EXHIBIT 4.1
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THE DERBY CYCLE CORPORATION
LYON INVESTMENTS B.V.
10% Senior Notes due 2008
$100,000,000
___________
INDENTURE
Dated as of May 14, 1998
___________
IBJ XXXXXXXX BANK & TRUST COMPANY,
Trustee
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TABLE OF CONTENTS
Page
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ARTICLE 1
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions.............................................. 1
SECTION 1.02. Other Definitions........................................ 29
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act........................................... 29
SECTION 1.04. Rules of Construction.................................... 30
ARTICLE 2
The Securities
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SECTION 2.01. Form and Dating.......................................... 31
SECTION 2.02. Execution and Authentication............................. 31
SECTION 2.03. Registrar and Paying Agent............................... 32
SECTION 2.04. Paying Agent to Hold Money in Trust...................... 33
SECTION 2.05. Securityholder Lists..................................... 33
SECTION 2.06. Transfer and Exchange.................................... 33
SECTION 2.07. Replacement Securities................................... 34
SECTION 2.08. Outstanding Securities................................... 35
SECTION 2.09. Temporary Securities..................................... 35
SECTION 2.10. Cancelation.............................................. 36
SECTION 2.11. Defaulted Interest....................................... 36
SECTION 2.12. CUSIP Numbers............................................ 36
SECTION 2.13. Currency Indemnity....................................... 36
ARTICLE 3
Redemption
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SECTION 3.01. Notices to Trustee....................................... 37
SECTION 3.02. Selection of Securities To Be Redeemed................... 37
SECTION 3.03. Notice of Redemption..................................... 38
SECTION 3.04. Effect of Notice of Redemption........................... 39
SECTION 3.05. Deposit of Redemption Price.............................. 39
SECTION 3.06. Securities Redeemed in Part.............................. 39
ARTICLE 4
Covenants
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SECTION 4.01. Payment of Securities.................................... 40
SECTION 4.02. Reports to Holders of Securities......................... 40
SECTION 4.03. Limitation on Indebtedness............................... 40
SECTION 4.04. Limitation on Restricted Payments........................ 43
SECTION 4.05. Limitation on Restrictions on
Distributions
from Restricted Subsidiaries............................ 47
SECTION 4.06. Limitation on Sales of Assets and
Subsidiary Stock........................................ 49
SECTION 4.07. Limitation on Transactions with
Affiliates.............................................. 53
SECTION 4.08. Change of Control........................................ 54
SECTION 4.09. Compliance Certificate................................... 56
SECTION 4.10. Further Instruments and Acts............................. 56
SECTION 4.11. Future Note Guarantors................................... 56
SECTION 4.12. Limitation on Lines of Business.......................... 57
SECTION 4.13. Limitation on the Sale or Issuance of
Capital Stock of Restricted Subsidiaries............... 57
SECTION 4.14. Limitation on Liens...................................... 57
SECTION 4.15. Limitation on Sale/Leaseback Transactions................ 57
SECTION 4.16. Additional Amounts; Withholding Taxes.................... 58
ARTICLE 5
Merger and Consolidation
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SECTION 5.01. When Issuers May Merge or Transfer Assets................ 59
ARTICLE 6
Defaults and Remedies
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SECTION 6.01. Events of Default........................................ 61
SECTION 6.02. Acceleration............................................. 63
SECTION 6.03. Other Remedies........................................... 64
SECTION 6.04. Waiver of Past Defaults.................................. 64
SECTION 6.05. Control by Majority...................................... 64
SECTION 6.06. Limitation on Suits...................................... 65
SECTION 6.07. Rights of Holders to Receive Payment..................... 65
SECTION 6.08. Collection Suit by Trustee............................... 65
SECTION 6.09. Trustee May File Proofs of Claim......................... 65
SECTION 6.10. Priorities............................................... 66
SECTION 6.11. Undertaking for Costs.................................... 66
SECTION 6.12. Waiver of Stay or Extension Laws......................... 67
ARTICLE 7
Trustee
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SECTION 7.01. Duties of Trustee........................................ 67
SECTION 7.02. Rights of Trustee........................................ 68
SECTION 7.03. Individual Rights of Trustee............................. 69
SECTION 7.04. Trustee's Disclaimer..................................... 69
SECTION 7.05. Notice of Defaults....................................... 69
SECTION 7.06. Reports by Trustee to Holders............................ 70
SECTION 7.07. Compensation and Indemnity............................... 70
SECTION 7.08. Replacement of Trustee................................... 71
SECTION 7.09. Successor Trustee by Merger.............................. 72
SECTION 7.10. Eligibility; Disqualification............................ 72
SECTION 7.11. Preferential Collection of Claims
Against the Issuers..................................... 72
ARTICLE 8
Discharge of Indenture; Defeasance
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SECTION 8.01. Discharge of Liability on Securities; Defeasance......... 73
SECTION 8.02. Conditions to Defeasance................................. 74
SECTION 8.03. Application of Trust Money............................... 76
SECTION 8.04. Repayment to the Issuers................................. 76
SECTION 8.05. Indemnity for Government Obligations..................... 76
SECTION 8.06. Reinstatement............................................ 76
ARTICLE 9
Amendments
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SECTION 9.01. Without Consent of Holders............................... 77
SECTION 9.02. With Consent of Holders.................................. 78
SECTION 9.03. Compliance with Trust Indenture Act...................... 79
SECTION 9.04. Revocation and Effect of Consents and Waivers............ 79
SECTION 9.05. Notation on or Exchange of Securities.................... 79
SECTION 9.06. Trustee to Sign Amendments............................... 80
SECTION 9.07. Payment for Consent...................................... 80
ARTICLE 10
Note Guarantees
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SECTION 10.01. Execution of Supplemental Indenture for
Future Note Guarantors.................................. 80
ARTICLE 11
Miscellaneous
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SECTION 11.01. Trust Indenture Act Controls............................ 81
SECTION 11.02. Notices................................................. 81
SECTION 11.03. Communication by Holders with Other Holders............. 82
SECTION 11.04. Certificate of Opinion as to Conditions Precedent....... 82
SECTION 11.05. Statements Required in Certificate or Opinion........... 82
SECTION 11.06. When Securities Disregarded............................. 83
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar............ 83
SECTION 11.08. Legal Holidays.......................................... 83
SECTION 11.09. Governing Law........................................... 83
SECTION 11.10. Jurisdiction............................................ 84
SECTION 11.11. No Personal Liability of Directors, Officers,
Employees and Stockholders............................ 84
SECTION 11.12. Successors.............................................. 85
SECTION 11.13. Multiple Originals...................................... 85
SECTION 11.14. Table of Contents; Headings............................. 85
Appendix A - Provisions Relating to Initial Securities,
Private Exchange Securities and Exchange Securities
Exhibit A - Form of Initial Security
Exhibit B - Form of Exchange Security
Exhibit C - Form of Supplemental Indenture
Exhibit D - Form of Transferee Letter of Representation
INDENTURE dated as of May 14, 1998 among THE DERBY CYCLE
CORPORATION, a Delaware corporation ("DCC"), LYON INVESTMENTS
B.V., a Company organized under the laws of The Netherlands and a
wholly owned subsidiary of DCC, which was formerly known as LYON
CYCLE B.V. ("Lyon" and, together with DCC, the "Issuers"), as
issuers, and IBJ XXXXXXXX BANK & TRUST COMPANY, a New York
banking corporation, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of (i) the Issuers' 10% Senior
Notes due 2008 issued on the date hereof (the "Initial Securities"), (ii) if and
when issued as provided in the Registration Agreement (as defined in Appendix A
hereto (the "Appendix"), the Issuers' 10% Senior Notes due 2008 issued in the
Registered Exchange Offer (as defined herein) in exchange for any Initial
Securities (the "Exchange Securities") and (iii) if and when issued as provided
in the Registration Agreement, the Private Exchange Securities (as defined
herein, and together with the Initial Securities and any Exchange Securities
issued hereunder, the "Securities") issued in the Private Exchange (as defined
in the Appendix). Except as otherwise provided herein, the Securities shall be
limited to $100,000,000 in aggregate principal amount outstanding.
ARTICLE 1
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions.
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"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by DCC or a Restricted Subsidiary in
a Related Business, (ii) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by DCC or
another Restricted Subsidiary or (iii) Capital Stock constituting a minority
interest in any Person that at such time is a Restricted Subsidiary; provided,
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however, that any such Restricted Subsidiary described in clause (ii) or (iii)
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above is primarily engaged in a Related Business.
"Additional Payment" means the contingent payment of up to $10,000,000
payable to DFS pursuant to the Recapitalization Agreement.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with
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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 4.06 and 4.07 only, "Affiliate" shall also mean any beneficial owner of
shares representing 5% or more of the total voting power of the Voting Stock (on
a fully diluted basis) of DCC or of rights or warrants to purchase such Voting
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.
"Asset Disposition" means any sale, lease (other than operating leases
entered into in the ordinary course of business), transfer or other disposition
(or series of related sales, leases, transfers or dispositions) by DCC 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 (i) 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 DCC or a Restricted
Subsidiary), (ii) all or substantially all the assets of any division or line of
business of DCC or any Restricted Subsidiary or (iii) any other assets of DCC or
any Restricted Subsidiary outside of the ordinary course of business of DCC or
such Restricted Subsidiary; provided, however, that Asset Dispositions shall not
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include (A) a disposition by a Restricted Subsidiary to DCC or by DCC or a
Restricted Subsidiary to a Wholly Owned Subsidiary, (B) for purposes of Section
4.06 only, a disposition subject to Section 4.04, (C) a disposition of assets
with a fair market value of less than $500,000, (D) the disposition of all or
substantially all of the assets of the Issuers as permitted under Article 5 or
any disposition that constitutes a Change of Control, (E) the sale or discount,
in each case without recourse, of accounts receivable arising in the ordinary
course of business, but only in connection with the compromise or collection
thereof, (F) the factoring of accounts receivable arising in the ordinary course
of business pursuant to arrangements customary in the industry, (G) the
licensing of intellectual property, (H) disposals or replacements of obsolete,
uneconomical, negligible, worn out or surplus property in the ordinary course of
business and (I) sales of accounts receivable, equipment and related assets
(including contract rights) of the type specified in the definition of the term
"Qualified Securitization Transaction" to a Securitization Entity for the fair
market value thereof, including cash in an amount at least equal to 75% of the
fair market value thereof. For the purposes of clause (I), Purchase Money
Securities shall be deemed to be cash.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by
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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).
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Bank Indebtedness" means any and all amounts payable under or in
respect of the Revolving Credit Agreement and any Refinancing Indebtedness with
respect thereto, as amended from time to time, including principal, premium, if
any, interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to either of the Issuers
whether or not a claim for post-filing interest is allowed in such proceedings),
fees, charges, expenses, reimbursement obligations, guarantees and all other
amounts payable thereunder or in respect thereof.
"board of directors" means the board of directors or similar governing
body of either of the Issuers or any Restricted Subsidiary, or any committee
thereof duly authorized to act on behalf of such board of directors or governing
body.
"Business Day" means a day other than a Saturday, Sunday or other day
on which the banking institutions in the United States, Germany, Luxembourg or
The Netherlands or any place of payment are authorized or required by law to
close.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, 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.
"Capitalized Lease Obligations" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with U.S. GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with U.S. 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 prepaid by
the lessee without payment of a penalty.
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"Change of Control" means the occurrence of any of the following
events:
(i) prior to an Initial Public Offering, 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 DCC, whether as a result of
issuance of securities of DCC, any merger, consolidation, liquidation or
dissolution of DCC, any direct or indirect transfer of securities by any
Permitted Holder or otherwise (for purposes of this clause (i) and clause
(ii) below, the Permitted Holders shall be deemed to beneficially own any
Voting Stock of an entity (the "specified entity") held by any other entity
(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);
(ii) (A) 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 (i) above, except that
for purposes of this clause (ii) 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 DCC and (B) the Permitted Holders
"beneficially own" (as defined in clause (i) above), directly or
indirectly, in the aggregate a lesser percentage of the total voting power
of the Voting Stock of DCC than 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 DCC (for the purposes of
this clause (ii), such other person shall be deemed to beneficially own any
Voting Stock of a specified corporation held by a parent corporation, if
such other person is the beneficial owner (as defined in this clause (ii)),
directly or indirectly, more than 35% of the voting power of the Voting
Stock of such parent corporation and the Permitted Holders "beneficially
own" (as defined in clause (i) above), directly or indirectly, in the
aggregate a lesser percentage of the voting power of the Voting Stock of
such parent corporation 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 corporation;
(iii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the board of directors of DCC
(together with any new directors whose election by such board of directors
or whose nomination for election by the shareholders of DCC was approved by
a vote of at least 50% of the directors of DCC then still in office who
were either directors at the
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beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of
such board of directors then in office;
(iv) the adoption of a plan relating to the liquidation or dissolution
of either of the Issuers; or
(v) the merger or consolidation of DCC with or into another Person
(other than Lyon) or the merger of another Person (other than Lyon) with or
into DCC, or the sale of all or substantially all the assets of DCC to
another Person (other than a Person that is controlled by the Permitted
Holders), and, in the case of any such merger or consolidation, the
securities of DCC that are outstanding immediately prior to such
transaction and which represent 100% of the aggregate voting power of the
Voting Stock of DCC are changed into or exchanged for cash, securities or
property, unless pursuant to such transaction such securities are changed
into or exchanged for, in addition to any other consideration, securities
of the surviving Person or transferee that represent immediately after such
transaction, at least a majority of the aggregate voting power of the
Voting Stock of the surviving Person or transferee.
"Closing Date" means the date of this Indenture.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the United States Securities and Exchange
Commission.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters for which financial statements are
available to (ii) Consolidated Interest Expense for such four fiscal quarters;
provided, however, that (A) if DCC or any Restricted Subsidiary has Incurred any
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Indebtedness since the beginning of such period that remains outstanding on such
date of determination 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 and the discharge of any other
Indebtedness repaid, repurchased, defeased or otherwise discharged with the
proceeds of such new Indebtedness as if such discharge had occurred on the first
day of such period, (B) if DCC or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any
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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 DCC 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, (C) if, since the beginning of
such period (including on the date of the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio), DCC or any Restricted Subsidiary
shall have made any Asset Disposition, the EBITDA for such period shall be
reduced by an amount equal to the EBITDA (if positive) directly attributable to
the assets that are the subject of such Asset Disposition for such period or
increased by an amount equal to the 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 DCC or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to DCC and its
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 DCC and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after such
sale), (D) if, since the beginning of such period, DCC or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary) or an
acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing 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 irrespective of the method (purchase or pooling) of accounting for such
Investment or acquisition of assets) and (E) if, since the beginning of such
period, any Person (that subsequently became a Restricted Subsidiary or was
merged with or into DCC or any Restricted Subsidiary since the beginning of such
period) shall have made any Asset Disposition or any Investment or acquisition
of assets that would have required an adjustment pursuant to clause (C) or (D)
above if made by DCC 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
of assets occurred on the first day of such period. For all purposes of the
foregoing definition, with respect to any EBITDA (or component thereof) and any
Consolidated Interest Expense (unless
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subject to a Currency Agreement covering principal, premium, if any, and
interest payable on such Indebtedness) denominated in a currency other than U.S.
dollars, the amount of such EBITDA (or component thereof) or Consolidated
Interest Expense shall be calculated at the relevant currency exchange rate in
effect on the date of determination. For purposes of this definition, whenever
pro forma effect is to be given to an acquisition of assets, the amount of
income or earnings relating thereto and the amount of Consolidated Interest
Expense associated with any Indebtedness Incurred in connection therewith, the
pro forma calculations shall be determined in good faith by a responsible
financial or accounting Officer of DCC. If any Indebtedness bears a floating
rate of interest and is being given pro forma effect, the interest expense on
such Indebtedness shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking into
account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term as at the date of determination in
excess of 12 months).
"Consolidated Current Liabilities" as of the date of determination
means the aggregate amount of liabilities of DCC and its Consolidated Restricted
Subsidiaries which may properly be classified as current liabilities (including
taxes accrued as estimated), on a Consolidated basis, after eliminating (i) all
intercompany items between DCC and any Restricted Subsidiary and (ii) all
current maturities of long-term Indebtedness, all as determined in accordance
with U.S. GAAP consistently applied.
"Consolidated Interest Expense" means, for any period, the total
interest expense of DCC and its Consolidated Restricted Subsidiaries, plus, to
the extent Incurred by DCC or its Subsidiaries in such period but not included
in such interest expense, (i) interest expense attributable to Capitalized Lease
Obligations and the interest expense attributable to leases constituting part of
any Sale/Leaseback Transaction, (ii) the earned discount or yield with respect
to any sale of receivables or equipment by any Securitization Entity in
connection with any Qualified Securitization Transaction, (iii) amortization of
debt discount and debt issuance cost other than as related to the
Recapitalization, (iv) capitalized interest, (v) non-cash interest expense, (vi)
commissions, discounts and other fees and charges attributable to letters of
credit and bankers' acceptance financing, (vii) interest accruing on any
Indebtedness of any other Person to the extent such Indebtedness is Guaranteed
by DCC or any Restricted Subsidiary, (viii) net costs associated with Hedging
Obligations (including amortization of fees), (ix) dividends in respect of (A)
all Preferred Stock of DCC and any of its Subsidiaries and (B) Disqualified
Stock of DCC, in the case of clause (A), other than non-cash dividends, and, in
the case of each of clauses (A) and (B), to the extent held by Persons other
than DCC or a Wholly Owned Subsidiary, (x) interest Incurred in connection with
investments in discontinued operations and (xi) the cash contributions to any
employee stock ownership plan or similar trust to the extent such contributions
are
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used by such plan or trust to pay interest or fees to any Person (other than
DCC) in connection with Indebtedness Incurred by such plan or trust.
Notwithstanding the foregoing, for the purposes of Section 4.03 only, there
shall be excluded from Consolidated Interest Expense all non-cash interest
payable in respect of the Additional Payment.
"Consolidated Net Income" means, for any period, the net income of DCC
and its Consolidated Subsidiaries for such period; provided, however, that there
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shall not be included in such Consolidated Net Income:
(i) any net income of any Person (other than DCC) if such Person is
not a Restricted Subsidiary, except that (A) subject to the limitations
contained in clause (iv) below, the equity of DCC 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 by such
Person during such period to DCC or a Restricted Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other
distribution made to a Restricted Subsidiary, to the limitations contained
in clause (iii) below) and (B) the equity of DCC in a net loss of any such
Person for such period shall be included in determining such Consolidated
Net Income;
(ii) any net income (or loss) of any Person acquired by DCC or any of
its Subsidiaries in a pooling of interests transaction for any period prior
to the date of such acquisition;
(iii) any net income (or loss) 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 DCC, except that (A)
subject to the limitations contained in clause (iv) below, the equity of
DCC 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 actually distributed by such Restricted Subsidiary during
such period to DCC or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution made
to another Restricted Subsidiary, to the limitation contained in this
clause (iii)); provided, however, that, for purposes of determining the
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Consolidated Coverage Ratio, any net income of any Restricted Subsidiary
subject only to any such direct or indirect restrictions on the payment of
dividends or the making of distributions by such Restricted Subsidiary,
directly or indirectly, to DCC that are permitted pursuant to Section 4.05
shall be included in Consolidated Net Income; and provided further, that,
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for purposes of
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Section 4.04 the amount of Consolidated Net Income of DCC and its
Consolidated Subsidiaries to be included pursuant to Section 4.04(a)(3)(A)
shall be increased by 100% of any increase in Consolidated Net Income
resulting from cash distributions from Restricted Subsidiaries, but only to
the extent that such increase in Consolidated Net Income does not cause the
amount of Consolidated Net Income included pursuant to such Section
4.04(a)(3)(A) to exceed the amount of Consolidated Net Income that would
have been included if this clause (iii) were inapplicable to the net income
of Restricted Subsidiaries which are the source (direct or indirect) of
such cash distributions; provided, further, however, that, for purposes of
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the immediately foregoing proviso as it applies to amounts available for
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Restricted Investments, the Restricted Subsidiaries shall be deemed to have
distributed cash to DCC that they could have distributed to DCC (to the
extent such amount exceeds the cash distributions actually made); provided
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that any resulting increase in Consolidated Net Income shall be subject to
the overall limitation on increases set forth in such proviso and (B) the
equity of DCC in a net loss of any such Restricted Subsidiary for such
period shall be included in determining such Consolidated Net Income;
(iv) any gain or loss realized upon the sale or other disposition of
any asset of DCC or any of its Consolidated Subsidiaries (including
pursuant to any Sale/Leaseback Transaction) that 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 together with any related tax effects according to U.S. GAAP
associated with the foregoing;
(v) any extraordinary gain or loss;
(vi) any gain or loss included in other income that is attributable
to Hedging Obligations;
(vii) any gain or loss that is attributable to minority interests;
and
(viii) 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 dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries to
DCC or any Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the amount of Restricted Payments permitted under Section
4.04(a)(3)(D).
10
"Consolidated Net Tangible Assets" as of any date of determination,
means the total amount of assets (less accumulated depreciation and
amortization, allowances for doubtful receivables, other applicable reserves and
other properly deductible items) which would appear on a consolidated balance
sheet of DCC and its Consolidated Restricted Subsidiaries, determined on a
Consolidated basis in accordance with U.S. GAAP, and after giving effect to
purchase accounting and after deducting therefrom Consolidated Current
Liabilities and, to the extent otherwise included, the amounts of: (i) minority
interests in consolidated Subsidiaries held by Persons other than DCC or a
Restricted Subsidiary; (ii) excess of cost over fair value of assets of
businesses acquired, as determined in good faith by the board of directors of
DCC; (iii) any revaluation or other write-up in book value of assets subsequent
to the Closing Date as a result of a change in the method of valuation in
accordance with U.S. GAAP consistently applied; (iv) unamortized debt discount
and expenses and other unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, licenses, organization or
developmental expenses and other intangible items; (v) treasury stock; (vi) cash
set apart and held in a sinking or other analogous fund established for the
purpose of redemption or other retirement of Capital Stock to the extent such
obligation is not reflected in Consolidated Current Liabilities; and (vii)
Investments in and assets of Unrestricted Subsidiaries.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of DCC and its Restricted Subsidiaries, determined on a
Consolidated basis, as of the end of the most recent fiscal quarter of DCC
ending at least 45 days prior to the taking of any action for the purpose of
which the determination is being made, as (i) the par or stated value of all
outstanding Capital Stock of DCC plus (ii) paid-in capital or capital surplus
relating to such Capital Stock plus (iii) any retained earnings or earned
surplus less (A) any accumulated deficit and (B) any amounts attributable to
Disqualified Stock.
"Consolidation" means the consolidation of the amounts of each of the
Restricted Subsidiaries with those of DCC in accordance with U.S. GAAP
consistently applied; provided, however, that "Consolidation" shall not include
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consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of DCC or any Restricted Subsidiary in an Unrestricted Subsidiary shall be
accounted for as an investment. The term "Consolidated" has a correlative
meaning.
"Contribution Indebtedness" means unsecured Indebtedness of DCC
incurred in connection with the acquisition of all or substantially all the
Capital Stock or assets of a Related Business in an aggregate principal amount
not greater than the aggregate amount of cash contributions made to the capital
of DCC, which amount shall not, in any event, exceed $40,000,000 in the
aggregate; provided that such Contribution
--------
11
Indebtedness (i) has a Stated Maturity later than the Stated Maturity of the
Securities, (ii) is Incurred substantially concurrently with such cash
contributions and (iii) is so designated as Contribution Indebtedness pursuant
to an Officers' Certificate delivered on the date of Incurrence.
"Corporate Trust Office of the Trustee" means the office at which the
corporate trust business of the Trustee is principally administered.
"Currency Agreement" means, in respect of any Person, any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or beneficiary.
"DCC" means The Derby Cycle Corporation, a corporation organized under
the laws of the State of Delaware.
"DC Cycle" means DC Cycle, L.L.C., a limited liability company
organized under the laws of the State of Delaware.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default, all as described in Section 6.01.
"Derby Holdings South Africa" means Derby Investment Holdings (Pty)
Limited.
"Designated Non-Cash Consideration" means any non-cash consideration
received by DCC or any of its Restricted Subsidiaries in connection with an
Asset Disposition that is so designated as Designated Non-Cash Consideration
pursuant to an Officers' Certificate executed by the Principal Executive Officer
and the Principal Financial Officer of DCC or such Restricted Subsidiary.
