Exhibit 4.2
EXECUTION COPY
_______________________________________________________________________________
_______________________________________________________________________________
Seagate Technology HDD Holdings
Issuer
Seagate Technology Holdings
Guarantor
8% Senior Notes Due 2009
____________________
INDENTURE
Dated as of May 13, 2002
____________________
U.S. Bank, N.A.,
as Trustee
_______________________________________________________________________________
_______________________________________________________________________________
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1) .............................. 7.10
(a)(2) .............................. 7.10
(a)(3) .............................. N.A.
(a)(4) .............................. N.A.
(b) .............................. 7.08; 7.10
(c) .............................. N.A.
311(a) .............................. 7.11
(b) .............................. 7.11
(c) .............................. N.A.
312(a) .............................. 2.05
(b) .............................. 11.03
(c) .............................. 11.03
313(a) .............................. 7.06
(b)(1) .............................. N.A.
(b)(2) .............................. 7.06
(c) .............................. 11.02
(d) .............................. 7.06
314(a) .............................. 4.02; 4.10; 11.02
(b) .............................. N.A.
(c)(1) .............................. 11.04
(c)(2) .............................. 11.04
(c)(3) .............................. N.A.
(d) .............................. N.A.
(e) .............................. 11.05
(f) .............................. 4.10
315(a) .............................. 7.01
(b) .............................. 7.05; 10.02
(c) .............................. 7.01
(d) .............................. 7.01
(e) .............................. 6.11
316(a)(last sentence) ........................... 11.06
(a)(1)(A) .............................. 6.05
(a)(1)(B) .............................. 6.04
(a)(2) .............................. N.A.
(b) .............................. 6.07
317(a)(1) .............................. 6.08
(a)(2) .............................. 6.09
(b) .............................. 2.04
318(a) .............................. 11.01
N.A. means Not Applicable.
_________________________
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
TABLE OF CONTENTS
Page
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ARTICLE 1 Definitions and Incorporation by Reference.............................................................1
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SECTION 1.01. Definitions....................................................................................1
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SECTION 1.02. Other Definitions.............................................................................44
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SECTION 1.03. Incorporation by Reference of Trust Indenture Act.............................................44
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SECTION 1.04. Rules of Construction.........................................................................45
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ARTICLE 2 The Securities........................................................................................46
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SECTION 2.01. Form and Dating...............................................................................46
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SECTION 2.02. Execution and Authentication..................................................................47
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SECTION 2.03. Registrar and Paying Agent....................................................................47
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SECTION 2.04. Paying Agent To Hold Money in Trust...........................................................49
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SECTION 2.05. Securityholder Lists..........................................................................49
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SECTION 2.06. Transfer and Exchange.........................................................................50
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SECTION 2.06. Replacement Securities........................................................................50
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SECTION 2.07. Outstanding Securities........................................................................51
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SECTION 2.08. Temporary Securities..........................................................................51
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SECTION 2.09. Cancellation..................................................................................52
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SECTION 2.10. Defaulted Interest............................................................................52
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SECTION 2.12. CUSIP Numbers.................................................................................53
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SECTION 2.11. Issuance of Additional Securities.............................................................53
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ARTICLE 3 Redemption............................................................................................54
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SECTION 3.01. Notices to Trustee............................................................................54
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SECTION 3.02. Selection of Securities To Be Redeemed........................................................55
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SECTION 3.03. Notice of Redemption..........................................................................55
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SECTION 3.04. Effect of Notice of Redemption................................................................56
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SECTION 3.05. Deposit of Redemption Price...................................................................57
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SECTION 3.06. Securities Redeemed in Part...................................................................57
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ARTICLE 4 Covenants.............................................................................................57
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SECTION 4.01. Payment of Securities.........................................................................57
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SECTION 4.02. SEC Reports...................................................................................58
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SECTION 4.03. Limitation on Indebtedness....................................................................59
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SECTION 4.04. Limitation on Restricted Payments.............................................................63
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SECTION 4.05. Limitation on Restrictions on Distributions from Restricted Subsidiaries......................72
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SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock............................................74
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SECTION 4.07. Limitation on Affiliate Transactions..........................................................79
SECTION 4.08. Limitation on the Sale or Issuance of Capital Stock of Restricted Subsidiaries................83
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SECTION 4.08. Change of Control.............................................................................83
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SECTION 4.10. Limitation on Liens...........................................................................86
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SECTION 4.11. Limitation on Sale/Leaseback Transactions.....................................................86
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SECTION 4.09. Amendment of Deferred Compensation Plans......................................................86
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SECTION 4.10. Additional Amounts............................................................................87
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SECTION 4.11. Compliance Certificate........................................................................90
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SECTION 4.12. Further Instruments and Acts..................................................................90
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ARTICLE 5 Successor Company.....................................................................................90
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SECTION 5.01. When the Company May Merge or Transfer Assets.................................................90
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SECTION 5.02. When Parent May Merge or Transfer Assets......................................................92
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ARTICLE 6 Defaults and Remedies.................................................................................93
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SECTION 6.01. Events of Default.............................................................................93
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SECTION 6.02. Acceleration..................................................................................96
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SECTION 6.03. Other Remedies................................................................................96
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SECTION 6.04. Waiver of Past Defaults.......................................................................97
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SECTION 6.05. Control by Majority...........................................................................97
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SECTION 6.06. Limitation on Suits...........................................................................97
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SECTION 6.07. Rights of Holders to Receive Payment..........................................................98
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SECTION 6.08. Collection Suit by Trustee....................................................................98
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SECTION 6.09. Trustee May File Proofs of Claim..............................................................99
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SECTION 6.10. Priorities....................................................................................99
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SECTION 6.11. Undertaking for Costs........................................................................100
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SECTION 6.12. Waiver of Stay or Extension Laws.............................................................100
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ARTICLE 7 Trustee..............................................................................................100
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SECTION 7.01. Duties of Trustee............................................................................100
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SECTION 7.02. Rights of Trustee............................................................................102
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SECTION 7.03. Individual Rights of Trustee.................................................................103
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SECTION 7.04. Trustee's Disclaimer.........................................................................103
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SECTION 7.05. Notice of Defaults...........................................................................104
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SECTION 7.06. Reports by Trustee to Holders................................................................104
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SECTION 7.07. Compensation and Indemnity...................................................................105
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SECTION 7.08. Replacement of Trustee.......................................................................106
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SECTION 7.09. Successor Trustee by Merger..................................................................107
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SECTION 7.10. Eligibility; Disqualification................................................................107
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SECTION 7.11. Preferential Collection of Claims Against Company............................................108
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ARTICLE 8 Discharge of Indenture; Defeasance...................................................................108
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SECTION 8.01. Discharge of Liability on Securities; Defeasance.............................................108
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SECTION 8.02. Conditions to Defeasance.....................................................................109
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SECTION 8.03. Application of Trust Money...................................................................111
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SECTION 8.04. Repayment to Company.........................................................................111
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SECTION 8.05. Indemnity for Government Obligations.........................................................112
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SECTION 8.06. Reinstatement................................................................................112
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ARTICLE 9 Amendments...........................................................................................112
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SECTION 9.01. Without Consent of Holders...................................................................112
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SECTION 9.02. With Consent of Holders......................................................................113
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SECTION 9.03. Compliance with Trust Indenture Act..........................................................115
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SECTION 9.04. Revocation and Effect of Consents and Waivers................................................115
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SECTION 9.05. Notation on or Exchange of Securities........................................................116
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SECTION 9.06. Trustee To Sign Amendments...................................................................116
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SECTION 9.07. Payment for Consent..........................................................................116
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ARTICLE 10 Guarantee...........................................................................................116
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SECTION 10.01. Guarantee...................................................................................117
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SECTION 10.02. Successors and Assigns......................................................................119
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SECTION 10.03. No Waiver...................................................................................119
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SECTION 10.04. Modification................................................................................120
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SECTION 10.05. Release of Guarantor and Termination of Parent Guaranty.....................................120
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ARTICLE 11 Miscellaneous.......................................................................................120
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SECTION 11.01. Trust Indenture Act Controls................................................................120
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SECTION 11.02. Notices.....................................................................................121
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SECTION 11.03. Communication by Holders with Other Holders.................................................122
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SECTION 11.04. Certificate and Opinion as to Conditions Precedent..........................................122
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SECTION 11.05. Statements Required in Certificate or Opinion...............................................123
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SECTION 11.06. When Securities Disregarded.................................................................123
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SECTION 11.07. Rules by Trustee, Paying Agent and Registrar................................................124
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SECTION 11.08. Legal Holidays..............................................................................124
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SECTION 11.09. GOVERNING LAW...............................................................................124
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SECTION 11.10. No Recourse Against Others..................................................................124
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SECTION 11.11. Successors..................................................................................124
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SECTION 11.12. Multiple Originals..........................................................................124
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SECTION 11.13. Consent to Jurisdiction; Appointment of Agent for Service of Process........................124
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SECTION 11.14. Table of Contents; Headings.................................................................126
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Rule 144A/Regulation S Appendix
Exhibit 1 - Form of Initial Security
Exhibit A - Form of Exchange Security or Private Exchange
Security
INDENTURE dated as of May 13, 2002, among
SEAGATE TECHNOLOGY HDD HOLDINGS, an exempted limited
liability company organized under the laws of the
Cayman Islands (the "Company"), SEAGATE TECHNOLOGY
HOLDINGS, an exempted limited liability company
organized under the laws of the Cayman Islands
("Parent"), and U.S. BANK, N.A., a national banking
association, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's
Initial Securities, Exchange Securities and Private Exchange Securities
(collectively, the "Securities"):
Definitions and Incorporation by Reference
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Definitions.
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"Additional Assets" means (1) any property, plant or equipment
used in a Related Business, (2) the Capital Stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such Capital Stock by
the Company or another Restricted Subsidiary or (3) Capital Stock constituting a
minority interest in any Person that at such time is a Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary described in clause (2)
- -------- -------
or (3) above is primarily engaged in a Related Business.
"Additional Interest" means "Additional Interest" as defined
in the Registration Rights Agreement.
"Additional Securities" means, subject to the Company's
compliance with Section 4.03, 8% Senior Notes Due 2009 issued from time to time
after the Issue Date under the terms of this Indenture (other than pursuant to
Section 2.06, 2.07, 2.09 or 3.06 of this Indenture and other than Exchange
Securities or Private Exchange Securities issued
pursuant to an exchange offer for other Securities outstanding under this
Indenture).
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any 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. For
purposes of Sections 4.04, 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 10% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"Applicable Premium" means, with respect to a Security at any
redemption date, the greater of (1) 1.0% of the principal amount of such
Security and (2) the excess of (A) the present value of (x) the redemption price
of such Security at May 15, 2006, as set forth in such Security (but excluding
accrued interest) plus (y) all required interest payments due on such Security
through May 15, 2006, computed using a discount rate equal to the Treasury Rate
plus 50 basis points over (B) the then-outstanding principal amount of such
Security.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of
(1) any shares of Capital Stock of a 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),
2
(2) all or substantially all the assets of any division or
line of business of the Company or any Restricted Subsidiary, or
(3) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or
such Restricted Subsidiary,
other than, in the case of (1), (2) and (3) above, (A) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (B) sales or other dispositions of
obsolete, uneconomical, negligible, worn-out or surplus assets, in each case in
the ordinary course of business, (C) issuances of (i) options, warrants or other
rights to purchase common stock of a Restricted Subsidiary or (ii) shares of
common stock of such Restricted Subsidiary upon exercise of such options,
warrants or other rights to officers, directors and employees of such Restricted
Subsidiary pursuant to the terms of agreements (including employment agreements)
or employee or director benefit plans (or amendments thereto) approved by the
Board of Directors of the Company in good faith; provided, however, that shares
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of common stock of such Restricted Subsidiary issued pursuant to the exercise of
such options, warrants or other rights to purchase such common stock which are
subject to this clause (C) shall not exceed 20% of the outstanding shares of
common stock of such Restricted Subsidiary, on a fully diluted basis, (D) for
purposes of Section 4.06 only, (i) a disposition that constitutes a Restricted
Payment permitted by Section 4.04 or a Permitted Investment, (ii) a disposition
of all or substantially all the assets of the Company in accordance with Section
5.01 and (z) a disposition of Capital Stock, Indebtedness or other securities of
an Unrestricted Subsidiary, (E) a disposition of Temporary Cash Investments, (F)
sales of assets received by the Company or any Restricted Subsidiary upon
foreclosure of a Lien, (G) the lease or sublease of office and factory space in
the ordinary course of business and (H) a disposition of assets with a fair
market value of less than $1 million.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of
3
determination, the present value (discounted at the interest rate borne by the
Securities, compounded annually) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such lease has been
extended); provided, however, that if such Sale/Leaseback Transaction results in
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a Capital Lease Obligation, the amount of Indebtedness represented thereby will
be determined in accordance with the definition of "Capital Lease Obligation."
"Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (1) the sum of
the products of the number of years from the date of determination to the dates
of each successive scheduled principal payment of or redemption or similar
payment with respect to such Indebtedness multiplied by the amount of such
payment by (2) the sum of all such payments.
"Board of Directors" with respect to a Person means the Board
of Directors of such Person or any committee thereof duly authorized to act on
behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means an obligation that is
required to be classified and accounted for as a capital lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty. For purposes of Section 4.10, a Capital
Lease Obligation will be deemed to be secured by a Lien on the property being
leased.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options,
4
participations or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but excluding any debt
securities convertible into such equity.
"Change of Control" means the occurrence of any of the
following events:
(1) prior to the earlier to occur of (A) the first public
offering of common stock of Parent or (B) the first public offering of
common stock of the Company, the Permitted Holders cease to be the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of a majority in the aggregate
of the total voting power of the Voting Stock of Parent or the Company,
whether as a result of issuance of securities of Parent or the Company,
any merger, consolidation, liquidation or dissolution of Parent or the
Company, or any direct or indirect transfer of securities by Parent or
the Company or otherwise (for purposes of this clause (1) and clause
(2) below, the Permitted Holders shall be deemed to beneficially own
any Voting Stock of a Person (the "specified Person") held by any other
Person (the "parent entity") so long as the Permitted Holders
beneficially own (as so defined), directly or indirectly, in the
aggregate a majority of the voting power of the Voting Stock of the
parent entity);
(2) any "person" (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 clause (1) above,
except that for purposes of this clause (2) such person shall be deemed
to have "beneficial ownership" of all shares that any 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
35% of the total voting power of the Voting Stock of the Company;
provided, however, that the Permitted Holders beneficially own (as
-------- -------
defined in clause (1) above), directly or indirectly, in the aggregate
a lesser percentage of the total voting power of the Voting Stock of
the Company than
5
such other person and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of
the Board of Directors of the Company (for the purposes of this clause
(2), such other person shall be deemed to beneficially own any Voting
Stock of a specified Person held by a parent entity, if such other
person is the beneficial owner (as defined in this clause (2)),
directly or indirectly, of more than 35% of the voting power of the
Voting Stock of such parent entity and the Permitted Holders
beneficially own (as defined in clause (1) above), directly or
indirectly, in the aggregate a lesser percentage of the voting power of
the Voting Stock of such parent entity and do not have the right or
ability by voting power, contract or otherwise to elect or designate
for election a majority of the board of directors of such parent
entity);
(3) individuals who on the Issue Date constituted the Board
of Directors of the Company or the Parent Board (together with any new
directors whose election by such Board of Directors of the Company or
the Parent Board or whose nomination for election by the shareholders
of the Company or Parent, as the case may be, was approved by a vote of
a majority of the directors of the Company or of Parent, as the case
may be, then still in office who were either directors on the Issue
Date 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 or the Parent Board then in office;
(4) the adoption of a plan relating to the liquidation or
dissolution of the Company; or
(5) the merger or consolidation of Parent or the Company
with or into another Person or the merger of another Person with or
into Parent or the Company, or the sale of all or substantially all the
assets of Parent or the Company (determined on a consolidated basis) to
another Person (other than, in all such cases, a Person that is
controlled by the Permitted
6
Holders), other than a transaction following which, in the case of a
merger or consolidation transaction, holders of securities that
represented 100% of the Voting Stock of Parent or the Company
immediately prior to such transaction (or other securities into which
such securities are converted as part of such merger or consolidation
transaction) own directly or indirectly at least a majority of the
voting power of the Voting Stock of the surviving Person in such merger
or consolidation transaction immediately after such transaction and in
substantially the same proportion as before the transaction.
Following the first day that Parent is permitted to be released from the Parent
Guaranty in connection with an initial public offering of the Company, as
described in Section 10.05(a), all references to Parent and Parent Board in
clauses (1) to (5) above shall be deemed to be deleted.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commodity Agreements" means, with respect to any Person, any
agreement for protection against fluctuations in commodity prices or any similar
agreements or arrangements to which such Person is a party or of which it is a
beneficiary.
"Company" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the indenture securities.
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of (x) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters for which financial statements are
internally available to the Company ending prior to the date of such
determination to (y) Consolidated Interest Expense for such four fiscal
quarters; provided, however, that:
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7
(1) if the Company or any Restricted Subsidiary has Incurred
any Indebtedness since the beginning of such period that remains
outstanding or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio is an Incurrence of Indebtedness,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day
of such period;
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since
the beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on
the date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense
for such period shall be calculated on a pro forma basis as if such
discharge had occurred on the first day of such period and as if the
Company or such Restricted Subsidiary has not earned the interest
income actually earned during such period in respect of cash or
Temporary Cash Investments used to repay, repurchase, defease or
otherwise discharge such Indebtedness;
(3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition, EBITDA for
such period shall be reduced by an amount equal to EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Disposition for such period, or increased by an amount equal to EBITDA
(if negative), directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense directly attributable
to any Indebtedness of the Company or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the
Company and its
8
continuing Restricted Subsidiaries in connection with such Asset
Disposition for such period (or, if the Capital Stock of any
Restricted Subsidiary is sold, the Consolidated Interest Expense for
such period directly attributable to the Indebtedness of such
Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale);
(4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction
requiring a calculation to be made hereunder, which constitutes all or
substantially all of an operating unit of a business, EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any
Indebtedness) as if such Investment or acquisition occurred on the
first day of such period; and
(5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into
the Company or any Restricted Subsidiary since the beginning of such
period) shall have made any Asset Disposition, any Investment or
acquisition of assets that would have required an adjustment pursuant
to clause (3) or (4) above if made by the Company or a Restricted
Subsidiary during such period, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition, Investment or acquisition
occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is
to be given to an acquisition of assets or other Investment, the amount of
income or earnings relating thereto, the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred in connection therewith and any
operating expense reductions and other
9
adjustments as described below, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting Officer of the Company
and (i) shall, except as described below in clause (iii), comply with the
requirements of Rule 11-02 of Regulation S-X of the SEC, (ii) may include
adjustments for operating expense reductions that would be permitted by such
Rule and (iii) in connection with acquisitions, purchases or mergers, may
reflect adjustments not permitted by such Rule for the elimination of operating
expenses attributable to any terminated lease or contract, the related reduction
in personnel or facility expenses as a result of such termination and the
elimination of personnel expenses as a result of severance and of facilities
expense as a result of the termination, closure or relocation of facilities, in
each case if such termination, severance, closure or relocation has occurred at
the time of such acquisition, purchase or merger or occurs within three months
thereof.
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries, plus, to the extent not included in such total interest expense,
and to the extent incurred by the Company or its Restricted Subsidiaries,
without duplication,
(1) interest expense attributable to Capital Lease
Obligations and the interest expense attributable to leases
constituting part of a Sale/Leaseback Transaction,
(2) amortization of debt discount and debt issuance cost
(other than any costs associated with the Incurrence of Indebtedness
with respect to the Securities and the Credit Agreement),
(3) capitalized interest,
(4) non-cash interest expense,
(5) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing,
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(6) net payments pursuant to Hedging Obligations,
(7) Preferred Stock dividends in respect of all Preferred
Stock held by Persons other than the Company or a Restricted Subsidiary
(other than dividends payable solely in Capital Stock (other than
Disqualified Stock) of the issuer of such Preferred Stock); provided,
--------
however, that such dividends will be multiplied by a fraction the
-------
numerator of which is one and the denominator of which is one minus the
effective combined tax rate of the issuer of such Preferred Stock
(expressed as a decimal) for such period (as estimated by the Chief
Financial Officer of the Company in good faith),
(8) interest incurred in connection with Investments in
discontinued operations,
(9) interest accruing on any Indebtedness of any other
Person to the extent such Indebtedness is Guaranteed by (or secured by
the assets of) the Company or any Restricted Subsidiary, and
(10) the cash contributions to any employee stock ownership
plan or similar trust to the extent such contributions are used by such
plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or
trust.
"Consolidated Net Income" means, for any period, the net
income of the Company and its consolidated Subsidiaries; provided, however, that
-------- -------
there shall not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if
such Person is not a Restricted Subsidiary, except that
(A) subject to the exclusion contained in clause (4)
below, the Company's equity in the net income of any such
Person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually
distributed
11
by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution paid
to a Restricted Subsidiary, to the limitations contained in
clause (3) below), and
(B) the Company's equity in a net loss of any such
Person to the extent accounted for pursuant to the equity
method of accounting for such period shall be included in
determining such Consolidated Net Income;
(2) any net income (or loss) of any Person acquired by the
Company or a Subsidiary in a pooling of interests transaction for any
period prior to the date of such acquisition;
(3) any net income of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions
by such Restricted Subsidiary, directly or indirectly, to the Company,
except that
(A) subject to the exclusion contained in clause
(4) below, the Company's equity in the net income of any such
Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of
cash that could have been distributed by such Restricted
Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution paid
to another Restricted Subsidiary, to the limitation contained
in this clause), and
(B) the Company's equity in a net loss of any such
Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;
12
(4) any gain (or loss) realized upon the sale or other
disposition of any assets of the Company, its consolidated Subsidiaries
or any other Person (including pursuant to any sale-and-leaseback
arrangement) which is not sold or otherwise disposed of in the ordinary
course of business and any gain (or loss) realized upon the sale or
other disposition of any Capital Stock of any Person;
(5) extraordinary gains or losses; and
(6) the cumulative effect of a change in accounting
principles.
Notwithstanding the foregoing, for the purposes of Section 4.04 only, there
shall be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of Investments or
return of capital to the Company or a Restricted Subsidiary to the extent such
repurchases, repayments, redemptions, proceeds or returns increase the amount of
Restricted Payments permitted under Section 4.04(a)(3)(D).
"Credit Agreement" means the Credit Agreement to be entered
into by and among Parent, the Company, Seagate Technology (US) Holdings, Inc.,
the lenders referred to therein, JPMorgan Chase Bank, as Administrative Agent,
Morgan Stanley Senior Funding, Inc., as Syndication Agent, and Citicorp USA,
Inc., Credit Suisse First Boston and Merrill Lynch Capital Corporation, as
Documentation Agents, together with the related documents thereto (including the
term loans and revolving loans thereunder, any guarantees and security
documents), as amended, extended, renewed, restated, supplemented or otherwise
modified (in whole or in part, and without limitation as to amount, terms,
conditions, covenants and other provisions) from time to time, and any other
agreement or agreements (and related document or documents) governing
Indebtedness incurred to Refinance, in whole or in part, the borrowings and
commitments then outstanding or permitted to be outstanding under such Credit
Agreement or a successor Credit Agreement, whether by the same or any other
lender or group of lenders.
