinion of Counsel within 10 Business Days of the date on
which it entered into such Guarantee to the effect that such supplemental indenture has been duly
authorized and constitutes a valid, binding and enforceable obligation of such Restricted
Subsidiary. If the Restricted Subsidiary is released from its Guarantee of such other Indebtedness
of the Company, it will automatically be released from its obligations as a Guarantor.
Section 4.20 Limitation on Business of Steen River Entities.
Steen River Limited Partnership and Steen River GP Ltd. may not engage in any business other than (i) owning an interest in the High Level Project, (ii) operating (jointly or with other Persons) or owning an interest in a Person that operates (jointly or with other Persons) the High Level Project and (iii) such business activities as are incidental or related thereto.
Section 4.21 Money for Security Payments to Be Held in Trust.
(a) If the Company or any of its Restricted Subsidiaries shall at any time act as Paying Agent
hereunder, it shall, on or before each due date of the principal of (and premium, if any) or
interest on any of the Notes, segregate and hold in trust for the benefit of the Person 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
shall promptly notify the Trustee of its action or failure so to act.
(b) Whenever the Company shall have one or more Paying Agents for the Notes, it shall, on or
before each due date of the principal of (and premium, if any) or
interest on any Notes, de-
-60-
posit
with a Paying Agent a sum in same day funds (or New York Clearing House funds if such deposit is
made prior to the date on which such deposit is required to be made) 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, if any or interest and the Company
shall promptly notify the Trustee of such action or any failure so to act.
(c) The Company shall cause each Paying Agent 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 4.21, that such Paying Agent shall:
(i) hold all sums held by it for the payment of the principal of (and premium, if any)
or interest on Notes 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;
(ii) give the Trustee notice of any default by the Company (or any other obligor upon
the Notes) in the making of any payment of principal (and premium, if any) or interest; and
(iii) at any time during the continuance of any such default, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay,
to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by the Company or such
Paying Agent; and upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest on any Note and
remaining unclaimed for two years after such principal (and premium, if any) or interest has become
due and payable shall be paid to the Company on Company request, unless an abandoned property law
designates another person, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note 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 that the Trustee or such Paying Agent, before being required to make any such repayment,
shall at the written direction and at the expense of the Company, cause to be published once, in
the New York Times, The Wall Street Journal (national edition), the Globe and Mail and the National
Post, 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 4.22 Maintenance of Properties.
The Company shall cause all properties owned by the Company or any Restricted Subsidiary and
used or useful in the conduct of its business or the business of any Restricted Subsidiary to be
maintained and kept in good condition, repair and working order (reasonable wear and tear excepted)
and supplied with all necessary equipment and shall 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 4.22 shall
prevent the Company or any
-61-
Restricted Subsidiary from discontinuing the maintenance of any of such
properties if such discontinuance is, as determined by the Company or such Restricted Subsidiary in
good faith, desirable in the conduct of its business or the business of any Restricted Subsidiary
and not disadvantageous in any material respect to the Holders.
Section 4.23 Maintenance of Insurance.
The Company shall, and shall cause its Restricted Subsidiaries to, keep at all times all of
their properties which are of an insurable nature insured (which may include self-insurance)
against loss or damage with insurers believed by the Company to be responsible to the extent that
property of similar character is usually so insured or self-insured by corporations similarly
situated and owning like properties in accordance with customary business practices.
Section 4.24 Post-Closing Required Mortgages.
Within ninety (90) days after the Issue Date, the Company shall cause:
(a) Each Post-Closing Required Mortgage to be duly executed and delivered by the Company or a
Restricted Subsidiary owning or leasing the applicable Post-Closing Required Mortgage Property, in
proper form for filing or recording in all applicable filing and recording offices in order to
create a valid second Lien (subject only to Primary Collateral Priority Liens and Permitted Encum
brances) on the property described therein in favor of the Collateral Trustee for the benefit
of the holders of the Notes and other Parity Lien Obligations and evidence that all filing and recording taxes have been
paid to be delivered to the Collateral Trustee;
(b) Recorded copies of each Post-Closing Required Mortgage to be delivered to the Collateral
Trustee promptly after such recordation (it being understood and agreed that such requirement may
be satisfied after the expiration of such 90-day period);
(c) Standard form lender’s title insurance policies or unconditional commitments with
customary endorsements to be issued from a nationally recognized title insurance company with
respect to the Company’s or the Restricted Subsidiary’s interest in the applicable Post-Closing
Required Mortgaged Property, in the applicable amount set forth in Exhibit F hereto, insuring a
valid fee or leasehold interest in such Post-Closing Required Mortgaged Property vested in the
Company or such Restricted Subsidiary and insuring the Collateral Trustee that the applicable
Post-Closing Required Mortgage creates a valid and enforceable mortgage Lien on the interest
encumbered thereby, subject only to (a) a standard survey exception limited to matters occurring
after the date of the most recent survey and (b) Permitted Encumbrances;
(d) A standard survey with respect to each Post-Closing Required Mortgaged Property with a
certification to the Collateral Trustee and the title company in a form that permits the issuance
of the applicable title insurance policies or unconditional commitments contemplated by clause (c)
above or confirmation from the title insurer that such survey is not necessary; and
(e) Favorable opinions of local counsel for the Company and the applicable Restricted Subsidiary
(i) in states/provinces in which the Post-Closing Required Mortgage Properties are located, with
respect to the enforceability and perfection of the Post-Closing Required Mortgages and any related
fixture filings and (ii) in states/provinces in which the Company or the applicable Restricted
Subsidiary party to the Mortgages are organized or formed, with respect to the valid existence,
corporate power and authority of such parties in the granting of the Post-Closing Required
Mortgages in substantially the forms in Exhibit G hereto.
-62-
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Amalgamation, Consolidation or Sale of Assets.
(a) The Company will not, directly or indirectly: (i) consolidate, amalgamate with or merge
with or into another Person (whether or not the Company is the surviving corporation); or (ii)
sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties
or assets of the
Company and its Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person, unless:
(1) either: (x) the Company is the surviving corporation; or (y) the Person formed by
or surviving any such consolidation, amalgamation or merger (if other than the Company) or
to which such sale, assignment, transfer, conveyance or other disposition has been made is a
corporation organized or existing under the laws of Canada or any province or territory
thereof, the United States, any state of the United States or the District of Columbia;
(2) the Person formed by or surviving any such consolidation, amalgamation or merger
(if other than the Company) or the Person to which such sale, assignment, transfer,
conveyance or other disposition has been made assumes all of the obligations of the Company
under the Notes and the Note Documents pursuant to agreements reasonably satisfactory to the
Trustee;
(3) immediately after such transaction no Default or Event of Default exists; and
(4) the Company or the Person formed by or surviving any such consolidation,
amalgamation or merger (if other than the Company), or to which such sale, assignment,
transfer, conveyance or other disposition has been made, will, on the date of such
transaction after giving pro forma effect thereto and any related financing transactions as
if the same had occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.09(a)
hereof.
(b) The Company will not, directly or indirectly, lease all or substantially all of its
properties or assets, in one or more related transactions, to any other Person. This Section 5.01
will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between
or among the Company and any of its Wholly Owned Restricted Subsidiaries, provided that the
surviving entity of any transaction involving the Company shall be a corporation or partnership
organized and existing under the laws of Canada or any province or territory thereof, the United
States, any state of the United States or the District of Columbia.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in accordance with
Section 5.01 hereof, the successor corporation formed by such consolidation or into or with which
the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this
Indenture referring to the Company shall
-63-
refer instead to the successor corporation and not to the
Company), and may exercise every right and power of the Company under this Indenture with the same
effect as if such successor Person had been named as the Company herein; provided that the
predecessor Company shall not be relieved from the obligation to pay the principal of and interest
on the Notes except in the case of a sale, assignment, transfer, conveyance or other disposition of
all of the Company’s assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
(a) An “Event of Default” wherever used herein, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body):
(1) Default in payment of any principal of, or premium, if any, on the Notes when due
(whether at maturity, upon redemption or otherwise);
(2) Default in the payment of any interest on any Note when due, which Default
continues for 30 days or more;
(3) failure by the Company or any of its Restricted Subsidiaries to comply with
Sections 3.09, 4.10, 4.15, 4.24 or 5.01 hereof;
(4) Default by the Company or any Restricted Subsidiary in the observance or
performance of any other covenant in the Notes or this Indenture for 30 days after written
notice from the Trustee or the Holders of not less than 25% in aggregate principal amount of
the Notes then outstanding;
(5) Default under any mortgage, indenture or instrument under which there may be issued
or by which there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now
exists, or is created after the Issue Date, if that default:
(i) is caused by a failure to pay principal of, or interest or premium, if any,
on such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a “Payment Default”); or
(ii) results in the acceleration of such Indebtedness prior to its expressed
maturity,
and, in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a Payment Default
or the maturity of which has been so accelerated, aggregates US$10.0 million or more;
-64-
(6) failure by the Company or any of its Restricted Subsidiaries to pay final judgments
aggregating in excess of US$10.0 million, net of applicable insurance coverage, provided
that the Company or such Restricted Subsidiary has submitted a claim for such judgment and
the provider of such insurance has not disputed such coverage, which judgments are not paid,
discharged or stayed for a period of 60 days;
(7) except as permitted by this Indenture, any Subsidiary Guarantee shall be held in
any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be
in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor,
shall deny or disaffirm its obligations under its Subsidiary Guarantee;
(8) default by the Company or any Guarantor in the performance of the Security
Documents which adversely affects the enforceability, validity, perfection or priority of
the Lien securing the Notes or any Security Document for any reason shall cease to be in
full force and effect, or cease to give the Collateral Trustee the Liens, rights, powers and
privileges purported to be created thereby, or any Collateral Trustee’s Lien purported to be
granted thereby on any one or more items of Collateral ceases to be enforceable or valid, in
whole or in part, or ceases for any reason (other than pursuant to a release that is
delivered or becomes effective as set forth in this Indenture) to be fully enforceable and
perfected with the priority set forth in the applicable Security Document and, in each case,
the Collateral affected has an aggregate fair market value in excess of $10.0 million and
such default continues for 10 days after the Company has received written notice thereof;
(9) the Company or any Guarantor, or any person acting on behalf of any of them, denies
or disaffirms, in writing, any obligation of the Company or any Guarantor set forth in or
arising under any Security Documents;
(10) if the Company or any of its Restricted Subsidiaries that is a Significant
Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary, pursuant to or within the meaning of Bankruptcy Law:
(i) commences proceedings to be adjudicated bankrupt or insolvent;
(ii) consents to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under applicable Bankruptcy law;
(iii)
consents to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or other similar official of it or for all or substantially all of its
property;
(iv) makes a general assignment for the benefit of its creditors; or
(v) generally is not paying its debts as they become due; and
(11) if a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any of its Restricted Subsidiaries
that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, in a proceeding in which the
Company or any
-65-
such Restricted Subsidiaries, that is a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary, is to be adjudicated bankrupt or insolvent;
(ii)
appoints a receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any of its Restricted Subsidiaries that is a
Significant
Subsidiary or any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary, or for all or substantially all of the property
of the Company or any of its Restricted Subsidiaries that is a Significant
Subsidiary or any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days.