"DFS" means Derby Finance S.a.r.l., a corporation (societe a
responsibilite limitee) organized under the laws of the Grand Duchy of
Luxembourg.
"DICSA" means Derby International Corporation S.A., a corporation
(societe anonyme) organized under the laws of the Grand Duchy of Luxembourg.
"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 or exercisable) or upon the
happening of any event (i) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (ii) is convertible or exchangeable for
Indebtedness or Disqualified Stock (excluding capital
12
stock which is convertible or exchangeable solely at the option of DCC or any of
its Restricted Subsidiaries) or (iii) is redeemable at the option of the holder
thereof, in whole or in part, in each case on or prior to the first anniversary
of the Stated Maturity of the Securities; provided, however, that only the
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portion of Capital Stock which so matures is mandatorily redeemable, is so
convertible or exchangeable or is so redeemable at the option of the holder
thereof prior to such date shall be deemed to be Disqualified Stock; provided,
--------
further, that any Capital Stock that would not constitute Disqualified Stock but
-------
for provisions thereof giving holders thereof the right to require such Person
to repurchase or redeem such Capital Stock upon the occurrence of an "asset
sale" or "change of control" occurring prior to the first anniversary of the
Stated Maturity of the Securities shall not constitute Disqualified Stock if 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 provisions
of Sections 4.06 and 4.08.
"Domestic Subsidiary" means any Restricted Subsidiary other than a
Foreign Subsidiary.
"EBITDA" for any period means the Consolidated Net Income for such
period, plus the following to the extent deducted in calculating such
Consolidated Net Income: (i) income tax expense of DCC and its Consolidated
Restricted Subsidiaries, (ii) Consolidated Interest Expense, (iii) depreciation
expense of DCC and its Consolidated Restricted Subsidiaries, (iv) amortization
of DCC and its Consolidated Restricted Subsidiaries (excluding amortization
attributable to a prepaid cash item that was paid in a prior period), (v) all
other non-cash charges of DCC and its Consolidated Restricted Subsidiaries
(excluding any such non-cash charge to the extent it represents an accrual of or
reserve for cash expenditures in any future period), in each case for such
period, (vi) all one time cash payments made for the payment (and amortization
thereof) of fees, expenses and charges incurred in connection with the
Recapitalization in an amount not to exceed $5,700,000 and (vii) all expenses
attributable to achieving Year 2000 compliance in an aggregate principal amount
not to exceed $1,900,000, less all amounts attributable to the amortization into
income of the transition asset related to the defined benefit pension plans of
DCC and its Subsidiaries, which transition asset was recognized upon the
adoption of Statement of Financial Accounting Standards No. 87. Notwithstanding
the foregoing, the provision for taxes based on the income or profits of, and
the depreciation and amortization and non-cash charges of, any 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 to DCC by such Restricted Subsidiary without prior approval (that has
not been obtained) pursuant to the terms of its
13
charter and all agreements, instruments, judgments, decrees, orders, statutes,
rules and governmental regulations applicable to such Restricted Subsidiary or
its shareholders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement, to be dated the Closing Date, among the Issuers
and the Initial Purchasers.
"Exchange Securities" means, collectively, debt securities of the
Issuers that are identical in all material respects to the Securities, except
for transfer restrictions relating to the Securities, issued in a like aggregate
principal amount of the Securities originally issued pursuant to the Exchange
and Registration Rights Agreement.
"Excluded Assets" means the assets identified in the Recapitalization
Agreement as the assets to be transferred and sold to one or more affiliates of
DICSA and DFS.
"Foreign Subsidiary" means any Restricted Subsidiary that is not
organized under the laws of the United States or any State thereof or the
District of Columbia.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreement
to keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, however, that the term
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"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.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Currency Agreement or Interest Rate Agreement.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
14
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
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Person existing at the time such Person becomes a Subsidiary of another Person
(whether by merger, consolidation, acquisition or otherwise) shall be deemed to
be Incurred by such Person at the time it becomes a Subsidiary of such other
Person. The term "Incurrence" when used as a noun has a correlative meaning.
The accretion of principal of a non-interest bearing or other discount security
shall be deemed the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication),
(i) the principal of and premium, if any, in respect of indebtedness
of such Person for borrowed money;
(ii) the principal of and premium, if any, in respect of obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments;
(iii) all obligations of such Person in respect of letters of credit
or other similar instruments (including reimbursement obligations with
respect thereto);
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except accrued expenses and Trade
Payables), which purchase price is due more than six months after the date
of placing such property in service or taking delivery and title thereto or
the completion of such services;
(v) all Capitalized Lease Obligations and all Attributable Debt of
such Person;
(vi) 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);
(vii) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the amount of Indebtedness of such Person shall be
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the lesser of (A) the fair market value of such asset at such date of
determination and (B) the amount of such Indebtedness of such other
Persons;
15
(viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person; or
(ix) all obligations of the type referred to in clauses (i) and (ii)
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.
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.
The amount of indebtedness of any person at any date shall be
determined as set forth above or otherwise in accordance with U.S. GAAP. For
purposes of calculating the amount of Indebtedness of a Securitization Entity
outstanding as of any date, the face or notional amount of any interest in
receivables or equipment that is outstanding as of such date shall be deemed to
be Indebtedness but any such interests held by Affiliates of such Securitization
Entity shall be excluded for purposes of such calculation.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Initial Public Offering" means the first underwritten public offering
of common stock (or ordinary shares) by either of the Issuers pursuant to a
registration statement filed with the Commission in accordance with the
Securities Act for aggregate net cash proceeds of at least $10,000,000.
"Initial Purchasers" means Chase Securities Inc., Chase Manhattan Bank
AG and Chase Manhattan International Limited.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or is a
beneficiary.
"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
extension of credit
16
(including by way of Guarantee or similar arrangement, but excluding any debt or
extension of credit represented by a bank deposit) 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. For purposes of the definition of "Unrestricted Subsidiary" and
Section 4.04, (i) "Investment" shall include the portion (proportionate to the
equity interest of DCC in such Subsidiary) of the fair market value of the net
assets of any Subsidiary of DCC at the time that such Subsidiary is designated
an Unrestricted Subsidiary; provided, however, that, upon a redesignation of
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such Subsidiary as a Restricted Subsidiary, DCC shall be deemed to continue to
have a permanent "Investment" in an Unrestricted Subsidiary in an amount (if
positive) equal to (x) the "Investment" of DCC in such Subsidiary at the time of
such redesignation less (y) the portion (proportionate to the equity interest of
DCC in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time of such redesignation; and (ii) 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 DCC.
"Investor Group" means, collectively, Xxxxxx, Perseus and DICSA.
"Issue Date" means the date on which the Initial Securities are
originally issued.
"Issuers" means each of DCC and Lyon until replaced by a successor
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.
"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).
"Lyon" means Lyon Investments B.V., a company organized under the laws
of The Netherlands and a Wholly Owned Subsidiary, which was formerly known as
Lyon Cycle B.V.
"MS Sport Group" means, collectively, MS Sport Vertriebs AG and MS
Sport Vertriebs GmbH.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and proceeds
from the sale or
17
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 the properties or assets that are the subject of such Asset Disposition or
received in any other non-cash form, and excluding Designated Non-Cash
Consideration) therefrom, in each case net of (i) all legal, accounting and
investment banking fees, and sales commissions, and all title and recording tax
expenses, commissions and other fees and expenses incurred, and all federal,
state, provincial, local and foreign taxes required to be paid or accrued as a
liability under U.S. GAAP, as a consequence of such Asset Disposition, (ii) 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,
(iii) all distributions and other payments required to be made to minority
interest holders in Subsidiaries of DCC or joint ventures as a result of such
Asset Disposition and (iv) appropriate amounts to be provided by the seller as a
reserve, in accordance with U.S. GAAP, against any liabilities associated with
the property or other assets disposed of in such Asset Disposition and retained
by DCC or any Restricted Subsidiary after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Non-Recourse Indebtedness" means Indebtedness (i) as to which neither
DCC nor any of its Restricted Subsidiaries (a) provides credit support of any
kind (including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise) or (c) constitutes the lender and (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of DCC or
any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its state of maturity and (iii) as to which the lenders have been notified in
writing they shall not have recourse to the shares or assets of DCC or any of
its Restricted Subsidiaries.
"Note Guarantee" means each Guarantee of the obligations with respect
to the Securities issued by a Subsidiary of DCC pursuant to the terms of this
Indenture.
18
Each such Note Guarantee shall be evidenced by delivery of a supplemental
indenture substantially in the form of Exhibit C hereto.
"Note Guarantor" means any Person that has issued a Note Guarantee.
"Officer" means the Chairman of the Board, the Principal Executive
Officer, the Principal Financial Officer, the President, any Vice President, the
Treasurer or the Secretary of either of the Issuers, or any of the Restricted
Subsidiaries, as the case may be.
"Officers' Certificate" means a certificate signed by two Officers of
either of the Issuers, or any of the Restricted Subsidiaries, as the case may
be.
"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,
DCC or the Trustee.
"Permitted Holders" means DC Cycle, Perseus Cycle and DFS, any of
their respective Affiliates, any Person who is a beneficial owner of DC Cycle,
Perseus Cycle or DFS on the Closing Date, and any investment fund managed by
Xxxxxx or Perseus, and any Person acting in the capacity of an underwriter in
connection with a public or private offering of the Capital Stock of either of
the Issuers.
"Permitted Investment" means an Investment by DCC or any Restricted
Subsidiary in (i) DCC, any Restricted Subsidiary or any Person that shall, upon
the making of such Investment, become a Restricted Subsidiary; provided,
--------
however, that the primary business of such Restricted Subsidiary is a Related
-------
Business; (ii) 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, DCC or any Restricted Subsidiary; provided,
--------
however, that the primary business of such Person is a Related Business; (iii)
-------
Temporary Cash Investments; (iv) receivables owing to DCC 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,
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that such trade terms may include such concessionary trade terms as DCC or any
such Restricted Subsidiary deems reasonable under the circumstances; (v)
payroll, travel 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; (vi) loans or
advances to employees made in the ordinary course of business consistent with
past practices of DCC or any Restricted Subsidiary and not exceeding $2,000,000
in the aggregate outstanding at any one time; (vii) stock, obligations or
securities received in settlement of debts created in the ordinary course of
19
business and owing to DCC or any Restricted Subsidiary or in satisfaction of
judgments; (viii) any Person to the extent such Investment represents the non-
cash portion of the consideration received for an Asset Disposition that was
made pursuant to and in compliance with Section 4.06; (ix) Investments existing
on the Closing Date; (x) Hedging Obligations otherwise in compliance with this
Indenture; (xi) additional Investments having an aggregate fair market value,
taken together with all other Investments made pursuant to this clause (xi) that
are at the time outstanding, not to exceed $10,000,000 (with a fair market value
of each Investment being measured at the time made and without giving effect to
subsequent changes in value); and (xii) any Investment by DCC or a Subsidiary of
DCC in a Securitization Entity or any Investment by a Securitization Entity in
any other Person in connection with a Qualified Securitization Transaction;
provided that any Investment in a Securitization Entity is in the form of a
--------
Purchase Money Securities or an equity interest.
"Permitted Liens" means, with respect to any Person, (i) Liens,
pledges or deposits by such Person under worker's compensation laws,
unemployment insurance and other types of social security 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 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; (ii) statutory liens of landlords and other Liens imposed by law,
including carriers', warehousemen's, suppliers', material men's, repairmen's and
mechanics' Liens, in each case for sums not yet due 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; (iii) Liens for
taxes, assessments or governmental charges not yet due or payable or subject to
penalties for non-payment on which are being contested in good faith by
appropriate proceedings; (iv) Liens in favor of issuers of surety bonds or
letters of credit issued pursuant to the request of and for the account of such
Person in the ordinary course of its business; provided, however, that such
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letters of credit do not constitute Indebtedness; (v) 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 said properties or materially impair their use in the operation of the
business of such Person; (vi) Liens securing Indebtedness Incurred to finance
the construction, purchase or lease of, or repairs, improvements or additions
to, property of such Person; provided,
--------
20
however, that the Lien may not extend to any other property owned by such Person
-------
or any of its Subsidiaries at the time the Lien is Incurred, 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; (vii) Liens to secure Indebtedness permitted
pursuant to clause (b) of Section 4.03; (viii) Liens existing on the Closing
Date; (ix) Liens on property or shares of stock of another Person at the time
such other Person becomes a Subsidiary of such Person; provided, however, that
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such Liens are not created, Incurred or assumed in connection with, or in
contemplation of, such other Person becoming such a Subsidiary; provided
--------
further, however, that such Liens may not extend to any other property owned by
------- -------
such Person or any of its Subsidiaries; (x) Liens on property at the time such
Person or any of its Subsidiaries acquires the property, including any
acquisition by means of a merger or consolidation with or into such Person or
any Subsidiary of such Person; provided, however, that such Liens are not
-------- -------
created, Incurred or assumed in connection with, or in contemplation of, such
acquisition; provided further, however, that the Liens may not extend to any
-------- ------- -------
other property owned by such Person or any of its Subsidiaries; (xi) Liens
securing Indebtedness or other obligations of a Subsidiary of such Person owing
to such Person or a wholly owned Subsidiary of such Person; (xii) 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; (xiii) 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 (vi),
(viii), (ix) and (x); provided, however, that (x) such new Lien shall be limited
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to all or part of the same property that secured the original Lien (plus
improvements to or on such property) and (y) the Indebtedness secured by such
Lien at such time is not increased to any amount greater than the sum of (A) the
outstanding principal amount or, if greater, committed amount of the
Indebtedness described under clause (vi), (viii), (ix) or (x) at the time the
original Lien became a Permitted Lien under this Indenture and (B) an amount
necessary to pay any fees and expenses, including premiums, related to such
Refinancings. Notwithstanding the foregoing, "Permitted Liens" shall not include
any Lien described in clause (vi), (ix) or (x) above to the extent such Lien
applies to any Additional Assets acquired directly or indirectly from Net
Available Cash pursuant to Section 4.06; (xiv) judgment Liens not giving rise to
an Event of Default; (xv) an interest or title of a lessor under any Capitalized
Lease Obligation; (xvi) Liens on specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate the
purchase, shipment or storage of such inventory or other goods; (xvii) liens
securing reimbursement obligations with respect to commercial letters of credit
which encumber documents and other property relating to such letters of credit;
(xviii) leases or subleases granted to others that do not
21
materially interfere with the ordinary course of business of DCC and its
Restricted Subsidiaries; and (xix) Liens in favor of customers and revenue
authorities arising as a matter of law to secure payment of customer duties. 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.
"Perseus" means Perseus Capital, L.L.C., a limited liability company
organized under the laws of the State of Delaware.
"Perseus Cycle" means Perseus Cycle, L.L.C., a limited liability
company organized under the laws of the State of Delaware.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary 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 that is due or overdue or is to become
due at the relevant time.
"Private Exchange Securities" means, collectively, debt securities of
the Issuers that are identical in all material respects to the Exchange
Securities, except for transfer restrictions relating to such Private Exchange
Securities, issued by the Issuers (under the same indenture as the Exchange
Securities) simultaneously with the delivery of the Exchange Securities in the
Registered Exchange Offer to any Securityholder that holds any Securities
acquired by it that have, or that are reasonably likely to be determined to
have, the status of an unsold allotment in an initial distribution, or to any
holder of Securities that is not entitled to participate in the Registered
Exchange Offer, upon the request of any such holder, in exchange for a like
aggregate principal amount of Securities held by such holder.
"Public Equity Offering" means a primary public offering of common
stock, ordinary shares or equivalent equity interests (other than Disqualified
Stock) of either of the Issuers, following which shares of common stock,
ordinary shares or equivalent equity interests, as the case may be, of such
Issuer either (i) are listed on a
22
nationally recognized stock exchange or automated quotation system in the United
States, Canada or a member of the European Union or (ii) have been distributed
in the United States by means of an effective registration statement under the
Securities Act or sales pursuant to Rule 144 under the Securities Act.
"Public Market" means that at any time with respect to the common
stock, ordinary shares or equivalent equity interests of either of the Issuers
(i) at least 10% of the total issued and outstanding common stock, ordinary
shares or equivalent equity interests of such Issuer has been distributed prior
to such time by means of an effective registration statement under the
Securities Act or (ii) an established public trading market otherwise exists for
any such common stock, or ordinary shares or equivalent equity interests.
"Purchase Money Indebtedness" means Indebtedness (i) 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 (ii) incurred to
finance the acquisition by DCC 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 DCC or such Restricted
Subsidiary, as the case may be, of such asset.
"Purchase Money Securities" means a promissory note of a
Securitization Entity evidencing a line of credit, which may be irrevocable,
from DCC or any Restricted Subsidiary in connection with a Qualified
Securitization Transaction, which note shall be repaid from cash available to
the Securitization Entity, other than amounts required to be established as
reserves pursuant to agreements, amounts paid to investors in respect of
interest, principal and other amounts owing to such investors and amounts paid
in connection with the purchase of newly generated receivables or newly acquired
equipment.
"Qualified Securitization Transaction" means any transaction or series
of transactions pursuant to which DCC or any Restricted Subsidiary may sell,
convey or otherwise transfer to (a) a Securitization Entity (in the case of a
transfer by DCC or any of Restricted Subsidiary) and (b) any other Person (in
the case of a transfer by a Securitization Entity), or may grant a security
interest in, any accounts receivable or equipment (whether existing on the
Closing Date or arising or acquired thereafter) of DCC or any of its Restricted
Subsidiaries, and any assets related thereto including, without limitation, all
collateral securing such accounts receivable and equipment, all contracts and
contract rights and all Guarantees or other obligations in respect of such
accounts receivable and equipment, proceeds of such accounts receivable and
equipment
23
and other assets (including contract rights) which are customarily transferred
or in respect of which security interests are customarily granted in connection
with asset securitization transactions involving accounts receivable and
equipment.
"Recapitalization" means the recapitalization of DCC pursuant to the
Recapitalization Agreement.
"Recapitalization Agreement" means the Recapitalization Agreement
dated as of March 11, 1998, as amended as of the Closing Date, among DCC, DC
Cycle, Perseus Cycle, DICSA and DFS, and, for the purposes specified therein, A.
Xxxxxx Xxxxxxxxx, Xxxx X. Finden-Crofts and Xxxxx X. Xxxxx.
"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 Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend, modify, restate, defer,
substitute or supplement (including pursuant to any defeasance or discharge
mechanism) any Indebtedness of DCC or any Restricted Subsidiary existing on the
Closing Date or Incurred in compliance with this Indenture (including
Indebtedness of DCC or such Restricted Subsidiary that Refinances Refinancing
Indebtedness); provided, however, that (i) the Refinancing Indebtedness has a
-------- -------
Stated Maturity no earlier than the Stated Maturity of the Indebtedness being
Refinanced, (ii) the 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, (iii) such Refinancing
Indebtedness is Incurred in an aggregate principal amount (or if issued with
original issue discount, an aggregate issue price) that is equal to or less than
the aggregate principal amount (or if issued with original issue discount, the
aggregate accreted value) then outstanding of the Indebtedness being Refinanced
(plus fees and expenses, including any premium and defeasance costs associated
with the Refinancing) and (vi) if the Indebtedness being Refinanced is
subordinated in right of payment to the Securities, such Refinancing
Indebtedness is subordinated in right of payment to the Securities at least to
the same extent as the Indebtedness being Refinanced; provided further, however,
-------- ------- -------
that Refinancing Indebtedness shall not include (x) Indebtedness of a Restricted
Subsidiary that Refinances Indebtedness of DCC or (y) Indebtedness of DCC or a
Restricted Subsidiary that Refinances Indebtedness of an Unrestricted
Subsidiary.
"Registered Exchange Offer" means a registered exchange offer for the
Securities (i) undertaken by the Issuers pursuant to the Exchange and
Registration Rights
24
Agreement and (ii) made to certain Holders of Initial Securities, to issue and
deliver to such Holders, in exchange for their Initial Securities, a like
aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Related Business" means any business related, ancillary or comple-
mentary to the businesses of DCC and the Restricted Subsidiaries on the Closing
Date.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Subsidiary" means any Subsidiary of DCC other than an
Unrestricted Subsidiary.
"Revolving Credit Agreement" means the credit agreement, to be dated
as of the Closing Date, as amended, waived or otherwise modified from time to
time, among DCC, the subsidiaries of DCC identified therein, Chase Manhattan
plc, as Arranger, the financial institutions named therein as banks and Chase
Manhattan International Limited, as Facility Agent and Security Agent (except to
the extent, if any, that any such amendment, waiver or other modification
thereto would be prohibited by the terms of this Indenture, unless otherwise
agreed to by the holders of at least a majority in aggregate principal amount of
Securities at the time outstanding).
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired by DCC or a Restricted Subsidiary whereby DCC or
a Restricted Subsidiary transfers such property to a Person and DCC or such
Restricted Subsidiary leases it from such Person, other than leases between DCC
and a Wholly Owned Subsidiary or leases between Wholly Owned Subsidiaries.
"Secured Indebtedness" means any Indebtedness of either of the Issuers
secured by a Lien. "Secured Indebtedness" of any Subsidiary of either of the
Issuers has a correlative meaning.
"Securities" means the Securities issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securitization Entity" means a Wholly Owned Subsidiary (or a wholly
owned Subsidiary of another Person in which DCC or any Subsidiary of DCC makes
an Investment and to which DCC or any Subsidiary of DCC transfers accounts
receivable or equipment and related assets) that engages in no activities other
than in connection with financing of accounts receivable or equipment and that
is designated by the board of
25
directors of DCC (as provided below) as a Securitization Entity (A) no portion
of the Indebtedness or any other obligations (contingent or otherwise) of which
(i) is Guaranteed by DCC or any Restricted Subsidiary (excluding Guarantees of
obligations (other than the principal of, and interest on, Indebtedness))
pursuant to Standard Securitization Undertakings, (ii) is recourse to or
obligates DCC or any Restricted Subsidiary in any way other than pursuant to
Standard Securitization Undertakings or (iii) subjects any property or asset of
DCC or any Restricted Subsidiary, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to Standard
Securitization Undertakings, (B) with which neither DCC nor any Restricted
Subsidiary has any material contract, agreement, arrangement or understanding
other than on terms no less favorable to DCC or such Restricted Subsidiary than
those that might be obtained at the time from Persons that are not Affiliates of
DCC, other than fees payable in the ordinary course of business in connection
with servicing receivables of such entity, and (C) to which neither DCC nor any
Restricted Subsidiary has any obligation to maintain or preserve such entities'
financial condition or cause such entity to achieve certain levels of operating
results. Any such designation by the board of directors of DCC shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of the board of directors of DCC giving effect to such designation
and an Officers' Certificate certifying that such designation complied with the
foregoing conditions.
"Senior Indebtedness"of either of the Issuers means the principal of,
premium, if any, and accrued and unpaid interest on (including interest accruing
on or after the filing of any petition in bankruptcy or for reorganization of
such Issuer, regardless of whether or not a claim for post-filing interest is
allowed in such proceedings), and fees and other amounts owing in respect of,
Bank Indebtedness and all other Indebtedness of such Issuer, whether outstanding
on the Closing Date or thereafter Incurred, unless in the instrument creating or
evidencing the same or pursuant to which the same is outstanding it is provided
that such obligations are not superior in right of payment to the Securities;
provided, however, that Senior Indebtedness shall not include (i) any obligation
-------- -------
of DCC to any of its Subsidiaries or any obligation of Lyon to any of the
Subsidiaries of DCC, (ii) any liability for federal, state, provincial, local,
foreign or other taxes owed or owing by such Issuer, (iii) any accounts payable
or other liability to trade creditors arising in the ordinary course of business
(including Guarantees thereof or instruments evidencing such liabilities), (iv)
any Indebtedness or obligation of such Issuer (and any accrued and unpaid
interest in respect thereof) that by its terms is subordinate or junior in any
respect to any other Indebtedness or obligation of such Issuer, including any
Subordinated Obligations, (v) any obligations with respect to any Capital Stock
or (vi) any Indebtedness Incurred in violation of this Indenture. "Senior
Indebtedness" of any Subsidiary of either of the Issuers has a correlative
meaning.
26
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of either of the Issuers within the meaning of Rule
1-02 under Regulation S-X promulgated by the Commission.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by DCC or any Subsidiary of
DCC that are reasonably customary in an accounts receivable or equipment
securitization transaction.
"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 beyond the control of the issuer unless such
contingency has occurred).