13
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Deferred Compensation Plans" means (1) the deferred
compensation plan dated as of November 22, 2000, of the Company (as amended,
waived, supplemented or otherwise modified from time to time in compliance with
the provisions set forth in Section 4.12), (2) any other plan established in
lieu of, or to renew or replace, in whole or in part, any plan referred to in
clause (1) above or this clause (2) and any other similar plan the purpose or
effect of which is to provide the participants therein the benefits that they
are entitled to on the Issue Date under the plans described in clause (1) above
or this clause (2), and (3) any Guarantee by the Company or any of its
Subsidiaries, that is in effect on the Issue Date and is described in the
Offering Memorandum, of any obligation under any Deferred Compensation Plan
referred to in clauses (1) and (2) above.
"Designated Preferred Stock" means Preferred Stock of the
Company (other than Disqualified Stock and Excluded Contributions) that is
issued for cash (other than to a Subsidiary of the Company or an employee stock
ownership plan or trust established by the Company or any of its Subsidiaries)
and is so designated as Designated Preferred Stock, pursuant to an Officers'
Certificate executed by an Officer of the Company on the issuance date thereof,
the cash proceeds of which are excluded from the calculation set forth in
Section 4.04(a)(3).
"Disqualified Stock" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable at the option of the holder) or
upon the happening of any event
14
(1) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise,
(2) is convertible or exchangeable at the option of the
holder for Indebtedness or Disqualified Stock, or
(3) is mandatorily redeemable or must be purchased upon the
occurrence of certain events or otherwise, in whole or in part,
in each case on or prior to 91 days after the Stated Maturity of the Securities;
provided, however, that if such Capital Stock is issued to any employee of the
- -------- -------
Company or any of its Subsidiaries or to any plan for the benefit of employees
of the Company or any of its Subsidiaries or by any such plan to such employees,
such Capital Stock shall not constitute Disqualified Stock solely because it may
be required to be repurchased by the Company in order to satisfy obligations as
a result of such employees' death or disability; and provided further, however,
-------- -------- --------
that any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
purchase or redeem such Capital Stock upon the occurrence of an "asset sale" or
"change of control" occurring prior to 91 days after the Stated Maturity of the
Securities shall not constitute Disqualified Stock if:
(1) the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more favorable to the holders
of such Capital Stock than the terms applicable to the Securities as
described in Sections 4.06 and 4.09 and
(2) any such requirement only becomes operative after
compliance with such terms applicable to the Securities, including the
purchase of any Securities tendered pursuant thereto.
The amount of any Disqualified Stock that does not have a
fixed redemption, repayment or repurchase price will be calculated in accordance
with the terms of such Disqualified Stock as if such Disqualified Stock were
15
redeemed, repaid or repurchased on any date on which the amount of such
Disqualified Stock is to be determined pursuant to this Indenture; provided,
--------
however, that if such Disqualified Stock could not be required to be redeemed,
- -------
repaid or repurchased at the time of such determination, the redemption,
repayment or repurchase price will be the book value of such Disqualified Stock
as reflected in the most recent financial statements of such Person.
"EBITDA" for any period means the sum of Consolidated Net
Income, plus the following to the extent deducted in calculating such
Consolidated Net Income:
(1) all income tax expense of the Company and its
consolidated Restricted Subsidiaries,
(2) Consolidated Interest Expense,
(3) depreciation and amortization expense of the Company and
its consolidated Restricted Subsidiaries (excluding amortization
expense attributable to a prepaid operating activity item that was paid
in cash in a prior period),
(4) all other non-cash charges and other non-operating
losses and expenses of the Company and its consolidated Restricted
Subsidiaries (excluding any such non-cash charge or other non-operating
loss or expense to the extent that it represents an accrual of or
reserve for cash expenditures in any future period),
(5) all expenses and charges as a result of the Refinancing
Transactions,
(6) any annual management, consulting, monitoring and
advisory fees paid by the Company and its Restricted Subsidiaries to
any of the Sponsors, in an amount not to exceed $5 million in the
aggregate in any calendar year, and
(7) any non-recurring charge relating to a restructuring
plan of the Company and its Restricted Subsidiaries,
16
in each case for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and amortization
and non-cash charges of, a Restricted Subsidiary shall be added to Consolidated
Net Income to compute 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 and only if a corresponding amount would be permitted at
the date of determination to be dividended or distributed to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.
"Equity Offering" means any public or private sale of common
stock or Preferred Stock of the Company or Parent other than (1) public
offerings with respect to the Company's or Parent's common stock registered on
Form S-8, (2) any public or private sale that constitutes Disqualified Stock,
Designated Preferred Stock or an Excluded Contribution and (3) other issuances
upon exercise of options by employees of Parent, the Company or any of the
Restricted Subsidiaries.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Contributions" means the Net Cash Proceeds received
by the Company after the Issue Date from (1) contributions (other than from a
Subsidiary of the Company or an employee stock ownership plan or trust
established by the Company or any of its Subsidiaries) to its common equity
capital and (2) the sale (other than to a Subsidiary of the Company or to any
Company or Subsidiary management equity plan or stock option plan or any other
management or employee benefit plan or agreement or an employee stock ownership
plan or trust established by the Company or any of its Subsidiaries) of Capital
Stock (other than Disqualified Stock and Designated Preferred Stock) of the
Company, in each case designated as Excluded Contributions pursuant to an
Officers' Certificate executed
17
by an Officer of the Company on the issuance date thereof, the cash proceeds of
which are excluded from the calculation set forth in Section 4.04(a)(3).
"Fiscal 2002" means the fiscal year commencing June 30, 2001
and ending on June 28, 2002.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the Issue Date, including those set
forth in
(1) the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants,
(2) statements and pronouncements of the Financial
Accounting Standards Board,
(3) such other statements by such other entity as approved
by a significant segment of the accounting profession, and
(4) the rules and regulations of the SEC governing the
inclusion of financial statements (including pro forma financial
statements) in periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements
in staff accounting bulletins and similar written statements from the
accounting staff of the SEC.
All ratios and computations based on GAAP contained in this
Indenture shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(1) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such Person (whether
arising by virtue
18
of partnership arrangements, or by agreements to keep-well, to
purchase assets, goods, securities or services, to take-or-pay or to
maintain financial statement conditions or otherwise) or
(2) entered into for the purpose of assuring in any other
manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in
part);
provided, however, that the term "Guarantee" shall not include endorsements for
- -------- -------
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement, Currency Agreement,
Commodity Agreement or similar agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness or Capital Stock of
-------- -------
a Person existing at the time such Person becomes a Restricted Subsidiary
(whether by merger, consolidation, acquisition or otherwise) shall be deemed to
be Incurred by such Person at the time it becomes a Restricted Subsidiary. The
term "Incurrence" when used as a noun shall have a correlative meaning. Solely
for purposes of determining compliance with Section 4.03,
(1) amortization of debt discount or the accretion of
principal with respect to a non-interest bearing or other discount
security,
(2) the payment of regularly scheduled interest in the form
of additional Indebtedness of the same instrument or the payment of
regularly scheduled dividends on Capital Stock in the form of
additional
19
Capital Stock of the same clause and with the same terms, and
(3) the obligation to pay a premium in respect of
Indebtedness arising in connection with the issuance of a notice of
redemption or the making of a mandatory offer to purchase such
Indebtedness
shall not be deemed to be the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication):
(1) the principal in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable, including, in each case, any
premium on such indebtedness to the extent such premium has become due
and payable;
(2) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered
into by such Person;
(3) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations
of such Person and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable arising in
the ordinary course of business);
(4) all obligations of such Person for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar
credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in
clauses (1) through (3) above) entered into in the ordinary course of
business of such Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the 30th Business Day following payment on the
letter of credit);
20
(5) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary of such Person,
any Preferred Stock (but excluding, in each case, any accrued
dividends);
(6) all obligations of the type referred to in clauses (1)
through (5) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise, including
by means of any Guarantee;
(7) all obligations of the type referred to in clauses (1)
through (6) of other Persons secured by any Lien on any property or
asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of
the value of such property or assets and the amount of the obligation
so secured; and
(8) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
Notwithstanding the foregoing, in connection with the purchase
by the Company or any Restricted Subsidiary of any business, the term
"Indebtedness" shall exclude post-closing payment adjustments to which the
seller may become entitled to the extent such payment is determined by a final
closing balance sheet or such payment depends on the performance of such
business after the closing; provided, however, that, at the time of closing, the
-------- -------
amount of any such payment is not determinable and, to the extent such payment
thereafter becomes fixed and determined, the amount is paid within 60 days
thereafter.
The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at such
date; provided, however, that in the case of Indebtedness sold at a discount,
-------- -------
the amount of such Indebtedness at any time will be the accreted value thereof
21
at such time. Notwithstanding the foregoing, in no event shall Indebtedness
include any liabilities incurred under the Deferred Compensation Plans.
"Indemnification Agreement" means that certain Indemnification
Agreement dated as of March 29, 2000, among Seagate Technology, Inc., VERITAS
Software Corporation and Suez Acquisition Company (Cayman) Limited.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Independent Qualified Party" means an investment banking
firm, accounting firm or appraisal firm of national standing; provided, however,
-------- -------
that such firm is not an Affiliate of the Company.
"Initial Purchasers" means Morgan Stanley & Co. Incorporated,
J.P. Morgan Securities Inc., Credit Suisse First Boston Corporation, Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc.
"Interest Rate Agreement" means in respect of a Person any
interest rate swap agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect such Person against fluctuations in
interest rates.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet of the
lender) or other extensions of credit (including by way of Guarantee or similar
arrangement) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition of Capital Stock, Indebtedness
or other similar instruments issued by such Person. Except as otherwise provided
for herein, the amount of an Investment shall be its fair value at the time the
Investment is made and without giving effect to subsequent changes in value.
22
For purposes of the definition of "Unrestricted Subsidiary",
the definition of "Restricted Payment" and Section 4.04,
(1) "Investment" shall include the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair market
value of the net assets of any Subsidiary of the Company at the time
that such Subsidiary is designated an Unrestricted Subsidiary;
provided, however, that upon a redesignation of such Subsidiary as a
-------- -------
Restricted Subsidiary, the Company shall be deemed to continue to have
a permanent "Investment" in an Unrestricted Subsidiary equal to an
amount (if positive) equal to (A) the Company's "Investment" in such
Subsidiary at the time of such redesignation less (B) the portion
(proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of such Subsidiary at the time
of such redesignation, and
(2) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of
Directors of the Company.
"Investment Grade Rating" means a rating equal to or higher
than Baa3 (or the equivalent) by Moody's and BBB-(or the equivalent) by S&P or
an equivalent rating by any other Rating Agency.
"Issue Date" means May 13, 2002.
"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).
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"Net Available Cash" from an Asset Disposition means cash
payments received therefrom (including any cash payments received by way of
deferred payment of principal
23
pursuant to a note or installment receivable or otherwise and proceeds from the
sale or other disposition of any securities received as consideration, but only
as and when received, but excluding any other consideration received in the form
of assumption by the acquiring Person of Indebtedness or other obligations
relating to such properties or assets or received in any other noncash form), in
each case net of
(1) all legal, accounting, investment banking and brokerage
fees and expenses and all title and recording tax expenses, commissions
and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be accrued as a
liability under GAAP, as a consequence of such Asset Disposition,
(2) all payments made on any Indebtedness which is secured
by any assets subject to such Asset Disposition, in accordance with
the terms of any Lien upon or other security agreement of any kind
with respect to such assets, or which must by its terms, or in order
to obtain a necessary consent to such Asset Disposition, or by
applicable law, be repaid out of the proceeds from such Asset
Disposition,
(3) all distributions and other payments required to be made
to minority interest holders in Restricted Subsidiaries as a result of
such Asset Disposition and
(4) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities
associated with the property or other assets disposed in such Asset
Disposition and retained by the Company or any Restricted Subsidiary
after such Asset Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of
Capital Stock or Indebtedness, means the cash proceeds of such issuance or sale
net of attorneys' fees, accountants' fees, underwriters', initial purchasers' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees actually incurred in
24
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"New SAC" means New SAC, an exempted limited liability company
organized under the laws of the Cayman Islands.
"Obligations" means with respect to any Indebtedness all
obligations for principal, premium, interest, penalties, fees, indemnifications,
reimbursements, and other amounts payable pursuant to the documentation
governing such Indebtedness.
"Offering Memorandum" means the Offering Memorandum dated as
of May 3, 2002, relating to the issuance of the Securities.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Parent" means the party named as such in this Indenture until
a successor replaces it and, thereafter, means the successor.
"Parent Board" means the Board of Directors of Parent or any
committee thereof duly authorized to act on behalf of such Board.
"Parent Guaranty" means the Guarantee by Parent of the
Company's obligations with respect to the Securities.
"Permitted Holders" means (1) the Sponsors, (2) members of
management of the Company, Parent, New SAC or
25
Seagate Technology International who own Capital Stock of Parent on the Issue
Date and (3) each of their Affiliates.
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in
(1) the Company, a Restricted Subsidiary or a Person that
will, upon the making of such Investment, become a Restricted
Subsidiary; provided, however, that the primary business of such
-------- -------
Restricted Subsidiary is a Related Business,
(2) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or a
Restricted Subsidiary; provided, however, that such Person's primary
-------- -------
business is a Related Business,
(3) cash and Temporary Cash Investments,
(4) receivables owing to the Company or any Restricted
Subsidiary if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concessionary
-------- -------
trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances,
(5) payroll, travel, moving and similar advances to cover
matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the
ordinary course of business,
(6) loans or advances to employees and directors made in the
ordinary course of business and not exceeding $15 million at any time
outstanding,
(7) stock, obligations or securities received in settlement
of debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments,
26
(8) any Person to the extent such Investment represents the
non-cash portion of the consideration received for an Asset Disposition
as permitted pursuant to Section 4.06,
(9) any Person to the extent such Investment exists on the
Issue Date and any Investment that replaces or refunds such an
Investment; provided, however, that the replacing or refunding
-------- -------
Investment is in an amount that does not exceed the amount of the
replaced or refunded Investment (valued at the time made and without
giving effect to subsequent changes in value) and is made in the same
Person as the replaced or refunded Investment,
(10) any Person; provided, however, that the payment for
-------- -------
such Investments consists solely of Capital Stock of the Company or its
Subsidiaries (other than Disqualified Stock),
(11) any Person to the extent such Investment consists of
the licensing of intellectual property pursuant to joint venture,
strategic alliances or joint marketing arrangements with such Person,
in each case made in the ordinary course of business,
(12) a vendor or supplier to the extent such Investment
consists of loans or advances to such vendor or supplier in connection
with any guarantees to the Company or any Restricted Subsidiary of
supply by, or to fund the supply capacity of, such vendor or supplier,
in any case not to exceed $50 million at any one time outstanding,
(13) any Person where such Investment was acquired by the
Company or any of its Restricted Subsidiaries (a) in exchange for any
other Investment or accounts receivable held by the Company or any such
Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer
of such other Investment or accounts receivable or (b) as a result of a
foreclosure by the Company or any of its
27
Restricted Subsidiaries with respect to any secured Investment or
other transfer of title with respect to any secured Investment in
default,
(14) Hedging Agreements permitted under Section 4.03(b)(8),
(15) any Person; provided, however, that such Investment is
-------- -------
acquired by the Company or any of its Restricted Subsidiaries (a) in
exchange for any other Investment or accounts receivable held by the
Company or any such Restricted Subsidiary in connection with or as a
result of a bankruptcy, workout, reorganization or recapitalization of
the issuer of such other Investment or accounts receivable or (b) as a
result of a foreclosure by the Company or any of its Restricted
Subsidiaries on a Lien,
(16) any Person consisting of Guarantees issued in
accordance with Section 4.03, and
(17) any other Persons (in addition to the Investments
permitted by clauses (1) through (16) of this definition) in aggregate
amount not to exceed $200 million at any time outstanding; provided,
--------
however, that not more than $100 million in aggregate amount of such
-------
Investments may be made in any calendar year.
"Permitted Liens" means, with respect to any Person,
(1) pledges or deposits by such Person under worker's
compensation laws, unemployment insurance laws or similar legislation,
or good faith deposits in connection with bids, tenders, contracts
(other than for the payment of Indebtedness) or leases to which such
Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States
government bonds to secure surety or appeal bonds to which such Person
is a party, or deposits as security for contested taxes or import
duties or for the payment of rent, in each case Incurred in the
ordinary course of business;
28
(2) Liens imposed by law, such as carriers', warehousemen's
and mechanics' Liens and other similar Liens, in each case for sums not
yet overdue by more than 30 days or being contested in good faith by
appropriate proceedings or other Liens arising out of judgments or
awards against such Person with respect to which such Person shall then
be proceeding with an appeal or other proceedings for review and Liens
arising solely by virtue of any statutory or common law provision
relating to banker's Liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided, however, that (A) such
-------- -------
deposit account is not a dedicated cash collateral account and is not
subject to restrictions against access by the Company in excess of
those set forth by regulations promulgated by the Federal Reserve Board
and (B) such deposit account is not intended by the Company or any
Restricted Subsidiary to provide collateral to the depository
institution;
(3) Liens for taxes, assessments or other governmental
charges not yet due or payable or subject to penalties for non-payment
or which are being contested in good faith by appropriate proceedings;
(4) Liens to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(5) minor survey exceptions, minor encumbrances, easements
or reservations of, or rights of others for, licenses, rights-of-way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of real
property or Liens incidental to the conduct of the business of such
Person or to the ownership of its properties which were not Incurred in
connection with Indebtedness and which do not in the aggregate
materially adversely affect the value of
29
said properties or materially impair their use in the operation of the
business of such Person;
(6) Liens securing Indebtedness Incurred to finance the
construction, purchase or lease of, or repairs, improvements or
additions to, property (real or personal, tangible or intangible),
plant or equipment (whether through the direct purchase of assets or
the Capital Stock of any person owning such assets) of such Person;
provided, however, that the Lien may not extend to any other property
-------- -------
owned by such Person or any of its Restricted Subsidiaries at the time
the Lien is Incurred (other than assets and property affixed or
appurtenant thereto), and the Indebtedness (other than any interest
thereon) secured by the Lien may not be Incurred more than 180 days
after the later of the acquisition, completion of construction, repair,
improvement, addition or commencement of full operation of the property
subject to the Lien;
(7) Liens to secure Indebtedness permitted under Section
4.03(b)(1);
(8) Liens existing on the Issue Date;
(9) Liens on property or shares of Capital Stock of another
Person at the time such other Person becomes a Subsidiary of such
Person; provided, however, that the Liens may not extend to any other
-------- -------
property owned by such Person or any of its Restricted Subsidiaries
(other than assets and property affixed or appurtenant thereto);
(10) Liens securing Hedging Obligations so long as such
Hedging Obligations relate to Indebtedness that is, and is permitted to
be under this Indenture, secured by a Lien on the same property
securing such Hedging Obligations;
(11) Liens on property at the time the Company or a
Restricted Subsidiary acquires such property, including any
acquisition by means of a merger or consolidation with or into the
Company or any
30
Restricted Subsidiary; provided, however, that such Liens are not
-------- -------
created or Incurred in connection with, or in contemplation of, such
acquisition; provided further, however, that the Liens may not extend
-------- ------- -------
to any other property owned by the Company or any Restricted
Subsidiary;
(12) Liens on specific items of inventory or other goods of
any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person solely to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(13) Liens consisting of leases and subleases of real
property by the Company or any of its Restricted Subsidiaries which do
not materially interfere with the ordinary conduct of the business of
the Company or any of its Restricted Subsidiaries;
(14) Liens arising from Uniform Commercial Code financing
statement filings by lessors regarding operating leases entered into by
such lessors and the Company and its Restricted Subsidiaries in the
ordinary course of business;
(15) Liens in favor of the Company or any of its Restricted
Subsidiaries;
(16) Liens over goods in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of such goods;
(17) licenses of intellectual property of the Company and
its Restricted Subsidiaries granted in the ordinary course of business;
(18) to the extent not included in clauses (1) through (17)
above, any other Lien that is permitted under the Credit Agreement in
effect as of the Issue Date; and
31
(19) Liens to secure any Refinancing (or successive
Refinancings) as a whole, or in part, of any Indebtedness secured by
any Lien referred to in the foregoing clauses (6), (7), (8), (9), (10),
(11) or (14); provided, however, that:
-------- -------
(A) such new Lien shall be limited to all or part
of the same property and assets that secured or, under the
written agreements pursuant to which the original Lien arose,
could secure the original Lien (plus improvements and
accessions to, such property or proceeds or distributions
thereof); and
(B) the Indebtedness secured by such Lien at such
time is not increased to any amount greater than the sum of
(x) the outstanding principal amount or, if greater, committed
amount of the Indebtedness described under clauses (6), (7),
(8), (9), (10), (13) or (16) at the time the original Lien
became a Permitted Lien and (y) an amount necessary to pay any
fees and expenses, including premiums, related to such
refinancing, refunding, extension, renewal or replacement.
Notwithstanding the foregoing, "Permitted Liens" will not
include any Lien described in clauses (6), (9) or (10) above to the extent such
Lien applies to any Additional Assets acquired directly or indirectly from Net
Available Cash pursuant to Section 4.06. For purposes of this definition, the
term "Indebtedness" shall be deemed to include interest on such Indebtedness.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however designated) which
is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary
32
liquidation or dissolution of such Person, over shares of Capital Stock of any
other class of such Person.
"principal" of a Security means the principal of the Security
plus the premium, if any, payable on the Security which is due or overdue or is
to become due at the relevant time.
"Publicly Traded Equity Securities" means equity securities
of companies (other than any Affiliate of the Company) which are listed on the
New York Stock Exchange, the Nasdaq National Market or another recognized
national securities exchange.
"Purchase Money Indebtedness" means Indebtedness
(1) consisting of the deferred purchase price of an asset,
conditional sale obligations, obligations under any title retention
agreement and other purchase money obligations, in each case where the
maturity of such Indebtedness does not exceed the anticipated useful
life of the asset being financed, and
(2) incurred to finance the acquisition by the Company or a
Restricted Subsidiary of such asset, including additions and
improvements;
provided, however, that such Indebtedness is incurred within 180 days after the
- -------- -------
acquisition by the Company or such Restricted Subsidiary of such asset.
"Rating Agency" means S&P and Moody's or, if S&P or Moody's
or both shall not make a rating on the Securities publicly available, a
nationally recognized statistical rating agency or agencies, as the case may
be, selected by the Company (as certified by a resolution of the Board of
Directors of the Company) which shall be substituted for S&P or Moody's or
both, as the case may be.
"Refinance" means, in respect of any Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue other Indebtedness in exchange or replacement for, such
33
indebtedness. "Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances
any Indebtedness of the Company or any Restricted Subsidiary existing on the
Issue Date or Incurred in compliance with this Indenture, including
Indebtedness that Refinances Refinancing Indebtedness; provided, however, that:
-------- -------
(1) such Refinancing Indebtedness has a Stated Maturity no
earlier than the Stated Maturity of the Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at the
time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being Refinanced; and
(3) such Refinancing Indebtedness has an aggregate principal
amount (or if Incurred with original issue discount, an aggregate issue
price) that is equal to or less than the aggregate principal amount (or
if Incurred with original issue discount, the aggregate accreted value)
then outstanding or committed (plus fees and expenses, including any
premium and defeasance costs) under the Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness shall not include (A)
- -------- ------- -------
Indebtedness of a Restricted Subsidiary that Refinances Indebtedness of the
Company or (B) Indebtedness of the Company or a Restricted Subsidiary that
Refinances Indebtedness of an Unrestricted Subsidiary.
"Refinancing Transactions" means, collectively, the
transactions described under the caption "The Refinancing" in the Offering
Memorandum.
