EXHIBIT 4.1
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PRESTOLITE ELECTRIC INCORPORATED,
Issuer
PEI HOLDING, INC.,
Parent Guarantor
9-5/8% Senior Notes Due 2008
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INDENTURE
Dated as of January 22, 1998
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First Trust National Association,
Trustee
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1)................................................... 7.10
(a)(2)................................................... 7.10
(a)(3)................................................... N.A.
(a)(4)................................................... N.A.
(b)...................................................... 7.8; 7.10
(c)...................................................... N.A.
311(a)...................................................... 7.11
(b)...................................................... 7.11
(c)...................................................... N.A.
312(a)...................................................... 2.5
(b)...................................................... 11.3
(c)...................................................... 11.3
313(a)...................................................... 7.6
(b)(1)................................................... N.A.
(b)(2)................................................... 7.6
(c)...................................................... 7.6
(d)...................................................... 7.6
314(a)...................................................... 4.2
4.15; 11.2
(b)...................................................... N.A.
(c)(1)................................................... 11.4
(c)(2)................................................... 11.4
(c)(3)................................................... N.A.
(d)...................................................... N.A.
(e)...................................................... 11.5
(f)...................................................... 4.13
315(a)...................................................... 7.1
(b)...................................................... 7.5; 11.2
(c)...................................................... 7.1
(d)...................................................... 7.1
(e)...................................................... 6.11
316(a)(last sentence)....................................... 11.6
(a)(1)(A)................................................ 6.5
(a)(1)(B)................................................ 6.4
(a)(2)................................................... N.A.
(b)...................................................... 6.7
317(a)(1)................................................... 6.8
(a)(2)................................................... 6.9
(b)...................................................... 2.4
318(a)...................................................... 11.1
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
TABLE OF CONTENTS
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ARTICLE I
Definitions and Incorporation by Reference........ 1
SECTION 1.1. Definitions....................................... 1
SECTION 1.2. Other Definitions................................. 23
SECTION 1.3. Incorporation by Reference of Trust
Indenture Act..................................... 24
SECTION 1.4. Rules of Construction............................. 24
SECTION 1.5. One Class of Securities........................... 25
ARTICLE II
The Securities.................................... 25
SECTION 2.1. Form and Dating................................... 25
SECTION 2.2. Execution and Authentication...................... 25
SECTION 2.3. Registrar and Paying Agent........................ 26
SECTION 2.4. Paying Agent To Hold Money in Trust............... 26
SECTION 2.5. Securityholder Lists.............................. 27
SECTION 2.6. [Intentionally Omitted]........................... 27
SECTION 2.7. Replacement Securities............................ 27
SECTION 2.8. Outstanding Securities............................ 27
SECTION 2.9. Temporary Securities.............................. 28
SECTION 2.10. Cancellation..................................... 28
SECTION 2.11. Defaulted Interest............................... 28
SECTION 2.12. CUSIP Numbers.................................... 29
ARTICLE III
Redemption........................................ 29
SECTION 3.1. Notices to Trustee................................ 29
SECTION 3.2. Selection of Securities To Be Redeemed............ 29
SECTION 3.3. Notice of Redemption.............................. 30
SECTION 3.4. Effect of Notice of Redemption.................... 30
SECTION 3.5. Deposit of Redemption Price....................... 31
SECTION 3.6. Securities Redeemed in Part....................... 31
ARTICLE IV
Covenants......................................... 31
SECTION 4.1. Payment of Securities............................. 31
SECTION 4.2. SEC Reports....................................... 32