(b) The Company shall deliver to the Trustee, as soon as practicable and in any event within
10 days after the Company’s knowledge thereof, written notice in the form of an Officers’
Certificate of any Default under this Indenture, its status and what action the Company proposes to
take with respect thereto.
Section 6.02 Acceleration.
(a) If any Event of Default (other than an Event of Default specified in clause (10) or (11)
of Section 6.01(a) hereof with respect to the Company or any of its Restricted Subsidiaries) occurs
and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately. Upon any such
declaration, the Notes shall become due and payable immediately. Notwithstanding the foregoing, if
an Event of Default specified in clause (10) or (11) of Section 6.01(a) hereof occurs with respect
to the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group
of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, all
outstanding Notes shall be due and payable immediately without further action or notice. The
Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice
to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if
the rescission would not conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium, if any that has become due solely because of
the acceleration) have been cured or waived.
(b) If an Event of Default occurs by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding payment of the premium, if any
that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant
to Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium shall also
become and be immediately due and payable, to the extent permitted by law.
(c) Notwithstanding the preceding paragraph, in the event of a declaration of acceleration in
respect of the Notes because of an Event of Default specified in Section 6.01(a)(5) shall have
occurred and be continuing, such declaration of acceleration shall be automatically annulled if the
Indebtedness that is the subject of such Event of Default has been discharged or the Holders
thereof have rescinded their declaration of acceleration in respect of such Indebtedness, and
written notice of such discharge or rescission, as the case may be, shall have been given to the
Trustee by the Company and coun-
-66-
tersigned
by the Holders of such Indebtedness or a trustee,
fiduciary or agent for such Holders, within 30 days after such declaration of acceleration in
respect of the Notes, and no other Event of Default has occurred during such 30-day period which
has not been cured or waived during such period.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy
to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes, this Indenture or the
Security Documents (subject to the Collateral Trust Agreement and the
IR Collateral Intercreditor Agreement).
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note
in exercising any right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the then outstanding
Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing
Default or Event of Default and its consequences hereunder, except a continuing Default or Event of
Default in the payment of the principal of, premium or interest on, the Notes (including in
connection with a Repurchase Offer); provided, subject to Section 6.02 hereof, that the Holders of
a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration
and its consequences, including any related payment default that resulted from such acceleration.
Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes may direct the time,
method and place of conducting any proceeding for exercising any remedy available to the Trustee or
exercising any trust or power conferred on it including without
limitation, any remedy available to it under the Security Documents
(subject to the Collateral Trust Agreement and the IR Collateral
Intercreditor Agreement). However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal
liability.
Section 6.06 Limitation on Suits.
Subject
to Section 6.07, a Holder of a Note may pursue a remedy with respect to this Indenture, the Notes or (subject to the Collateral Trust Agreement and the IR Collateral Intercreditor Agreement) the Security Documents
only if:
(a) the Holder of a Note gives to the Trustee written notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then outstanding Notes make a
written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or expense;
-67-
(d) the Trustee does not comply with the request within 60 days after receipt of the request
and the offer and, if requested, the provision of indemnity; and
(e) during such 60-day period the Holders of a majority in principal amount of the then
outstanding Notes do not give the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a
Note or to obtain a preference or priority over another Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to
receive payment of principal, premium, if any, and interest on the Note, on or after the respective
due dates expressed in the Note (including in connection with a Repurchase Offer), or to bring suit
for the enforcement of any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a)(1) or (2) occurs and is continuing, the
Trustee is authorized to recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount of principal of, premium, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel.
Section 6.09 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 proceedings, 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 has been
instituted.
Section 6.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Notes in Section 2.07, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 6.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note 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, the Security Documents (subject to the Collateral Trust
Agreement and the IR Collateral Intercreditor Agreement) or
-68-
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 6.12 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes including the Guarantors), its creditors or its property and
shall be entitled and empowered to collect, receive and distribute any money or other property
payable or deliverable on any such claims and any custodian in any such judicial proceeding is
hereby authorized by each Holder 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 to 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 7.07 hereof.
To the extent that the payment of any such compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07
hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the
same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties that the Holders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.13 Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay out the money in the
following order:
(i) to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof,
including payment of all compensation, expense and liabilities incurred, and all advances
made, by the Trustee and the costs and expenses of collection;
(ii) to Holders of Notes for amounts due and unpaid on the Notes for principal,
premium, if any and interest, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for principal, premium, if any and interest,
respectively; and
(iii) to the Company or to such party as a court of competent jurisdiction shall direct
including a Guarantor, if applicable.
The Trustee may fix a record date and payment date for any payment to Holders of Notes
pursuant to this Section 6.13.
Section 6.14 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion
may require
-69-
the filing by any party litigant in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of care and skill in
its exercise, as a prudent person would exercise or use under the circumstances in the conduct of
such person’s own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the express provisions of
this Indenture and the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, in the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved in a court of competent jurisdiction that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 6.05
hereof.
(d) Whether or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall be under no obligation to exercise any of its rights and powers under
this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or expense.
-70-
(f) The Trustee shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney at the sole cost of the Company and
shall incur no liability or additional liability of any kind by reason of such inquiry or
investigation.
(b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate
or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee
may consult with counsel of its selection and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be responsible for the
misconduct or negligence of any agent or attorney appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take in good faith
that it believes to be authorized or within the rights or powers conferred upon it by this
Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction
or notice from the Company shall be sufficient if signed by an Officer of the Company.
(f) None of the provisions of this Agreement shall require the Trustee to expend or risk its
own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or indemnity satisfactory to it against such
risk or liability is not assured to it.
(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any
event which is in fact such a default is received by the Trustee at the Corporate Trust Office of
the Trustee, and such notice references the Notes and this Indenture
(h) In no event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss of
profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or
damage and regardless of the form of action.
(i) The rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and
other Person employed to act hereunder.
-71-
(j) The Trustee may request that the Company deliver an Officers’ Certificate setting forth
the names of individuals and/or titles of officers authorized at such time to take specified
actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person
authorized to sign an Officers’ Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Company or any Affiliate of the Company with the same rights it
would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the Commission for permission to
continue as Trustee or resign. Any Agent may do the same with like rights and duties. The Trustee
is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee’s Disclaimer.
The Trustee shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the Company’s use of the
proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any
provision of this Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other document in connection with
the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is known to the Trustee,
the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 90
days after it occurs. Except in the case of a Default or Event of Default in payment of principal
of, premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as
a committee of its Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Notes and the Trustee shall withhold the notice of any Default
under Section 6.01(a)(4) hereof until 30 days after notice under such section is given. The
Trustee shall not be deemed to know of any default or Event of Default unless a Responsible
Officer of the Trustee has actual knowledge thereof or unless written notice of any event
which is such a default is received by the Trustee at the Corporate Trust Office of the Trustee.
Section 7.06 Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15th, beginning with the May 15th following the date of this
Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of
the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but
if no event described in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section
313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to
the Company and filed with the Commission and each stock exchange on which the Notes are listed in
-72-
accordance with TIA Section 313(d). The Company shall promptly notify the Trustee when the Notes
are listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such compensation for its acceptance of
this Indenture and services hereunder as the parties shall agree in writing from time to time. The
Trustee’s compensation shall not be limited by any law on compensation of a Trustee of an express
trust. The Company shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation, disbursements and expenses of
the Trustee’s agents and counsel.
The obligations of the Company under this Section 7.07 shall survive the satisfaction and
discharge of this Indenture or the earlier resignation or removal of the Trustee.
To secure the Company’s payment obligations in this Section, the Trustee shall have a Lien
prior to the Notes on all money or property held or collected by the Trustee, except that held in
trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction
and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of Default specified in
Section 6.01(a)(10) or (11) hereof occurs, the expenses and the compensation for the services
(including the fees and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to the extent
applicable.
Section 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor Trustee shall become
effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the trust hereby created by so
notifying the Company. The Holders of a majority in principal amount of the then outstanding Notes
may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with
respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any
reason, the Company shall promptly appoint a successor Trustee. Within one year after the
successor
-73-
Trustee takes office, the Holders of a majority in principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days after the retiring Trustee resigns
or is removed, the retiring Trustee (at the Company’s expense), the Company, or the Holders of at
least 10% in principal amount of the then outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder who has been a Holder for at least six
months, fails to comply with Section 7.10, such Holder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to
Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to
the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company’s obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation without any further
act shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation organized and doing
business under the laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate Trustee power, that is subject to supervision or examination
by federal or state authorities and that has a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements of TIA Sections
310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in
TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section
311(a) to the extent indicated therein.
Section 7.12 Appointment of Co-Trustee.
It is recognized that in case of litigation under this Indenture, and in particular in case of
the enforcement thereof on default, or in the case the Trustee deems that by reason of any present
or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein
granted to the Trustee or hold title to the properties, in trust, as herein granted or take any
action which may be desirable
-74-
or necessary in connection therewith, it may be necessary that the
Trustee appoint an individual or institution as a separate or co-Trustee. The following provisions
of this Section are adopted to these ends.
In the event that the Trustee appoints an additional individual or institution as a separate
or co-Trustee, each and every remedy, power, right, claim, demand, cause of action, immunity,
estate, title, interest and lien expressed or intended by this Indenture to be exercised by or
vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such
separate or co-Trustee but only to the extent necessary to enable such separate or co-Trustee to
exercise such powers, rights and remedies, and only to the extent that the Trustee by the laws of
any jurisdiction is incapable of exercising such powers, rights and remedies and every covenant and
obligation necessary to the exercise thereof by such separate or co-Trustee shall run to and be
enforceable by either of them.
Should any instrument in writing from the Company be required by the separate or co-Trustee so
appointed by the Trustee for more fully and certainly vesting in and confirming to it such
properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing
shall, on request, be executed, acknowledged and delivered by the Company; provided that if an
Event of Default shall have occurred and be continuing, if the Company does not execute any such
instrument within fifteen (15) days after request therefor, the Trustee shall be empowered as an
attorney-in-fact for the Company to execute any such instrument in the Company’s name and stead.
In case any separate or co-Trustee or a successor to either shall die,
become incapable of acting, resign or be removed, all the estates, properties, rights, powers,
trusts, duties and obligations of such separate or co-Trustee, so far as permitted by law, shall
vest in and be exercised by the Trustee until the appointment of a new Trustee or successor to such
separate or co-Trustee.
Every separate Trustee and co-Trustee shall, to the extent permitted by law, be appointed and
act subject to the following provisions and conditions:
(i) all rights and powers, conferred or imposed upon the Trustee shall be conferred or
imposed upon and may be exercised or performed by such separate Trustee or co-Trustee; and
(ii) no Trustee hereunder shall be personally liable by reason of any act or omission
of any other Trustee hereunder.
Any notice, request or other writing given to the Trustee shall be deemed to have been given
to each of the then separate Trustees and co-Trustees, as effectively as if given to each of them.
Every instrument appointing any separate Trustee or co-Trustee shall refer to this Indenture and
the conditions of this Article.
Any separate Trustee or co-Trustee may at any time appoint the Trustee as its agent or
attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any
lawful act under or in respect of this Indenture on its behalf and in its name. If any separate
Trustee or co-Trustee shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to
the extent permitted by law, without the appointment of a new or successor Trustee.