"Subordinated Obligation" means any Indebtedness of either of the
Issuers (whether outstanding on the Closing Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement. "Subordinated Obligation" of any Subsidiary of either of the
Issuers has a correlative meaning.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following: (i) any
investment in direct obligations of the United States or any agency thereof or
obligations Guaranteed by the United States or any agency thereof, (ii)
investments in time deposit accounts, certificates of deposit and money market
deposits maturing within 180 days of the date of acquisition thereof issued by a
bank or trust DCC that is organized under the laws of the United States, any
state thereof or any foreign country recognized by the United States having
capital, surplus and undivided profits aggregating in excess of $250,000,000 (or
the foreign currency equivalent thereof) and whose long-term debt 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), (iii) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (i) above
entered into with a bank meeting the
27
qualifications described in clause (ii) above, (iv) investments in commercial
paper, maturing not more than 90 days after the date of acquisition, issued by a
corporation (other than an Affiliate of DCC) organized and in existence under
the laws of the United States or any foreign country recognized by the United
States with a rating at the time as of which any investment therein is made of
"P-1" (or higher) according to Xxxxx'x Investors Service, Inc. ("Moody's") or
"A-1" (or higher) according to Standard and Poor's Ratings Service, a division
of The XxXxxx-Xxxx Companies, Inc. ("S&P"), and (v) investments in securities
with maturities of six months or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United States,
or by any political subdivision or taxing authority thereof, and rated at least
"A" by S&P or "A" by Moody's.
"Xxxxxx" means Xxxxxx Equity Investors III, L.P., a limited
partnership organized under the laws of the State of Delaware.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
------
77bbbb) as in effect on the Closing Date.
"Total Assets" means the total Consolidated assets of DCC and its
Restricted Subsidiaries, as set forth on DCC's most recent consolidated balance
sheet.
"Trade Payables" means, with respect to any Person, any accounts
payable or any Indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
in connection with the acquisition of goods or services.
"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.
"Univega" means Univega Beteiligungen GmbH.
"Unrestricted Subsidiary" means (i) any Subsidiary of DCC (other than
Lyon) that at the time of determination shall be designated an Unrestricted
Subsidiary by the board of directors of DCC in the manner provided below and
(ii) any Subsidiary of
28
an Unrestricted Subsidiary. The board of directors of DCC may designate any
Subsidiary of DCC (other than Lyon) (including any newly acquired or newly
formed Subsidiary of DCC) 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, either of the Issuers or any other
Subsidiary of either of the Issuers that is not a Subsidiary of the Subsidiary
to be so designated; provided, however, that either (A) the Subsidiary to be so
-------- -------
designated has total Consolidated assets of $1,000 or less or (B) if such
Subsidiary has Consolidated assets greater than $1,000, then such designation
would be permitted under Section 4.04. The board of directors of DCC may
designate any Subsidiary of DCC that is an Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, however, that immediately after giving effect
-------- -------
to such designation, (x) DCC could Incur $1.00 of additional Indebtedness under
paragraph (a) of Section 4.03 and (y) no Default shall have occurred and be
continuing. Any such designation of a Subsidiary as a Restricted Subsidiary or
Unrestricted Subsidiary by the board of directors of DCC shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the resolution of such
board of directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"U.S. GAAP" means generally accepted accounting principles in the
United States as in effect as of the Closing Date, including those set forth in
(i) the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the Commission
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
Commission. All ratios and computations based on U.S. GAAP contained in this
Indenture shall be computed in conformity with U.S. GAAP.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States (including any agency or instrumentality thereof) for the payment
of which the full faith and credit of the United States 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
29
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 of DCC all the
Capital Stock of which (other than directors' qualifying shares) is owned by DCC
or another Wholly Owned Subsidiary.
SECTION 1.02. Other Definitions.
------------------
Defined in
Term Section
---- -------------
"Additional Amounts"...................................... 4.16
"Affiliate Transaction"................................... 4.07
"Authorized Agent"........................................ 11.01
"Bankruptcy Law".......................................... 6.01
"Change of Control Offer"................................. 4.08(b)
"covenant defeasance option".............................. 8.01(b)
"Custodian"............................................... 6.01
"Event of Default"........................................ 6.01
"legal defeasance option"................................. 8.01(b)
"Legal Holiday"........................................... 11.08
"Offer"................................................... 4.06(b)
"Offer Amount"............................................ 4.06(c)
"Offer Period"............................................ 4.06(c)
"Paying Agent"............................................ 2.03
"protected purchaser"..................................... 2.07
"Purchase Date"........................................... 4.06(c)
"Registrar"............................................... 2.03
"Restricted Payment"...................................... 4.04(a)
"Successor Company"....................................... 5.01(a)
"Tax Authority"........................................... 4.16
"Taxes"................................................... 4.16
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
This Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by
30
reference in and made a part of this Indenture. The following TIA terms have the
following meanings:
"Commission" means the United States Securities and Exchange
Commission.
"indenture securities" means the Securities and the Note Guarantees.
"indenture security holder" means a Holder or Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuers, the Note
Guarantors 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 Commission rule
have the meanings assigned to them by such definitions.
SECTION 1.04. 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 U.S. 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;
31
(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 U.S. GAAP;
(8) 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.
ARTICLE 2
The Securities
--------------
SECTION 2.01. Form and Dating. Provisions relating to the Initial
----------------
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in the Appendix, which is hereby incorporated in and expressly made a part
of this Indenture. The (i) Initial Securities and the Trustee's certificate of
authentication and (ii) Private Exchange Securities and the Trustee's
certificate of authentication shall each be substantially in the form of Exhibit
A hereto, which is hereby incorporated in and expressly made a part of this
Indenture. The Exchange Securities and the Trustee's certificate of
authentication shall each be substantially in the form of Exhibit B hereto,
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 either of the Issuers or any Note
Guarantor is subject, if any, or usage (provided that any such notation, legend
or endorsement is in a form acceptable to the Issuers). Each Security shall be
dated the date of its authentication.
SECTION 2.02. Execution and Authentication. One or more Officers
-----------------------------
shall sign the Securities for each of the Issuers 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 make available for delivery
Securities as set forth in the Appendix.
32
The Trustee may appoint an authenticating agent reasonably acceptable
to the Issuers to authenticate the Securities. Any such appointment shall be
evidenced by an instrument signed by a Trust Officer, a copy of which shall be
furnished to the Issuers. 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.
SECTION 2.03. Registrar and Paying Agent. The Issuers 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
Issuers may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent, and the
term "Registrar" includes any co-registrars. The Issuers initially appoint the
Trustee as (i) Registrar and Paying Agent in connection with the Securities and
(ii) the Securities Custodian (as defined in the Appendix) with respect to the
Global Securities. The Issuers also intend to appoint The Industrial Bank of
Japan (Luxembourg), S.A. as Luxembourg Paying Agent once they apply for listing
of the Securities on the Luxembourg Stock Exchange. In all circumstances, the
Issuers shall ensure that (i) at least one Paying Agent shall be located in the
United States, (ii) at least one Paying Agent shall be, if and so long as the
Securities are listed on the Luxembourg Stock Exchange and the rules of such
exchange so require, located in Luxembourg or such other place as the Luxembourg
Stock Exchange may approve and (iii) if and so long as the Securities are listed
on any other securities exchange, any applicable requirements of such exchange
as to Paying Agents are satisfied.
The Issuers shall enter into an appropriate agency agreement with any
Registrar or Paying Agent 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 Issuers shall notify the Trustee of
the name and address of any such agent. If the Issuers fail 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. DCC or any of its
domestically organized Wholly Owned Subsidiaries may act as Paying Agent or
Registrar.
The Issuers 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 (1) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Issuers and such
33
successor Registrar or Paying Agent, as the case may be, and delivered to the
Trustee or (2) notification to the Trustee that the Trustee shall serve as
Registrar or Paying Agent until the appointment of a successor in accordance
with clause (1) above. The Registrar or Paying Agent may resign at any time upon
written notice; provided, however, that the Trustee may resign as Paying Agent
-------- -------
or Registrar only if the Trustee also resigns as Trustee in accordance with
Section 7.08.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
------------------------------------
date of the principal, interest and Additional Amounts, if any, on any Security,
the Issuers shall deposit with the Paying Agent (or if DCC or any Subsidiary is
acting as Paying Agent, segregate and hold in trust for the benefit of the
Persons entitled thereto) a sum sufficient to pay such principal, interest and
Additional Amounts, if any, when so becoming due. The Issuers shall require
each Paying Agent (other than the Trustee) to agree 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 or Additional
Amounts, if any, on the Securities and shall notify the Trustee of any default
by the Issuers in making any such payment. If DCC or a Subsidiary of DCC acts
as Paying Agent, it shall segregate the money held by it as Paying Agent and
hold it as a separate trust fund. The Issuers 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.
SECTION 2.05. 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 Issuers shall furnish, or cause the Registrar to furnish, to the
Trustee, in writing at least five Business Days before each 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.
SECTION 2.06. Transfer and Exchange. The Securities shall be issued
----------------------
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of Section 8-401(a)(l) of the
Uniform Commercial Code are met. When Securities are presented to the 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
same requirements are met. To permit registration of transfers and exchanges,
the Issuers shall execute and the Trustee shall authenticate Securities at the
Registrar's request. The Issuers, or the Paying Agent, as applicable, may
require payment of a sum
34
sufficient to pay all taxes, assessments or other governmental charges in
connection with any transfer or exchange pursuant to this Section 2.06. The
Issuers shall not be required to make and the Registrar need not register
transfers or exchanges of Securities selected for redemption (except, in the
case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or transfers or exchanges of Securities for a period of 15 days before
a selection of Securities to be redeemed.
Prior to the due presentation for registration of transfer of any
Security, and subject to the provisions of the Securities with respect to record
dates, the Issuers, the Note Guarantors, the Trustee, the Paying Agent or the
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, interest, and Additional Amounts, if any, on such Security and for
all other purposes whatsoever, whether or not such Security is overdue, and none
of the Issuers, any Note Guarantor, the Trustee, the Paying Agent or the
Registrar shall be affected by notice to the contrary.
Any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interest in such Global Security
may be effected only through a book-entry system maintained by (i) the Holder of
such Global Security (or its agent) or (ii) 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.
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 Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.07. 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 Issuers shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met, such that the Holder (i)
satisfies the Issuers or the Trustee within a reasonable time after he has
notice of such loss, destruction or wrongful taking and the Registrar does not
register a transfer prior to receiving such notification, (ii) makes such
request to the Issuers or the Trustee prior to the Security being acquired by a
protected purchaser as defined in Section 8-303 of the Uniform Commercial Code
(a "protected purchaser") and (iii) satisfies any other reasonable requirements
of the Trustee. If required by the Trustee or the Issuers, such Holder shall
furnish an indemnity bond sufficient in the judgment of the Trustee to protect
the Issuers, the Trustee, the Paying Agent and the Registrar from any loss that
any of them may suffer if a Security is replaced. The Issuers and the Trustee
may charge the Holder for their expenses in
35
replacing a Security. In the event any such mutilated, lost, destroyed or
wrongfully taken Security has become or is about to become due and payable, the
Issuers in their discretion may pay such Security instead of issuing a new
Security in replacement thereof.
Every replacement Security is an additional obligation of the Issuers.
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.
SECTION 2.08. 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 cancelation and those described in this Section
2.08 as not outstanding. Subject to Section 11.06, a Security does not cease to
be outstanding because the Issuers or an Affiliate of the Issuers holds the
Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Issuers receive proof satisfactory to
them that the replaced Security is held by a protected 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, interest and Additional Amounts, if any, payable on that date
with respect to the Securities (or portions thereof) to be redeemed or maturing,
as the case may be, and the Paying Agent is not prohibited from paying such
money to the Securityholders on that date pursuant to the terms of this
Indenture, then on and after that date such Securities (or portions thereof)
cease to be outstanding and interest and Additional Amounts, if any, on them
cease to accrue.
SECTION 2.09. Temporary Securities. In the event that Definitive
---------------------
Securities (as defined in the Appendix) are to be issued under the terms of this
Indenture, until such Definitive Securities are ready for delivery, the Issuers
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 Issuers consider appropriate for temporary Securities.
Without unreasonable delay, the Issuers 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 Issuers, without charge to the Holder.
36
SECTION 2.10. Cancelation. The Issuers at any time may deliver
------------
Securities to the Trustee for cancelation. 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 all
Securities surrendered for registration of transfer, exchange, payment or
cancelation and deliver canceled Securities to the Issuers pursuant to written
direction by an Officer. Subject to Section 2.07, the Issuers may not issue new
Securities to replace Securities they have redeemed, paid or delivered to the
Trustee for cancelation. The Trustee shall not authenticate Securities in place
of canceled Securities other than pursuant to the terms of this Indenture.
SECTION 2.11. Defaulted Interest. If the Issuers default in a
-------------------
payment of interest on the Securities, the Issuers shall pay the defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any
lawful manner. The Issuers may pay the defaulted interest to the Persons who
are Securityholders on a subsequent special record date. The Issuers shall fix
or cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee or Paying Agent, as applicable. At least
15 days before the subsequent special record date, the Issuers shall deliver, in
accordance with Section 11.02, a notice to each Holder of Securities, with a
copy to the Trustee and the Paying Agent, that states the subsequent special
record date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
SECTION 2.12. CUSIP Numbers. The Issuers in issuing the Securities
--------------
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use the applicable "CUSIP" number 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.
SECTION 2.13. Currency Indemnity. U.S. dollars is the sole currency
------------------
of account and payment for all sums payable by the Issuers under or in
connection with the Securities, including damages. Any amount received or
recovered in a currency other than U.S. dollars (whether as a result of, or the
enforcement of, a judgment or order of a court of any jurisdiction, in the
winding-up or dissolution of either of the Issuers or otherwise) by any holder
of a Security in respect of any sum expressed to be due to it from the Issuers
shall only constitute a discharge to the Issuers to the extent of the U.S.
dollar amount which the recipient is able to purchase with the amount so
received or recovered in that other currency on the date of that receipt or
recovery (or, if it is not
37
practicable to make that purchase on the date, on the first date on which it is
practicable to do so). If the U.S. dollar amount is less than the U.S. dollar
amount expressed to be due to the recipient under any Security, the Issuers
shall indemnify the recipient against any loss sustained by it as a result. In
any event, the Issuers shall indemnify the recipient against the cost of making
any such purchase. For the purposes of this Section 2.14, the Holder of a
Security shall certify in a satisfactory manner to the Trustee (indicating the
sources of information used) that it would have suffered a loss had an actual
purchase of U.S. dollars been made with the amount so received in that other
currency on the date of receipt or recovery (or, if a purchase of U.S. dollars
on such date had not been practicable due to currency market conditions
generally, on the first date on which it would have been practicable, it being
required that the need for a change of date be certified in the manner mentioned
above). These indemnities constitute a separate and independent obligation from
the other obligations of the Issuers, shall give rise to a separate and
independent cause of action, shall apply irrespective of any indulgence granted
by any holder of a Security and shall continue in full force and effect despite
any other judgment, order, claim or proof for a liquidated amount in respect of
any sum due under any Security.
ARTICLE 3
Redemption
----------
SECTION 3.01. Notices to Trustee. If the Issuers elect to redeem
-------------------
Securities pursuant to paragraph 5 of the Securities, they 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
shall occur.
The Issuers shall give each notice to the Trustee provided for in this
Section 3.01 at least 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 Issuers to the effect that such
redemption shall comply with the conditions herein. If fewer than all the
Securities are to be redeemed, the record date relating to such redemption shall
be selected by the Issuers and given to the Trustee, which record date shall be
not fewer than 15 days after the date of notice to the Trustee. Any such notice
may be canceled at any time prior to notice of such redemption being delivered
to any Holder and shall thereby be void and of no effect.
SECTION 3.02. 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 in compliance with the requirements of the principal securities
exchange, if
38
any, on which such Securities are listed and the requirements of any depositary
holding the global certificates representing the Securities, or, if such
Securities are not so listed or such exchange prescribes no method of selection
and the depositary, if any, holding the global certificates representing the
Securities imposes no requirements, on a pro rata basis, by lot or by such other
method that the Trustee in its sole discretion shall deem to be fair and
appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances (and in such manner as
complies with applicable legal and exchange requirements). Any such requirements
of any such securities exchange not located in the United States shall be
specified by the Issuers in writing to the Trustee. 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 equal to or larger than $1,000. Securities and portions of
them the Trustee selects shall be in amounts of $1,000 or a whole multiple of
$1,000. 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 Issuers promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more
---------------------
than 60 days before a date for redemption of Securities, the Issuers shall
deliver or cause to be delivered, in accordance with Section 11.02, a notice of
redemption to each Holder whose Securities are to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price and the amount of accrued and unpaid
interest, if any, and Additional Amounts, if any, to be paid;
(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 plus accrued and unpaid
interest, if any, and Additional Amounts, if any;
(5) if fewer than all the outstanding Securities are to be redeemed,
the certificate numbers and principal amounts of the particular Securities
(or portion thereof) to be redeemed;
(6) that, unless the Issuers default in making such redemption payment
or the Paying Agent is prohibited from making such payment pursuant to the
terms
39
of this Indenture, interest and Additional Amounts, if any, on Securities
(or 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;
(8) the CUSIP number, if any, printed on the Securities being
redeemed; and
(9) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Issuers' request, the Trustee shall give the notice of
redemption in the Issuers' name and at the Issuers' expense. In such event, the
Issuers shall provide the Trustee with the information required by this Section
3.03.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
-------------------------------
redemption is given in accordance with Section 3.03, Securities called for
redemption become due and payable on the redemption date and at the redemption
price plus accrued and unpaid interest and Additional Amounts, if any, stated in
the notice. Upon surrender to the Trustee or Paying Agent, such Securities
shall be paid at the redemption price stated in the notice, plus accrued and
unpaid interest and Additional Amounts, if any, to the redemption date;
provided, however, that if the redemption date is after a regular record date
-------- -------
and on or prior to the payment date, the accrued interest shall be payable to
the Securityholder of the redeemed Securities registered on the relevant record
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.
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m. New
----------------------------
York City time on the redemption date, the Issuers shall deposit with the Paying
Agent (or, if DCC or a Subsidiary of DCC is the Paying Agent, shall segregate
and hold in trust) money in U.S. dollars sufficient to pay the redemption price
of and accrued and unpaid interest and Additional Amounts, if any, on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption that have been delivered by the Issuers to the
Trustee for cancelation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
----------------------------
Security that is redeemed in part, the Issuers shall execute and the Trustee
shall authenticate for the Holder (at the Issuers' expense) a new Security equal
in principal amount to the unredeemed portion of the Security surrendered.
40
ARTICLE 4
Covenants
---------
SECTION 4.01. Payment of Securities. The Issuers shall promptly pay
----------------------
the principal of and interest, liquidated damages and Additional Amounts, if
any, on the Securities on the dates and in the manner provided in the Securities
and in this Indenture. Principal, interest and Additional Amounts shall be
considered paid on the date due if at 10:00 a.m. New York City time on such date
the Trustee or the Paying Agent holds in accordance with this Indenture money in
U.S. dollars sufficient to pay all principal, interest, liquidated damages and
Additional Amounts then due.
The Issuers shall pay interest on overdue principal at the rate
specified therefor in the Securities, and they shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. Reports to Holders of Securities. Notwithstanding that
---------------------------------
DCC may not be subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act, DCC shall file with the Commission and provide the Trustee and
holders of Securities and prospective holders of Securities (upon request)
within 15 days after DCC files them with the Commission, copies of its annual
report and the information, documents and other reports that are specified in
Sections 13 and 15(d) of the Exchange Act. In addition, following a Public
Equity Offering, DCC shall furnish to the Trustee and Securityholders, promptly
upon their becoming available, copies of the annual report to shareholders and
any other information provided by such Issuer to its public shareholders
generally. The Issuers shall comply with the other provisions of Section 314(a)
of the TIA.
SECTION 4.03. Limitation on Indebtedness. (a) DCC shall not, and
---------------------------
shall not permit any Restricted Subsidiary to, Incur, directly or indirectly,
any Indebtedness; provided, however, that DCC or any Restricted Subsidiary may
-------- -------
Incur Indebtedness, if on the date of such Incurrence and after giving effect
thereto, the Consolidated Coverage Ratio would be greater than 2.00:1.00 if such
Indebtedness is Incurred on or prior to the second anniversary of the date of
the original issuance of the Securities and 2.25:1.00 if such Indebtedness is
Incurred thereafter.
(b) Notwithstanding Section 4.03(a), DCC and its Restricted
Subsidiaries may Incur the following Indebtedness:
41
(i) Indebtedness outstanding at any one time in an aggregate
principal amount not to exceed the greater of (A) 100% of the total
commitment under the Revolving Credit Agreement on the Closing Date (DM225
million) less the aggregate amount of Indebtedness incurred by all
Securitization Entities in connection with Qualified Securitization
Transactions that is outstanding at such time; or (B) 75% of accounts
receivable and 35% of inventory, in each case net of reserves and as shown
on the consolidated balance sheet of DCC as of the most recent month for
which financial statements are available from time to time (so that
Indebtedness incurred pursuant to this clause (B) is not at any time
greater than the permitted amount based on the most recent such financial
statements);
(ii) Indebtedness of DCC owed to, and held by, any Restricted
Subsidiary or Indebtedness of a Restricted Subsidiary owed to, and held by,
DCC or any other Restricted Subsidiary; provided, however, that any
-------- -------
subsequent issuance or transfer of any Capital Stock or any other event
that results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any subsequent transfer of any such Indebtedness (except to
DCC or a Restricted Subsidiary) shall be deemed, in each case, to
constitute the Incurrence of such Indebtedness by the issuer thereof;
(iii) Indebtedness (A) represented by the Securities, any Exchange
Securities or any Private Exchange Securities, (B) outstanding on the
Closing Date (other than the Indebtedness described in clauses (i) and (ii)
above), (C) consisting of Refinancing Indebtedness Incurred in respect of
any Indebtedness described in this clause (iii) (including Indebtedness
Refinancing Refinancing Indebtedness) or the foregoing clause (i) and (D)
consisting of Guarantees of any Indebtedness not prohibited by this
Indenture;
(iv) (A) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on which such Restricted Subsidiary was
acquired by DCC or a Restricted Subsidiary (other than Indebtedness
Incurred 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 DCC or a Restricted Subsidiary or was otherwise acquired by
DCC or a Restricted Subsidiary); provided, however, that on the date that
-------- -------
such Restricted Subsidiary is acquired by DCC or a Restricted Subsidiary,
DCC would have been able to Incur $1.00 of additional Indebtedness pursuant
to Section 4.03(a) after giving effect to the Incurrence of such
Indebtedness pursuant to this clause (iv) and (B) Refinancing Indebtedness
Incurred by a Restricted Subsidiary in respect of Indebtedness Incurred by
such Restricted Subsidiary pursuant to this clause (iv);
42
(v) Indebtedness (A) in respect of performance bonds, bankers'
acceptances, letters of credit and surety or appeal bonds provided by DCC
and its Restricted Subsidiaries in the ordinary course of business and (B)
under Currency Agreements and Interest Rate Agreements entered into for
bona fide hedging purposes of DCC and its Restricted Subsidiaries in the
ordinary course of business; provided, however, that such Currency
-------- -------
Agreements and Interest Rate Agreements do not increase the Indebtedness of
DCC and its Restricted Subsidiaries outstanding at any time other than as a
result of fluctuations in foreign currency exchange rates or interest rates
or by reason of fees, indemnities and compensation payable thereunder;
(vi) Purchase Money Indebtedness and Capitalized Lease Obligations
in an aggregate principal amount not in excess of $10,000,000 at any time
outstanding;
(vii) Indebtedness arising from agreements of DCC or any of its
Restricted Subsidiaries providing for indemnification, adjustment of
purchase price, earn out or other similar obligations, in each case,
incurred or assumed in connection with the disposition of a Restricted
Subsidiary or any business or assets of DCC or a Restricted Subsidiary,
other than Guarantees of Indebtedness incurred by any Person acquiring all
or any portion of such business, assets or such Restricted Subsidiary for
the purpose of financing such acquisition; provided that the maximum
--------
assumable liability in respect of all such Indebtedness shall at no time
exceed the gross proceeds actually received by DCC or its Restricted
Subsidiaries in connection with such disposition;
(viii) Indebtedness incurred by a Securitization Entity in a Qualified
Securitization Transaction that is Non-Recourse Indebtedness with respect
to DCC and its other Restricted Subsidiaries (except for Standard
Securitization Undertakings);
(ix) the Incurrence of Indebtedness by Foreign Subsidiaries which
does not exceed $5,000,000 at any one time outstanding;
(x) Indebtedness (other than Indebtedness permitted to be Incurred
pursuant to the foregoing paragraph (a) or any other clause of this
paragraph (b)) in an aggregate principal amount on the date of Incurrence
that, when added to all other Indebtedness Incurred pursuant to this clause
(x) and then outstanding, shall not exceed $20,000,000; and
(xi) Contribution Indebtedness.
