EXHIBIT 4.10
BREED TECHNOLOGIES, INC.,
Issuer,
EACH OF THE SUBSIDIARY GUARANTORS
LISTED ON SCHEDULE I HERETO,
Subsidiary Guarantors,
and
IBJ SCHRODER BANK & TRUST COMPANY,
Trustee
____________________
INDENTURE
Dated as of April 28, 1998
_____________________
$330,000,000
9 1/4% Senior Subordinated Notes due 2008
===============================================================================
BREED TECHNOLOGIES, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT
OF 1939 AND INDENTURE, DATED AS OF APRIL 28, 1998
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
(S) 310(a)(1) ................................ 607
(a)(2) ................................ 607
(b) ................................ 608
(S) 312(c) ................................ 701
(S) 314(a) ................................ 703
(a)(4) ................................ 1008(a)
(c)(1) ................................ 102
(c)(2) ................................ 102
(e) ................................ 102
(S) 315(b) ................................ 601
(S) 316(a)(last
sentence) ................................ 101 ("Outstanding")
(a)(1)(A) ................................ 502, 512
(a)(1)(B) ................................ 513
(b) ................................ 508
(c) ................................ 105(d)
(S) 317(a)(1) ................................ 503
(a)(2) ................................ 504
(b) ................................ 1003
(S) 318(a) ................................ 111
TABLE OF CONTENTS
PAGE
PARTIES............................................................. 1
RECITALS OF THE COMPANY............................................. 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
(a) SECTION 101. Definitions........................... 2
(b) Acquired Indebtedness............................... 2
(c) Act................................................. 2
(d) Additional Securities............................... 2
(e) Adjusted Net Assets................................. 3
(f) Affiliate........................................... 3
(g) Asset Sale.......................................... 3
(h) Asset Sale Offer.................................... 3
(i) Asset Sale Purchase Date............................ 3
(j) Banks............................................... 3
(k) Board of Directors.................................. 4
(l) Board Resolution.................................... 4
(m) Borrowing Base...................................... 4
(n) Business Day........................................ 4
(o) Capitalized Lease Obligation........................ 4
(p) Capital Stock....................................... 4
(q) Cash Equivalents.................................... 4
(r) Change of Control................................... 4
(s) Change of Control Offer............................. 5
(t) Change of Control Payment Date...................... 5
(u) Closing Date........................................ 5
(v) Commission.......................................... 5
(w) Company............................................. 5
(x) Company Request..................................... 5
(y) Consolidated EBITDA................................. 5
(z) Consolidated Net Income............................. 6
- --------------------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
PAGE
(aa) Consolidated Net Worth.............................. 7
(bb) Convertible Debentures.............................. 7
(cc) Corporate Trust Office.............................. 7
(dd) December 1997 Charges............................... 7
(ee) Default............................................. 7
(ff) Defaulted Interest.................................. 7
(gg) Depositary.......................................... 8
(hh) Designated Senior Indebtedness...................... 8
(ii) Disinterested Director.............................. 8
(jj) Disqualified Stock.................................. 8
(kk) Domestic Restricted Subsidiary...................... 8
(ll) Domestic Subsidiary................................. 8
(mm) Equity Offering..................................... 8
(nn) Event of Default.................................... 9
(oo) Exchange Act........................................ 9
(pp) Exchange Offer...................................... 9
(qq) Exchange Offer Registration Statement............... 9
(rr) Exchange Securities................................. 9
(ss) Fair market value................................... 9
(tt) Federal Bankruptcy Code............................. 9
(uu) Fixed Charges....................................... 9
(vv) Fixed Charge Coverage Ratio......................... 10
(ww) Foreign Subsidiary.................................. 10
(xx) Gallino Disposition................................. 10
(yy) Generally Accepted Accounting Principles............ 10
(zz) Guarantee........................................... 10
(aaa) Hedging Obligations................................. 10
(bbb) Holder.............................................. 10
(ccc) Indebtedness........................................ 10
(ddd) Indenture........................................... 11
(eee) Indenture Obligations............................... 11
(fff) Initial Securities.................................. 11
(ggg) Interest Payment Date............................... 11
(hhh) Investment.......................................... 11
(iii) Joint Venture Agreement............................. 12
(jjj) Lien................................................ 12
(kkk) Maturity............................................ 12
(lll) Moody's............................................. 12
(mmm) Net Cash Proceeds................................... 12
ii
PAGE
(nnn) New Credit Facility................................. 13
(ooo) New Credit Facility Agent........................... 13
(ppp) Non-U.S. Person..................................... 13
(qqq) Offering............................................ 13
(rrr) Officers' Certificate............................... 13
(sss) Opinion of Counsel.................................. 13
(ttt) Outstanding......................................... 13
(uuu) Pari Passu Indebtedness............................. 14
(vvv) Paying Agent........................................ 14
(www) Permitted Holder.................................... 14
(xxx) Permitted Investments............................... 14
(yyy) Person.............................................. 16
(zzz) Predecessor Security................................ 16
(aaaa) Preferred Securities................................ 16
(bbbb) Preferred Stock..................................... 16
(cccc) Qualified Equity Interest........................... 16
(dddd) Qualified Stock..................................... 16
(eeee) QIB................................................. 16
(ffff) Receivables and Related Assets...................... 16
(gggg) Receivables Program................................. 17
(hhhh) Receivables Subsidiary.............................. 17
(iiii) Redemption Date..................................... 17
(jjjj) Redemption Price.................................... 17
(kkkk) Refinancing of Existing Credit Facility............. 17
(llll) Registrar........................................... 17
(mmmm) Registration Rights Agreement....................... 17
(nnnn) Registration Statement.............................. 17
(oooo) Regular Record Date................................. 17
(pppp) Regulation S........................................ 17
(qqqq) Restricted Payments................................. 17
(rrrr) Restricted Subsidiary............................... 18
(ssss) Rule 144A........................................... 18
(tttt) Securities.......................................... 18
(uuuu) Securities Act...................................... 18
(vvvv) Security Register................................... 18
(wwww) Senior Indebtedness................................. 18
(xxxx) Shelf Registration Statement........................ 19
(yyyy) Siemens............................................. 19
(zzzz) Siemens Joint Venture............................... 19
iii
PAGE
(aaaaa) Significant Subsidiary.............................. 19
(bbbbb) S&P................................................. 19
(ccccc) Special Record Date................................. 19
(ddddd) SRS Acquisition..................................... 19
(eeeee) Stated Maturity..................................... 19
(fffff) Subordinated Indebtedness........................... 20
(ggggg) Subsidiary.......................................... 20
(hhhhh) Subsidiary Guarantee................................ 20
(iiiii) Subsidiary Guarantor................................ 20
(jjjjj) Subsidiary Guarantor Senior Indebtedness............ 20
(kkkkk) Trust Indenture Act................................. 21
(lllll) Trustee............................................. 21
(mmmmm) Unrestricted Subsidiary............................. 21
(nnnnn) U.S. Government Obligations......................... 21
(ooooo) Voting Stock........................................ 21
(ppppp) Weighted Average Life............................... 21
(qqqqq) Wholly Owned Restricted Subsidiary.................. 22
(rrrrr) SECTION 102. Compliance Certificates and
Opinions.............................. 22
(sssss) SECTION 103. Form of Documents Delivered
Trustee............................... 23
(ttttt) SECTION 104. Acts of Holders....................... 23
(uuuuu) SECTION 105. Notices, etc., to Trustee, Company.... 25
(vvvvv) SECTION 106. Notice to Holders; Waiver............. 25
SECTION 107. Conflict of any Provision of
Indenture with Trust Indenture Act............ 25
(wwwww) SECTION 108. Effect of Headings and Table of
Contents.............................. 26
(xxxxx) SECTION 109. Successors and Assigns................ 26
(yyyyy) SECTION 110. Separability Clause................... 26
(zzzzz) SECTION 111. Benefits of Indenture................. 27
(aaaaaa) SECTION 112. Governing Law......................... 27
(bbbbbb) SECTION 113. Legal Holidays........................ 27
iv
PAGE
ARTICLE TWO
SECURITY FORMS
(cccccc) SECTION 201. Forms Generally....................... 28
(dddddd) SECTION 202. Restrictive Legends................... 29
ARTICLE THREE
THE SECURITIES
(eeeeee) SECTION 301. Title and Terms....................... 31
(fffff) SECTION 302. Denominations......................... 32
(gggggg) SECTION 303. Execution, Authentication, Delivery
and Dating............................ 32
(hhhhhh) SECTION 304. Temporary Securities.................. 34
(iiiiii) SECTION 305. Registration, Registration of
Transfer and Exchange................. 34
(jjjjjj) SECTION 306. Book-Entry Provisions for U.S.
Global Security....................... 36
(kkkkkk) SECTION 307. Special Transfer Provisions........... 37
(llllll) SECTION 308. Mutilated, Destroyed, Lost and
Stolen Securities..................... 41
(mmmmmm) SECTION 309. Payment of Interest; Interest
Rights Preserved...................... 42
(nnnnnn) SECTION 310. Persons Deemed Owners................. 43
(oooooo) SECTION 311. Cancellation.......................... 44
(pppppp) SECTION 312. Issuance of Additional Securities..... 44
SECTION 313. CUSIP and CINS Numbers................ 44
(qqqqqq) SECTION 314. Computation of Interest............... 44
ARTICLE FOUR
SATISFACTION AND DISCHARGE
(rrrrrr) SECTION 401. Satisfaction and Discharge of
Indenture............................. 45
(ssssss) SECTION 402. Application of Trust Money............ 46
v
PAGE
ARTICLE FIVE
REMEDIES
(tttttt) SECTION 501. Events of Default..................... 46
(uuuuuu) SECTION 502. Acceleration of Maturity;
Rescission and Annulment.............. 48
(vvvvvv) SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee............ 49
(wwwwww) SECTION 504. Trustee May File Proofs of Claim...... 50
(xxxxxx) SECTION 505. Trustee May Enforce Claims Without
Possession of Securities.............. 51
(yyyyyy) SECTION 506. Application of Money Collected........ 51
(zzzzzz) SECTION 507. Limitation on Suits................... 52
(aaaaaaa) SECTION 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest.............................. 53
(bbbbbbb) SECTION 509. Restoration of Rights and Remedies.... 53
(ccccccc) SECTION 510. Rights and Remedies Cumulative........ 53
(ddddddd) SECTION 511. Delay or Omission Not Waiver.......... 53
(eeeeeee) SECTION 512. Control by Holders.................... 54
(fffffff) SECTION 513. Waiver of Past Defaults............... 54
(ggggggg) SECTION 514. Waiver of Stay or Extension Laws...... 54
SECTION 515. Undertaking for Costs................. 55
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.................... 55
(hhhhhhh) SECTION 602. Certain Rights of Trustee............. 56
(iiiiiii) SECTION 603. Trustee Not Responsible for Recitals
or Issuance of Securities............. 57
(jjjjjjj) SECTION 604. May Hold Securities................... 57
(kkkkkkk) SECTION 605. Money Held in Trust................... 58
(lllllll) SECTION 606. Compensation and Reimbursement........ 58
vi
PAGE
(mmmmmmm) SECTION 607. Corporate Trustee Required;
Eligibility........................... 59
(nnnnnnn) SECTION 608. Resignation and Removal;
Appointment of Successor.............. 59
(ooooooo) SECTION 609. Acceptance of Appointment by
Successor............................. 61
(ppppppp) SECTION 610. Merger, Conversion, Consolidation
or Succession to Business............. 61
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE
(qqqqqqq) SECTION 701. Disclosure of Names and Addresses
of Holders............................ 62
(rrrrrrr) SECTION 702. Reports by Trustee.................... 62
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
(sssssss) SECTION 801. Company May Consolidate, etc.,
Only on Certain Terms................. 62
(ttttttt) SECTION 802. Successor Substituted................. 64
ARTICLE NINE
SUPPLEMENTS AND AMENDMENTS TO INDENTURE
(uuuuuuu) SECTION 901. Without Consent of Holders............ 64
(vvvvvvv) SECTION 902. With Consent of Holders............... 65
(wwwwwww) SECTION 903. Execution of Supplemental
Indentures............................ 66
(xxxxxxx) SECTION 904. Effect of Supplemental Indentures..... 66
(yyyyyyy) SECTION 905. Conformity with Trust Indenture Act... 67
vii
PAGE
(zzzzzzz) SECTION 906. Reference in Securities to
Supplemental Indentures............... 67
(aaaaaaaa) SECTION 907. Notice of Supplemental Indentures..... 67
ARTICLE TEN
COVENANTS
(bbbbbbbb) SECTION 1001. Payment of Principal, Premium,
If Any, and Interest................. 67
(cccccccc) SECTION 1002. Maintenance of Office or Agency...... 68
(dddddddd) SECTION 1003. Money for Security Payments to Be
Held in Trust........................ 68
(eeeeeeee) SECTION 1004. Corporate Existence.................. 70
(ffffffff) SECTION 1005. Payment of Taxes and Other Claims.... 70
(gggggggg) SECTION 1006. Maintenance of Properties............ 70
(hhhhhhhh) SECTION 1007. Insurance............................ 71
(iiiiiiii) SECTION 1008. Statement by Officers As to
Default.............................. 71
(jjjjjjjj) SECTION 1009. Provision of Reports and
Financial Statements................. 71
(kkkkkkkk) SECTION 1010. Limitation on Incurrence of
Indebtedness and Issuance of
Disqualified Stock................... 72
(llllllll) SECTION 1011. Limitation on Restricted Payments.... 75
(mmmmmmmm) SECTION 1012. Purchase of Securities upon a
Change of Control.................... 79
(nnnnnnnn) SECTION 1013. Limitation on Certain Asset Sales.... 80
(oooooooo) SECTION 1014. Limitation on Transactions with
Affiliates........................... 82
(pppppppp) SECTION 1015. Limitation on Dividends and Other
Payment Restrictions Affecting
Restricted Subsidiaries.............. 84
(qqqqqqqq) SECTION 1016. Limitation on Issuances and Sales
of Capital Stock of Restricted
Subsidiaries......................... 85
(rrrrrrrr) SECTION 1017. Limitation on Liens.................. 85
(ssssssss) SECTION 1018. Unrestricted Subsidiaries............ 86
(ssssssss) SECTION 1019. Limitations on Layering
Indebtedness......................... 86
viii
PAGE
(tttttttt) SECTION 1020. Limitation on Guarantees of
Indebtedness by Restricted
Subsidiaries......................... 87
(uuuuuuuu) SECTION 1021. Payment for Consent.................. 88
(vvvvvvvv) SECTION 1022. Waiver of Certain Covenants.......... 88
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
(wwwwwwww) SECTION 1101. Right of Redemption.................. 88
(xxxxxxxx) SECTION 1102. Applicability of Article............. 89
(yyyyyyyy) SECTION 1103. Election to Redeem; Notice to
Trustee.............................. 89
(zzzzzzzz) SECTION 1104. Selection by Trustee of Securities
to Be Redeemed....................... 89
(aaaaaaaaa) SECTION 1105. Notice of Redemption................. 90
(bbbbbbbbb) SECTION 1106. Deposit of Redemption Price.......... 91
(ccccccccc) SECTION 1107. Securities Payable on Redemption
Date................................. 91
(ddddddddd) SECTION 1108. Securities Redeemed in Part.......... 91
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
(eeeeeeeee) SECTION 1201. Company Option to Effect Defeasance
or Covenant Defeasance............... 92
(fffffffff) SECTION 1202. Defeasance and Discharge............. 92
(ggggggggg) SECTION 1203. Covenant Defeasance.................. 92
(hhhhhhhhh) SECTION 1204. Conditions to Defeasance or
Covenant Defeasance.................. 93
(iiiiiiiii) SECTION 1205. Deposited Money and U.S. Government
Obligations to Be Held in Trust;
Other Miscellaneous Provisions....... 95
(jjjjjjjjj) SECTION 1206. Reinstatement........................ 95
ix
PAGE
ARTICLE THIRTEEN
SUBSIDIARY GUARANTEES
(kkkkkkkkk) SECTION 1301. Subsidiary Guarantees................ 96
(lllllllll) SECTION 1302. Guaranty Absolute.................... 97
(mmmmmmmmm) SECTION 1303. Waivers.............................. 99
(nnnnnnnnn) SECTION 1304. Subrogation.......................... 99
(ooooooooo) SECTION 1305. No Waiver; Remedies.................. 100
(ppppppppp) SECTION 1306. Continuing Guaranty; No Right of
Set-Off; Independent Obligation...... 100
(qqqqqqqqq) SECTION 1307. Subsidiary Guarantors May
Consolidate, Etc., on Certain
Terms................................ 101
(rrrrrrrrr) SECTION 1308. Additional Subsidiary Guarantors..... 101
(sssssssss) SECTION 1309. Releases............................. 101
(ttttttttt) SECTION 1310. Benefits Acknowledged................ 102
(uuuuuuuuu) SECTION 1311. Severability......................... 102
ARTICLE FOURTEEN
SUBORDINATION OF SECURITIES AND SUBSIDIARY GUARANTEES
(vvvvvvvvv) SECTION 1401. Securities and Subsidiary
Guarantees Subordinate to Senior
Indebtedness......................... 103
(wwwwwwwww) SECTION 1402. Payment Over of Proceeds Upon
Dissolution, Etc..................... 103
(xxxxxxxxx) SECTION 1403. No Payment When Certain Senior
Indebtedness in Default.............. 105
(yyyyyyyyy) SECTION 1404. Payment Permitted If No Default...... 106
(zzzzzzzzz) SECTION 1405. Subrogation to Rights of Holders of
Senior Indebtedness.................. 106
(aaaaaaaaaa) SECTION 1406. Provisions Solely to Define Relative
Rights............................... 107
(bbbbbbbbbb) SECTION 1407. Trustee to Effectuate Subordination.. 108
(cccccccccc) SECTION 1408. No Waiver of Subordination Provisions 108
(dddddddddd) SECTION 1409. Notice to Trustee.................... 109
(eeeeeeeeee) SECTION 1410. Reliance on Judicial Order or
Certificate of Liquidation Agent..... 109
x
PAGE
(ffffffffff) SECTION 1411. Trustee Not Fiduciary for Holders
of Senior Indebtedness............... 110
(gggggggggg) SECTION 1412. Rights of Trustee as Holder of
Senior Indebtedness; Preservation
of Trustee's Rights.................. 110
(hhhhhhhhhh) SECTION 1413. Applicability to Paying Agents....... 110
(iiiiiiiiii) SECTION 1414. Defeasance of this Article
Fourteen............................. 111
(jjjjjjjjjj) SECTION 1415. Subordination Provisions
Controlling.......................... 111
SCHEDULE I - Subsidiary Guarantors
EXHIBITS
Exhibit A - Form of Security
Exhibit B - Form of Certificate to Be Delivered upon Termination of Restricted
Period
Exhibit C - Form of Certificate to Be Delivered in Connection with Transfers
to Non-QIB Institutional Accredited Investors
Exhibit D - Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S
xi
INDENTURE, dated as of April 28, 1998 between Breed Technologies, Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), each of the Company's subsidiaries listed on
Schedule I hereto (collectively, the "Subsidiary Guarantors") and IBJ Schroder
Bank & Trust Company, a bank and trust company duly organized and existing under
the laws of New York, trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of and issue of 9 1/4% Senior
Subordinated Notes due 2008 (herein called the "Initial Securities"), and 9 1/4%
Senior Series B Subordinated Notes due 2008 (the "Exchange Securities" and,
together with the Initial Securities, the "Securities") of substantially the
tenor and amount hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture.
Each of the Subsidiary Guarantors has duly authorized its guarantee of the
Securities, and to provide therefor each of them has duly authorized the
execution and delivery of this Indenture.
Upon the issuance of the Exchange Securities, if any, or the effectiveness
of the Exchange Offer Registration Statement (as defined herein) or, under
certain circumstances, the effectiveness of the Shelf Registration Statement (as
defined herein), this Indenture will be subject to the provisions of the Trust
Indenture Act of 1939, as amended, that are required to be part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
The Company has also duly authorized the creation of up to $100,000,000
aggregate principal amount of additional Securities to be issued from time to
time having identical terms and conditions to the Securities offered hereby.
All things necessary have been done to make the Securities, when executed
by the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company and to make this Indenture a valid
agreement of the Company and the Subsidiary Guarantors, each in accordance with
their respective terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and "self-liquidating
paper", as used in TIA Section 311, shall have the meanings assigned to them in
the rules of the Commission adopted under the Trust Indenture Act;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Two, Eight, Ten and Twelve
are defined in that Article.
"Acquired Indebtedness" means Indebtedness of a Person (a) existing at
the time such Person is merged with or into the Company or becomes a Restricted
Subsidiary or (b) assumed in connection with the acquisition of assets from such
Person; provided that any Indebtedness of such Person that is redeemed,
--------
defeased, retired or otherwise repaid at the time of or immediately upon
consummation of the transaction by which such Person is merged with or into the
Company, becomes a Restricted Subsidiary or such assets are acquired from such
Person shall not be Acquired Indebtedness.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Additional Securities" has the meaning set forth in Section 301.
"Adjusted Net Assets" has the meaning set forth in Section 1301.
2
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control", when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. Notwithstanding the foregoing, no Person (other
than the Company or any Subsidiary of the Company) in whom a Receivables
Subsidiary makes an Investment in connection with a Receivables Program shall be
deemed to be an Affiliate of the Company or any of its Subsidiaries solely by
reason of such Investments.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger,
consolidation or sale and leaseback transaction) (collectively, a "transfer") by
the Company or a Restricted Subsidiary, directly or indirectly, in one or a
series of related transactions, of (a) any Capital Stock of any Restricted
Subsidiary (other than directors' qualifying shares or shares required by
applicable law to be held by a Person other than the Company or a Restricted
Subsidiary), (b) all or substantially all of the properties and assets of the
Company and its Restricted Subsidiaries representing a division or line of
business or (c) any other properties or assets of the Company or any Restricted
Subsidiary, other than in the ordinary course of business. For the purposes of
this definition, the term "Asset Sale" shall not include any transfer of
properties or assets (i) that is governed by the provisions of this Indenture in
Article Eight, (ii) between or among the Company and its Restricted Subsidiaries
pursuant to transactions that do not violate any other provision of this
Indenture, (iii) to any Person to the extent it constitutes a Restricted Payment
that is permitted under the covenant described in Section 1011. (iv) consisting
of inventory or wornout, obsolete or permanently retired equipment and
facilities, (v) consisting of Receivables and Related Assets transferred
pursuant to a Receivables Program, (vi) the gross proceeds of which (exclusive
of indemnities) do not exceed $1.0 million in connection with any transfer,
(vii) that are the subject of the Gallino Disposition or (viii) that constitutes
a Permitted Investment.
"Asset Sale Offer" has the meaning set forth in Section 1013.
"Asset Sale Purchase Date" has the meaning set forth in Section 1013.
"Banks" means the banks and other financial institutions that from
time to time are lenders under the New Credit Facility.
"Board of Directors" means either the board of directors
of the Company or any duly authorized committee of that board.
3
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Borrowing Base" means, as of any date, an amount equal to the sum of
(a) 80% of the face amount of the accounts receivable owned by the Company and
its Restricted Subsidiaries (other than any Receivables Subsidiary) and (b) 60%
of the book value of all inventory owned by the Company and its Restricted
Subsidiaries, all calculated on a consolidated basis and in accordance with GAAP
as of the last day of the immediately preceding fiscal quarter for which
internal financial statements are available on such date.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York are
authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" of any Person means any and all shares, partnership
interests, participations, rights in or other equivalents of, or interest in,
the equity of such Person, but excluding any debt securities convertible into
such equity.
"cash equivalents" means (i) any evidence of Indebtedness with a
maturity of 180 days or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (ii) certificates of deposit or acceptances with a
maturity of 180 days or less of any financial institution that is a member of
the Federal Reserve System having combined capital and surplus and undivided
profits of not less than $500,000,000; and (iii) commercial paper with a
maturity of 180 days or less issued by a corporation that is not an Affiliate of
the Company and is organized under the laws of any state of the United States or
the District of Columbia and rated at least A-1 by S&P or at least P-1 by
Moody's.
"Change of Control" means the occurrence of any of the following
events:
(a) Any Person or "group" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a Person will be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than a majority of the voting power
of all classes of Voting Stock of the Company.
4
(b) During any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election to such Board of Directors, or
whose nomination for election by the stockholders of the Company, was approved
by a vote of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office.