-75-
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at its option and at any time, elect to have either Section 8.02 or 8.03
hereof applied to all outstanding Notes upon compliance with the conditions set forth below in this
Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section
8.02, the Company and the Guarantors shall, subject to the satisfaction of the conditions set forth
in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to
all outstanding Notes and Subsidiary Guarantees on the date the conditions set forth below are
satisfied (“Legal Defeasance”). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes,
which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under
such Notes and this Indenture including that of the Guarantors (and the Trustee, on demand of and
at the expense of the Company, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or discharged hereunder:
(a) the rights of Holders of outstanding Notes to receive payments in respect of the principal
of, or interest or premium, if any, on such Notes when such payments are due from the trust fund
described in Section 8.04 hereof;
(b) the Company’s obligations with respect to the Notes under Article 2 and Section 4.02
hereof; the rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company’s and the Guarantor’s obligations in connection therewith; and
(c) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section
8.03, the Company and the Guarantors shall, subject to the satisfaction of the conditions set forth
in Section 8.04 hereof, be released from their obligations under the covenants contained in
Sections 4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13,
4.15, 4.16, 4.17, 4.19, 4.21, 4.22, 4.23
and 4.24 hereof and clause (4) of Section 5.01(a) hereof with respect to the outstanding Notes on
and after the date the conditions set forth in Section 8.04 hereof are satisfied (“Covenant
Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof)
in connection with such covenants, but shall continue to be deemed “outstanding” for all other
purposes hereunder (it being understood that such Notes shall not be deemed outstanding for
accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no liability in
-76-
respect of
any term, condition or limitation set forth in any such covenant, whether directly or indirectly,
by reason of any reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except
as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In
addition, upon the Company’s exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, Sections 6.01(a)(4), 6.01(a)(5), 6.01(a)(6), and 6.01(a)(7) hereof shall not constitute
Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof
to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) The Company shall irrevocably deposit with the Trustee, in trust, for the benefit of the
Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination of
cash in U.S. dollars and non-callable Government Securities, in such amounts as will be sufficient,
in the opinion of a nationally recognized firm of independent public accountants, to pay the
principal of, or interest and premium, if any on the outstanding Notes on the stated maturity or on
the applicable redemption date, as the case may be, and the Company must specify whether the Notes
are being defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company shall have delivered to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that (a) the
Company has received from, or there has been published by, the Internal Revenue Service a ruling or
(b) since the Issue Date, there has been a change in the applicable U.S. federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the
Holders of the outstanding Notes will not recognize income, gain or loss for U.S. federal income
tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on
the same amounts, in the same manner and at the same times as would have been the case if such
Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company shall have delivered to
the Trustee an Opinion of Counsel confirming that the Holders of the outstanding Notes will not
recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant
Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(d) in the case of Section 8.02 or Section 8.03, the Company shall have delivered to the
Trustee an Opinion of Counsel in Canada to the effect that Holders and beneficial owners of the
outstanding Notes will not recognize income, gain or loss for Canadian federal, provincial or
territorial income tax or other tax purposes as a result of such Legal Defeasance or Covenant
Defeasance, as applicable, and will be subject to Canadian federal, provincial or territorial
income tax and other tax on the same amounts, in the same manner and at the same times as would
have been the case if such Legal Defeasance or Covenant Defeasance, as applicable, had not occurred
(which condition may not be waived by any Holder or the Trustee);
-77-
(e) no Default or Event of Default may have occurred and be continuing on the date of such
deposit (other than a Default or Event of Default resulting from the borrowing of funds to be
applied to such deposit);
(f) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of,
or constitute a default under any material agreement or instrument (other than this Indenture) to
which the Company or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(g) the Company shall have delivered to the Trustee an Officers’ Certificate stating that the
deposit was not made by the Company with the intent of preferring the Holders of
Notes over the other creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
|
|
|
Section 8.05 |
|
Deposited Money and Government Securities to Be Held in Trust;
Other Miscellaneous Provisions. |
Subject to Section 8.06 hereof, all money and non-callable Government Securities (including
the proceeds thereof) deposited with the Trustee (or other qualifying Trustee, collectively for
purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company or a Guarantor acting as Paying Agent) as the Trustee may determine,
to the Holders of such Notes of all sums due and to become due thereon in respect of principal,
premium, if any and interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the cash or non-callable Government Securities deposited pursuant to Section
8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay
to the Company from time to time upon the request of the Company any money or non-callable
Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof),
are in excess of the amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
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, premium, if any or interest on any Note and remaining
unclaimed for two years after such principal, and premium or interest has become due and payable
shall be paid to the Company on its request or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Note shall thereafter look only to the Company for payment
thereof, and all
-78-
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 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 the New York Times, The Wall Street Journal (national
edition), the Globe and Mail and the National Post, 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 notification or publication, any unclaimed balance
of such money then remaining will be repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable
Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason
of any order or judgment of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company’s obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided that, if the Company
makes any payment of principal of, premium, if any or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 hereof, the Company, the Guarantors and the Trustee may amend or
supplement this Indenture, the Subsidiary Guarantees or the Notes without the consent of any Holder
of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of certificated
Notes;
(3) to provide for the assumption of the Company’s obligations to Holders of Notes by
a successor to the Company pursuant to Article 5 hereof;
(4) to make any change that would provide any additional rights or benefits to the
Holders of Notes or that in the good faith opinion of the Board of Directors of the Company
(evidenced by a resolution of the Board of Directors set forth in an Officers’ Certificate
delivered to the Trustee) does not adversely affect the rights under this Indenture of any
such Holder;
(5) to add a Guarantor;
(6) to comply with requirements of the Commission in order to effect or maintain the
qualification of this Indenture under the TIA; or
(7) to conform the text of the Note Documents to any provision of the “Description of
the New Notes” or “Description of Collateral and Security” section of the Offering
Memoran-
-79-
dum, to the extent such provision of the Note Documents was intended to conform
verbatim to the text of such “Description of the New Notes” or “Description of Collateral
and Security” section.
Upon the request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or supplemental indenture, and upon receipt by the
Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company
and the Guarantors in the execution of any amended or supplemental indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental indenture that affects its own rights, duties or immunities under this
Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the Trustee may amend or
supplement this Indenture, the Notes and the Subsidiary Guarantees with the consent of the Holders
of at least a majority in principal amount of the Notes (including PIK Notes, if any) then
outstanding voting as a single class (including, without limitation, consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium, if any or interest on the Notes,
except a payment default resulting from an acceleration that has been rescinded) or compliance with
any provision of this Indenture, the Subsidiary Guarantees or the Notes may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding Notes (including
PIK Notes, if any) voting as a single class (including consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes).
Upon the request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or supplemental indenture, and upon the filing with
the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the
Trustee shall join with the Company in the execution of such amended or supplemental indenture
unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or
immunities under this indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to
approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such
consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes effective, the Company
shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such amended or supplemental
indenture or waiver.
Without the consent of each Holder affected, an amendment or waiver under this Section 9.02
may not (with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver;
-80-
(2) reduce the principal of or change the fixed maturity of any Note or alter the
provisions with respect to the redemption of the Notes (other than Sections 3.09, 4.10 or
4.15);
(3) reduce the rate of or change the time for payment of interest on any Note,
including Additional Amounts;
(4) waive a Default or Event of Default in the payment of principal of, or interest or
premium, if any on the Notes (except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount of the Notes and a waiver of
the payment default that resulted from such acceleration);
(5) make any Note payable in money other than that stated in the Notes;
(6) make any change in the provisions of this Indenture relating to waivers of past
Defaults or the rights of Holders of Notes to receive payments of principal of or interest
or premium, if any on the Notes;
(7) waive a redemption payment with respect to any Note (other than a payment required
by Section 4.10 or Section 4.15 hereof);
(8) release any Guarantor from any of its obligations under its Subsidiary Guarantee
or this Indenture, except in accordance with the terms of this Indenture; or
(9) make any change in Section 6.04 or 6.07 hereof or to this Article 9.
In addition, without the consent of holders of sixty-six and two-thirds percent (66 2/3%) in
aggregate principal amount of the Notes outstanding, an amendment or waiver may not release the
Collateral from the Liens securing the Notes or make any change in the Security Documents or the
provisions relating to the Collateral that could adversely affect the holders of Notes, except in
accordance with the provisions of this Indenture and the Security Documents.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be set forth in a amended
or supplemental Indenture that complies with the TIA as then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a
Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder’s Note, even
if notation of the consent is not made on any Note. However, any such Holder of a Note or
subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes effective. An
amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds
every Holder.
The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record
date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at
such record date (or their duly designated proxies), and only such Persons, shall be entitled to
consent to such amendment,
-81-
supplement, or waiver or to revoke any consent previously given, whether
or not such Persons continue to be Holders after such record date. No such consent shall be valid
or effective for more than 120 days after such record date unless the consent of the requisite
number of Holders has been obtained.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment, supplement or waiver on any
Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee
shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article
9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Company may not sign an amendment, supplement or waiver until the
Board of Directors approves it. In executing any amendment, supplement or waiver, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in
relying upon, in addition to the documents required by Section 13.04 hereof, an Officers’
Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture.
ARTICLE 10
GUARANTEES
Section 10.01 Subsidiary Guarantee.
Subject to this Article 10, each of the Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and
to the Trustee and its successors and assigns, irrespective of the validity and enforceability of
this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that:
(a) the principal, interest and premium, if any on the Notes will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company
to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that same will be promptly paid
in full when due or performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. Failing payment when due of any amount so
guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly
and severally obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
The Guarantors hereby agree that their obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the
Notes, the Security Documents or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with
respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any
action to enforce the same or
-82-
any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenant that this Subsidiary Guarantee shall not be
discharged except by complete performance of the obligations contained in the Notes and this
Indenture.
The obligations of the Guarantor under its Subsidiary Guarantee are independent of the
obligations guaranteed by such Guarantor hereunder, and a separate action or actions may be brought
and prosecuted by the Trustee on behalf of, or by, the Holders, subject to the terms and conditions
set forth in this Indenture against a Guarantor to enforce the
Subsidiary Guarantee and the Security Documents (subject to the
Collateral Trust Agreement and the IR Collateral Intercreditor
Agreement), irrespective
of whether any action is brought against the Company or whether the Company is joined in any such
action or actions.
The Guarantor hereby agrees that, in the event of a default in payment of principal (or
premium, if any) or interest on a Note, whether at its stated maturity, by acceleration, purchase
or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of
such Note, subject to the terms and conditions set forth in this Indenture, directly against each
of the Guarantors to enforce such Guarantor’s Subsidiary Guarantee without first proceeding against
the Company or any other Guarantor.
The Guarantor agrees that if, after the occurrence and during the continuance of an Event of
Default, the Trustee or any of the Holders are prevented by applicable law from exercising their
respective rights to accelerate the maturity of the Notes, to collect interest on the Notes, or to
enforce or exercise any other right or remedy with respect to the Notes, such Guarantor shall pay
to the Trustee for the account of the Holder, upon demand therefor, the amount that would otherwise
have been due and payable had such rights and remedies been permitted to be exercised by the
Trustee or any of the Holders.