"Registration Default" shall have the meaning assigned to
such term in the Registration Rights Agreement.
34
"Registration Rights Agreement" means the Registration Rights
Agreement dated May 13, 2002, among the Company and the Initial Purchasers.
"Related Business" means any business related, ancillary or
complementary to the businesses of the Company and its Restricted Subsidiaries
on the Issue Date or which constitutes a reasonable extension or expansion of
such businesses.
"Restricted Payment" with respect to any Person means
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including
any payment in connection with any merger or consolidation involving
such Person) or similar payment to the direct or indirect holders of
its Capital Stock (other than dividends or distributions payable solely
in its Capital Stock (other than Disqualified Stock) and dividends or
distributions payable solely to the Company or a Restricted Subsidiary,
and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority
stockholders (or owners of an equivalent interest in the case of a
Subsidiary that is an entity other than a corporation)),
(2) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company held by any
Person or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Company (other than a Restricted Subsidiary),
including in connection with any merger or consolidation and including
the exercise of any option to exchange any Capital Stock (other than
into Capital Stock of the Company that is not Disqualified Stock),
(3) the purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value, prior to scheduled
maturity, scheduled repayment or scheduled sinking fund payment of
any Subordinated Obligations of such Person (other than
35
the purchase, repurchase or other acquisition of Subordinated
Obligations purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due
within one year of the date of such purchase, repurchase or other
acquisition),
(4) any distribution or other payment (whether in cash,
securities or other property or any combination thereof) under or in
respect of any Deferred Compensation Plan, or
(5) the making of any Investment (other than a Permitted
Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company
that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Rating Group, Inc. and its
successors.
"Sale/Leaseback Transaction" means an arrangement relating to
property owned the Company or a Restricted Subsidiary on the Issue Date or
thereafter acquired by the Company or a Restricted Subsidiary whereby the
Company or a Restricted Subsidiary transfers such property to a Person and the
Company or a Restricted Subsidiary leases it from such Person, other than
leases between the Company and a Wholly Owned Subsidiary.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities" means the Securities issued under this Indenture.
"Senior Indebtedness" means with respect to any Person:
36
(1) Indebtedness of such Person, whether outstanding on the
Issue Date or thereafter Incurred, and
(2) accrued and unpaid interest (including interest accruing
on or after the filing of any petition in bankruptcy or for
reorganization relating to such Person whether or not post-filing
interest is allowed in such proceeding) in respect of (A) indebtedness
of such Person for money borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment
of which such Person is responsible or liable,
unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that such obligations are subordinate in right of payment to the
Securities; provided, however, that Senior Indebtedness shall not include
-------- -------
(1) any obligation of such Person to any Subsidiary,
(2) any liability for Federal, state, local or other taxes
owed or owing by such Person,
(3) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including
guarantees thereof or instruments evidencing such liabilities),
(4) any Indebtedness of such Person (and any accrued and
unpaid interest in respect thereof) which is subordinate or junior in
any respect to any other Indebtedness or other obligation of such
Person, or
(5) that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of this Indenture.
"Shareholders' Agreement" means each of (1) that certain
Shareholders' Agreement dated as of November 22, 2000, among each of the
Sponsors and New SAC and (2) that
37
certain Management Shareholders Agreement dated as of November 22, 2000, among
each of the members of the management group that held ordinary shares of New
SAC on November 22, 2000, and New SAC, each as in effect on the Issue Date.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC.
"Sponsors" means Silver Lake Capital Partners, L.P., Integral
Capital Partners, TPG Partners III, L.P., August Capital, JPMorgan Capital
Partners and GS Capital Partners III, L.P. and each of their respective
Affiliates that is a party to a Shareholders' Agreement.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the
Company (whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement to that effect.
"Subsidiary" means, with respect to any Person, any
corporation, association, partnership or other business entity of which more
than 50% of the total voting power of shares of Voting Stock is at the time
owned or controlled, directly or indirectly, by (1) such Person, (2) such Person
and one or more Subsidiaries of such Person or (3) one or more Subsidiaries of
such Person.
"Temporary Cash Investments" means any of the following:
38
(1) any investment in direct obligations of the United
States of America or any agency thereof or obligations guaranteed by
the United States of America or any agency thereof;
(2) investments in (a) time deposit accounts, bankers'
acceptances, certificates of deposit and money market deposits maturing
within one year of the date of acquisition thereof issued by a bank or
trust company which is organized under the laws of the United States of
America, any State thereof or any foreign country recognized by the
United States of America or (b) obligations of United States federal
agencies sponsored by the federal government (including, without
limitation, Federal Home Loan Bank, Federal Farm Credit Bank, Federal
Home Loan Mortgage Corporation and Federal National Mortgage
Association) but that are not direct obligations of the United States
of America or any agency thereof and are not obligations guaranteed by
the United States of America or any agency thereof; in each case which
bank, trust company or federally sponsored agency has capital, surplus
and undivided profits aggregating in excess of $250 million (or the
foreign currency equivalent thereof) and has outstanding debt which is
rated "A" (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in
Rule 436 under the Securities Act) or any money-market fund sponsored
by a registered broker dealer or mutual fund distributor;
(3) fully collateralized repurchase obligations with a term
of not more than 45 days for securities of the types described in
clause (1) above or clauses (5), (6) or (7) below entered into with a
financial institution meeting the qualifications described in clause
(2) above;
(4) investments in commercial paper, maturing not more than
one year after the date of acquisition, issued by a corporation (other
than an Affiliate of the Company) organized and in existence under the
laws of the United States of America or any foreign country
39
recognized by the United States of America with a rating at the time
as of which any investment therein is made of "P-1" (or higher)
according to Moody's or "A-1" (or higher) according to S&P;
(5) investments in securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States of America, or
by any political subdivision or taxing authority thereof, and rated
at least "A" by S&P or "A" by Moody's;
(6) investments in securities with maturities of three years
or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States of America, or by
any political subdivision or taxing authority thereof, and rated at
least "AA" by S&P or "Aa" by Moody's;
(7) securities issued by any foreign government or any
political subdivision of any foreign government or any public
instrumentality thereof having maturities of not more than six months
from the date of acquisition thereof and, at the time of acquisition,
having one of the two highest credit ratings obtainable from Moody's or
S&P;
(8) investments in corporate bonds or notes maturing not
more than three years from the date of acquisition thereof and
having, at the date of such acquisition, a rating of at least "AA" by
S&P or "Aa" by Moody's;
(9) auction rate preferred stock maturing not more than 90
days from the date of acquisition thereof and having a rating of at
least "A" by S&P or "A" by Moody's; and
(10) money market funds that (i) comply with the criteria
set forth in SEC Rule 2A-7 under the Investment Company Act of 1940
and (ii) have portfolio assets of at least $1 billion.
40
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)
------
(S) 77aaa-77bbbb) as in effect on the date of this Indenture.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled by, and published in, the most recent Federal Reserve Statistical
Release H.15(519) which has become publicly available at least two Business
Days prior to the date fixed for redemption of the Securities following a
Change of Control (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the
period from the redemption date to May 15, 2006; provided, however, that if the
-------- -------
period from the redemption date to May 15, 2006 is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average
yields of United States Treasury securities for which such yields are given,
except that if the period from the redemption date to May 15, 2006 is less than
one year, the weekly average yield on actually traded United States Treasury
adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the
President or any other officer or assistant officer of the Trustee assigned by
the Trustee to administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of
determination shall be designated an
41
Unrestricted Subsidiary by the Board of Directors of the Company in the
manner provided below, and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of
its Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds
any Lien on any property of, the Company or any other Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated; provided,
--------
however, that (A) the Subsidiary to be so designated has total assets of $1,000
- -------
or less, (B) the Subsidiary to be so designated became a Subsidiary of the
Company upon the consolidation of or merger with or into Parent or the merger
of Parent into the Company if such designation is made at the time of such
consolidation or merger and the shareholders of Parent and the Company receive
no consideration in connection with any such consolidation or merger other than
Capital Stock of the successor company (but excluding any Disqualified Stock)
or (C) if such Subsidiary has assets greater than $1,000, such designation
would be permitted under Section 4.04.
The Board of Directors of the Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
-------- -------
immediately after giving effect to such designation (A) the Company could Incur
$1.00 of additional Indebtedness under Section 4.03(a) and (B) no Default shall
have occurred and be continuing. Any such designation by the Board of Directors
of the Company shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the resolution of the Board of Directors of the Company
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing provisions.
"U.S. Dollar Equivalent" means with respect to any monetary
amount in a currency other than U.S. dollars, at any time for determination
thereof, the amount of U.S. dollars obtained by converting such foreign
currency
42
involved in such computation into U.S. dollars at the spot rate for the
purchase of U.S. dollars with the applicable foreign currency as published in
The Wall Street Journal in the "Exchange Rates" column under the heading
"Currency Trading" on the date two Business Days prior to such determination.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all
the Capital Stock of which (other than directors' qualifying shares) is owned
by the Company or one or more Wholly Owned Subsidiaries.
43
Other Definitions.
------------------
Defined in
Term Section
---- -------
"Additional Amounts"............................................ 4.13
"Affiliate Transaction"......................................... 4.07
"Appendix"...................................................... 2.01
"Authorized Agent".............................................. 11.13(b)
"Bankruptcy Law"................................................ 6.01
"Change of Control Offer"....................................... 4.09(b)
"covenant defeasance option".................................... 8.01(b)
"cross acceleration provisions"................................. 6.01
"Custodian"..................................................... 6.01
"Event of Default" ............................................. 6.01
"Excess Interim Tax Distributions".............................. 4.04(b)(15)
"Guaranteed Obligation"......................................... 10.01
"Initial Lien".................................................. 4.10
"legal defeasance option"....................................... 8.01(b)
"Legal Holiday"................................................. 11.08
"Notice of Default"............................................. 6.01
"Obligations"................................................... 10.01
"Offer"......................................................... 4.06(b)
"Offer Amount".................................................. 4.06(c)(2)
"Offer Period".................................................. 4.06(c)(2)
"Paying Agent".................................................. 2.03
"Purchase Date" ................................................ 4.07(c)(1)
"Registrar"..................................................... 2.03
"Relevant Taxing Jurisdiction".................................. 4.13
"Subpart F income".............................................. 4.04(b)(15)
"Successor Company"............................................. 5.01(a)
"Tax Distributions"............................................. 4.04(b)(15)
"Taxes"......................................................... 4.13
Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC;
44
"indenture securities" means the Securities and the Parent
Guaranty;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Company,
Parent and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
Rules of Construction. Unless the context otherwise requires:
----------------------
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in
the plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP;
45
(8) interest payable on the Securities shall include any
Additional Interest required to be paid on the Securities under the
Registration Rights Agreement;
(9) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect
to such Preferred Stock, whichever is greater;
(10) all references to the date the Securities were
originally issued shall refer to the Issue Date; and
(11) all references to "$" or "dollars" are to U.S. dollars.
The Securities
--------------
Form and Dating. Provisions relating to the Initial
----------------
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in the Rule 144A/Regulation S Appendix attached hereto (the "Appendix")
which is hereby incorporated in and expressly made part of this Indenture. The
Initial Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to the Appendix which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities, the Private Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Security shall be dated the date of its authentication. The terms of the
Securities set forth in the Appendix, Exhibit 1 to the Appendix and Exhibit A
are part of the terms of this Indenture.
46
Execution and Authentication. One Officer shall sign the
-----------------------------
Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate and deliver Securities as set
forth in the Appendix.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
Registrar and Paying Agent. The Company shall maintain an
---------------------------
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"). The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of
47
any such agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.07. The Company or any Wholly Owned Subsidiary
incorporated or organized within either the United States of America or the
Cayman Islands may act as Paying Agent, Registrar, co-registrar or transfer
agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
The Company may remove any Registrar or Paying Agent upon
written notice to such Registrar or Paying Agent and to the Trustee; provided,
--------
however, that no such removal shall become effective until (a) acceptance of an
- -------
appointment by a successor Registrar or Paying Agent, as the case may be, as
evidenced by an appropriate agreement entered into by the Company and such
successor Registrar or Paying Agent, as the case may be, and delivered to the
Trustee or (b) notification to the Trustee that the Trustee shall serve as
Registrar or Paying Agent, as the case may be, until the appointment in
accordance with clause (a) above. The Registrar or Paying Agent may resign at
any time upon written notice to the Company and the Trustee.
48
Paying Agent To Hold Money in Trust. Prior to each due date
------------------------------------
of the principal and interest on any Security, the Company shall deposit with
the Paying Agent a sum sufficient to pay such principal and interest when so
becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent
for the payment of principal of or interest on the Securities and shall notify
the Trustee of any default by the Company in making any such payment. If the
Company or a Wholly Owned Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it in trust for the benefit of
the Persons entitled thereto. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon complying with this Section 2.04, the
Paying Agent shall have no further liability for the money delivered to the
Trustee.
Securityholder Lists. The Trustee shall preserve in as
---------------------
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
49
SECTION 2.06. Transfer and Exchange. The Securities shall
----------------------
be issued in registered form and shall be transferable only upon the surrender
of the Securities being transferred for registration of transfer and in
compliance with the Appendix. When a Security is presented to the Registrar or
a co-registrar with a request to register a transfer, the Registrar shall
register the transfer as requested if the requirements therefor are met. When
Securities are presented to the Registrar or a co-registrar with a request to
exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the
requirements therefor are met.
Replacement Securities. If a mutilated Security is
-----------------------
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements
of Section 8-405 of the Uniform Commercial Code are met and the Holder
satisfies any other reasonable requirements of the Trustee. If required by the
Trustee or the Company, such Holder shall furnish an indemnity bond sufficient
in the judgment of the Company and the Trustee to protect the Company, the
Trustee, the Paying Agent, the Registrar and any co-registrar from any loss
which any of them may suffer if a Security is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Security. In
the event that any mutilated, lost, destroyed or wrongfully taken Security has
become or is about to become due and payable, the Company in its discretion may
pay such Security, together with all accrued and unpaid interest thereon,
instead of issuing a new Security in replacement thereof.
Every replacement Security is an additional obligation of the
Company.
The provisions of this Section 2.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, lost, destroyed or wrongfully taken
Securities.
50
Outstanding Securities. Securities outstanding at any time
-----------------------
are all Securities authenticated by the Trustee except for those canceled by
it, those delivered to it for cancellation and those described in this Section
2.08 as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, then on and after that date such Securities (or portions thereof) cease
to be outstanding and interest on them ceases to accrue.
Temporary Securities. Until definitive Securities are ready
---------------------
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities upon surrender of such
temporary Securities at the office or agency of the Company, without charge to
the Holder.
51
Cancellation. The Company at any time may deliver Securities
-------------
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancellation. The Trustee shall not
authenticate Securities in place of canceled Securities other than pursuant to
the terms of this Indenture.
Defaulted Interest. If the Company defaults in a payment of
-------------------
interest on the Securities, the Company shall pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) in any lawful manner.
The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
52
SECTION 2.12. CUSIP Numbers. The Company in issuing the
--------------
Securities may use numbers assigned by the Committee on Uniform Securities
Identification Procedures ("CUSIP") and corresponding International Securities
Identification Numbers ("ISIN") (if then generally in use) and, if so, the
Trustee shall use CUSIP numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
-------- -------
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee of any
change in the CUSIP or ISIN numbers.
Issuance of Additional Securities. The Company shall be
----------------------------------
entitled, subject to its compliance with Section 4.03, without the consent of
the Holders, to issue Additional Securities from time to time after the Issue
Date under this Indenture, in an unlimited aggregate principal amount, which
shall have identical terms as the Initial Securities issued on the Issue Date,
other than with respect to the date of issuance and issue price. The Initial
Securities issued on the Issue Date, any Additional Securities and all Exchange
Securities or Private Exchange Securities issued in exchange therefor shall be
treated as a single class for all purposes under this Indenture, including,
without limitation, waivers, amendments, redemptions and offers to purchase.
With respect to any Additional Securities, the Company shall
set forth in a resolution of the Board of Directors of the Company and an
Officers' Certificate, a copy of each which shall be delivered to the Trustee,
the following information:
(1) the aggregate principal amount of such Additional
Securities to be authenticated and delivered pursuant to this
Indenture;
(2) the issue price, the issue date and the CUSIP or ISIN
number of such Additional Securities; provided, however, that no
-------- -------
Additional Securities may be issued at
53
a price that would cause such Additional Securities to have "original
issue discount" within the meaning of Section 1273 of the Code; and
(3) whether such Additional Securities shall be Transfer
Restricted Securities and issued in the form of Initial Securities as
set forth in the Appendix to this Indenture or shall be issued in the
form of Exchange Securities as set forth in Exhibit A.
Redemption
----------
Notices to Trustee. If the Company elects to redeem
-------------------
Securities pursuant to paragraph 5 or 6 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities
to be redeemed and the paragraph of the Securities pursuant to which the
redemption will occur.
The Company shall give each notice to the Trustee provided for
in this Section at least 45 but no more than 60 days before the redemption date
unless the Trustee consents to a shorter period. Such notice shall be
accompanied by an Officers' Certificate and an Opinion of Counsel from the
Company to the effect that such redemption will comply with the conditions
herein. Any such notice to the Trustee may be canceled by the Company by written
notice to the Trustee given no later than three Business Days prior to the date
on which the Trustee intends to mail notice of such redemption to any Holder and
shall thereby be void and of no effect.
54
Selection of Securities To Be Redeemed. If fewer than all the
---------------------------------------
Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed pro rata or by lot or by a method that the Trustee in its sole
discretion shall deem to be fair and appropriate. The Trustee shall make the
selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in principal amounts of $1,000 or an integral multiple
of $1,000, unless a Security has a principal amount of $1,000 or less, in which
case the Trustee may select the whole principal amount but not part of the
principal amount. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
Notice of Redemption. At least 30 days but not more than 60
---------------------
days before a date for redemption of Securities, the Company shall mail a notice
of redemption by first-class mail to each Holder of Securities to be redeemed at
such Holder's registered address.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment, interest on Securities (or
55
portion thereof) called for redemption ceases to accrue on and after
the redemption date;
(7) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP or ISIN number, if any, listed in such notice or
printed on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section 3.03.
Effect of Notice of Redemption. Once notice of redemption is
-------------------------------
mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Securities shall be paid at the redemption price
stated in the notice, plus accrued interest to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the related interest payment date). Failure to give notice or any defect
in the notice to any Holder shall not affect the validity of the notice to any
other Holder.
56
Deposit of Redemption Price. Prior to the redemption date,
----------------------------
the Company shall deposit with the Paying Agent (or, if the Company or a Wholly
Owned Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to
the Trustee for cancellation. On and after the redemption date, interest shall
cease to accrue on Securities or portions of Securities called for redemption
so long as the Issuer has deposited with the Paying Agent (or, if the Company
or a Wholly Owned Subsidiary is the Paying Agent, has segregated and holds in
trust) funds sufficient to pay in full the principal of, plus all accrued and
unpaid interest on, the Securities to be redeemed, unless the Paying Agent is
prohibited from taking such payment pursuant to the terms of this Indenture.
Securities Redeemed in Part. Upon surrender of a Security
----------------------------
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder (at the Company's expense) a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.
Covenants
---------
Payment of Securities. The Company shall promptly pay the
----------------------
principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
57
SEC Reports. Notwithstanding that the Company may not be
------------
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with the SEC (unless not permitted by SEC practice)
and provide the Trustee and Securityholders within 15 days after it files them
(or would have filed them if permitted by SEC practice) with the SEC with such
annual reports and such information, documents and other reports as are
specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S.
corporation subject to such Sections, such information, documents and other
reports to be so filed and provided at the times specified for the filing of
such information, documents and reports under such Sections; provided, however,
-------- -------
that in lieu of any annual report required of U.S. corporations, if the Company
is a "foreign private issuer" for purposes of the Exchange Act, the Company may
file and provide such annual report required of foreign private issuers subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
provided further, however, that (a) so long as Parent is the Guarantor of the
- -------- ------- -------
Securities, the reports, information and other documents required to be filed
and provided as described in this Section 4.02 may, at the Company's option, be
filed and provided by, and be those of, Parent rather than the Company, and (b)
in that event and if Parent conducts any business or holds any significant
assets other than the capital stock of the Company at the time of filing any
such report, information or other document, such reports, information and other
documents must include summarized financial information (consistent with that
provided in the Offering Memorandum) with respect to the Company and its
Subsidiaries. In addition, the Company shall furnish to the Holders of the
Securities and to prospective investors, upon the requests of such Holders or
prospective investors, any information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act so long any Securities are not freely
transferable under the Securities Act. The Company also shall comply with the
other provisions of TIA (S) 314(a).
58
Limitation on Indebtedness.
---------------------------
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness;
provided, however, that the Company shall be entitled to Incur Indebtedness if,
- -------- -------
on the date of such Incurrence and after giving effect thereto, the Consolidated
Coverage Ratio exceeds 3.0 to 1.0.
(b) Notwithstanding the foregoing paragraph (a), the Company
and the Restricted Subsidiaries shall be entitled to Incur any or all of the
following Indebtedness:
(1) Indebtedness of the Company or any Restricted Subsidiary
Incurred pursuant to the Credit Agreement; provided, however, that,
-------- -------
immediately after giving effect to any such Incurrence, the aggregate
principal amount of all Indebtedness Incurred under this clause (1) and
then outstanding does not exceed $600 million;
(2) Indebtedness owed to and held by the Company or a
Restricted Subsidiary; provided, however, that (A) any subsequent
-------- -------
issuance or transfer of any Capital Stock which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of such Indebtedness (other than to the Company or
a Restricted Subsidiary) shall be deemed, in each case, to constitute
the Incurrence of such Indebtedness by the obligor thereon and (B) if
the Company is the obligor on such Indebtedness, such Indebtedness is
expressly subordinated to the prior payment in full in cash of all
obligations with respect to the Securities;
(3) the Securities and the Exchange Securities (other than
any Additional Securities);
(4) any Indebtedness to the extent outstanding on the Issue
Date after application of the proceeds from the sale of the Securities
(other than Indebtedness described in clauses (1), (2) or (3) of this
Section 4.03(b);
(5) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on
59
which such Restricted Subsidiary was acquired by the Company (other
than Indebtedness Incurred in contemplation of, in connection with, as
consideration in, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary
became a Subsidiary of or was otherwise acquired by the Company);
provided, however, that on the date of such acquisition and after
-------- -------
giving pro forma effect thereto, either (A) the Company would have
been able to Incur at least $1.00 of additional Indebtedness pursuant
to Section 4.03(a) after giving effect to the Incurrence of such
Indebtedness pursuant to this clause (5) or (B) the Consolidated
Coverage Ratio after giving effect to such acquisition would be (i)
greater than the Consolidated Coverage Ratio immediately prior to such
acquisition and (ii) at least 2.5:1.0;
(6) Refinancing Indebtedness in respect of Indebtedness
Incurred pursuant to Section 4.03(a) or pursuant to clause (4) or (5)
of this Section 4.03(b) or this clause (6);
(7) Purchase Money Indebtedness and Refinancing Indebtedness
in respect of Indebtedness Incurred pursuant to this clause (7) in an
aggregate principal amount not to exceed $150 million at any time
outstanding;
(8) Hedging Obligations entered into in good faith to hedge
risks with respect to the Company's and the Restricted Subsidiaries'
interest rate, currency and commodity price exposure;
(9) obligations in respect of workman's compensation,
performance, bid and surety bonds, completion guarantees and payment
obligations in connection with self-insurance or similar requirements
provided by the Company or any Restricted Subsidiary in the ordinary
course of business;
(10) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or
60
similar instrument drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is
-------- -------
extinguished within five Business Days of its Incurrence;
(11) Indebtedness arising from agreements of the Company or
a Restricted Subsidiary providing for customary indemnification,
adjustment of purchase price or similar obligations, in each case
Incurred in connection with the acquisition or disposition of any
business, assets or a Subsidiary by the Company or any Restricted
Subsidiary in compliance with the terms of this Indenture, other than
Indebtedness consisting of Guarantees of Indebtedness Incurred by any
Person acquiring all or any portion of such business, assets or
Subsidiary for the purpose of financing such acquisition;
(12) obligations arising from or representing deferred
compensation to employees of the Company or its Subsidiaries (A) that
constitute or are deemed to be Indebtedness under GAAP and that are
Incurred in the ordinary course of business or (B) pursuant to the
Deferred Compensation Plans; and
(13) Indebtedness of the Company or any Restricted Subsidiary
in an aggregate principal amount which, when taken together with all
other Indebtedness of the Company and the Restricted Subsidiaries
outstanding on the date of such Incurrence (other than Indebtedness
permitted by clauses (1) through (12) of this Section 4.03(b) or
Section 4.03(a)) does not exceed $100 million.