SECTION 4.3. Limitation on Indebtedness........................ 32
SECTION 4.4. Limitation on Indebtedness and Preferred
Stock of Restricted Subsidiaries.................. 34
SECTION 4.5. Limitation on Restricted Payments................. 36
SECTION 4.6. Limitation on Restrictions on
Distributions from Restricted Subsidiaries........ 39
SECTION 4.7. Limitation on Sale of Assets and
Subsidiary Stock.................................. 40
SECTION 4.8. Limitation on Transactions With
Affiliates........................................ 44
SECTION 4.9. Change of Control................................. 45
SECTION 4.10. Limitation on Sale or Issuance of
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Capital Stock of Restricted Subsidiaries............... 47
SECTION 4.11. Limitation on Liens.................................... 47
SECTION 4.12. Limitation on Sale/Leaseback
Transactions........................................... 47
SECTION 4.13. Limitation on Business Activities and
Investments of the Guarantor and Existing Non-
Company Guarantor Subsidiaries......................... 48
SECTION 4.14. Compliance Certificate................................. 48
SECTION 4.15. Further Instruments and Acts........................... 49
SECTION 4.16. Maintenance of Office or Agency........................ 49
SECTION 4.17. Corporate Existence.................................... 49
SECTION 4.18. Payment of Taxes and Other Claims...................... 49
SECTION 4.19. Maintenance of Properties and Insurance................ 50
ARTICLE V
Successor Company....................................... 50
SECTION 5.1. When the Company May Merge or Transfer Assets........... 50
ARTICLE VI
Defaults and Remedies................................... 51
SECTION 6.1. Events of Default....................................... 51
SECTION 6.2. Acceleration............................................ 54
SECTION 6.3. Other Remedies.......................................... 54
SECTION 6.4. Waiver of Past Defaults................................. 54
SECTION 6.5. Control by Majority..................................... 54
SECTION 6.6. Limitation on Suits..................................... 55
SECTION 6.7. Rights of Holders To Receive Payment.................... 55
SECTION 6.8. Collection Suit by Trustee.............................. 55
SECTION 6.9. Trustee May File Proofs of Claim........................ 56
SECTION 6.10. Priorities............................................. 56
SECTION 6.11. Undertaking for Costs.................................. 56
SECTION 6.12. Waiver of Stay or Extension Laws....................... 57
ARTICLE VII
Trustee................................................. 57
SECTION 7.1. Duties of Trustee....................................... 57
SECTION 7.2. Rights of Trustee....................................... 58
SECTION 7.3. Individual Rights of Trustee............................ 59
SECTION 7.4. Trustee's Disclaimer.................................... 59
SECTION 7.5. Notice of Defaults...................................... 59
SECTION 7.6. Reports by Trustee to Holders........................... 59
SECTION 7.7. Compensation and Indemnity.............................. 60
SECTION 7.8. Replacement of Trustee.................................. 61
SECTION 7.9. Successor Trustee by Merger............................. 62
SECTION 7.10. Eligibility; Disqualification.......................... 62
SECTION 7.11. Preferential Collection of Claims
Against Company........................................ 62
ARTICLE VIII
Discharge of Indenture; Defeasance.................... 62
SECTION 8.1. Discharge of Liability on Securities;
Defeasance.............................................. 62
SECTION 8.2. Conditions to Defeasance................................ 64
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SECTION 8.3. Application of Trust Money.............................. 65
SECTION 8.4. Repayment to Company.................................... 65
SECTION 8.5. Indemnity for Government Obligations.................... 65
SECTION 8.6. Reinstatement........................................... 65
ARTICLE IX
Amendments.............................................. 66
SECTION 9.1. Without Consent of Holders.............................. 66
SECTION 9.2. With Consent of Holders................................. 67
SECTION 9.3. Compliance with Trust Indenture Act..................... 68
SECTION 9.4. Revocation and Effect of Consents and
Waivers................................................. 68
SECTION 9.5. Notation on or Exchange of Securities................... 68
SECTION 9.6. Trustee To Sign Amendments.............................. 68
SECTION 9.7. Payment for Consent..................................... 68
ARTICLE X
PEI Guarantee.......................................... 69
SECTION 10.1. PEI Guarantee.......................................... 69
SECTION 10.2. Limitation on Liability................................ 71
SECTION 10.3. Successors and Assigns................................. 71