If any Holder or the Trustee is required by any court or otherwise to return to the Company,
the Guarantors or any custodian, Trustee, liquidator or other similar official acting in relation
to either the Company or the Guarantors, any amount paid either to the Trustee or such
Holder, this Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to
the Holders in respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on
the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes
of this Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations
(whether or not due and payable) shall forthwith become due and payable by the Guarantors for the
purpose of this Subsidiary Guarantee. The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Guarantee.
Each Subsidiary Guarantee shall remain in full force and effect and continue to be effective
should any petition be filed by or against the Company for
liquidation or reorganization, should the
Company become insolvent or make an assignment for the benefit of creditors or should a receiver or
trustee be appointed for all or any significant part of the Company’s assets, and shall, to the
fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if
at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or
reduced in amount, or must other-
-83-
wise be restored or returned by any obligee on the Notes or
Subsidiary Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all
as though such payment or performance had not been made. In the event that any payment or any part
thereof, is rescinded, reduced, restored or returned, the Note shall, to the fullest extent
permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned. The form of Subsidiary Guarantee is attached hereto as Exhibit
B.
In case any provision of any Subsidiary Guarantee shall be invalid, illegal or unenforceable,
the validity, legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
The Subsidiary Guarantee issued by any Guarantor shall be a senior obligation of such
Guarantor, and will be secured to the extent described in Article 11 hereof. Each Subsidiary
Guarantee will rank equally in right of payment with all existing and future senior Indebtedness of
the Guarantor.
Each payment to be made by a Guarantor in respect of its Subsidiary Guarantee shall be made
without set-off, counterclaim, reduction or diminution of any kind or nature.
Section 10.02 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the
intention of all such parties that the guarantee by each Guarantor pursuant to its Subsidiary
Guarantee not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar United States
federal or state law or Canadian federal, provincial or territorial law
relating to fraudulent transfer or conveyance. To effectuate the foregoing intention, the
Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each
Guarantor shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to any collections from
or payments made by or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to its contribution obligations under the Indenture,
result in the obligations of such Guarantor under the Guarantee not constituting a fraudulent
conveyance or fraudulent transfer under applicable law. Each Guarantor that makes a payment or
distribution under a Guarantee shall be entitled to a contribution from each other Guarantor in a
proportional amount based on the net assets of each Guarantor, determined in accordance with GAAP.
Section 10.03 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 10.01, each Guarantor hereby agrees
that a notation of such Subsidiary Guarantee substantially in the form included in Exhibit
B hereto shall be endorsed by an Officer of such Guarantor on each Note authenticated and
delivered by the Trustee and that this Indenture shall be executed on behalf of such Guarantor by
its President or one of its Vice Presidents.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 10.01 shall
remain in full force and effect notwithstanding any failure to endorse on each Note a notation of
such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary Guarantee no longer
holds that office at the time the Trustee authenticates the Note on which a Subsidiary Guarantee is
endorsed, the Subsidiary Guarantee shall be valid nevertheless.
-84-
The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of the
Guarantors.
In the event that the Company creates or acquires any new Restricted Subsidiaries, other than
Non-Guarantor Restricted Subsidiaries, subsequent to the date of this Indenture, if required by
Section 4.16 hereof, the Company shall cause such Restricted Subsidiaries to execute supplemental
indentures to this Indenture and Subsidiary Guarantees in accordance with Section 4.16 hereof and
this Article 10, to the extent applicable.
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 10.05 hereof, no Guarantor may sell or otherwise
dispose of all or substantially all of its assets to, or consolidate, amalgamate with or merge with
or into (whether or not such Guarantor is the surviving Person) another Person, other than the
Company or another Guarantor unless:
(a) immediately after giving effect to that transaction, no Default or Event of Default
exists; and
(b) either:
(1) the Guarantor is the surviving Person, or the Person acquiring the
property in any such sale or disposition or the Person formed by or surviving any
such consolidation, amalgamation or merger assumes all the obligations of that
Guarantor under this Indenture and its Subsidiary Guarantee pursuant to a
supplemental indenture satisfactory to the Trustee and completes all other required
documentation; or
(2) the Net Proceeds of such sale or other disposition are applied in
accordance with the provisions of Section 4.10 hereof;
In case of any such consolidation, amalgamation, merger, sale or conveyance and upon the
assumption by the successor Person (where applicable), by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Guarantee endorsed upon
the Notes and the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of the Subsidiary Guarantees to
be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee. All the Subsidiary Guarantees so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of this Indenture as though all of
such Subsidiary Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses (a) and (b) above,
nothing contained in this Indenture or in any of the Notes shall prevent any consolidation or
merger of a Guarantor with or into the Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
-85-
Section 10.05 Releases Following Sale of Assets.
A Guarantor shall be released from all of its obligations under its Guarantee if all or a
majority of its Capital Stock is sold or otherwise disposed of (including by way of merger,
amalgamation or consolidation in compliance with Section 5.01 hereof) to a Person that is not
(either before or after giving effect to such transaction) the Company or a Restricted Subsidiary
of the Company, after which the Guarantor is no longer a Restricted Subsidiary, provided that such
sale or other disposition does not violate the terms of this Indenture. Further, if the Company
redesignates any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in
accordance with Section 4.17 hereof then such Guarantor will be released and relieved of any
obligations under its Subsidiary Guarantee. Upon delivery by the Company to the Trustee of an
Officers’ Certificate and an Opinion of Counsel to the effect that such sale or other disposition
was made by the Company in accordance with the provisions of this Indenture, including without
limitation Section 4.10 hereof, the Trustee shall execute any documents reasonably required in
order to evidence the release of any Guarantor from its obligations under its Subsidiary Guarantee.
Any Guarantor not released from its obligations under its Subsidiary Guarantee shall remain
liable for the full amount of principal of and interest on the Notes and for the other obligations
of any Guarantor under this Indenture as provided in this Article 10.
Section 10.06 Subrogation.
Each Guarantor shall be subrogated to all rights of Holders of Notes against the Company in
respect of any amounts paid by any Guarantor pursuant to the provisions of Section 10.01; provided
that, if an Event of Default has occurred and is continuing, no Guarantor shall be entitled to
enforce or receive any payments arising out of, or based upon, such right of subrogation until all
amounts then due and payable by the Company under this Indenture or the Notes shall have been paid
in full.
Section 10.07 Benefits Acknowledged.
Each Guarantor acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it
pursuant to its Subsidiary Guarantee are knowingly made in contemplation of such benefits.
ARTICLE 11
COLLATERAL AND SECURITY
Section 11.01 Collateral Trust Agreement: IR Collateral Intercreditor Agreement
In
order to secure the due and punctual payment of the principal of (premium, if any) and interest on the Notes when and as the same shall be due an payable, whether on an interest payment date, at maturity, by acceleration, call for redemption, or otherwise, and interest on overdue principal, premium and interest, if any, of the Notes and performance of all other obligations of
the Company to the Holders or the Trustee under this Indenture or the
Notes, according to the terms hereunder and thereunder, the Company will, on the date hereof, make an assignment of its right, title and interest in and to the Collateral to the Collateral Trustee in accordance with the Collateral Trust Agreement, the IR Collateral Intercreditor Agreement and the other
Security Documents and to the extent provided for therein. Each
Holder, by its acceptance of a Note, consents and agrees to the terms
of the Collateral Trust Agreement (including without limitation, the
provisions providing for the enforcement and release of Collateral)
as the same may be in effect or may be amended from time to time in accordance with the terms hereof and thereof.
Section 11.02 Equal and Ratable Sharing of Collateral by Holders of Parity Lien
Debt
Notwithstanding:
(a) anything to the contrary contained in the Security Documents;
(b) the time of incurrence of any Series of Parity Lien Debt;
(c) the order or method of attachment or perfection of any Liens securing any Series of Parity
Lien Debt;
(d) the time or order of filing or recording of financing statements, mortgages or other
documents filed or recorded to perfect any Lien upon any Collateral;
-86-
(e) the time of taking possession or control over any Collateral;
(f) that any Parity Lien may not have been perfected or may be or have become subordinated, by
equitable subordination or otherwise, to any other Lien; or
(g) the rules for determining priority under any law governing relative priorities of Liens:
(1) all Liens at any time granted to secure any of the Parity Lien Debt (other
than Liens on the Inventory and Receivables Collateral) shall secure, equally and
ratably, all present and future Parity Lien Obligations;
(2) at any time, all proceeds of Collateral (other than the Inventory and
Receivables Collateral) on which Liens have been granted to secure any of the
Parity Lien Debt and other Parity Lien Obligations shall be allocated and
distributed equally and ratably on account of the Parity Lien Debt and other Parity
Lien Obligations;
(3) all Liens on the Inventory and Receivables Collateral at any time granted
to secure any of the Parity Lien Debt shall secure, equally and ratably, all
present and future Parity Lien Obligations (other than the Existing Credit Facility
Obligations, which shall be secured by a first priority Lien on the Inventory and
Receivables Collateral pledged as collateral under an Existing Credit Facility); and
(4) at any time, all proceeds of Inventory and Receivables Collateral on which
Liens have been granted to secure any of the Parity Lien Debt and other Parity Lien
Obligations shall be allocated and distributed equally and ratably on account of
the Parity Lien Debt and other Parity Lien Obligations (other than the Existing
Credit Facility Obligations, which shall be secured by a first priority Lien on the
Inventory and Receivables Collateral).
The foregoing provision is intended for the benefit of, and shall be enforceable as a third
party beneficiary by, each present and future holder of Parity Lien Obligations, each present and
future Parity Debt Representative and the Collateral Trustee as holder of Parity Liens. The Parity
Debt Representative of each future Series of Parity Lien Debt will be required to deliver a Parity
Debt Sharing Confirmation to the Collateral Trustee and the Trustee at the time of incurrence of
such Series of Parity Lien Debt.
Section 11.03 Ranking of Note Liens
Notwithstanding:
-87-
(a) anything to the contrary contained in the Security Documents;
(b) the time of incurrence of any Series of Secured Debt;
(c) the order or method of attachment or perfection of any Liens securing any Series of
Secured Debt;
(d) the time or order of filing or recording of financing statements, mortgages or other
documents filed or recorded to perfect any Lien upon any Collateral;
(e) the time of taking possession or control over any Collateral;
(f) that any Priority Lien may not have been perfected or may be or have become subordinated,
by equitable subordination or otherwise, to any other Lien; or
(g) the rules for determining priority under any law governing relative priorities of Liens,
all Liens at any time (i) on the Primary Collateral to secure any of the Parity Lien Obligations
shall be subject and subordinate to all Primary Collateral Priority Liens securing Priority Lien
Obligations and (ii) on the Inventory and Receivables Collateral to secure any of the Parity Lien
Obligations (other than the Existing Credit Facility Obligations) shall be subject and subordinate
to all IR Collateral Priority Liens securing the Existing Credit Facility Obligations and/or the
Priority Lien Obligations. If the requirements set forth in Section 11.05(a) have been satisfied,
comparable provisions will apply with respect to the DB Facility Collateral. If the requirements
set forth in Section 11.05(b) have been satisfied, comparable provisions will apply with respect to
the ML Facility Collateral.