(c) Notwithstanding the foregoing, the Company and the
Restricted Subsidiaries shall not Incur any Indebtedness pursuant to Section
4.03(b) if the proceeds thereof are used, directly or indirectly, to Refinance
any Subordinated Obligations unless such Indebtedness shall be subordinated to
the Securities to at least the same extent as such Subordinated Obligations.
(d) For purposes of determining compliance with this Section
4.03, (1) any Indebtedness outstanding under the
61
Credit Agreement on the Issue Date will be treated as Incurred on the Issue Date
under Section 4.03(b)(1), (2) in the event that an item of Indebtedness meets
the criteria of more than one of the types of Indebtedness described herein, the
Company, in its sole discretion, shall classify such item of Indebtedness at the
time of Incurrence and only be required to include the amount and type of such
Indebtedness in one of the above clauses, (3) the Company shall be entitled to
divide and classify an item of Indebtedness in more than one of the types of
Indebtedness described herein, and (4) at any time that the Consolidated
Coverage Ratio exceeds 3.0 to 1.0, the Company may reclassify Indebtedness
originally Incurred pursuant to one or more clauses of Section 4.03(b) as
Indebtedness Incurred pursuant to Section 4.03(a) but only to the extent such
Indebtedness could have been Incurred pursuant to Section 4.03(a).
(e) Notwithstanding any other provision of this Section
4.03, the maximum amount of Indebtedness that the Company or any Restricted
Subsidiary may Incur pursuant to this Section 4.03 shall not be deemed to be
exceeded solely as a result of fluctuations in the exchange rates of currencies
after the date on which such Indebtedness was Incurred. For purposes of
determining compliance with any U.S. dollar denominated restriction on the
Incurrence of Indebtedness where the Indebtedness Incurred is denominated in a
different currency, the amount of such Indebtedness will be the U.S. Dollar
Equivalent determined on the date of the Incurrence of such Indebtedness;
provided, however, that if any such Indebtedness denominated in a different
- -------- -------
currency is subject to a Currency Agreement with respect to the U.S. dollar
covering all principal, premium, if any, and interest payable on such
Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be
as provided in such Currency Agreement. The principal amount of any Refinancing
Indebtedness Incurred in the same currency as the Indebtedness being Refinanced
will be the U.S. Dollar Equivalent of the Indebtedness being Refinanced, except
to the extent that (1) such U.S. Dollar Equivalent was determined based on a
Currency Agreement, in which case the Refinancing Indebtedness will be
determined in accordance with the preceding sentence and (2) the principal
amount of the Refinancing Indebtedness exceeds the principal amount of the
Indebtedness being Refinanced, in which case the U.S.
62
Dollar Equivalent of such excess will be determined on the date such Refinancing
Indebtedness is Incurred.
(f) Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of this Section 4.03.
Limitation on Restricted Payments.
---------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary, directly or indirectly, to make a Restricted Payment if at the time
the Company or such Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or
would result therefrom);
(2) the Company is not entitled to Incur an additional
$1.00 of Indebtedness under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date would exceed the sum of
(without duplication):
(A) 50% of the Consolidated Net Income accrued
during the period (treated as one accounting period) from the
beginning of Fiscal 2002 to the end of the most recent fiscal
quarter ended for which financial statements are internally
available to the Company prior to the date of such Restricted
Payment (or, in case such Consolidated Net Income shall be a
deficit, minus 100% of such deficit); plus
----
(B) 100% of the aggregate Net Cash Proceeds
received by the Company from the issuance or sale of its
Capital Stock (other than Disqualified Stock, Excluded
Contributions and Designated Preferred Stock) subsequent to
the beginning of Fiscal 2002 (other than an issuance or sale
to a
63
Subsidiary of the Company and other than an issuance or sale
to an employee stock ownership plan or to a trust established
by the Company or any of its Subsidiaries for the benefit of
their employees) and 100% of any cash contribution (other than
Excluded Contributions) received by the Company from its
shareholders subsequent to the beginning of Fiscal 2002; plus
----
(C) the amount by which Indebtedness of the Company
is reduced on the Company's balance sheet upon the conversion
or exchange subsequent to the beginning of Fiscal 2002 of any
Indebtedness of the Company convertible or exchangeable for
Capital Stock (other than Disqualified Stock) of the Company
(less the amount of any cash, or the fair value of any other
property, distributed by the Company upon such conversion or
exchange); provided, however, that the foregoing amount shall
-------- -------
not exceed the Net Cash Proceeds received by the Company or
any Restricted Subsidiary from the sale of such Indebtedness
(excluding Net Cash Proceeds from sales to a Subsidiary of the
Company or to an employee stock ownership plan or a trust
established by the Company or any of its Subsidiaries for the
benefit of their employees); plus
----
(D) an amount equal to the sum of (x) the net
reduction in the Investments (other than Permitted
Investments) made by the Company or any Restricted Subsidiary
in any Person resulting from repurchases, repayments or
redemptions of such Investments by such Person, proceeds
realized on the sale of such Investment and proceeds
representing the return of capital (excluding dividends and
distributions), in each case received by the Company or any
Restricted Subsidiary and (y) to the extent such Person is an
Unrestricted Subsidiary, the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair
market value of the net assets of such Unrestricted Subsidiary
at the time such Unrestricted Subsidiary is designated a
Restricted
64
Subsidiary; provided, however, that the foregoing sum shall
-------- -------
not exceed, in the case of any Person or Unrestricted
Subsidiary, the amount of Investments (excluding Permitted
Investments) previously made (and treated as a Restricted
Payment) by the Company or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary.
(b) The provisions of Section 4.04(a) shall not prohibit:
(1) any Restricted Payment made out of the Net Cash Proceeds
of the substantially concurrent sale of, or made by exchange for,
Capital Stock of the Company (other than Disqualified Stock, other than
Capital Stock issued or sold to a Subsidiary of the Company or an
employee stock ownership plan or to a trust established by the Company
or any of its Subsidiaries for the benefit of their employees and other
than any such Net Cash Proceeds that have previously been applied under
Sections 4.04(b)(1), (4), (12) or (14)) or a substantially concurrent
cash capital contribution received by the Company from its
shareholders; provided, however, that (A) such Restricted Payment shall
-------- -------
be excluded in the calculation of the amount of Restricted Payments and
(B) the Net Cash Proceeds from such sale or such cash capital
contribution (to the extent so used for such Restricted Payment) shall
be excluded from the calculation of amounts under Section
4.04(a)(3)(B);
(2) any purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value of Subordinated Obligations
made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness which is permitted to be Incurred
pursuant to Section 4.03; provided, however, that such purchase,
-------- -------
repurchase, redemption, defeasance or other acquisition or retirement
for value shall be excluded in the calculation of the amount of
Restricted Payments;
(3) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with this Section 4.04;
65
provided, however, that such dividend shall be included in the
-------- -------
calculation of the amount of Restricted Payments;
(4) so long as no Default has occurred and is continuing,
the repurchase or other acquisition of shares of Capital Stock of New
SAC, Parent or the Company or any of its Subsidiaries from employees,
former employees, directors or former directors of New SAC, Parent or
the Company or any of its Subsidiaries (or permitted transferees of
such employees, former employees, directors or former directors),
pursuant to the terms of the agreements (including employment
agreements) or plans (or amendments thereto) approved by the Board of
Directors of the Company under which such individuals purchase or sell
or are granted the option to purchase or sell, shares of such Capital
Stock; provided, however, that the aggregate amount of such
-------- -------
repurchases and other acquisitions shall not exceed $25 million in any
calendar year (with unused amounts in any calendar year being
permitted to be carried over for the two succeeding calendar years);
provided further, however, that such amount in any calendar year may
-------- ------- -------
be increased by an amount not to exceed (A) the Net Cash Proceeds
received by the Company or any of its Restricted Subsidiaries in such
calendar year from the sale of Capital Stock of the Company or any of
its Restricted Subsidiaries (other than Disqualified Stock or
Preferred Stock and other than any such Net Cash Proceeds that have
previously been applied under Sections 4.04(b)(1), (4), (12) or (14))
to members of management or directors of the Company or any of its
Restricted Subsidiaries that occurs after the Issue Date (provided
--------
that the amount of such cash proceeds utilized for any such
repurchase, retirement, other acquisition or dividend will not
increase the amount available for Restricted Payments under Section
4.04(a)(3)) plus (B) the cash proceeds of key man life insurance
policies received by the Company and its Restricted Subsidiaries in
such calendar year after the Issue Date; provided further, however,
-------- ------- -------
that such repurchases and other acquisitions shall be excluded in the
calculation of the amount of Restricted Payments;
66
(5) dividends to Parent to be used by Parent solely to pay
its franchise taxes and other fees required to maintain its corporate
existence and to pay for general corporate and overhead expenses
(including salaries and other compensation of the employees) incurred
by Parent in the ordinary course of its business; provided, however,
-------- -------
that such dividends shall not exceed $3 million in any calendar year;
provided further, however, that such dividends shall be excluded in
-------- ------- -------
the calculation of the amount of Restricted Payments;
(6) the payment of dividends on the Company's common stock
following the first bona fide underwritten public offering of common
stock of the Company or Parent, as the case may be, after the Issue
Date, of up to 6% per annum of the Net Cash Proceeds received by the
Company or Parent, as the case may be, from such public offering;
provided, however, that (A) the aggregate amount of all such dividends
-------- -------
shall not exceed the aggregate amount of Net Cash Proceeds received by
or, in the case of a public offering by Parent, contributed by Parent
to the Company in connection with such public offering and (B) such
dividends shall be included in the calculation of the amount of
Restricted Payments;
(7) the payment of, or the making of distributions to Parent
solely to allow Parent to pay, annual management, consulting,
monitoring and advisory fees to any of the Sponsors; provided, however,
-------- -------
that any such payment is permitted by Section 4.07; provided further,
-------- -------
however, that any such payment is excluded in the calculation of the
-------
amount of Restricted Payments;
(8) the making of distributions to Parent and the making of
distributions or other payments to participants under the Deferred
Compensation Plans, in each case on or about the Issue Date in the
amounts and on the terms described in the Offering Memorandum;
provided, however, that such distributions and payments shall be
-------- -------
excluded in the calculation of the amount of Restricted Payments;
(9) any prepayment, repayment, purchase, repurchase,
redemption, retirement, defeasance or other
67
acquisition for value of Subordinated Obligations from Net Available
Cash to the extent that any surplus Net Available Cash exists after
the consummation of an offer to purchase Securities under Section
4.06(a)(3)(C); provided, however, that such prepayment, repayment,
-------- -------
purchase, repurchase, redemption, retirement, defeasance or other
acquisition for value shall be excluded in the calculation of the
amount of Restricted Payments;
(10) any repurchase of Capital Stock of the Company deemed
to occur upon the exercise of stock options to acquire Capital Stock of
the Company if such Capital Stock represents a portion of the exercise
price of such options; provided, however, that such repurchase shall be
-------- -------
excluded in the calculation of the amount of Restricted Payments;
(11) the declaration and payment of dividends or
distributions to holders of any class or series of Disqualified Stock
of the Company or its Restricted Subsidiaries issued or Incurred after
the Issue Date in accordance with Section 4.03; provided, however,
-------- -------
that such dividends or distributions shall be excluded in the
calculation of the amount or Restricted Payments;
(12) the declaration and payment of dividends to holders of
any class or series of Designated Preferred Stock issued after the
Issue Date; provided, however, that (A) for the most recently ended
-------- -------
four full fiscal quarters for which financial statements are internally
available to the Company immediately preceding the declaration of any
such dividend after giving effect to such dividend on a pro forma
basis, the Consolidated Coverage Ratio would have been at least
3.0:1.0, and (B) the aggregate amount of dividends declared and paid
pursuant to this Section 4.04(b)(12) on a particular class or series of
Designated Preferred Stock does not exceed the Net Cash Proceeds
received by the Company from the sale of such class or series of
Designated Preferred Stock issued after the Issue Date that have not,
at the date of such payment, been applied under Sections 4.04(b)(1),
(4) or (12); provided further, however, that such dividends shall be
-------- ------- -------
excluded in the calculation of the amount of Restricted Payments;
68
(13) payments, or the making of distributions to Parent
solely to allow payments, which are contemplated by the Indemnification
Agreement; provided, however, that such payments shall be excluded in
-------- -------
the calculation of the amount of Restricted Payments;
(14) investments that are made with Excluded Contributions
(other than Excluded Contributions that have previously been applied
under Sections 4.04(b)(1), (4) or (14)); provided, however, that such
-------- -------
Investments shall be excluded in the calculation of the amount of
Restricted Payments;
(15) if the Company or any of its Subsidiaries is a controlled
foreign corporation for United States federal income tax purposes for
all or a portion of the Company's or any such Subsidiary's taxable
year, the declaration and payment of dividends or distributions on the
Company's Capital Stock within 30 days after the end of the calendar
year during which such taxable year ends, in a maximum amount equal to
the product of (x) the aggregate amount of "Subpart F income" (within
the meaning of Section 952 of the Code, which for the purposes of this
Section 4.04(b)(15) shall include income includable under Section
951(a)(1)(B) of the Code) of the Company for the portion of such
taxable year for which the Company was a controlled foreign corporation
plus the amount of Subpart F income of any of the Company's
Subsidiaries for the portion of such taxable year for which such
Subsidiary was a controlled foreign corporation, multiplied by (y) 40%
(such dividends, "Tax Distributions"); provided that (A) the Company
--------
shall have delivered to the Trustee at least 30 calendar days prior to
the declaration of such Tax Distribution or any interim Tax
Distribution pursuant to clause (C) of this Section 4.04(b)(15), a
notice, certified by the Chief Financial Officer of the Company,
setting forth in detail reasonably satisfactory to the Trustee the
basis for the determination of the amount of such Tax Distribution, (B)
Tax Distributions in respect of any Subpart F income of an Unrestricted
Subsidiary shall only be permitted if they are made with the proceeds
of dividends or distributions from an
69
Unrestricted Subsidiary that are received by the Company or a
Restricted Subsidiary; provided that the amount of such dividends and
--------
distributions will not increase the amount available for Restricted
Payments under Section 4.04(a)(3), (C)(i) interim Tax Distributions
may be made during each calendar year on or shortly after April 10,
June 10, September 10 and December 31 of such year based on good-faith
estimates of the Subpart F income, if any, of the Company and its
Subsidiaries for the taxable year to which such interim Tax
Distribution relates and (ii) if any such interim Tax Distributions
are made by the Company during a calendar year, then within 30
calendar days after the end of such calendar year the Company shall
deliver to the Trustee a determination of the maximum amount of Tax
Distributions that may be made for such calendar year, and if the
aggregate interim Tax Distributions made for such calendar year exceed
such maximum, then such excess amount ("Excess Interim Tax
Distributions") shall be applied to reduce amounts payable under any
subsection of this Section 4.04(b) for the next calendar year and to
the extent not so applied, shall be carried forward for application
against such amounts in a future calendar year, and (D)(i) any Tax
Distributions (excluding any Excess Interim Tax Distributions) paid
pursuant to this Section 4.04(b)(15) shall be excluded in the
calculation of the amount of Restricted Payments and (ii) any Excess
Interim Tax Distributions shall be included in the amount of
Restricted Payments;
(16) immediately prior to or concurrently with the initial
public offering of the Company that would permit Parent to be released
from the Parent Guaranty pursuant to Section 10.05(a), the making of
distributions by the Company to Parent and the making of distributions
or other payments to participants under the Deferred Compensation
Plans; provided, however, that (A) on the date of such distributions
-------- -------
and payments and after giving effect to such distributions and payments
and to such initial public offering and the Net Cash Proceeds therefrom
(i) the ratio of (x) the average amount of cash and cash equivalents
held by the Company and the Restricted Subsidiaries at the close of
business during the five Business Day period ending three Business Days
70
prior to the date of payment of such distributions and payments to (y)
the aggregate amount of all Indebtedness of the Company and the
Restricted Subsidiaries outstanding as of such date of payment is no
less than 1.1 to 1.0, and (ii) no Event of Default has occurred and is
continuing, and (B) no later than two Business Days prior to the date
of payment of such distributions and payments, the Company shall have
delivered to the Trustee an Officers' Certificate dated as of such date
that (i) sets forth, in reasonable detail, the calculation of the
amount of such distribution and payment and (ii) certifies compliance
with the ratio set forth in clause (A) of the first proviso to this
Section 4.04(b)(16); provided further, however, that (x) the aggregate
-------- ------- -------
amount of all such distributions and payments under this Section
4.04(b)(16) shall not exceed $580,000,000 minus the aggregate amount of
all distributions and payments made pursuant to Section 4.04(b)(8) and
(y) the amount of any distribution and payment pursuant to this Section
4.04(b)(16) shall be included in the calculation of the amount of
Restricted Payments;
(17) Restricted Payments consisting of distributions or other
payments (whether in cash, securities or other property or any
combination thereof) under any Deferred Compensation Plan; provided,
--------
however, that such distributions or payments under this Section
-------
4.04(b)(17) shall be included in the calculation of the amount of
Restricted Payments;
(18) Restricted Payments in an aggregate amount not to exceed
$60 million consisting of dividends or distributions made or paid to
Parent prior to or in connection with an underwritten initial public
offering of the Company's common stock; provided that (A) the entire
--------
amount of such dividends or distributions are immediately contributed
or otherwise provided, directly or indirectly, to XIOtech Corporation,
(B) the entire amount of such dividends or distributions are
immediately used by XIOtech Corporation to repay in full all amounts
then owed by XIOtech Corporation to the Company or its Restricted
Subsidiaries and (C) all dividends, distributions or payments made or
paid
71
pursuant to this Section 4.04(b)(18) shall be excluded in the
calculation of the amount of Restricted Payments; and
(19) other Restricted Payments in an aggregate amount not to
exceed $75 million; provided, however, that such Restricted Payments
-------- -------
shall be excluded in the calculation of the amount of Restricted
Payments.
(c) Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of this Section 4.04.
Limitation on Restrictions on Distributions from Restricted
-----------------------------------------------------------
Subsidiaries.
- ------------
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (1) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (2) make any loans or advances to the Company
or (3) transfer any of its property or assets to the Company, except:
(i) with respect to clauses (1), (2) and (3),
(A) any encumbrance or restriction pursuant to the Credit
Agreement, as in effect at the Issue Date, and any other agreement in
effect at or entered into on the Issue Date;
(B) any encumbrance or restriction with respect to a
Restricted Subsidiary contained in the terms of any Indebtedness of
such Restricted Subsidiary, which Indebtedness was permitted to be
Incurred pursuant to Section 4.03 or any agreement pursuant to which
such Indebtedness was Incurred if (x) either (i) the encumbrance or
restriction applies only in the event of
72
and during the continuance of a payment default or a default with
respect to a financial covenant contained in such Indebtedness or
agreement or (ii) the Company determines at the time any such
Indebtedness is Incurred (and at the time of any modification of the
terms of any such encumbrance or restriction) that any such
encumbrance or restriction will not materially affect the Company's
ability to make principal, premium (if any) or interest payments on
the Securities and (y) the encumbrance or restriction is not
materially more disadvantageous to the Holders of the Securities than
is customary in comparable financings or agreements (as determined by
the Board of Directors of the Company in good faith);
(C) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by such Restricted Subsidiary on or prior to the
date on which such Restricted Subsidiary was acquired by the Company
(other than Indebtedness Incurred in contemplation of, in connection
with, as consideration in, or to provide all or any portion of the
funds or credit support utilized to consummate, the transaction or
series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the
Company) and outstanding on such date;
(D) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an
agreement referred to in Section 4.05(a)(i)(A), (B) or (C) or this
clause (D) or contained in any amendment to an agreement referred to in
Section 4.05(a)(i)(A), (B) or (C) or this clause (D); provided,
--------
however, that the encumbrances and restrictions with respect to such
-------
Restricted Subsidiary contained in any such refinancing agreement or
amendment are no less favorable to the Securityholders than
encumbrances and restrictions with respect to such Restricted
Subsidiary contained in such predecessor agreements;
(E) any encumbrance or restriction pursuant to applicable
law, rule, regulation or order;
73
(F) any encumbrance or restriction on cash or other deposits
or net worth imposed by customers under contracts entered into in the
ordinary course of business; and
(G) customary provisions in joint venture agreements and
other similar agreements entered into in the ordinary course of
business; and
(ii) with respect to clause (3) only,
(A) any such encumbrance or restriction consisting of
customary nonassignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of the
lease or the property leased thereunder;
(B) restrictions contained in security agreements or
mortgages securing Indebtedness of a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property subject
to such security agreements or mortgages; and
(C) any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or assets of
such Restricted Subsidiary pending the closing of such sale or
disposition.
(b) Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of this Section 4.05.
Limitation on Sales of Assets and Subsidiary Stock.
--------------------------------------------------
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, consummate any Asset
Disposition unless (1) the Company or such Restricted Subsidiary receives
consideration at the time
74
of such Asset Disposition at least equal to the fair market value (including as
to the value of all non-cash consideration), as determined in good faith by the
Board of Directors of the Company, of the shares and assets subject to such
Asset Disposition, (2) at least 75% of the consideration thereof received by the
Company or such Restricted Subsidiary is in the form of cash or cash equivalents
and (3) an amount equal to 100% of the Net Available Cash from such Asset
Disposition is applied by the Company (or such Restricted Subsidiary, as the
case may be) (A) first, to the extent the Company elects (or is required by the
-----
terms of any Indebtedness), to prepay, repay, redeem or purchase Senior
Indebtedness of the Company or Indebtedness (other than any Disqualified Stock)
of a Wholly Owned Subsidiary (in each case other than Indebtedness owed to the
Company or an Affiliate of the Company) within one year from the later of the
date of such Asset Disposition or the receipt of such Net Available Cash, (B)
second, to the extent of the balance of such Net Available Cash after
- ------
application in accordance with clause (A), to the extent the Company elects, to
acquire Additional Assets within one year from the later of the date of such
Asset Disposition or the receipt of such Net Available Cash and (C) third, to
-----
the extent of the balance of such Net Available Cash after application in
accordance with clauses (A) and (B), to make an Offer to the holders of the
Securities (and to holders of other Senior Indebtedness of the Company
designated by the Company) to purchase Securities (and such other Senior
Indebtedness of the Company) pursuant to and subject to the conditions contained
in this Indenture; provided, however, that in connection with any prepayment,
-------- -------
repayment or purchase of Indebtedness pursuant to clause (A) or (C) above, the
Company or such Restricted Subsidiary shall permanently retire such Indebtedness
and shall cause the related loan commitment (if any) to be permanently reduced
in an amount equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section 4.06, the Company and
the Restricted Subsidiaries shall not be required to apply any Net Available
Cash in accordance with this Section 4.06(a) except to the extent that the
aggregate Net Available Cash from all Asset Dispositions which are not applied
in accordance with this Section 4.06(a) exceeds $25 million. Pending application
of Net Available Cash pursuant to this Section 4.06(a), such Net Available Cash
shall be invested in Temporary Cash
75
Investments or applied to temporarily reduce revolving credit indebtedness.