43
(c) Notwithstanding the foregoing, neither of the Issuers may Incur
any Indebtedness pursuant to paragraph (b) above if the proceeds thereof are
used, directly or indirectly, to repay, prepay, redeem, defease, retire, refund
or refinance any Subordinated Obligations of such Issuer unless such
Indebtedness shall be subordinated to the Securities to at least the same extent
as such Subordinated Obligations.
(d) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that DCC 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. For purposes of
determining the outstanding principal amount of any particular Indebtedness
Incurred pursuant to this Section 4.03, (i) Indebtedness Incurred pursuant to
the Revolving Credit Agreement prior to or on the Closing Date shall be treated
as Incurred pursuant to Section 4.03(b)(i), (ii) Indebtedness permitted by this
Section 4.03 need not be permitted solely by reference to one provision
permitting such Indebtedness but may be permitted in part by one such provision
and in part by one or more other provisions of this Section 4.03 permitting such
Indebtedness and (iii) in the event that Indebtedness meets the criteria of more
than one of the types of Indebtedness described in this Section 4.03, DCC, in
its sole discretion, shall classify such Indebtedness and only be required to
include the amount of such Indebtedness in one of such clauses.
SECTION 4.04. Limitation on Restricted Payments. (a) DCC shall not,
----------------------------------
and shall not permit any Restricted Subsidiary, directly or indirectly, to (i)
declare or pay any dividend or make any distribution on or in respect of its
Capital Stock (including any payment in connection with any merger or
consolidation involving DCC) or similar payment (including any payment in
respect of the Additional Payment) to the direct or indirect holders of its
Capital Stock except dividends or distributions payable solely in its Capital
Stock (other than Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock and except dividends or distributions payable to DCC
or another Restricted Subsidiary (and, if such Restricted Subsidiary has
shareholders other than DCC or other Restricted Subsidiaries, to its other
shareholders on a pro rata basis), (ii) purchase, redeem, retire or otherwise
acquire for value any Capital Stock of DCC or any Restricted Subsidiary held by
Persons other than DCC or another Restricted Subsidiary, (iii) purchase,
repurchase, redeem, defease or otherwise acquire or retire for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Obligations (other than 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 acquisition) or (iv) make any Restricted
Investment in any Person (any such dividend, distribution, purchase, redemption,
repurchase, defeasance, other
44
acquisition, retirement or Investment being herein referred to as a "Restricted
Payment") if at the time DCC or such Restricted Subsidiary makes such Restricted
Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
(2) DCC could not Incur at least $1.00 of additional Indebtedness
under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments (the amount so expended, if other than in cash, to be
determined in good faith by the board of directors of DCC, whose
determination shall be conclusive and evidenced by a resolution of such
board of directors) declared or made subsequent to the Closing Date would
exceed the sum of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the fiscal
quarter immediately following the fiscal quarter during which the
Closing Date occurs to the end of the most recent fiscal quarter for
which financial statements are available (or, in case such
Consolidated Net Income shall be a deficit, minus 100% of such
deficit);
(B) the aggregate Net Cash Proceeds received by DCC from the
issue or sale of its Capital Stock (other than Disqualified Stock) or
other capital contributions subsequent to the Closing Date other than
an issuance or sale to (x) a Subsidiary of DCC or (y) an employee
stock ownership plan or other trust established by DCC or any of its
Subsidiaries to the extent such sale to an employee stock ownership
plan or similar trust is financed by loans from, or is Guaranteed by,
DCC or any Restricted Subsidiary unless such loans have been repaid in
cash prior to the date of such determination;
(C) the amount by which Indebtedness of DCC or its Restricted
Subsidiaries is reduced on DCC's consolidated balance sheet upon the
conversion or exchange (other than by a Subsidiary of DCC) subsequent
to the Closing Date of any Indebtedness of DCC or its Restricted
Subsidiaries convertible or exchangeable for Capital Stock (other than
Disqualified Stock) of DCC (less the amount of any cash or the fair
market value of other property distributed by DCC or any Restricted
Subsidiary upon such conversion or exchange), plus the amount of cash
and the fair market value of any other property (determined as
provided
45
above) received by DCC or any Restricted Subsidiary upon such
conversion or exchange; and
(D) the amount equal to the net reduction in Investments in
Unrestricted Subsidiaries resulting from (i) payments of dividends,
repayments of the principal of loans or advances or other transfers of
assets to DCC or any Restricted Subsidiary from Unrestricted
Subsidiaries or the disposal of such Investments or (ii) the
redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of "Investment")
not to exceed, in the case of any Unrestricted Subsidiary, the amount
of Investments previously made by DCC or any Restricted Subsidiary in
such Unrestricted Subsidiary, which amount was included in the
calculation of the amount of Restricted Payments, less (E) the
aggregate principal amount of any outstanding Contribution
Indebtedness.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) any Restricted Payment made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of DCC
(other than Disqualified Stock and other than Capital Stock issued or sold
to a Subsidiary of DCC or an employee stock ownership plan or other trust
established by DCC or any of its Subsidiaries to the extent such sale to an
employee stock ownership plan or similar trust is financed by loans from,
or is Guaranteed by, DCC or any Restricted Subsidiary unless such loans
have been repaid in cash prior to the date of such determination) or a
substantially concurrent capital contribution to DCC; provided, however,
-------- -------
that (A) such Restricted Payment shall be excluded in the calculation of
the amount of Restricted Payments under clause (3) of Section 4.04(a) and
(B) the Net Cash Proceeds from such sale applied in the manner set forth in
this clause (i) shall be excluded from the calculation of amounts under
clause (3)(B) of Section 4.04(a);
(ii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of DCC or
its Restricted Subsidiaries made by exchange for, or out of the proceeds
of, the substantially concurrent sale of, Indebtedness of DCC or its
Restricted Subsidiaries that is permitted to be Incurred pursuant to
Section 4.03(b); 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 under
clause (3) of Section 4.04(a);
46
(iii) any purchase or redemption of Subordinated Obligations of any
Subsidiary of DCC from Net Available Cash to the extent permitted by
Section 4.06; provided, however, that such purchase or redemption shall be
-------- -------
excluded in the calculation of the amount of Restricted Payments under
clause (3) of Section 4.04(a);
(iv) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with Section 4.04(a); provided, however, that such dividend shall be
-------- -------
included in the calculation of the amount of Restricted Payments under
clause (3) of Section 4.04(a);
(v) the repurchase or other acquisition of shares of, or options to
purchase shares of, common stock of DCC or any of its Subsidiaries from
employees, former employees, directors or former directors of DCC 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 relevant board of directors under which such
individuals purchase or sell, or are granted the option to purchase or
sell, shares of such common stock; provided, however, that the aggregate
-------- -------
amount of such repurchases or acquisitions shall not exceed $2,000,000 in
any calendar year or $5,000,000 in total; provided further, however, that
---------------- -------
such repurchases and other acquisitions shall be excluded in the
calculation of the amount of Restricted Payments under clause (3) of
Section 4.04(a);
(vi) repurchases of Capital Stock deemed to occur upon the exercise
of stock options if such Capital Stock represents a portion of the exercise
price thereof; provided further, however, that such repurchases shall be
-------- ------- -------
excluded in the calculation of the amount of Restricted Payments under
clause (3) of Section 4.04(a);
(vii) any purchases of Capital Stock of Univega or the MS Sport Group
for aggregate consideration not in excess of $7,000,000; provided, however,
-------- -------
that such purchases shall be included in the calculation of the amount of
Restricted Payments under clause (3) of Section 4.04(a);
(viii) any purchases of Capital Stock of Derby Holdings South Africa
for aggregate consideration not in excess of $2,000,000; provided, however,
-------- -------
that such purchases shall not be included in the calculation of the amount
of Restricted Payments under clause (3) of Section 4.04(a); or
(ix) any distribution on or in respect of any Capital Stock of DCC or
any Restricted Subsidiary or similar payment made in connection with any
sale of Excluded Assets undertaken in
47
accordance with the terms of the Recapitalization Agreement in an aggregate
amount not in excess of $300,000; provided, however, that such distribution
-------- -------
or payment shall not be included in the calculation of the amount of
Restricted Payments under clause (3) of Section 4.04(a).
SECTION 4.05. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries. DCC 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 (i) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to either of the
Issuers, (ii) make any loans or advances to either of the Issuers or (iii)
transfer any of its property or assets to either of the Issuers, except:
(1) any encumbrance or restriction pursuant to an agreement in effect
at, or entered into on, the Closing Date;
(2) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred
by such Restricted Subsidiary prior to the date on which such Restricted
Subsidiary was acquired by DCC or another Restricted Subsidiary or of
another Person that is assumed by DCC or any Restricted Subsidiary in
connection with the acquisition of assets from, or merger or consolidation
with, such Person (other than Indebtedness Incurred as consideration paid
in connection with, in contemplation of, 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 otherwise acquired by DCC or another
Restricted Subsidiary) and outstanding on such date;
(3) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to any agreement not relating to any Indebtedness in
existence when a Person becomes a Subsidiary of DCC or any other Restricted
Subsidiary or when such assets are acquired by DCC or any Restricted
Subsidiary, that is not created in contemplation of such Person becoming
such a Subsidiary or such acquisition;
(4) any encumbrance or restriction pursuant to an agreement effecting
a refinancing of Indebtedness, including agreements that increase the
amount of such Indebtedness to the extent otherwise permitted by this
Indenture, Incurred pursuant to an agreement referred to in clause (1) or
(2) of this Section 4.05 or this clause (4) or contained in any amendment
to an agreement referred to in clause (1) or (2) of this Section 4.05 or
this clause (4); provided, however, that the encumbrances and restrictions
-------- -------
contained in any such refinancing agreement or
48
amendment are no less favorable to holders of the Securities than the
encumbrances and restrictions contained in such predecessor agreements;
(5) in the case of clause (iii) any encumbrance or restriction (A)
that restricts in a customary manner the subletting, assignment or transfer
of any property or asset that is subject to a lease, license or similar
contract, or the assignment or transfer of any lease, license or contract,
(B) that is or was created by virtue of any transfer of, agreement to
transfer, option or right with respect to, or Lien on, any property or
assets of DCC or any Restricted Subsidiary not otherwise prohibited by this
Indenture or (C) contained in security agreements securing Indebtedness of
a Restricted Subsidiary to the extent such encumbrance or restriction
restricts the transfer of the property subject to such security agreements;
(6) with respect to a Restricted Subsidiary, any restriction 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;
(7) any agreement or instrument governing Capital Stock of any person
that is in effect on the date such Person is acquired by DCC or a
Restricted Subsidiary and that is not created in contemplation of such
acquisition or of such Person becoming a Subsidiary of DCC or a Restricted
Subsidiary;
(8) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
(9) any Purchase Money Security or other Indebtedness or other
contractual requirements of a Securitization Entity in connection with a
Qualified Securitization Transaction; provided, that such restrictions
--------
apply only to such Securitization Entity; and
(10) any agreement or instrument governing Indebtedness of Foreign
Subsidiaries operating in jurisdictions in which the Issuers, as of the
Closing Date, do not have any significant operations; provided, however,
-------- -------
that, at the time such agreement or instrument is executed by the parties
thereto, the aggregate earnings before interest, taxes, depreciation and
amortization of such Foreign Subsidiaries for the period of the most recent
four consecutive fiscal quarters for which financial statements are
available (calculated, in the case of each such Foreign Subsidiary, in a
manner consistent with the calculation of EBITDA, and, in the case of each
such Foreign Subsidiary that is acquired by DCC, on a pro
49
forma basis as if such acquisition had occurred on the first day of such
period) shall not exceed 10% of EBITDA for such period.
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock. (a)
---------------------------------------------------
DCC shall not, and shall not permit any Restricted Subsidiary to, make any Asset
Disposition unless (i) DCC or such Restricted Subsidiary receives consideration
(including by way of relief from, or by any other Person assuming sole
responsibility for, any liabilities, contingent or otherwise) at the time of
such Asset Disposition at least equal to the fair market value, as determined in
good faith by the board of directors of DCC or such Restricted Subsidiary, as
the case may be, of the shares and assets subject to such Asset Disposition,
(ii) at least 80% of the consideration thereof received by DCC or such
Restricted Subsidiary is in the form of cash or cash equivalents and (iii) an
amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by DCC or such Restricted Subsidiary, as the case may be, (A) first, to
-----
the extent the Issuers elect (or are required by the terms of the Revolving
Credit Agreement or any secured refinancing thereof (including refinancings that
increase the amount of Indebtedness outstanding to the extent otherwise
permitted by this Indenture)), to prepay, repay, redeem or purchase Indebtedness
of the Issuers or a Restricted Subsidiary of DCC outstanding under the Revolving
Credit Agreement or any such refinancing referred to above 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 Net Available Cash
------
after application in accordance with clause (A), to the extent DCC or such
Restricted Subsidiary elects, to reinvest in Additional Assets (including by
means of an Investment in Additional Assets by a Restricted Subsidiary with Net
Available Cash received by DCC or another Restricted Subsidiary) within one year
from the later of such Asset Disposition or the receipt of such Net Available
Cash (or DCC or such a Restricted Subsidiary enters into an agreement to
reinvest in Additional Assets within one year from the later of such Asset
Disposition or the receipt of such Net Available Cash, which reinvestment must
be consummated within 18 months from the later of such Asset Disposition or the
receipt of such Available Net Cash); (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 (as defined in Section 4.06(b)) to purchase Securities
pursuant to and subject to the conditions of Section 4.06(b); provided, however,
-------- -------
that, if the Issuers elect (or are required by the terms of any other Senior
Indebtedness of the Issuers or any Restricted Subsidiary), such Offer may be
made ratably to purchase the Securities and other Senior Indebtedness of the
Issuers or any Restricted Subsidiary and (D) fourth, to the extent of the
------
balance of such Net Available Cash after application in accordance with clauses
(A), (B) and (C), for any other general corporate purpose not prohibited by this
Indenture, including Restricted Payments; provided, however that, in connection
-------- -------
with any prepayment, repayment or purchase of Indebtedness pursuant to clause
(A), (C) or (D) above, DCC or such Restricted Subsidiary shall retire such
Indebtedness and shall
50
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, DCC 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 that is not applied in accordance
with this Section 4.06(a) exceeds $5,000,000. The provisions of this Section
4.06 shall not apply to any consideration received by DCC or any Restricted
Subsidiary in connection with any sale of Excluded Assets undertaken in
accordance with the terms of the Recapitalization Agreement to the extent that
the aggregate amount of such consideration does not exceed $300,000.
For the purposes of this Section 4.06, the following are deemed to be
cash: (x) the assumption of Indebtedness of DCC (other than Disqualified Stock
of DCC) or any Restricted Subsidiary and the release of DCC or such Restricted
Subsidiary from all liability on such Indebtedness in connection with such Asset
Disposition, (y) securities received by DCC or any Restricted Subsidiary from
the transferee that are promptly converted by DCC or such Restricted Subsidiary
into cash and (z) any Designated Non-Cash Consideration received by DCC or any
Restricted Subsidiary in such Asset Disposition having an aggregate fair market
value, taken together with all other Designated Non-Cash Consideration received
pursuant to this clause (z) that is at that time outstanding, not to exceed 3%
of Total Assets at the time of the receipt of such Designated Non-Cash
Consideration (with the fair market value of each item of Designated Non-Cash
Consideration being measured at the time received without giving effect to
subsequent changes in value).
(b) In the event of an Asset Disposition that requires the purchase of
Securities (and other Senior Indebtedness of the Issuers or any Restricted
Subsidiary) pursuant to clause (a)(iii)(C) of this Section 4.06, the Issuers
shall be required to purchase Securities (and other Senior Indebtedness of the
Issuers or any Restricted Subsidiary) tendered pursuant to an offer by the
Issuers for the Securities (and other Senior Indebtedness of the Issuers or any
Restricted Subsidiary) (the "Offer") at a purchase price of 100% of their
principal amount (without premium) plus accrued and unpaid interest and
Additional Amounts, if any, to the date of purchase (subject to the right of
holders of record on the relevant record date to receive interest due on the
relevant payment date and Additional Amounts, if any, in respect thereof) in
accordance with the procedures (including prorationing in the event of
oversubscription) set forth in Section 4.06(d). If the aggregate purchase price
of Securities (and other Senior Indebtedness of the Issuers or any Restricted
Subsidiary) tendered pursuant to the Offer is less than the Net Available Cash
allotted to the purchase of the Securities (and other Senior Indebtedness of the
Issuers or any Restricted Subsidiary), the Issuers shall apply the remaining Net
Available Cash in accordance with clause (a)(iii)(D) of this Section
51
4.06. The Issuers shall not be required to make an Offer for Securities (and
other Senior Indebtedness of the Issuers or any Restricted Subsidiary) pursuant
to this Section 4.06 if the Net Available Cash available therefor (after
application of the proceeds as provided in clauses (A) and (B) of Section 4.06
(a)(iii)) is less than $10,000,000 for any particular Asset Disposition (which
lesser amount shall be carried forward for purposes of determining whether an
Offer is required with respect to the Net Available Cash from any subsequent
Asset Disposition). Upon completion of any such offer pursuant to Section 4.06
(a)(iii)(C), the Net Available Cash amount shall be reset at zero.
(c) (1) Promptly, and in any event within 10 days after the Issuers
become obligated to make an Offer, the Issuers shall be obligated to deliver to
the Trustee and to deliver or cause to be delivered, in accordance with Section
11.02, a notice of an Offer to each Holder whose Securities are to be
purchased. The notice shall state that the Holder may elect to have his
Securities purchased by the Issuers either in whole or in part (subject to
prorationing as hereinafter described in the event the Offer is oversubscribed)
in integral multiples of DM1,000 of principal amount, at the applicable purchase
price. The notice shall specify a purchase date not less than 30 days nor more
than 60 days after the date of such notice (the "Purchase Date") and shall
contain (or, in the case of a notice by publication, shall contain instructions
on how to obtain from the Issuers by first-class mail, postage prepaid) such
information concerning the business of the Issuers which the Issuers in good
faith believe shall enable such Holders to make an informed decision (which at a
minimum shall include (i) the most recently filed Annual Report on Form 10-K
(including audited consolidated financial statements) of DCC, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current Report on Form
8-K of DCC filed subsequent to such Quarterly Report, other than Current Reports
describing Asset Dispositions otherwise described in the offering materials (or
corresponding successor reports), (ii) a description of material developments in
the Issuers' business subsequent to the date of the latest of such reports and
(iii) if material, appropriate pro forma financial information) and all
instructions and materials necessary to tender Securities pursuant to the Offer,
together with the address referred to in clause (3).
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided above, the Issuers shall deliver to the
Trustee an Officers' Certificate as to (i) the amount of the Offer (the "Offer
Amount"), (ii) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (iii) the compliance
of such allocation with the provisions of Section 4.06(a). On such date, the
Issuers shall also irrevocably deposit with the Trustee or with a Paying Agent
(or, if DCC or a Subsidiary of DCC is the Paying Agent, segregate and hold in
trust) an amount equal to the Offer Amount to be invested in Temporary Cash
Investments and to be held for payment in accordance with the provisions of this
Section 4.06. Upon the expiration of the period for which the Offer
52
remains open ( the "Offer Period"), the Issuers shall deliver to the Trustee for
cancelation the Securities or portions thereof that have been properly tendered
to and are to be accepted by the Issuers. The Trustee (or the Paying Agent, if
not the Trustee) shall, on the date of purchase, mail or deliver 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 Issuers to the
Trustee is less than the Offer Amount applicable to the Securities, the Trustee
shall deliver the excess to the Issuers 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
Issuers 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 Issuers receive, 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 by the
Holder for purchase and a statement that such Holder is withdrawing his election
to have such Security purchased. If at the expiration of the Offer Period the
aggregate principal amount of Securities included in the Offer surrendered by
Holders thereof exceeds the Offer Amount, the Issuers shall select the
Securities to be purchased in compliance with the requirements of the principal
securities exchange, if any, on which such Securities are listed and the
requirements of any depositary holding the global certificates representing the
Securities, or, if the Securities are not so listed or such exchange prescribes
no method of selection and the depositary, if any, holding the global
certificates representing the Securities imposes no requirement, subject to
applicable law, on a pro rata basis (with such adjustments as may be deemed
appropriate by the Issuers so that only Securities in denominations of DM1,000,
or integral multiples thereof, shall be 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 Issuers deliver Securities to the Trustee which
are to be accepted for purchase, the Issuers shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Issuers
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 Issuers shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations, including any securities laws of The Netherlands and the
requirements of the Luxembourg Stock Exchange or any other securities exchange
on which the Securities are listed, to the
53
extent such laws or regulations or requirements are applicable, 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 Issuers 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 thereof.
SECTION 4.07. Limitation on Transactions with Affiliates. (a) DCC
-------------------------------------------
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, enter into or conduct any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
Affiliate of DCC (an "Affiliate Transaction") on terms (i) that are less
favorable to DCC or such Restricted Subsidiary, as the case may be, 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, (ii) if such Affiliate Transaction
involves an aggregate amount in excess of $5,000,000, (1) set forth in writing
and (2) that have been approved by a majority of the members of the board of
directors of DCC or such Restricted Subsidiary, as the case may be, having no
personal stake in such Affiliate Transaction, or have been determined by a
nationally recognized appraisal or investment banking firm to be fair, from a
financial standpoint, to DCC and its Restricted Subsidiaries and (iii) if such
Affiliate Transaction involves an amount in excess of $10,000,000, that have
been determined by a nationally recognized appraisal or investment banking firm
to be fair, from a financial standpoint, to DCC and its Restricted Subsidiaries.
(b) The provisions of Section 4.07(a) shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant Section 4.04 or any Permitted
Investment, (ii) any issuance of securities, or other payments, awards or grants
in cash, or otherwise pursuant to, or the funding of, employment arrangements,
stock options and stock ownership plans approved by the board of directors of
DCC or such Restricted Subsidiary, as the case may be, (iii) the grant of stock
options or similar rights to employees and directors of DCC or such Restricted
Subsidiary pursuant to plans approved by the board of directors of DCC or such
Restricted Subsidiary, as the case may be, (iv) loans or advances to employees
in the ordinary course of business in accordance with past practices of DCC or
such Restricted Subsidiary, as the case may be, but in any event not to exceed
$4,000,000 in the aggregate outstanding at any one time, (v) the entering into,
maintaining or performance of any employment contract, collective bargaining
agreement, benefit plan, program or arrangement, related trust agreement or any
other similar arrangement for or with any employee, officer or director entered
into before or after the Closing Date in the ordinary course of business,
including vacation, health, insurance deferred compensation, retirement, savings
or other similar plans, (vi) the payment of customary annual management,
consulting and advisory fees and related expenses to the Investor Group and any
of their respective Affiliates made pursuant to any financial advisory,
financing,
54
underwriting or placement agreement or in respect of other investment banking
activities, including, without limitation, in connection with acquisitions or
divestitures which are approved by the board of directors of DCC or any
Restricted Subsidiary in good faith; provided, however, that the aggregate
-------- -------
amount of such fees and related expenses shall not exceed $2,000,000 in any
calendar year, (vii) reasonable fees and compensation paid to, and indemnity
provided on behalf of, officers, directors, employees or consultants of DCC or
any of its Subsidiaries as determined in good faith by the board of directors of
DCC or such Subsidiary, as the case may be, (viii) any agreement in effect as of
the Closing Date or any amendment or replacement thereto or any transaction
contemplated thereby (including pursuant to any amendment or replacement
thereto) so long as any such amendment or replacement agreement is not more
disadvantageous to the holders of Securities in any material respect than the
original agreement as in effect on the Closing Date, (ix) transactions with
customers, clients, suppliers, joint venture partners or purchasers or sellers
of goods or services, in each case in the ordinary course of business
(including, without limitation, pursuant to joint venture agreements) and
otherwise in compliance with the terms of this Indenture and which are fair to
DCC and its Restricted Subsidiaries, in the reasonable determination of the
board of directors of DCC or such Restricted Subsidiary, as the case may be, or
are on terms at least as favorable as might reasonably have been obtained at
such time from an unaffiliated party, (x) transactions effected as part of a
Qualified Securitization Transaction, (xi) any transaction between DCC and a
Wholly Owned Subsidiary or between or among Wholly Owned Subsidiaries and (xii)
any sale of Excluded Assets undertaken in accordance with the terms of the
Recapitalization Agreement; provided that the consideration received by DCC or
--------
any Restricted Subsidiary in connection with such sale does not exceed $300,000.