Clauses (i) and (ii) of the foregoing provision are intended for the benefit of, and shall be
enforceable as a third party beneficiary by, each present and future holder of Priority Lien
Obligations, each present and future Priority Debt Representative and the Collateral Trustee as
holder of Priority Liens. Clause (ii) of the foregoing provision is intended for the benefit of,
and shall be enforceable as a third party beneficiary by, each present and future holder of
Existing Credit Facility Obligations and the Existing Credit Facility Agent as holder of Liens on
the Inventory and Receivables Collateral pledged as collateral under an Existing Credit Facility. No other Person shall be entitled to rely on, have the
benefit of or enforce this provision. The Parity Debt Representative of each future Series of
Parity Lien Debt shall be required to deliver a Parity Debt Sharing Confirmation to the Collateral
Trustee, each Priority Debt Representative and the Existing Credit Facility Agent (provided that
the Parity Debt Sharing Confirmation delivered by the Existing Credit Facility Agent, in its
capacity as a Parity Debt Representative, will be solely in respect of the Primary Collateral).
In addition, the foregoing provision is intended solely to set forth the relative ranking, as
Liens, of the Liens securing Parity Lien Debt as against the Priority Liens. Neither the Notes nor
any other Parity Lien Obligations nor the exercise or enforcement of any right or remedy for the
payment or collection thereof (other than enforcement against the Collateral) are intended to be,
or shall ever be by reason of the foregoing provision, in any respect subordinated, deferred,
postponed, restricted or prejudiced.
Section 11.04 Relative Rights
Nothing in the Note Documents:
-88-
(a) impairs, as between the Company and the Holders, the obligation of the Company to pay
principal of, premium and interest, if any, on the Notes in accordance with their terms or any
other obligation of the Company or any Guarantor under the Note Documents;
(b) affects the relative rights of Holders as against any other creditors of the Company or
any Guarantor under the Note Documents (other than holders of Priority Liens or other Parity
Liens);
(c) restricts the right of any Holder to sue for payments that are then due and owing (but not
enforce any judgment in respect thereof against any Collateral to the extent specifically
prohibited by Sections [___] or [___] of the Collateral Trust Agreement or Sections [___],
[___] or [___] of the IR Collateral Intercreditor Agreement and if the requirements set forth in
Section 11.05 have been satisfied, the comparable provisions set forth in the intercreditor
agreements entered into with respect to the DB Facility Collateral and the ML Facility Collateral,
respectively);
(d) restricts or prevents any Holder or any holder of other Parity Lien Obligations, the
Trustee, the Collateral Trustee or other Person on their behalf from exercising any of its rights
or remedies upon a Default or Event of Default not specifically restricted or prohibited by
Sections [___] or [___] of the Collateral Trust Agreement or Sections [___], [___] or [___]
of the IR Collateral Intercreditor Agreement and if the requirements set forth in Section 11.05
have been satisfied, the comparable provisions set forth in the intercreditor agreements entered
into with respect to the DB Facility Collateral and the ML Facility Collateral, respectively; or
(e) restricts or prevents any Holder or any holder of other Parity Lien Obligations, the
Trustee, the Collateral Trustee or any other Person on their behalf from taking any lawful action
in an insolvency, receivership or liquidation proceeding not specifically restricted or prohibited
by Sections [___] or [___] of the Collateral Trust Agreement or Sections [___], [___] or
[___] of the IR Collateral Intercreditor Agreement and if the requirements set forth in Section
11.05 have been satisfied, the comparable provisions set forth in the intercreditor agreements
entered into with respect to the DB Facility Collateral and the ML Facility Collateral,
respectively.
Section 11.05 Release of Security Interest in Respect of Notes
The Collateral Trustee’s Liens upon all Collateral shall no longer secure the Notes
outstanding under this Indenture or any other Obligations with respect to the Notes under this
Indenture, and the rights of the Holders and the holders of such Obligations to the benefits and
proceeds of the Collateral Trustee’s Liens on all Collateral shall terminate and be discharged:
-89-
(a) upon satisfaction and discharge of this Indenture in accordance with Article 12 hereof;
(b) upon a Legal Defeasance or Covenant Defeasance of the Notes in accordance with Article 8
hereof;
(c) upon payment in full and discharge of all Notes outstanding under this Indenture and all
related Obligations that are outstanding, due and payable under this Indenture at the time the
Notes are paid in full and discharged; or
(d) in whole or in part, with the consent of the Holders of the requisite percentage of Notes
in accordance with Article 9 hereof.
|
|
Section 11.06 |
Covenant with Respect to DB Facility Collateral and ML Facility
Collateral |
The Company shall use its commercially reasonable efforts to:
(a) Obtain requisite consents from the DB Facility Agent and the lenders under the Deutsche
Bank Facility (a) to permit the Company and/or the applicable Guarantors to grant to the Collateral
Trustee, for the benefit of the Priority Lien Secured Parties, a second priority Lien on the DB
Facility Collateral, (b) to permit the Company and/or the applicable Guarantors to grant to the
Collateral Trustee, for the benefit of the Parity Lien Secured Parties, a third priority Lien on
the DB Facility Collateral and (c) to remove any requirement that the obligations under the
Deutsche Bank Facility be secured equally and ratably with the Parity Lien Obligations, provided
that, in connection with its commercially reasonable efforts to obtain such consents, the Company
and/or the applicable Guarantors shall be permitted to grant to the DB Facility Agent, for the
benefit of the lenders under the Deutsche Bank Facility, a first priority Lien on the DB Facility
Collateral; and
(b) Obtain requisite consents from the ML Facility Agent and the lenders under the Merrill
Lynch Facility (a) to permit the Company and/or the applicable Guarantors to grant to the Collateral
Trustee, for the benefit of the Priority Lien Secured Parties, a second priority Lien on the ML
Facility Collateral and (b) to permit the Company and/or the applicable Guarantors to grant to the
Collateral Trustee, for the benefit of the Parity Lien Secured Parties, a third priority Lien on
the ML Facility Collateral.
If the requirements of clause (a) of this Section 11.05 are satisfied, as certified to the
Collateral Trustee and the Trustee in an Officers’ Certificate of the Company, (i) the Collateral
Trustee and the Trustee will enter into an intercreditor agreement setting forth the relative
priorities of Liens in the DB Facility Collateral (including that the DB Facility Agent, for the
benefit of the lenders under the Deutsche Bank Facility, holds a first priority Lien on the DB
Facility Collateral) and (ii) the Collateral Trustee will enter into such security documents as are
necessary, as set forth in such Officers’ Certificate, to create and perfect the Liens on the DB
Facility Collateral in favor of the Collateral Trustee (and such intercreditor agreement and all
such security documents shall be deemed, for all purposes hereof, to be “Security Documents”).
If the requirements of clause (b) of this Section 11.05 are satisfied, as certified to the
Collateral Trustee and the Trustee in an Officers’ Certificate of the Company, (i) the Collateral
Trustee and the Trustee will enter into an intercreditor agreement setting forth the relative
priorities of Liens in the ML Facility Collateral (including that the ML Facility Agent, for
the benefit of the lenders under the Merrill Lynch Facility, holds a first priority Lien on
the ML Facility Collateral) and (ii) the Collateral Trustee will enter into such security documents
as are necessary, as set forth in such Officers’ Certificate,
-90-
to create and perfect the Liens on
the ML Facility Collateral in favor of the Collateral Trustee (and such intercreditor agreement and
all such security documents shall be deemed, for all purposes hereof, to be “Security Documents”).
If the requirements of Clause (b) of this Section 11.06 are not met within 90 days of the Issue
Date, the Company will pay to each Holder an amount equal to 0.50% of the outstanding principal
amount of Notes held by such Holder as of such 90th day.
Section 11.07
Covenant with respect to Grant
The
Company will request that Grant permit the Company to directly pledge
the Company's interest in the High Level Project to the Collateral
Trustee as further security for the First Lien Notes and the Notes.
In the event such request is granted by Grant, the Company's interest
in the High Level Project shall, for all purposes of this Indenture
and the Security Documents, be Primary Collateral.
Section
11.08 Compliance with Trust Indenture Act
(a) The Company shall comply with the provisions of TIA §314.
(b) To the extent applicable, the Company shall cause TIA §313(b), relating to reports, and
TIA §314(d), relating to the release of property or securities or relating to the substitution
therefor of any property or securities to be subjected to the Lien of the Security Documents, to be
complied with. Any certificate or opinion required by TIA §314(d) may be made by an Officer of the
Company except in cases where TIA §314(d) requires that such certificate or opinion be made by an
independent Person, which Person will be an independent engineer, appraiser or other expert
selected or reasonably satisfactory to the Trustee. Notwithstanding anything to the contrary in
this provision, the Company will not be required to comply with all or any portion of TIA §314(d)
if it determines, in good faith based on advice of counsel, that under the terms of TIA §314(d)
and/or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including
“no action” letters or exemptive orders, all or any portion of TIA §314(d) is inapplicable to one
or a series of released Collateral.
Without limiting the generality of the foregoing, certain no-action letters issued by the SEC
have permitted an indenture qualified under the TIA to contain provisions permitting the release of
collateral from Liens under such indenture in the ordinary course of the issuer’s business without
requiring the issuer to provide certificates and other documents under TIA §314(d).
-91-
Section
11.09 Further Assurances
(a) The Company and each of the Guarantors shall do or cause to be done all acts and things
that may be required, or that the Collateral Trustee from time to time may reasonably request, to
assure and confirm that the Collateral Trustee holds, for the benefit of the holders of Secured
Obligations, duly created and enforceable and perfected Liens upon the Collateral, including after
acquired Collateral and any property or assets that become Collateral after the Notes are issued,
subject to such exceptions as may be contemplated by the Secured Debt Documents.
(b) Upon the reasonable request of the Collateral Trustee or any Secured Debt Representative
at any time and from time to time, the Company and each of the Guarantors shall promptly execute,
acknowledge and deliver such security documents, instruments, certificates, notices and other
documents, and take such other actions as shall be reasonably required, or that the Collateral
Trustee may reasonably request, to create, perfect, protect, assure or enforce the Liens and
benefits intended to be conferred, in each case as contemplated by the Secured Debt Documents.
Section 11.10
Authorization of Receipt of Funds by the Trustee under the Security
Documents
The
Trustee is hereby authorized to receive any funds for the benefit of
the Holders distributed under the Security Documents, and to make
such further distributions of such funds to Holders according to the
provisions of this Indenture.
ARTICLE 12
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further effect as to all Notes
issued thereunder, when:
(a) either:
(1) all Notes that have been authenticated, except lost, stolen or destroyed
Notes that have been replaced or paid and Notes for whose payment money has been
deposited in trust and thereafter repaid to the Company, have been delivered to the
Trustee for cancellation; or
(2) all Notes that have not been delivered to the Trustee for cancellation have
become due and payable by reason of the mailing of a notice of redemption or
otherwise or will become due and payable within one year and the Company or any
Guarantor has irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be sufficient without
consideration of any reinvestment of interest, to pay and discharge the entire
indebtedness on the Notes not delivered to the Trustee for cancellation for
principal, premium, if any and accrued interest to the date of maturity or
redemption;
(b) no Default or Event of Default shall have occurred and be continuing on the date of the
deposit or shall occur as a result of the deposit and the deposit will not result in a breach or
violation of, or constitute a default under, any other instrument to which the Company or any
Guarantor is a party or by which the Company or any Guarantor is bound;
(c) the Company or any Guarantor has paid or caused to be paid all sums payable by it under
this Indenture; and
-92-
(d) the Company has delivered irrevocable instructions to the Trustee under this Indenture to
apply the deposited money toward the payment of the Notes at maturity or the redemption date, as
the case may be.