For the purposes of this Section 4.06(a), the following are
deemed to be cash or cash equivalents: (1) the assumption of Indebtedness of the
Company or any Restricted Subsidiary and the release of the Company or such
Restricted Subsidiary from all liability on such Indebtedness in connection with
such Asset Disposition; (2) securities received by the Company or any Restricted
Subsidiary in an Asset Disposition from the transferee with respect to which the
Company or such Restricted Subsidiary shall use its reasonable best efforts to
convert into cash within 90 days after the later to occur of (A) the
consummation of such Asset Disposition or (B) the expiration of any lock-up or
similar restriction on the right of the Company or such Restricted Subsidiary to
dispose of such securities; provided, however, that all the cash received upon
-------- -------
such conversion shall be Net Available Cash for the purposes of, and applied in
accordance with, this Section 4.06(a); and (3) any assets related to a Related
Business received in exchange for assets of comparable fair market value in the
good faith determination of the Board of Directors of the Company.
(b) In the event of an Asset Disposition that requires the
purchase of Securities (and other Senior Indebtedness of the Company) pursuant
to Section 4.06(a)(3)(C), the Company shall purchase Securities tendered
pursuant to an offer by the Company for the Securities (and such other Senior
Indebtedness) (the "Offer") at a purchase price of 100% of their principal
amount (or, in the event such other Senior Indebtedness of the Company was
issued with significant original issue discount, 100% of the accreted value
thereof), without premium, plus accrued but unpaid interest (or, in respect of
such other Senior Indebtedness of the Company, such lesser price, if any, as may
be provided for by the terms of such Senior Indebtedness) in accordance with the
procedures (including prorating in the event of oversubscription) set forth in
Section 4.06(c). If the aggregate purchase price of Securities (and any other
Senior Indebtedness) tendered pursuant to the Offer exceeds the Net Available
Cash allotted to their purchase, the Company shall select the Securities and
other Senior Indebtedness to be purchased on a pro rata basis but in round
76
denominations, which in the case of the Securities will be denominations of
$1,000 principal amount or multiples thereof. The Company shall not be required
to make an Offer to purchase Securities (and other Senior Indebtedness) pursuant
to this Section 4.06 if the Net Available Cash available therefor is less than
$25 million (which lesser amount shall be carried forward for purposes of
determining whether such an Offer is required with respect to the Net Available
Cash from any subsequent Asset Disposition). Upon completion of such Offer, Net
Available Cash will be deemed to be reduced by the aggregate amount of such
Offer.
(c) (1) Promptly, and in any event within 10 days after the
Company becomes obligated to make an Offer, the Company shall deliver to the
Trustee and send, by first-class mail to each Holder, a written notice stating
that the Holder may elect to have his Securities purchased by the Company either
in whole or in part (subject to prorating as described in Section 4.06(b) in the
event the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount, at the applicable purchase price. The notice shall specify a purchase
date (the "Purchase Date") not less than 30 days nor more than 60 days after the
date of such notice and shall contain such information concerning the business
of the Company which the Company in good faith believes will enable such Holders
to make an informed decision (which at a minimum will include (A) the most
recently filed Annual Report on Form 10-K (including audited consolidated
financial statements) of Parent or the Company, as applicable, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current Report on Form
8-K of Parent or the Company, as applicable, filed subsequent to such Quarterly
Report, other than Current Reports describing Asset Dispositions otherwise
described in the offering materials (or corresponding successor reports), (B) a
description of material developments in the Company's business subsequent to the
date of the latest of such Reports and (C) if material, appropriate pro forma
financial information) and all instructions and materials necessary to tender
Securities pursuant to the Offer, together with the information contained in
Section 4.06(c)(3).
(2) Not later than the date upon which written notice of an
Offer is delivered to the Trustee as provided
77
below, the Company shall deliver to the Trustee an Officers' Certificate as to
(A) the amount of the Offer (the "Offer Amount"), including information as to
any other Senior Indebtedness included in the Offer, (B) the allocation of the
Net Available Cash from the Asset Dispositions pursuant to which such Offer is
being made and (C) the compliance of such allocation with the provisions of
Section 4.06(a) and (b). On such date, the Company shall also irrevocably
deposit with the Trustee or with a Paying Agent (or, if the Company or any
Wholly Owned Subsidiary is acting as its own Paying Agent, segregate and hold in
trust) an amount equal to the Offer Amount to be invested in Temporary Cash
Investments, maturing on the last day prior to the Purchase Date or on the
Purchase Date if funds are immediately available by open of business, an amount
equal to the Offer Amount to be held for payment in accordance with the
provisions of this Section 4.06. If the Offer includes other Senior
Indebtedness, the deposit described in the preceding sentence may be made with
any other paying agent pursuant to arrangements satisfactory to the Trustee.
Upon the expiration of the period for which the Offer remains open (the "Offer
Period"), the Company shall deliver to the Trustee for cancellation the
Securities or portions thereof which have been properly tendered to and are to
be accepted by the Company. The Trustee (or the Paying Agent, if not the
Trustee) shall, on the Purchase Date, mail or deliver payment (or cause the
delivery of payment) to each tendering Holder in the amount of the purchase
price. In the event that the aggregate purchase price of the Securities
delivered by the Company to the Trustee (and other Senior Indebtedness tendered)
is less than the Offer Amount applicable to the Securities (and other Senior
Indebtedness tendered), the Trustee shall deliver the excess to the Company
immediately after the expiration of the Offer Period for application in
accordance with this Section 4.06.
(3) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the Purchase Date, a facsimile transmission or letter setting
78
forth the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased. Holders whose
Securities are purchased only in part shall be issued new Securities equal in
principal amount to the unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the
Trustee which are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section 4.06. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
(d) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section 4.06. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.06, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.06 by virtue of its
compliance with such securities laws or regulations.
(e) Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of this Section 4.06.
Limitation on Affiliate Transactions.
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property, employee
compensation arrangements or the rendering of any service) with, or for the
benefit of,
79
any Affiliate of the Company (an "Affiliate Transaction") unless:
(1) the terms of the Affiliate Transaction are no less
favorable to the Company or such Restricted Subsidiary than those that
could be obtained at the time of such transaction in arm's-length
dealings with a Person who is not such an Affiliate;
(2) if such Affiliate Transaction involves an amount in
excess of $25 million, the terms of the Affiliate Transaction are set
forth in writing and a majority of the non-employee directors of the
Company disinterested with respect to such Affiliate Transaction have
determined in good faith that the criteria set forth in clause (1) are
satisfied and have approved the relevant Affiliate Transaction as
evidenced by a resolution of the Board of Directors of the Company;
and
(3) if such Affiliate Transaction involves an amount in
excess of $50 million, the Board of Directors of the Company shall also
have received a written opinion from an Independent Qualified Party to
the effect that such Affiliate Transaction is fair, from a financial
standpoint, to the Company and its Restricted Subsidiaries or not less
favorable to the Company and its Restricted Subsidiaries than could
reasonably be expected to be obtained at the time in an arm's-length
transaction with a Person who was not an Affiliate.
(b) The provisions of Section 4.07(a) shall not prohibit:
(1) any Investment (other than a Permitted Investment) or
other Restricted Payment, in each case permitted to be made pursuant to
Section 4.04;
(2) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans
approved by the Board of Directors of the Company;
(3) loans or advances to employees in the ordinary course of
business of the Company or its Restricted
80
Subsidiaries, but in any event not to exceed $15 million in the
aggregate outstanding at any one time;
(4) the payment of reasonable and customary fees and
compensation to, or the provision of employee benefit arrangements and
indemnity for the benefit of, directors, officers, employees and
consultants of the Company and its Restricted Subsidiaries in the
ordinary course of business;
(5) any transaction with a Restricted Subsidiary or joint
venture or similar entity which would constitute an Affiliate
Transaction solely because the Company or a Restricted Subsidiary owns
an equity interest in or otherwise controls such Restricted Subsidiary,
joint venture or similar entity;
(6) the payment by the Company or any of its Restricted
Subsidiaries of (A) annual management, consulting, monitoring and
advisory fees and any related and reasonable out-of-pocket expenses to
any of the Sponsors in an aggregate amount, for all the Sponsors, not
to exceed $5 million in any calendar year and (B) fees to any of the
Sponsors paid for any financial advisory, financing, underwriting or
placement services including, without limitation, in connection with
any acquisition transaction or divestiture entered into by the Company
or any Restricted Subsidiary; provided, however, that the aggregate
-------- -------
amount of fees paid to all of the Sponsors under this clause (B) in
respect of any transaction shall not exceed the lesser of (i) 25% of
the total amount of such transaction and (ii) the greater of 2% of the
total amount of such transaction and $2 million;
(7) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company;
(8) transactions with customers, clients, suppliers or
purchasers or sellers of goods or services in each case in the ordinary
course of business and otherwise in compliance with the terms of this
Indenture which are fair to the Company or its Restricted Subsidiaries,
in the good faith determination of the Board of Directors
81
of the Company or the senior management thereof, or are on terms at
least as favorable as might reasonably have been obtained at such time
from an unaffiliated party;
(9) any agreement as in effect as of the Issue Date on the
terms described in the Offering Memorandum or any amendment thereto (so
long as any such amendment is not disadvantageous to the Holders of the
Securities in any material respect) or any transaction contemplated
thereby;
(10) any licensing agreement or similar agreement entered
into in the ordinary course of business relating to the use of
technology or intellectual property between any of the Company and its
Subsidiaries, on the one hand, and any company or other Person, on the
other hand, which is an Affiliate of the Company or its Subsidiaries
by virtue of the fact that a Sponsor has made an investment in or owns
any Capital Stock of such company or other Person which are fair to
the Company or its Restricted Subsidiaries, in the reasonable
determination of the Board of Directors of the Company or the senior
management thereof, or are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated party;
(11) the grant of stock options or similar rights to
employees and directors of the Company or any of its Restricted
Subsidiaries pursuant to plans approved by the Board of Directors of
the Company in good faith; and
(12) the existence of, or the performance by the Company or
any of its Restricted Subsidiaries of its obligations under the terms
of, any stockholders agreement (including any registration rights
agreement or purchase agreement related thereto) to which it is a party
as of the Issue Date, and any similar agreements which it may enter
into thereafter; provided, however, that the existence of, or the
-------- -------
performance by the Company or any of its Restricted Subsidiaries of its
obligations under, any future amendment to such existing agreement or
under any similar agreement entered into after the Issue Date shall
only be permitted by this clause (12) to the extent that the terms of
any such amendment or
82
new agreement are not disadvantageous to the Holders in any material
respect.
(c) Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of this Section 4.07.
SECTION 4.08. Limitation on the Sale or Issuance of Capital
---------------------------------------------
Stock of Restricted Subsidiaries. The Company (1) shall not, and shall not
- ---------------------------------
permit any Restricted Subsidiary to, sell, lease, transfer or otherwise dispose
of any Capital Stock of any Restricted Subsidiary to any Person (other than to
the Company or a Wholly Owned Subsidiary) and (2) shall not permit any
Restricted Subsidiary to issue any of its Capital Stock (other than, if
necessary, shares of its Capital Stock constituting directors' or other legally
required qualifying shares) to any Person (other than to the Company or a Wholly
Owned Subsidiary) unless (A) immediately after giving effect to such issuance,
sale or other disposition, neither the Company nor any of its Subsidiaries own
any Capital Stock of such Restricted Subsidiary or (B) made in compliance with
Section 4.06 and, immediately after giving effect to such issuance, sale or
other disposition, such Restricted Subsidiary either (x) continues to be a
Restricted Subsidiary or (y) would no longer constitute a Restricted Subsidiary
and any Investment in such Person remaining after giving effect thereto is
treated as a new Investment by the Company and such Investment would be
permitted to be made under Section 4.04 if made on the date of such issuance,
sale or other disposition. The proceeds of any sale of such Capital Stock
permitted hereby will be treated as Net Available Cash from an Asset Disposition
and must be applied in accordance with the terms of Section 4.06.
Change of Control.
------------------
(a) Upon the occurrence of a Change of Control, each Holder
shall have the right to require that the Company repurchase such Holder's
Securities at a purchase price in cash equal to 101% of the principal amount
thereof on the date of purchase plus accrued and unpaid interest, if any, to
83
the date of purchase (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date), in
accordance with the terms contemplated in Section 4.09(b).
(b) Within 30 days following any Change of Control, the
Company shall mail a notice to each Holder with a copy to the Trustee (the
"Change of Control Offer") stating:
(1) that a Change of Control has occurred and that such
Holder has the right to require the Company to purchase such Holder's
Securities at a purchase price in cash equal to 101% of the principal
amount thereof on the date of purchase, plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest on
the relevant interest payment date);
(2) the circumstances and relevant facts regarding such
Change of Control;
(3) the purchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent
with this Section 4.09, that a Holder must follow in order to have its
Securities purchased.
(c) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the purchase date, a facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.
84
(d) On the purchase date, all Securities purchased by the
Company under this Section 4.09 shall be delivered by the Company to the Trustee
for cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section
4.09, the Company shall not be required to make a Change of Control Offer
following a Change of Control if (1) a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section applicable to a Change of Control Offer
made by the Company and purchases all Securities validly tendered and not
withdrawn under such Change of Control Offer or (2) the Company has exercised
its option to redeem all the Securities pursuant to Article 3.
(f) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section 4.09. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.09, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.09 by virtue of its
compliance with such securities laws or regulations.
85
SECTION 4.10. Limitation on Liens. The Company shall not,
--------------------
and shall not permit any Restricted Subsidiary to, directly or indirectly, Incur
or permit to exist any Lien (the "Initial Lien") of any nature whatsoever on any
of its properties (including Capital Stock of a Restricted Subsidiary), whether
owned at the Issue Date or thereafter acquired, securing any Indebtedness, other
than Permitted Liens, without effectively providing that the Securities shall be
secured equally and ratably with (or prior to) the obligations so secured for so
long as such obligations are so secured. Any Lien created for the benefit of the
Holders of the Securities pursuant to the preceding sentence shall provide by
its terms that such Lien shall be automatically and unconditionally released and
discharged upon the release and discharge of the Initial Lien.
SECTION 4.11. Limitation on Sale/Leaseback Transactions.
------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary to, enter
into any Sale/Leaseback Transaction with respect to any property unless (1) the
Company or such Restricted Subsidiary would be entitled to (A) Incur
Indebtedness in an amount equal to the Attributable Debt with respect to such
Sale/Leaseback Transaction pursuant to Section 4.03 and (B) create a Lien on
such property securing such Attributable Debt without equally and ratably
securing the Securities pursuant to Section 4.10, (2) the net proceeds received
by the Company or any Restricted Subsidiary in connection with such
Sale/Leaseback Transaction are at least equal to the fair value (as determined
by the Board of Directors of the Company) of such property and (3) the Company
applies the proceeds of such transaction in compliance with Section 4.06.
Amendment of Deferred Compensation Plans.
-----------------------------------------
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to,
(1) amend, modify or waive any of its rights under any
Deferred Compensation Plan, except to the extent that such amendments,
modifications or waivers, individually and in the aggregate, (i) would
not reasonably be expected to be materially adverse to the Holders and
(ii) would not require the Company or any of its Subsidiaries to make
any distributions or other
86
payments (whether in cash, securities or other property or any
combination thereof) that would be in violation of the covenants set
forth in this Indenture, or
(2) adopt any Deferred Compensation Plan if the terms
(including subordination terms) of such Deferred Compensation Plan that
are material to the Holders are in any way less favorable to the
Holders than the terms of the Deferred Compensation Plans in effect on
the Issue Date.
Notwithstanding clause (1) above, the Company shall not, and shall not permit
any Restricted Subsidiary to, amend, modify or waive any of the subordination
terms of any Deferred Compensation Plan in effect on the Issue Date.
(b) Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of this Section 4.12.
Additional Amounts. All payments made by the Company and
-------------------
Parent under or with respect to the Securities and the Parent Guaranty shall be
made free and clear of and without withholding or deduction for or on account of
any present or future tax, duty, levy, impost, assessment or other governmental
charge (including penalties, interest and other liabilities related thereto)
(hereinafter "Taxes") imposed or levied by or on behalf of the government of the
-----
Cayman Islands or any political subdivision or any authority or agency therein
or thereof having power to tax, or within any other jurisdiction in which we are
organized or are otherwise resident for tax purposes or any jurisdiction from or
through which payment is made (each a "Relevant Taxing Jurisdiction"), unless
----------------------------
the applicable obligor is required to withhold or deduct Taxes by law or by the
interpretation or administration thereof.
If the Company or Parent is so required to withhold or deduct
any amount for or on account of Taxes imposed by a Relevant Taxing Jurisdiction
from any payment made under or with respect to the Securities or the Parent
Guaranty, the
87
Company or Parent, as the case may be, shall pay such additional amounts
("Additional Amounts") as may be necessary so that the net amount received by
------------------
the Holders (including Additional Amounts) after such withholding or deduction
will not be less than the amount the Holders would have received if such Taxes
had not been withheld or deducted; provided, however, that the foregoing
-------- -------
obligation to pay Additional Amounts does not apply to (1) any Taxes that would
not have been so imposed but for the existence of any present or former
connection between the relevant Holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of, or possessor of power over the relevant
Holder, if the relevant Holder is an estate, nominee, trust or corporation) and
the Relevant Taxing Jurisdiction (other than the mere receipt of such payment or
the ownership or holding outside of the Cayman Islands of such Security, but
including, without limitation, such relevant Holder (or such fiduciary, settlor,
beneficiary, member or shareholder or possessor) being or having been a citizen
or resident thereof or being or having been present or engaged in a trade or
business therein or having or having had a permanent establishment therein); (2)
any estate, inheritance, gift, sales, excise, transfer, personal property tax or
similar tax, assessment or governmental charge; (3) any Tax that is imposed or
withheld by reason of the failure by the Holder or the beneficial owner of the
Security to comply with a request of the Company or Parent addressed to the
Holder (x) to provide information, documents or other evidence concerning the
nationality, residence or identity of the Holder or such beneficial owner or (y)
to make and deliver any declaration or other similar claim (other than a claim
for refund of a tax, assessment or other governmental charge withheld by the
Company or Parent) or satisfy any information or reporting requirements, which,
in the case of (x) or (y), is required or imposed by a statute, treaty,
regulation or administrative practice of the Relevant Taxing Jurisdiction as a
precondition to exemption from all or part of such Tax; or (4) any Tax that is
payable otherwise than by withholding from payment of principal of, premium, if
any, or interest on such Security; nor shall the Company or Parent be required
to pay Additional Amounts (a) if the payment could have been made without such
deduction or withholding if the beneficiary of the payment had presented the
Security for payment within 30 days after the date on which such payment or such
Security became due
88
and payable or the date on which payment thereof is duly provided for,
whichever is later (except to the extent that the Holder would have been
entitled to Additional Amounts had the Security been presented on the last day
of such 30 day period), (b) if, at the election of the relevant Holder, the
payment of principal of (or premium, if any, on) or interest on such Security
could have been made through another paying agent without such deduction or
withholding, or (c) with respect to any payment of principal of (or premium, if
any, on) or interest on or with respect to such Security to any Holder who is a
fiduciary or partnership (for United States Federal tax purposes) or any person
other than the sole beneficial owner of such payment, to the extent that a
beneficiary or settlor with respect to such fiduciary, a partner of such a
partnership or the beneficial owner of such payment would not have been
entitled to the Additional Amounts had such beneficiary, settlor, partner or
beneficial owner been the actual Holder of such Security.
The Company shall provide the Trustee with official receipts
or other documentation evidencing the payment of the Taxes with respect to which
Additional Amounts are paid.
Whenever in this Indenture or any Security there is mentioned,
in any context: (1) the payment of principal; (2) purchase prices in connection
with a purchase of Securities; (3) interest; or (4) any other amount payable on
or with respect to any of the Securities, such reference shall be deemed to
include payment of Additional Amounts provided for in this Section 4.13 to the
extent that, in such context, Additional Amounts are, were or would be payable
in respect thereof.
The Company shall pay any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise in any jurisdiction from the execution, delivery, enforcement
or registration of the Securities, this Indenture or any other document or
instrument in relation thereof, or the receipt of any payments with respect to
the Securities, excluding such taxes, charges or similar levies imposed by any
jurisdiction outside of the Cayman Islands or the United States (or any
political subdivision or taxing authority of either jurisdiction), the
jurisdiction of incorporation of any
89
successor of the Company or any jurisdiction in which a paying agent is located
or the Company is organized or engaged in business for tax purposes, and the
Company will agree to indemnify the Holders for any such taxes paid by such
Holders.
The obligations described under this Section 4.13 shall
survive any termination, defeasance or discharge of this Indenture and shall
apply mutatis mutandis to any jurisdiction in which any successor Person to the
Company or Parent is organized or any political subdivision or taxing authority
or agency thereof or therein.
Compliance Certificate. The Company shall deliver to the
-----------------------
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA (S) 314(a)(4).
Further Instruments and Acts. Upon request of the Trustee,
-----------------------------
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
Successor Company
-----------------
When the Company May Merge or Transfer Assets.
----------------------------------------------
(a) The Company shall not consolidate with or merge with or
into, or convey, transfer or lease, in one transaction or a series of
transactions, directly or indirectly, all or substantially all its assets to,
any Person, unless:
(1) the resulting, surviving or transferee Person (the
"Successor Company") shall be a Person organized
90
and existing under either the laws of the Cayman Islands or the laws
of the United States of America, any State thereof or the District of
Columbia and the Successor Company (if not the Company) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Securities and this Indenture;
(2) immediately after giving pro forma effect to such
transaction (and treating any Indebtedness which becomes an obligation
of the Successor Company or any Subsidiary as a result of such
transaction as having been Incurred by such Successor Company or such
Subsidiary at the time of such transaction), no Default shall have
occurred and be continuing;
(3) immediately after giving pro forma effect to such
transaction, either (i) the Successor Company would be able to Incur an
additional $1.00 of Indebtedness pursuant to Section 4.03(a) or (ii)
the Consolidated Coverage Ratio would be (A) greater than the
Consolidated Coverage Ratio immediately prior to such transaction and
(B) at least 2.5 to 1.0; and
(4) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture;
provided, however, that clause (3) will not be applicable to (A) a Restricted
- -------- -------
Subsidiary consolidating with, merging into or transferring all or part of its
properties and assets to the Company or (B) the Company merging with an
Affiliate of the Company solely for the purpose and with the sole effect of
reincorporating the Company in another jurisdiction.
For the purposes of this Section 5.01, the sale, lease,
conveyance, assignment, transfer or other disposition of all or substantially
all of the properties and assets of one or more Subsidiaries of the Company,
which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties
91
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.
The Successor Company shall be the successor to the Company
and shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture, and the predecessor Company, except
in the case of a lease, shall be released from the obligation to pay the
principal of and interest on the Securities.