(c) The Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution, other than a transaction that complies with the
provisions of Article Eight."
"Change of Control Offer" has the meaning set forth in section 1012.
"Change of Control Payment Date" has the meaning set forth in Section
1012.
"Closing Date" means the date on which the Initial Securities are
originally issued under this Indenture.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its President, any Vice
President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.
"Consolidated EBITDA" means, for any period, the sum of, without
duplication, Consolidated Net Income for such period, plus (or, in the case of
clause (e) below, plus or minus) the following items to the extent included in
computing Consolidated Net Income for such period (a) Fixed Charges for such
period, plus (b) the federal, state, local and foreign income tax expense of the
Company and its Restricted Subsidiaries for such period, plus (c) the
depreciation and amortization expense of the Company and its Restricted
Subsidiaries for such period, plus (d) one time charges associated with cash
disruption costs not to exceed $15.0 million in fiscal year 1998 and $15.0
million in fiscal year 1999, plus (e) any other non-cash charges for such period
and minus non-cash credits for such period, other than non-cash charges or
credits resulting from changes in prepaid assets or accrued liabilities
5
in the ordinary course of business plus (f) the December 1997 Charges; provided
--------
that income tax expense, depreciation and amortization expense and non-cash
charges and credits of a Restricted Subsidiary shall be included in Consolidated
EBITDA only to the extent (and in the same proportion) that the net income of
such Restricted Subsidiary was included in calculating Consolidated Net Income
for such period.
"Consolidated Net Income" means, for any period, the net income (or
net loss) of the Company and its Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP, adjusted to the
extent included in calculating such net income or loss by excluding (a) any net
after-tax extraordinary gains or losses (less all fees and expenses relating
thereto), (b) any net after-tax gains or losses (less all fees and expenses
relating thereto) attributable to Asset Sales, (c) the net income (but not the
net loss) of any Person (other than the Company or a Restricted Subsidiary), in
which the Company or any Restricted Subsidiary has an equity interest, except
that the aggregate amount of dividends or other distributions actually paid to
the Company or any Restricted Subsidiary in cash during such period will be
included in such Consolidated Net Income, (d) the net income (or loss) of any
Person acquired by the Company or any Restricted Subsidiary in a "pooling of
interests" transaction attributable to any period prior to the date of such
acquisition, (e) the net income (but not the net loss) of any Restricted
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of such net income is at the date of
determination restricted, directly or indirectly, except that the aggregate
amount of such net income that could be paid to the Company or a Restricted
Subsidiary thereof by loans, advances, intercompany transfers, principal
repayments or otherwise will be included in such Consolidated Net Income and (f)
dividends paid or accrued on the Preferred Securities or any other Preferred
Stock issued by the Company or any Restricted Subsidiary; provided, however,
-------- -------
that, so long as the Company retains a minority investment in the Siemens Joint
Venture, Consolidated Net Income for any period shall include the Company's
proportionate share of the net income or net loss of the Siemens Joint Venture
for such period determined as if the Siemens Joint Venture were accounted for by
the Company on an equity accounting basis in accordance with GAAP and, provided
--------
further that notwithstanding the foregoing proviso, if the Siemens Joint Venture
- -------
generates net income for any period, the amount of such net income that is
included in Consolidated Net Income for such period shall not exceed the
aggregate amount of (i) dividends or other distributions plus (ii) other
payments by the Siemens Joint Venture under any management agreement, royalty
agreement or other similar arrangement, in either case actually paid to the
Company or any Restricted Subsidiary in cash during such period.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity of the Company and its Restricted Subsidiaries as set forth
on the most recently available quarterly or annual consolidated balance sheet of
the Company and its Restricted Subsidiaries, less any amounts attributable to
Disqualified Stock or any equity security convertible into or exchangeable for
Indebtedness, the cost of treasury stock and the principal amount of any
promissory notes receivable from the sale of the Capital Stock of the Company
6
or any of its Restricted Subsidiaries and less, to the extent included in
calculating such stockholders' equity of the Company and its Restricted
Subsidiaries, the stockholders' equity attributable to Unrestricted
Subsidiaries, each item to be determined in conformity with GAAP (excluding the
effects of foreign currency adjustments under Financial Accounting Standards
Board Statement of Financial Accounting Standards No. 52).
"Convertible Debentures" means the Company's 6.5% Convertible
Subordinated Debentures due 2027 which were sold to BTI Capital Trust in the
original aggregate principal amount of $257.7 million.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee, at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this Indenture is
located at One State Street, New York, NY 10004, except that with respect to
presentation of Securities for payment or for registration of transfer or
exchange, such term shall mean the office or agency of the Trustee at which, at
any particular time, its corporate trust and agency business shall be conducted.
"December 1997 Charges" means aggregate costs of approximately $349.9
million recorded by the Company during the three month period ended December 31,
1997 which include (i) a $244.0 million charge incurred by the Company in
connection with its repositioning, (ii) a $77.5 million charge relating to the
write-off of in-process research and development for technology acquired in the
SRS Acquisition that had not been established as technologically feasible and
(iii) a $28.4 million charge against cost of sales for inventory and long-term
customer contracts relating to manufacturing processes that will be exited by
the Company.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 309.
"Depositary" means The Depository Trust Company, its nominees and
successors.
"Designated Senior Indebtedness" means (i) all Senior Indebtedness
under the New Credit Facility and (ii) any other issue of Senior Indebtedness or
refinancing thereof permitted by the definition of Senior Indebtedness, having a
principal amount of at least $25.0 million.
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors, to make a finding or otherwise
take action under the Indenture, a
7
member of the Board of Directors who does not have any material direct or
indirect financial interest in or with respect to such transaction or series of
transactions.
"Disqualified Stock" means any class or series of Capital Stock that,
either by its terms, or by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise (a) is, or upon the
happening of an event or passage of time would be, required to be redeemed prior
to one year after the final Stated Maturity of the Securities, (b) is redeemable
at the option of the holder thereof at any time prior to one year after such
final Stated Maturity or (c) at the option of the holder thereof, is convertible
into or exchangeable for debt securities at any time prior to one year after
such final Stated Maturity; provided that any Capital Stock that would not
--------
constitute Disqualified Stock but for provisions therein giving holders thereof
the right to cause the issuer thereof to repurchase or redeem such Capital Stock
upon the occurrence of an "asset sale" or "change of control" occurring prior to
the Stated Maturity of the Securities will not constitute Disqualified Stock if
the "asset sale" or "change of control" provisions applicable to such Capital
Stock are no more favorable to the holders of such Capital Stock than the
provisions contained in Sections 1012 and 1013 and such Capital Stock
specifically provides that the issuer will not repurchase or redeem any of such
stock pursuant to such provision prior to the Company's repurchase of such of
the Securities as are required to be repurchased pursuant to Sections 1012 and
1013.
"Domestic Restricted Subsidiary" means a Domestic Subsidiary that is a
Restricted Subsidiary.
"Domestic Subsidiary" means any Subsidiary whose jurisdiction of
incorporation, organization or formation is the United States, any state thereof
or the District of Columbia.
"Equity Offering" means an offer and sale by the Company of its common
stock (which is Qualified Stock) to one or more Persons other than a Subsidiary.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder.
"Exchange Offer" means the exchange offer that may be effected
pursuant to the Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Exchange Securities" has the meaning stated in the first recital of
this Indenture and refers to any Exchange Securities containing terms
substantially identical to the
8
Initial Securities (except that such Exchange Securities shall not contain terms
with respect to the interest rate step-up provisions in Section 309 of the
Initial Securities and transfer restrictions in Section 307 of the Initial
Securities) that are issued and exchanged for the Initial Securities pursuant to
the Registration Rights Agreement and this Indenture.
"Fair market value" means, with respect to any asset, the price which
could be negotiated in an arm's-length free market transaction, for cash,
between an informed and willing seller and an informed and willing buyer,
neither of which is under pressure or compulsion to complete the transaction.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the
United States Code, as amended from time to time.
"Fixed Charges" means, for any period, without duplication, the sum of
(a) the amount that, in conformity with GAAP, would be set forth opposite the
caption "interest expense" (or any like caption) on a consolidated statement of
operations of the Company and its Restricted Subsidiaries for such period,
including, without limitation, (i) amortization of debt discount, (ii) the net
cost of interest rate contracts (including amortization of discounts), (iii) the
interest portion of any deferred payment obligation, (iv) amortization of debt
issuance costs and (v) the interest component of Capitalized Lease Obligations,
plus (b) cash dividends paid on Preferred Stock and Disqualified Stock by the
Company and any Restricted Subsidiary (to any Person other than the Company and
its Restricted Subsidiaries), including cash dividends on the Preferred
Securities, plus (c) all interest on any Indebtedness of any Person guaranteed
by the Company or any of its Restricted Subsidiaries; provided, however, that
-------- -------
Fixed Charges shall not include (i) any gain or loss from extinguishment of
debt, including the write-off of debt issuance costs and (ii) the fixed charges
of a Restricted Subsidiary to the extent (and in the same proportion) that the
net income of such Subsidiary was excluded in calculating Consolidated Net
Income pursuant to clause (e) of the definition thereof for such period.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of (a)
Consolidated EBITDA for such period to (b) Fixed Charges for such period.
"Foreign Subsidiary" means any Subsidiary other than a Domestic
Subsidiary.
"Gallino Disposition" means the proposed sale by the Company of the
plastic interior and exterior parts business of Gallino Plasturgia, S.r.l.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, that
are in effect on the Closing Date.
9
"Guarantee" means, as applied to any obligation, (a) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of all or any
part of such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limitation, the payment of
amounts drawn down under letters of credit.
"Hedging Obligations" means the obligations of any Person under (i)
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements and (ii) other agreements or arrangements designed to protect
such Person against fluctuations in interest rates or the value of foreign
currencies.
"Holder" means the Person in whose name a Security is, at the time of
determination, registered on the Security Register.
"Indebtedness" means (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (a) every obligation of such Person for money
borrowed, (b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, (c) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person (other than up to $10.0 million
of obligations at any time outstanding with respect to letters of credit
securing obligations entered into in the ordinary course of business of such
Person to the extent such letters are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed not later than the fifth Business Day
following receipt of a demand for reimbursement following payment on the letter
of credit), (d) every obligation of such Person issued or assumed as the
deferred purchase price of property or services, (e) the amount of every
Capitalized Lease Obligation of such Person, (f) all Disqualified Stock of such
Person valued at its maximum fixed repurchase price (including, without
duplication, accrued and unpaid dividends), (g) all obligations of such Person
under or in respect of Hedging Obligations and (h) every obligation of the type
referred to in clauses (a) through (g) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed.
For purposes of this definition, the "maximum fixed repurchase price" of any
Disqualified Stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were repurchased on any date on which Indebtedness is
required to be determined pursuant to the Indenture, and if such price is based
upon, or measured by, the fair market value of such Disqualified Stock, such
fair market value shall be determined in good faith by the board of directors of
the issuer of such Disqualified Stock. Notwithstanding the foregoing, trade
accounts payable and accrued liabilities arising in the ordinary course of
business and any liability for federal, state or local taxes or other taxes owed
by such Person shall not be considered Indebtedness for purposes of this
definition.
10
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Indenture Obligations" means the obligations of the Company and any
other obligor hereunder or under the Securities, including the Subsidiary
Guarantors, to pay principal of (and premium, if any) and interest on the
Securities when due and payable at Maturity, and all other amounts due or to
become due under or in connection with this Indenture, the Securities and the
performance of all other obligations to the Trustee (including all amounts due
to the Trustee under Section 606 hereof) and the Holders under this Indenture
and the Securities, according to the terms hereof and thereof.
"Initial Securities" has the meaning stated in the first recital of
this Indenture.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Investment" in any Person means (a) any direct or indirect advance,
loan or other extension of credit (including, without limitation, by way of
guarantee or similar arrangement) or capital contribution to such Person, the
purchase or other acquisition of any Capital Stock, Indebtedness or other
securities issued by such Person, the acquisition (by purchase or otherwise) of
all or substantially all of the business or assets of such Person, or the making
of any investment in such Person, (b) the designation of any Restricted
Subsidiary as an Unrestricted Subsidiary, (c) the transfer of any assets or
properties from the Company or a Restricted Subsidiary to an Unrestricted
Subsidiary, other than the transfer of assets or properties made in the ordinary
course of business and (d) the fair market value of the Capital Stock (or any
other Investment), held by the Company or any of its Restricted Subsidiaries, of
(or in) any Person that has ceased to be a Restricted Subsidiary, including,
without limitation, by reason of any transaction permitted by clause (d) of
Section 1016. Investments exclude extensions of trade credit on commercially
reasonable terms in accordance with normal trade practices.
"Joint Venture Agreement" means the Joint Venture Agreement between
the Company and Siemens pursuant to which the Company and Siemens agreed to form
the Siemens Joint Venture.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as
11
therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or cash equivalents, including payments in
respect of deferred payment obligations, but only as and when received, in the
form of, or stock or other assets when disposed of for, cash or cash equivalents
(except to the extent that such obligations are financed or sold with recourse
to the Company or any Restricted Subsidiary), net of (a) brokerage commissions
and other fees and expenses (including fees and expenses of legal counsel,
accountants and investment banks) related to such Asset Sale, (b) provisions for
all taxes payable or required to be accrued in accordance with GAAP as a result
of such Asset Sale, (c) payments made to retire Indebtedness where payment of
such Indebtedness is secured by a Lien on the assets that are the subject of
such Asset Sale, (d) amounts required to be paid to any Person (other than the
Company or any Restricted Subsidiary) owning a beneficial interest in the assets
that are subject to the Asset Sale and (e) appropriate amounts to be provided by
the Company or any Restricted Subsidiary, as the case may be, as a reserve
required in accordance with GAAP against any liabilities associated with such
Asset Sale and retained by the seller after such Asset Sale, including pension
and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale.
"New Credit Facility" means the credit agreement dated as of April 28,
1998 between the Company, NationsBank, N.A., as agent, and the Banks, as such
agreement may be amended, restated, supplemented, refinanced or otherwise
modified from time to time.
"New Credit Facility Agent" means NationsBank, N.A., as agent for the
Banks under the New Credit Facility or any successor thereto as "agent"
identified in written notice to the Trustee given by the predecessor agent.
"Non-U.S. Person" means a Person that is not a "U.S. Person" as
defined in Regulation S.
"Offering" means the offering of 9 1/4% Senior Subordinated Notes Due
2008 by the Company.
"Officers' Certificate" means a certificate signed by the Chairman,
the President or a Vice President, and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
12
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, including an employee of the Company, and who shall be
reasonably satisfactory to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment, redemption or
purchase money in the necessary amount has been theretofore deposited with
the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Securities; provided that, if
--------
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(c) Securities, except to the extent provided in Sections 1202 and
1203, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Twelve; and
(d) Securities which have been paid pursuant to Section 308 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands the Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or such other
obligor.
13
"Pari Passu Indebtedness" means any Indebtedness of the Company or any
Subsidiary Guarantor, whether outstanding at the date of this Indenture or
incurred thereafter, that ranks pari passu in right of payment with the
Securities or any Subsidiary Guarantee, as the case may be.
"Paying Agent" means IBJ Schroder Bank & Trust Company and any
successor (including the Company acting as Paying Agent) authorized by the
Company to pay the principal of (and premium, if any) or interest on any
Securities on behalf of the Company.
"Permitted Holder" means (i) Allen K. Breed and Johnnie Cordell Breed,
any trust existing solely for the benefit of Allen K. Breed and/or Johnnie
Cordell Breed and the estate or any executor, administrator, conservator or
other legal representative of Allen K. Breed or Johnnie Cordell Breed and (ii)
Siemens and its Affiliates.
"Permitted Investments" means any of the following:
(a) Investments in (i) securities with a maturity of one year or less
issued or directly and fully guaranteed or insured by the United States or
any agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof); (ii)
certificates of deposit or acceptances with a maturity of one year or less
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus of not less than $500,000,000; (iii)
commercial paper with a maturity of one year or less issued by a
corporation that is not an Affiliate of the Company and is organized under
the laws of any state of the United States or the District of Columbia and
having the highest rating obtainable from Moody's Investors Service, Inc.
or Standard & Poor's Ratings Services and (iv) money market mutual funds
that invest substantially in securities of the type described in the
preceding clauses (i) through (iii).
(b) Investments by the Company or any Restricted Subsidiary in another
Person, if as a result of such Investment such other Person (i) becomes a
Restricted Subsidiary or (ii) is merged or consolidated with or into, or
transfers or conveys all or substantially all of its assets to, the Company
or a Restricted Subsidiary.
(c) Investments by the Company or any of the Restricted Subsidiaries
in any one of the other of them.
(d) Investments in existence on the Closing Date.
(e) Investments made as a result of the receipt of non-cash
consideration in an Asset Sale permitted under Section 1013.
(f) Investments in assets owned or used in the ordinary course of
business.
14
(g) Investments in any Person in the form of a capital contribution of
the Company's common stock.
(h) Property and assets, including cash, constituting the Company's
initial contribution to the Siemens Joint Venture pursuant to the Joint
Venture Agreement, and other Investments in the Siemens Joint Venture that
do not exceed, during any fiscal quarterly period, an amount equal to 9% of
the net sales of the Company and its consolidated subsidiaries for the
immediately preceding fiscal quarterly period determined in accordance with
GAAP.
(i) Other Investments that do not exceed $10.0 million in the
aggregate at any time outstanding.
(j) Any acquisition of assets, Capital Stock or other securities to
the extent made in exchange for the issuance of Capital Stock (other than
Disqualified Stock) of the Company.
(k) Investments in securities of trade creditors or customers received
pursuant to any plan or reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers.
(l) Investments by the Company or a Restricted Subsidiary in a
Receivables Subsidiary.
"Person" means any individual, corporation, limited or general
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 308 in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Securities" means $250.0 million aggregate liquidation
amount of 6.5% Convertible Trust Preferred Securities issued by BTI Capital
Trust.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, partnership interests, participations, or other equivalents
(however designated) of such Person's preferred or preference stock, whether now
outstanding or issued after the Closing Date, and including, without limitation,
all classes and series of preferred or preference stock of such Person.
15
"Qualified Equity Interest" means any Qualified Stock and all
warrants, options or other rights to acquire Qualified Stock (but excluding any
debt security that is convertible into or exchangeable for Capital Stock).
"Qualified Stock" of any Person means any and all Capital Stock of
such Person, other than Disqualified Stock.
"QIB" means a "Qualified Institutional Buyer" under Rule 144A.
"Receivables and Related Assets" means accounts receivable,
instruments, chattel paper, obligations, general intangibles and other similar
assets, including interests in merchandise or goods, the sale or lease of which
give rise to the foregoing, related contractual rights, guarantees, insurance
proceeds, collections, other related assets and proceeds of all of the
foregoing.
"Receivables Program" means, with respect to any Person, any accounts
receivable securitization program pursuant to which such Person, directly or
indirectly, pledges, sells or otherwise transfers or encumbers its accounts
receivable, including to a trust, limited liability company, special purpose
entity or other similar entity.
"Receivables Subsidiary" means a Wholly Owned Restricted Subsidiary of
the Company (i) created for the purpose of financing receivables created in the
ordinary course of business of the Company and its Restricted Subsidiaries and
(ii) the sole assets of which consist of Receivables and Related Assets of the
Company and its Restricted Subsidiaries and related Permitted Investments.
"Redemption Date", when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Refinancing of Existing Credit Facility" means the use of proceeds
from the offering of the Initial Securities, together with borrowings under the
New Credit Facility, to repay borrowings outstanding on the Closing Date under a
$900.0 million credit facility arranged by NationsBank, N.A.
"Registrar" means IBJ Schroder Bank & Trust Company and any successor
authorized by the Company to act as Registrar.
"Registration Rights Agreement" means the Registration Rights
Agreement between the Company and the Initial Purchasers named therein, dated as
of April 28, 1998 relating to the Securities.
16
"Registration Statement" means the Registration Statement as defined
in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the April 1 or October 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Restricted Payments" has the meaning set forth in Section 1011.
"Restricted Subsidiary" means any Subsidiary other than an
Unrestricted Subsidiary and includes BTI Capital Trust.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture. For all purposes of this Indenture, the term "Securities"
shall include any Exchange Securities to be issued and exchanged for any Initial
Securities in accordance with the Exchange Offer as provided for in the
Registration Rights Agreement and this Indenture. From and after the issuance
of any Additional Securities pursuant to Section 312 (but, not for purposes of
determining whether such issuance is permitted hereunder), "Securities" shall
include such Additional Securities for purposes of this Indenture, and all
Initial Securities, Exchange Securities and Additional Securities shall vote
together as one series of Securities under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations thereunder.
"Security Register" has the meaning set forth in Section 305.
"Senior Indebtedness" means the principal of and premium, if any, and
interest on (including interest accruing after the filing of a petition
initiating any proceeding pursuant to any bankruptcy law, whether or not
allowed) and other amounts due on or in connection with any Indebtedness of the
Company (other than the Securities or Pari Passu Indebtedness), whether
outstanding on the Closing Date or thereafter incurred, unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness will be subordinate in right of payment to any Indebtedness or
other general unsecured obligations of the Company. Without limiting the
generality of the foregoing, "Senior Indebtedness" includes the principal of and
premium, if any, and interest (including interest accruing after the occurrence
of an event of default or after the filing of a petition initiating any
proceeding pursuant to any
17
bankruptcy law, whether or not allowed) on all obligations of every nature of
the Company from time to time owed to the Banks under the New Credit Facility,
provided, however, that any Indebtedness under any refinancing, refunding or
- -------- -------
replacement of the New Credit Facility shall not constitute Senior Indebtedness
to the extent that the Indebtedness thereunder is by its express terms
subordinate to any other Indebtedness of the Company. Notwithstanding the
foregoing, "Senior Indebtedness" shall not include (a) Indebtedness evidenced by
the Securities, (b) Indebtedness that is expressly subordinate or junior in
right of payment to any Indebtedness of the Company, (c) Indebtedness that, when
incurred and without respect to any election under Section 1111(b) of Title 11,
United States Code, is without recourse to the Company, (d) Indebtedness that is
represented by Disqualified Stock, (e) Indebtedness for goods, materials or
services purchased in the ordinary course of business or Indebtedness consisting
of trade payables ties (other than Indebtedness in respect of any services
rendered by or purchased from, or current liabilities owing to, banks or
financial institutions or the current portion of any long-term Indebtedness that
would constitute Senior Indebtedness but for the operation of this clause (e)),
(f) Indebtedness of or amounts owed by the Company for compensation to employees
or for services rendered to the Company, (g) any liability for foreign, federal,
state, local or other taxes owed or owing by the Company, (h) Indebtedness of
the Company to a Subsidiary of the Company or any other Affiliate of the Company
or any of such Affiliate's Subsidiaries, (i) that portion of any Indebtedness
that, at the time of the incurrence, is incurred by the Company in violation of
the Indenture and (j) amounts owing under leases (other than Capital Lease
Obligations).
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Siemens" means Siemens Aktiengesellschaft.
"Siemens Joint Venture" means BST Restraint Systems International Gmbh
& Co. KG, a joint venture formed (or to be formed, as the case may be) pursuant
to the Joint Venture Agreement for the purpose of providing for the research,
development, engineering, assembly and marketing of integrated occupant
protection systems.
"Significant Subsidiary" means any Restricted Subsidiary of the
Company that would be a "Significant Subsidiary" of the Company within the
meaning of Rule 1-02 under Regulation S-K promulgated by the Commission as such
Rule is in effect on the date of the Indenture.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, and its successors.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 309.
18
"SRS Acquisition" means the Company's acquisition of the safety
restraint systems business of AlliedSignal Inc. on October 30, 1997.
"Stated Maturity" means, when used with respect to any Security or any
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable and, when used with respect to any other
Indebtedness, means the date specified in the instrument governing such
Indebtedness as the fixed date on which the principal of such Indebtedness or
any installment of interest thereon is due and payable, and will not, in either
case, include any contingent obligations to repay, redeem or repurchase any such
interest or principal prior to the date originally scheduled for the payment
thereof.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Subsidiary Guarantor that is subordinated in right of payment to the Securities
or the Subsidiary Guarantee issued by such Subsidiary Guarantor, as the case may
be.
"Subsidiary" means any Person a majority of the equity ownership or
Voting Stock of which is at the time owned, directly or indirectly, by the
Company and/or one or more Subsidiaries of the Company.