In addition, the Company must deliver an Officers’ Certificate and an Opinion of Counsel to the
Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money shall have been
deposited with the Trustee pursuant to subclause (2) of clause (a) of this Section 12.01, the
provisions of Section 12.02 and Section 8.06 hereof shall survive.
Section 12.02 Application of Trust Money.
Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee
pursuant to Section 12.01 hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes 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 the Trustee; but such money need not be segregated from other
funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or Government Securities in
accordance with Section 12.01 hereof by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company’s and any Guarantor’s obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred
pursuant to Section 12.01 hereof;
provided that if the Company has made any payment of principal of, premium, if any or interest on
any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or Government Securities
held by the Trustee or Paying Agent.
ARTICLE 13
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by
TIA Section 318(c), the imposed duties shall control.
Section 13.02 Notices.
Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly
given if in writing and delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, to
the others’ address:
-93-
If to the Company and/or any Guarantor:
Ainsworth Lumber Co. Ltd.
Suite 3194, Bentall IV,
P.O. Box 49307,
1055 Dunsmuir Street,
Vancouver, British Columbia,
Canada, V7X 1L3
Telecopier No.: (604) 661-3200
Attention: Chief Financial Officer
With copies to:
Skadden, Arps, Slate, Meagher & Flom LLP
222 Bay Street
Suite 1750
Toronto, Ontario
Canada, M5K 1J5
Telephone Number (416) 777-4700
Attention: Christopher W. Morgan
— and —
Blake, Cassels & Graydon LLP
595 Burrard Street
P.O. Box 49314
Suite 2600, Three Bentall Centre
Vancouver, British Columbia,
Canada, V7X 1L3
Telecopier No.: (604) 631-3371
Attention: William Sirett
If to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21W
New York, New York 10286
Telecopier No.: (212) 815-5803
Attention: Corporate Trust Administration
The Company, any Guarantor or the Trustee, by notice to the others may designate additional or
different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery; provided that any notice or communication delivered to the Trustee
shall be deemed effective upon actual receipt thereof.
-94-
Any notice or communication to a Holder shall be mailed by first class mail, certified or
registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to
its address shown on the register kept by the Registrar. Any notice or communication shall also be
so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee
and each Agent at the same time.
Section 13.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone
else shall have the protection of TIA Section 312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent.
(a) Upon any request or application by the Company or any of the Restricted Subsidiaries to
the Trustee to take any action under this Indenture, the Company or such Guarantor, as the case may
be, shall furnish to the Trustee an Officers’ Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in Section 13.05 hereof)
stating that, in the opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have been satisfied; and
(b) An Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which
shall include the statements set forth in Section 13.05 below) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been satisfied.
Section 13.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (other than a certificate provided pursuant to Section 4.04 hereof or TIA
Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has read such covenant or
condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he or she 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, in the case of an Opinion of Counsel, may
be limited to reliance on an Officers’ Certificate as to matters of fact); and
-95-
(d) a statement as to whether or not, in the opinion of such Person, such condition or
covenant has been complied with.
Section 13.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar
or Paying Agent may make reasonable rules and set reasonable requirements for its functions.
Section 13.07 No Personal Liability of Directors, Officers, Employees and Shareholders.
No past, present or future director, officer, employee, incorporator or shareholder of the
Company or any Guarantor, as such, shall have any liability for any obligations of the Company or
the Guarantors under the Notes, this Indenture, the Subsidiary Guarantees, or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
Section 13.08 Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE
NOTES AND THE SUBSIDIARY GUARANTEES.
Section 13.09 Waiver of Jury Trial.
EACH OF THE COMPANY, THE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 13.10 Force Majeure.
In no event shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations under this Indenture arising out of or caused by, directly or
indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages,
accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural
catastrophes or acts of god, and interruptions, loss or malfunctions of utilities, communications
or computer (software or hardware) services.
Section 13.11 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or debt agreement of the
Company or their Restricted Subsidiaries or of any other Person. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 13.12 Successors.
All agreements of the Company in this Indenture and the Notes shall bind their successors.
All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each
Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section
10.05.
-96-
Section 13.13 Agent for Service; Submission to Jurisdiction; Waiver of Immunities.
By the execution and delivery of this Indenture, the Company and each of the Non-U.S.
Guarantors (i) acknowledges that it has, by separate written instrument, irrevocably designated and
appointed CT Corporation System, 111 Eighth Avenue, 13th Floor, New York, New York 10011 as its
authorized agent upon which process may be served in any suit, action or proceeding arising out of
or relating to the Notes, the Subsidiary Guarantees or this Indenture that may be instituted in any
U.S. federal or state court located in the Borough of Manhattan in The City of New York, or brought
under federal or state securities laws, and acknowledges that CT Corporation System has accepted
such designation, (ii) submits to the non-exclusive jurisdiction of such courts in any such suit,
action or proceeding, and (iii) agrees that service of process upon CT Corporation System and
written notice of said service to it (mailed or delivered to its Chief Financial Officer at its
principal office in Vancouver, British Columbia as specified in Section 13.02 hereof), shall be
deemed in every respect effective service of process upon it in any such suit or proceeding. The
Company further agrees to take any and all action, including the execution and filing of any and
all such documents and instruments, as may be necessary to continue such designation and
appointment in full force and effect so long as this Indenture shall be in full force and effect.
To the extent that any of the Company or the Guarantors has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, each of the Company and the Guarantors hereby irrevocably waives
such immunity in respect of its obligations under this Indenture and the Notes, to the extent
permitted by law.
Section 13.14 Conversion of Currency
(a) (i) If for the purpose of obtaining judgment in, or enforcing the judgment of, any court
in any country, it becomes necessary to convert into any other currency (the “judgment currency”)
an amount due in U.S. dollars, then the conversion shall be made at the rate of exchange
prevailing on the Business Day before the day on which the judgment is given or the order of
enforcement is made, as the case may be (unless a court shall otherwise determine). (ii) If there
is a change in the rate of exchange prevailing between the Business Day before the day on which the
judgment is given or an order of enforcement is made, as the case may be (or such other date as a
court shall determine), and the date of receipt of the amount due, the Company will pay such
additional (or, as the case may be, such lesser) amount, if any, as may be necessary so that the
amount paid in the judgment currency when converted at the rate of exchange prevailing on the date
of receipt will produce the amount in U.S. dollars originally due.
(b) In the event of the winding-up of the Company at any time while any amount or damages
owing under the Notes, Subsidiary Guarantees or this Indenture, or any judgment or order rendered
in respect thereof, shall remain outstanding, the Company shall indemnify and hold the Holders and
the Trustee harmless against any deficiency arising or resulting from any variation in rates of
exchange between (1) the date as of which the equivalent of the amount in U.S. dollars due or
contingently due under the Notes, Subsidiary Guarantees or this Indenture (other than under this
Clause (b)) is calculated for the purposes of such winding-up and (2) the final date for the filing
of proofs of claim in such winding-up. For the purpose of this Clause (b), the final date for the
filing of proofs of claim in the winding-up of the Company shall be the date fixed by the
liquidator or otherwise in accordance with the relevant provisions of applicable law as being the
latest practicable date as at which liabilities of the Company may be ascertained for such
winding-up prior to payment by the liquidator or otherwise in respect thereto.
-97-
(c) The obligations contained in Clauses (a)(ii) and (b) of this Section 13.14 shall
constitute separate and independent obligations of the Company from its other obligations under the
Notes, Subsidiary Guarantees and this Indenture, shall give rise to separate and independent causes
of action against the Company, shall apply irrespective of any waiver or extension granted by any
Holder or Trustee or either of them from time to time and shall continue in full force and effect
notwithstanding any judgment or order or the filing of any proof of claim in the winding-up of the
Company for a liquidated sum in respect of amounts due hereunder (other than under Clause (b)
above) or under any such judgment or order. Any such deficiency as aforesaid shall be deemed to
constitute a loss suffered by the Holders or the Trustee, as the case may be, and no proof or
evidence of any actual loss shall be required by the Company, the Guarantors or the liquidator or
otherwise. In the case of Clause (b) above, the amount of such deficiency shall not be deemed to
be reduced by any variation in rates of exchange occurring between the said final date and the date
of any liquidating distribution.
(d) The term “rate(s) of exchange” shall mean the rate of exchange quoted by the Federal
Reserve Bank of New York, noon buying rate on the date of determination for purchases of U.S.
dollars with the judgment currency other than U.S. dollars referred to in Clauses (a) and (b) above
and includes any premiums and costs of exchange payable.
(e) The Trustee shall have no duty or liability with respect to monitoring or enforcing this
Section 13.14.
Section 13.15 Currency Equivalent.
Except as provided in Section 13.14, for purposes of the construction of the terms of this
Indenture or of the Notes and Subsidiary Guarantees, in the event that any amount is stated herein
in the currency of one nation (the “First Currency”), as of any date such amount shall also be
deemed to represent the amount in the currency of any other relevant nation (the “Other Currency”)
which is required to purchase such amount in the First Currency at the rate of exchange quoted by the Federal
Reserve Bank of New York, noon buying rate on the date of determination.
Section 13.16 Severability.
In case any provision in this Indenture or in the Notes 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 13.17 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement.
Section 13.18 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be considered a part of
this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
-98-
|
|
|
|
|
|
SIGNATURES
AINSWORTH LUMBER CO. LTD.
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
AINSWORTH ENGINEERED CORP.
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
AINSWORTH ENGINEERED CANADA LIMITED PARTNERSHIP
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
|
|
|
|
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
AINSWORTH ENGINEERED, LLC
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
AINSWORTH CORP.
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
The Bank of New York, as Trustee
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
-2-
EXHIBIT A
[Face of Note]
[Insert
the Global Note Legend, if applicable, and the Canadian Legend, if
required, pursuant to the
provisions of the Indenture]
Note CUSIP: •
Note ISIN: •
14% Senior Secured Second Lien Notes due June 24, 2014
No. ___ US$
AINSWORTH LUMBER CO. LTD.
promises to pay to or registered assigns, the principal sum of
United States Dollars on June 24, 2014.
Interest Payment Dates: June 30 and December 30
Record Dates: June 15 and December 15
A-1
IN WITNESS HEREOF, the Company has caused this instrument to be duly executed.
Dated:
|
|
|
|
|
|
AINSWORTH LUMBER CO. LTD.
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
A-2
This is one of the Notes referred to in the within-mentioned Indenture:
|
|
|
|
|
|
The Bank of New York, as Trustee
|
|
|
By: |
|
|
|
|
Authorized Signatory |
|
|
|
|
|
|
A-3
[Back of Note]
14% Senior Secured Second Lien Notes due June 24, 2014
Capitalized terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.