SECTION 4.08. Change of Control. (a) Upon a Change of Control, each
------------------
Holder shall have the right to require that the Issuers repurchase all or any
part of such Holder's Securities at a purchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest and Additional
Amounts, if any, to the date of repurchase (subject to the right of Holders of
record on a record date to receive interest due on the relevant payment date and
Additional Amounts, if any, in respect thereof), in accordance with the terms
contemplated in Section 4.08(b); provided, however, that notwithstanding the
-------- -------
occurrence of a Change in Control, the Issuers shall not be obligated to
purchase the Securities pursuant to this Section 4.08 in the event that they
have exercised their right to redeem all the Securities under paragraph 5 of the
Securities. In the event that at the time of such Change of Control the terms
of the Bank Indebtedness restrict or prohibit the repurchase of Securities
pursuant to this Section 4.08, then prior to delivery of the notice to Holders
provided for in Section 4.08(b) but in any event within
55
30 days following any Change of Control, the Issuers shall (i) repay in full all
Bank Indebtedness or (ii) obtain the requisite consent under the agreements
governing the Bank Indebtedness to permit the repurchase of the Securities as
provided for in Section 4.08(b).
(b) Within 30 days following any Change of Control (except as
provided in the proviso to the first sentence of Section 4.08(a)), the Issuers
shall deliver a notice, in accordance with Section 11.02, to each Holder, with a
copy of such notice 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 Issuers to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest and Additional Amounts, if any, to the date of
repurchase (subject to the right of Holders of record on a relevant record
date to receive interest thereof);
(2) the circumstances and relevant facts and financial information
regarding such Change of Control;
(3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is delivered, except as
otherwise may be required by applicable law); and
(4) the instructions determined by the Issuers, consistent with this
Section 4.08, that a Holder must follow in order to have its Securities
purchased.
(c) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Issuers 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 Issuers receive, 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.
(d) On the purchase date, all Securities purchased by the Issuers
under this Section 4.08 shall be delivered to the Trustee for cancelation, and
the Issuers shall pay the purchase price plus accrued and unpaid interest and
Additional Amounts, if any, to the Holders entitled thereto.
56
(e) Notwithstanding the foregoing provisions of this Section 4.08,
the Issuers shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in Section 4.08(b) applicable to a Change of Control Offer made by the Issuers
and purchases all Securities validly tendered and not withdrawn under such
Change of Control Offer.
(f) The Issuers shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations, including any securities laws of The Netherlands and the
requirements of the Luxembourg Stock Exchange or any other securities exchange
on which the Securities are listed, to the extent such laws or regulations or
requirements are applicable, in connection with the repurchase of Securities
pursuant to this Section 4.08. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 4.08,
the Issuers shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached their obligations under this Section 4.08
by virtue thereof.
SECTION 4.09. Compliance Certificate. The Issuers shall deliver to
----------------------
the Trustee within 120 days after the end of each fiscal year of DCC an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Issuers 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 Issuers are taking or propose to take
with respect thereto. The Issuers also shall comply with Section 314(a)(4) of
the TIA.
SECTION 4.10. Further Instruments and Acts. Upon request of the
----------------------------
Trustee, the Issuers shall 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.
SECTION 4.11. Future Note Guarantors. DCC shall cause each Domestic
----------------------
Subsidiary that Incurs Indebtedness and each Restricted Subsidiary that is a
Guarantor of Indebtedness Incurred by either of the Issuers pursuant to clauses
(b)(i) or (b)(vii) of Section 4.03 to become a Note Guarantor, and, if
applicable, execute and deliver to the Trustee a supplemental indenture
substantially in the form of Exhibit C pursuant to which such Restricted
Subsidiary shall Guarantee payment of the Securities. Each Note Guarantee shall
be limited to an amount not to exceed the maximum amount that can be Guaranteed
by the applicable Restricted Subsidiary without rendering the Note Guarantee, as
it relates to such Restricted Subsidiary, voidable under applicable law
57
relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
SECTION 4.12. Limitation on Lines of Business. DCC shall not, and
-------------------------------
shall not permit any Restricted Subsidiary to, engage in any business, other
than a Related Business.
SECTION 4.13. Limitation on the Sale or Issuance of Capital Stock of
------------------------------------------------------
Restricted Subsidiaries. DCC shall not sell or otherwise dispose of any shares
-----------------------
of Capital Stock of a Restricted Subsidiary, and shall not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell or otherwise dispose of any
shares of its Capital Stock except: (i) to DCC or a Wholly Owned Subsidiary;
(ii) if, immediately after giving effect to such issuance, sale or other
disposition, none of DCC or any of its Subsidiaries own any Capital Stock of
such Restricted Subsidiary, or (iii) if, immediately after giving effect to such
issuance or sale, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary and any Investment in such Person remaining after giving
effect thereto would have been 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 shall be treated as Net Available
Cash from an Asset Disposition and must be applied in accordance with Section
4.06.
SECTION 4.14. Limitation on Liens. DCC shall not, and shall not
-------------------
permit any Restricted Subsidiary to, directly or indirectly, Incur or permit to
exist any Lien of any nature whatsoever on any of its property or assets
(including Capital Stock of a Restricted Subsidiary), whether owned on the
Closing Date or thereafter acquired, 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; provided, however, that DCC may Incur other Liens to secure
-------- -------
Indebtedness as long as the amount of outstanding Indebtedness secured by Liens
Incurred pursuant to this proviso does not exceed 5% of Consolidated Net
Tangible Assets, as determined based on the consolidated balance sheet of DCC as
of the end of the most recent fiscal quarter for which financial statements are
available.
SECTION 4.15. Limitation on Sale/Leaseback Transactions. DCC shall
-----------------------------------------
not, and shall not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless (i) DCC 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 4.14, (ii) the net proceeds received by DCC or such Restricted
Subsidiary in connection with such Sale/Leaseback Transaction are at
58
least equal to the fair market value (as determined in good faith by the board
of directors) of DCC or such Restricted Subsidiary, as the case may be, of such
property and (iii) the transfer of such property is permitted by, and DCC
applies the proceeds of such transaction in compliance with, Section 4.06.
SECTION 4.16. Additional Amounts; Withholding Taxes. (a) All payments
-------------------------------------
made by the Issuers on the Securities shall be made without withholding or
deduction for, or on account of, any present or future taxes, duties,
assessments or governmental charges of whatever nature (collectively, "Taxes")
imposed or levied by or on behalf of the United States, The Netherlands or any
other jurisdiction in which either of the Issuers is organized or engaged in
business for tax purposes or, in each case, any political subdivision thereof or
any authority having power to tax therein (each a "Tax Authority"), unless the
withholding or deduction of such Taxes is then required by law. If any deduction
or withholding for, or on account of, any Taxes of any Tax Authority shall at
any time be required on any payments made by the Issuers with respect to the
Securities, including payments of principal, redemption price, interest,
liquidated damages or premium, the Issuers shall pay such additional amounts
(the "Additional Amounts") as may be necessary in order that the net amounts
received in respect of such payments by the holders of the Securities or the
Trustee, as the case may be, after such withholding or deduction, equal the
respective amounts which would have been received in respect of such payments in
the absence of such withholding or deduction.
(b) Section 4.16(a), however, shall not apply to (i) any Taxes which
would not have been imposed but for the existence of any present or former
connection between a holder of Securities and the United States, The Netherlands
or any other jurisdiction in which either of the Issuers is organized or engaged
in business for tax purposes other than the mere receipt of such payment or the
holding of such Securities; (ii) any Taxes which would not have been imposed but
for the presentation by a holder of Securities for payment on a date more than
30 days after the date on which such payment became due and payable or the date
on which payment thereof was duly provided for; (iii) the extent that such Taxes
would not have been imposed but for the failure of a holder of Securities to
comply with any certification, identification or other reporting requirements
concerning the nationality, residence, identity or connection with The
Netherlands of such holder if (A) such compliance is required or imposed by law
as a precondition to exemption from all or a part of such Taxes, (B) such holder
may legally comply with such requirements and (C) at least 30 days prior to the
date on which the Issuers shall apply this clause (iii), the Issuers shall have
notified all holder of Securities of such requirements; (iv) any estate,
inheritance, gift, sale, transfer, personal property or similar tax, assessment
or governmental charge; or (v) any combination of the items set forth in clause
(i), (ii), (iii) or (iv).
59
(c) The Issuers shall pay any present or future stamp, court or
documentary taxes, or any other excise or property taxes, charges or similar
levies which arise in any jurisdiction from the execution, delivery or
registration of this Indenture or the Securities or any other document or
instrument referred to herein or therein, or the receipt of any payments with
respect to the Securities, excluding any such taxes, charges or similar levies
imposed by any jurisdiction outside of the United States, The Netherlands or any
jurisdiction in which a Paying Agent is located, other than those resulting
from, or required to be paid in connection with, the enforcement of the
Securities or any other such document or instrument following the occurrence of
any Event of Default with respect to the Securities.
(d) No Additional Amounts shall be paid with respect to any payment on
a Security to a holder that is a fiduciary or partnership or other than the sole
beneficial owner of such payment to the extent a beneficiary or settlor with
respect to such fiduciary or member of such partnership or beneficial owner
would not have been entitled to receive payment of the Additional Amounts had
the beneficiary, settlor, member or beneficial owner been the holder of the
Securities.
(e) Upon request, the Issuers shall provide the Trustee with
documentation satisfactory to the Trustee evidencing the payment of Additional
Amounts. Copies of such documentation shall be made available to the holders of
Securities upon request.
ARTICLE 5
Merger and Consolidation
------------------------
SECTION 5.01. (a) When Issuers May Merge or Transfer Assets. Neither
-----------------------------------------
of the Issuers shall consolidate with or merge with or into, or convey, transfer
or lease all or substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation organized and existing under the laws of
the United States, any state thereof or the District of Columbia, in the
case of DCC, or The Netherlands, in the case of Lyon, and the Successor
Company (if not an Issuer) shall expressly assume, by a supplemental
indenture, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, all the obligations of such Issuer under the
Securities and this Indenture;
(ii) immediately after giving effect to such transaction (and treating
any Indebtedness which becomes an obligation of the Successor Company or
any
60
Restricted Subsidiary as a result of such transaction as having been
Incurred by the Successor Company or such Restricted Subsidiary at the time
of such transaction), no Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a);
(iv) the Issuers shall have delivered to the Trustee Officers'
Certificates and Opinions of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture, if any, comply with
this Indenture; and
(v) the Issuers shall have delivered to the Trustee opinions of tax
counsel reasonably acceptable to the Trustee stating that (A) any payment
of principal, redemption price or purchase price of, premium, if any,
interest on, and, if any, Additional Amounts in respect of, the Securities
by the Successor Company to a holder of Securities after the consolidation,
merger, conveyance, transfer or lease of assets shall be exempt from the
Taxes described in Section 4.16 and (B) no other taxes on income (including
taxable capital gains) shall be payable under the laws of The Netherlands
and any other jurisdiction where the Successor Company is or becomes
located by a holder of Securities who is not deemed to be a resident of The
Netherlands or other jurisdiction where the Successor Company is or becomes
located and does not carry on any business activities through a branch,
agency or permanent establishment in The Netherlands or such other
jurisdiction where the Successor Company is or becomes located in respect
of the acquisition, ownership or disposition of Securities, including
receipt of principal, premium, if any, interest on, and, Additional
Amounts, if any, paid pursuant to such Securities.
The Successor Company shall succeed to, and be substituted for, and
may exercise every right and power of, such Issuer under this Indenture, but the
predecessor Issuer in the case of a conveyance, transfer or lease of all or
substantially all its assets shall not be released from the obligation to pay
the principal of and interest on the Securities.
(b) The Issuers shall not permit any Note Guarantor to consolidate
with or merge with or into, or convey, transfer or lease, in one transaction or
series of transactions, all or substantially all of its assets to any Person
unless: (i) the resulting, surviving or transferee Person (if not such Note
Guarantor) shall be a Person organized and existing under the laws of the
jurisdiction under which such Subsidiary was
61
organized or under the laws of the United States, or any state thereof or the
District of Columbia, and such Person shall expressly assume, by an amendment to
this Indenture, in a form acceptable to the Trustee, all the obligations of such
Note Guarantor, if any, under its Note Guarantee; (ii) 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 (iii) the Issuers deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such amendment to this Indenture, if any, complies with
this Indenture.
Notwithstanding the foregoing, (a) any Restricted Subsidiary may
consolidate with, merge into or transfer all or part of its properties and
assets to either of the Issuers and (b) either of the Issuers may merge with an
Affiliate of the Issuers incorporated solely for the purpose of reincorporating
such Issuer in another jurisdiction to realize tax or other benefits.
ARTICLE 6
Defaults and Remedies
---------------------
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
-----------------
(1) the Issuers default in any payment of interest on, or Additional
Amounts, if any, with respect to any Security when the same becomes due and
payable, and such default continues for a period of 30 days;
(2) the Issuers default in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity, upon
redemption, upon declaration or otherwise;
(3) either Issuer fails to comply with Section 5.01;
(4) either Issuer fails to comply with Section 4.02, 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.11, 4.12, 4.13, 4.14, 4.15 or 4.16 (other than a
failure to purchase Securities when required under Section 4.06 or 4.08)
and such failure continues for 30 days after the notice specified below;
62
(5) Either Issuer fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in (1), (2), (3)
or (4) above) and such failure continues for 60 days after the notice
specified below;
(6) Indebtedness of either Issuer or any Significant Subsidiary (other
than a Securitization Entity) is not paid within any applicable grace
period after final maturity (giving effect to any extensions thereof) or
the acceleration by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $5,000,000 or its
foreign currency equivalent at the time and such failure continues for 10
days after the notice specified below;
(7) either Issuer 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 either Issuer or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of either Issuer or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of either Issuer 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; or
63
(9) any judgment or decree for the payment of money in excess of
$10,000,000 or its foreign currency equivalent at the time is entered
against either Issuer or any Significant Subsidiary and is not discharged,
waived or stayed and either (A) an enforcement proceeding has been
commenced by any creditor upon such judgment or decree or (B) there is a
period of 60 days following the entry of such judgment or decree during
which such judgment or decree is not discharged, waived or the execution
thereof stayed.
The foregoing shall 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 Xxxxx 00, Xxxxxx Xxxxxx 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 clause (4), (5) or (9) 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 Issuers of the Default and the Issuers do not
cure such Default within the time specified in clause (4), (5) or (9) 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 Issuers shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) and any event which with the giving of
notice or the lapse of time would become an Event of Default under clause (4),
(5) or (9), its status and what action the Issuers are taking or propose to take
with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
------------
Event of Default specified in Section 6.01(7) or (8) with respect to either of
the Issuers) occurs and is continuing, the Trustee by notice to the Issuers, or
the Holders of at least 25% in principal amount of the outstanding Securities by
notice to the Issuers, may declare the principal of and accrued but unpaid
interest and Additional Amounts, if any, on all the Securities to be due and
payable by notice in writing to the Issuers and the Trustee specifying the Event
of Default and that the notice is a "notice of acceleration". Upon such a
declaration, such principal, interest and Additional Amounts shall be due and
payable immediately. If an Event of Default specified in Section 6.01(7) or (8)
with respect to either of the Issuers occurs, the principal of and interest and
Additional
64
Amounts, if any, 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 and Additional Amounts, if any, that has
become due solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal 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.
SECTION 6.04. 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 the terms of 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.
SECTION 6.05. Control by Majority. The Holders of a majority in
-------------------
principal amount of the 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.
65
SECTION 6.06. Limitation on Suits. Except to enforce the right to
--------------------
receive payment of principal, premium, interest or Additional Amounts, if any,
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 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;
(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 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.
SECTION 6.07. 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, any liquidated damages or Additional
Amounts, if any, 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 such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
---------------------------
specified in Section 6.01(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
Issuers for the whole amount of principal and accrued and unpaid interest and
Additional Amounts, if any, then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
SECTION 6.09. 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
66
proceedings relative to DCC, any Subsidiary of DCC or any Note Guarantor, their
creditors or their 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.
SECTION 6.10. 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, interest, and Additional Amounts, if any,
ratably, and any liquidated damages without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal, interest, Additional Amounts, if any, and any liquidated
damages, respectively; and
THIRD: to the Issuers.
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 Trustee shall mail to each Securityholder and each Issuer a
notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. 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.
67
SECTION 6.12. Waiver of Stay or Extension Laws. None of the Issuers
---------------------------------
or any Note Guarantor (to the extent it may lawfully do so) shall 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 each of the Issuers and each Note Guarantor (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.
ARTICLE 7
Trustee
-------
SECTION 7.01. 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.
(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 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.
(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;
68
(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 Issuers.
(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.
SECTION 7.02. Rights of Trustee. Subject to Section 7.01: (a) The
------------------
Trustee may 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 an
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.
69
(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, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
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.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
note or other paper or document unless requested in writing to do so by the
Holders of not less than a majority in principal amount of the Securities at the
time outstanding, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of each of the
Issuers, personally or by agent or attorney.
SECTION 7.03. 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 Issuers or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent or Registrar may do the
same with like rights. However, the Trustee must comply with Sections 7.10 and
7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
---------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Issuers'
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Issuers 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.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
-------------------
continuing and if it is known to the Trustee, the Trustee shall deliver to each
Securityholder notice of the Default, in accordance with Section 11.02 and
otherwise in accordance with the procedures set forth in this Indenture, within
the earlier of 90 days after it occurs or 30 days after it is known to a Trust
Officer or written notice of it is received by the Trustee. Except in the case
of a Default in payment of principal or premium, if any, interest or Additional
Amounts, if any, on any Security (including payments pursuant to the redemption
provisions of such Security), the Trustee may withhold the notice if and so
70
long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
------------------------------
practicable after each May 15 beginning with May 15, 1999, 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 Section 313(a) of the TIA.
The Trustee shall also comply with Section 313(b) of the TIA.
A copy of each report at the time of its mailing to Securityholders
shall be filed with the Commission and each stock exchange, if any, on which the
Securities are listed. The Issuers agree to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.07. Compensation and Indemnity. The Issuers 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 Issuers 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 Issuers and each Note Guarantor, if any, jointly and severally
shall indemnify the Trustee against any and all loss, liability or expense
(including reasonable attorneys' fees) incurred by or in connection with the
administration of this trust and the performance of its their duties hereunder.
The Trustee shall notify the Issuers of any claim for which it may seek
indemnity promptly upon obtaining actual knowledge thereof; provided, however,
-------- --------
that any failure so to notify the Issuers shall not relieve the Issuers or any
Note Guarantor of its indemnity obligations hereunder. The Issuers shall defend
the claim and the indemnified party shall provide reasonable cooperation at the
Issuers' expense in the defense. Such indemnified parties may have separate
counsel and the Issuers and the Note Guarantors, as applicable, shall pay the
fees and expenses of such counsel; provided, however, that the Issuers shall not
-------- -------
be required to pay such fees and expenses if they assume such indemnified
parties' defense and, in such indemnified parties' reasonable judgment, there is
no conflict of interest between the Issuers and the Note Guarantors, as
applicable, and such parties in connection with such defense. The Issuers need
not reimburse any expense or indemnify against any loss, liability or expense
incurred by an indemnified party through such party's own wilful misconduct,
negligence or bad faith.
To secure the Issuers' payment obligations pursuant to this Section
7.07, the Trustee shall have a lien prior to the Securities on all money or
property held or
71
collected by the Trustee other than money or property held in trust to pay
principal of and interest and any liquidated damages and Additional Amounts on
particular Securities.
The Issuers' payment obligations pursuant to this Section 7.07 shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence
of a Default specified in Section 6.01(7) or (8) with respect to the Issuers,
the expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
-----------------------
time by so notifying the Issuers. 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 Issuers 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 Issuers 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 Issuers shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. 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
72
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, any Securityholder
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 Issuers' obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. 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.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
------------------------------
all times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b); provided, however, that there shall be excluded from the operation
-------- -------
of TIA (S) 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Issuers are
outstanding if the requirements for such exclusion set forth in TIA (S)
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against the Issuers.
------------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
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ARTICLE 8
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a)
-------------------------------------------------
When (i) the Issuers deliver to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancelation or (ii) all
outstanding Securities have become due and payable, whether at maturity or as a
result of the giving of a notice of redemption pursuant to Article 3 hereof and
the Issuers irrevocably deposit with the Trustee U.S. funds or U.S. Government
Obligations on which payment of principal and interest when due shall be
sufficient to pay at maturity or upon redemption all outstanding Securities,
including interest thereon and Additional Amounts, if any, to maturity or such
redemption date (other than Securities replaced pursuant to Section 2.07), and
if in either case the Issuers pay all other sums payable hereunder by the
Issuers, then this Indenture shall, subject to Section 8.01(c), cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Issuers accompanied by an Officers' Certificate
and an Opinion of Counsel and at the cost and expense of the Issuers.
(b) Subject to Sections 8.01(c) and 8.02 and any applicable
requirements of the TIA, the Issuers at any time may terminate (i) all of their
obligations under the Securities and this Indenture ("legal defeasance option")
or (ii) their 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, 4.13, 4.14, 4.15 and 4.16 and the operation of
Section 5.01(a)(iii), 5.01(a)(iv), 6.01(4), 6.01(6), 6.01(7) (with respect to
Significant Subsidiaries of DCC only), 6.01(8) (with respect to Significant
Subsidiaries of DCC only) and 6.01(9) ("covenant defeasance option"). The
Issuers may exercise their legal defeasance option notwithstanding their prior
exercise of their covenant defeasance option. In the event that the Issuers
terminate all of their obligations under the Securities and this Indenture by
exercising either their legal defeasance option or their covenant defeasance
option, the obligations under any Note Guarantee shall each be terminated
simultaneously with the termination of such obligations.
If the Issuers exercise their legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the
Issuers exercise their covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Section 6.01(4),
6.01(6), 6.01(7) (with respect to Significant Subsidiaries of DCC only), 6.01(8)
(with respect to Significant Subsidiaries of DCC only) and 6.01(9) or because of
the failure of the Issuers to comply with clauses (iii) and (iv) of Section
5.01(a).
74
Upon satisfaction of the conditions set forth herein and upon request
of the Issuers, the Trustee shall acknowledge in writing the discharge of those
obligations that the Issuers terminate.
(c) Notwithstanding clauses (a) and (b) above, the Issuers'
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07, 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Issuers' obligations in Sections 7.07, 8.04, 8.05 and 8.06 shall
survive.
SECTION 8.02. Conditions to Defeasance. The Issuers may exercise
-------------------------
their legal defeasance option or their covenant defeasance option only if:
(1) the Issuers irrevocably deposit in trust with the Trustee money in
U.S. Dollars or U.S. Government Obligations for the payment of principal,
premium, if any, interest and Additional Amounts, if any, on the Securities
to maturity or redemption, as the case may be;
(2) the Issuers deliver to the Trustee a certificate from an
internationally recognized firm of 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 shall provide cash at such times and in
such amounts as shall 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 Section 6.01(7) or (8) with respect to the
Issuers 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 Issuers;
(5) the Issuers deliver 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 Issuers shall have
delivered to the Trustee an Opinion of Counsel stating that (i) (A) the
Issuers have received from, or there has been published by, the Internal
Revenue Service a ruling, or (B) since the Closing Date there has been a
change in the applicable U.S. federal income tax law, in either case to the
effect that, and based thereon
75
such Opinion of Counsel shall confirm that, the Securityholders shall not
recognize income, gain or loss for U.S. federal income tax purposes as a
result of such defeasance and shall be subject to U.S. federal income tax
and income tax under applicable law of The Netherlands on same amount, in
the same manner and at the same times as would have been the case if such
defeasance had not occurred, (ii) after the 91st day following the deposit,
trust funds shall not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally under applicable U.S. federal or state law or applicable
law of The Netherlands and that the Trustee has a perfected security
interest in such trust funds for the ratable benefit of holders of the
Securities and (iii) payments from the defeasance trust shall be free and
exempt from any and all withholding taxes and other income taxes of
whatever nature imposed or levied by or on behalf of The Netherlands or any
political subdivision thereof or therein having the power to tax;
(7) in the case of the covenant defeasance option, the Issuers shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Security holders shall not recognize income, gain or loss for U.S. federal
income tax purposes as a result of such covenant defeasance and shall be
subject to U.S. federal income tax and income tax under applicable law of
The Netherlands on the same amount, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred, (ii) after the 91st day following the deposit, trust funds shall
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally under
applicable U.S. federal or state law or applicable law of The Netherlands
and that the Trustee has a perfected security interest in such trust funds
for the ratable benefit of holders of the Securities and (iii) payments
from the defeasance trust shall be free and exempt from any and all
withholding taxes and other income taxes of whatever nature imposed or
levied by or on behalf of The Netherlands or any political subdivision
thereof or therein having the power to tax; and
(8) the Issuers deliver 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 Issuers may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
76
SECTION 8.03. Application of Trust Money. The Trustee shall hold in
---------------------------
trust money in Deutsche Marks or German Government Obligations deposited with it
pursuant to this Article 8. It shall apply the deposited money and the money
from German Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal of, interest and Additional
Amounts, if any, on the Securities.