"Subsidiary Guarantee" means a guarantee of the Securities by a
Restricted Subsidiary in accordance with the provisions of the Indenture.
"Subsidiary Guarantor" means, initially, each of the Company's
Subsidiaries listed on Schedule I hereto, and thereafter, any Restricted
Subsidiary that issues or has issued a Subsidiary Guarantee pursuant to or as
required by the provisions of this Indenture.
"Subsidiary Guarantor Senior Indebtedness" means, as to any Subsidiary
Guarantor, the principal of and premium, if any, and interest on (including
interest accruing after the filing of a petition initiating any proceeding
pursuant to any bankruptcy law, whether or not allowed) and other amounts due on
or in connection with any Indebtedness of such Subsidiary Guarantor (other than
the Subsidiary Guarantee made by such Subsidiary Guarantor or Pari Passu
Indebtedness), whether outstanding on the Closing Date or thereafter incurred,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness will be subordinate in right of payment to any
Indebtedness or other general unsecured obligations of such Subsidiary
Guarantor. Without limiting the generality of the foregoing, "Subsidiary
Guarantor Senior Indebtedness" includes the principal of and premium, if any,
and interest (including interest accruing after the occurrence of an event of
default or after the filing of a petition initiating any proceeding pursuant to
any bankruptcy law, whether or not allowed) on all obligations of every nature
of such Subsidiary Guarantor from time to time owed to the Banks under the New
Credit Facility, provided, however, that any Indebtedness under any refinancing,
-------- -------
refunding or replacement of the New Credit Facility shall not constitute
19
Senior Indebtedness to the extent that the Indebtedness thereunder is by its
express terms subordinate to any other Indebtedness of such Subsidiary
Guarantor. Notwithstanding the foregoing, "Senior Indebtedness" shall not
include (a) Indebtedness evidenced by the Securities, (b) Indebtedness that is
expressly subordinate or junior in right of payment to any Indebtedness of such
Subsidiary Guarantor, (c) Indebtedness that, when incurred and without respect
to any election under Section 1111(b) of Title 11, United States Code, is
without recourse to such Subsidiary Guarantor, (d) Indebtedness that is
represented by Disqualified Stock, (e) Indebtedness for goods, materials or
services purchased in the ordinary course of business or Indebtedness consisting
of trade payables or other current liabilities (other than Indebtedness in
respect of any services rendered by or purchased from, or current liabilities
owing to, banks or financial institutions or the current portion of any long-
term Indebtedness that would constitute Subsidiary Guarantor Senior Indebtedness
but for the operation of this clause (e)), (f) Indebtedness of or amounts owed
by such Subsidiary Guarantor for compensation to employees or for services
rendered to such Subsidiary Guarantor, (g) any liability for foreign, federal,
state, local or other taxes owed or owing by such Subsidiary Guarantor, (h)
Indebtedness of such Subsidiary Guarantor to a Subsidiary of the Company or any
other Affiliate of the Company or any of such Affiliate's Subsidiaries, (i) that
portion of any Indebtedness that, at the time of the incurrence, is incurred by
such Subsidiary Guarantor in violation of the Indenture and (j) amounts owing
under leases (other than Capital Lease Obligations).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Subsidiary" means (a) any Subsidiary that is designated
by the Board of Directors as an Unrestricted Subsidiary in accordance with
Section 1018 and (b) any Subsidiary of an Unrestricted Subsidiary.
"U.S. Government Obligations" has the meaning set forth in Section
1204.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes has, or might have, voting power by reason of the
happening of any contingency).
"Weighted Average Life" means, as of the date of determination with
respect to any Indebtedness or Disqualified Stock, the quotient obtained by
dividing (a) the sum of the
20
products of (i) the number of years from the date of determination to the date
or dates of each successive scheduled principal or liquidation value payment of
such Indebtedness or Disqualified Stock, respectively, multiplied by (ii) the
amount of each such principal or liquidation value payment by (b) the sum of all
such principal or liquidation value payments.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary,
all of the outstanding Capital Stock (other than directors' qualifying shares or
shares of Foreign Restricted Subsidiaries required to be owned by foreign
nationals pursuant to applicable law) of which is owned, directly or indirectly,
by the Company.
SECTION 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company or any Subsidiary
Guarantor to the Trustee to take any action under any provision of this
Indenture, the Company or such Subsidiary Guarantor, as the case may be, shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture (including any covenant
compliance with which constitutes a condition precedent) relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1008(a)) shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(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 each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
21
SECTION 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company and/or any
Subsidiary Guarantor may be based, insofar as it relates to legal matters, upon
a certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company and/or any such Subsidiary Guarantor stating that the information with
respect to such factual matters is in the possession of the Company and/or any
such Subsidiary Guarantors, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in Person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company or the
Subsidiary Guarantors. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and conclusive in favor of the Trustee, the
Company and the Subsidiary Guarantors, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying
22
that the individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of authority. The fact and date of the execution of
any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner that the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) If the Company or any Subsidiary Guarantor shall solicit from the
Holders of Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company or any such Subsidiary Guarantor (as
the case may be), may, at its option, by or pursuant to a Board Resolution, fix
in advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company or any such Subsidiary Guarantor (as the case may be) shall have
no obligation to do so. Notwithstanding TIA Section 316(c), such record date
shall be the record date specified in or pursuant to such Board Resolution,
which shall be a date not earlier than the date 30 days prior to the first
solicitation of Holders generally in connection therewith and not later than the
date such solicitation is completed. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
--------
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than eleven months after
the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company and/or the Subsidiary Guarantors in reliance thereon, whether or not
notation of such action is made upon such Security.
(f) For all purposes of this Indenture, all Initial Securities and
Exchange Securities shall vote together as one series of Securities under this
Indenture.
SECTION 105. Notices, etc., to Trustee, Company.
----------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
23
(a) the Trustee by any Holder, the Company or any Subsidiary Guarantor
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing or mailed, first-class postage prepaid, to or with the
Trustee at its Corporate Trust Office, Attention: Corporate Finance
Department, or sent by facsimile to the Trustee at (212) 858-2952 (with
receipt confirmed by telephone at (212) 858-2300); or
(b) the Company by the Trustee, any Holder or any Subsidiary Guarantor
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid,
to the Company addressed to it at 5300 Old Tampa Highway, P.O. Box 33050,
Lakeland, Florida 33807, Attention: Stuart Boyd, Esq., or sent by facsimile
to the Company at (941) 668-6036 (with receipt confirmed by telephone at
(941) 668-6000), or at any other address or facsimile number previously
furnished in writing to the Trustee by the Company; or
(c) any Subsidiary Guarantor by the Company, any other Subsidiary
Guarantor, the Trustee or any Holder shall be sufficient for any purpose
hereunder (unless otherwise herein expressly provided) if in writing, and
mailed, first class postage prepaid, to such Subsidiary Guarantor addressed
to it at c/o BREED Technologies, Inc. 5300 Old Tampa Highway, P.O. Box
33050, Lakeland, Florida 33807, Attention: Stuart Boyd, Esq., or sent by
facsimile to such Subsidiary Guarantor at (941) 668-6000 (with receipt
confirmed by telephone), or at any other address or facsimile number
previously furnished in writing to the Trustee by such Subsidiary
Guarantor.
SECTION 106. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice of any event to Holders by
the Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders. Any
notice mailed to a Holder in the manner herein prescribed shall be conclusively
deemed to have been received by such Holder, whether or not such Holder actually
receives such notice. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
24
In case by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
SECTION 107. Conflict of any Provision of Indenture with Trust
-------------------------------------------------
Indenture Act.
- -------------
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 318,
inclusive, of the Trust Indenture Act, or conflicts with any provision (an
"incorporated provision") required by or deemed to be included in this Indenture
by operation of such Trust Indenture Act sections, such imposed duties or
incorporated provision shall control.
SECTION 108. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company and the
Subsidiary Guarantors shall bind its respective successors and assigns, whether
so expressed or not.
SECTION 110. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto, any Paying Agent, any
Securities Registrar and their successors hereunder, and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
25
SECTION 112. Governing Law.
-------------
This Indenture and the Securities shall be governed by and construed
in accordance with the law of the State of New York. Upon the issuance of the
Exchange Securities, if any, or the effectiveness of the Exchange Offer
Registration Statement (as defined herein) or, under certain circumstances, the
effectiveness of the Shelf Registration Statement (as defined herein), this
Indenture shall be subject to the provisions of the Trust Indenture Act of 1939,
as amended, that are required to be part of this Indenture and shall, to the
extent applicable, be governed by such provisions.
SECTION 113. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date, date
established for payment of Defaulted Interest pursuant to Section 309, Stated
Maturity or Maturity, Change of Control Purchase Date or Asset Sale Purchase
Date with respect to any Security or other day on which principal, premium or
interest in respect or the Securities is due, shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of principal (or premium, if any) or interest need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Redemption Date, date
established for payment of Defaulted Interest pursuant to Section 309, Stated
Maturity or Maturity, Change of Control Purchase Date or Asset Sale Purchase
Date; provided that no interest shall accrue for the period from and after such
--------
Interest Payment Date or other such day, Redemption Date, date established for
payment of Defaulted Interest pursuant to Section 309, Stated Maturity or
Maturity, Change in Control Purchase Date or Asset Sale Purchase Date, as the
case may be, to the next succeeding Business Day.
26
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
---------------
The Securities and the Trustee's certificate of authentication shall
be in substantially the form annexed hereto as Exhibit A, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. Any portion of the text of
any Security may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved
on steel-engraved borders or may be produced in any other manner, all as
determined by the officers of the Company executing such Securities, as
evidenced by their execution of such Securities.
The terms and provisions contained in the form of the Securities
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Indenture. To the extent applicable, the Company, the Subsidiary
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Initial Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global Securities
substantially in the form set forth in Exhibit A (the "U.S. Global Security")
deposited with, or on behalf of, the Depositary or with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of the U.S.
Global Security may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depositary or its
nominee, as hereinafter provided.
Initial Securities offered and sold in reliance on Regulation S shall
be issued initially in the form of temporary certificated Securities in
registered form substantially in the form set forth in Exhibit A (the "Temporary
Offshore Global Securities"). The Temporary Offshore Global Securities will be
registered in the name of, and held by, a temporary certificate holder
designated by NationsBanc Capital Markets, Inc. until the termination of the
"restricted period" (as defined in Regulation S) with respect to the offer and
sale of the Initial Securities (the "Offshore Securities Exchange Date"). At
any time following the Offshore Securities Exchange Date, upon receipt by the
Trustee and the Company of a certificate
27
substantially in the form of Exhibit B hereto, the Company shall execute, and
the Trustee shall authenticate and deliver, one or more permanent certificated
Securities in registered form substantially in the form set forth in Exhibit A
(the "Permanent Offshore Physical Securities"), in exchange for the surrender of
Temporary Offshore Global Securities of like tenor and amount.
Initial Securities offered and sold other than as described in the
preceding two paragraphs shall be issued in the form of permanent certificated
Securities in registered form in substantially the form set forth in Exhibit A
(the "U.S. Physical Securities").
The Temporary Offshore Global Securities, Permanent Offshore Physical
Securities and U.S. Physical Securities are sometimes collectively herein
referred to as the "Physical Securities".
SECTION 202. Restrictive Legends.
-------------------
Unless and until (i) an Initial Security is sold under an effective
Registration Statement or (ii) an Initial Security is exchanged for an Exchange
Security in connection with an effective Registration Statement, in each case
pursuant to the Registration Rights Agreement, each certificate representing a
Security shall contain a legend substantially to the following effect (the
"Private Placement Legend") on the face thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL,
PLEDGE OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE WHICH IS TWO
YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
ON WHICH BREED TECHNOLOGIES, INC. (THE "COMPANY") OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT
28
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR", FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO THE EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO
CLAUSE (D) PRIOR TO THE END OF THE 40-DAY RESTRICTED PERIOD WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSES (E)
OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF
THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Each U.S. Global Security, whether or not an Initial Security, shall
also bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
REPRESENTATIVE OF THE DEPOSITORY
29
TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTIONS 306 AND 307 OF THE INDENTURE.
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
---------------
The initial aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $330,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section 304,
305, 306, 307, 308, 906, 1012, 1013 or 1108, pursuant to an Exchange Offer or
pursuant to Section 312. The Company may also issue up to $100 million
aggregate principal amount of Additional Securities having identical terms and
conditions to the Securities, subject to compliance with the covenants contained
herein (the "Additional Securities").
The Initial Securities shall be known and designated as the "9 1/4%
Senior Subordinated Notes due 2008" and the Exchange Securities shall be known
and designated as the "9 1/4% Exchange Senior Subordinated Notes due 2008."
Their Stated Maturity shall be April 15, 2008, and they shall bear interest at
the rate of 9 1/4% per annum from April 28, 1998, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
payable semiannually on April 15 and October 15 in each year, commencing October
15, 1998, until the principal thereof is paid or duly provided for, to the
Person in whose name the Security (or any predecessor Security) is registered at
the close of business on the April 1 or October 1 next preceding such Interest
Payment Date.
The principal of (and premium, if any), and interest on the Securities
shall be payable, and the Securities shall be exchangeable and transferable, at
the office or agency of the Company in The City of New York maintained for such
purposes, (which initially shall be
30
the office of the Trustee located at One State Street, New York, NY 10004) or,
at the option of the Company, interest may be paid by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Security Register; provided that all payments with respect to the U.S. Global
--------
Securities, as well as Physical Securities the Holders of which have given wire
transfer instructions to the Trustee (or other Paying Agent) by the Regular
Record Date for such payment, will be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders thereof.
Securities that remain outstanding after the consummation of the
Exchange Offer and Exchange Securities issued in connection with the Exchange
Offer will be treated as a single class of securities under this Indenture.
The Securities shall be redeemable as provided in Article Eleven.
SECTION 302. Denominations.
-------------
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its
Chairman, its President or a Vice President. The signature of any of these
officers on the Securities may be manual or facsimile signatures of the present
or any future such authorized officer and may be imprinted or otherwise
reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Initial Securities executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Initial Securities directing the Trustee to
authenticate the Securities and certifying that all conditions precedent to the
issuance of Securities contained herein have been fully complied with, and the
Trustee in accordance with such Company Order shall authenticate and deliver
such Initial Securities. On Company Order, the Trustee shall authenticate for
original issue Exchange Securities in an aggregate principal amount not to
exceed $330,000,000 plus the aggregate principal amount of any Additional
Securities issued; provided that such Exchange Securities shall be issuable only
--------
upon the valid surrender for cancellation of Initial Securities of a like
aggregate principal amount in accordance with an Exchange Offer pursuant to the
Registration Rights Agreement and a Company Order for the authentication of such
securities
31
certifying that all conditions precedent to the issuance have been complied with
(including the effectiveness of a registration statement related thereto). In
each case, the Trustee shall be entitled to receive an Officers' Certificate and
an Opinion of Counsel of the Company that it may reasonably request in
connection with such authentication of Securities. Such order shall specify the
amount of Securities to be authenticated and the date on which the original
issue of Initial Securities or Exchange Securities is to be authenticated.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for in Exhibit
A duly executed by the Trustee by manual signature of an authorized officer, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture.
In case the Company, pursuant to Article Eight, shall be consolidated
or merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article Eight, any of the Securities authenticated
or delivered prior to such consolidation, merger, conveyance, transfer, lease or
other disposition may, from time to time, at the request of the successor
Person, be exchanged for other Securities executed in the name of the successor
Person with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Securities surrendered for such
exchange and of like principal amount; and the Trustee, upon Company Request of
the successor Person, shall authenticate and deliver Securities as specified in
such request for the purpose of such exchange. If Securities shall at any time
be authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Securities, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Securities at the time
Outstanding for Securities authenticated and delivered in such new name.
SECTION 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other
32
variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 1002,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at the Corporate Finance Department
of the Trustee a register (the register maintained in such office and in any
other office or agency designated pursuant to Section 1002 being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Security
Register shall be in written form or any other form capable of being converted
into written form within a reasonable time. At all reasonable times, the
Security Register shall be open to inspection by the Trustee. The Trustee is
hereby initially appointed as "Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 1002, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of any
authorized denomination or denominations of a like aggregate principal amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange (including an
exchange of Initial Securities for Exchange Securities), the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive; provided that no exchange
--------
of Initial Securities for Exchange Securities shall occur until an Exchange
Offer Registration Statement shall have been declared effective by the
Commission and that the Initial Securities to be exchanged for the Exchange
Securities shall be cancelled by the Trustee.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the
33
same benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration 304, 906, 1012, 1013 or 1108 not involving
any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Security during a period beginning at the opening of business
15 days before the selection of Securities to be redeemed under Section 1104 and
ending at the close of business on the day of such mailing of the relevant
notice of redemption, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
Notwithstanding anything to the contrary contained herein, the Trustee
shall have no duty whatsoever to monitor compliance with Federal or State
securities laws other than to collect the certificates required herein.
34
SECTION 306. Book-Entry Provisions for U.S. Global Security.
----------------------------------------------
(a) The U.S. Global Security initially shall (i) be registered in the
name of Cede & Co., as nominee of the Depositary, (2) be deposited with, or on
behalf of, the Depositary or with the Trustee, as custodian for such Depositary,
and (iii) bear legends as set forth in Section 202.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any U.S. Global Security
held on their behalf by the Depositary, or the Trustee as its custodian, or
under the U.S. Global Security, and the Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of such U.S. Global Security for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or shall
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a holder of any
Security.
(b) Transfers of the U.S. Global Security shall be limited to
transfers of such U.S. Global Security in whole, but not in part, to the
Depositary, its successors or their respective nominees. Interests of
beneficial owners in the U.S. Global Security may be transferred in accordance
with the rules and procedures of the Depositary and the provisions of Section
307. In addition, if (i) the Company notifies the Trustee in writing that the
Depositary is no longer willing or able to act as a depositary and the Company
is unable to locate a qualified successor within 90 days or (ii) the Company, at
its option, notifies the Trustee in writing that it elects to cause the issuance
of Securities in the form of Physical Securities hereunder then, upon surrender
by the Global Security Holder of its Global Security, Physical Securities will
be issued to each Person that the Global Security Holder and the Depositary
identify as being the beneficial owner of the related Securities.
(c) In connection with any transfer of a portion of the beneficial
interest in the U.S. Global Security to beneficial owners pursuant to subsection
(b) of this Section, the Registrar shall reflect on its books and records the
date and a decrease in the principal amount of the U.S. Global Security in an
amount equal to the principal amount of the beneficial interest in the U.S.
Global Security to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more U.S. Physical Securities of
like tenor and amount.
(d) In connection with the transfer of the entire U.S. Global Security
to beneficial owners pursuant to subsection (b) of this Section, the U.S. Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by the
35
Depositary in exchange for its beneficial interest in the U.S. Global Security,
an equal aggregate principal amount of U.S. Physical Securities of authorized
denominations.
(e) Any U.S. Physical Security delivered in exchange for an interest
in the U.S. Global Security pursuant to subsection (c) or subsection (d) of this
Section shall, except as otherwise provided by paragraph (a)(i)(x) and paragraph
(f) of Section 307, bear the applicable legend regarding transfer restrictions
applicable to the U.S. Physical Security set forth in Section 202.
(f) The Holder of the U.S. Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 307. Special Transfer Provisions.
---------------------------
The Trustee is entitled to rely upon the certificates delivered
pursuant to this Section 307 and is irrevocably authorized to produce such
certificates or copies thereof to any interested party in any administrative or
legal proceeding or official inquiry with respect to the matters covered
thereby.
Unless and until (i) an Initial Security is sold under an effective
Registration Statement, or (ii) an Initial Security is exchanged for an Exchange
Security in connection with an effective Registration Statement, in each case
pursuant to the Registration Rights Agreement, the following provisions shall
apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The
-------------------------------------------------------
following provisions shall apply with respect to the registration of any
proposed transfer of an Initial Security to any institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act) which is not a QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Initial Security,
whether or not such Initial Security bears the Private Placement Legend, if
(x) the requested transfer is at least two years after the original issue
date of the Initial Securities or (y) the proposed transferee has delivered
to the Registrar a certificate substantially in the form of Exhibit C
hereto.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (i) and (y)
instructions given in accordance with the Depositary's and the Registrar's
procedures therefor, the Registrar shall reflect on its books and records
the date and a decrease in the principal amount of the U.S. Global Security
in an amount equal to the principal amount of the beneficial interest in
36
the U.S. Global Security to be transferred, and the Company shall execute,
and the Trustee shall authenticate and deliver, one or more U.S. Physical
Securities of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
-----------------
respect to the registration of any proposed transfer of an Initial Security to a
QIB (excluding Non-U.S. Persons):
(i) If the Security to be transferred consists of U.S. Physical
Securities, Temporary Offshore Global Securities or Permanent Offshore
Physical Securities, the Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has checked the box
provided for on the form of Initial Security stating, or has otherwise
advised the Company and the Registrar in writing, that the sale has been
made in compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Initial Security
stating, or has otherwise advised the Company and the Registrar in writing,
that it is purchasing the Initial Security for its own account or an
account with respect to which it exercises sole investment discretion and
that it, or the Person on whose behalf it is acting with respect to any
such account, is a QIB within the meaning of Rule 144A, and is aware that
the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information and
that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided
by Rule 144A.
(ii) If the proposed transferee is an Agent Member, and the Initial
Security to be transferred consists of U.S. Physical Securities, Temporary
Offshore Global Securities or Permanent Offshore Physical Securities, upon
receipt by the Registrar of instructions given in accordance with the
Depositary's and the Registrar's procedures therefor, the Registrar shall
reflect on its books and records the date and an increase in the principal
amount of the U.S. Global Security in an amount equal to the principal
amount of the U.S. Physical Securities, Temporary Offshore Global
Securities or Permanent Offshore Physical Securities, as the case may be,
to be transferred, and the Trustee shall cancel the Physical Security so
transferred.
(c) Transfers by Non-U.S. Persons on or Prior to June 8, 1998. The
---------------------------------------------------------
following provisions shall apply with respect to registration of any proposed
transfer of an Initial Security by a Non-U.S. Person on or prior to June 8,
1998:
(i) The Registrar shall register the transfer of any Initial Security
(x) if the proposed transferee is a Non-U.S. Person and the proposed
transferor has delivered to the Registrar a certificate substantially in
the form of Exhibit D hereto or (y) if the proposed transferee is a QIB and
the proposed transferor has checked the box provided
37
for on the form of Initial Security stating, or has otherwise advised the
Company and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has signed
the certification provided for on the form of Initial Security stating, or
has otherwise advised the Company and the Registrar in writing, that it is
purchasing the Initial Security for its own account or an account with
respect to which it exercises sole investment discretion and that it, or
the Person on whose behalf it is acting with respect to any such account,
is a QIB within the meaning of Rule 144A, and is aware that the sale to it
is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information and
that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided
by Rule 144A. Unless clause (ii) below is applicable, the Company shall
execute, and the Trustee shall authenticate and deliver, one or more
Temporary Offshore Physical Securities of like tenor and amount.
(ii) If the proposed transferee is an Agent Member, upon receipt by
the Registrar of instructions given in accordance with the Depositary's and
the Registrar's procedures therefor, the Registrar shall reflect on its
books and records the date and an increase in the principal amount of the
U.S. Global Security in an amount equal to the principal amount of the
Temporary Offshore Global Security to be transferred, and the Trustee shall
cancel the Temporary Offshore Global Security so transferred.
(d) Transfers by Non-U.S. Persons After June 8, 1998. The following
------------------------------------------------
provisions shall apply with respect to any transfer of an Initial Security by a
Non-U.S. Person after June 8, 1998:
(i) (x) If the Initial Security to be transferred is a Permanent
Offshore Physical Security, the Registrar shall register such transfer, (y)
if the Initial Security to be transferred is a Temporary Offshore Global
Security, upon receipt of a certificate substantially in the form of
Exhibit D from the proposed transferor, the Registrar shall register such
transfer and (z) in the case of either clause (x) or (y), unless clause
(ii) below is applicable, the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Permanent Offshore Physical
Securities of like tenor and amount.
(ii) If the proposed transferee is an Agent Member, upon receipt by
the Registrar of instructions given in accordance with the Depositary's and
the Registrar's procedures therefor, the Registrar shall reflect on its
books and records the date and an increase in the principal amount of the
U.S. Global Security in an amount equal to the principal amount of the
Temporary Offshore Global Security or Permanent Offshore Physical Security
to be transferred, and the Trustee shall cancel the Physical Security so
transferred.