SECTION 10.4. No Waiver.............................................. 71
SECTION 10.5. Modification........................................... 71
ARTICLE XI
Miscellaneous.......................................... 72
SECTION 11.1. Trust Indenture Act Controls........................... 72
SECTION 11.2. Notices................................................ 72
SECTION 11.3. Communication by Holders with other
Holders................................................ 73
SECTION 11.4. Certificate and Opinion as to Conditions
Precedent.............................................. 73
SECTION 11.5. Statements Required in Certificate or
Opinion................................................ 73
SECTION 11.6. When Securities Disregarded............................ 74
SECTION 11.7. Rules by Trustee, Paying Agent and
Registrar.............................................. 74
SECTION 11.8. Legal Holidays......................................... 74
SECTION 11.9. Governing Law.......................................... 74
SECTION 11.10. No Recourse Against Others............................ 74
SECTION 11.11. Successors............................................ 74
SECTION 11.12. Multiple Originals.................................... 74
SECTION 11.13. Variable Provisions................................... 75
SECTION 11.14. Qualification of Indenture............................ 75
SECTION 11.15. Table of Contents; Headings........................... 75
Rule 144A/Regulation S Appendix
Exhibit 1 to Appendix - Form of Initial Security
Exhibit A - Form of Exchange Security and Private Exchange Security
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INDENTURE dated as of January 22, 1998, among PRESTOLITE ELECTRIC
INCORPORATED, a Delaware corporation (as further defined below, the
"Company"), PEI HOLDING, INC., the Company's Parent Corproation (the
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Guarantor), and FIRST TRUST NATIONAL ASSOCIATION, a national banking
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association, as trustee (the "Trustee ").
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Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's 9-5/8% Senior
Notes Due 2008 (the "Initial Securities") and, if and when issued in exchange
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for Initial Securities as provided in the Registration Rights Agreement (as
hereinafter defined), the Company's Series B 9-5/8% Senior Notes Due 2008 (the
"Exchange Securities") and if and when issued pursuant to a private exchange for
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Initial Securities, the Company's Series C 9-5/8% Senior Notes Due 2008 (the
"Private Exchange Securities"):
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ARTICLE I
Definitions and Incorporation by Reference
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SECTION 1.1. Definitions.
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"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; (ii) the Capital Stock of
a Person that becomes a Wholly Owned Restricted Subsidiary as a result of the
acquisition of such Capital Stock by the Company or another Wholly Owned
Restricted Subsidiary; (iii) shares of Capital Stock of a Person that becomes a
Non-U.S./U.K. Subsidiary as a result of the acquisition of such Capital Stock by
the Company or a Wholly Owned Restricted Subsidiary; or (iv) Capital Stock
constituting a minority interest in any Person that at such time is a Restricted
Subsidiary; provided, however, that, in the case of clauses (ii), (iii) and
(iv), such Restricted Subsidiary is primarily engaged in a Related Business.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing;
provided that for purposes of the covenants in this Indenture, "Affiliate" shall
also mean any beneficial owner of Capital Stock representing 10% or more of the
total voting power of the Voting Stock (on a fully diluted basis) of the Company
or of rights or warrants to purchase such 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.
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"Argentina Credit Facility" means one or more credit facilities to be
entered into on or after the Issue Date among one or more of Xxxxx Argentina or
any other Non-U.S./U.K. Subsidiary having more than 66-2/3% of its tangible
assets located in Argentina or Brazil and the lenders from time to time party
thereto, including any collateral documents, instruments and agreements executed
in connection therewith, and the term Argentina Credit Facility shall also
include any amendments, supplements, modifications, extensions, renewals,
restatements or refundings thereof and any credit facilities that replace,
refund or refinance any part of the loans, other credit facilities or
commitments thereunder, including any such replacement, refunding or refinancing
facility that increases the amount borrowable thereunder or alters the maturity
thereof.