1. INTEREST. Ainsworth Lumber Co. Ltd., a corporation amalgamated under the laws of the
Province of British Columbia (the “Company”), promises to pay, subject to the next paragraph,
interest on the principal amount of this Note in cash at 14% per annum from •, 2008 until but not
including, the date of maturity. The Company will pay interest semi-annually in arrears on June
30th and December 30th of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an “Interest Payment Date”). Interest on the Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that the first Interest Payment Date shall be June 30, 2008. The
Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy
Law) on overdue principal and premium, if any, from time to time on demand at the interest rate on
the Notes plus 1% to the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest from time to time on
demand at the interest rate on the Notes plus 1% to the extent lawful. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months. For the purposes of disclosure
under the Interest Act (Canada), the yearly rate of interest which is equivalent to the rate
payable hereunder is the rate payable hereunder multiplied by the actual number of days in the year
divided by 360.
For payments due through December 30, 2010, the Company may, at its option, pay interest on
the Notes entirely by increasing the principal amount of the outstanding Notes or by issuing
additional Notes (“PIK Notes”) in an aggregate principal amount equal to the amount of interest
then due and payable, in accordance with the following sentence, rounded up to the nearest whole dollar (“PIK Interest”). PIK Interest will
accrue at the rate of 15% per annum on the Notes. Interest shall accrue on PIK Notes issued pursuant to the
Indenture from and including the date of issuance of such PIK Notes. Any such PIK Notes shall be
issued on the same terms as the Notes and shall constitute part of the same series of securities as
the Notes and will vote together as one series on all matters with respect to the Notes. All
references to Notes herein shall include any PIK Notes.
The Company must elect the form of interest payment with respect to each interest period by
delivering a notice to the Trustee at least ten business days prior to the beginning of each
interest period. The Trustee shall promptly deliver a corresponding notice to the Holders. In the
absence of such an election, interest on the Notes will be payable according to the election for
the previous interest period. The first interest payment on
June 30, 2008 will be made by increasing the principal amount of
the Global Note in an amount equal to the PIK Interest. After December 30, 2010, the Company will make all interest payments on the Notes
entirely in cash.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes to the Persons who are
registered Holders of Notes at the close of business on the June 15 or December 15 (whether or not
a Business Day), as the case may be, next preceding the Interest Payment Date, even if such Notes
are canceled after such record date and on or before such Interest Payment Date, except as provided
in Section 2.12 of the Indenture with respect to defaulted interest. Payment of cash interest may
be made by check mailed to the Holders at their addresses set forth in the register of Holders,
provided that payment by wire transfer of immediately available funds will be required with respect
to principal of and cash interest and premium, if any on all Global Notes and all other Notes the
Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent.
Such payment shall be in
A-4
such coin or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
The Company will make any payments of PIK Interest in respect of Notes represented
by Global Notes by increasing the principal amount of such Global Notes for the benefit of the
accounts of Participants specified by DTC or its nominee. Any such
increase in the
principal amount of the Global Note will be made by the Trustee or the Custodian (at the direction of the Trustee). The Company will make any payments of PIK
Interest in respect of Notes represented by Certificated Notes by issuing PIK Notes in the form of
Certificated Notes and delivering them to Holders.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the Trustee under the
Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to the Holders. The Company or any Guarantor may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an Indenture, dated as of •, 2008 (the
“Indenture”), among the Company, the Guarantors named therein and the Trustee. This Note is one of
a duly authorized issue of notes of the Company designated as its 14% Senior Secured Second Lien
Notes due 2014. The Notes and any PIK Notes issued under the Indenture (referred to herein as the
“Notes”) shall be treated as a single class of securities under the Indenture, unless otherwise
specified in the Indenture. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”).
The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act
for a statement of such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.
5. OPTIONAL REDEMPTION.
(a) Except as described below under clauses 5(b) and 5(c) hereof, the Notes will not be
redeemable at the Company’s option before January 30, 2011. Thereafter, the Company may redeem all
or a part of the Notes upon not less than 30 nor more than 60 days’ prior notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid
interest on the Notes redeemed, to, but not including, the applicable redemption date, subject to
the rights of the Holders of Notes on a record date to receive interest due on the relevant
interest payment date, if redeemed during the twelve-month period beginning on January 30 of the
years indicated below:
|
|
|
|
|
|
|
Optional |
|
|
Redemption |
Year |
|
Price |
|
2011 |
|
|
107.00 |
% |
2012 |
|
|
104.67 |
% |
2013 |
|
|
102.33 |
% |
2014 and thereafter |
|
|
100.00 |
% |
(b) At any time prior to January 30, 2011, the Company may on any one or more occasions redeem
up to 35% of the aggregate principal amount of Notes (including any PIK Notes), at a redemption
price equal to 114% of the principal amount, plus accrued and unpaid interest to, but not
including, the redemption date, subject to the rights of the Holders of Notes on a record date to
receive in-
A-5
terest due on the relevant interest payment date, with the net cash proceeds of one or more
Equity Offerings; provided that:
(1) at least 65% of the aggregate principal amount of Notes (including any PIK Notes)
theretofore issued under the Indenture remains outstanding immediately after the occurrence
of such redemption (excluding Notes held by the Company and its Subsidiaries); and
(2) the redemption occurs within 60 days of the date of the closing of such Equity
Offering.
(c) The Company may redeem all, but not less than all, of the Notes at any time at 100% of the
aggregate principal amount of the Notes, together with accrued and unpaid interest on the Notes
redeemed to the applicable redemption date, subject to the rights of the Holders of Notes on a
record date to receive interest due on the relevant interest payment date, if the Company has
become or would become obligated to pay, on the next date on which any amount would be payable with
respect to the Notes, any Additional Amounts as a result of a change in the laws (including any
regulations promulgated thereunder) of Canada (or any political subdivision or taxing authority
thereof or therein), or any change in any official position of any governmental agency, taxing
authority or regulatory authority regarding the application or interpretation of such laws or
regulations, which change is announced or becomes effective on or after the date of the Offering
Memorandum.
(d) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 of the Indenture.
6. MANDATORY REDEMPTION. The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
7. NOTICE OF REDEMPTION. Subject to Section 3.09 of the Indenture, notice of redemption will
be mailed by first class mail at least 30 days but not more than 60 days before the redemption date
(except that redemption notices may be mailed more than 60 days prior to a redemption date if the
notice is issued in connection with Article 8 or Article 11 of the Indenture) to each Holder whose
Notes are to be redeemed at its registered address. Notes may be redeemed in multiples of US$1.00.
On and after the redemption date interest ceases to accrue on Notes or portions thereof called for
redemption.
8. OFFERS TO REPURCHASE.
(a) Upon the occurrence of a Change of Control, the Company shall make an offer (a “Change of
Control Offer”) to each Holder to repurchase all or any part (equal to US$1.00 or an integral
multiple thereof) of each Holder’s Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest to the date of purchase (the “Change of
Control Payment”) subject to the rights of the Holders of Notes on a record date to receive
interest due on the relevant interest payment date. However, the Company will not be obligated to
make a Change of Control Offer in the event that it has exercised its rights to redeem all of the
Notes as described above under “Optional Redemption.” The Change of Control Offer shall be made in
accordance with Sections 3.09 and 4.15 of the Indenture.
(b) If the Company or any of its Restricted Subsidiaries consummates an Asset Sale, the
Company may use Excess Proceeds to make at any time, and when the aggregate amount of Excess
A-6
Proceeds
exceeds US$10.0 million the Company will make, an offer to purchase (an “Asset
Sale Offer”) to all Holders of Notes and all Holders of other Indebtedness that is pari passu with
the Notes containing provisions similar to those set forth in the Indenture with respect to offers
to purchase or redeem such indebtedness with the proceeds of sales of assets, to purchase the
maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out
of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest to the date fixed for the closing of such offer, in
accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount
of Notes and other pari passu Indebtedness tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company (or such Restricted Subsidiary) may use those Excess Proceeds for
any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes
and other pari passu Indebtedness tendered pursuant to an Asset Sale Offer exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be
purchased on a pro rata basis based on the principal amount of Notes and other pari passu
Indebtedness tendered. Holders of Notes that are the subject of an offer to purchase will receive
an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such
Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” on the reverse
of the Notes.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in
denominations of US$1.00 and integral multiples of US$1.00. The transfer of Notes may be
registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the transfer of any Note or
portion of a Note selected for redemption, except for the unredeemed portion of any Note being
redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a
period of 15 days before a selection of Notes to be redeemed.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for
all purposes, except as set forth in Section 4.18 of the Indenture.
11. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Subsidiary Guarantees or the Notes
may be amended or supplemented as provided in the Indenture.
12. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section
6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes
to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable immediately without further action or notice. Holders may not enforce the
Indenture, the Security Documents, the Notes or the Subsidiary
Guarantees except as provided in the Indenture, the Collateral Trust
Agreement and the IR Collateral Intercreditor Agreement. Subject to
certain limitations, Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of
the Notes notice of any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal, premium, if any or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate principal amount
of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest or the principal of,
premium, if any or interest on, the Notes. The Company is required to deliver to the Trustee
annually a
A-7
statement regarding compliance with the Indenture, and the Company is required upon becoming
aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such
Default or Event of Default.
13. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.
14. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE
INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
15. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes
and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.
The Company will furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to:
Ainsworth Lumber Co. Ltd.
Suite 3194, Bentall IV,
P.O. Box 49307,
1055 Dunsmuir Street,
Vancouver, British Columbia, Canada V7X 1L3
Attention: Chief Financial Officer
A-8
ASSIGNMENT FORM
To assign this Note, fill in the form below:
|
|
|
(I) or (we) assign and transfer this Note to: |
|
|
|
|
(Insert assignee’ legal name) |
(Insert assignee’s soc. sec. or tax I.D. no.)
(Print or type assignee’s name, address and zip code)
to transfer this Note on the books of the Company. The agent may substitute another to act for
him.
Date:
|
|
|
|
|
|
Your Signature: |
|
|
|
(Sign exactly as your name appears on
the face of this Note)
|
Signature Guarantee*:
|
|
|
* |
|
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor acceptable to the Trustee). |
A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or
4.15 of the Indenture, check the appropriate box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of this Note purchased by the Company pursuant to
Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:
US$
Date:
|
|
|
|
|
|
Your Signature: |
|
|
|
(Sign exactly as your name appears on
the face of this Note)
|
Signature Guarantee*:
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-10
EXHIBIT B
[FORM OF NOTATION OF GUARANTEE]
For value received, each Guarantor (which term includes any successor Person under the
Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the
Indenture (as defined below) and subject to the provisions in the Indenture dated as of •, 2008
(the “Indenture”) among Ainsworth Lumber Co. Ltd., a corporation amalgamated under the laws of the
Province of British Columbia, Ainsworth Engineered Corp., Ainsworth Engineered Canada Limited
Partnership, Ainsworth Engineered, LLC, Ainsworth Corp. and The Bank of New York, as Trustee (the
“Trustee”), (a) the due and punctual payment of the principal of, premium, if any and interest on
the Notes (as defined in the Indenture), whether at maturity, by acceleration, redemption or
otherwise, the due and punctual payment of interest on overdue principal and premium, if any, and,
to the extent permitted by law, interest, and the due and punctual performance of all other
obligations of the Company to the Holders or the Trustee all in accordance with the terms of the
Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to this Subsidiary Guarantee and the Indenture are expressly set forth in the Indenture
and reference is hereby made to the Indenture for the precise terms of the Subsidiary Guarantee.