38
(e) Transfers to Non-U.S. Persons at Any Time. The following
-----------------------------------------
provisions shall apply with respect to any transfer of an Initial Security to a
Non-U.S. Person:
(i) Prior to June 8, 1998, the Registrar shall register any proposed
transfer of an Initial Security to a Non-U.S. Person upon receipt of a
certificate substantially in the form of Exhibit D hereto from the proposed
transferor and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Temporary Offshore Global Securities
of like tenor and amount.
(ii) On and after June 8, 1998, the Registrar shall register any
proposed transfer to any Non-U.S. Person (w) if the Initial Security to be
transferred is a Permanent Offshore Physical Security, (x) if the Initial
Security to be transferred is a Temporary Offshore Global Security, upon
receipt of a certificate substantially in the form of Exhibit D from the
proposed transferor, (y) if the Initial Security to be transferred is a
U.S. Physical Security or an interest in the U.S. Global Security, upon
receipt of a certificate substantially in the form of Exhibit D from the
proposed transferor and (z) in the case of either clause (w), (x) or (y),
the Company shall execute, and the Trustee shall authenticate and deliver,
one or more Permanent Offshore Physical Securities of like tenor and
amount.
(iii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Registrar of (x) the document, if any, required by paragraph (i), and (y)
instructions in accordance with the Depositary's and the Registrar's
procedures therefor, the Registrar shall reflect on its books and records
the date and a decrease in the principal amount of the U.S. Global Security
in an amount equal to the principal amount of the beneficial interest in
the U.S. Global Security to be transferred and the Company shall execute,
and the Trustee shall authenticate and deliver, one or more Permanent
Offshore Physical Securities of like tenor and amount.
(f) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless either (i) the circumstances contemplated by
the fifth paragraph of Section 201 or paragraphs (a)(i)(x), (d)(i) or (e)(ii) of
this Section 307 exist and the Company directs the Trustee pursuant to an
Officers' Certificate to remove such legend or (ii) there is delivered to the
Registrar an Opinion of Counsel reasonably satisfactory to the Company and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of the
Securities Act.
39
(g) General. By its acceptance of any Security bearing the Private
-------
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of
such Security set forth in this Indenture and in the Private Placement Legend
and agrees that it will transfer such Security only as provided in this
Indenture.
The Registrar shall retain as required by law copies of all letters,
notices and other written communications received pursuant to Section 306 or
this Section 307. The Company shall have the right to inspect and make copies
of all such letters, notices or other written communications at any reasonable
time upon the giving of reasonable written notice to the Registrar.
SECTION 308. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If (i) any mutilated Security is surrendered to the Trustee or the
Registrar, or (ii) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a bona
fide purchaser, the Company shall execute and upon Company Order the Trustee
shall authenticate and deliver, in exchange for any such mutilated Security or
in lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
40
SECTION 309. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name such Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest at the
office or agency of the Company in The City of New York maintained for such
purposes (which initially shall be the office of the Trustee located at One
State Street, New York, NY 10004) pursuant to Section 1002 or, at the option of
the Company, interest may be paid by check mailed to the address of the Person
entitled thereto pursuant to 310 as such address appears in the Security
Register; provided that all payments with respect to Global Securities and
--------
Physical Securities the Holders of which have given wire transfer instructions
to the Trustee (or other Paying Agent) by the Regular Record Date shall be
required to be made by wire transfer of immediately available funds to the
accounts specified by the holders thereof.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date shall forthwith cease to
be payable to the Holder on the Regular Record Date by virtue of having been
such Holder, and such defaulted interest and (to the extent lawful) interest on
such defaulted interest at the rate borne by the Securities (such defaulted
interest and interest thereon herein collectively called "Defaulted Interest")
may be paid by the Company, at its election in each case, as provided in clause
(a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security and
the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date, and in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be given in the manner provided for in
Section 106, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so given, such Defaulted Interest shall be
41
paid to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
If the Company shall be required to pay any additional interest
pursuant to the terms of the Registration Rights Agreement, it shall deliver an
Officers' Certificate to the Trustee setting forth the new interest rate and the
period for which such rate is applicable.
SECTION 310. Persons Deemed Owners.
---------------------
Prior to the due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of (and premium,
if any) and (subject to Sections 305 and 309) interest on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and none
of the Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 311. Cancellation.
------------
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. If
the Company shall so acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the
Trustee for cancellation. No Securities shall be authenticated in lieu of or in
exchange for
42
any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee shall
be disposed of by the Trustee in accordance with its customary procedures and
certification of their disposal delivered to the Company unless by Company Order
the Company shall direct that cancelled Securities be returned to it.
SECTION 312. Issuance of Additional Securities. The Company may,
---------------------------------
subject to Article Ten of this Indenture, issue up to $100,000,000 aggregate
principal amount of additional Securities having identical terms and conditions
to the Securities offered hereby (the "Additional Securities"). Any Additional
Securities will be part of the same issue as the Securities offered hereby and
will vote on all matters with the Securities offered hereby.
SECTION 313. CUSIP and CINS Numbers. The Company in issuing the
----------------------
Securities may use "CUSIP" and "CINS" numbers (if then generally in use) and, if
so, the Trustee shall use "CUSIP" and "CINS" numbers in notices of redemption as
a convenience to Holders; provided that any such notice may state that no
--------
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
SECTION 314. Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
43
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
the Securities, as expressly provided for herein or pursuant hereto) and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture when
(a) either
(i) all the Securities theretofore authenticated and delivered
(other than mutilated, destroyed, lost or stolen Securities that have
been replaced or paid as provided in Section 308 and Securities that
have been subject to defeasance under Article Twelve) have been
delivered to the Trustee for cancellation; or
(ii) all Securities not theretofore delivered to the Trustee
for cancellation
(A) have become due and payable,
(B) will become due and payable at Stated
Maturity within one year, or
(C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, or the Subsidiary Guarantors, as the case may be, in
the case of (A), (B) or (C) above, has irrevocably deposited or caused
to be deposited with the Trustee funds in trust for the purpose in an
amount sufficient to pay and discharge the entire Indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation,
for principal (and premium, if any, on) and interest on the Securities
to the date of such deposit (in the case of Securities that have
become due and payable) or to the Stated Maturity or Redemption Date,
as the case may be;
(b) the Company or the Subsidiary Guarantors, as the case may be, has
paid or caused to be paid all sums payable hereunder by the Company; and
44
(c) the Company or the Subsidiary Guarantors, as the case may be, has
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
-----------------
"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 the payment of any interest on any Security when it
becomes due and payable, and continuance of such default for a period of 30
days (whether or not prohibited by the subordination provisions of this
Indenture);
(2) default in the payment of the principal of (or premium, if any,
on) any Security when due (whether or not prohibited by the subordination
provisions of this Indenture);
(3) failure to perform or comply with the provisions described in
Article Eight, Section 1012 or Section 1013 hereof;
45
(4) default in the performance, or breach, of any covenant or
agreement of the Company or any Subsidiary Guarantor contained in this Indenture
or any Subsidiary Guarantee (other than as contemplated by clauses (1), (2) and
(3) above) and continuance of such default or breach for a period of 60 days
after written notice has been given to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Securities then Outstanding;
(5) an event of default has occurred under any mortgage, bond,
indenture, loan agreement or other document evidencing Indebtedness of the
Company or any Significant Subsidiary, which Indebtedness has an aggregate
outstanding principal amount of $10,000,000 or more, and such default (i)
results in the acceleration of such Indebtedness prior to its Stated Maturity or
(ii) constitutes a failure to make any payment when due of any such
Indebtedness;
(6) failure by the Company or any of its Restricted Subsidiaries to
pay one or more final judgments the uninsured portion of which exceeds in the
aggregate $10,000,000, which judgment or judgments are not paid, discharged or
stayed for a period of 60 days;
(7) any Subsidiary Guarantee issued by a Significant Subsidiary ceases
to be in full force and effect or is declared null and void or any Subsidiary
Guarantor denies that it has any further liability under any Subsidiary
Guarantee, or gives notice to such effect (other than by reason of the
termination of this Indenture or the release of any such Subsidiary Guarantee in
accordance with this Indenture), and such condition has continued for a period
of 30 days after written notice of such failure requiring the Subsidiary
Guarantor and the Company to remedy the same has been given (x) to the Company
by the Trustee or (y) to the Company and the Trustee by the Holders of 25% in
aggregate principal amount of the Securities then outstanding; or
(8) entry of a decree or order by a court having jurisdiction in the
premises adjudging the Company or any Significant Subsidiary a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustments or composition of or in respect of the Company or any
Significant Subsidiary under the Federal Bankruptcy Code or any other applicable
federal or state law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or any Significant
Subsidiary or of any substantial part of its property, or ordering the winding
up or liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 90 consecutive days;
(9) the institution by the Company or any Significant Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to
the institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a
46
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Code or any other applicable federal or state law, or
the consent by it to the filing of any such petition or to the appointment
of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or any Significant Subsidiary or of any
substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due; or
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than as specified in Section 501(8) or
(9)) occurs and is continuing, the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Securities then Outstanding, by written
notice to the Company, may, and the Trustees at the request of such Holders, by
written notice to the Company, shall, declare the principal of, and accrued
and unpaid interest on, all of the Outstanding Securities immediately due and
payable and, upon any such declaration, such principal and interest will become
due and payable immediately. If an Event of Default specified in Section 501(8)
or (9) above occurs and is continuing, then the principal of all of the
Securities Outstanding will ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder of
Securities. The Company shall deliver to the Trustee, within 10 days after the
occurrence thereof, notice of any default or acceleration referred to the
Section 501(5).
At any time after a declaration of acceleration, but before a judgment
or decree for payment of the money due has been obtained by the Trustee, the
Holders of a majority in aggregate principal amount of the Outstanding
Securities, by written notice to the Company and the Trustee, may rescind such
declaration and its consequences if
(i) the Company or any Subsidiary Guarantor has paid or deposited with
the Trustee a sum sufficient to pay,
(A) all overdue interest on all Securities,
(B) all unpaid principal of (and premium, if any, on) any
Outstanding Securities that has become due otherwise than by such
declaration of acceleration and interest thereon at the rate borne by
the Securities, and
(C) to the extent that payment of such interest is lawful,
interest on overdue interest and overdue principal at the rate borne
by the Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
47
(ii) all Events of Default, other than the non-payment of amounts of
principal of (or premium, if any, on) or interest on the Securities that
have become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Notwithstanding the preceding paragraph, in the event of a declaration
of acceleration in respect of the Securities because of an Event of Default
specified in Section 501(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 countersigned by
the holders of the requisite percentage of such Indebtedness or a trustee,
fiduciary or agent for such holders, within 30 days after such declaration of
acceleration in respect of the Securities, and no other Event of Default has
occurred during such 30-day period which has not been cured or waived during
such period.
SECTION 503. Collection of Indebtedness and Suits for Enforcement
----------------------------------------------------
by Trustee.
- ----------
The Company and each of the Subsidiary Guarantors covenants that if
(a) default is made in the payment of any installment of interest on
any Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Company and each Subsidiary Guarantor will, upon demand of the Trustee, pay
to the Trustee for the benefit of the Holders of such Securities, the whole
amount then due and payable on such Securities for principal (and premium, if
any) and interest, and interest on any overdue principal (and premium, if any)
and, to the extent that payment of such interest shall be legally enforceable,
upon any overdue installment of interest, at the rate borne by the Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company or any Subsidiary Guarantor, as the case may be, fails
to pay such amounts forthwith upon such demand, the Trustee, in its own name as
trustee of an express trust, may institute a judicial proceeding for the
collection of the sums so due and
48
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company, such Subsidiary Guarantor or any other
obligor upon the Securities and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company, such
Subsidiary Guarantor or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities (including the Subsidiary Guarantors) or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of overdue principal,
premium, if any, or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(b) to collect and receive any moneys or other securities or property
payable or deliverable upon the conversion or exchange of such securities
or upon any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606.
49
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities.
- ----------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
and as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
606;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and premium, if
any) and interest, respectively; and
THIRD: The balance, if any, to the Company and/or the Subsidiary
Guarantors, as the case may be, or as a court of competent jurisdiction may
direct.
SECTION 507. Limitation on Suits.
-------------------
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
50
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities (including fees and
expenses of its agents and counsel) to be incurred in compliance with such
request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority or
more in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
---------------------------------------------------
Premium and Interest.
- --------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment, as provided herein (including, if applicable, Article Twelve)
and in such Security of the principal of (and premium, if any) and (subject to
Section 309) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Subsidiary Guarantors, the
Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been instituted.
51
SECTION 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 308, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, provided that
--------
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(c) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders not
consenting.
SECTION 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities may, on behalf of the Holders of all of the Securities,
waive any past defaults hereunder, except a default
52
(a) in the payment of the principal of (or premium, if any) or
interest on any Security, or
(b) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Security Outstanding.
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 Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Stay or Extension Laws.
--------------------------------
The Company and each Subsidiary Guarantor covenant (to the extent that
it may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company and
each Subsidiary Guarantor (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 515. Undertaking for Costs.
----------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorney's fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal (or premium, if any ) or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
53
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.
------------------
If a Default or an Event of Default occurs and is continuing and is
known to the Trustee, the Trustee shall mail to each Holder of the Securities in
the manner and to the extent provided in TIA Section 313(c) notice of the
Default or Event of Default within 90 days after the occurrence thereof;
provided, however, that, except in the case of a Default or an Event of Default
- -------- -------
in the payment of principal of (and premium, if any, on) or interest on any
Securities, the Trustee may withhold the notice to the Holders of the Securities
if a committee of its trust officers in good faith determines that withholding
such notice is in the interests of the Holders of the Securities.
SECTION 602. Certain Rights of Trustee.
-------------------------
Subject to the provisions of TIA Sections 315(a) through 315(d):
(a) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting, pursuant to the terms of this Indenture or
otherwise, upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper Person or Persons;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order with
sufficient detail as may be requested by the Trustee and any resolution of
the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate or an Opinion of
Counsel;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
54
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities (including fees and expenses of its agents
and counsel) which might be incurred by it in compliance with such request
or direction;
(f) the Trustee shall not be bound to make any investigation into, and
may conclusively rely upon, the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture; and
(i) except during the continuance of an Event of Default, the Trustee
need perform only those duties as are specifically set forth in this
Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. Trustee Not Responsible for Recitals or Issuance of
---------------------------------------------------
Securities.
- ----------
The recitals contained herein and in the Securities, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company and the Subsidiary Guarantors, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture, the Securities or any
Subsidiary Guarantee, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder and, upon the effectiveness of the
Registration Statement, that the
55
statements made by it in a Statement of Eligibility on Form T-1 supplied to the
Company are true and accurate, subject to the qualifications set forth therein.
The Trustee shall not be accountable for the use or application by the Company
of Securities or the proceeds thereof or any money paid to the Company or upon
the Company's direction under any provision of this Indenture. The Trustee
shall not be responsible for the use or application of any money received by any
Paying Agent other than the Trustee.
SECTION 604. May Hold Securities.
-------------------
The Trustee, any Paying Agent, any Registrar or any other agent of the
Company or of the Trustee, in its individual or any other capacity, may become
the owner or pledgee of Securities and, subject to TIA Sections 310(b) and 311,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Paying Agent, Registrar or such other agent.
SECTION 605. Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company or any Subsidiary Guarantor, as the case may
be.
SECTION 606. Compensation and Reimbursement.
------------------------------
The Company agrees:
(a) to pay to the Trustee (in its capacity as Trustee, Paying Agent
and Registrar) from time to time reasonable compensation for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee promptly upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust, including the costs and expenses (including the reasonable
expenses and disbursements of counsel) of enforcing this Indenture against
the Company or the Subsidiary Guarantors (including
56
this Section 606) and of defending itself against any claim (whether
asserted by any Holder or the Company or any other Person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture and any termination under any bankruptcy law. As
security for the performance of such obligations of the Company, the Trustee
shall have a claim prior to the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the payment of
principal of (and premium, if any) or interest on particular Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(8) or (9), the expenses
(including the reasonable charges and expenses of its counsel) of and the
compensation for such services are intended to constitute expenses of
administration under any applicable bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall be at all times a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of Federal, State, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 609 shall not have been delivered to the Trustee within 30
days after the giving of such notice of
57
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
not less than a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, except when the Trustee's duty to resign is stayed in accordance
with the provisions of TIA Section 310(b), or
(2) the Trustee shall cease to be eligible under Section 607 and shall
fail to resign after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided subject to
TIA Section 315(e), any Holder who has been a bona fide Holder of a Security for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
58
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to the Holders of
Securities in the manner provided for in Section 106. Each notice shall include
the name of the successor Trustee and the address of its Corporate Finance
Department.
SECTION 609. Acceptance of Appointment by Successor.
--------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder subject to the retiring Trustee's rights as
provided under the last sentence of Section 606. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
- --------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
In case at that time any of the Securities shall not have been authenticated,
any successor Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee. In all such
cases such certificates shall have the full force and effect which this
Indenture provides that the certificate of authentication of the Trustee shall
have; provided, however, that the right to adopt the certificate of
-------- -------
authentication of any predecessor Trustee or to authenticate Securities in the
name of any predecessor Trustee shall apply only to its successor or successors
by merger, conversion or consolidation.
59
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE
SECTION 701. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that none of the Company or the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders in accordance
with TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee.
------------------
Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Securities, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief
report dated as of such May 15 if required by TIA Section 313(a).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate or merge with or into any other
Person (whether or not the Company is the surviving Person), or directly or
indirectly convey, sell, assign, transfer, lease or otherwise dispose of all or
substantially all of its properties or assets (determined on a consolidated
basis for the Company and its Subsidiaries taken as a whole) in one transaction
or a series of related transactions, unless each of the following conditions is
satisfied:
(a) either (i) the Company is the surviving corporation or (ii) the
Person (if other than the Company) formed by such consolidation or into
which the Company is merged or the Person that acquires by conveyance,
sale, assignment, transfer, lease or other disposition the properties and
assets of the Company substantially as an entirety (the "Surviving Entity")
(A) is a corporation, partnership or trust organized and validly existing
under the laws of the United States, any state thereof or the District of
Columbia and (B) expressly assumes, by a supplemental indenture in form
reasonably
60
satisfactory to the Trustee, all the obligations of the Company under the
Securities and this Indenture;
(b) immediately after giving effect to such transaction, no Default or
Event of Default has occurred and is continuing;
(c) immediately after giving effect to such transaction on a pro forma
basis, the Consolidated Net Worth of the Company (or of the Surviving
Entity if the Company is not the continuing obligor under this Indenture)
is equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction;
(d) immediately after giving effect to such transaction on a pro forma
basis (on the assumption that the transaction occurred at the beginning of
the most recently ended four full fiscal quarter period for which internal
financial statements are available), the Company (or the Surviving Entity
if the Company is not the continuing obligor under this Indenture) could
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to the first paragraph of Section 1010;
(e) if the Company is not the continuing obligor under this Indenture,
each Subsidiary Guarantor, unless it is the other party to the transaction
described above, has by supplemental indenture, upon the reasonable request
of the Trustee, confirmed that its Subsidiary Guarantee applies to the
Surviving Entity's obligations under this Indenture and the Securities; and
(f) the Company delivers, or causes to be delivered, to the Trustee,
in form and substance reasonably satisfactory to the Trustee, an Officers'
Certificate and an Opinion of Counsel, each stating that such transaction
complies with the requirements of this Indenture.
In the event of a merger of a Wholly Owned Restricted Subsidiary into
the Company, the Company need not comply with the foregoing clauses (c) and (d).
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries that constitutes all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
SECTION 802. Successor Substituted.
---------------------
In the event of any transaction described in and complying with the
conditions listed in the first paragraph of Section 801 in which the Company is
not the continuing obligor under this Indenture, the Surviving Entity shall
succeed to, and be substituted for, and may
61
exercise every right and power of, the Company under this Indenture with the
same effect as if such Surviving Entity had been named as the Company herein,
and thereafter the Company shall, except in the case of a lease, be discharged
of all its obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTS AND AMENDMENTS TO INDENTURE
AND SUBSIDIARY GUARANTEES
SECTION 901. Without Consent of Holders.
--------------------------
Without the consent of any Holders, the Company and any affected
Subsidiary Guarantor, each when authorized by a Board Resolution, and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, for any of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
contained herein and in the Securities; or
(b) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein or in the Securities
conferred upon the Company; or
(c) to add any additional Events of Default; or
(d) to provide for uncertificated Securities in addition to or in
place of the certificated Securities;
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of Section
609; or
(f) to secure the Securities or any Subsidiary Guarantee;
(g) to cure any ambiguity or mistake, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to matters
or questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture; provided that such action shall not
--------
adversely affect the interests of the Holders in any material
respect; or
62
(h) to qualify, or maintain the qualification of, this Indenture under
the Trust Indenture Act;
(i) to add a Subsidiary Guarantor pursuant to Section 1308 hereof;
(j) to make any other change that does not adversely affect the rights
of any Holder.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture,
Security or Subsidiary Guarantee, and upon receipt by the Trustee of the
documents described in Section 602 hereof, the Trustee shall join with the
Company in the execution of any amended or supplemental Indenture or Subsidiary
Guarantee 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 or Subsidiary Guarantee that affects its own rights,
duties or immunities under this Indenture or otherwise.
SECTION 902. With Consent of Holders.
-----------------------
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company, and upon the filing with the Trustee of evidence of
consent of the Holders as aforesaid, any affected Subsidiary Guarantor and the
Trustee, the Company and the Subsidiary Guarantor, each when authorized by a
Board Resolution, and the Trustee may amend or supplement in any manner this
Indenture or any Subsidiary Guarantee or modify in any manner the rights of the
Holders under this Indenture or any Subsidiary Guarantee; provided, however,
-------- -------
that no such supplement, amendment or modification may, without the consent of
the Holder of each Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Security, or reduce the principal amount thereof or the
rate of interest thereon or any premium payable upon the redemption
thereof, or change the place of payment where, or the coin or currency in
which any Security or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment
after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date), or
(b) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any waiver of
compliance with certain provisions of, or certain defaults and their
consequences provided for under, this Indenture, or
63
(c) waive a default in the payment of principal of, or premium, if
any, or interest on the Securities or reduce the percentage or aggregate
principal amount of Outstanding Securities the Consent of whose Holders is
necessary for waiver of compliance with certain provisions of the Indenture
or for waiver of certain defaults; or
(d) modify any of the provisions of the Indenture relating to the
subordination of the Securities or the Subsidiary Guarantees in a manner
materially adverse to the Holders.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Officer's Certificate and
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and that such supplemental indenture
constitutes the legal, valid and binding obligation of the Company and the
Subsidiary Guarantor subject to the customary exceptions and such other matters
as the Trustee may reasonably request. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustees own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If
64
the Company shall so determine, new Securities so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
SECTION 907. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Company, any affected Subsidiary
Guarantor and the Trustee of any supplemental indenture pursuant to the
provisions of Section 902, the Company shall give notice thereof to the Holders
of each Outstanding Security affected, in the manner provided for in Section
106, setting forth in general terms the substance of such supplemental
indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, If Any, and Interest.
---------------------------------------------------
The Company covenants and agrees for the benefit of the Holders that
it will duly and punctually pay the principal of (and premium, if any) and
interest on the Securities in accordance with the terms of the Securities and
this Indenture.
Principal of (premium, if any) and interest shall be considered paid
on the date due if as of 10:00 a.m. (New York City time) on such date the
Trustee or the Paying Agent if other than the Company or an Affiliate of the
Company holds in accordance with this Indenture money in immediately available
funds sufficient to pay all principal (premium, if any) and interest then due
and the Trustee, the Paying Agent or the Affiliate of the Company, as the case
may be, is not prohibited from paying such money to the Holders on that date
pursuant to the terms of this Indenture.
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in The City of New York, an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Corporate Trust Office located at One State
Street, New York, NY 10004 of the Trustee shall be such office or agency of the
Company, unless the Company shall designate and maintain some other office or
agency for one or more of such purposes. The Company will give prompt written
notice to the Trustee of any change in the location of any 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
65
the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Finance Department of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; provided, however, that no such
-------- -------
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and any change in the location of any such other
office or agency.
SECTION 1003. Money for Security Payments to Be Held in Trust.