SECTION 8.04. Repayment to the Issuers. The Trustee and the Paying
-------------------------
Agent shall promptly turn over to the Issuers 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 Issuers upon written 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
Issuers for payment as general creditors; provided, however, that the Trustee or
-------- -------
such Paying Agent, before being required to make any such repayment, may at the
expense of the Issuers give notice to the Holders that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification, any unclaimed balance of such money
then remaining shall be repaid to the Issuers. Such notice shall also be given
in accordance with Section 11.02.
SECTION 8.05. Indemnity for Government Obligations. The Issuers
-------------------------------------
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited German Government Obligations or the
principal and interest received on such German Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
--------------
unable to apply any money in Deutsche Marks or German 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 Issuers' 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 German
Government Obligations in accordance with this Article 8; provided, however,
-------- -------
that, if the Issuers have made any payment of interest and Additional Amounts,
if any, on or principal of any Securities because of the reinstatement of its
obligations, the Issuers shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or German Government
Obligations held by the Trustee or Paying Agent.
77
ARTICLE 9
Amendments
----------
SECTION 9.01. Without Consent of Holders. The Issuers 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 comply with Article 5;
(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 uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add Note Guarantees with respect to the Securities or to secure
the Securities;
(5) to add to the covenants of the Issuers for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Issuers;
(6) to comply with any requirements of the Commission 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;
(8) to provide for the issuance of the Exchange Securities or Private
Exchange Securities, which shall have terms substantially identical in all
material respects to the Initial Securities (except that the transfer
restrictions contained in the Initial Securities shall be modified or
eliminated, as appropriate), and which shall be treated, together with any
outstanding Initial Securities, as a single issue of securities; or
(9) to provide for the assumption by a Successor Company of the
obligations of either of the Issuers.
78
After an amendment under this Section becomes effective, the Issuers
shall deliver to each Securityholder, in accordance with Section 11.02, 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.
SECTION 9.02. With Consent of Holders. The Issuers 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 offer for the Securities). However,
without the consent of each Securityholder affected, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest or
any liquidated damages on any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption of any Security or
change the time at 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) make any change in Section 6.04 or 6.07 or the second sentence of
this Section 9.02; or
(7) make any change in Section 4.16 that adversely affects the rights
of any Holder of Securities or amend the terms of this Indenture in a way
that would result in a loss of an exemption from any of the Taxes described
thereunder or an exemption from any obligation to withhold or deduct Taxes
so described thereunder unless the Issuers agree to pay Additional Amounts,
if any, in respect thereof.
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.
79
After an amendment under this Section 9.02 becomes effective, the
Issuers 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 9.02.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
------------------------------------
to this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. 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 once both (i) the requisite number of
consents have been received by the Issuers or the Trustee and (ii) such
amendment or waiver has been executed by the Issuers and the Trustee.
The Issuers 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.
SECTION 9.05. 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 Issuers or the Trustee so determines, the Issuers
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.
80
SECTION 9.06. 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 and that such amendment
is the legal, valid and binding obligation of the Issuers and the Note
Guarantors, if any, enforceable against them in accordance with its terms,
subject to customary exceptions, and complies with the provisions hereof
(including Section 9.03).
SECTION 9.07. Payment for Consent. None of the Issuers or any
--------------------
Affiliate of the Issuers 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.
ARTICLE 10
Note Guarantees
---------------
SECTION 10.01. Execution of Supplemental Indenture for Future Note
---------------------------------------------------
Guarantors. Each Subsidiary which is required to become a Note Guarantor
-----------
pursuant to Section 4.11 shall promptly execute and deliver to the Trustee a
supplemental indenture in the form of Exhibit C hereto pursuant to which such
Subsidiary shall become a Note Guarantor and shall guarantee the Guaranteed
Obligations (as defined in Exhibit C). Concurrently with the execution and
delivery of such supplemental indenture, the Issuers shall deliver to the
Trustee an Opinion of Counsel and an Officers' Certificate to the effect that
such supplemental indenture has been duly authorized, executed and delivered by
such Subsidiary and that, subject to the application of bankruptcy, insolvency,
moratorium, fraudulent conveyance or transfer and other similar laws relating to
creditors' rights generally and to the principles of equity, whether considered
in a proceeding at law or in equity, the Note Guarantee of such Note Guarantor
is a legal, valid and binding obligation of such Note Guarantor, enforceable
against such Note Guarantor in accordance with its terms.
81
ARTICLE 11
Miscellaneous
-------------
SECTION 11.01. 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, the required provision
shall control.
SECTION 11.02. Notices. (a) Any notice or communication to the
--------
Issuers or the Trustee shall be in writing and delivered in person or mailed by
first-class mail addressed as follows:
if to the Issuers:
The Derby Cycle Corporation,
c/o Raleigh Industries Ltd.
Xxxxxxx Xxxx
Xxxxxxxxxx XX0 0XX, Xxxxxxx
(telecopier no.: 011-44-115-942-2178)
Attention of:
Xx. Xxxx X. Finden-Crofts
if to the Trustee:
IBJ Xxxxxxxx Bank & Trust Company
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(telecopier no.: (000) 000-0000)
Attention of:
Corporate Finance Trust Services
The Issuers or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications. Any
notice or communication to the Issuers or the Trustee shall be deemed to have
been given or made upon actual receipt thereof by the addressee.
(b) Notice regarding the Securities shall be (i) mailed by first-class
mail to each Holder's registered address and (ii) published in a leading
newspaper having a general circulation in (a) New York City (which is expected
to be the Wall Street Journal), (b) Frankfurt, Germany (which is expected to be
---- ------ -------
Frankfurter Allgemeine
----------- ----------
82
Zeitung) and (c) if and so long as the Securities are listed on the Luxembourg
-------
Stock Exchange and the rules of the Luxembourg Stock Exchange so require, a
newspaper having a general circulation in Luxembourg (which is expected to be
the Luxembourg Wort). If and so long as the Securities are listed on any other
---------------
securities exchange, notices shall also be given in accordance with any
applicable requirements of such securities exchange (which requirements, in the
case of any such securities exchange not located in the United States, shall be
specified by the Issuers in writing to the Trustee). Notices given by
publication shall be deemed to be given on the first date on which publication
is made, and notices given by first-class mail shall be deemed given five
calendar days after mailing.
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 published or mailed in the
manner provided herein, it is duly given, whether or not the addressee reads or
receives it.
SECTION 11.03. 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 Issuers, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S) 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
---------------------------------------------------
Upon any request or application by the Issuers to the Trustee to take or refrain
from taking any action under this Indenture, the Issuers 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 the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 11.05. 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;
83
(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.
SECTION 11.06. 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 Issuers, any Note
Guarantor or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Issuers or any Note
Guarantor 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. Subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar. The
---------------------------------------------
Trustee may make reasonable rules for action by or at a meeting of
Securityholders. If and so long as the Securities are listed on any securities
exchange, such rules shall, to the extent not inconsistent with the provisions
of this Indenture, comply with any applicable requirements of such securities
exchange. The Registrar and the Paying Agent may make reasonable rules for
their functions.
SECTION 11.08. 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, the Netherlands, Luxembourg or a place of payment. 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 with respect to
such payment for the intervening period. If a regular record date is a Legal
Holiday, the record date shall not be affected.
SECTION 11.09. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES
--------------
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
84
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY.
SECTION 11.10 Jurisdiction. Each of the Issuers agrees that any
-------------
suit, action or proceeding against such Issuer or any Note Guarantor brought by
any Holder or the Trustee arising out of or based upon this Indenture or the
Securities may be instituted in any state or U.S. federal court in the Borough
of Manhattan, The City of New York, New York, and any appellate court from any
thereof, and it irrevocably submits to the non-exclusive jurisdiction of such
courts in any suit, action or proceeding. Each of the Issuers 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 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. Each
of the Issuers agrees that final judgment in any such suit, action or proceeding
brought in such court shall be conclusive and binding upon such Issuer and may
be enforced in any court to the jurisdiction of which such Issuer is subject by
a suit upon such judgment; provided that service of process is effected upon
--------
such Issuer in the manner provided by this Section 11.10. Each of the Issuers
has irrevocably appointed CT Corporation System, with offices on the date hereof
at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized agent (the
"Authorized Agent"), upon whom process may be served in any suit, action or
proceeding arising out of or based upon this Indenture, the Securities or the
transactions contemplated herein which may be instituted in any state or U.S.
federal court in the Borough of Manhattan, The City of New York, New York, by
any Holder or the Trustee, and expressly accepts the non-exclusive jurisdiction
of any such court in respect of any such suit, action or proceeding. Each of
the Issuers hereby represents and warrants that the Authorized Agent has
accepted such appointment and has agreed to act as said agent for service of
process, and each of the Issuers agrees to take any and all action, including
the filing of any and all documents, that may be necessary to continue such
respective appointment in full force and effect as aforesaid. Service of
process upon the Authorized Agent shall be deemed, in every respect, effective
service of process upon each of the Issuers. Notwithstanding the foregoing, any
action involving the Issuers arising out of or based upon this Indenture or the
Securities may be instituted by any Holder or the Trustee in any court of
competent jurisdiction in any other jurisdiction.
SECTION 11.11. No Personal Liability of Directors, Officers,
---------------------------------------------
Employees and Stockholders. No director, officer, employee or stockholder of
--------------------------
either of the Issuers, as such, shall have any liability for any obligations of
such Issuer under the Securities or this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each holder of
a Security by accepting such Security waives
85
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Securities. Such waiver may not be effective
to waive liabilities under U.S. federal securities laws and it is the view of
the Commission that such a waiver is against public policy.
SECTION 11.12. Successors. All agreements of the Issuers and each
-----------
Note Guarantor in this Indenture and the Securities shall bind its successors.
All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 11.13. 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.
SECTION 11.14. 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.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
THE DERBY CYCLE CORPORATION,
by /s/ Xxxx X. Finden-Crofts
-------------------------------
Name: Xxxx X. Finden-Crofts
Title:
LYON INVESTMENTS B.V.,
by /s/ Xxxx X. Finden-Crofts
-------------------------------
Name: Xxxx X. Finden-Crofts
Title:
IBJ XXXXXXXX BANK & TRUST COMPANY, as Trustee
by /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title:
APPENDIX A
PROVISIONS RELATING TO INITIAL SECURITIES,
------------------------------------------
PRIVATE EXCHANGE SECURITIES
---------------------------
AND EXCHANGE SECURITIES
-----------------------
1. Definitions
-----------
1.1 Definitions
-----------
For the purposes of this Appendix A 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 Depositary for such Global
Security, Euroclear and Cedel, in each case to the extent applicable to such
transaction and as in effect from time to time.
"Cedel" means Cedel Bank, S.A., or any successor securities clearing
agency.
"Definitive Security" means a certificated Initial Security or
Exchange Security (bearing the Restricted Securities Legend if the transfer of
such Security is restricted by applicable law) that does not include the Global
Securities Legend.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Euroclear" means the Euroclear Clearance System or any successor
securities clearing agency.
"Global Securities Legend" means the legend set forth under that
caption in Exhibit A to this Indenture.
"IAI" means an institutional "accredited investor" as described in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Private Exchange" means an offer by the Issuers, pursuant to a
Registration Agreement, to issue and deliver to certain purchasers, in exchange
for the Initial Securities held by such purchasers as part of their initial
distribution, a like aggregate principal amount of Private Exchange Securities.
2
"Purchase Agreement" means the Purchase Agreement dated May 7, 1998,
among the Issuers and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Agreement" means the Exchange and Registration Rights
Agreement dated May 14, 1998, among the Issuers and the Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Securities" means all Initial Securities offered and
sold outside the United States in reliance on Regulation S.
"Regulation S Securities Legend" means the legend set forth under that
caption in Exhibit A to this Indenture.
"Restricted 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 Issue Date with respect to such Securities.
"Restricted Securities Legend" means the legend set forth in Section
2.3(e)(i) herein.
"Rule 501" means Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Securities" means all Initial Securities offered and sold
to QIBs in reliance on Rule 144A.
"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 Depositary) or any successor person thereto, who
shall initially be the Trustee.
"Shelf Registration Statement" means a registration statement filed by
the Issuers in connection with the offer and sale of Initial Securities pursuant
to a Registration Agreement.
3
"Transfer Restricted Securities" means Definitive Securities and any
other Securities that bear or are required to bear the Restricted Securities
Legend.
1.2 Other Definitions
-----------------
Term: Defined in Section:
---- ------------------
"Agent Members"................................................... 2.1(b)
"IAI Global Security.............................................. 2.1(a)
"Global Security"................................................. 2.1(a)
"Regulation S Global Security".................................... 2.1(a)
"Rule 144A Global Security"....................................... 2.1(a)
2. The Securities
--------------
2.1 Form and Dating
---------------
The Initial Securities issued on the date hereof shall be (i) offered
and sold by the Issuers pursuant to a Purchase Agreement and (ii) resold,
initially only to (A) QIBs in reliance on Rule 144A and (B) Persons other than
U.S. Persons (as defined in Regulation S) in reliance on Regulation S. Such
Initial Securities may thereafter be transferred to, among others, QIBs,
purchasers in reliance on Regulation S and, except as set forth below, IAIs in
accordance with Rule 501.
(a) Global Securities. Rule 144A Securities 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
Regulation S Securities shall be issued initially in the form of one or more
global Securities (collectively, the "Regulation S Global Security"), in each
case without interest coupons and bearing the Global Securities Legend, the
Restricted Securities Legend and, in the case of the Regulation S Global
Security, the Regulation S Securities Legend, which shall be deposited on behalf
of the purchasers of the Securities represented thereby with the Securities
Custodian, and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by each of the Issuers and authenticated by the
Trustee as provided in this Indenture. One or more global securities in
definitive, fully registered form without interest coupons and bearing the
Global Securities Legend and the Restricted Securities Legend (collectively, the
"IAI Global Security") shall also be issued on the Closing Date, deposited with
the Securities Custodian, and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by each of the Issuers and
authenticated by the Trustee as provided in this Indenture to accommodate
transfers of beneficial interests in the Securities to IAIs subsequent to the
initial distribution.
4
Beneficial ownership interests in the Regulation S Global Security shall not be
exchangeable for interests in the Rule 144A Global Security, the IAI Global
Security or any other Security without a Restricted Securities Legend until the
expiration of the Restricted Period. The Rule 144A Global Security, the IAI
Global Security and the Regulation S Global Security are each referred to herein
as a "Global Security" and 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 Depositary 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 Depositary.
Each of the Issuers shall execute and the Trustee shall, in accordance
with this Section 2.1(b) and pursuant to an order of each of the Issuers,
authenticate and deliver initially one or more Global Securities that (a) shall
be registered in the name of the Depositary for such Global Security or Global
Securities or the nominee of such Depositary and (b) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instructions or held
by the Trustee as Securities Custodian.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or by the Trustee as Securities Custodian or
under such Global Security, and the Depositary may be treated by the Issuers,
the Trustee and any agent of the Issuers or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwith standing the
foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent of
the Issuers or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and its Agent Members, the operation of customary practices of
such Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
(c) Definitive Securities. Except as provided in Section 2.3 or 2.4,
----------------------
owners of beneficial interests in Global Securities shall not be entitled to
receive physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and make available for
---------------
delivery upon a written order of each of the Issuers signed by two Officers (1)
Initial Securities for original issue on the date hereof in an aggregate
principal amount of $100,000,000 and (2) the (A) Exchange Securities for issue
only in a Registered Exchange Offer and (B) Private Exchange Securities for
issue only in a Private Exchange, in the case of each of (A) and (B) pursuant to
a Registration Agreement and for a like principal amount of Initial Securities
exchanged pursuant thereto. Such order shall specify the amount of the
Securities
5
to be authenticated, the date on which the original issue of Securities is to be
authenticated and whether the Securities are to be Initial Securities, Exchange
Securities or Private Exchange Securities. The aggregate principal amount of
Securities outstanding at any time may not exceed $100,000,000 except as
provided in Section 2.07 of this Indenture.
2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive
---------------------- -----------------------------------
Securities. When Definitive Securities are presented to the Registrar with a
-----------
request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
the 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 each of the Issuers and the
Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act, 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 (in
the form set forth on the reverse side of the Initial Security);
(B) if such Definitive Securities are being transferred to the
Issuers, a certification to that effect (in the form set forth on the
reverse side of the Initial Security); or
(C) if such Definitive Securities are being transferred pursuant
to an exemption from registration in accordance with Rule 144 under
the Securities Act or in reliance upon another exemption from the
registration requirements of the Securities Act, (i) a certification
to that effect (in the form set forth on the reverse side of the
Initial Security) and (ii) if the Issuers so request, an opinion of
counsel or other evidence reasonably satisfactory to them as to the
6
compliance with the restrictions set forth in the legend set forth in
Section 2.3(d)(i).
(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 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 a written instrument
of transfer in form reasonably satisfactory to the Issuers and the Registrar,
together with:
(i) certification (in the form set forth on the reverse side of the
Initial Security) that such Definitive Security is being transferred (A) to
a QIB in accordance with Rule 144A, (B) to an IAI that has furnished to the
Trustee a signed letter substantially in the form of Exhibit D or (C)
outside the United States in an offshore transaction within the meaning of
Regulation S and in compliance with Rule 904 under the Securities Act; 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 Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the Depositary
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 Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security 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 Global Security
equal to the principal amount of the Definitive Security so canceled. If no
Global Securities are then outstanding and the Global Security has not been
previously exchanged for certificated securities pursuant to Section 2.4, the
Issuers shall issue and the Trustee shall authenticate, upon written order of
each of the Issuers in the form of an Officers' Certificate, a new Global
Security 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 Depositary, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depositary therefor. A transferor of a beneficial interest in a Global
Security shall deliver a written order given in accordance with the Depositary's
procedures containing information regarding the participant account of the
Depositary to be credited with a beneficial interest in such Global Security or
another Global
7
Security and such account shall be credited in accordance with such order with a
beneficial interest in the applicable Global Security and the account of the
Person making the transfer shall be debited by an amount equal to the beneficial
interest in the Global Security being transferred. Transfers by an owner of a
beneficial interest in the Rule 144A Global Security or the IAI Global Security
to a transferee who takes delivery of such interest through the Regulation S
Global Security, whether before or after the expiration of the Restricted
Period, shall be made only upon receipt by the Trustee of a certification from
the transferor to the effect that such transfer is being made in accordance with
Regulation S or (if available) Rule 144 under the Securities Act and that, if
such transfer is being made prior to the expiration of the Restricted Period,
the interest transferred shall be held immediately thereafter through Euroclear
or Cedel. In the case of a transfer of a beneficial interest in either the
Regulation S Global Security or the Rule 144A Global Security for an interest in
the IAI Global Security, the transferee must furnish a signed letter
substantially in the form of Exhibit D to the Trustee.
(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 Global Security from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Security may not be
transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(iv) In the event that a Global Security is exchanged for Definitive
Securities pursuant to Section 2.4 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, Regulation S or such
other applicable exemption from registration under the Securities Act, as
the case may be) and such other procedures as may from time to time be
adopted by the Issuers.
8
(d) Restrictions on Transfer of Regulation S Global Security. (i)
--------------------------------------------------------
Prior to the expiration of the Restricted Period, interests in the Regulation S
Global Security may only be held through Euroclear or Cedel. During the
Restricted Period, beneficial ownership interests in the Regulation S Global
Security may only be sold, pledged or transferred through Euroclear or Cedel in
accordance with the Applicable Procedures and only (A) to the Issuers, (B) 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, (C) in an offshore
transaction in accordance with Regulation S, (D) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 (if applicable) under
the Securities Act, (E) to an IAI purchasing for its own account, or for the
account of such an IAI, in a minimum principal amount of Securities of $250,000
or (F) 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. Prior to the expiration of the Restricted Period, transfers
by an owner of a beneficial interest in the Regulation S Global Security to a
transferee who takes delivery of such interest through the Rule 144A Global
Security or the IAI Global Security shall be made only in accordance with
Applicable Procedures and upon receipt by the Trustee of a written certification
from the transferor of the beneficial interest in the form provided on the
reverse of the Initial Security to the effect that such transfer is being made
to (i) a person whom the transferor reasonably believes is a QIB within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A or
(ii) an IAI purchasing for its own account, or for the account of such an IAI,
in a minimum principal amount of the Securities of $250,000. Such written
certification shall no longer be required after the expiration of the Restricted
Period. In the case of a transfer of a beneficial interest in the Regulation S
Global Security for an interest in the IAI Global Security, the transferee must
furnish a signed letter substantially in the form of Exhibit D to the Trustee.
(ii) Upon the expiration of the Restricted Period, beneficial
ownership interests in the Regulation S Global Security shall be
transferable in accordance with applicable law and the other terms of this
Indenture.
(e) Legend.
-------
(i) Except as permitted by the following paragraphs (ii), (iii) or
(iv), each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a
9
legend in substantially the following form (each defined term in the legend
being defined as such for purposes of the legend only):
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY
AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF SUCH SECURITY), ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL INVESTOR ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE
SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE
10
SECURITIES ACT, SUBJECT TO THE ISSUERS AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Each Definitive Security shall also bear the following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted Security that
is a Definitive Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Security that
does not bear the legends set forth above and rescind any restriction on
the transfer of such Transfer Restricted Security if the Holder certifies
in writing to the Registrar that its request for such exchange was made in
reliance on Rule 144 (such certification to be in the form set forth on the
reverse of the Initial Security).
(iii) After a transfer of any Initial Securities or Private Exchange
Securities 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 the
Restricted Securities Legend on such Initial Securities or such Private
Exchange Securities shall cease to apply and the requirements that any such
Initial Securities or such Private Exchange Securities be issued in global
form shall continue to apply.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which Holders of such Initial
Securities are offered Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to Initial Securities, including
that Initial Securities be issued in global form, shall continue to apply,
and Exchange Securities in global form without the Restricted Securities
Legend shall be available to Holders that exchange such Initial Securities
in such Registered Exchange Offer.
11
(v) Upon the consummation of a Private Exchange with respect to the
Initial Securities pursuant to which Holders of such Initial Securities are
offered Private Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities,
including that Initial Securities be issued in global form, shall continue
to apply, and Private Exchange Securities in global form with the
Restricted Securities Legend shall be available to Holders that exchange
such Initial Securities in such Private Exchange.
(vi) Upon a sale or transfer after the expiration of the Restricted
Period of any Initial Security acquired pursuant to Regulation S, all
requirements that such Initial Security bear the Restricted Securities
Legend shall cease to apply and the requirements requiring any such Initial
Security be issued in global form shall continue to apply.
(f) Cancelation or Adjustment of Global Security. At such time as
---------------------------------------------
all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, transferred, redeemed, repurchased or canceled, such
Global Security shall be returned by the Depositary to the Trustee for
cancelation or retained and canceled by the Trustee. At any time prior to such
cancelation, if any beneficial interest in a Global Security is exchanged for
Definitive Securities, transferred in exchange for an interest in another Global
Security, redeemed, repurchased 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.
(g) Obligations with Respect to Transfers and Exchanges of
----------------------------------------- ------------
Securities.
-----------
(i) To permit registrations of transfers and exchanges, each of the
Issuers shall execute and the Trustee shall authenticate, Definitive
Securities and Global Securities at the Registrar's request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Issuers, or the Paying Agent, as applicable, 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, 4.06, 4.08 and 9.05).