"Asset Disposition" means any sale, lease, transfer or other disposition
(or series of related sales, leases, transfers or dispositions) by the Company
or any Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the purposes of this
definition as a "disposition"), of (i) any shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares or similar shares
or shares required by applicable law to be held by a Person other than the
Company or a Restricted Subsidiary or issuances of shares permitted under
Section 4.10), (ii) all or substantially all the assets of any division or line
of business of the Company or any Restricted Subsidiary or (iii) any other
assets of the Company or any Restricted Subsidiary outside of the ordinary
course of business of the Company or such Restricted Subsidiary (other than, in
the case of (i), (ii) and (iii) above, (v) a pledge, sale or transfer of title
of receivables in connection with a Permitted Lien described in clause (l) of
the definition thereof, (w) a disposition of obsolete or worn-out assets, (x) a
disposition by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Wholly Owned Subsidiary, (y) for purposes of Section
4.7 only, a disposition that constitutes a Restricted Payment permitted by
Section 4.5 and (z) disposition of assets with a fair market value of less than
$500,000).
"Attributable Indebtedness" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"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 product 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
3
Stock multiplied by the amount of such payment by (ii) the sum of all such
payments.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee thereof duly authorized to act on
behalf of such Board of Directors.
"Business Day" means a day other than a Saturday, Sunday or other day on
which banking institutions in New York City are authorized or required by law to
close.
"Capitalized Lease Obligation" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"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.
"Change of Control" means the occurrence of any of the following events:
(i) prior to the first public offering of Common Stock of the
Guarantor or the Company, the Permitted Holders cease to be the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of a majority in the aggregate of the total voting
power of the Voting Stock of the Company, whether as a result of issuance
of securities of the Guarantor or the Company, any merger, consolidation,
liquidation or dissolution of the Guarantor or the Company, any direct or
indirect transfer of securities by the Guarantor or the Company 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 a
corporation (the "specified corporation") held by any other corporation
(the "parent corporation") 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 corporation);
(ii) subsequent to the first public offering of common stock
of the Guarantor or the Company, (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) directly or indirectly, of more than 35% of the total voting
power of the Voting Stock of the Company and (B) the Permitted Holders
"beneficially own" (as defined in
4
clause (i) above), directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the Voting Stock of the Company
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 the Company (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 clause (i) above),
directly or indirectly, of 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); provided, however,
that a Person shall not be deemed the "beneficial owner" of shares tendered
pursuant to a tender or exchange offer made by such Person or any Affiliate
of such Person until the tendered shares are accepted for purchase or
exchange;
(iii) during any period of two consecutive years (or, in the
case this event occurs within the first two years after the Issue Date,
such shorter period as shall have begun on the Issue Date), individuals who
at the beginning of such period constituted the Board of Directors of the
Guarantor or the Company (together with any new directors whose election by
such Board of Directors or whose nomination for election by the
shareholders of the Guarantor or the Company was approved by a vote of
66 2\3% of the directors of the Guarantor or the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors of the
Guarantor or the Company then in office; or
(iv) the merger or consolidation of the Guarantor or the
Company with or into another Person or the merger of another Person with or
into the Guarantor or the Company, or the sale of all or substantially all
the assets of the Guarantor or the Company 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 the Guarantor or the
Company that are outstanding immediately prior to such transaction and
which represent 100% of the aggregate voting power of the Voting Stock of
the Guarantor or the Company are changed into or
5
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 corporation that
represent immediately after such transaction, at least a majority of the
aggregate voting power of the Voting Stock of the surviving corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"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 ending prior to the date of such
determination for which financial statements are available to (ii) Consolidated
Interest Expense for such four fiscal quarters; provided, however, that (1) if
the Company or any Restricted Subsidiary has Incurred any Indebtedness since the
beginning of such period that remains outstanding or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence
of Indebtedness, or both, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
period, (2) if the Company or any Restricted Subsidiary has repaid, repurchased,
defeased or otherwise discharged any Indebtedness since the beginning of such
period or if any Indebtedness is to be repaid, repurchased, defeased or
otherwise discharged (in each case other than Indebtedness Incurred under any