-----------------------------------------------
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (or premium, if any) or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal of (or premium,
if any) or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it will, on or before each due date of the principal of (or premium,
if any) or interest on any Securities, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of such action or any
failure so to act.
The Company will 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, that
such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities 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;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal (and premium, if any) or interest; and
66
(c) 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 sums.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (or premium, if
any) or interest on any Security 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, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
-------- -------
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and corporate power of the Company and each Restricted Subsidiary;
provided, however, that the Company shall not be required to preserve any such
- -------- -------
corporate existence and corporate power if the Board of Directors 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 disadvantageous in any material respect to the
Holders.
SECTION 1005. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of
67
the Company or any Subsidiary except for such taxes, assessments and
governmental charges being contested in good faith and (b) all material lawful
claims for labor, materials and supplies, which, if unpaid, might by law become
a lien upon the property of the Company or any Subsidiary that could produce a
material adverse effect on the consolidated financial condition of the Company;
provided, however, that the Company shall not be required to pay or discharge or
- -------- -------
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 1006. Maintenance of Properties.
-------------------------
The Company will cause all properties owned by the Company or any
Subsidiary or used or held for use in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times, except, in every case, as and to the extent that the
Company may be prevented by fire, strikes, lockouts, acts of God, inability to
obtain labor or materials, governmental restrictions, enemy action, civil
commotion or unavoidable casualty or similar causes beyond the control of the
Company; provided, however, that nothing in this Section shall prevent the
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Company from discontinuing the maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1007. Insurance.
---------
The Company will at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurers, believed by
the Company to be responsible, against loss or damage to the extent that
property of similar character is usually so insured by corporations similarly
situated and owning like properties.
SECTION 1008. Statement by Officers As to Default.
-----------------------------------
(a) The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year, a brief certificate from the principal executive
officer, principal financial officer or principal accounting officer as to his
or her knowledge of compliance by the Company and the Restricted Subsidiaries
with all conditions and covenants under this Indenture. For purposes of this
Section 1008(a), such compliance shall be determined without regard to any
period of grace or requirement of notice under this Indenture.
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(b) When any Default has occurred and is continuing under this
Indenture, the Company shall deliver to the Trustee by registered or certified
mail or by telegram, telex or facsimile transmission an officers certificate
specifying such event, notice or other action within ten Business Days of its
occurrence.
SECTION 1009. Provision of Reports and Financial Statements.
---------------------------------------------
The Company shall be required to file on a timely basis with the
Commission, to the extent such filings are accepted by the Commission and
whether or not the Company has a class of securities registered under the
Exchange Act, the annual reports, quarterly reports and other documents that the
Company would be required to file if it were subject to Section 13 or 15(d) of
the Exchange Act. The Company shall also be required (a) to supply to the
Trustee and each Holder, or supply to the Trustee for forwarding to each such
Holder, without cost to such Holder, copies of such reports and documents within
15 days after the date on which the Company files such reports and documents
with the Commission or the date on which the Company would be required to file
such reports and documents if the Company were so required and (b) if filing
such reports and documents with the Commission is not accepted by the Commission
or is prohibited under the Exchange Act, to supply at the Company's cost copies
of such reports and documents to any prospective Holder of Securities promptly
upon written request.
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SECTION 1010. Limitation on Incurrence of Indebtedness and
--------------------------------------------
Issuance of Disqualified Stock.
- ------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, create, issue, assume, guarantee or in any manner become directly or
indirectly liable for the payment of, or otherwise incur (collectively,
"incur"), any Indebtedness (including Acquired Indebtedness) or issue any
Disqualified Stock, except that the Company or a Restricted Subsidiary may incur
Indebtedness or issue Disqualified Stock if, at the time of such event, the
Fixed Charge Coverage Ratio for the immediately preceding four full fiscal
quarters for which internal financial statements are available, taken as one
accounting period, would have been equal to at least 2.0 to 1.0.
In making the foregoing calculation for any four-quarter period which
includes the Closing Date, pro forma effect shall be given to the Refinancing of
the Existing Credit Facility, as if such transactions had occurred at the
beginning of such four-quarter period. In addition (but without duplication),
in making the foregoing calculation, pro forma effect will be given to: (i) the
incurrence of such Indebtedness and (if applicable) the application of the net
proceeds therefrom, including to refinance other Indebtedness, as if such
Indebtedness was incurred and the application of such proceeds occurred at the
beginning of such four-quarter period, (ii) the incurrence, repayment or
retirement of any other Indebtedness by the Company or its Restricted
Subsidiaries since the first day of such four-quarter period as if such
Indebtedness was incurred, repaid or retired at the beginning of such four-
quarter period, (iii) if such four-quarter period ends before December 31, 1998,
the SRS Acquisition as if such Acquisition occurred at the beginning of such
four-quarter period, (iv) the acquisition (whether by purchase, merger or
otherwise) or disposition (whether by sale, merger or otherwise) of any other
company, entity or business (as defined in Rule 11-01 under Article 11 of
Regulation S-X under the Securities Act) acquired or disposed of by the Company
or any Restricted Subsidiary, as the case may be, since the first day of such
four-quarter period, as if such acquisition or disposition occurred at the
beginning of such four-quarter period and (v) any pro forma expenses and cost
reductions calculated on a basis consistent with Regulation S-X under the
Securities Act attributable to any acquisition referred to in the foregoing
clause (iv). In making a computation under the foregoing clause (i) or (ii),
(A) interest on Indebtedness bearing a floating interest rate shall be computed
as if the rate in effect on the dated of computation had been the applicable
rate for the entire period (taking into account any Hedging Obligations
applicable to such Indebtedness if such Hedging Obligations have a remaining
term at the date of determination in excess of 12 months), (B) if such
Indebtedness bears, at the option of the Company, a fixed or floating rate of
interest, interest thereon will be computed by applying, at the option of the
Company, either the fixed or floating rate and (C) the amount of any
Indebtedness under a revolving credit facility will be computed based on the
average daily balance of such Indebtedness during such four-quarter period.
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Notwithstanding the foregoing, the Company may, to the extent
expressly permitted below, and may permit its Restricted Subsidiaries to, incur
any of the following Indebtedness ("Permitted Indebtedness"):
(i) Indebtedness of the Company or any Restricted Subsidiary under the
New Credit Facility or one or more other credit facilities in an aggregate
principal amount at any one time outstanding not to exceed the greater of
(x) $675.0 million or (y) the amount of the Borrowing Base, less in either
case (A) any amounts applied to the permanent reduction of the New Credit
Facility or any such other credit facility pursuant to Section 1013 and (B)
the amount of Indebtedness of all Receivables Subsidiaries then outstanding
in excess of $150.0 million;
(ii) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the Closing Date (other than Indebtedness described under
clause (i) above or clause (xii) below);
(iii) Indebtedness owed by the Company to any Wholly Owned Restricted
Subsidiary or owed by any Restricted Subsidiary to the Company or a Wholly
Owned Restricted Subsidiary (provided that such Indebtedness is held by the
--------
Company or such Wholly Owned Restricted Subsidiary); provided, however,
--------- -------
that any Indebtedness of the Company owing to any such Wholly Owned
Restricted Subsidiary is unsecured and subordinated in right of payment
from and after such time as the Securities shall become due and payable
(whether at Stated Maturity, acceleration, or otherwise) to the payment and
performance of the Company's obligations under the Securities;
(iv) Indebtedness represented by the Securities (other than the
Additional Securities) and the Subsidiary Guarantees;
(v) Indebtedness of the Company or any Restricted Subsidiary in
respect of Hedging Obligations incurred in the ordinary course of business;
(vi) Capitalized Lease Obligations of the Company or any Restricted
Subsidiary, provided that the aggregate amount of Indebtedness under this
--------
clause (vi) and clause (vii) below does not exceed 3.5% of the total
assets of the Company and its consolidated subsidiaries at any one time
outstanding;
(vii) Indebtedness of the Company or any Restricted Subsidiary under
purchase money mortgages or secured by purchase money security interests so
long as (x) such Indebtedness is not secured by any property or assets of
the Company or any Restricted Subsidiary other than the property and assets
so acquired and (y) such Indebtedness is created within 90 days of the
acquisition of the related property; provided that the aggregate amount of
Indebtedness under this clause (vii) and clause
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(vi) above does not exceed 3.5% of the total assets of the Company and its
consolidated subsidiaries at any one time outstanding;
(viii) 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, shares of Capital Stock;
(ix) Guarantees by any Restricted Subsidiary (A) of Indebtedness
referred to in clause (i) above or (B) made in accordance with the provisions of
Section 1020;
(x) Indebtedness of the Company or any Restricted Subsidiary, not
otherwise permitted by the first paragraph of this Section 1010 and any other
clause of this definition, in an aggregate principal amount not to exceed $20.0
million at any one time outstanding;
(xi) Indebtedness incurred by a Receivable Subsidiary, other than
Indebtedness described in clause (iii) above, in an amount not exceeding 95% of
the aggregate unpaid balance of the Receivables and Related Assets of such
Receivables Subsidiary at the time of such incurrence pursuant to a Receivables
Program, provided that, after giving effect thereto, if the aggregate amount of
--------
Indebtedness incurred by all Receivable Subsidiaries under this clause (xi) then
outstanding exceeds $150.0 million, the Company could incur $1.00 of
Indebtedness under the foregoing clause (i);
(xii) Indebtedness of one or more Foreign Subsidiaries under one or
more credit facilities in an aggregate principal amount at any one time
outstanding not to exceed $140 million;
(xiii) Guarantees by the Company of Indebtedness of any Restricted
Subsidiary, that was permitted to be incurred by another provision of this
covenant; and
(xiv) any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause, a "refinancing") of any
outstanding Indebtedness, other than Indebtedness incurred pursuant to clause
(i), (iii), (v), (vi), (vii), (ix), (x), (xi), (xii), or (xiii) of this
definition, including any successive refinancings thereof, so long as (A) any
such new Indebtedness is in a principal amount that does not exceed the
principal amount so refinanced, plus the amount of any premium required to be
paid in connection with such refinancing pursuant to the terms of the
Indebtedness refinanced or the amount of any premium reasonably determined by
the Company as necessary to accomplish such refinancing, plus the amount of the
expenses of the Company reasonably estimated to be incurred in connection with
such refinancing, (B) in the case of any refinancing of Subordinated
Indebtedness of the Company or any Subsidiary
72
Guarantors, such new Indebtedness is made subordinate to the Securities or
the Subsidiary Guarantees, as the case may be, at least to the same extent
as the Indebtedness being refinanced and (C) such refinancing Indebtedness
does not have a Weighted Average Life less than the Weighted Average Life of
the Indebtedness being refinanced and does not have a final scheduled
Maturity earlier than the final scheduled Maturity, or permit redemption at
the option of the holder earlier than the earliest date of redemption at the
option of the holder, of the Indebtedness being refinanced.
SECTION 1011. Limitation on Restricted Payments.
---------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, take any of the following actions:
(a) declare or pay any dividend on, or make any distribution to
holders of, any shares of the Capital Stock of the Company or any
Restricted Subsidiary, other than (i) dividends or distributions payable
solely in Qualified Equity Interests, (ii) dividends or distributions by a
Restricted Subsidiary payable to the Company or another Restricted
Subsidiary or (iii) pro rata dividends or distributions on common stock of
a Restricted Subsidiary held by minority stockholders, provided that such
dividends do not in the aggregate exceed the minority stockholders' pro
rata share of such Restricted Subsidiaries' net income from the first day
of the Company's fiscal quarter during which the Closing Date occurs;
(b) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of Capital Stock (or any options,
warrants or other rights to acquire shares of Capital Stock) of (i) the
Company or any Unrestricted Subsidiary or (ii) any Restricted Subsidiary
held by any Affiliate of the Company (other than, in either case, any such
Capital Stock owned by the Company or any of its Restricted Subsidiaries);
(c) make any principal payment on, or repurchase, redeem, defease or
otherwise acquire or retire for value, prior to any scheduled principal
payment, sinking fund payment or Maturity, Pari Passu Indebtedness or any
Subordinated Indebtedness (except a payment of principal at Stated
Maturity), or make any payment on or in respect of the Convertible
Debentures; or
(d) make any Investment (other than a Permitted Investment) in any
Person
(such payments or other actions described in (but not excluded from) clauses (a)
through (d) being referred to as "Restricted Payments"), unless at the time of,
and immediately after giving effect to, the proposed Restricted Payment:
(i) no Default or Event of Default has occurred and is continuing;
73
(ii) the Company could incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) pursuant to the first paragraph of
Section 1010; and
(iii) the aggregate amount of all Restricted Payments declared or made
after the Closing Date does not exceed the sum of:
(A) 50% of the aggregate Consolidated Net Income of the Company
during the period (taken as one accounting period) from the first day
of the Company's fiscal quarter during which the Closing Date occurs
to the last day of the Company's most recently ended fiscal quarter
for which internal financial statements are available at the time of
such proposed Restricted Payment (or, if such aggregate cumulative
Consolidated Net Income is a loss, minus 100% of such amount), plus
(B) the aggregate net proceeds, including the fair market value
of property other than cash (as determined by the Board of Directors,
whose good faith determination will be conclusive), received by the
Company after the Closing Date from the issuance or sale (other than
to a Subsidiary) of, or as a capital contribution in respect of,
Qualified Equity Interests of the Company (excluding from this
computation proceeds of an Equity Offering received by the Company
that are used by it to redeem Securities), plus
(C) the aggregate net proceeds, including the fair market value
of property other than cash (as determined by the Board of Directors,
whose good faith determination will be conclusive), received by the
Company after the Closing Date from the issuance or sale (other than
to a Subsidiary) of debt securities or Disqualified Stock that have
been converted into or exchanged for Qualified Stock of the Company,
together with the aggregate net cash proceeds received by the Company
at the time of such conversion or exchange, plus
(D) $10.0 million.
Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may take any of the following actions, so long as (with respect to
clauses (e), (f), (g) and (j) below) no Default or Event of Default has occurred
and is continuing or would occur:
(a) the payment of any dividend within 60 days after the date of
declaration thereof, if at the declaration date such payment would not have
been prohibited by the foregoing provision;
74
(b) the repurchase, redemption or other acquisition or retirement for
value of any shares of Capital Stock of the Company, in exchange for, or
out of the net cash proceeds of a substantially concurrent issuance and
sale (other than to a Subsidiary) of, Qualified Equity Interests of the
Company;
(c) the purchase, redemption, defeasance or other acquisition or
retirement for value of any Pari Passu Indebtedness or Subordinated
Indebtedness in exchange for, or out of the net cash proceeds of a
substantially concurrent issuance and sale (other than to a Subsidiary) of
Qualified Equity Interests of the Company;
(d) the purchase, redemption, defeasance or other acquisition or
retirement for value of Pari Passu Indebtedness or Subordinated
Indebtedness in exchange for, or out of the net cash proceeds of a
substantially concurrent issuance or sale (other than to a Subsidiary) of,
Subordinated Indebtedness, so long as the Company or a Subsidiary would be
permitted to refinance such original Subordinated Indebtedness with such
new Subordinated Indebtedness pursuant to clause (xiv) of the definition of
Permitted Indebtedness;
(e) the repurchase of any Subordinated Indebtedness at a purchase
price not greater than 101% of the principal amount of such Subordinated
Indebtedness in the event of a "change of control" in accordance with
provisions similar to the provisions of Section 1012; provided that, prior
--------
to or simultaneously with such repurchase, the Company has made the
Change of Control Offer as provided in such covenant with respect to the
Securities and has repurchased all Securities validly tendered for payment
in connection with such Change of Control Offer;
(f) the payment of dividends or other distributions on the Preferred
Securities (and corresponding payments of interest on the Convertible
Debentures in an amount equal to the amount of such dividends or other
distributions) on or prior to March 31, 1999; and the payment of such
dividends or other distributions (and such corresponding payments of
interest) after March 31, 1999, provided that, immediately after giving
--------
effect to any such payment made after March 31, 1999, the Company
could incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to the first paragraph of Section 1010;
(g) loans or advances to officers, directors and employees of the
Company or any of its Restricted Subsidiaries made in the ordinary course
of business after the Closing Date in an amount not to exceed $5.0 million
in the aggregate at any one time outstanding;
(h) the acquisition by a Receivables Subsidiary in connection with a
Receivables Program of Capital Stock of a trust or other Person established
by such Receivables Subsidiary in connection with such Receivables Program;
75
(i) payments or distributions to stockholders pursuant to appraisal
rights in respect of up to 10% of the Capital Stock of the Company or any
Restricted Subsidiary required by law in connection with a consolidation,
merger or transfer of assets that complies with Section 801; and
(j) the purchase, redemption, defeasance or other acquisition or
retirement for value of Capital Stock of the Company or any Restricted
Subsidiary from employees, former employees, directors or former directors of
the Company or any such Restricted Subsidiary (or permitted transferees of
such employees, former employees, directors or former directors or their
respective estates) pursuant to any employment agreement, management equity
subscription agreement or stock option agreement, provided that the aggregate
--------
price paid for all such repurchased, redeemed, defeased or acquired or
retired shares of Capital Stock does not exceed $2.0 million in any 12-month
period.
The payments described in clauses (b), (c), (e), (f) and (g) of this paragraph
shall be Restricted Payments that shall be permitted to be taken in accordance
with this paragraph but shall reduce the amount that would otherwise be
available for Restricted Payments under clause (iii) of the first paragraph of
this Section 1011 and the payments described in clauses (a) and (d) of this
paragraph shall be Restricted Payments that shall be permitted to be taken in
accordance with this paragraph and shall not reduce the amount that would
otherwise be available for Restricted Payments under clause (iii) of the first
paragraph of this Section 1011.
For the purpose of making any calculations under this Indenture (i) if
a Restricted Subsidiary is designated an Unrestricted Subsidiary, the Company
shall be deemed to have made an Investment in an amount equal to the fair market
value or net book value of the net assets of such Restricted Subsidiary at the
time of such designation as determined by the Board of Directors of the Company,
whose good faith determination will be conclusive, (ii) any property transferred
to or from an Unrestricted Subsidiary will be valued at fair market value at the
time of such transfer, as determined by the Board of Directors of the Company,
whose good faith determination will be conclusive and (iii) subject to the
foregoing, the amount of any Restricted Payment, if other than cash, will be
determined by the Board of Directors of the Company, whose good faith
determination will be conclusive.
If the aggregate amount of all Restricted Payments calculated under
the first paragraph of this Section 1011 includes an Investment in an
Unrestricted Subsidiary or other Person that thereafter becomes a Restricted
Subsidiary, the aggregate amount of all Restricted Payments calculated under the
first paragraph of this Section 1011 shall be reduced by the lesser of (x) the
net asset value of such Subsidiary at the time it becomes a Restricted
Subsidiary and (y) the initial amount of such Investment.
If an Investment resulted in the making of a Restricted Payment, the
aggregate amount of all Restricted Payments calculated under this Section 1011
shall be reduced by the
76
amount of any net reduction in such Investment (resulting from the payment of
interest or dividends, loan repayment, transfer of assets or otherwise), to the
extent such net reduction is not included in the Company's Consolidated Net
Income; provided that the total amount by which the aggregate amount of all
Restricted Payments may be reduced shall not exceed the lesser of (x) the cash
proceeds received by the Company and its Restricted Subsidiaries in connection
with such net reduction and (y) the initial amount of such Investment.
In computing the Consolidated Net Income of the Company for purposes
of the foregoing clause (iii)(A) of the first paragraph of this Section 1011,
(i) the Company may use audited financial statements for the portions of the
relevant period for which audited financial statements are available on the date
of determination and unaudited financial statements and other current financial
data based on the books and records of the Company for the remaining portion of
such period and (ii) the Company will be permitted to rely in good faith on the
financial statements and other financial data derived from the books and records
of the Company that are available on the date of determination. If the Company
makes a Restricted Payment that, at the time of the making of such Restricted
Payment, would in the good faith determination of the Company be permitted under
the requirements of this Indenture, such Restricted Payment shall be deemed to
have been made in compliance with this Indenture notwithstanding any subsequent
adjustments made in good faith to the Company's financial statements affecting
Consolidated Net Income of the Company for any period.
SECTION 1012. Purchase of Securities upon a Change of Control.
-----------------------------------------------
If a Change of Control occurs at any time, then each Holder will have
the right to require that the Company purchase such Holder's Securities and
Additional Securities, if any, in whole or in part in integral multiples of
$1,000, at a purchase price in cash equal to 101% of the principal amount of
such Securities and Additional Securities, if any, plus accrued and unpaid
interest, if any, to the date of purchase, pursuant to the offer described below
(the "Change of Control Offer") and the other procedures set forth in this
Indenture.
Within 30 days following any Change of Control, the Company shall
notify the Trustee thereof and give written notice of such Change of Control to
each holder of Securities and Additional Securities by first-class mail, postage
prepaid, at its address appearing in the Security Register, stating, among other
things, (i) the purchase price and the purchase date, which will be a Business
Day no earlier than 30 days nor later than 60 days from the date such notice is
mailed or such later date as is necessary to comply with requirements under the
Exchange Act; (ii) that any Security or Additional Security not tendered will
continue to accrue interest; (iii) that, unless the Company defaults in the
payment of the purchase price, any Securities or Additional Securities accepted
for payment pursuant to the Change of Control Offer will cease to accrue
interest after the Change of Control purchase date; (iv) that Holders electing
to have any Securities purchased pursuant to a Change of Control Offer shall be
required to surrender the Securities, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Securities completed, to the Paying
Agent at the address
77
specified in the notice prior to the close of business on the third Business Day
preceding the purchase date (the "Change of Control Payment Date"); (v) that
Holders shall be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Securities delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Securities purchased; (vi) that Holders
whose Securities are being purchased only in part shall be issued new Securities
equal in principal amount to the unpurchased portion of the Securities
surrendered, which unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof; (vii) the instructions that the Holders
of Securities must follow in order to tender their Securities; and (viii) the
circumstances and relevant facts regarding such Change of Control.
The Company shall comply with the applicable tender offer rules
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws and regulations in connection with a Change of Control Offer.
SECTION 1013. Limitation on Certain Asset Sales.
---------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any Asset Sale unless (i) the consideration received by
the Company or such Restricted Subsidiary for such Asset Sale is not less than
the fair market value of the assets sold (as determined by the Board of
Directors of the Company, whose good faith determination will be conclusive) and
(ii) the consideration received by the Company or the relevant Restricted
Subsidiary in respect of such Asset Sale consists of at least 75% (A) cash or
cash equivalents or (B) the assumption by the transferee of Indebtedness of the
Company or a Restricted Subsidiary that is senior to or pari passu with the
Securities or the Subsidiary Guarantees, as the case may be, and release of the
Company or such Restricted Subsidiary from all liability on such Indebtedness,
or a combination of the foregoing.
(b) If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company may, at its option, within 12 months after such Asset Sale,
(i) apply all or a portion of the Net Cash Proceeds to the permanent reduction
of amounts outstanding under the New Credit Facility or other credit facility
referred to in clause (i) of the definition of Permitted Indebtedness or to the
repayment of other Senior Indebtedness of the Company or a Restricted Subsidiary
or (ii) invest (or enter into a legally binding agreement to invest) all or a
portion of such Net Cash Proceeds in properties and assets to replace the
properties and assets that were the subject of the Asset Sale or in properties
and assets that will be used in businesses of the Company or its Restricted
Subsidiaries, as the case may be, existing on the Closing Date. If any such
legally binding agreement to invest such Net Cash Proceeds is terminated, the
Company may, within 90 days of such termination or within 12 months of such
Asset Sale, whichever is later, invest such Net Cash Proceeds as provided in
clause (b)(i) or (b)(ii) (without regard to the parenthetical contained in such
clause (b)(ii)) above. The amount
78
of such Net Cash Proceeds not so used as set forth above in this paragraph (b)
constitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $5,000,000,
the Company shall, within 30 days thereafter, make an offer to purchase (an
"Asset Sale Offer") from all Holders of Securities and Additional Securities, if
any, and from the holders of any Pari Passu Indebtedness, to the extent required
by the terms thereof, on a pro rata basis, in accordance with the procedures set
forth in paragraph (d) below or the agreement governing any such Pari Passu
Indebtedness, the maximum principal amount (expressed as a multiple of $1,000)
of Securities and Additional Securities, if any, and any such Pari Passu
Indebtedness that may be purchased with the Excess Proceeds. The offer price as
to each Security and Additional Security, if any, and any such Pari Passu
Indebtedness will be payable in cash in an amount equal to (solely in the case
of the Securities and Additional Securities) 100% of the principal amount of
such Security and Additional Security, if any, and (solely in the case of Pari
Passu Indebtedness) no greater than 100% of the principal amount (or accreted
value, as applicable) of such Pari Passu Indebtedness, plus in each case accrued
and unpaid interest, if any, to the date of purchase. To the extent that the
aggregate principal amount of Securities and Additional Securities, if any, and
any such Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is
less than the Excess Proceeds, the Company may use the portion of the Excess
Proceeds not required to be used to repurchase the Securities and Additional
Securities and such Pari Passu Indebtedness for general corporate purposes. If
the aggregate principal amount of Securities and Additional Securities, if any,
and any such Pari Passu Indebtedness validly tendered and not withdrawn by
holders thereof exceeds the Excess Proceeds, the Securities and Additional
Securities and any such Pari Passu Indebtedness to be purchased will be selected
on a pro rata basis (based upon the principal amount of Securities and
Additional Securities and the principal amount or accreted value of such Pari
Passu Indebtedness tendered by each holder). Upon completion of such offer to
purchase, the amount of Excess Proceeds will be reset to zero.