(iii) Prior to the due presentation for registration of transfer of
any Security, each of the Issuers, the Trustee, the Paying Agent or the
Registrar may deem and treat the Person in whose name a Security is
registered as the absolute owner of such
12
Security for the purpose of receiving payment of principal of and interest
on such Security and for all other purposes whatsoever, whether or not such
Security is overdue, and none of the Issuers, any Note Guarantor, the
Trustee, the Paying Agent or the Registrar shall be affected by notice to
the contrary.
(iv) 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 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
Depositary or any other Person with respect to the accuracy of the records
of the Depositary 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 Depositary) of any notice (including any notice of
redemption or repurchase) 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 the registered Holders (which shall be the
Depositary 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 Depositary subject to the applicable rules and procedures of the
Depositary. The Trustee may rely and shall be fully protected in relying
upon information furnished by the Depositary 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 Depositary 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.
13
2.4 Definitive Securities
---------------------
(a) A Global Security deposited with the Depositary or with the
Trustee as Securities Custodian pursuant to Section 2.1 shall be transferred to
the beneficial owners thereof in the form of Definitive Securities in an
aggregate principal amount equal to the principal amount of such Global
Security, in exchange for such Global Security, only if such transfer complies
with Section 2.3 and (i) the Depositary notifies each of the Issuers that it is
unwilling or unable to continue as a Depositary for such Global Security or if
at any time the Depositary ceases to be a "clearing agency" registered under the
Exchange Act, and a successor depositary is not appointed by each of the Issuers
within 90 days of such notice, or (ii) an Event of Default has occurred and is
continuing or (iii) each of the Issuers, 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 2.4 shall be surrendered by the Depositary to
the Trustee, 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 Definitive 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 and any integral
multiple thereof and registered in such names as the Depositary shall direct.
Any certificated Initial Security in the form of a Definitive Security delivered
in exchange for an interest in the Global Security shall, except as otherwise
provided by Section 2.3(e), bear the Restricted Securities Legend.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a)(i), (ii) or (iii), the Issuers shall promptly make available to
the Trustee a reasonable supply of Definitive Securities in fully registered
form without interest coupons.
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE ISSUERS OR THEIR 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.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY
AFFILIATE OF THE ISSUERS
2
WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A)
TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL
INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT
OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS' AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
[Regulation S Securities Legend]
UNTIL 40 DAYS AFTER THE COMMENCEMENT OF THE OFFERING, AN OFFER OR SALE
OF SECURITIES 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 RULE 144A
UNDER THE U.S. SECURITIES ACT.
Each Definitive Security shall bear the following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES
3
AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM
THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
No. $__________
10% Senior Note due 2008
CUSIP No. ______
THE DERBY CYCLE CORPORATION, a Delaware corporation, and LYON
INVESTMENTS B.V., a company organized under the laws of the Netherlands, as
joint and several obligors, promise to pay to Cede & Co., or registered assigns,
the principal sum [of Dollars] [listed on the Schedule of
Increases or Decreases in Global Security attached hereto]/1/ on May 15, 2008.
Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
_________________
/1/ Use the second set of bracketed language for a Global Security.
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.
THE DERBY CYCLE CORPORATION,
by
__________________________________
Name:
Title:
by
__________________________________
Name:
Title:
LYON INVESTMENTS B.V.,
by
__________________________________
Name:
Title:
by
__________________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by _________________________
Authorized Signatory
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
10% Senior Note due 2008
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Indenture (as defined).
1. Interest
--------
(a) THE DERBY CYCLE CORPORATION, a Delaware corporation, and LYON
INVESTMENTS B.V., a company organized under the laws of the Netherlands, as
joint and several obligors, promise to pay interest on the principal amount of
this Security at the rate per annum shown above. The Issuers shall pay interest
semiannually on May 15 and November 15 of each year[, commencing [ ],
1998]/2/. Interest on the Securities shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from May 14,
1998. Interest shall be computed on the basis of a 360-day year of twelve 30-
day months. The Issuers shall pay interest on overdue principal at the rate
borne by the Securities plus 1% per annum, and they shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
(b) Liquidated Damages. The Holder of this Security is entitled to
------------------
the benefits of an Exchange and Registration Rights Agreement, dated as of May
14, 1998, among the Issuers and the Initial Purchasers named therein (the
"Registration Agreement"). Capitalized terms used in this paragraph (b) but not
defined herein have the meanings assigned to them in the Registration Agreement.
If (i) the Shelf Registration Statement or Exchange Offer Registration
Statement, as applicable under the Registration Agreement, is not filed with the
Commission on or prior to 90 days after the Issue Date, (ii) the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
is not declared effective within 210 days after the Issue Date, (iii) the
Registered Exchange Offer is not consummated on or prior to 240 days after the
Issue Date, or (iv) the Shelf Registration Statement is filed and declared
effective within 210 days after the Issue Date but shall thereafter cease to be
effective (at any time that the Issuers are obligated to maintain the
effectiveness thereof) without being succeeded within 30 days by an additional
Registration Statement filed and declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), the Issuers shall pay
liquidated damages to each Holder of Transfer Restricted Securities, during the
period of such Registration Default, in an amount equal to $0.192 per week per
$1,000 principal amount of the Securities constituting Transfer Restricted
Securities held by such Holder until the applicable Registration Statement is
filed
__________________
/2/ Use bracketed language for Initial Securities only.
or declared effective, the Registered Exchange Offer is consummated or the
Shelf Registration Statement again becomes effective, as the case may be. All
accrued liquidated damages shall be paid to Holders in the same manner as
interest payments on the Securities on semi-annual payment dates which
correspond to payment dates for the Securities. Following the cure of all
Registration Defaults, the accrual of liquidated damages shall cease. The
Trustee shall have no responsibility with respect to the determination of the
amount of any such liquidated damages. For purposes of the foregoing, "Transfer
Restricted Securities" means (i) each Initial Security until the date on which
such Initial Security has been exchanged for a freely transferable Exchange
Security in the Registered Exchange Offer, (ii) each Initial Security or Private
Exchange Security until the date on which such Initial Security or Private
Exchange Security has been effectively registered under the Securities Act and
disposed of in accordance with a Shelf Registration Statement or (iii) each
Initial Security or Private Exchange Security until the date on which such
Initial Security or Private Exchange Security is distributed to the public
pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule
144(k) under the Securities Act.
2. Method of Payment
-----------------
The Issuers shall 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 next preceding the payment date even if
Securities are canceled after the record date and on or before the payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Issuers shall pay principal, premium, liquidated damages,
interest and Additional Amounts, if any, in money of the United States of
America 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, liquidated damages, interest and
Additional Amounts, if any) shall be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company. The
Issuers shall make all payments in respect of a certificated Security (including
principal, premium, liquidated damages, interest and Additional Amounts, if
any), by mailing a check to the registered address of each Holder thereof;
provided, however, that payments on the Securities 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).
2
3. Paying Agent and Registrar
--------------------------
Initially, IBJ XXXXXXXX BANK & TRUST COMPANY, a New York banking
corporation (the "Trustee"), shall act as Paying Agent and Registrar. The
Issuers also intend to appoint THE INDUSTRIAL BANK OF JAPAN (LUXEMBOURG), S.A.
as Luxembourg Paying Agent once they apply for listing of the Securities on the
Luxembourg Stock Exchange. The Issuers may appoint and change any Paying Agent
or Registrar without notice. DCC or any of its domestically incorporated Wholly
Owned Subsidiaries may act as Paying Agent or Registrar. In all circumstances,
the Issuers shall ensure that (i) at least one Paying Agent shall be located in
the United States, (ii) at least one Paying Agent shall be, if and so long as
the Securities are listed on the Luxembourg Stock Exchange and the rules of such
exchange so require, located in Luxembourg or such other place as the Luxembourg
Stock Exchange may approve and (iii) if and so long as the Securities are listed
on any other securities exchange, any applicable requirements of such exchange
as to Paying Agents are satisfied.
4. Indenture
---------
The Issuers issued, as joint and several obligors, the Securities
under an Indenture dated as of May 14, 1998 (the "Indenture"), among the Issuers
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 "TIA"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Securities are
subject to all terms and provisions of the Indenture, and Securityholders are
referred to the Indenture and the TIA for a statement of such terms and
provisions.
The Securities are senior unsecured obligations of the Issuers, as
joint and several obligors, limited to $100,000,000 aggregate principal amount
at any one time outstanding (subject to Section 2.07 of the Indenture). This
Security is one of the [Initial Securities] [Private Exchange Securities]
referred to in the Indenture. The Securities include the Initial Securities and
any Exchange Securities and Private Exchange Securities issued in exchange for
the Initial Securities pursuant to the Indenture. The Initial Securities, the
Exchange Securities and the Private Exchange Securities are treated as a single
class of securities under the Indenture. The Indenture imposes certain
limitations on the ability of DCC and its Restricted Subsidiaries to, among
other things, make certain Investments and other Restricted Payments, pay
dividends and other distributions, incur Indebtedness, enter into consensual
restrictions upon the payment of certain dividends and distributions by such
Restricted Subsidiaries, issue or sell shares of capital stock of such
Restricted Subsidiaries, enter into or permit certain transactions with
Affiliates, create or incur Liens, enter into additional lines of business,
enter into Sale/Leaseback Transactions and make asset sales.
3
The Indenture also imposes limitations on the ability of the Issuers to
consolidate or merge with or into any other Person or convey, transfer or lease
all or substantially all of the property of either Issuer.
To guarantee the due and punctual payment of the principal, interest
and Additional Amounts, if any, on the Securities and all other amounts payable
by the Issuers under the Indenture and the Securities when and as the same shall
be due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, any Note Guarantors shall,
jointly and severally, unconditionally guarantee the Guaranteed Obligations on a
senior basis pursuant to the terms of the Indenture and the Supplemental
Indenture.
5. Optional Redemption
-------------------
Except as set forth below, the Securities shall not be redeemable at
the option of the Issuers prior to May 15, 2003. Thereafter, the Securities
shall be redeemable at the option of the Issuers, in whole or in part, on not
less than 30 nor more than 60 days' prior notice delivered to each Holder of
Securities in accordance with paragraph 7 herein, at the following redemption
prices (expressed as percentages of principal amount), plus accrued and unpaid
interest and Additional Amounts, if any, to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant payment date and Additional Amounts, if any, in respect
thereof), if redeemed during the 12-month period commencing on May 15 of the
years set forth below:
REDEMPTION
YEAR PRICE
------------------------------------------------------
2003 105.000%
2004 103.333%
2005 101.667%
2006 and thereafter 100.000%
At any time and from time to time prior to May 15, 2001, the Issuers
may, at their option, redeem up to a maximum of 33 1/3% of the original
aggregate principal amount of the Securities with all or a portion of the
proceeds of one or more Public Equity Offerings following which there is a
Public Market, at a redemption price equal to 110.000% of the principal amount
thereof, plus accrued and unpaid interest and Additional Amounts, if any, to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant payment date and Additional
Amounts, if any, in respect thereof); provided, however, that, after giving
-------- -------
effect to any such redemption, at least 66 2/3% of the original aggregate
principal amount of the Securities remains outstanding. Any
4
such redemption shall be made within 60 days of such Public Equity Offering upon
not less than 30 nor more than 60 days' notice delivered to each Holder of
Securities being redeemed in accordance with paragraph 7 herein and otherwise in
accordance with the procedures set forth in the Indenture.
The Securities may be redeemed, at the option of the Issuers, in whole
but not in part, at any time upon giving not less than 30 nor more than 60 days'
notice delivered to each Holder of Securities in accordance with paragraph 7
herein (which notice shall be irrevocable), at a redemption price equal to the
principal amount thereof, together with accrued and unpaid interest, if any, to
the date fixed by the Issuers for redemption (a "Tax Redemption Date") and all
Additional Amounts, if any, then due and which shall become due on the Tax
Redemption Date as a result of the redemption or otherwise, if the Issuers
determine that, as a result of (i) any change in, or amendment to, the laws or
treaties (or any regulations, protocols or rulings promulgated thereunder) of
the United States or The Netherlands or any other jurisdiction in which either
of the Issuers is organized or engaged in business for tax purposes (or, in each
case, any political subdivision or taxing authority thereof or therein) or of
the jurisdiction from or through which payment is made or where the payor is
located affecting taxation, which change or amendment becomes effective on or
after the Closing Date, or (ii) any change in position regarding the
application, administration or interpretation of such laws, treaties,
regulations or rulings (including a holding, judgment or order by a court of
competent jurisdiction), which change, amendment, application or interpretation
becomes effective on or after the Closing Date, the Issuers are or shall be
required to pay Additional Amounts, and the Issuers determine that such payment
obligation cannot be avoided by the Issuers taking reasonable measures.
Notwithstanding the foregoing, no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which the Issuers would be
obligated to make such payment or withholding if a payment in respect of the
Securities were then due. Prior to the delivery of any notice of redemption of
the Securities pursuant to the foregoing, the Issuers shall deliver to the
Trustee an opinion of a tax counsel reasonably satisfactory to the Trustee to
the effect that the circumstances referred to above exist. The Trustee shall
accept such opinion as sufficient evidence of the satisfaction of the conditions
precedent described above, in which event it shall be conclusive and binding on
all Holders of Securities.
6. Sinking Fund
------------
The Securities are not subject to any sinking fund.
7. Notice of Redemption
--------------------
Notice of redemption shall be given at least 30 days but not more than
60 days before the redemption date. Such notice shall be (i) mailed by first-
class mail to the
5
registered address of each Holder of Securities to be redeemed and (ii)
published in a leading newspaper having a general circulation in (a) New York
City (which is expected to be the Wall Street Journal), (b) Frankfurt, Germany
-------------------
(which is expected to be Frankfurter Allgemeine Zeitung) and (c) if and so long
------------------------------
as the Securities are listed on the Luxembourg Stock Exchange and the rules of
the Luxembourg Stock Exchange so require, a newspaper having a general
circulation in Luxembourg (which is expected to be the Luxembourg Wort)). If and
---------------
so long as the Securities are listed on any other securities exchange, notices
shall also be given in accordance with any applicable requirements of such
securities exchange. Notices given by publication shall be deemed to be given on
the first date on which publication is made, and notices given by first-class
mail shall be deemed given five calendar days after mailing. Securities in
denominations equal to or larger than $1,000 may be redeemed in part but only in
whole multiples of $1,000. If money sufficient to pay the redemption price of
and accrued and unpaid interest and Additional Amounts, if any, 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. Repurchase of Securities at the Option of Holders upon Change of Control
------------------------------------------------------------------------
Upon a Change of Control, each Holder of Securities shall have the
right, subject to certain conditions specified in the Indenture, to cause the
Issuers to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest and Additional Amounts, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant payment date that
is on or prior to the date of purchase and Additional Amounts, if any, in
respect thereof) as provided in, and subject to the terms of, the Indenture.
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents, and the Issuers, or the Paying
Agent, as applicable, may require a Holder to pay any taxes required by law or
permitted by the Indenture. The Issuers shall not be required to transfer or
exchange 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 to transfer or exchange any Securities for a period of 15 days prior to a
selection of Securities to be redeemed.
6
10. Persons Deemed Owners
---------------------
Subject to the provisions hereof with respect to record dates, the
registered Holder of this Security may be treated as the owner of it for all
purposes.
11. Unclaimed Money
---------------
If money for the payment of principal, interest or Additional Amounts
remains unclaimed for two years, the Trustee or Paying Agent shall pay the money
back to the Issuers at their written request unless an abandoned property law
designates another Person. After any such payment, Holders entitled to the
money must look only to the Issuers and not to the Trustee for payment.
12. Discharge and Defeasance
------------------------
Subject to certain conditions, the Issuers at any time may terminate
some of or all of their obligations under the Securities and the Indenture if
the Issuers deposit with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
13. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities (including
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, such Securities) and (ii) any default or noncompliance with any
provision may be waived with the written consent of the Holders of at least a
majority in principal amount of the outstanding Securities. Subject to certain
exceptions set forth in the Indenture, without the consent of any Holder of
Securities, the Issuers and the Trustee may amend the Indenture or the
Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to
comply with Article 5 of the Indenture; (iii) to provide for uncertificated
Securities in addition to or in place of certificated Securities; (iv) to add
Note Guarantees with respect to the Securities; (v) to secure the Securities;
(vi) to add additional covenants or to surrender rights and powers conferred on
the Issuers; (vii) to comply with the requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the TIA; (viii) to
make any change that does not adversely affect the rights of any Securityholder;
(ix) to provide for the issuance of the Exchange Securities or Private Exchange
Securities; or (x) to provide for the assumption by a Successor Company of the
obligations of either of the Issuers.
7
14. Defaults and Remedies
---------------------
If an Event of Default (other than an Event of Default relating to
certain events of bankruptcy, insolvency or reorganization of either Issuer)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the outstanding Securities by notice to the Issuers may
declare the principal of and accrued but unpaid interest and Additional Amounts,
if any, on all the Securities to be due and payable. If an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of either
Issuer occurs, the principal of and interest and Additional Amounts, if any, on
all the Securities shall become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders. Under
certain circumstances, the Holders of a majority in principal amount of the
outstanding Securities may rescind any such acceleration with respect to the
Securities and its consequences.
If an Event of Default occurs and is continuing, the Trustee shall be
under no obligation to exercise any of the rights or powers under the Indenture
at the request or direction of any of the Holders unless such Holders have
offered to the Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium, if any, interest or Additional Amounts, if any, when due, no
Holder may pursue any remedy with respect to the Indenture or the Securities
unless (i) such Holder has previously given the Trustee notice that an Event of
Default is continuing, (ii) Holders of at least 25% in principal amount of the
outstanding Securities have requested the Trustee in writing to pursue the
remedy, (iii) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense, (iv) the Trustee has not
complied with such request within 60 days after the receipt of the request and
the offer of security or indemnity and (v) the Holders of a majority in
principal amount of the outstanding Securities have not given the Trustee a
direction inconsistent with such request within such 60-day period. Subject to
certain restrictions, the Holders of a majority in principal amount of the
outstanding Securities are given the right to 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. The Trustee, however,
may refuse to follow any direction that conflicts with law or the Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other
Holder or that would involve the Trustee in personal liability. Prior to taking
any action under the Indenture, 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.
15. Trustee Dealings with the Issuers
---------------------------------
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of
8
Securities and may otherwise deal with and collect obligations owed to it by the
Issuers or their Affiliates and may otherwise deal with the Issuers or their
Affiliates with the same rights it would have if it were not Trustee. The
Indenture contains certain limitations on the rights of the Trustee, should it
become a creditor of either of the Issuers, to obtain payment of claims in
certain cases or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee shall be permitted to engage in
other transactions; provided, however, if it acquires any conflicting interest,
-------- -------
it must eliminate such conflict within 90 days, apply to the Commission for
permission to continue or resign.
16. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of either
Issuer or any Note Guarantor shall not have any liability for any obligations of
the Issuers 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.
17. 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.
18. 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).
19. Governing Law
-------------
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITH OUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
10
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers have caused CUSIP numbers to be
printed on the Securities and have 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.
THE ISSUERS SHALL FURNISH TO ANY HOLDER OF SECURITIES UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT
THE TEXT OF THIS SECURITY.
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 Issuers. The agent may substitute another to act for him.
____________________________________________________________
Date: ________________ Your Signature: _____________________
Signature of Signature Guarantee: ______________________________________________
Sign exactly as your name appears on the other side of this Security. Signature
must be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER RESTRICTED SECURITIES
This certificate relates to $_________ principal amount of Securities held in
(check applicable space) ____ book-entry or _____ definitive form by the
undersigned.
The undersigned (check one box below):
[_] has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated above);
[_] has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
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, the undersigned confirms that such Securities
are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [_] to an Issuer; or
(2) [_] pursuant to an effective registration statement under the
Securities Act of 1933; or
(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; or
2
(5) [_] to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that
has furnished to the Trustee a signed letter containing certain
representations and agreements; or
(6) [_] pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee shall 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 may require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Issuers have 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.
________________________
Your Signature
Signature Guarantee:
Date: ______________________ __________________________
Signature must be guaranteed Signature of Signature
by a participant in a Guarantee
recognized signature guaranty
medallion program or other
signature guarantor acceptable
to the Trustee
____________________________________________________________________
3
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 Issuers 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
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].
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 this Signature of authorized
Exchange Principal Amount of this Principal Amount of this Global Security following Signatory of Trustee or
Global Security Global Security such decrease or increase Securities Custodian
OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS SECURITY PURCHASED BY AN ISSUER
PURSUANT TO SECTION 4.06 (ASSET SALE) OR 4.08 (CHANGE OF CONTROL) OF THE
INDENTURE, CHECK THE BOX:
ASSET SALE [_] CHANGE OF CONTROL [_]
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS SECURITY PURCHASED BY
AN ISSUER PURSUANT TO SECTION 4.06 OR 4.08 OF THE INDENTURE, STATE THE AMOUNT:
$
DATE: __________________ YOUR SIGNATURE: __________________
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE OTHER SIDE OF THE SECURITY)
SIGNATURE GUARANTEE:_______________________________________
SIGNATURE MUST BE GUARANTEED BY A PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTY
MEDALLION PROGRAM OR OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE ISSUERS OR THEIR 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.
No. $__________
10% Senior Note due 2008
CUSIP No. ______
THE DERBY CYCLE CORPORATION, a Delaware corporation, and LYON
INVESTMENTS B.V., a company organized under the laws of the Netherlands, as
joint and several obligors, promise to pay to Cede & Co., or registered assigns,
the principal sum [of Dollars] [listed on the Schedule of Increases or
Decreases in Global Security attached hereto]/3/ on May 15, 2008.
Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
____________
/3/ Use the second set of bracketed language for a Global Security.
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.
THE DERBY CYCLE CORPORATION,
by
_________________________________
Name:
Title:
by
_________________________________
Name:
Title:
LYON INVESTMENTS B.V.,
by
_________________________________
Name:
Title:
by
_________________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
_____________________________
Authorized Signatory
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
10% Senior Note due 2008
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Indenture (as defined).
1. Interest
--------
THE DERBY CYCLE CORPORATION, a Delaware corporation, and LYON
INVESTMENTS B.V., a company organized under the laws of the Netherlands, as
joint and several obligors, promise to pay interest on the principal amount of
this Security at the rate per annum shown above. The Issuers shall pay interest
semiannually on May 15 and November 15 of each year[, commencing [ ],
1998]/4/. Interest on the Securities shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from May 14,
1998. Interest shall be computed on the basis of a 360-day year of twelve 30-
day months. The Issuers shall pay interest on overdue principal at the rate
borne by the Securities plus 1% per annum, and they shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
2. Method of Payment
-----------------
The Issuers shall 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 next preceding the payment date even if
Securities are canceled after the record date and on or before the payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Issuers shall pay principal, premium, liquidated damages,
interest and Additional Amounts, if any, in money of the United States of
America 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, liquidated damages, interest and
Additional Amounts, if any) shall be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company. The
Issuers shall make all payments in respect of a certificated Security (including
principal, premium, liquidated damages, interest and Additional Amounts, if
any), by mailing a check to the registered address of each Holder thereof;
provided, however, that payments on the Securities 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
/4/ Use bracketed language for Initial Securities only.
2
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, IBJ XXXXXXXX BANK & TRUST COMPANY, a New York banking
corporation (the "Trustee"), shall act as Paying Agent and Registrar. The
Issuers also intend to appoint THE INDUSTRIAL BANK OF JAPAN (LUXEMBOURG), S.A.
as Luxembourg Paying Agent once they apply for listing of the Securities on the
Luxembourg Stock Exchange. The Issuers may appoint and change any Paying Agent
or Registrar without notice. DCC or any of its domestically incorporated Wholly
Owned Subsidiaries may act as Paying Agent or Registrar. In all circumstances,
the Issuers shall ensure that (i) at least one Paying Agent shall be located in
the United States, (ii) at least one Paying Agent shall be, if and so long as
the Securities are listed on the Luxembourg Stock Exchange and the rules of such
exchange so require, located in Luxembourg or such other place as the Luxembourg
Stock Exchange may approve and (iii) if and so long as the Securities are listed
on any other securities exchange, any applicable requirements of such exchange
as to Paying Agents are satisfied.
4. Indenture
---------
The Issuers issued, as joint and several obligors, the Securities
under an Indenture dated as of May 14, 1998 (the "Indenture"), among the Issuers
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 "TIA"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Securities are
subject to all terms and provisions of the Indenture, and Securityholders are
referred to the Indenture and the TIA for a statement of such terms and
provisions.