The laws of the State of New York shall govern and be used to construe this Subsidiary
Guarantee.
|
|
|
|
|
|
[Name of Guarantor(s)]
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
B-1
EXHIBIT C
[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
Supplemental Indenture (this “Supplemental Indenture”), dated as of , among
(the “Guaranteeing Subsidiary”), a subsidiary of Ainsworth Lumber Co. Ltd., a
corporation incorporated under the laws of the Province of British Columbia (the “Company”), the
Company, and The Bank of New York, as Trustee under the Indenture referred to below (the
“Trustee”).
WITNESSETH
WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the
“Indenture”), dated as of •, 2008, providing for the issuance of 14% Senior Secured Second Lien
Notes due June 24, 2014 (the “Notes”);
WHEREAS, the Indenture provides that under certain circumstances a Subsidiary providing a
Subsidiary Guarantee shall execute and deliver to the Trustee a supplemental indenture pursuant to
which such Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the
Notes and the Indenture on the terms and conditions set forth herein (the “Subsidiary Guarantee”);
and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and
deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree
for the equal and ratable benefit of the Holders of the Notes as follows:
(1) Capitalized Terms. Capitalized terms used herein without definition shall have the
meanings assigned to them in the Indenture.
(2) Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees as follows:
(a) Along with all Guarantors named in the Indenture, to jointly and severally
unconditionally guarantee to each Holder of a Note authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of and interest and premium, if any on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest on the Notes, if
any, if lawful, and all other obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and
(ii) in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, that same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed
C-1
or any performance so guaranteed for whatever reason, the Guarantors shall be
jointly and severally obligated to pay the same immediately.
(b) The obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes, the Security Documents or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor.
(c) The obligations of the Guaranteeing Subsidiary under this Subsidiary Guarantee are
independent of the obligations guaranteed by the Guaranteeing Subsidiary hereunder, and a
separate action or actions may be brought and prosecuted by the Trustee on behalf of, or by,
the Holders, subject to the terms and conditions set forth in the Indenture, against the
Guaranteeing Subsidiary to enforce this Subsidiary Guarantee, irrespective of whether any
action is brought against the Company or whether the Company is joined in any such action or
actions.
(d) In the event of a default in payment of principal (or premium, if any) or interest
on a Note, whether at its stated maturity, by acceleration, purchase or otherwise, legal
proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Note,
subject to the terms and conditions set forth in the Indenture, directly against the
Guaranteeing Subsidiary to enforce the Subsidiary Guarantee or the Security Documents without first proceeding against
the Company or any other Guarantor. If, after the occurrence and during the continuance of
an Event of Default, the Trustee or any of the Holders are prevented by applicable law from
exercising their respective rights to accelerate the maturity of the Notes, to collect
interest on the Notes, or to enforce or exercise any other right or remedy with respect to
the Notes, the Guaranteeing Subsidiary shall pay to the Trustee for the account of the
Holder, upon demand therefor, the amount that would otherwise have been due and payable had
such rights and remedies been permitted to be exercised by the Trustee or any of the
Holders.
(e) The following is hereby waived: diligence presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands whatsoever.
(f) This Subsidiary Guarantee shall not be discharged except by complete performance of
the obligations contained in the Notes, the Indenture and this Supplemental Indenture, and
the Guaranteeing Subsidiary accepts all obligations of a Guarantor under the Indenture.
(g) If any Holder or the Trustee is required by any court or otherwise to return to the
Company, the Guarantors (including the Guaranteeing Subsidiary), or
any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or the
Guarantors, any amount paid either to the Trustee or such Holder, this Subsidiary Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and effect.
(h) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until payment in
full of all obligations guaranteed hereby.
(i) As between the Guaranteeing Subsidiary, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be ac-
C-2
celerated as provided in Article 6 of the Indenture for the purposes of this Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such obligations as provided in Article 6 of the Indenture,
such obligations (whether or not due and payable) shall forthwith become due and payable by
the Guaranteeing Subsidiary for the purpose of this Subsidiary Guarantee.
(j) The Guaranteeing Subsidiary shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the rights of the
Holders under this Subsidiary Guarantee.
(k) Pursuant to Section 10.02 of the Indenture, after giving effect to all other
contingent and fixed liabilities that are relevant under any applicable Bankruptcy or
fraudulent conveyance laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other Guarantor in respect
of the obligations of such other Guarantor under Article 10 of the Indenture, this new
Subsidiary Guarantee shall be limited to the maximum amount permissible such that the
obligations of such Guaranteeing Subsidiary under this Subsidiary Guarantee will not
constitute a fraudulent transfer or conveyance.
(l) This Subsidiary Guarantee shall remain in full force and effect and continue to be
effective should any petition be filed by or against the Company for
liquidation or
reorganization, should the Company become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or any significant part of
the Company’s assets, and shall, to the fullest extent permitted by law, continue to be
effective or be reinstated, as the case may be, if at any time payment and performance of
the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise
be restored or returned by any obligee on the Notes and Subsidiary Guarantee, whether as a
“voidable preference”, “fraudulent transfer” or otherwise, all as though such payment or
performance had not been made. In the event that any payment or any part thereof, is
rescinded, reduced, restored or returned, the Note shall, to the fullest extent permitted by
law, be reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
(m) In case any provision of this Subsidiary Guarantee shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
(n) This Subsidiary Guarantee shall be a senior obligation of such Guaranteeing
Subsidiary, and will be secured to the extent described in Article 11 of the Indenture.
(o) Each payment to be made by the Guaranteeing Subsidiary in respect of this
Subsidiary Guarantee shall be made without set-off, counterclaim, reduction or diminution of
any kind or nature.
(3) Execution and Delivery. The Guaranteeing Subsidiary agrees that the Subsidiary Guarantee
shall remain in full force and effect notwithstanding any failure to endorse on each Note a
notation of this Subsidiary Guarantee.
C-3
(4) Guaranteeing Subsidiary may Consolidate, etc. on Certain Terms.
(a) Except as otherwise provided in Section 10.05 of the Indenture, the Guaranteeing
Subsidiary may not sell or otherwise dispose of all or substantially all of its assets to, or
consolidate, amalgamate with or merge with or into (whether or not such Guaranteeing Subsidiary is
the surviving Person) another Person other than the Company or another Guarantor unless:
(b) immediately after giving effect to that transaction, no Default or Event of Default
exists; and
(c) either:
(1) the Guaranteeing Subsidiary is the surviving Person, or the Person acquiring the
property in any such sale or disposition or the Person formed by or surviving any such
consolidation, amalgamation or merger assumes all the obligations of the Guaranteeing
Subsidiary under the Indenture and this Subsidiary Guarantee pursuant to a supplemental
indenture satisfactory to the Trustee and completes all other required documentation; or
(2) the Net Proceeds of such sale or other disposition are applied in accordance with
the provisions of Section 4.10 of the Indenture;
(d) In case of any such consolidation, amalgamation, merger, sale or conveyance and upon the
assumption by the successor Person (where applicable), by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of this Subsidiary Guarantee
endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions
of the Indenture to be performed by the Guaranteeing Subsidiary, such successor Person shall
succeed to and be substituted for the Guaranteeing with the same effect as if it had been named
herein as a Guaranteeing Subsidiary. Such successor Person thereupon may cause to be signed the
Subsidiary Guarantee to be endorsed upon all of the Notes issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee. The Subsidiary Guarantee
so issued shall in all respects have the same legal rank and benefit under the Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the terms of the
Indenture as though all of such Subsidiary Guarantees had been issued at the date of the execution
hereof.
(e) Except as set forth in Articles 4 and 5 of the Indenture, and notwithstanding clauses (a)
and (b) above, nothing contained in the Indenture or in any of the Notes shall prevent any
consolidation, amalgamation or merger of a Guaranteeing Subsidiary with or into the Company or
another Guarantor, or shall prevent any sale or conveyance of the property of the Guaranteeing
Subsidiary as an entirety or substantially as an entirety to the Company or another Guarantor.
(5) Releases.
(a) In the event of a sale or other disposition (including by way of merger, amalgamation or
consolidation in compliance with Section 5.01 of the Indenture)
of all or a majority of the capital
stock of the Guaranteeing Subsidiary to a Person that is not (either before or after giving effect
to such transaction) the Company or a Restricted Subsidiary then the Guaranteeing Subsidiary (in
the event of a sale or other disposition, by way of merger, consolidation or otherwise, of all of
the capital stock of such Guaranteeing Subsidiary) will be released and relieved of any obligations
under this Subsidiary Guarantee; after which the Guarantor is no longer a Restricted Subsidiary,
provided that such sale or other disposition does not violate the terms of the Indenture. Further,
if the Company redesignates any Restricted
C-4
Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with Section 4.17
of the Indenture then the Guaranteeing Subsidiary will be released and relieve of any obligations
under this Subsidiary Guarantee. Upon delivery by the Company to the Trustee of an Officers’
Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by
the Company in accordance with the provisions of the Indenture, including without limitation
Section 4.10 of the Indenture, the Trustee shall execute any documents reasonably required in order
to evidence the release of the Guaranteeing Subsidiary from its obligations under this Subsidiary
Guarantee.
(b) The Guaranteeing Subsidiary not released from its obligations under this Subsidiary
Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for
the other obligations of the Guaranteeing Subsidiary under the Indenture a provided in Article 10
thereof.
(6) No Recourse Against Others. No past, present or future director, officer, employee,
incorporator, shareholder or agent of the Guaranteeing Subsidiary, as such, shall have any
liability for any obligations of the Company or any Subsidiary under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the consideration for
issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver is against public policy.
(7) THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL
INDENTURE, THE INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
(8) Counterparts. The parties may sign any number of copies of this Supplemental Indenture.
Each signed copy shall be an original, but all of them together represent the same agreement.
(9) Effect of Headings. The Section headings herein are for convenience only and shall not
affect the construction hereof.
(10) The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the
recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and
the Company.
(11) Subrogation. The Guaranteeing Subsidiary shall be subrogated to all rights of Holders of
Notes against the Company in respect of any amounts paid by the Guaranteeing Subsidiary pursuant to
the provisions of Section 2 hereof; provided, however, that, if an Event of Default has occurred
and is continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or receive any
payments arising out of, or based upon, such right of subrogation until all amounts then due and
payable by the Company under the Indenture or the Notes shall have been paid in full.
(12) Benefits Acknowledged. The Guaranteeing Subsidiary acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by the Indenture and this
Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Subsidiary
Guarantee are knowingly made in contemplation of such benefits.
(13) Successors. All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture
shall bind its Successors, except as otherwise provided in Section
2(k) hereof or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.
C-5
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed, all as of the date first above written.
Dated: ,
|
|
|
|
|
|
AINSWORTH LUMBER CO. LTD.
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
[GUARANTEEING SUBSIDIARY]
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
The Bank of New York, as Trustee
|
|
|
By: |
|
|
|
|
Authorized Signatory |
|
|
|
|
|
C-6
Exhibit D
Post-Closing Required Mortgaged Properties
D-1
Exhibit E
Form of Post-Closing Required Mortgages
E-1
Exhibit F
Title Insurance Policies-Amounts
F-1
Exhibit G
Post-Closing Required Mortgages
Forms of Opinion
G-1