revolving credit facility unless such Indebtedness has been permanently repaid
and has not been replaced) on the date of the transaction giving rise to the
need to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated
Interest Expense for such period shall be calculated on a pro forma basis as if
such discharge had occurred on the first day of such period and as if the
Company or such Restricted Subsidiary has not earned the interest income
actually earned during such period in respect of cash or Temporary Cash
Investments used to repay, repurchase, defease or otherwise discharge such
Indebtedness, (3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition or if the
transaction giving rise to the need to calculate the Consolidated Coverage Ratio
is an Asset Disposition, the EBITDA for such period shall be reduced by an
amount equal to the EBITDA (if positive) directly attributable to the assets
which are the subject of such Asset Disposition for such period, or increased by
an amount equal to 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 the Company or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the Company and
its continuing Restricted Subsidiaries in connection with such Asset Disposition
for such
6
period (or, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale), (4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an Investment in
any Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary)
or an acquisition of assets, including any acquisition of assets occurring in
connection with a transaction requiring a calculation to be made hereunder,
which constitutes all or substantially all of an operating unit of a business,
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto (including the Incurrence of any
Indebtedness) as if such Investment or acquisition occurred on the first day of
such period and (5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period) shall
have made any Asset Disposition, any Investment or acquisition of assets that
would have required an adjustment pursuant to clause (3) or (4) above if made by
the Company or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto as if such Asset Disposition, Investment or acquisition
of assets occurred on the first day of such period. For purposes of this
definition, whenever pro forma effect is to be given to an acquisition of
assets, 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 the Company. 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 in excess
of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent Incurred by the Company or its Restricted Subsidiaries, without
duplication, (i) interest expense attributable to Capitalized Lease Obligations
and to leases constituting part of a Sale/Leaseback Transaction, (ii)
amortization of debt discount and debt issuance cost, (iii) capitalized
interest, (iv) non-cash interest expense, (v) commissions and discounts owed
with respect to letters of credit and bankers' acceptance financing, (vi) net
costs associated with Hedging Obligations (including amortization of fees),
(vii) Preferred Stock dividends in respect of all Preferred Stock of
7
the Company and its Subsidiaries held by Persons other than the Company or a
Wholly Owned Subsidiary, (viii) interest incurred in connection with Investments
in discontinued operations, (ix) interest accruing on any Indebtedness of any
other Person to the extent such Indebtedness is Guaranteed by (or secured by the
assets of) the Company or any Restricted Subsidiary and (x) the cash
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any Person (other than the Company) in connection with Indebtedness Incurred
by such plan or trust.
"Consolidated Net Income" means, for any period, the net income (loss)
of the Company and its consolidated Subsidiaries; provided, however, that there
shall not be included in such Consolidated Net Income:
(i) any net income (loss) of any Person (other than the Company) if
such Person is not a Restricted Subsidiary, except that (A), subject to the
exclusion contained in clause (iv) below, the Company's equity in the net
income of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the
case of a dividend or other distribution paid to a Restricted Subsidiary,
to the limitations contained in clause (iii) below) and (B) the Company's
equity in a net loss of any such Person for such period shall be included
in determining such Consolidated Net Income;
(ii) any net income (loss) of any Person acquired by the Company or
a Subsidiary in a pooling of interests transaction for any period prior to
the date of such acquisition;
(iii) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that (A),
subject to the exclusion contained in clause (iv) below, the Company's
equity in the net income of any such Restricted Subsidiary for such period
shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by such Restricted Subsidiary during
such period to the Company or another Restricted Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other
distribution paid to another Restricted Subsidiary, to the limitation
contained in this clause) and (B) the Company's equity in a net loss of any
such Restricted Subsidiary for such period shall be included in determining
such Consolidated Net Income;
8
(iv) any gain or loss realized upon the sale or other disposition of
any assets of the Company, its consolidated Subsidiaries or any
other Person (including pursuant to any Sale/Leaseback
Transaction) which is not sold or otherwise disposed of in the
ordinary course of business and any gain or loss realized upon
the sale or other disposition of any Capital Stock of any
Person;
(v) any extraordinary gain or loss; and
(vi) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of Section 4.5 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 the Company or a Restricted Subsidiary to the extent such dividends,
repayments or transfers increase the amount of Restricted Payments permitted
under Section 4.5(a)(3)(D).