The Securities are senior unsecured obligations of the Issuers, as
joint and several obligors, limited to $100,000,000 aggregate principal amount
at any one time outstanding (subject to Section 2.07 of the Indenture). This
Security is one of the Exchange Securities referred to in the Indenture. The
Securities include the Initial Securities and any Exchange Securities and
Private Exchange Securities issued in exchange for the Initial Securities
pursuant to the Indenture. The Initial Securities, the Exchange Securities and
the Private Exchange Securities are treated as a single class of securities
under the Indenture. The Indenture imposes certain limitations on the ability of
DCC and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted
3
Payments, pay dividends and other distributions, incur Indebtedness, enter into
consensual restrictions upon the payment of certain dividends and distributions
by such Restricted Subsidiaries, issue or sell shares of capital stock of such
Restricted Subsidiaries, enter into or permit certain transactions with
Affiliates, create or incur Liens, enter into additional lines of business,
enter into Sale/Leaseback Transactions and make asset sales. The Indenture also
imposes limitations on the ability of the Issuers to consolidate or merge with
or into any other Person or convey, transfer or lease all or substantially all
of the property of either Issuer.
To guarantee the due and punctual payment of the principal, interest
and Additional Amounts, if any, on the Securities and all other amounts payable
by the Issuers under the Indenture and the Securities when and as the same shall
be due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, any Note Guarantors shall,
jointly and severally, unconditionally guarantee the Guaranteed Obligations on a
senior basis pursuant to the terms of the Indenture and the Supplemental
Indenture.
5. Optional Redemption
-------------------
Except as set forth below, the Securities shall not be redeemable at
the option of the Issuers prior to May 15, 2003. Thereafter, the Securities
shall be redeemable at the option of the Issuers, in whole or in part, on not
less than 30 nor more than 60 days' prior notice delivered to each Holder of
Securities in accordance with paragraph 7 herein, at the following redemption
prices (expressed as percentages of principal amount), plus accrued and unpaid
interest and Additional Amounts, if any, to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant payment date and Additional Amounts, if any, in respect
thereof), if redeemed during the 12-month period commencing on May 15 of the
years set forth below:
REDEMPTION
YEAR PRICE
------------------------------------------------------
2003 105.000%
2004 103.333%
2005 101.667%
2006 and thereafter 100.000%
At any time and from time to time prior to May 15, 2001, the Issuers
may, at their option, redeem up to a maximum of 33 1/3% of the original
aggregate principal amount of the Securities with all or a portion of the
proceeds of one or more Public Equity Offerings following which there is a
Public Market, at a redemption price equal to 110.000% of the
4
principal amount thereof, plus accrued and unpaid interest and Additional
Amounts, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
payment date and Additional Amounts, if any, in respect thereof); provided,
however, that, after giving effect to any such redemption, at least 66 2/3% of
the original aggregate principal amount of the Securities remains outstanding.
Any such redemption shall be made within 60 days of such Public Equity Offering
upon not less than 30 nor more than 60 days' notice delivered to each Holder of
Securities being redeemed in accordance with paragraph 7 herein and otherwise in
accordance with the procedures set forth in the Indenture.
The Securities may be redeemed, at the option of the Issuers, in whole
but not in part, at any time upon giving not less than 30 nor more than 60 days'
notice delivered to each Holder of Securities in accordance with paragraph 7
herein (which notice shall be irrevocable), at a redemption price equal to the
principal amount thereof, together with accrued and unpaid interest, if any, to
the date fixed by the Issuers for redemption (a "Tax Redemption Date") and all
Additional Amounts, if any, then due and which shall become due on the Tax
Redemption Date as a result of the redemption or otherwise, if the Issuers
determine that, as a result of (i) any change in, or amendment to, the laws or
treaties (or any regulations, protocols or rulings promulgated thereunder) of
the United States or The Netherlands or any other jurisdiction in which either
of the Issuers is organized or engaged in business for tax purposes (or, in each
case, any political subdivision or taxing authority thereof or therein) or of
the jurisdiction from or through which payment is made or where the payor is
located affecting taxation, which change or amendment becomes effective on or
after the Closing Date, or (ii) any change in position regarding the
application, administration or interpretation of such laws, treaties,
regulations or rulings (including a holding, judgment or order by a court of
competent jurisdiction), which change, amendment, application or interpretation
becomes effective on or after the Closing Date, the Issuers are or shall be
required to pay Additional Amounts, and the Issuers determine that such payment
obligation cannot be avoided by the Issuers taking reasonable measures.
Notwithstanding the foregoing, no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which the Issuers would be
obligated to make such payment or withholding if a payment in respect of the
Securities were then due. Prior to the delivery of any notice of redemption of
the Securities pursuant to the foregoing, the Issuers shall deliver to the
Trustee an opinion of a tax counsel reasonably satisfactory to the Trustee to
the effect that the circumstances referred to above exist. The Trustee shall
accept such opinion as sufficient evidence of the satisfaction of the conditions
precedent described above, in which event it shall be conclusive and binding on
all Holders of Securities.
6. Sinking Fund
------------
The Securities are not subject to any sinking fund.
5
7. Notice of Redemption
--------------------
Notice of redemption shall be given at least 30 days but not more than
60 days before the redemption date. Such notice shall be (i) mailed by first-
class mail to the registered address of each Holder of Securities to be redeemed
and (ii) published in a leading newspaper having a general circulation in (a)
New York City (which is expected to be the Wall Street Journal), (b) Frankfurt,
---- ------ -------
Germany (which is expected to be Frankfurter Allgemeine Zeitung) and (c) if and
----------- ---------- -------
so long as the Securities are listed on the Luxembourg Stock Exchange and the
rules of the Luxembourg Stock Exchange so require, a newspaper having a general
circulation in Luxembourg (which is expected to be the Luxembourg Wort)). If and
---------------
so long as the Securities are listed on any other securities exchange, notices
shall also be given in accordance with any applicable requirements of such
securities exchange. Notices given by publication shall be deemed to be given
on the first date on which publication is made, and notices given by first-class
mail shall be deemed given five calendar days after mailing. Securities in
denominations equal to or larger than $1,000 may be redeemed in part but only in
whole multiples of $1,000. If money sufficient to pay the redemption price of
and accrued and unpaid interest and Additional Amounts, if any, 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. Repurchase of Securities at the Option of Holders upon Change of Control
------------------------------------------------------------------------
Upon a Change of Control, each Holder of Securities shall have the
right, subject to certain conditions specified in the Indenture, to cause the
Issuers to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest and Additional Amounts, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant payment date that
is on or prior to the date of purchase and Additional Amounts, if any, in
respect thereof) as provided in, and subject to the terms of, the Indenture.
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents, and the Issuers, or the Paying
Agent, as applicable, may require a Holder to pay any taxes required by law or
permitted by the Indenture. The Issuers shall not be required to
6
transfer or exchange 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 to transfer or exchange any Securities for a period of 15 days
prior to a selection of Securities to be redeemed.
10. Persons Deemed Owners
---------------------
Subject to the provisions hereof with respect to record dates, the
registered Holder of this Security may be treated as the owner of it for all
purposes.
11. Unclaimed Money
---------------
If money for the payment of principal, interest or Additional Amounts
remains unclaimed for two years, the Trustee or Paying Agent shall pay the money
back to the Issuers at their written request unless an abandoned property law
designates another Person. After any such payment, Holders entitled to the
money must look only to the Issuers and not to the Trustee for payment.
12. Discharge and Defeasance
------------------------
Subject to certain conditions, the Issuers at any time may terminate
some of or all of their obligations under the Securities and the Indenture if
the Issuers deposit with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
13. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities (including
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, such Securities) and (ii) any default or noncompliance with any
provision may be waived with the written consent of the Holders of at least a
majority in principal amount of the outstanding Securities. Subject to certain
exceptions set forth in the Indenture, without the consent of any Holder of
Securities, the Issuers and the Trustee may amend the Indenture or the
Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to
comply with Article 5 of the Indenture; (iii) to provide for uncertificated
Securities in addition to or in place of certificated Securities; (iv) to add
Note Guarantees with respect to the Securities; (v) to secure the Securities;
(vi) to add additional covenants or to surrender rights and powers conferred on
the Issuers; (vii) to comply with the requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the TIA;
7
(viii) to make any change that does not adversely affect the rights of any
Securityholder; (ix) to provide for the issuance of the Exchange Securities or
Private Exchange Securities; or (x) to provide for the assumption by a Successor
Company of the obligations of either of the Issuers.
14. Defaults and Remedies
---------------------
If an Event of Default (other than an Event of Default relating to
certain events of bankruptcy, insolvency or reorganization of either Issuer)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the outstanding Securities by notice to the Issuers may
declare the principal of and accrued but unpaid interest and Additional Amounts,
if any, on all the Securities to be due and payable. If an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of either
Issuer occurs, the principal of and interest and Additional Amounts, if any, on
all the Securities shall become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders. Under
certain circumstances, the Holders of a majority in principal amount of the
outstanding Securities may rescind any such acceleration with respect to the
Securities and its consequences.
If an Event of Default occurs and is continuing, the Trustee shall be
under no obligation to exercise any of the rights or powers under the Indenture
at the request or direction of any of the Holders unless such Holders have
offered to the Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium, if any, interest or Additional Amounts, if any, when due, no
Holder may pursue any remedy with respect to the Indenture or the Securities
unless (i) such Holder has previously given the Trustee notice that an Event of
Default is continuing, (ii) Holders of at least 25% in principal amount of the
outstanding Securities have requested the Trustee in writing to pursue the
remedy, (iii) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense, (iv) the Trustee has not
complied with such request within 60 days after the receipt of the request and
the offer of security or indemnity and (v) the Holders of a majority in
principal amount of the outstanding Securities have not given the Trustee a
direction inconsistent with such request within such 60-day period. Subject to
certain restrictions, the Holders of a majority in principal amount of the
outstanding Securities are given the right to 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. The Trustee, however,
may refuse to follow any direction that conflicts with law or the Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other
Holder or that would involve the Trustee in personal liability. Prior to taking
any action under the Indenture, 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.
8
15. Trustee Dealings with the Issuers
---------------------------------
Subject to certain limitations imposed by the TIA, 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 Issuers or their Affiliates and may otherwise deal with the Issuers
or their Affiliates with the same rights it would have if it were not Trustee.
The Indenture contains certain limitations on the rights of the Trustee, should
it become a creditor of either of the Issuers, to obtain payment of claims in
certain cases or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee shall be permitted to engage in
other transactions; provided, however, if it acquires any conflicting interest,
-------- -------
it must eliminate such conflict within 90 days, apply to the Commission for
permission to continue or resign.
16. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of either
Issuer or any Note Guarantor shall not have any liability for any obligations of
the Issuers 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.
17. 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.
18. 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).
9
19. Governing Law
-------------
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITH OUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers have caused CUSIP numbers to be
printed on the Securities and have 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.
THE ISSUERS SHALL FURNISH TO ANY HOLDER OF SECURITIES UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT
THE TEXT OF THIS SECURITY.
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 Issuers. The agent may substitute another to act
for him.
____________________________________________________________
Date: ________________ Your Signature: _____________________
Signature of Signature Guarantee:_______________________________________________
Sign exactly as your name appears on the other side of this Security. Signature
must be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].
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 this Signature of authorized
Exchange Principal Amount of this Principal Amount of this Global Security following Signatory of Trustee or
Global Security Global Security such decrease or increase Securities Custodian
OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS SECURITY PURCHASED BY AN ISSUER
PURSUANT TO SECTION 4.06 (ASSET SALE) OR 4.08 (CHANGE OF CONTROL) OF THE
INDENTURE, CHECK THE BOX:
ASSET SALE [_] CHANGE OF CONTROL [_]
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS SECURITY PURCHASED BY
AN ISSUER PURSUANT TO SECTION 4.06 OR 4.08 OF THE INDENTURE, STATE THE AMOUNT:
$
DATE: __________________ YOUR SIGNATURE: __________________
(SIGN EXACTLY AS YOUR NAME
APPEARS ON THE OTHER SIDE OF
THE SECURITY)
SIGNATURE GUARANTEE:_______________________________________
SIGNATURE MUST BE GUARANTEED BY A PARTICIPANT IN A
RECOGNIZED SIGNATURE GUARANTY MEDALLION PROGRAM OR OTHER
SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as
of , among [GUARANTOR] (the "New Guarantor"), THE
DERBY CYCLE CORPORATION (or its successor), a Delaware corporation,
LYON INVESTMENTS B.V. (or its successor), a company organized under
the laws of the Netherlands, and IBJ XXXXXXXX BANK & TRUST COMPANY, a
New York banking corporation, as trustee under the Indenture referred
to below (the "Trustee").
W I T N E S E T H :
WHEREAS the Issuers have heretofore executed and delivered to the
Trustee an Indenture (the "Indenture") dated as of May 14, 1998, providing for
the issuance of an aggregate principal amount of up to $100,000,000 of 10%
Senior Notes due 2008 (the "Securities");
WHEREAS Section 4.11 of the Indenture provides that under certain
circumstances the Issuers are required to cause the New Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the New
Guarantor shall unconditionally guarantee all the Issuers' obligations under the
Securities pursuant to a Note Guarantee on the terms and conditions set forth
herein;
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the
Issuers and the Existing Guarantors are authorized to execute and deliver this
Supplemental Indenture; and
WHEREAS the terms used but not defined herein shall have the meanings
ascribed thereto in the Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor, the Issuers[, the Existing Guarantors] and the Trustee mutually
covenant and agree for the equal and ratable benefit of the Holders of the
Securities as follows:
1. Agreement to Guarantee. The New Guarantor hereby agrees[, jointly
-----------------------
and severally with all the Existing Guarantors,] to unconditionally guarantee
the Issuers' obligations under the Securities as a Note Guarantor on the terms
and subject to the conditions set forth below and to be bound by all other
applicable provisions of the Indenture and the Securities:
2
a. Note Guarantees. The New Guarantor hereby jointly and severally
---------------
unconditionally and irrevocably guarantees, as a primary obligor and not
merely as a surety, to each Holder and to the Trustee and its successors
and assigns (i) the full and punctual payment of principal of and interest
and Additional Amounts, if any, on and liquidated damages in respect of the
Securities when due, whether at Stated Maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Issuers
under the Indenture (including obligations to the Trustee) and the
Securities and (ii) the full and punctual performance within applicable
grace periods of all other obligations of the Issuers whether for expenses,
indemnification or otherwise under the Indenture and the Securities (all
the foregoing being hereinafter collectively called the "Guaranteed
Obligations"). The New Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice
or further assent from the New Guarantor, and that the New Guarantor shall
remain bound under this Supplemental Indenture notwithstanding any
extension or renewal of any Guaranteed Obligation.
The New Guarantor waives presentation to, demand of, payment from and
protest to the Issuers of any of the Guaranteed Obligations and also waives
notice of protest for nonpayment. The New Guarantor waives notice of any
default under the Securities or the Guaranteed Obligations. The obligations
of the New Guarantor 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 Issuers or any other Person under the
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 the 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 Trustee to exercise any right or remedy
against any other guarantor of the Guaranteed Obligations; or (f) any
change in the ownership of the New Guarantor, except as provided in Section
1(b)(ii).
The New Guarantor hereby waives any right to which it may be entitled
to have its obligations hereunder divided among any other Note Guarantor,
such that the New Guarantor's obligations would be less than the full
amount claimed. The New Guarantor hereby waives any right to which it may
be entitled to have the assets of the Issuers first be used and depleted as
payment of the Issuers' or the New Guarantor's obligations hereunder prior
to any amounts being claimed from or paid by the New Guarantor hereunder.
The New Guarantor hereby waives any right to which it may be entitled to
require that the Issuers be sued prior to an action being initiated against
the New Guarantor.
The New Guarantor further agrees that its Note Guarantee herein
constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of
3
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.
Except as expressly set forth in Sections 8.01(b) and 10.01 of the
Indenture and Section 1(b) herein, the obligations of the New Guarantor
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 the New Guarantor herein 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 the Indenture,
the Securities or any other agreement, by any waiver or modification of any
thereof, by any default, failure or delay, wilful 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 any Note Guarantor or would otherwise operate
as a discharge of any Note Guarantor as a matter of law or equity.
The New Guarantor agrees that its Note Guarantee shall remain in full
force and effect until payment in full of all the Guaranteed Obligations.
The New Guarantor further agrees that its Note Guarantee 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 Issuers
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 the
New Guarantor by virtue hereof, upon the failure of the Issuers to pay the
principal of or interest or Additional Amounts, if any, 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, the New Guarantor 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 (i) the unpaid principal amount of such Guaranteed Obligations,
(ii) accrued and unpaid interest on such Guaranteed Obligations (but only
to the extent not prohibited by law) and (iii) all other monetary
obligations of the Issuers to the Holders and the Trustee.
The New Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guaranteed
Obligations guaranteed hereby until payment in full of all Guaranteed
Obligations. The New Guarantor further agrees that, as between it, on the
one hand, and the Holders and the Trustee, on the other hand, (x) the
4
maturity of the Guaranteed Obligations guaranteed hereby may be accelerated
as provided in Article 6 of the Indenture for the purposes of any Note
Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Guaranteed Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration
of such Guaranteed Obligations as provided in Article 6 of the Indenture,
such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by the New Guarantor for the purposes of
this Section 1(a).
The New Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Trustee
or any Holder in enforcing any rights under this Section 1(a).
Upon request of the Trustee, the New Guarantor shall 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
the Indenture and this Supplemental Indenture.
b. Limitation on Liability. (i) Any term or provision of this
-----------------------
Supplemental Indenture to the contrary notwithstanding, the maximum,
aggregate amount of the Guaranteed Obligations guaranteed hereunder by the
New Guarantor shall not exceed the maximum amount that can be hereby
guaranteed without rendering this Supplemental Indenture voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
(ii) This Note Guarantee as to the New Guarantor shall terminate and
be of no further force or effect and the New Guarantor shall be deemed to
be released from all obligations under this Supplemental Indenture upon (A)
the merger or consolidation of the New Guarantor with or into any Person
other than DCC or a Subsidiary or Affiliate of DCC where the New Guarantor
is not the surviving entity of such consolidation or merger or (B) the sale
by DCC or any Subsidiary of DCC (or any pledgee of DCC) of the Capital
Stock of the New Guarantor, where, after such sale, the New Guarantor is no
longer a Subsidiary of DCC; provided, however, that each such merger,
-------- -------
consolidation or sale (or, in the case of a sale by such a pledgee, the
disposition of the proceeds of such sale) shall comply with Section 4.06 of
the Indenture. At the request of the Issuers, the Trustee shall execute and
deliver an appropriate instrument evidencing such release.
c. Successors and Assigns. This Supplemental Indenture shall be
-----------------------
binding upon the New Guarantor and its successors and assigns and shall
inure 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 the Indenture, this Supplemental Indenture and in the Securities shall
automatically extend to and
5
be vested in such transferee or assignee, all subject to the terms and
conditions of the Indenture and this Supplemental Indenture.
d. 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 Supplemental Indenture 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 Supplemental Indenture at law, in equity,
by statute or otherwise.
e. Modification. No modification, amendment or waiver of any
-------------
provision of this Supplemental Indenture, nor the consent to any departure
by the New Guarantor 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 the New Guarantor in any
case shall entitle the New Guarantor to any other or further notice or
demand in the same, similar or other circumstances.
2. Ratification of Indenture; Supplemental Indentures Part of
----------------------------------------------------------
Indenture. Except as expressly amended hereby, the Indenture is in all respects
----------
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby.
3. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY,
--------------
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
4. Jurisdiction. The New Guarantor agrees that any suit, action or
-------------
proceeding against the New Guarantor brought by any Holder or the Trustee
arising out of or based upon the Indenture, this Supplemental Indenture or the
Securities may be instituted in any state or U.S. federal court in the Borough
of Manhattan, The City of New York, New York, and any appellate court from any
thereof, and it irrevocably submits to the non-exclusive jurisdiction of such
courts in any suit, action or proceeding. The New Guarantor irrevocably waives,
to the fullest extent permitted by law, any objection to any suit, action, or
proceeding that may be brought in connection with the Indenture, this
Supplemental Indenture or the Securities, including such actions, suits or
proceedings relating to securities laws of the United States 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
6
or proceeding has been brought in an inconvenient forum. The New Guarantor
agrees that final judgment in any such suit, action or proceeding brought in
such court shall be conclusive and binding upon the New Guarantor and may be
enforced in any court to the jurisdiction of which the New Guarantor is subject
by a suit upon such judgment; provided that service of process is effected upon
--------
the New Guarantor in the manner provided by this Section 4. The New Guarantor
has irrevocably appointed CT Corporation System, with offices on the date hereof
at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized agent (the
"Authorized Agent"), upon whom process may be served in any suit, action or
proceeding arising out of or based upon the Indenture, this Supplemental
Indenture, the Securities or the transactions contemplated herein which may be
instituted in any state or U.S. federal court in the Borough of Manhattan, The
City of New York, New York, by any Holder or the Trustee, and expressly accepts
the non-exclusive jurisdiction of any such court in respect of any such suit,
action or proceeding. The New Guarantor hereby represents and warrants that the
Authorized Agent has accepted such appointment and has agreed to act as said
agent for service of process, and the New Guarantor agrees to take any and all
action, including the filing of any and all documents that may be necessary to
continue such respective appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent shall be deemed, in every respect,
effective service of process upon the New Guarantor. Notwithstanding the
foregoing, any action involving the New Guarantor arising out of or based upon
the Indenture, this Supplemental Indenture or the Securities may be instituted
by any Holder or the Trustee in any court of competent jurisdiction in any other
jurisdiction.
5. Trustee Makes No Representation. The Trustee makes no
--------------------------------
representation as to the validity or sufficiency of this Supplemental Indenture.
6. Counterparts. The parties may sign any number of copies of this
-------------
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
7. Effect of Headings. The Section headings herein are for
-------------------
convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR],
by
_________________________________
Name:
Title:
THE DERBY CYCLE CORPORATION,
by
_________________________________
Name:
Title:
LYON INVESTMENTS B.V.,
by
_________________________________
Name:
Title:
[EXISTING GUARANTORS],
by________________________________
Name:
Title:
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Trustee,
by
_________________________________
Name:
Title:
EXHIBIT D
Form of
Transferee Letter of Representation
The Derby Cycle Corporation
Lyon Investments B.V.
In care of
IBJ Xxxxxxxx Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $_______ principal
amount of the 10% Senior Notes due 2008 (the "Securities") of The Derby Cycle
Corporation, a Delaware corporation, and Lyon Investments B.V. (together, the
"Issuers").
Upon transfer, the Securities would be registered in the name of the new
beneficial owner as follows:
Name:________________________
Address:_____________________
Taxpayer ID Number:__________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We, and any accounts for which we are acting, are each
able to bear the economic risk of our or its investment.
2
2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Securities to offer, sell or
otherwise transfer such Securities prior to the date that is two years after the
later of the date of original issue and the last date on which the Issuers or
any affiliate of the Issuers was the owner of such Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date") only (a) to the
Issuers, (b) pursuant to a registration statement that has been declared
effective under the Securities Act, (c) in a transaction complying with the
requirements of Rule 144A under the Securities Act ("Rule 144A"), to a person we
reasonably believe is a qualified institutional buyer under Rule 144A (a "QIB")
that is purchasing for its own account or for the account of a QIB and to whom
notice is given that the transfer is being made in reliance on Rule 144A, (d) in
an offshore transaction within the meaning of, and in compliance with,
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of such
an institutional "accredited investor," in each case in a minimum principal
amount of Securities of $250,000, or (f) pursuant to any other available
exemption from the registration requirements of the Securities Act, subject in
each of the foregoing cases to any requirement of law that the disposition of
our property or the property of such investor account or accounts be at all
times within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale shall not apply
subsequent to the Resale Restriction Termination Date. If any resale or other
transfer of the Securities is proposed to be made pursuant to clause (e) above
prior to the Resale Restriction Termination Date, the transferor shall deliver a
letter from the transferee substantially in the form of this letter to the
Issuers and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such Securities for investment purposes and not for distribution in violation of
the Securities Act. Each purchaser acknowledges that the Issuers and the
Trustee reserve the right prior to the offer, sale or other transfer prior to
the Resale Restriction Termination Date of the Securities pursuant to clause
(d), (e) or (f) above to require the delivery of an opinion of counsel,
certifications or other information satisfactory to the Issuers and the Trustee.
TRANSFEREE:_________________,
by _______________________