(b) Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of Section 5.01(a)(3).
SECTION 5.02. When Parent May Merge or Transfer Assets.
-----------------------------------------
Parent shall not merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person unless:
(a) the resulting, surviving or transferee Person (if not
Parent) shall be a Person organized and existing under the laws of the
Cayman Islands or under the laws of the United States of America, or
any State thereof or the District of Columbia, and such Person shall
expressly assume all the obligations of Parent, if any, under the
Parent Guaranty;
(b) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person
as a result of such transaction as having been issued by such Person at
the time of such transaction), no Default shall have occurred and be
continuing; and
(c) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such assumption of obligations
under the Parent Guaranty, if any, complies with this Indenture.
92
Defaults and Remedies
---------------------
Events of Default. An "Event of Default" occurs if:
------------------
(1) the Company defaults in any payment of interest or any
Additional Amounts on any Security when the same becomes due and
payable and such default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of
any Security when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon required purchase, upon
declaration of acceleration or otherwise;
(3) the Company or Parent fails to comply with Section 5.01
or Section 5.02, respectively;
(4) the Company fails to comply for 45 days after notice
with any of its obligations under Section 4.09 (other than a failure
to purchase Securities) or under Sections 4.02, 4.03, 4.04, 4.05, 4.06
(other than a failure to purchase Securities), 4.07, 4.08, 4.10, 4.11
or 4.12;
(5) the Company fails to comply with any of its agreements
in the Securities or this Indenture (other than those referred to in
clause (1), (2), (3) or (4) above) and such failure continues for 60
days after the notice specified below;
(6) Indebtedness of the Company or any Significant
Subsidiary is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default
and the total amount of such Indebtedness unpaid or accelerated
exceeds $50 million or its foreign currency equivalent at the time
(the "cross acceleration provisions") and such failure continues for
30 days after the notice specified below;
93
(7) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for any substantial part of its
property; or
(C) orders the winding up or liquidation of the
Company or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money (other
than judgments which are covered by enforceable insurance policies
issued by creditworthy, solvent and reputable insurance carriers) in
excess of $50 million or its foreign currency equivalent at the time is
entered against the Company or any Significant Subsidiary, remains
outstanding for a period of 60 consecutive days following the entry of
such judgment
94
or decree and is not discharged, waived or the execution thereof stayed
within 10 days after the notice specified below; or
(10) the Parent Guaranty ceases to be in full force and
effect (other than in accordance with the terms of this Indenture) or
Parent denies or disaffirms its obligations under the Parent Guaranty
and such Default continues for 10 days after the notice specified
below;
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is 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.
The term "Bankruptcy Law" means Title 11, United States Code,
------------------
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clauses (4), (5), (6), (9) or (10) is not an
Event of Default until the Trustee or the Holders of at least 25% in principal
amount of the outstanding Securities notify the Company of the default and the
Company does not cure such Default within the time specified after receipt of
such notice. Such notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any event which with the giving of notice or the lapse of time would become
an Event of Default under clause (4), (5), (6) or (10), its status and what
action the Company is taking or proposes to take with respect thereto; provided,
--------
however, that in the case of any event which would become an Event of Default
- -------
under clause (9), such delivery shall be made within 10 days after the
occurrence thereof.
95
Acceleration. If an Event of Default (other than an Event of
-------------
Default specified in Section 6.01(7) or (8) with respect to the Company) occurs
and is continuing, the Trustee by notice to the Company, or the Holders of at
least 25% in principal amount of the outstanding Securities by notice to the
Company and the Trustee, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an Event of
Default specified in Sections 6.01(7) or (8) with respect to the Company occurs,
the principal of and interest on all the Securities shall ipso facto become and
---- -----
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Securityholders. The Holders of a majority in principal
amount of the Securities by notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
Other Remedies. If an Event of Default occurs and is
---------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
96
Waiver of Past Defaults. The Holders of a majority in
------------------------
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (i) a Default in the payment of the
principal of or interest on a Security (ii) a Default arising from the failure
to redeem or purchase any Security when required pursuant to this Indenture or
(iii) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Securityholder affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.
Control by Majority. The Holders of a majority in principal
--------------------
amount of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
-------- -------
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
Limitation on Suits. Except to enforce the right to receive
--------------------
payment of principal, premium (if any) or interest when due, no Securityholder
may pursue any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
97
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in principal amount of the
outstanding Securities do not give the Trustee a direction inconsistent
with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
Rights of Holders to Receive Payment. Notwithstanding any
-------------------------------------
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, or to bring suit for the
enforcement of any payment with respect to the Securities, shall not be impaired
or affected without the consent of such Holder.
Collection Suit by Trustee. If an Event of Default specified
---------------------------
in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount then due and owing (together with interest on any overdue
installments of interest at the rate of 8% per annum to the extent lawful) and
the amounts provided for in Section 7.07.
98
Trustee May File Proofs of Claim. The Trustee may file such
---------------------------------
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Securityholders allowed in
any judicial proceedings relative to the Company, its creditors or its property
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.
Priorities. If the Trustee collects any money or property
-----------
pursuant to this Article 6, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 6.10. At least 15 days
before such record date, the Company shall mail to each Securityholder and the
Trustee a notice that states the record date, the payment date and amount to be
paid.
99
Undertaking for Costs. In any suit for the enforcement of any
----------------------
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a
suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10%
in principal amount of the Securities.
Waiver of Stay or Extension Laws. The Company (to the extent
---------------------------------
it may lawfully do so) shall not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
Trustee
-------
Duties of Trustee.
------------------
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise the rights and powers vested in it by this Indenture
and use the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such Person's
own affairs.
100
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith or gross negligence on its
part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture (but need not confirm or investigate
the accuracy of mathematical calculations or other facts stated
therein).
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph
(b) of this Section 7.01;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section
7.01.
(e) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company.
101
(f) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur 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 to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section 7.01 and to the provisions of
the TIA.
Rights of Trustee.
------------------
(a) The Trustee may conclusively rely on any document
believed by it to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
-------- -------
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection,
and the advice or opinion of counsel with respect to legal matters relating to
this Indenture and the
102
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
Individual Rights of Trustee. The Trustee in its individual
-----------------------------
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
Trustee's Disclaimer.
---------------------
(a) The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company in this Indenture or in any document issued in connection with the sale
of the Securities or in the Securities other than the Trustee's certificate of
authentication.
(b) The Trustee shall not be under any obligation to
ascertain whether or not a Change of Control or Registration Default has
occurred or to give notice with respect thereto and may conclusively assume, in
the absence of either actual knowledge of a Trust Officer of such occurrence or
receipt of a written notice to the contrary from the Company, that no Change of
Control or Registration Default has occurred.
103
Notice of Defaults. If a Default occurs and is continuing and
-------------------
if it is known to the Trustee, the Trustee shall mail to each Securityholder
notice of the Default within 90 days after it occurs. Except in the case of a
Default in payment of principal of or interest on any Security (including
payments pursuant to the mandatory redemption provisions of such Security, if
any), the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
Reports by Trustee to Holders. As promptly as practicable
------------------------------
after each May 15 beginning with the second May 15 following the date of this
Indenture, and in any event prior to July 15 in each year, the Trustee shall
mail to each Securityholder a brief report dated as of May 15 that complies with
TIA [sec] 313(a). The Trustee also shall comply with TIA [sec] 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
104
Compensation and Indemnity. The Company shall pay to the
---------------------------
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including reasonable attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee may have separate counsel and the Company shall
pay the reasonable fees and expenses of such counsel. The Company need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own wilful misconduct, negligence
or bad faith.
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee other than money or property held in
trust to pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
7.07 shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of a Default specified in Section 6.01(7) or (8)
with respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
105
Replacement of Trustee. The Trustee may resign at any time by
-----------------------
so notifying the Company. The Holders of a majority in principal amount of the
Securities may remove the Trustee by so notifying the Trustee and may appoint a
successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, unless the
Trustee's duty to resign is stayed as provided in TIA [sec] 310(b), any
Securityholder who has been a bona fide
106
holder of a Security for at least six months may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07 shall continue
for the benefit of the retiring Trustee.
Successor Trustee by Merger. If the Trustee consolidates
----------------------------
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
Eligibility; Disqualification. The Trustee shall at all times
------------------------------
satisfy the requirements of TIA [sec] 310(a). The Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA [sec]
310(b); provided, however, that there shall be excluded from the operation of
-------- -------
TIA [sec] 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA [sec]
310(b)(1) are met.
107
Preferential Collection of Claims Against Company. The
--------------------------------------------------
Trustee shall comply with TIA [sec] 311(a), excluding any creditor relationship
listed in TIA [sec] 311(b). A Trustee who has resigned or been removed shall be
subject to TIA [sec] 311(a) to the extent indicated.
Discharge of Indenture; Defeasance
----------------------------------
Discharge of Liability on Securities; Defeasance.
-------------------------------------------------
(a) When (1) all outstanding Securities (other than
Securities replaced or paid pursuant to Section 2.07) have been canceled or
delivered to the Trustee for cancelation or (2) all outstanding Securities have
become due and payable, whether at maturity or on a redemption date as a result
of the mailing of a notice of redemption pursuant to Article 3 hereof and the
Company irrevocably deposits with the Trustee funds or U.S. Government
Obligations, or a combination thereof, in an amount sufficient, in the opinion
of a nationally recognized firm of independent public accountants delivered to
the Trustee (which delivery will only be required if U.S. Government Obligations
have been so delivered), to pay at maturity or upon redemption all outstanding
Securities, including interest thereon to maturity or such redemption date
(other than Securities replaced or paid pursuant to Section 2.07), and if in
either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Section 8.01(c), cease to be of further
effect and all obligations of Parent and the Company hereunder shall cease. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (1) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (2) its obligations under Sections
4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 4.13 and
the operation of Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but,
in the case of Sections 6.01(7) and
108
(8), with respect only to Significant Subsidiaries) and the limitations
contained in Sections 5.01(a)(3) and Parent may terminate the limitations
contained in Section 5.02 ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Sections 6.01(4),
6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections 6.01(7) and
(8), with respect only to Significant Subsidiaries) or because of the failure of
the Company to comply with Section 5.01(a)(3) or because of the failure by
Parent to comply with Section 5.02. If the Company exercises its legal
defeasance option or its covenant defeasance option, Parent shall be released
from all its obligations with respect to the Parent Guaranty.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
Conditions to Defeasance. The Company may exercise its legal
-------------------------
defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations, or a combination thereof,
for the payment of principal of and interest on the Securities to
maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of
109
independent accountants expressing their opinion that the payments of
principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will
be sufficient to pay principal and interest when due on all the
Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.01(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any
other agreement binding on the Company;
(5) the Company delivers to the Trustee an Opinion of
Counsel to the effect that the trust resulting from the deposit does
not constitute, or is qualified as, a regulated investment company
under the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such legal defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the
Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Securityholders 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
110
at the same times as would have been the case if such covenant
defeasance had not occurred;
(8) the Company delivers to the Trustee an Opinion of
Counsel in the jurisdiction of organization of the Company (if other
than the United States) to the effect that Holders will not recognize
income, gain or loss for income tax purposes of such jurisdiction as a
result of such deposit and defeasance and will be subject to income tax
of such jurisdiction on the same amounts, in the same manner and at the
same times as would have been the case if such deposit and defeasance
had not occurred; and
(9) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities as
contemplated by this Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
Application of Trust Money. The Trustee shall hold in trust
---------------------------
money or U.S. Government Obligations deposited with it pursuant to this Article
8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities.
Repayment to Company. The Trustee and the Paying Agent shall
---------------------
promptly turn over to the Company upon request any excess money or securities
held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
111
Indemnity for Government Obligations. The Company shall pay
-------------------------------------
and shall indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against deposited U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations.
Reinstatement. If the Trustee or Paying Agent is unable to
--------------
apply any money or U.S. Government Obligations in accordance with this Article 8
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 8 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article 8; provided, however, that, if the Company has made any
-------- -------
payment of interest on or principal of any Securities because of 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 or U.S.
Government Obligations held by the Trustee or Paying Agent.
Amendments
----------
Without Consent of Holders. The Company, Parent and the
--------------------------
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to provide for the assumption by a Successor Company of
the obligations of the Company or Parent under this Indenture;
(3) to provide for uncertificated Securities in addition to
or in place of certificated Securities; provided, however, that the
-------- -------
uncertificated Securities are issued in registered form for purposes
of Section 163(f) of the Code or in a manner such that the
112
uncertificated Securities are described in Section 163(f)(2)(B) of the
Code;
(4) to add Guarantees with respect to the Securities or to
secure the Securities;
(5) to add to the covenants of the Company or Parent for the
benefit of the Holders or to surrender any right or power herein
conferred upon the Company or Parent;
(6) to comply with any requirement of the SEC in connection
with qualifying, or maintaining the qualification of, this Indenture
under the TIA;
(7) to make any change that does not adversely affect the
rights of any Securityholder; or
(8) to make any amendment to the Appendix; provided, that
--------
(a) compliance with the Appendix as so amended would not violate the
Securities Act or any other applicable law and (b) such amendment does
not materially affect the rights of Holders to transfer Securities.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section 9.01.
With Consent of Holders. The Company, Parent and the Trustee
------------------------
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities then outstanding (including consents obtained in
connection with a tender offer or exchange for the Securities). However, without
the consent of each Securityholder affected thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment;
113
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal amount of or extend the Stated
Maturity of any Security;
(4) reduce the amount payable upon the redemption of any
Security or change the time at which or the preconditions upon which
any Security may be redeemed in accordance with Article 3;
(5) make any Security payable in money other than that
stated in the Security;
(6) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Securities on or after the
due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Securities;
(7) make any changes in the amendment provisions which
require each Holder's consent or in the waiver provisions;
(8) make any changes in the ranking or priority of any
Security that would adversely affect the Securityholders;
(9) make any change in the Parent Guaranty that would
adversely affect the Securityholders; or
(10) make any change in Section 4.13 that adversely affects
the rights of any Securityholder or amend the terms of the Securities
or this Indenture in a way that would result in the loss of an
exemption from any of the Taxes described therein.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective,
the Company shall mail to Securityholders a notice
114
briefly describing such amendment. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the validity
of an amendment under this Section 9.02.
Compliance with Trust Indenture Act. Every amendment to this
------------------------------------
Indenture or the Securities shall comply with the TIA as then in effect.
Revocation and Effect of Consents and Waivers. A consent to
----------------------------------------------
an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation
of the consent or waiver is not made on the Security. However, any such Holder
or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
115
Notation on or Exchange of Securities. If an amendment
--------------------------------------
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
Trustee To Sign Amendments. The Trustee shall sign any
---------------------------
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
Payment for Consent. Neither the Company nor any Affiliate of
--------------------
the Company 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 to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
116
Guarantee
---------
Guarantee. Parent hereby unconditionally and irrevocably
----------
guarantees to each Holder and to the Trustee and its successors and assigns (a)
the full and punctual payment of principal of and interest on the Securities
when due, whether at maturity, by acceleration, by redemption or otherwise, and
all other monetary obligations of the Company under this Indenture and the
Securities and (b) the full and punctual performance within applicable grace
periods of all other obligations of the Company under this Indenture and the
Securities (all the foregoing being hereinafter collectively called the
"Guaranteed Obligations"). Parent further agrees that the Guaranteed Obligations
may be extended or renewed, in whole or in part, without notice or further
assent from Parent and that Parent will remain bound under this Article 10
notwithstanding any extension or renewal of any Guaranteed Obligation.
Parent waives presentation to, demand of payment from and
protest to the Company of any of the Guaranteed Obligations and also waives
notice of protest for nonpayment. Parent waives notice of any default under the
Securities or the Guaranteed Obligations. The obligations of Parent hereunder
shall not be affected by (a) the failure of any Holder or the Trustee to assert
any claim or demand or to enforce any right or remedy against the Company or any
other Person under this Indenture, the Securities or any other agreement or
otherwise, (b) any extension or renewal of any thereof, (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Indenture, the Securities or any other agreement, (d) the release of any
security held by any Holder or the Trustee for the Guaranteed Obligations or any
of them, (e) the failure of any Holder or the Trustee to exercise any right or
remedy against any other guarantor of the Guaranteed Obligations, or (f) except
as set forth in Section 10.05, any change in the ownership of Parent.
Parent further agrees that the Parent Guaranty herein
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Guaranteed Obligations.
117
Except as expressly set forth in Sections 8.01(b) and 10.05,
the obligations of Parent hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense of setoff, counterclaim, recoupment or termination whatsoever or
by reason of the invalidity, illegality or unenforceability of the Guaranteed
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of Parent pursuant to this Article 10 shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Securities or any other agreement, by any waiver or modification of any thereof,
by any default, failure or delay, willful or otherwise, in the performance of
the obligations, or by any other act or thing or omission or delay to do any
other act or thing which may or might in any manner or to any extent vary the
risk of Parent or would otherwise operate as a discharge of Parent as a matter
of law or equity.
Parent agrees that the Parent Guaranty herein shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any Guaranteed Obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against
Parent by virtue hereof, upon the failure of the Company to pay the principal of
or interest on any Guaranteed Obligation when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise, or to perform
or comply with any other Guaranteed Obligation, Parent hereby promises to and
shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to
be paid, in cash, to the Holders or the Trustee an amount equal to the sum of
(1) the unpaid amount of such Guaranteed Obligations, (2) accrued and unpaid
interest on such Guaranteed Obligations (but only to the extent not prohibited
by law) and (3) all other monetary Obligations of the Company to the Holders and
the Trustee.
118
Parent agrees that, as between it, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the Guaranteed
Obligations may be accelerated as provided in Article 6 for the purposes of the
Parent Guaranty herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such Obligations as provided in Article 6, such Obligations (whether or not due
and payable) shall forthwith become due and payable by Parent for the purposes
of this Section 10.01.
Parent also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any Holder in
enforcing any rights under this Section 10.01.
Successors and Assigns. This Article 10 shall be binding upon
-----------------------
Parent and its successors and assigns and shall enure to the benefit of the
successors and assigns of the Trustee and the Holders and, in the event of any
transfer or assignment of rights by any Holder or the Trustee, the rights and
privileges conferred upon that party in this Indenture and in the Securities
shall automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.
No Waiver. Neither a failure nor a delay on the part of
----------
either the Trustee or the Holders in exercising any right, power or privilege
under this Article 10 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Article 10
at law, in equity, by statute or otherwise.
119
Modification. No modification, amendment or waiver of any
-------------
provision of this Article 10, nor the consent to any departure by Parent
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Trustee, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice to
or demand on any Guarantor in any case shall entitle Parent to any other or
further notice or demand in the same, similar or other circumstances.
SECTION 10.05. Release of Guarantor and Termination of
---------------------------------------
Parent Guaranty. (a) In connection with either an initial public offering of
- ----------------
the Company that involves an underwritten public offering of common stock of the
Company or a merger or consolidation between Parent and New SAC in a transaction
permitted by Section 5.02, Parent shall, at Parent's option, be released from
all obligations under this Article 10 without any further action required on the
part of the Trustee or any Holder. At the request of the Company, the Trustee
shall execute and deliver an appropriate instrument evidencing such release.
(b) If Parent and the Company merge or consolidate in a
transaction permitted by Sections 5.01 and 5.02, then the Parent Guaranty shall
automatically be terminated upon the consummation of such merger or
consolidation and shall no longer have any effect from such time without any
further action required on the part of the Trustee or any Holder. At the request
of the Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such termination.
Miscellaneous
-------------
Trust Indenture Act Controls. If any provision of this
-----------------------------
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA (S)(S) 310 to 318,
inclusive, the required provision shall control.
120
Notices. Any notice or communication shall be in writing and
--------
delivered in person or mailed by first-class mail addressed as follows:
if to the Company or Parent:
c/o Seagate Technology (US) Holdings, Inc.
920 Disc Drive
Scotts Valley, CA 95067
Attention of:
William L. Hudson
Senior Vice President,
General Counsel and Secretary
Tel: 831-439-5370
Fax: 831-438-6675
Glen A. Peterson
Vice President of Finance
and Treasurer
Tel: 831-439-2870
Fax: 831-438-8931
with a copy to:
Simpson Thacher & Bartlett
3330 Hillview Avenue
Palo Alto, CA 94304
Attention of:
William H. Hinman
Tel: 650-251-5000
Fax: 650-251-5002
if to the Trustee:
U.S. Bank, N.A.
One California Street
Suite 2550
San Francisco, CA 94111
121
Attention of:
Robert C. Hyman
Tel: 415-273-4584
Fax: 415-273-4591
The Company, Parent or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
Communication by Holders with Other Holders. Securityholders
--------------------------------------------
may communicate pursuant to TIA (S) 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities. The Company,
Parent, the Trustee, the Registrar and anyone else shall have the protection of
TIA (S) 312(c).
Certificate and Opinion as to Conditions Precedent. Upon any
---------------------------------------------------
request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in
122
the opinion of such counsel, all such conditions precedent have been
complied with.
Statements Required in Certificate or Opinion. Each
----------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
When Securities Disregarded. In determining whether the
----------------------------
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
123
Rules by Trustee, Paying Agent and Registrar. The Trustee may
---------------------------------------------
make reasonable rules for action by or a meeting of Securityholders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or
---------------
a day on which banking institutions are not required to be open in the State of
New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.
GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE
--------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
No Recourse Against Others. A director, officer, employee,
---------------------------
incorporator or stockholder, as such, of the Company or Parent shall not have
any liability for any obligations of the Company or Parent under the Securities,
the Parent Guaranty or this Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
Successors. All agreements of the Company in this Indenture
-----------
and the Securities shall bind its successors. All agreements of the Trustee in
this Indenture shall bind its successors.
Multiple Originals. The parties may sign any number of copies
-------------------
of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
124
Consent to Jurisdiction; Appointment of Agent for
-------------------------------------------------
Service of Process.
- -------------------
(a) The Company and Parent agree that any suit, action or
proceeding against the Company or Parent arising out of or relating to this
Indenture or the Securities may be instituted in any state or U.S. Federal court
located in the Borough of Manhattan, The City of New York, New York, and any
appellate court from any thereof, and each of them irrevocably submits to the
nonexclusive jurisdiction of such courts in any suit, action or proceeding that
may be brought in connection with this Indenture or the Securities. The Company
and Parent each irrevocably waives, to the fullest extent permitted by law, any
objection to any suit, action or proceeding that may be brought in connection
with this Indenture or the Securities, including such actions, suits or
proceedings relating to securities laws of the United States of America or any
state thereof, in such courts whether on the grounds of venue, residence or
domicile or on the ground that any such suit, action or proceeding has been
brought in an inconvenient forum. The Company and Parent agree that final
judgment in any such suit, action or proceeding brought in such court shall be
conclusive and binding upon the Company and Parent, as the case may be, and may
be enforced in any court to the jurisdiction of which the Company or Parent, as
the case may be, is subject by a suit upon such judgment; provided, however,
-------- -------
that service of process is affected upon the Company or Parent, as the case may
be, in the manner provided by Section 11.13(b).
(b) The Company and Parent each have appointed CT
Corporation System Inc., with offices on the date hereof at 818 West Seventh
Street, Suite 200, Los Angeles, CA 90017, as its authorized agent (the
"Authorized Agent"), upon whom process may be served in any suit, action or
proceeding arising out of or relating to this Indenture or the Securities or the
transactions contemplated herein which may be instituted in the Borough of
Manhattan, The City of New York, New York, and expressly accepts the
non-exclusive jurisdiction of any such court in respect of any such suit, action
or proceeding. The Company and Parent each hereby represent and warrant that the
Authorized Agent has accepted such appointment and has agreed to act as said
agent for service of process, and the Company and Parent agree to take any and
all actions, including the filing of any and all documents, that may be
necessary to continue such respective appointment in full force and effect
through June 1, 2009.