(d) Within the time period described in (c) above for making an Asset
Sale Offer, the Company shall mail a notice to each Holder in the manner
provided in Section 106 stating: (1) that the Asset Sale Offer is being made
pursuant to the provisions of Section 1013 of this Indenture and that all
Securities and Additional Securities, if any, duly and timely tendered shall be
accepted for payment (except, as provided above, if the aggregate principal
amount as the case may be, of the Securities, Additional Securities and any Pari
Passu Indebtedness surrendered exceeds the amount of Excess Proceeds); (2) the
purchase price and the purchase date (the "Asset Sale Purchase Date"), which
date shall be no earlier than 30 days nor later than 60 days from the date such
notice is mailed; (3) that any Securities or new Additional Securities not
tendered shall continue to accrue interest; (4) that, unless the Company
defaults in the payment of the purchase price, all Securities and Additional
Securities accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest after the Asset Sale Purchase Date; (5) that Holders electing to
have any Securities and Additional Securities purchased pursuant to an Asset
Sale Offer shall be required to surrender the
79
Securities, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Securities completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third Business Day
preceding the Asset Sale Purchase Date; (6) that Holders shall be entitled to
withdraw their election if the Paying Agent receives, not later than the close
of business on the second Business Day preceding the Asset Sale Purchase Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Securities and Additional Securities delivered
for purchase, and a statement that such Holder is withdrawing his election to
have such Securities purchased; (7) that Holders whose Securities and Additional
Securities are being purchased only in part shall be issued new Securities or
new Additional Securities equal in principal amount to the unpurchased portion
of the Securities or Additional Securities surrendered, which unpurchased
portion must be equal to $1,000 in principal amount or an integral multiple
thereof; (8) any other procedures that the Holders of Securities and Additional
Securities must follow in order to tender their Securities; and (9) the
circumstances and relevant facts regarding such Asset Sale.
SECTION 1014. Limitation on Transactions with Affiliates.
-------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, enter into or suffer to exist any transaction with,
or for the benefit of, any Affiliate of the Company unless (a) such transaction
is on terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that could have been obtained in an
arm's length transaction with third parties who are not Affiliates and (b)
either (i) with respect to any transaction or series of related transactions
involving aggregate payments in excess of $2,000,000, but less than $10,000,000,
the Company delivers a resolution of the Board of Directors of the Company set
forth in an Officers' Certificate to the Trustee certifying that such
transaction or transactions comply with clause (a) above and that such
transaction or transactions have been approved by the Board of Directors
(including a majority of the Disinterested Directors) of the Company or (ii)
with respect to a transaction or series of related transactions involving
aggregate payments equal to or greater than $10,000,000, the Company delivers to
the Trustee (x) an Officers' Certificate certifying that such transaction or
transactions have been approved by the Board of Directors (including a majority
of the Disinterested Directors) of the Company and (y) a written opinion from a
nationally recognized investment banking firm or an independent financial
advisor of national standing to the effect that such transaction or transactions
are fair to the Company or such Restricted Subsidiary from a financial point of
view.
The foregoing covenant shall not restrict any of the following:
(A) transactions among the Company and/or its Restricted Subsidiaries;
(B) the Company from paying reasonable and customary regular
compensation or fees to, or entering into customary expense reimbursement,
80
indemnification or similar arrangements with, directors and officers of the
Company or any Restricted Subsidiary;
(C) so long as Siemens is not an Affiliate of the Company,
transactions with the Siemens Joint Venture provided such transactions are
--------
either (i) in accordance with the terms and provisions of the Joint Venture
Agreement, (ii) in accordance with the operating budget of the Siemens Joint
Venture, which operating budget has been adopted and approved in accordance
with the terms of the Joint Venture Agreement or (iii) approved by the
Company and Siemens;
(D) transactions permitted by the provisions of Section 1011;
(E) transactions between a Receivables Subsidiary and any Person in
which the Receivables Subsidiary has an Investment; and
(F) in the case of joint ventures (other than the Siemens Joint
Venture) in which the Company has an interest, so long as other parties to
the joint venture that are not Affiliates of the Company own at least 50% of
the equity of such joint venture, transactions between such joint venture and
the Company or any Restricted Subsidiary.
SECTION 1015. Limitation on Dividends and Other Payment Restrictions
------------------------------------------------------
Affecting Restricted Subsidiaries.
- ---------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (a) pay dividends, in cash or otherwise,
or make any other distributions on or in respect of its Capital Stock, (b) pay
any Indebtedness owed to the Company or any other Restricted Subsidiary, (c)
make loans or advances to the Company or any other Restricted Subsidiary or (d)
transfer any of its properties or assets to the Company or any other Restricted
Subsidiary, except for such encumbrances or restrictions existing under or by
reason of any of the following:
(i) any agreement in effect on the Closing Date;
(ii) customary non-assignment provisions of any lease governing a
leasehold interest of the Company or any Restricted Subsidiary;
(iii) the refinancing or successive refinancing of Indebtedness
incurred under the agreements in effect on the Closing Date, so long as such
encumbrances or restrictions are no less favorable to the Company or any
Restricted Subsidiary than those contained in such original agreement;
81
(iv) any agreement or other instrument of a Person acquired by the
Company or any Restricted Subsidiary in existence at the time of such
acquisition (but not created in contemplation thereof), which encumbrance or
restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person, or the property or assets of the Person,
so acquired;
(v) any agreement providing for the incurrence of Indebtedness by a
Restricted Subsidiary in compliance with the provisions of Section 1010,
provided that such Restricted Subsidiary is or becomes a Subsidiary
--------
Guarantor;
(vi) contained in any agreement pursuant to which Indebtedness was
issued if (A) the encumbrance or restriction applies only in the event of a
payment default or a default with respect to a financial covenant contained
in such Indebtedness, (B) the encumbrance or restriction is not materially
more disadvantageous to the Holders of the Securities than is customary in
comparable financings (as determined by the Company) and (C) the Company
determines that any such encumbrance or restriction will not materially
affect the Company's ability to make principal or interest payments on the
Securities;
(vii) in the case of clause (d) above, any security agreements or
mortgages securing Indebtedness of a Restricted Subsidiary to the extent such
encumbrance or restriction restricts the transfer of the property subject to
such security agreements or mortgages;
(viii) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature described
in clause (d) above on the property so acquired;
(ix) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar agreements;
and
(x) any agreement entered into by a Restricted Subsidiary that
provides for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Restricted Subsidiary pending the closing of
such sale or disposition.
SECTION 1016. Limitation on Issuances and Sales of Capital Stock of
-----------------------------------------------------
Restricted Subsidiaries.
- -----------------------
The Company shall not sell, and shall not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell any shares of Capital Stock
of a Restricted Subsidiary (including options, warrants or other rights to
purchase shares of such Capital Stock) except (a) to the Company or a Wholly
Owned Restricted Subsidiary, (b) issuances or sales to foreign nationals of
shares of Capital Stock of Foreign Restricted Subsidiaries, to the extent
required
82
by applicable law, or issuances or sales to directors of directors' qualifying
shares, (c) if, immediately after giving effect to such issuance or sale,
neither the Company nor any of its Subsidiaries owns any shares of Capital Stock
of such Restricted Subsidiary (including options, warrants or other rights to
purchase shares of such Capital Stock) or (d) if, immediately after giving
effect to such issuance or sale, such Restricted Subsidiary would no longer
constitute a Restricted Subsidiary and any remaining Investment in such Person
would have been permitted to be made under the provisions of Section 1011 if
made on the date of such issuance or sale.
The Company shall not permit any Restricted Subsidiary that is a
Subsidiary Guarantor to issue Preferred Stock.
SECTION 1017. Limitation on Liens.
-------------------
The Company shall not, and shall not permit any Subsidiary Guarantor
to, create, incur, affirm or suffer to exist any Lien of any kind securing any
Pari Passu Indebtedness or Subordinated Indebtedness (including any assumption,
guarantee or other liability with respect thereto by any Subsidiary Guarantor)
upon any property or assets (including any intercompany notes) of the Company or
any Subsidiary Guarantor now owned or acquired after the Closing Date, or any
income or profits therefrom, unless the Securities are directly secured equally
and ratably with (or prior to in the case of Subordinated Indebtedness) the
obligation or liability secured by such Lien, and except for any Lien securing
Acquired Indebtedness created prior to the incurrence of such Indebtedness by
the Company or any Subsidiary Guarantor, provided that any such Lien only
--------
extends to the assets that were subject to such Lien securing such Acquired
Indebtedness prior to the related acquisition by the Company or the Subsidiary
Guarantor.
SECTION 1018. Unrestricted Subsidiaries.
-------------------------
(a) The Board of Directors of the Company may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary so long as (i) neither the Company nor any Restricted
Subsidiary is directly or indirectly liable for any Indebtedness of such
Subsidiary, (ii) no default with respect to any Indebtedness of such
Subsidiary would permit (upon notice, lapse of time or otherwise) any holder
of any other Indebtedness of the Company or any Restricted Subsidiary to
declare a default on such other Indebtedness or cause the payment thereof to
be accelerated or payable prior to its Stated Maturity, (iii) any Investment
in such Subsidiary made as a result of designating such Subsidiary an
Unrestricted Subsidiary will not violate the provisions of Section 1011, (iv)
neither the Company nor any Restricted Subsidiary has a contract, agreement,
arrangement, understanding or obligation of any kind, whether written or
oral, with such Subsidiary other than those that might be obtained at the
time from Persons who are not Affiliates of the Company and (v) neither the
Company nor any Restricted Subsidiary has any obligation to subscribe for
additional shares of Capital Stock or other equity interest in such
Subsidiary, or
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to maintain or preserve such Subsidiary's financial condition or to cause such
Subsidiary to achieve certain levels of operating results.
(b) The Board of Directors of the Company may designate any
Unrestricted Subsidiary as a Restricted Subsidiary; provided that (i) no Default
--------
or Event of Default has occurred and is continuing following such designation
and (ii) the Company could incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) pursuant to the first paragraph of Section
1010 (treating any Indebtedness of such Unrestricted Subsidiary as the
incurrence of Indebtedness by a Restricted Subsidiary).
SECTION 1019. Limitation on Layering Indebtedness.
------------------------------------
The Company and each Subsidiary Guarantor shall not, directly or
indirectly, incur or otherwise permit to exist any Indebtedness that is
subordinate in right of payment to any Indebtedness of the Company or such
Subsidiary Guarantor, as the case may be, unless such Indebtedness is also pari
passu with, or subordinate in right of payment to, the Securities or the
Subsidiary Guarantee issued by such Subsidiary Guarantor, as the case may be, or
subordinate in right of payment to the Securities or such Subsidiary Guarantee,
as the case may be.
SECTION 1020. Limitation on Guarantees of Indebtedness by
-------------------------------------------
Restricted Subsidiaries.
- -----------------------
Except with respect to the guarantee by a Foreign Restricted
Subsidiary of the payment of Indebtedness of another Foreign Restricted
Subsidiary, the Company shall not permit any Restricted Subsidiary that is not a
Subsidiary Guarantor, directly or indirectly, to guarantee, assume or in any
other manner become liable for the payment of any Indebtedness of the Company or
any Indebtedness of any other Restricted Subsidiary, unless
(a) such Restricted Subsidiary simultaneously executes and delivers a
supplemental indenture providing for a guarantee of payment of the Securities
by such Restricted Subsidiary; and
(b) with respect to any guarantee of Subordinated Indebtedness by a
Restricted Subsidiary, any such guarantee is subordinated to such Restricted
Subsidiary's guarantee with respect to the Securities at least to the same
extent as such Subordinated Indebtedness is subordinated to the Securities,
provided that the foregoing provision shall not be applicable to any guarantee
- --------
by any Restricted Subsidiary that existed at the time such Person became a
Restricted Subsidiary and was not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary.
84
Any guarantee by a Restricted Subsidiary of the Securities pursuant to
the preceding paragraph may provide by its terms that it shall be automatically
and unconditionally released and discharged upon: (a) any sale, exchange or
transfer to any Person not an Affiliate of the Company of all of the Company's
and the Restricted Subsidiaries' Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by the Indenture); (b) the release or discharge of the guarantee
that resulted in the creation of such guarantee of the Securities, except a
discharge or release by or as a result of payment under such guarantee; or (c)
the designation of such Restricted Subsidiary as an Unrestricted Subsidiary in
accordance with the terms of this Indenture.
SECTION 1021. Payment for Consent.
-------------------
Neither the Company nor any of its Restricted Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Securities unless such consideration is offered to be paid or is paid to
all Holders 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 1022. Waiver of Certain Covenants.
---------------------------
The Company or any Restricted Subsidiary may omit in any particular
instance to comply with any term, provision or condition set forth in Sections
1006 through 1021, inclusive, if before or after the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities, by Act of such Holders, waive such compliance in such instance with
such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.
-------------------
(a) The Securities may be redeemed at the option of the Company, as a
whole or from time to time in part, at any time on or after April 15, 2003,
subject to the conditions and at the Redemption Prices specified in the form of
Security attached hereto as Exhibit A, together with accrued interest to the
Redemption Date.
85
(b) In addition, at any time or from time to time prior to April 15,
2001, the Company may redeem, on one or more occasions, up to 35% of the sum of
(i) the initial aggregate principal amount of the Securities and (ii) the
initial aggregate principal amount of any Additional Securities with the net
proceeds of one or more Equity Offerings at a redemption price equal to 109.25%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided that, immediately after giving effect to such redemption, at least 65%
- --------
of the initial aggregate principal amount of the Securities (including any
Additional Securities) remains outstanding; provided further that such
-------- -------
redemptions occur within 90 days of the date of closing of the related Equity
Offering.
SECTION 1102. Applicability of Article.
------------------------
Redemption of Securities at the election of the Company or otherwise,
as permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 1104.
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by lot or such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the principal of Securities; provided, however, that no such partial
-------- -------
redemption shall reduce the portion of the principal amount of a Security not
redeemed to less than $1,000.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
86
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided for in
Section 106 not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Securities to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest to the
Redemption Date payable as provided in Section 1107, if any,
(3) if less than all Outstanding Securities are to be redeemed, the
identification (and, in the case of a partial redemption, the principal amounts)
of the particular Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without charge,
a new Security or Securities of authorized denominations for the principal
amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price (and accrued
interest, if any, to the Redemption Date payable as provided in Section 1107)
will become due and payable upon each such Security, or the portion thereof, to
be redeemed, and that interest thereon will cease to accrue on and after said
date,
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and accrued interest, if any, and
(7) the CUSIP or CINS number, as the case may be.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
87
SECTION 1106. Deposit of Redemption Price.
---------------------------
On or prior to 10:00 a.m. (New York City time) on any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money sufficient to pay the Redemption
Price of, and accrued interest on, all the Securities which are to be redeemed
on that date.
SECTION 1107. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued interest, if any, to
the Redemption Date), and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with said notice, such Security shall be paid by
the Company at the Redemption Price, together with accrued interest, if any, to
the Redemption Date; provided, however, that installments of interest whose
-------- -------
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 309.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.
SECTION 1108. Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part shall be surrendered
at the office or agency of the Company maintained for such purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
88
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company Option to Effect Defeasance or Covenant
-----------------------------------------------
Defeasance.
- ----------
The Company may, at its option by Board Resolution at any time, with
respect to the Securities, elect to have either Section 1202 or Section 1203 be
applied to all Outstanding Securities upon compliance with the conditions set
forth below in this Article Twelve.
SECTION 1202. Defeasance and Discharge.
------------------------
Upon the Company's exercise under Section 1201 of the option
applicable to this Section 1202, the Company and the Subsidiary Guarantors shall
be deemed to have been discharged from their obligations with respect to all
Outstanding Securities on the date the conditions set forth in Section 1204 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities, which shall thereafter
be deemed to be "Outstanding" only for the purposes of Section 1205 and the
other Sections of this Indenture referred to in (A) and (B) below, and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of Outstanding Securities to receive
payments in respect of the principal of (and premium, if any, on) and interest
on such Securities when such payments are due, (B) the Company's obligations
with respect to such Securities under Sections 304, 305, 308, 1002 and 1003, (C)
the rights, powers, trusts, duties and immunities of the Trustee hereunder and
(D) this Article Twelve. Subject to compliance with this Article Twelve, the
Company may exercise its option under this Section 1202 notwithstanding the
prior exercise of its option under Section 1203 with respect to the Securities.
SECTION 1203. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 1201 of the option
applicable to this Section 1203, each of the Company and the Subsidiary
Guarantors shall be released from its obligations under any covenant contained
in Section 801 and in Sections 1004 through 1022 with respect to the Outstanding
Securities on and after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"), and the Securities shall thereafter be
deemed not to be "Outstanding" for the purposes of any direction, waiver,
consent or declaration or Act of Holders (and the consequences of any thereof)
in connection with such covenants, but shall continue to be deemed "Outstanding"
for all other purposes hereunder. For this purpose,
89
such covenant defeasance means that, with respect to the Outstanding Securities,
the Company and any Subsidiary Guarantor may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Sections 501(3), 501(4), 501(5), 501(6) and 501(7) but, except as specified
above, the remainder of this Indenture and such Securities shall be unaffected
thereby.
SECTION 1204. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either Section
1202 or Section 1203 to the Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 607 who shall agree to comply with the provisions of this Article
Twelve applicable to it) as trust funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of such
Securities, (A) money in an amount, or (B) U.S. Government Obligations (as
defined herein) that through the scheduled payment of principal and interest
thereon will provide money in an amount, or (C) a combination thereof,
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay and discharge the principal of (and premium, if
any, on) and interest on the Outstanding Securities on the Stated Maturity
(or upon Redemption Date, if applicable) of such principal (and premium, if
any) or installment of interest; provided that the Trustee shall have been
irrevocably instructed to apply such--------money or the proceeds of such
U.S. Government Obligations to said payments with respect to the Securities.
Before such a deposit, the Company may give to the Trustee, in accordance
with Section 1103 hereof, a notice of its election to redeem all of the
Outstanding Securities at a future date in accordance with Article Eleven
hereof, which notice shall be irrevocable. Such irrevocable redemption
notice, if given, shall be given effect in applying the foregoing. For this
purpose, "U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the timely payment of which
its full faith and credit is pledged or (y) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at the option
of the issuer thereof, and shall also include a depository receipt issued by
a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian
with respect to any such U.S. Government Obligation or a specific payment of
principal of or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depository receipt, provided
that (except as required by law) such custodian is not authorized to make any
deduction
90
from the amount payable to the holder of such depository receipt from any
amount received by the custodian in respect of the U.S. Government Obligation
or the specific payment of principal of or interest on the U.S. Government
Obligation evidenced by such depository receipt.
(2) No Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit or, insofar
as paragraphs (8) and (9) of Section 501 hereof are concerned, at any time
during the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until the
expiration of such period).
(3) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company or any Subsidiary
Guarantor is a party or by which it is bound.
(4) In the case of an election under Section 1202, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the Closing Date, there has been a
change in the applicable federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders of the
Outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred.
(6) In the case of an election under Section 1203, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Securities Outstanding will not recognize income, gain or loss
for federal income tax purposes as a result of such covenant defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such covenant defeasance
had not occurred.
(7) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1202
or the covenant defeasance under Section 1203, as the case may be, have been
complied with.
SECTION 1205. Deposited Money and U.S. Government Obligations to Be
-----------------------------------------------------
Held in Trust; Other Miscellaneous Provisions.
- ---------------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or
91
other qualifying trustee, collectively for purposes of this Section 1205, the
"Trustee") pursuant to Section 1204 in respect of the Outstanding Securities
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities of
all sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to Section 1204 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Securities.
Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1204 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance, as applicable, in accordance with this Article.
SECTION 1206. Reinstatement.
-------------
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1205 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 1202 or 1203, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 1205; provided, however, that if the Company makes any payment of
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principal of (or premium, if any) or interest on any Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money held by
the Trustee or Paying Agent.
ARTICLE THIRTEEN
SUBSIDIARY GUARANTEES
SECTION 1301. Subsidiary Guarantees.
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(a) Subject to Article Fourteen and clause (b) of this Section 1301,
each Subsidiary Guarantor hereby, jointly and severally, fully, absolutely,
unconditionally and irrevocably guarantees to each Holder of a Security
authenticated and delivered by the Trustee, and to the Trustee on behalf of each
Holder, the punctual payment when due of all Indenture Obligations which, for
purposes of its Subsidiary Guarantee, shall also be deemed to include all
commissions, fees, charges, costs and other expenses (including reasonable legal
fees and disbursements of counsel) arising out of or incurred by the Trustee or
the Holders in connection with the enforcement of any Subsidiary Guarantee.
Without limiting the generality of the foregoing, each Subsidiary Guarantor's
liability shall extend to all amounts that constitute part of the Indenture
Obligations and would be owed by the Company to such Holder or the Trustee under
the Securities or this Indenture but for the fact that they are unenforceable,
reduced, limited, suspended or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Company.
(b) Each Subsidiary Guarantor and by its acceptance hereof each Holder
hereby confirms that it is the intention of all such parties that the guarantee
by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute
a fraudulent transfer or conveyance for purposes of the Federal Bankruptcy Code,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act of
any similar federal or state law or the provisions of its local law relating to
fraudulent transfer or conveyance. To effectuate the foregoing intention, the
Holders and each Subsidiary Guarantor hereby irrevocably agree that the
obligations of such Subsidiary Guarantor under its Subsidiary Guarantee shall be
limited to the maximum amount as shall, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guaranmade by or on behalf
of any other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to paragraph (c)
of this Section 1301, result in the obligations of such Subsidiary Guarantor
under its Subsidiary Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under federal or state law.
(c) In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under its Subsidiary Guarantee, such Funding Guarantor
shall be entitled to a contribution from each other Subsidiary Guarantor in a
pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor
(including the Funding Guarantor) for all payments, damages and expenses
incurred by the Funding Guarantor in discharging the Indenture Obligations of
the Company or any other Subsidiary Guarantor's obligations with respect to its
Subsidiary Guarantee. "Adjusted Net Assets" of such Subsidiary Guarantor at any
date shall mean the lesser of (x) the amount by which the fair value of the
property of such Subsidiary Guarantor exceeds the total amount of liabilities,
including, without limitation, contingent liabilities (after giving effect to
all other fixed and contingent liabilities incurred or assumed on such date),
but excluding liabilities under the Subsidiary Guarantee of such Subsidiary
Guarantor at such date
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and (y) the amount by which the present fair salable value of the assets of such
Subsidiary Guarantor at such date exceeds the amount that shall be required to
pay the probable liability of such Subsidiary Guarantor on its debts (after
giving effect to all other fixed and contingent liabilities incurred or assumed
on such date), excluding debt in respect of the Subsidiary Guarantee, as they
become absolute and matured.
SECTION 1302. Guaranty Absolute.