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending prior to the taking of any action for the
purpose of which the determination is being made for which financial statements
are available, as (i) the par or stated value of all outstanding Capital Stock
of the Company 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.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect such Person against fluctuations in currency values as to
which such Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"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 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 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 any Capital Stock
that would not constitute Disqualified Stock but for provisions
9
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 described in
Sections 4.7 and 4.9.
"EBITDA" for any period means the sum of Consolidated Net Income, plus the
following to the extent deducted in calculating such Consolidated Net Income:
(a) Consolidated Interest Expense, (b) all income tax expense of the Company and
its consolidated Restricted Subsidiaries, (c) depreciation expense of the
Company and its consolidated Restricted Subsidiaries, (d) amortization expense
of the Company and its consolidated Restricted Subsidiaries (excluding
amortization expense attributable to a prepaid cash item that was paid in a
prior period) and (e) all other non-cash charges of the Company and its
consolidated Restricted Subsidiaries (excluding any such non-cash charge to the
extent that it represents an accrual of or reserve for cash expenditures in any
future period), in each case for such period. Notwithstanding the foregoing, the
provision for taxes based on the income or profits of, and the depreciation and
amortization and non-cash charges of, a Restricted Subsidiary shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income of such Restricted Subsidiary was included in
calculating Consolidated Net Income and only if a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Non-Company Guarantor Subsidiaries" means, collectively, PEI
1998 LLC, a Delaware limited liability company, Prestolite International Sales
Corporation, a Delaware corporation, Prestolite Electric of Michigan,
Incorporated, a Delaware corporation, Megatron Industries Incorporated, a
Delaware corporation, Xxxxx-Xxxxxxx Corporation, a Delaware corporation, and
Beech Electric Corporation, a Delaware corporation.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in (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)
10
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 SEC
governing the inclusion of financial statements (including pro forma financial
statements) in periodic reports required to be filed pursuant to Section 13 of
the Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the SEC.
All ratios and computations based on GAAP contained in this Indenture shall be
computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation of such Person (whether arising by virtue
of partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be incurred by such
Subsidiary at the time it becomes a Subsidiary. The term "Incurrence" when used
as a noun shall have 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 in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable, including, in each case, any premium
11
on such indebtedness to the extent such premium has become due and payable;
(ii) all Capitalized Lease Obligations of such Person and all
Attributable Indebtedness in respect of Sale/Leaseback Transactions entered
into by such Person;
(iii) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations of
such Person and all obligations of such Person under any title retention
agreement (but excluding Trade Payables arising in the ordinary course of
business);
(iv) all obligations of such Person for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit
securing obligations (other than obligations described in clauses (i)
through (iii) above) entered into in the ordinary course of business of
such Person to the extent such letters of credit are not drawn upon or, if
and to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following receipt by such Person of a demand for
reimbursement following a payment on the letter of credit);
(v) 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, the liquidation
preference with respect to, any Preferred Stock (but excluding, in each
case, any accrued dividends);
(vi) all obligations of the type referred to in clauses (i)
through (v) 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;
(vii) all obligations of the type referred to in clauses (i)
through (vi) of other Persons secured by any Lien on any property or asset
of such Person (whether or not such obligation is assumed by such Person),
the amount of such obligation being deemed to be the lesser of the value of
such property or assets or the amount of the obligation so secured; and
(viii) to the extent not otherwise included in this definition,
net Hedging Obligations of such Person.