125
Service of process upon the Authorized Agent shall be deemed, in every respect,
effective service of process upon the Company and Parent. Notwithstanding the
foregoing, any action involving the Company or Parent arising out of or relating
to this Indenture or the Securities may be instituted in any court of competent
jurisdiction in any other jurisdiction.
Table of Contents; Headings. The table of contents,
----------------------------
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
126
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
SEAGATE TECHNOLOGY HDD HOLDINGS,
by /s/ William L. Hudson
-------------------------------
Name: William L. Hudson
Title: Secretary
SEAGATE TECHNOLOGY HOLDINGS,
by /s/ William L. Hudson
-------------------------------
Name: William L. Hudson
Title: Secretary
U.S. BANK, N.A.,
as trustee,
by /s/ Leticia Sabiniano
-------------------------------
Name: Leticia Sabiniano
Title: Assistant Vice President
127
RULE 144A/REGULATION S APPENDIX
PROVISIONS RELATING TO INITIAL SECURITIES,
------------------------------------------
PRIVATE EXCHANGE SECURITIES
---------------------------
AND EXCHANGE SECURITIES
-----------------------
1. Definitions.
------------
1.1 Definitions
-----------
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Temporary Regulation S Global Security or beneficial
interest therein, the rules and procedures of the Depository, Euroclear and
Clearstream for such a Temporary Regulation S Global Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Clearstream" means Clearstream Banking, societe anonyme, or
any successor securities clearing agency.
"Definitive Security" means a certificated Initial Security or
Exchange Security or Private Exchange Security bearing, if required, the
restricted securities legend set forth in Section 2.3(e).
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Distribution Compliance Period", with respect to any
Securities, means the period of 40 consecutive days beginning on and including
the later of (i) the day on which such Securities are first offered to Persons
other than distributors (as defined in Regulation S under the Securities Act) in
reliance on Regulation S and (ii) the date on which such Securities are
initially issued.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear System, or any successor securities clearing agency.
"Exchange Securities" means (1) the 8% Senior Notes Due 2009
issued pursuant to the Indenture in connection with a Registered Exchange Offer
pursuant to a Registration Rights Agreement and (2) Additional Securities, if
any, issued pursuant to a registration statement filed with the SEC under the
Securities Act.
"Initial Purchasers" means (1) with respect to the Initial
Securities issued on the Issue Date, Morgan Stanley & Co. Incorporated, J.P.
Morgan Securities Inc., Credit Suisse First Boston Corporation, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc. and (2) with
respect to each issuance of Additional Securities, the Persons purchasing such
Additional Securities under the related Purchase Agreement.
"Initial Securities" means (1) $400 aggregate principal amount
of 8% Senior Notes Due 2009 issued on the Issue Date and (2) Additional
Securities, if any, issued in a transaction exempt from the registration
requirements of the Securities Act.
"Private Exchange" means the offer by the Company, pursuant to
the Registration Rights Agreement, to the Initial Purchasers to issue and
deliver to each Initial Purchaser, in exchange for the Initial Securities held
by the Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means any 8% Senior Notes Due
2009 issued in connection with a Private Exchange.
"Purchase Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Purchase Agreement dated May 3, 2002,
among the Company and the Initial Purchasers, and (2) with respect to each
issuance of Additional Securities, the purchase agreement or underwriting
agreement among the Company and the Persons purchasing such Additional
Securities.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to a Registration Rights Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for the Initial
2
Securities, a like aggregate principal amount of Exchange Securities registered
under the Securities Act.
"Registration Rights Agreement" means (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated May 13, 2002, among the Company and the Initial Purchasers, and (2) with
respect to each issuance of Additional Securities issued in a transaction exempt
from the registration requirements of the Securities Act, the registration
rights agreement, if any, among the Company and the Persons purchasing such
Additional Securities under the related Purchase Agreement.
"Securities" means the Initial Securities, the Exchange
Securities and the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor Person
thereto and shall initially be the Trustee.
"Shelf Registration Statement" means the registration
statement issued by the Company in connection with the offer and sale of Initial
Securities or Private Exchange Securities pursuant to the a Registration Rights
Agreement.
"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.3(e) hereto.
1.2 Other Definitions
-----------------
Defined in
----------
Term Section:
---- -------
"Agent Members"......................................................... 2.1(b)
"Global Security"........................................................2.1(a)
"Permanent Regulation S Global Security".................................2.1(a)
"Regulation S"...........................................................2.1(a)
"Restricted Global Security".............................................2.1(a)
3
"Rule 144A"..............................................................2.1(a)
"Temporary Regulation S Global Security..................................2.1(a)
2. The Securities.
---------------
2.1 (a) Form and Dating. The Initial Securities will be offered and
----------------
sold by the Company pursuant to a Purchase Agreement. The Initial Securities
will be resold initially only to (i) QIBs in reliance on Rule 144A under the
Securities Act ("Rule 144A") and (ii) Persons other than U.S. Persons (as
defined in Regulation S) in reliance on Regulation S under the Securities Act
("Regulation S"). Initial Securities may thereafter be transferred to, among
others, QIBs and purchasers in reliance on Regulation S, in each case, subject
to the restrictions on transfer set forth herein. Initial Securities initially
resold pursuant to Rule 144A shall be issued initially in the form of one or
more permanent global Securities in definitive, fully registered form
(collectively, the "Rule 144A Global Security") and Initial Securities
initially resold pursuant to Regulation S shall be issued initially in the form
of one or more temporary global securities in definitive, fully registered form
(collectively, the "Temporary Regulation S Global Security"), in each case
without interest coupons and with the global securities legend and restricted
securities Legend set forth in Exhibit 1 hereto, which shall be deposited on
behalf of the purchasers of the Initial Securities represented thereby with the
Securities Custodian, and registered in the name of the Depository or a nominee
of the Depository, duly executed by the Company and authenticated by the
Trustee as provided in the Indenture. Except as set forth in this Section
2.1(a), beneficial ownership interests in the Temporary Regulation S Global
Security will not be exchangeable for interests in the permanent global
security (the "Permanent Regulation S Global Security"), or any other Security
without a legend containing restrictions on transfer of such Security prior to
the expiration of the Distribution Compliance Period and then beneficial
interests in the Temporary Regulation S Global Security may be exchanged for
interests in a Rule 144A Global Security or the Permanent Regulation S Global
Security only upon certification in a form reasonably satisfactory to the
Trustee that beneficial ownership interests in such Temporary Regulation S
Global Security are owned either by non-U.S. persons or U.S. persons who
purchased such interests in a transaction that did not require registration
under the Securities Act.
Beneficial interests in Temporary Regulation S Global Securities
may be exchanged for interests in Rule 144A Global
4
Securities or Permanent Regulation S Global Securities only if (1) such exchange
occurs in connection with a transfer of Securities in compliance with Rule 144A
and (2) the transferor of the Regulation S Global Security first delivers to the
Trustee a written certificate (in a form satisfactory to the Trustee) to the
effect that the Regulation S Global Security being transferred to a Person (a)
who the transferor reasonably believes to be a QIB (b) purchasing for its own
account or the account of a QIB in a transaction meeting the requirements of
Rule 144A and (c) in accordance with all applicable securities laws of the
States of the United States and other jurisdictions.
The Rule 144A Global Security, the Temporary Regulation S Global
Security and the Permanent Regulation S Global Security are collectively
referred to herein as "Global Securities". The aggregate principal amount of
the Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depository or its
nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
----------------------
only to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
5
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository or by the Trustee as the custodian of
the Depository or under such Global Security, and the Company, the Trustee and
any agent of the Company or the Trustee shall be entitled to treat the
Depository as the absolute owner of such 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 Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of such Depository governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this
------------------------
Section 2.1 or Section 2.3 or 2.4 of this Appendix, owners of beneficial
interests in Restricted Global Securities shall not be entitled to receive
physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
---------------
on the Issue Date, an aggregate principal amount of $400 million 8% Senior Notes
Due 2009, (2) any Additional Securities for an original issue in an aggregate
principal amount specified in the written order of the Company pursuant to
Section 2.02 of the Indenture and (3) Exchange Securities or Private Exchange
Securities for issue only in a Registered Exchange Offer or a Private Exchange,
respectively, pursuant to a Registration Rights Agreement, for a like principal
amount of Initial Securities, in each case upon a written order of the Company
signed by one Officer. Such order shall specify the amount of the Securities to
be authenticated and the date on which the original issue of Securities is to be
authenticated and, in the case of any issuance of Additional Securities pursuant
to Section 2.13 of the Indenture, shall certify that such issuance is in
compliance with Section 4.03 of the Indenture.
2.3 Transfer and Exchange.
-----------------------
(a) Transfer and Exchange of Definitive Securities. When
-----------------------------------------------
Definitive Securities are presented to the Registrar or a co-registrar with a
request:
(x) to register the transfer of such Definitive Securities; or
6
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other
authorized denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
- -------- -------
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to
the Company and the Registrar or co-registrar, duly
executed by the Holder thereof or its attorney duly
authorized in writing; and
(ii) if such Definitive Securities are required to bear a
restricted securities legend, they are being transferred or
exchanged pursuant to an effective registration statement
under the Securities Act, pursuant to Section 2.3(b) of this
Appendix or pursuant to clause (A), (B) or (C) below, and
are accompanied by the following additional information and
documents, as applicable:
(A) if such Definitive Securities are being delivered to
the Registrar by a Holder for registration in the
name of such Holder, without transfer, a
certification from such Holder to that effect; or
(B) if such Definitive Securities are being transferred
to the Company, a certification to that effect; or
(C) if such Definitive Securities are being transferred
(x) pursuant to an exemption from registration in
accordance with Rule 144A, Regulation S or Rule 144
under the Securities Act; or (y) in reliance upon
another exemption from the requirements of the
Securities Act: (i) a certification to that effect
(in the form set forth on the reverse of the
Security) and (ii) if the Company so requests, an
opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the
restrictions set forth
7
in the legend set forth in Section 2.3(e)(i) of this
Appendix.
(b) Restrictions on Transfer of a Definitive Security for a
-------------------------------------------------------
Beneficial Interest in a Global Security. A Definitive Security may not be
- -----------------------------------------
exchanged for a beneficial interest in a Rule 144A Global Security or a
Permanent Regulation S Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the
Security, that such Definitive Security is either (A) being
transferred to a QIB in accordance with Rule 144A or (B) is
being transferred after expiration of the Distribution
Compliance Period by a Person who initially purchased such
Security in reliance on Regulation S to a buyer who elects
to hold its interest in such Security in the form of a
beneficial interest in the Permanent Regulation S Global
Security; and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on
its books and records with respect to such Rule 144A Global
Security (in the case of a transfer pursuant to clause
(b)(i)(A)) or Permanent Regulation S Security (in the case
of a transfer pursuant to clause (b)(i)(B)) to reflect an
increase in the aggregate principal amount of the Securities
represented by the Rule 144A Global Security or Permanent
Regulation S Global Security, as applicable, such
instructions to contain information regarding the
Depository account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Rule 144A Global
Security or Permanent Regulation S Global Security, as applicable, to be
increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Rule 144A
8
Global Security or Permanent Regulation S Global Security, as applicable, equal
to the principal amount of the Definitive Security so canceled. If no Rule 144A
Global Securities or Permanent Regulation S Global Securities, as applicable,
are then outstanding, the Company shall issue and the Trustee shall
authenticate, upon written order of the Company in the form of an Officers'
Certificate, a new Rule 144A Global Security or Permanent Regulation S Global
Security, as applicable, in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities.
-------------------------------------------
(i) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the
Depository, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depository therefor. A
transferor of a beneficial interest in a Global Security
shall deliver to the Registrar a written order given in
accordance with the Depository's procedures containing
information regarding the participant account of the
Depository to be credited with a beneficial interest in the
Global Security. The Registrar shall, in accordance with
such instructions, instruct the Depository to credit to the
account of the Person specified in such instructions a
beneficial interest in the Global Security and to debit the
account of the Person making the transfer the beneficial
interest in the Global Security being transferred.
(ii) If the proposed transfer is a transfer
of a beneficial interest in one Global Security to a
beneficial interest in another Global Security, the
Registrar shall reflect on its books and records the date
and an increase in the principal amount of the Global
Security to which such interest is being transferred in an
amount equal to the principal amount of the interest to be
so transferred, and the Registrar shall reflect on its
books and records the date and a corresponding decrease in
the principal amount of the Global Security from which such
interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in
9
Section 2.4 of this Appendix), a Global Security may not be
transferred as a whole except by the Depository to a
nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or
by the Depository or any such nominee to a successor
Depository or a nominee of such successor Depository.
(iv) In the event that a Global Security is exchanged for
Definitive Securities pursuant to Section 2.4 of this
Appendix, prior to the consummation of a Registered
Exchange Offer or the effectiveness of a Shelf Registration
Statement with respect to such Securities, such Securities
may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this
Section 2.3 (including the certification requirements set
forth on the reverse of the Initial Securities intended to
ensure that such transfers comply with Rule 144A or
Regulation S, as the case may be) and such other procedures
as may from time to time be adopted by the Company.
(d) Restrictions on Transfer of Temporary Regulation S Global
---------------------------------------------------------
Securities. During the Distribution Compliance Period, beneficial ownership
- -----------
interests in Temporary Regulation S Global Securities may only be sold, pledged
or transferred through Euroclear or Clearstream in accordance with the
Applicable Procedures and only (i) to the Company, (ii) so long as such
Security is eligible for resale pursuant to Rule 144A, to a Person whom the
selling holder reasonably believes is a QIB that purchases for its own account
or for the account of a QIB to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, (iii) in an offshore
transaction in accordance with Regulation S, (iv) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 (if applicable)
under the Securities Act or (v) pursuant to an effective registration statement
under the Securities Act, in each case in accordance with any applicable
securities laws of any State of the United States.
(e) Legend.
-------
(i) Except as permitted by the following paragraphs (ii), (iii)
and (iv), each Security certificate evidencing the
10
Restricted Global Securities (and all Securities issued in exchange
therefor or in substitution thereof) shall bear a legend in
substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS IN THE UNITED
STATES. THIS SECURITY MAY NOT BE REOFFERED, RESOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT MEETING THE
APPLICABLE REQUIREMENTS OF THE SECURITIES ACT OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN
WILL BE ABLE TO EXERCISE THE EXCHANGE RIGHT ONLY IF THE HOLDER
CERTIFIES THAT IT (A) IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT, (B) IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPHS (a)(1),(2),(3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT OR (C) IS NOT A U.S. PERSON (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) AND IS NOT EXERCISING
SUCH EXCHANGE RIGHT ON BEHALF OF A U.S. PERSON.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS
SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE"), WHICH IS, IN THE
CASE OF NOTES SOLD IN RELIANCE UPON RULE 144A: TWO YEARS, OR, IN
THE CASE OF NOTES SOLD IN RELIANCE UPON REGULATION S: 40 DAYS,
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH SEAGATE TECHNOLOGY HDD HOLDINGS OR ANY AFFILIATE
THEREOF WAS THE OWNER OF THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A)
TO SEAGATE TECHNOLOGY HDD HOLDINGS OR ANY SUBSIDIARY THEREOF,
(B) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A "QUALIFIED INSTITUTIONAL BUYER" TO WHICH NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF SUCH AN
11
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, (D) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (E) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, INCLUDING UNDER RULE 144, IF AVAILABLE, OR (F) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, SUBJECT TO SEAGATE TECHNOLOGY HDD HOLDINGS'
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (C) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
IT, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act, the
Registrar shall permit the transferee thereof to exchange such Transfer
Restricted Security for a certificated Security that does not bear the
legend set forth above and rescind any restriction on the transfer of
such Transfer Restricted Security, if the transferor thereof certifies
in writing to the Registrar that such sale or transfer was made in
reliance on Rule 144 (such certification to be in the form set forth on
the reverse of the Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities pursuant to and during the period of the
effectiveness of a Shelf Registration Statement with respect to such
Initial Securities or Private Exchange Securities, as the case may be,
all requirements pertaining to legends on such Initial Security or such
Private Exchange Security will cease to apply, the requirements
requiring any such Initial Security or such Private Exchange Security
issued to certain Holders be issued in global form will cease to apply,
and a certificated Initial Security or Private Exchange Security or an
Initial Security or Private Exchange Security in global form, in each
case without restrictive transfer legends, will be available to
12
the transferee of the Holder of such Initial Securities or Private
Exchange Securities upon exchange of such transferring Holder's
certificated Initial Security or Private Exchange Security or
directions to transfer such Holder's interest in the Global Security,
as applicable.
(iv) Upon the consummation of a Registered Exchange Offer
with respect to the Initial Securities, all requirements pertaining to
such Initial Securities that Initial Securities issued to certain
Holders be issued in global form will still apply with respect to
Holders of such Initial Securities that do not exchange their Initial
Securities, and Exchange Securities in certificated or global form
will be available to Holders that exchange such Initial Securities in
such Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued
in global form will still apply with respect to Holders of such Initial
Securities that do not exchange their Initial Securities, and Private
Exchange Securities in global form with the global securities legend
and the Restricted Securities Legend set forth in Exhibit 1 hereto will
be available to Holders that exchange such Initial Securities in such
Private Exchange.
(f) Cancellation or Adjustment of Global Security. At such
----------------------------------------------
time as all beneficial interests in a Global Security have either been exchanged
for certificated Securities, redeemed, purchased or canceled, such Global
Security shall be returned to the Depository for cancellation or retained and
canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for certificated
Securities, redeemed, purchased or canceled, the principal amount of Securities
represented by such Global Security shall be reduced and an adjustment shall be
made on the books and records of the Trustee (if it is then the Securities
Custodian for such Global Security) with respect to such Global Security, by the
Trustee or the Securities Custodian, to reflect such reduction.
13
(g) Obligations with Respect to Transfers and Exchanges of
------------------------------------------------------
Securities.
- -----------
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate certificated
Securities and Global Securities at the Registrar's or co-registrar's
request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Sections 3.06, 4.09 and 9.05 of
the Indenture).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period
beginning 15 Business Days before the mailing of a notice of an offer
to repurchase or redeem Securities or 15 Business Days before an
interest payment date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
(subject to paragraph 2 of the Securities) interest on such Security
and for all other purposes whatsoever, whether or not such Security is
overdue, and none of the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice to the
contrary.
(v) Any Holder of a Global Security shall, by acceptance of
such Global Security, agree that transfers of any beneficial interest
in such Global Security may be effected only through a book-entry
system maintained by (a) the Holder of such Global Security (or its
agent) or (b) any Holder of a beneficial interest in such Global
Security, and that ownership of a beneficial interest in such Global
Security shall be required to be reflected in a book entry.
(vi) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this
14
Indenture as the Securities surrendered upon such transfer or exchange.
(h) No Obligation of the Trustee.
-----------------------------
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a
participant in the Depository or other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository) of
any notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made
to Holders under the Securities shall be given or made only to or upon
the order of the registered Holders (which shall be the Depository or
its nominee in the case of a Global Security). The rights of beneficial
owners in any Global Security shall be exercised only through the
Depository subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to
its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers
between or among Depository participants, members or beneficial owners
in any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
2.4 Certificated Securities.
------------------------
(a) A Global Security deposited with the Depository or with
the Trustee as custodian for the Depository pursuant to Section 2.1 of this
Appendix shall be transferred to the beneficial owners thereof in the form of
certificated Securities in an aggregate principal amount equal to the principal
amount of such Global
15
Security, in exchange for such Global Security, only if such transfer complies
with Section 2.3 of this Appendix and (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Global
Security or if at any time such Depository ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is not appointed by
the Company within 90 days of such notice, or (ii) an Event of Default has
occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the
beneficial owners thereof pursuant to this Section shall be surrendered by the
Depository to the Trustee located at its principal corporate trust office in
the Borough of Manhattan, The City of New York, to be so transferred, in whole
or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Security, an equal aggregate principal amount of certificated Initial
Securities of authorized denominations. Any portion of a Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depository shall direct.
Any certificated Initial Security or Private Exchange Security delivered in
exchange for an interest in the Global Security shall, except as otherwise
provided by Section 2.3(e) of this Appendix, bear the restricted securities
legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b) of this
Appendix, the registered Holder of a Global Security shall be entitled to 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.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a) of this Appendix, the Company shall promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.
16
EXHIBIT 1
to
RULE 144A/REGULATION S APPENDIX
FORM OF FACE OF INITIAL SECURITY
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, 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 SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC 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 THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE
COMMENCEMENT OF THE OFFERING, AN OFFER OR SALE OF NOTES WITHIN THE UNITED STATES
BY A DEALER (AS DEFINED IN THE U.S. SECURITIES ACT) MAY VIOLATE THE REGISTRATION
REQUIREMENTS OF THE U.S. SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE
THAN IN ACCORDANCE WITH THE RULE 144A THEREUNDER.]
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR OF ANY OTHER JURISDICTION.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
RESOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT MEETING THE APPLICABLE
REQUIREMENTS OF THE SECURITIES ACT OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN
WILL BE ABLE TO EXERCISE THE EXCHANGE RIGHT ONLY IF THE HOLDER CERTIFIES THAT IT
(A) IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT, (B) IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPHS (a)(1),(2),(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT OR
(C) IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT)
AND IS NOT EXERCISING SUCH EXCHANGE RIGHT ON BEHALF OF A U.S. PERSON.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY OR ANY
BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE"), WHICH IS, IN THE CASE OF NOTES SOLD IN RELIANCE UPON RULE
144A, TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH SEAGATE TECHNOLOGY HDD HOLDINGS OR ANY AFFILIATE THEREOF WAS THE
OWNER OF THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO SEAGATE TECHNOLOGY HDD HOLDINGS OR ANY SUBSIDIARY
THEREOF, (B) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A "QUALIFIED
INSTITUTIONAL BUYER" TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" 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, (D) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904
OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, INCLUDING
UNDER RULE 144, IF AVAILABLE, OR (F) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, SUBJECT TO SEAGATE
TECHNOLOGY HDD HOLDINGS' RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (C) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
[Temporary Regulation S Global Security Legend]
EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN
THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR
INTERESTS IN THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY
REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT
CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF
THE "40-DAY DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE
903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON
CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH
BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO
PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION
UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.A., AS
OPERATOR OF THE EUROCLEAR SYSTEM OR CLEARSTREAM BANKING, SOCIETE ANONYME AND
ONLY (A) TO SEAGATE TECHNOLOGY HDD HOLDINGS OR ANY SUBSIDIARY THEREOF, (B) FOR
SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A "QUALIFIED INSTITUTIONAL BUYER" TO WHICH
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO
AN INSTITUTIONAL "ACCREDITED INVESTOR" 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, (D) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, INCLUDING UNDER RULE 144, IF
AVAILABLE, OR (F) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, SUBJECT TO SEAGATE TECHNOLOGY HDD HOLDINGS'
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO IT, AND IN EACH OF THE FOREGOING CASES, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE EXPIRATION OF THE 40-DAY
DISTRIBUTION COMPLIANCE PERIOD.
3
BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL
SECURITY MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL SECURITY ONLY IF
(1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN
COMPLIANCE WITH RULE 144A, AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL
SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM
ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL
SECURITY BEING TRANSFERRED TO A PERSON (A) WHO THE TRANSFEROR REASONABLY
BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
(B) PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.