-----------------
Subject to the limitations in Section 1301, each Subsidiary Guarantor
guarantees that the Securities shall be paid or performed strictly in accordance
with the terms of the Securities and this Indenture, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of any Holder with respect thereto. The obligations
of each Subsidiary Guarantor under its Subsidiary Guarantee are independent of
the obligations of the Company under the Securities and this Indenture, and a
separate action or actions may be brought and prosecuted against such Subsidiary
Guarantor to enforce its Subsidiary Guarantee, irrespective of whether any
action is brought against the Company or any other Subsidiary Guarantor or
whether the Company or any other Subsidiary Guarantor is joined in any such
action or actions. The liability of each Subsidiary Guarantor under its
Subsidiary Guarantee shall be absolute and unconditional and the liability and
obligations of such Subsidiary Guarantor hereunder shall not be released,
discharged, mitigated, waived, impaired or affected in whole or in part by:
(a) any lack of validity or enforceability of this Indenture or the
Securities with respect to the Company or any Subsidiary Guarantor or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Indenture Obligations, or any other
amendment or waiver of or any consent to departure from this Indenture,
including any increase in the Indenture Obligations resulting from the
extension of additional credit to the Company or otherwise;
(c) the failure to give notice to the Subsidiary Guarantor of the
occurrence of a Default under the provisions of this Indenture or the
Securities;
(d) any taking, release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the Indenture
Obligations;
(e) any failure, omission, delay by or inability on the part of the
Trustee or the Holders to assert or exercise any right, power or remedy
conferred on the Trustee or the Holders in this Indenture or the Securities;
94
(f) any change in the corporate structure, or termination,
dissolution, consolidation or merger of the Company or any Subsidiary Guarantor
with or into any other Person, the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all the assets of
the Company or any Subsidiary Guarantor, the marshalling of the assets and
liabilities of the Company or any Subsidiary Guarantor, the receivership,
insolvency, bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition with the creditors, or readjustment of, or other
similar proceedings affecting the Company or any Subsidiary Guarantor, or any of
the assets of any of them;
(g) the assignment of any right, title or interest of the Trustee or
any Holder in this Indenture or the Securities to any other Person; or
(h) any other event or circumstance (including any statute of
limitations), whether foreseen or unforeseen and whether similar or dissimilar
to any of the foregoing, that might otherwise constitute a defense available to,
or a discharge of, the Company or a Subsidiary Guarantor, other than payment in
full of the Indenture Obligations; it being the intent of each Subsidiary
Guarantor that its obligations hereunder shall not be discharged except by
payment of all amounts owing pursuant to this Indenture or the Securities.
The Subsidiary Guarantee of each Subsidiary Guarantor shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Indenture Obligations is rescinded or must otherwise be returned by
any Holder or the Trustee upon the insolvency, bankruptcy or reorganization of
the Company or otherwise, all as though such payment had not been made. Each
Subsidiary Guarantor further agrees, to the fullest extent that it may lawfully
do so, that, as between such Subsidiary Guarantor, on the one hand, and the
Holders and the Trustee, on the other hand, (i) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article Five of this
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 (ii) in the event of any acceleration of
such obligations as provided in Article Five of this Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Subsidiary Guarantor for the purpose of this Subsidiary Guarantee.
SECTION 1303. Waivers.
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(a) Each Subsidiary Guarantor hereby expressly waives (to the extent
permitted by law) notice of the acceptance of its Subsidiary Guarantee and
notice of the existence, renewal, extension or the non-performance, non-payment,
or non-observance on the part of the Company of any of the terms, covenants,
conditions and provisions of this Indenture or the Securities or any other
notice whatsoever to or upon the Company or such Subsidiary Guarantor with
respect to the Indenture Obligations. Each Subsidiary Guarantor
95
hereby acknowledges communication to it of the terms of this Indenture and the
Securities and all of the provisions herein contained and consents to and
approves the same. Each Subsidiary Guarantor hereby expressly waives (to the
extent permitted by law) diligence, presentment and protest.
(b) Without prejudice to any of the rights or recourse which the
Trustee or the Holders may have against the Company, each Subsidiary Guarantor
hereby expressly waives (to the extent permitted by law) any right to require
the Trustee or the Holders to:
(1) initiate or exhaust any rights, remedies or recourse against the
Company, any Subsidiary Guarantor or any other Person;
(2) value, realize upon, or dispose of any security of the Company or
any other Person held by the Trustee or the Holders; or
(3) initiate or exhaust any other remedy which the Trustee or the
Holders may have in law or equity;
before requiring, becoming entitled to or demanding payment from such Subsidiary
Guarantor under this Subsidiary Guarantee.
SECTION 1304. Subrogation.
-----------
Each Subsidiary Guarantor shall not exercise any rights that it may
acquire by way of subrogation under this Subsidiary Guarantee, by any payment
made hereunder or otherwise, until all the Indenture Obligations shall have been
paid in full. If any amount shall be paid to any Subsidiary Guarantor on
account of any such subrogation rights at any time when all the Indenture
Obligations shall not have been paid in full, such amount shall be held in trust
for the benefit of the Holders and the Trustees and shall forthwith be paid to
the Trustee, on behalf of the Holders, to be credited and applied to the
Indenture Obligations, whether matured or unmatured.
SECTION 1305. No Waiver; Remedies.
-------------------
No failure on the part of any Holder or the Trustee to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
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SECTION 1306. Continuing Guaranty; No Right of Set-Off; Independent
-----------------------------------------------------
Obligation.
- ----------
(a) This Subsidiary Guarantee is a continuing guarantee of the
payment of all Indenture Obligations and shall remain in full force and effect
until the payment in full (subject to Section 1301) of all of the Indenture
Obligations and all other amounts payable under this Subsidiary Guarantee and
shall apply to and secure any ultimate balance due or remaining unpaid to the
Trustee or the Holders under this Indenture or the Securities; and this
Subsidiary Guarantee shall not be considered as wholly or partially satisfied by
the payment or liquidation at any time or from time to time of any sum of money
for the time being due or remaining unpaid to the Trustee or the Holders.
(b) Subject to Section 1301, each Subsidiary Guarantor hereby
guarantees that the Indenture Obligations shall be paid to the Trustee without
set-off or counterclaim or other reduction whatsoever (whether for taxes,
withholding or otherwise) in lawful currency of the United States of America.
(c) Subject to Section 1301, each Subsidiary Guarantor guarantees
that the Indenture Obligations shall be paid strictly in accordance with their
terms regardless of any lack of validity or enforceability of any of such terms
or the rights of the Holders with respect thereto.
(d) Each Subsidiary Guarantor's liability to pay or perform or cause
the performance of the Indenture Obligations under this Subsidiary Guarantee
shall arise forthwith after demand for payment by the Trustee has been given to
such Subsidiary Guarantor in the manner prescribed in this Indenture.
SECTION 1307. Subsidiary Guarantors May Consolidate, Etc., on Certain
-------------------------------------------------------
Terms.
- ------
(a) Nothing contained in this Indenture or in any of the Securities
shall prevent any consolidation or merger of a Subsidiary Guarantor with or into
the Company or another Subsidiary Guarantor or shall prevent any sale or
conveyance of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety to the Company or another Subsidiary Guarantor,
which consolidation, merger, sale or conveyance is otherwise in accordance with
the terms of this Indenture.
(b) Other than as set forth in paragraph (a) of this Section, no
Subsidiary Guarantor may consolidate with or merge with or into (whether or not
such Subsidiary Guarantor is the surviving Person) another Person whether or not
affiliated with such Subsidiary Guarantor unless: (i) subject to the provisions
of Section 1309, the Person formed by or surviving such consolidation or merger
(if other than such Subsidiary Guarantor) assumes all of the obligations of such
Subsidiary Guarantor under this Indenture and its
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Subsidiary Guarantee, pursuant to a supplemental indenture in form and substance
satisfactory to the Trustee, and (b) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing.
SECTION 1308. Additional Subsidiary Guarantors.
---------------------------------
The Company will cause each Person that becomes a Domestic Restricted
Subsidiary (other than BTI Capital Trust and certain domestic subsidiaries owned
by a foreign subsidiary of the Company), or any other Restricted Subsidiary that
guarantees any other Indebtedness of the Company or of a Domestic Restricted
Subsidiary (other than BTI Capital Trust and certain domestic subsidiaries owned
by a foreign subsidiary of the Company), after the date of this Indenture to
become a Subsidiary Guarantor with respect to the Indenture Obligations by
executing and delivering a supplemental indenture to this Indenture providing
for a Subsidiary Guarantee by such Subsidiary under this Article Thirteen (or
under a separate guarantee agreement consistent in all material respects with
this Article Thirteen). The Company shall deliver to the Trustee, together with
the supplemental indenture referred to above, an Opinion of Counsel that such
Subsidiary Guarantee is a legal, valid, binding and enforceable obligation of
such Subsidiary Guarantor, subject to customary local law exceptions and
customary exceptions for bankruptcy and equitable principles.
SECTION 1309. Releases.
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(a) In the event of (i) the conveyance, sale, assignment, transfer or
other disposition (by way of merger, consolidation or otherwise) of all of the
Capital Stock of a Subsidiary Guarantor to a Person that is not an Affiliate of
the Company in compliance with this Section 1309 and the terms of this Indenture
or (ii) a conveyance, sale, assignment, transfer or other disposition of all or
substantially all of the assets of a Subsidiary Guarantor (by way of merger,
consolidation or otherwise) to a Person that is not an Affiliate of the Company
in compliance with this Section 1309 and the terms of this Indenture, then such
Subsidiary Guarantor (or Person acquiring such assets in the event of a sale or
other disposition of all of the assets of such Subsidiary Guarantor) shall be
deemed automatically and unconditionally released from and discharged from all
of its obligations under this Article Thirteen and its Subsidiary Guarantee
without any further action required on the part of the Trustee or any Holder;
provided that, in the event such transaction constitutes an Asset Sale, the Net
- --------
Proceeds of such sale, transfer or other disposition are applied in accordance
with Section 1013 hereof.
(b) Any Subsidiary Guarantor that is designated by the Board of
Directors of the Company as an Unrestricted Subsidiary, or such Subsidiary
Guarantor ceases to be a Subsidiary of the Company, in accordance with the terms
of this Indenture may, at such time, at the option of the Board of Directors, be
released and relieved of its obligations under its Subsidiary Guarantee.
98
(c) Concurrently with the defeasance of the Securities under Section
1202 hereof, or the covenant defeasance of the Securities under Section 1203
hereof, the Subsidiary Guarantors shall be released from all their obligations
under their Subsidiary Guarantees under this Article Thirteen.
(d) The Trustee shall deliver an appropriate instrument evidencing
such release upon receipt of a Company Request accompanied by an Officers'
Certificate certifying as to the compliance with this Section 1306. Any
Subsidiary Guarantor not so released shall remain liable for the full amount of
principal of and interest on the Securities as provided in its Subsidiary
Guarantee.
SECTION 1310. Benefits Acknowledged.
---------------------
Each Subsidiary Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this Indenture
and that its guarantee and waivers pursuant to its Subsidiary Guarantee are
knowingly made in contemplation of such benefits.
SECTION 1311. Severability.
------------
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.
ARTICLE FOURTEEN
SUBORDINATION OF SECURITIES AND SUBSIDIARY GUARANTEES
SECTION 1401. Securities and Subsidiary Guarantees Subordinate to
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Senior Indebtedness.
- --------------------
(a) The Company covenants and agrees, and each Holder of a Security,
by his acceptance thereof, likewise covenants and agrees, that, to the extent
and in the manner hereinafter set forth in this Article Fourteen, the
indebtedness represented by the Securities and the payment of the principal of
(and premium, if any) and interest on each and all of the Securities (but not
amounts owing to the Trustee by the Company pursuant to Section 606 hereof) are
hereby expressly made subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness.
(b) Each Subsidiary Guarantor covenants and agrees, and each Holder of
a Security, by his acceptance thereof, likewise covenants and agrees, that, to
the extent and in the manner hereinafter set forth in this Article Fourteen, the
indebtedness represented by the
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Subsidiary Guarantee of such Subsidiary Guarantor is hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Subsidiary Guarantor Senior Indebtedness of such Subsidiary Guarantor.
SECTION 1402. Payment Over of Proceeds Upon Dissolution, Etc.
-----------------------------------------------
In the event of any payment or distribution of assets of the Company
or any Subsidiary Guarantor to creditors upon any liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors, marshaling
of assets or any bankruptcy, insolvency or similar proceedings, whether
voluntary or involuntary, of the Company or any Subsidiary Guarantor (the
Company or such Subsidiary Guarantor being the "Affected Obligor"), then
(except (x) in connection with the consolidation or merger of the Company or its
liquidation or dissolution following the conveyance, transfer or lease of its
properties and assets substantially as an entirety, upon the terms and
conditions described in Article Eight or (y) in connection with the
consolidation or merger of a Subsidiary Guarantor, or its liquidation or
dissolution, not in violation of any provision of this Indenture) (each such
event referred to in clause (x) or (y) above, if any, herein sometimes referred
to as a "Proceeding"), (i) if the Affected Obligor is the Company, the holders
of Senior Indebtedness shall first be entitled to receive payment in full, in
cash or cash equivalents, of all amounts due or to become due on or in respect
of such Senior Indebtedness (including, to the extent permitted by applicable
law, interest accruing after the commencement of any such Proceeding at the rate
specified therein) before the Holders of the Securities are entitled to receive
any payment or distribution of any kind with respect to the Securities or on
account of the purchase or redemption or other acquisition of Securities by the
Company or any Subsidiary of the Company and (ii) if the Affected Obligor is a
Subsidiary Guarantor, the holders of Subsidiary Guarantor Senior Indebtedness of
such Subsidiary Guarantor shall first be entitled to receive payment in full, in
cash or cash equivalents, of all amounts due or to become due on or in respect
of such Subsidiary Guarantor Senior Indebtedness (including, to the extent
permitted by applicable law, interest accruing after the commencement of any
such Proceeding at the rate specified therein) before the Holders of the
Securities are entitled to receive any payment or distribution of any kind with
respect to the Subsidiary Guarantee of such Subsidiary Guarantor (any payment on
or purchase, redemption or acquisition of the Securities, referred to in clause
(i), and any payment on a Subsidiary Guarantee, referred to in clause (ii),
being, individually and collectively, a "Securities Payment"), and, to that end,
if the Affected Obligor is the Company, the holders of Senior Indebtedness and,
if the Affected Obligor is a Subsidiary Guarantor, the holders of Subsidiary
Guarantor Senior Indebtedness of such Subsidiary Guarantor (such Senior
Indebtedness or Subsidiary Guarantor Senior Indebtedness, as the case may be,
being "Affected Obligor Senior Indebtedness" of such Affected Obligor) shall be
entitled to receive, for application to the payment thereof, any payment or
distribution of any kind or character, whether in cash, property or securities
which may be payable or deliverable in respect of the Securities in any such
Proceeding.
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In the event that, notwithstanding the foregoing provisions of this
Section 1402, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of an Affected Obligor of any kind or
character before all Affected Obligor Senior Indebtedness is paid in full, then
such payment or distribution, except for amounts subject to the claim granted to
the Trustee in Section 606 hereof, shall be held in trust for the holders of
Affected Obligor Senior Indebtedness and shall be paid over or delivered
forthwith to the trustee in bankruptcy or other Person making payment or
distribution of assets of the Affected Obligor for application to the payment of
all Affected Obligor Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Affected Obligor Senior Indebtedness in full, after giving
effect to any concurrent payment or distribution to or for the holders of the
Affected Obligor Senior Indebtedness.
For purposes of this Article Fourteen only, the words "any payment or
distribution of any kind or character, cash, property or securities" shall not
be deemed to include a payment or distribution of equity or subordinated
securities of the Affected Obligor provided for by a plan of reorganization or
readjustment or of any other corporation provided for by such plan of
reorganization or readjustment that, in the case of subordinated securities, are
subordinated in right of payment to all then outstanding Affected Obligor Senior
Indebtedness to at least the same extent as the Securities or Subsidiary
Guarantees, as the case may be, are so subordinated as provided in this Article
Fourteen.
SECTION 1403. No Payment When Certain Senior Indebtedness in Default.
-------------------------------------------------------
In the event that any Senior Payment Default (as defined below) shall
have occurred and be continuing, then no Securities Payment shall be made unless
and until such Senior Payment Default shall have been cured or waived or shall
have ceased to exist or all amounts then due and payable in respect of the
Designated Senior Indebtedness or other obligations that are the subject of such
Senior Payment Default shall have been paid in full. For purposes hereof,
"Senior Payment Default" means any default in the payment of principal of (or
premium, if any), or interest on, Designated Senior Indebtedness or a default in
the payment of any other obligation under the New Credit Facility, when due,
whether at the Stated Maturity of any such payment or by declaration of
acceleration, call for redemption or otherwise.
In the event that any Senior Nonmonetary Default (as defined below)
shall have occurred and be continuing, then, upon the receipt by the Company and
the Trustee of written notice of such Senior Nonmonetary Default from the New
Credit Facility Agent or from an authorized Person on behalf of any holder of
Designated Senior Indebtedness, no Securities Payment shall be made during the
period (the "Payment Blockage Period") commencing on the date of receipt of such
written notice (the "Blockage Notice") and ending on the earliest of (i) the
179th day after the date of such receipt of the Blockage Notice (the "Initial
Period") unless a Senior Payment Default has occurred and is continuing at the
end of such 179-day period, (ii) the date, if any, on which the Designated
Senior Indebtedness to which such default relates
101
is discharged or such default is waived or otherwise cured and (iii) the date,
if any, on which such Payment Blockage Period shall have been terminated by
written notice to the Company or the Trustee from the New Credit Facility Agent
or from the Person who gave the Blockage Notice. In any event, not more than
one Payment Blockage Period may be commenced during any period of 360
consecutive days, and there must be a period of at least 181 consecutive days in
each period of 360 consecutive days when no Payment Blockage Period is in
effect. No Senior Nonmonetary Default that existed or was continuing on the
date of commencement of any Payment Blockage Period with respect to the
Designated Senior Indebtedness initiating such Payment Blockage Period shall be,
or can be, made the basis for the commencement of a subsequent Payment Blockage
Period unless such Senior Nonmonetary Default shall have been cured or waived
for a period of not less than 90 consecutive days. For purposes hereof, "Senior
Nonmonetary Default" means the occurrence or existence of any event,
circumstance, condition or state of facts that, by the terms of any instrument
pursuant to which any Designated Senior Indebtedness is outstanding, permits one
or more holders of such Designated Senior Indebtedness (or a trustee or agent on
behalf of the holders thereof) to declare such Designated Senior Indebtedness
due and payable prior to the date on which it would otherwise become due and
payable, other than a Senior Payment Default. Notwithstanding the foregoing,
the Company and the Subsidiary Guarantors may make Securities Payments without
regard to the foregoing if the Company and the Trustee receive written notice
approving such payment from a representative of such Designated Senior
Indebtedness affected by such Senior Payment Default or Senior Nonmonetary
Default.
In the event that, notwithstanding the foregoing, the Company or any
Subsidiary Guarantor shall make any payment to the Trustee or any Holder
prohibited by the foregoing provisions of this Section 1403, then such payment
shall be held in trust for the holders of the Affected Obligor Senior
Indebtedness and shall be paid over and delivered forthwith to the holders of
the Affected Obligor Senior Indebtedness remaining unpaid, to the extent
necessary to pay in full all the Affected Obligor Senior Indebtedness.
SECTION 1404. Payment Permitted If No Default.
-------------------------------
Nothing contained in this Article Fourteen or elsewhere in this
Indenture or in any of the Securities shall, at any time except during the
pendency of any Proceeding referred to in Section 1402 or under the conditions
described in Section 1403, prevent (a) the Company or any Subsidiary Guarantor
from making Securities Payments, or (b) the application by the Trustee of any
money deposited with it hereunder to Securities Payments or the retention of
such payment by the Holders.
SECTION 1405. Subrogation to Rights of Holders of Senior
------------------------------------------
Indebtedness.
- -------------
Subject to the payment in full of all Senior Indebtedness, the rights
of the Holders of the Securities shall be subrogated to the rights of the
holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable
102
to the Senior Indebtedness until the principal of (and premium, if any) and
interest on the Securities shall be paid in full. Subject to the payment in
full of all Subsidiary Guarantor Senior Indebtedness, the rights of the Holders
of the Securities shall be subrogated to the rights of the holders of such
Subsidiary Guarantor Senior Indebtedness to receive payments and distributions
of cash, property and securities applicable to such Subsidiary Guarantor Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Securities shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of the Senior Indebtedness or Subsidiary
Guarantor Senior Indebtedness of any cash, property or securities to which the
Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article Fourteen, and no payments over pursuant to the
provisions of this Article Fourteen to the holders of Senior Indebtedness or
Subsidiary Guarantor Senior Indebtedness by Holders of the Securities or the
Trustee, shall, as among the Company, the Subsidiary Guarantors, their
respective creditors (other than holders of Senior Indebtedness and the
Subsidiary Guarantor Senior Indebtedness and the Holders of the Securities, be
deemed to be a payment or distribution by the Company to or on account of the
Senior Indebtedness). Neither the Holders of the Securities nor the Trustee
shall have any claim against the holders of the Senior Indebtedness or the
Subsidiary Guarantor Senior Indebtedness or the New Credit Facility Agent for
any impairment of the subrogation rights herein granted arising out of any
release of Liens securing the Senior Indebtedness or the Subsidiary Guarantor
Senior Indebtedness.
SECTION 1406. Provisions Solely to Define Relative Rights.
--------------------------------------------
The provisions of this Article Fourteen are and are intended solely
for the purpose of defining the relative rights of the Holders on the one hand
and the holders of Senior Indebtedness and Subsidiary Guarantor Senior
Indebtedness on the other hand. Nothing contained in this Article Fourteen or
elsewhere in this Indenture or in the Securities is intended to or shall (a)
impair, as among the Company, its creditors (other than holders of Senior
Indebtedness) and the Holders of the Securities, the obligation of the Company,
which is absolute and unconditional (and which, subject to the rights under this
Article Fourteen of the holders of Senior Indebtedness, is intended to rank
equally with all other general obligations of the Company) to pay to the Holders
of the Securities the principal of (and premium, if any) and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms; or (b) impair, as among the Subsidiary Guarantors, their creditors
(other than holders of Subsidiary Guarantor Senior Indebtedness) and the Holders
of the Securities, the obligation of the Subsidiary Guarantors, which is
absolute and unconditional (and which, subject to the rights under this Article
Fourteen of the holders of Subsidiary Guarantor Senior Indebtedness, is intended
to rank equally with all other general obligations of the Subsidiary Guarantors)
to pay to the Holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become due and payable
in accordance with their terms; or (c) affect the relative rights against the
Company of the Holders of the Securities and creditors of the Company (other
than the holders of Senior Indebtedness) or the relative rights against the
Subsidiary Guarantors of the Holders of the
103
Securities and creditors of the Subsidiary Guarantors (other than
the Holders of Subsidiary Guarantor Senior Indebtedness); or (d) prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article Fourteen of the holders of Senior
Indebtedness and Subsidiary Guarantor Senior Indebtedness to receive cash,
property and securities otherwise payable or deliverable to the Trustee or such
Holder. The holders of the Senior Indebtedness and the New Credit Facility
Agent, as the case may be, shall be entitled to enforce the provisions of this
Article Fourteen against the Company, the Subsidiary Guarantors, the Holders of
the Securities and the Trustee.
SECTION 1407. Trustee to Effectuate Subordination.
------------------------------------
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article Fourteen
and appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 1408. No Waiver of Subordination Provisions.
--------------------------------------
No right of any present or future holder of any Senior Indebtedness or
Subsidiary Guarantor Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or any Subsidiary Guarantor or by any
act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company or any Subsidiary Guarantor with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness or Subsidiary Guarantor Senior Indebtedness,
as the case may be, may, at any time and from time to time, without the consent
of or notice to the Trustee or the Holders of the Securities, without incurring
responsibility to the Trustee or the Holders of the Securities and without
impairing or releasing the subordination provided in this Article Fourteen or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness or Subsidiary Guarantor Senior Indebtedness, as the case may
be, do any one or more of the following: (i) change the manner, place or terms
of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or Subsidiary Guarantor Senior Indebtedness, as the case may be, or
otherwise amend or supplement in any manner Senior Indebtedness or Subsidiary
Guarantor Senior Indebtedness, as the case may be, or any instrument evidencing
the same or any agreement under which Senior Indebtedness or Subsidiary
Guarantor Senior Indebtedness, as the case may be, is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness or any Subsidiary Guarantor Senior
Indebtedness, as the case may be; (iii) release any Person liable in any manner
for the collection of Senior Indebtedness
104
or any Subsidiary Guarantor Senior Indebtedness, as the case may be; and (iv)
exercise or refrain from exercising any rights against the Company or any
Subsidiary Guarantor and any other Person.
SECTION 1409. Notice to Trustee.
-----------------
The Company and each Subsidiary Guarantor shall give prompt written
notice to the Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the Securities and of
any subsequent cure or waiver thereof. Notwithstanding the provisions of this
Article Fourteen or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or a holder of Subsidiary Guarantor
Senior Indebtedness or from any trustee or agent therefor; and, prior to the
receipt of any such written notice, the Trustee, shall be entitled in all
respects to assume that no such facts exist.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness or a holder of Subsidiary Guarantor Senior Indebtedness (or a
trustee or agent therefor) to establish that such notice has been given by a
holder of Senior Indebtedness or a holder of Subsidiary Guarantor Senior
Indebtedness (or a trustee or agent therefor). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness or a holder of Subsidiary
Guarantor Senior Indebtedness, as the case may be, to participate in any payment
or distribution pursuant to this Article Fourteen, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness or Subsidiary Guarantor Senior Indebtedness,
as the case may be, held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article Fourteen, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 1410. Reliance on Judicial Order or Certificate of
--------------------------------------------
Liquidation Agent.
- ------------------
Upon any payment or distribution of assets of the Company or any
Subsidiary Guarantor referred to in this Article Fourteen, the Trustee and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in a Proceeding, or a certificate
of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee
for the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the
105
holders of the Senior Indebtedness, Subsidiary Guarantor Senior Indebtedness and
other indebtedness of the Company and the Subsidiary Guarantors, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article Fourteen.
SECTION 1411. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness.
- -------------
Except to the extent of its obligations under the penultimate
paragraph of Section 1402 and the last paragraph of Section 1403, the Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness or Subsidiary Guarantor Senior Indebtedness and shall not be liable
to any such holders if it shall in good faith mistakenly pay over or distribute
to Holders of Securities or to the Company or to any other Person cash, property
or securities to which any holders of Senior Indebtedness or Subsidiary
Guarantor Senior Indebtedness shall be entitled by virtue of this Article
Fourteen or otherwise. The Trustee's duties with respect to holders of Senior
Indebtedness and Subsidiary Guarantor Senior Indebtedness are limited to those
specifically set forth in this Indenture, and no implied covenants or
obligations shall be construed by any provision hereof.
SECTION 1412. Rights of Trustee as Holder of Senior Indebtedness;
---------------------------------------------------
Preservation of Trustee's Rights.
- ---------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Fourteen with respect to any Senior
Indebtedness or Subsidiary Guarantor Senior Indebtedness which may at any time
be held by it, to the same extent as any other holder of Senior Indebtedness or
Subsidiary Guarantor Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article Fourteen shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 606.
SECTION 1413. Applicability to Paying Agents.
------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article Fourteen shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article Fourteen in addition to or in place of the Trustee;
provided, however, that this Section 1413 shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.
106
SECTION 1414. Defeasance of this Article Fourteen.
------------------------------------
The subordination of the Securities and the Subsidiary Guarantees
provided by this Article Fourteen is expressly made subject to the provisions
for defeasance or covenant defeasance in Article Twelve hereof and, anything
herein to the contrary notwithstanding, upon the effectiveness of any such
defeasance or covenant defeasance, the Securities and the Subsidiary Guarantees
then outstanding shall thereupon cease to be subordinated pursuant to this
Article Fourteen.
SECTION 1415. Subordination Provisions Controlling.
-------------------------------------
Notwithstanding anything to the contrary contained in this Indenture,
to the extent that any provision contained in Articles One (other than Section
101) through Thirteen of this Indenture conflicts with any provision contained
in Article Fourteen (including the definitions of certain terms used in Article
Fourteen) of this Indenture, the provisions contained in Article Fourteen of
this Indenture shall govern and control.
This Indenture may be signed in any number of counterparts each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
107
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
BREED TECHNOLOGIES, INC.
By
------------------------------
Name:
Title:
BREED ARIZONA, INC.
By
------------------------------
Name:
Title:
BREED INTERNATIONAL
MANUFACTURING DEVELOPMENT
CORP.
By
------------------------------
Name:
Title:
BREED ALABAMA, INC.
By
------------------------------
Name:
Title:
BREED AUTOMOTIVE OF
FLORIDA, INC.
By
------------------------------
Name:
Title:
BREED AUTOMOTIVE
TECHNOLOGY, INC.
By
------------------------------
Name:
Title:
BREED STEERING SYSTEMS, INC.
By
------------------------------
Name:
Title:
BREED NEVADA, INC.
By
------------------------------
Name:
Title:
BREED MANUFACTURING OF
TEXAS, INC.
By
------------------------------
Name:
Title:
BREED AUTOMOTIVE WEST, INC.
By
------------------------------
Name:
Title:
BTI TENNESSEE, INC.
By
------------------------------
Name:
Title:
BTI MICHIGAN, INC.
By
------------------------------
Name:
Title:
INNOVATIVE MIM
TECHNOLOGIES, INC.
By
------------------------------
Name:
Title:
HAMLIN, INCORPORATED
By
------------------------------
Name:
Title:
BREED ASIAN HOLDINGS, INC.
By
------------------------------
Name:
Title:
FORCE IMAGING
TECHNOLOGIES, INC.
By
------------------------------
Name:
Title:
ARTISTIC ANALYTICAL
METHODS, INC.
By
------------------------------
Name:
Title:
AUTO TRIM, INC.
By
------------------------------
Name:
Title:
BREED AUTOMOTIVE, L.P.
By
------------------------------
Name:
Title:
BREED TENNESSEE HOLDINGS, L.P.
By
------------------------------
Name:
Title:
IBJ SCHRODER BANK & TRUST
COMPANY
By
------------------------------
Name:
Title:
SCHEDULE I
Subsidiary Guarantors
Breed Arizona, Inc.
Breed International Manufacturing Development Corp.
Breed Alabama, Inc.
Breed Automotive of Florida, Inc.
Breed Automotive Technology, Inc.
Breed Steering Systems, Inc.
Breed Nevada, Inc.
Breed Manufacturing of Texas, Inc.
Breed Automotive West, Inc.
BTI Tennessee, Inc.
BTI Michigan, Inc.
Innovative Mim Technologies, Inc.
Hamlin, Incorporated
Breed Asian Holdings, Inc.
Force Imaging Technologies, Inc.
Artistic Analytical Methods, Inc.
Auto Trim, Inc.
Breed Automotive, L.P.
Breed Tennessee Holdings, L.P.
Exhibit A
---------
[FACE OF SECURITY]
BREED TECHNOLOGIES, INC.
9 1/4% [Series B]/** /Senior Subordinated Note due 2008
CUSIP ______________
No. _______ $_________________
BREED TECHNOLOGIES, INC., a Delaware corporation (the "Company", which
term includes any successor under the Indenture hereinafter referred to), for
value received, promises to pay to ___________, or its registered assigns, the
principal sum of ____________________________________ ($___________), on April
15, 2008.
[Initial Interest Rate: 9.25% per annum.]*
[Interest Rate: 9.25% per annum.]**
Interest Payment Dates: April 15 and October 15 of each year
commencing October 15, 1998.
Regular Record Dates: April 1 and October 1 of each year.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
Date: ______________ BREED TECHNOLOGIES, INC.
By:
-----------------------------
Title:
A-1
(Form of Trustee's Certificate of Authentication)
This is one of the 9-1/4% [Series B]* Senior Subordinated Notes due 2008
described in the within-mentioned Indenture.
IBJ SCHRODER BANK & TRUST
COMPANY, as Trustee
By:
-----------------------------
Authorized Signatory
- --------------------
** Include only for Exchange Securities.
A-2
[REVERSE SIDE OF SECURITY]
BREED TECHNOLOGIES, INC.
9-1/4% Senior Subordinated Note due 2008
1. Principal and Interest.
----------------------
The Company will pay the principal of this Security on April 15, 2008.
The Company promises to pay interest on the principal amount of this
Security on each Interest Payment Date, as set forth below, at the rate of
[9.25% per annum (subject to adjustment as provided below)]* [9.25% per annum,
except that interest accrued on this Security pursuant to the penultimate
paragraph of this Section 1 for periods prior to the applicable Exchange Date
(as such term is defined in the Registration Rights Agreement referred to below)
will accrue at the rate or rates borne by the Securities from time to time
during such periods].**
Interest will be payable semiannually (to the holders of record of the
Securities (or any predecessor Securities) at the close of business on the April
1 or October 1 immediately preceding the Interest Payment Date) on each Interest
Payment Date, commencing October 15, 1998.
[The Holder of this Security is entitled to the benefits of the
Registration Rights Agreement, dated April 28, 1998, among the Company and the
Initial Purchasers named therein (the "Registration Rights Agreement"). In the
event that either (a) the Exchange Offer Registration Statement (as such term is
defined in the Registration Rights Agreement) is not filed with the Securities
and Exchange Commission on or prior to the 60th calendar day following the date
of original issue of the Securities or (b) the Exchange Offer (as such term is
defined in the Registration Rights Agreement) is not consummated or a Shelf
Registration Statement (as such term is defined in the Registration Rights
Agreement) is not declared effective on or prior to the 180th calendar day
following the date of original issue of the Securities, the interest rate borne
by this Security shall be increased by 0.25% per annum for
- --------------------
* Include only for Initial Securities.
** Include only for Exchange Securities.
A-3
the first 90 days following the 60-day period referred to in clause (a) above or
the 180-day period referred to in clause (b) above. Such interest will be
increased by an additional 0.25% per annum at the beginning of each subsequent
90-day period in the case of clause (a) or clause (b) above; provided, however,
-------- -------
that in no event will the interest rate borne by the Securities be increased by
more than 1.50%. Upon the filing of the Exchange Offer Registration Statement,
the consummation of the Exchange Offer or the effectiveness of a Shelf
Registration Statement, as the case may be, the interest rate borne by this
Security from the date of such filing, consummation or effectiveness, as the
case may be, will be reduced to the original interest rate set forth above;
provided, however, that, if after such reduction in interest rate, a different
- -------- -------
event specified in clause (a) or (b) above occurs, the interest rate may again
be increased pursuant to the foregoing provisions.]*
Interest on this Security will accrue from the most recent date to
which interest has been paid [on this Security or the Security surrendered in
exchange herefor]** or, if no interest has been paid, from April 28, 1998;
provided that, if there is no existing default in the payment of interest and if
- --------
this Security is authenticated between a Regular Record Date referred to on the
face hereof and the next succeeding Interest Payment Date, interest shall accrue
from such Interest Payment Date. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
a rate per annum equal to the rate of interest applicable to the Securities.
2. Method of Payment.
-----------------
The Company will pay interest (except defaulted interest) on the
principal amount of the Securities on each April 15 and October 15 to the
persons who are Holders (as reflected in the Security Register at the close of
business on the April 1 and October 1 immediately preceding the Interest Payment
Date), in each case, even if the Security is cancelled on registration of
transfer or registration of exchange after such record date; provided that, with
--------
respect to the payment of principal, the Company will make payment to the Holder
that surrenders this Security to any Paying Agent on or after April 15, 2008.
- --------------------
* Include only for Initial Securities.
** Include only for Exchange Securities
A-4
The Company will pay principal, premium, if any, and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. [Payment of the principal of (and premium, if any)
and interest on the Securities will be made at the office or agency of the
Company maintained for that purpose in The City of New York (which shall be the
Corporate Finance Department of the Trustee, unless the Company shall designate
and maintain some other office or agency for such purpose), or at such other
office or agency of the Company as may be maintained for such purpose, in lawful
money of the United States of America, or payment of interest may be made at the
option of the Company by check mailed to the address of the Person entitled
thereto as such address shall appear on the Security Register; provided,
--------
however, that all payments to Holders who have given wire transfer instructions
- -------
to the Company will be made by wire transfer of immediately available funds to
the accounts specified by such Holder.]* [All payments will be made by wire
transfer of immediately available funds to the accounts specified by the
Holder.]** If a payment date is a date other than a Business Day at a place of
payment, payment may be made at that place on the next succeeding day that is a
Business Day and no interest shall accrue for the intervening period.
3. Paying Agent and Registrar.
--------------------------
Initially, the Trustee will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar upon written notice thereto.
The Company, any Subsidiary or any Affiliate of any of them may act as Paying
Agent, Registrar or co-registrar.
4. Subsidiary Guarantees.
---------------------
This Security is entitled to the benefits of the Subsidiary Guarantees
made by each of the Subsidiary Guarantors as described in the Indenture,
pursuant to which the Subsidiary Guarantors have irrevocably and
unconditionally, jointly and severally, guaranteed on a senior subordinated
basis the punctual payment when due, whether at Stated Maturity, by
acceleration, redemption or otherwise, of all obligations of the Company under
the Indenture and this Security. A Subsidiary Guarantor shall be released from
its Subsidiary Guarantee upon the terms and subject to the conditions set forth
in the Indenture.
- --------------------
*** Include for Physical Securities only.
** Include for U.S. Global Security only.
A-5
5. Subordination.
-------------
This Security and the Subsidiary Guarantees are subordinated in right
of payment, as set forth in the Indenture, to the prior payment in full of all
existing and future Senior Indebtedness and Subsidiary Guarantor Senior
Indebtedness. Each of the Company and the Subsidiary Guarantors agrees, and
each Holder by accepting this Security agrees, to the subordination provisions
set forth in the Indenture, authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purposes.
6. Indenture; Limitations.
----------------------
The Company issued the Securities under an Indenture dated as of April
28, 1998 (the "Indenture"), among the Company, certain active domestic
subsidiaries of the Company (the "Subsidiary Guarantors," which term will
include all successor subsidiary guarantors under the Indenture) and IBJ
Schroder Bank & Trust Company, as trustee (the "Trustee"). Capitalized terms
herein are used as defined in the Indenture unless otherwise indicated. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act. The Securities
are subject to all such terms, and Holders are referred to the Indenture and the
Trust Indenture Act for a statement of all such terms. To the extent permitted
by applicable law, in the event of any inconsistency between the terms of this
Security and the terms of the Indenture, the terms of the Indenture shall
control.
The Securities are general unsecured obligations of the Company.
7. Redemption.
----------
Optional Redemption. The Securities may be redeemed at the option of
-------------------
the Company, in whole or in part, at any time and from time to time on or after
April 15, 2003, at the following Redemption Prices (expressed in percentages of
principal amount), plus accrued and unpaid interest, if any, to the Redemption
Date (subject to the right of Holders of record on the relevant Regular Record
Date to receive interest due on an Interest Payment Date that is on or prior to
the Redemption Date), if redeemed during the 12-month period beginning April 15
of each of the years set forth below:
Redemption
Year Price
---- ----------
2003............................ 104.625%
2004............................ 103.083%
2005............................ 101.542%
2006 and thereafter............. 100.000%
A-6
In addition, at any time or from time to time prior to April 15, 2001,
the Company may redeem up to 35% of the sum of (i) the initial aggregate
principal amount of the Securities and (ii) the initial aggregate principal
amount of any Additional Securities with the net proceeds of one or more Equity
Offerings at a redemption price equal to 109 1/4% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the Redemption Date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant Interest Payment Date); provided that,
--------
immediately after giving effect to such redemption, at least 65% of the initial
aggregate principal amount of the Securities (including any Additional
Securities) remains outstanding; provided further that such redemptions occur
-------- -------
within 90 days of the date of closing of the related Equity Offering.
Notice of a redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's last address as it appears in the Security Register.
Securities in original denominations larger than $1,000 may be redeemed in part
in integral multiples of $1,000. On and after the Redemption Date, interest
ceases to accrue on Securities or portions of Securities called for redemption,
unless the Company defaults in the payment of the Redemption Price.
8. Repurchase upon a Change in Control and Asset Sales.
---------------------------------------------------
(a) Upon the occurrence of a Change of Control, the Company is
obligated to make an offer to purchase all outstanding Securities at a
redemption price of 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of purchase and (b) upon Asset Sales, the
Company may be obligated to make offers to purchase Securities with a portion of
the Net Cash Proceeds of such Asset Sales at a redemption price of 100% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase.
9. Denominations; Transfer; Exchange.
---------------------------------
The Securities are in registered form without coupons, in
denominations of $1,000 and multiples of $1,000 in excess thereof. A Holder may
register the transfer or exchange of Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer or exchange of any Securities selected for redemption (except the
unredeemed portion of any Security being redeemed in part). Also, it need not
register the transfer or exchange of any Securities for a period of 15 days
before a selection of Securities to be redeemed is made.
A-7
10. Persons Deemed Owners.
---------------------
A Holder may be treated as the owner of a Security for all purposes.
11. Unclaimed Money.
---------------
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its request. After that, Holders entitled to the
money must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity.
-----------------------------------------
If the Company irrevocably deposits, or causes to be deposited, with
the Trustee money or U.S. Government Obligations sufficient to pay the then
outstanding principal of, premium, if any, and accrued interest on the
Securities to redemption or maturity, the Company will be discharged from the
Indenture and the Securities, except in certain circumstances for certain
sections thereof.
13. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount of the Securities then Outstanding, and any
existing default or compliance with any provision may be waived with the consent
of the Holders of a majority in aggregate principal amount of the Securities
then Outstanding. Without notice to or the consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Securities to, among other
things, cure any ambiguity, defect or inconsistency and make any change that
does not materially adversely affect the rights of any Holder.
14. Restrictive Covenants.
---------------------
The Indenture contains certain covenants, including, without
limitation, covenants with respect to the following matters: (i) Indebtedness;
(ii) Restricted Payments; (iii) certain Asset Sales; (iv) transactions with
Affiliates; (v) dividends and other payment
A-8
restrictions affecting Restricted Subsidiaries; (vi) issuances and sale of
Capital Stock of Restricted Subsidiaries; (vii) designation of Unrestricted
Subsidiaries; (viii) Liens; and (ix) merger and certain transfers of assets.
Within 120 days after the end of each fiscal year, the Company must report to
the Trustee on compliance with such limitations.
15. Successor Persons.
-----------------
When a successor person or other entity assumes all the obligations of
its predecessor under the Securities and the Indenture, the predecessor person
will be released from those obligations.
16. Remedies for Events of Default.
------------------------------
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of not less than 25% in principal amount
of the Securities then Outstanding may declare all the Securities to be
immediately due and payable. If a bankruptcy or insolvency default with respect
to the Company or any of its Significant Subsidiaries occurs and is continuing,
the Securities automatically become immediately due and payable. Holders may
not enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of at
least a majority in principal amount of the Securities then Outstanding may
direct the Trustee in its exercise of any trust or power.
17. Trustee Dealings with Company.
-----------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may make loans to,
accept deposits from, perform services for, and otherwise deal with, the Company
and its Affiliates as if it were not the Trustee.
18. Authentication.
--------------
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
A-9
19. Abbreviations.
-------------
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Breed
Technologies, Inc., 5300 Old Tampa Highway, P.O. Box 33050, Lakeland, Florida
33807, Attention: Stuart Boyd, Esq.
A-10
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
- ----------------------------------
(Please print or typewrite name and address including zip code of assignee)
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing attorney to transfer such Security on the books of the Company
with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES EXCEPT,
PERMANENT OFFSHORE PHYSICAL CERTIFICATES]
In connection with any transfer of this Security occurring prior to
the date which is the earlier of the date of an effective Registration Statement
or April 28, 2000 the undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
---------
[ ] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
or
- --
[ ] (b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
A-11
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 307 of the Indenture shall have
been satisfied.
Date: ____________________ ________________________________
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or any
change whatsoever.
Signature Guarantee:
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: ________________________________
NOTICE: To be executed by an executive
officer, general partner, trustee or
similar representative.
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 1012 or Section 1013 of the Indenture, check the Box: [ ].
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 1012 or Section 1013 of the Indenture, state the
amount (in original principal amount) below:
$_____________________.
Date:
Your Signature: ________________________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: ____________________________
(Signature must be guaranteed by a member of the New York
Stock Exchange or a commercial bank or trust company)
A-12
Exhibit B
---------
Form of Certificate
to Be Delivered upon
Termination of Restricted Period
--------------------------------
On or after June 8, 1998
Breed Technologies, Inc.
5300 Old Tampa Highway
P.O. Box 33050
Lakeland, Florida 33807
c/o
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attention: Corporate Trust Office,
Corporate Finance Department
Re: Breed Technologies, Inc. (the "Company") 9 1/4% Senior
Subordinated Notes due 2008 (the "Notes")
------------------------------------------------------
Ladies and Gentlemen:
This letter relates to $________ principal amount of Notes represented
by the temporary global note certificate (the "Temporary Certificate").
Pursuant to Section 201 of the Indenture dated as of April 28, 1998 relating to
the Notes (the "Indenture"), we hereby certify that (1) we are the beneficial
owner of such principal amount of Notes represented by the Temporary Certificate
and (2) we are a person outside the United States to whom the Notes could be
transferred in accordance with Rule 904 of Regulation S promulgated under the
U.S. Securities Act of 1933, as amended. Accordingly, the Company and the
Trustee are hereby requested to issue a Certificated Note representing the
undersigned's interest in the principal amount of Notes represented by the
Temporary Certificate, all in the manner provided by the Indenture.
The Trustee and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Holder]
By: ____________________________
Authorized Signature
B-2
Exhibit C
---------
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Institutional Accredited Investors
-------------------------------------------------------
___________________, ____
Breed Technologies, Inc.
5300 Old Tampa Highway
P.O. Box 33050
Lakeland, Florida 33807
c/o
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attention: Corporate Trust Office,
Corporate Finance Department
Re: Breed Technologies, Inc. (the "Company") 9 1/4% Senior
Subordinated Notes due 2008 (the "Notes")
------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $____________ aggregate
principal amount of the Notes:
1. We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended (the "Securities Act"), or an entity in which all of the
equity owners are accredited investors within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act (an
"Institutional Accredited Investor");
(ii) any purchase of the Notes by us will be for our own account
or for the account of one or more other Institutional Accredited
Investors;
(iii) in the event that we purchase any of the Notes, we will acquire
Notes having a minimum purchase price of not less than $100,000 for our own
account or for any separate account for which we are acting;
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of purchasing
the Notes;
(v) we are not acquiring the Notes with a view to any distribution
thereof in a transaction that would violate the Securities Act or the
securities laws of any State of the United States or any other applicable
jurisdictions, provided that the disposition of our property and the property
of any accounts for which we are acting as fiduciary shall remain at all
times within our control; and
(vi) we have had access to such financial and other information, and
have been afforded the opportunity to ask such questions of representatives
of the Company and receive answers thereto, as we deem necessary in
connection with our decision to purchase the Notes.
2. We understand that the Notes are being offered in a transaction
not involving any public offering within the meaning of the Securities Act and
that the Notes have not been registered under the Securities Act, and we agree,
on our own behalf and on behalf of each account for which we acquire any Notes,
that such Notes may be offered, resold, pledged or otherwise transferred only
(i) to a person whom we reasonably believe to be a qualified institutional buyer
(as defined in Rule 144A under the Securities Act) in a transaction meeting the
requirements of Rule 144A, in a transaction meeting the requirements of Rule 144
under the Securities Act or in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel if the Company so requests), (ii) to the Company or (iii) pursuant to an
effective registration statement under the Securities Act, and, in each case, in
accordance with any applicable securities laws of any State of the United States
or any other applicable jurisdiction. We understand that the registrar and
transfer agent will not be required to accept for registration of transfer any
Notes, except upon presentation of evidence satisfactory to the Company as
applicable, that the foregoing restrictions on transfer have been complied with.
We further understand that the Notes will be in the form of definitive physical
certificates and that any such certificates will bear a legend reflecting the
substance of this paragraph.
C-2
3. The Trustee and the Company are entitled to rely upon this letter
and the Trustee and the Company are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any
C-3
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By: ______________________________
(NAME OF PURCHASER)
Date:
Upon transfer, the Notes should be registered in the name of the new
beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
C-4
Exhibit D
---------
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
--------------------------------------
_________________, ___
Breed Technologies, Inc.
5300 Old Tampa Highway
P.O. Box 33050
Lakeland, Florida 33807
c/o
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attention: Corporate Trust Office,
Corporate Finance Department
Re: Breed Technologies, Inc. (the "Company") 9 1/4% Senior
Subordinated Notes due 2008 (the "Notes")
------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the Securities Act of 1933, as amended,
and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States
or (b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and
neither we nor any person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933, as amended.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(2) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(2) or Rule 904(c)(1), as the case may be.
The Trustee and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: __________________________
Authorized Signature
D-2