BENEFICIAL INTEREST IN A RULE 144A GLOBAL SECURITY MAY BE
TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE
REGULATION S GLOBAL SECURITY, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE
40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO
THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO
THE EFFECT THAT IF SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR
904 OF REGULATION S OR RULE 144 (IF AVAILABLE) AND THAT, IF SUCH TRANSFER OCCURS
PRIOR TO THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, THE
INTEREST TRANSFERRED WILL BE HELD IMMEDIATELY THEREAFTER THROUGH EUROCLEAR BANK
S.A./N.A. OR CLEARSTREAM BANKING SOCIETE ANONYME.
[Each Definitive Security shall bear the following additional legend.]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR, TRUSTEE AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRUSTEE OR TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM
THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
4
No. ______ $ ____
8% Senior Notes Due 2009
CUSIP NO. ________
ISIN NO. _________
SEAGATE TECHNOLOGY HDD HOLDINGS, an exempted limited liability
company organized under the laws of the Cayman Islands, promises to pay to ., or
registered assigns, the principal sum of ____Dollars on May 15, 2009.
Interest Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
Additional provisions of this Security are set forth on the
other side of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to
be duly executed.
Dated:
SEAGATE TECHNOLOGY HDD HOLDINGS
by___________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. BANK, N.A.
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
_________________________________
Authorized Signatory
5
FORM OF REVERSE SIDE OF INITIAL SECURITY
8% Senior Note Due 2009
1. Interest
--------
SEAGATE TECHNOLOGY HDD HOLDINGS, an exempted limited liability
company organized under the laws of the Cayman Islands (such company, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above; provided, however, that if a
-------- -------
Registration Default occurs, additional interest will accrue on this Security at
a rate of 1.0% per annum from and including the date on which any such
Registration Default shall occur to but excluding the earlier of (a) the date on
which all Registration Defaults have been cured and (b) the first date on which
the Securities shall become saleable pursuant to Rule 144(k) under the
Securities Act, or any successor rule thereof. The Company will pay interest
semiannually on May 15 and November 15 of each year, commencing on November 15,
2002. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from May 13, 2002.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue installments of interest at the
rate of 8% per annum to the extent lawful.
6
2. Method of Payment
-----------------
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the May 1 or November 1 immediately preceding the
interest payment date even if Securities are canceled after the record date and
on or before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium, if
any, and interest) will be made by wire transfer of immediately available funds
to the accounts specified by The Depository Trust Company. The Company will make
all payments in respect of a certificated Security (including principal,
premium, if any, and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on a certificated Security
-------- -------
may also be made, in the case of a Holder of at least $1,000,000 aggregate
principal amount of Securities, by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).
3. Paying Agent and Registrar
--------------------------
Initially, U.S. Bank, N.A., a national banking association
(the "Trustee"), will act as Paying Agent and Registrar. The Company may appoint
and change any Paying Agent, Registrar or co-registrar without notice. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar or co-registrar.
7
4. Indenture
---------
The Company issued the Securities under an Indenture dated as
of May 13, 2002 ("Indenture"), among the Company, Seagate Technology Holdings,
an exempted limited liability company organized under the laws of the Cayman
Islands ("Parent"), and the Trustee. 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 of 1939 (15 U.S.C. (s)(s) 77aaa-77bbbb) as in effect on the
------
date of the Indenture (the "Act"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.
The Securities are senior unsecured obligations of the
Company. The Company shall be entitled, subject to its compliance with Section
4.03 of the Indenture, to issue Additional Securities pursuant to Section 2.13
of the Indenture. The Initial Securities issued on the Issue Date, any
Additional Securities and all Exchange Securities or Private Exchange Securities
issued in exchange therefor will be treated as a single class for all purposes
under the Indenture. The Indenture contains covenants that limit the ability of
the Company and its subsidiaries to incur additional indebtedness; pay dividends
or distributions on, or redeem or repurchase, capital stock; make investments;
issue or sell capital stock of subsidiaries; engage in transactions with
affiliates; create liens on assets; transfer or sell assets; guarantee
indebtedness; restrict dividends or other payments of subsidiaries; consolidate,
merge or transfer all or substantially all of its assets and the assets of its
subsidiaries; engage in sale/leaseback transactions; and amend any deferred
compensation plan of the Company. These covenants are subject to important
exceptions and qualifications, and certain of them will terminate from the first
date that the Securities have an Investment Grade Rating from both of the Rating
Agencies.
5. Optional Redemption
-------------------
Except as set forth below, or under paragraph 6 of this
Security, the Company shall not be entitled to redeem the Securities at its
option prior to May 15, 2006.
8
On and after May 15, 2006, the Company shall be entitled at
its option to redeem all or a portion of the Securities upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued interest
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), if redeemed during the 12-month period commencing on May 15 of the years
set forth below:
Redemption
Period Price
------ --------
2006 104.00%
2007 102.00%
2008 and thereafter 100.00%
At any time prior to May 15, 2005, the Company shall be
entitled at its option on one or more occasions to redeem Securities (which
includes Additional Securities, if any) in an aggregate principal amount not to
exceed 35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued with the Net Cash Proceeds from
one or more Equity Offerings (1) by the Company or (2) by Parent to the extent
the Net Cash Proceeds thereof are contributed to the Company or used to purchase
Capital Stock (other than Disqualified Stock) of the Company from the Company,
at a redemption price equal to 108.00% of the principal amount thereof, plus
accrued and unpaid interest 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, however, that after giving effect to
-------- -------
any such redemption:
(1) at least 65% of such aggregate principal amount of
Securities (which includes Additional Securities, if any) remains
outstanding immediately after the occurrence of each such redemption
(other than Securities held, directly or indirectly, by the Company or
its Affiliates); and
(2) each such redemption occurs within 90 days after the
date of the related Equity Offering.
9
At any time prior to May 15, 2006, the Securities may be
redeemed, as a whole but not in part, at the option of the Company upon the
occurrence of a, or if applicable each, Change of Control, upon not less than 30
or more than 60 days' prior notice (but in no event may any such redemption
occur more than 90 days after the occurrence of such Change of Control) mailed
by first-class mail to each Holder's registered address, at a redemption price
equal to the sum of (1) the principal amount thereof and (2) the Applicable
Premium as of, and accrued and unpaid interest, if any, to, the redemption date
(subject to the right of the Holders of record on the relevant record date to
receive interest due on the relevant interest payment date).
6. Redemption for Changes in Withholding Taxes.
--------------------------------------------
(a) The Company shall be entitled to redeem the Securities,
at its option, at any time as a whole but not in part, upon not less than 30 nor
more than 60 days' notice, at 100% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date of redemption (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), in the event the Company has become or would
become obligated to pay, on the next date on which any amount would be payable
with respect to the Securities, any Additional Amounts as a result of:
(1) a change in or an amendment to the laws (including any
regulations or rulings promulgated thereunder) of (x) the Cayman
Islands, (y) any jurisdiction, other than the United States, from or
through which a payment on the Securities is made or (z) any other
jurisdiction, other than the United States, in which the Company or
Parent is organized (or any political subdivision or taxing authority
thereof or therein), in any such case which change or amendment is
announced or becomes effective on or after May 3, 2002; or
(2) any change in or amendment to any official position
regarding the application or interpretation of such laws, regulations
or rulings, or any exception of or amendment to any treaty or treaties
affecting taxation to
10
which such jurisdiction (or such political subdivision or taxing
authority) is a party, which change or amendment is announced or
becomes effective on or after May 3, 2002,
and the Company cannot avoid such obligation by taking reasonable measures
available to it.
(b) Before the Company publishes or mails notice of
redemption of the Securities pursuant to paragraph 6(a), it will deliver to the
Trustee an Officers' Certificate to the effect that it cannot avoid its
obligation to pay Additional Amounts by taking reasonable measures available to
it. The Company will also deliver an Opinion of Counsel from independent legal
counsel of recognized standing stating that the Company would be obligated to
pay Additional Amounts as a result of a change in tax laws, regulations or
rulings or the application or interpretation of such laws, regulations, rulings
or treaties, as applicable.
7. Notice of Redemption
--------------------
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 principal amount may be redeemed in part but
only in whole multiples of $1,000. Securities in denominations of $1,000
principal amount or less may be redeemed in whole but not in part. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
11
8. Put Provisions
--------------
Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the Securities
of such Holder at a repurchase price equal to 101% of the principal amount of
the Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
Under certain circumstances as set forth in the Indenture, the
Company will be required to offer to purchase Securities with the Net Available
Cash from Asset Dispositions.
9. Guarantee
---------
The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and unconditionally guaranteed on a
senior unsecured basis by Parent. Such Guarantee may be released or terminated
in certain circumstances which are set forth in the Indenture.
10. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in
denominations of $1,000 principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or 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, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
12
11. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the
owner of it for all purposes.
12. Unclaimed Money
---------------
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company for payment as general creditors, and the Trustee and the Paying
Agent shall have no further liability with respect to such monies.
13. Discharge and Defeasance
------------------------
Subject to certain conditions, the Company at any time shall
be entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations, or a combination thereof, for the payment of principal and interest
on the Securities to redemption or maturity, as the case may be.
13
14. Amendment; Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company, Parent and
the Trustee shall be entitled to amend the Indenture or the Securities to cure
any ambiguity, omission, defect or inconsistency, or to provide for the
assumption by a Successor Company of the obligations of the Company or Parent
under Article 5 of the Indenture, or to provide for uncertificated Securities in
addition to or in place of certificated Securities, or to add guarantees with
respect to the Securities, or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company or Parent, or
to comply with any request of the SEC in connection with qualifying the
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder, or to amend certain provisions of the
Indenture relating to form, authentication and transfer of Securities, provided
that (a) compliance with the Indenture as so amended would not violate the
Securities Act of 1933, as amended, or any other applicable law and (b) such
amendment does not materially affect the rights of Holders to transfer
Securities.
15. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
or 6 of the Securities, upon acceleration or otherwise, or failure by the
Company to redeem or purchase Securities when required; (iii) failure by the
Company to comply for 60 days after notice with other agreements in the
Indenture or the Securities; (iv) certain accelerations
14
(including failure to pay within any grace period after final maturity) of
other Indebtedness of the Company or any Significant Subsidiary if the amount
accelerated (or so unpaid) exceeds $50 million and the failure continues for 30
days after notice; (v) certain events of bankruptcy or insolvency with respect
to the Company or any Significant Subsidiary; (vi) certain judgments or decrees
for the payment of money in excess of $50 million; and (vii) certain defaults
with respect to the Parent Guaranty. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Securities may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in the interest of the Holders.
16. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
17. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any
15
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
18. Authentication
--------------
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
-------------
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
16
21. Holders' Compliance with Registration Rights Agreement.
------------------------------------------------------
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
22. Governing Law.
--------------
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:
Seagate Technology HDD Holdings
c/o Seagate Technology (US) Holdings, Inc.
920 Disc Drive
Scotts Valley, California 95067
1-800-SEAGATE
Attn: Walter Chang
17
_______________________________________________________________________________
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
_______________________________________________________________________________
Date: _____________________ Your Signature: ___________________________________
_______________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
[In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement under
the Securities Act of 1933; or
18
(3) [ ] inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities
Act of 1933) that purchases for its own account or for
the account of a qualified institutional buyer to whom
notice is given that such transfer is being made in
reliance on Rule 144A, in each case pursuant to and in
compliance with Rule 144A under the Securities Act of
1933; or
(4) [ ] outside the United States in an offshore transaction
within the meaning of Regulation S under the
Securities Act in compliance with Rule 904 under the
Securities Act of 1933 and such Security shall be
held immediately after the transfer through Euroclear
or Clearstream until the expiration of the Restricted
Period; or
(5) [ ] to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) that has furnished the Trustee with a
representation letter in a form reasonably acceptable
to the Trustee; or
(6) [ ] pursuant to the exemption from registration provided
by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however,
-------- -------
that if box (4), (5) or (6) is checked, the Trustee shall be entitled
to require, prior to registering any such transfer of the Securities,
such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act of 1933, such as
the exemption provided by Rule 144 under such Act.
19
___________________________
Your Signature
Signature Guarantee:
____________________________ ________________________________
Signature must be guaranteed Signature of Signature Guarantor
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
__________________________________________________________________________
TO BE COMPLETED BY PURCHASER IF (3) 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, 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]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
Date of Amount of decrease in Amount of increase in Principal amount of Signature of authoriz
Exchange Principal amount of Principal amount of this Global Security officer of Trustee or
this Global Security this Global Security following such decrea Securities Custodian
or increase
20
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 (Asset Disposition) or 4.09 (Change of Control)
of the Indenture, check the box:
Asset Disposition [ ] Change of Control [ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.09 of the Indenture,
state the amount ($1,000 or an integral multiple thereof) in principal amount:
$__________
Date: _______________ Your Signature: ____________________________
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee: _________________________________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
21
EXHIBIT A
FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY* **
- ----------
*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".
**/ If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.
No. ______ $ ____
8% Senior Notes Due 2009
CUSIP NO. ______
ISIN NO. ______
SEAGATE TECHNOLOGY HDD HOLDINGS, an exempted limited liability
company organized under the laws of the Cayman Islands, promises to pay to
_____, or registered assigns, the principal sum of ___________Dollars on May 15,
2009.
Interest Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
Additional provisions of this Security are set forth on the
other side of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to
be duly executed.
Dated:
SEAGATE TECHNOLOGY HDD HOLDINGS
by___________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. BANK, N.A.
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by_____________________________
Authorized Signatory
2
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
8% Senior Note Due 2009
1. Interest
--------
SEAGATE TECHNOLOGY HDD HOLDINGS, an exempted limited liability
company organized under the laws of the Cayman Islands (such company, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above[; provided, however, that if a
-------- -------
Registration Default occurs, additional interest will accrue on this Security at
a rate of 1.0% per annum from and including the date on which any such
Registration Default shall occur to but excluding the earlier of (a) the date on
which all Registration Defaults have been cured and (b) the first date on which
the Securities shall become saleable pursuant to Rule 144(k) under the
Securities Act, or any successor rule thereof.]/1/ The Company will pay interest
semiannually on May 15 and November 15 of each year, commencing on November 15,
2002. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from May 13, 2002.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue installments of interest at the
rate of 8% per annum to the extent lawful.
- --------------------
/1./ Insert if at the date of issuance of the Exchange Security or
Private Exchange Security (as the case may be) any Registration Default
has occurred with respect to the related Initial Securities during the
interest period in which such date of issuance occurs.
3
2. Method of Payment
-----------------
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the May 1 or November 1 immediately preceding the
interest payment date even if Securities are canceled after the record date and
on or before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium, if
any, and interest) will be made by wire transfer of immediately available funds
to the accounts specified by The Depository Trust Company. The Company will make
all payments in respect of a certificated Security (including principal,
premium, if any, and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on a certificated Security
-------- -------
may also be made, in the case of a Holder of at least $1,000,000 aggregate
principal amount of Securities, by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).
3. Paying Agent and Registrar
--------------------------
Initially, U.S. Bank, N.A., a national banking association
(the "Trustee"), will act as Paying Agent and Registrar. The Company may appoint
and change any Paying Agent, Registrar or co-registrar without notice. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar or co-registrar.
4
4. Indenture
---------
The Company issued the Securities under an Indenture dated as
of May 13, 2002 ("Indenture"), among the Company, Seagate Technology Holdings,
an exempted limited liability company organized under the laws of the Cayman
Islands ("Parent"), and the Trustee. 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 of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect on the
------
date of the Indenture (the "Act"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.
The Securities are senior unsecured obligations of the
Company. The Company shall be entitled, subject to its compliance with Section
4.03 of the Indenture, to issue Additional Securities pursuant to Section 2.13
of the Indenture. The Initial Securities issued on the Issue Date, any
Additional Securities and all Exchange Securities or Private Exchange Securities
issued in exchange therefor will be treated as a single class for all purposes
under the Indenture. The Indenture contains covenants that limit the ability of
the Company and its subsidiaries to incur additional indebtedness; pay dividends
or distributions on, or redeem or repurchase, capital stock; make investments;
issue or sell capital stock of subsidiaries; engage in transactions with
affiliates; create liens on assets; transfer or sell assets; guarantee
indebtedness; restrict dividends or other payments of subsidiaries; consolidate,
merge or transfer all or substantially all of its assets and the assets of its
subsidiaries; engage in sale/leaseback transactions; and amend any deferred
compensation plan of the Company. These covenants are subject to important
exceptions and qualifications, and certain of them will terminate from the first
date that the Securities have an Investment Grade Rating from both of the Rating
Agencies.
5. Optional Redemption
-------------------
Except as set forth below, or under paragraph 6 of this
Security, the Company shall not be entitled to redeem the Securities at its
option prior to May 15, 2006.
5
On and after May 15, 2006, the Company shall be entitled at
its option to redeem all or a portion of the Securities upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued interest
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), if redeemed during the 12-month period commencing on May 15 of the years
set forth below:
Redemption
Period Price
------ ---------
2006 104.00%
2007 102.00%
2008 and thereafter 100.00%
At any time prior to May 15, 2005, the Company shall be
entitled at its option on one or more occasions to redeem Securities (which
includes Additional Securities, if any) in an aggregate principal amount not to
exceed 35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued with the Net Cash Proceeds from
one or more Equity Offerings (1) by the Company or (2) by Parent to the extent
the Net Cash Proceeds thereof are contributed to the Company or used to purchase
Capital Stock (other than Disqualified Stock) of the Company from the Company,
at a redemption price equal to 108.00% of the principal amount thereof, plus
accrued and unpaid interest 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, however, that after giving effect to
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any such redemption:
(1) at least 65% of such aggregate principal amount of
Securities (which includes Additional Securities, if any) remains
outstanding immediately after the occurrence of each such redemption
(other than Securities held, directly or indirectly, by the Company or
its Affiliates); and
(2) each such redemption occurs within 90 days after the
date of the related Equity Offering.
6
At any time prior to May 15, 2006, the Securities may be
redeemed, as a whole but not in part, at the option of the Company upon the
occurrence of a, or if applicable each, Change of Control, upon not less than 30
or more than 60 days' prior notice (but in no event may any such redemption
occur more than 90 days after the occurrence of such Change of Control) mailed
by first-class mail to each Holder's registered address, at a redemption price
equal to the sum of (1) the principal amount thereof and (2) the Applicable
Premium as of, and accrued and unpaid interest, if any, to, the redemption date
(subject to the right of the Holders of record on the relevant record date to
receive interest due on the relevant interest payment date).
6. Redemption for Changes in Withholding Taxes.
--------------------------------------------
(a) The Company shall be entitled to redeem the Securities,
at its option, at any time as a whole but not in part, upon not less than 30 nor
more than 60 days' notice, at 100% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date of redemption (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), in the event the Company has become or would
become obligated to pay, on the next date on which any amount would be payable
with respect to the Securities, any Additional Amounts as a result of:
(1) a change in or an amendment to the laws (including any
regulations or rulings promulgated thereunder) of (x) the Cayman
Islands, (y) any jurisdiction, other than the United States, from or
through which a payment on the Securities is made or (z) any other
jurisdiction, other than the United States, in which the Company or
Parent is organized (or any political subdivision or taxing authority
thereof or therein), in any such case which change or amendment is
announced or becomes effective on or after May 3, 2002; or
(2) any change in or amendment to any official position
regarding the application or interpretation of such laws, regulations
or rulings, or any exception of or amendment to any treaty or treaties
affecting taxation to which such jurisdiction (or such political
subdivision or
7
taxing authority) is a party, which change or amendment is announced or
becomes effective on or after May 3, 2002,
and the Company cannot avoid such obligation by taking reasonable measures
available to it.
(b) Before the Company publishes or mails notice of redemption
of the Securities pursuant to paragraph 6(a), it will deliver to the Trustee an
Officers' Certificate to the effect that it cannot avoid its obligation to pay
Additional Amounts by taking reasonable measures available to it. The Company
will also deliver an Opinion of Counsel from independent legal counsel of
recognized standing stating that the Company would be obligated to pay
Additional Amounts as a result of a change in tax laws, regulations or rulings
or the application or interpretation of such laws, regulations, rulings or
treaties, as applicable.
7. Notice of Redemption
--------------------
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 principal amount may be redeemed in part but
only in whole multiples of $1,000. Securities in denominations of $1,000
principal amount or less may be redeemed in whole but not in part. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
8
8. Put Provisions
--------------
Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the Securities
of such Holder at a repurchase price equal to 101% of the principal amount of
the Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
Under certain circumstances as set forth in the Indenture, the
Company will be required to offer to purchase Securities with the Net Available
Cash from Asset Dispositions.
9. Guarantee
---------
The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and unconditionally guaranteed on a
senior unsecured basis by Parent. Such Guarantee may be released or terminated
in certain circumstances which are set forth in the Indenture.
10. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in
denominations of $1,000 principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or 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, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
9
11. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the
owner of it for all purposes.
12. Unclaimed Money
---------------
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company for payment as general creditors, and the Trustee and the Paying
Agent shall have no further liability with respect to such monies.
13. Discharge and Defeasance
------------------------
Subject to certain conditions, the Company at any time shall
be entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations, or a combination thereof, for the payment of principal and interest
on the Securities to redemption or maturity, as the case may be.
10
14. Amendment; Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company, Parent and
the Trustee shall be entitled to amend the Indenture or the Securities to cure
any ambiguity, omission, defect or inconsistency, or to provide for the
assumption by a Successor Company of the obligations of the Company or Parent
under Article 5 of the Indenture, or to provide for uncertificated Securities in
addition to or in place of certificated Securities, or to add guarantees with
respect to the Securities, or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company or Parent, or
to comply with any request of the SEC in connection with qualifying the
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder, or to amend certain provisions of the
Indenture relating to form, authentication and transfer of Securities, provided
that (a) compliance with the Indenture as so amended would not violate the
Securities Act of 1933, as amended, or any other applicable law and (b) such
amendment does not materially affect the rights of Holders to transfer
Securities.
11
15. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
or 6 of the Securities, upon acceleration or otherwise, or failure by the
Company to redeem or purchase Securities when required; (iii) failure by the
Company to comply for 60 days after notice with other agreements in the
Indenture or the Securities; (iv) certain accelerations (including failure to
pay within any grace period after final maturity) of other Indebtedness of the
Company or any Significant Subsidiary if the amount accelerated (or so unpaid)
exceeds $50 million and the failure continues for 30 days after notice; (v)
certain events of bankruptcy or insolvency with respect to the Company or any
Significant Subsidiary; (vi) certain judgments or decrees for the payment of
money in excess of $50 million; and (vii) certain defaults with respect to the
Parent Guaranty. If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the Securities may declare
all the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in the interest of the Holders.
12
16. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
17. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
18. Authentication
--------------
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
-------------
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
13
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
[21. Holders' Compliance with Registration Rights Agreement.
------------------------------------------------------
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.]/2/
22. Governing Law.
--------------
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:
Seagate Technology HDD Holdings
c/o Seagate Technology (US) Holdings, Inc.
920 Disc Drive
Scotts Valley, California 95067
1-800-SEAGATE
Attn: Walter Chang
- --------------------
/2./ Delete if this Security is not being issued in exchange for an
Initial Security.
14
- -------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
_______________________________________________________________________________
Date: _____________________ Your Signature: ___________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
15
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 (Asset Disposition) or 4.09 (Change of Control)
of the Indenture, check the box:
Asset Disposition [ ] Change of Control [ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.09 of the Indenture,
state the amount ($1,000 or an integral multiple thereof) in principal amount:
$.
Date: _______________ Your Signature: ____________________________
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee: __________________________________________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.