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
12
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date; provided, however, that the amount
outstanding at any time of any Indebtedness Incurred with original issue
discount is the face amount of such Indebtedness less the remaining unamortized
portion of the original issue discount of such Indebtedness at such time as
determined in conformity with GAAP.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"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 designed to protect such Person against
fluctuations in interest rates as to which such Person is party or 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 such Person) or other
extension of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definitions of
"Unrestricted Subsidiary" and "Restricted Payment" and Section 4.5, (i)
"Investment" shall include the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of any
Subsidiary of the Company at the time that such Subsidiary is designated an
Unrestricted Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent "Investment" in an Unrestricted Subsidiary equal to an
amount (if positive) equal to (x) the Company's "Investment" in such Subsidiary
at the time of such redesignation less (y) the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of such Subsidiary at the time that such Subsidiary is so re-
designated a Restricted Subsidiary; 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 and evidenced by a resolution of such Board of Directors of the
Company certified in an Officers' Certificate to the Trustee.
"Issue Date" means the date on which the Initial Securities are
originally issued.
13
"Legal Holiday" has the meaning ascribed in Section 11.8.
"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).
"Xxxxx Acquisition" means the acquisition of certain power conversion
and related businesses of Xxxxx Industries plc, as described in the Offering
Circular dated January 16, 1998 relating to the Initial Securities.
"Xxxxx Argentina" means, collectively, Xxxxx Indiel Argentina S.A., an
Argentine corporation, Prestolite Newco, Inc., a Delaware corporation, and Xxxxx
Argentine Holdings Inc., a Delaware corporation, or any successor entity to
either or any of the foregoing.
"Xxxxx Argentina Option" means the right of the Company to acquire,
directly or indirectly, all of the shares of Capital Stock of Xxxxx Argentina
not owned, directly or indirectly, by the Company as of the Issue Date, other
than approximately 1% of the outstanding shares of Capital Stock of Xxxxx
Argentina, for an aggregate purchase price not to exceed 1.23 million Argentine
Pesos.
"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 other disposition of any securities received as consideration,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to such properties or assets or received in any other non-
cash form) therefrom, in each case net of (i) all legal, title and recording tax
expenses, commissions and other fees and expenses incurred, and all Federal,
state, provincial, foreign and local taxes required to be paid or accrued as a
liability under 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 arrangement 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 Restricted Subsidiaries or joint ventures as a result of
such Asset Disposition and (iv) the deduction of appropriate amounts to be
provided by the seller as a reserve, in accordance with GAAP, against any
liabilities associated with the assets disposed of in such Asset Disposition
14
and retained by the Company or any Restricted Subsidiary after such Asset
Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, 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.
"New U.S. Credit Facility" means that certain credit facility to be
entered into on the Issue Date among the Company and the lenders from time to
time party thereto, including any collateral documents, instruments and
agreements executed in connection therewith, and the term New U.S. Credit
Facility shall also include any amendments, supplements, modifications,
extensions, renewals, restatements or refundings thereof and any credit
facilities or agreements that replace, refund or refinance any part of the
loans, other credit facilities or commitments thereunder, including any such
replacement, refunding or refinancing facility that increases the amount
borrowable thereunder or alters the maturity thereof.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any Restricted Subsidiary (a) provides any Guarantee or credit
support of any kind (including any undertaking, Guarantee, indemnity, agreement
or instrument that would constitute Indebtedness) or (b) is directly or
indirectly liable (as a guarantor or otherwise) 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 the
Company or any Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"Non-U.S./U.K. Subsidiary" means any Restricted Subsidiary of the
Company having more than 66 2/3% of its tangible assets located in one or
more jurisdictions outside of the United States or the United Kingdom.
"Offering Circular" means the Offering Circular dated January 16, 1998
relating to the Initial Securities; provided that after the issuance of Exchange
Securities, all references herein to "Offering Circular" shall be deemed
references to the prospectus contained in the registration statement relating to
the Exchange Securities.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company, as applicable.
15
"Officers' Certificate" means a certificate signed by any two
Officers.
"Opinion of Counsel" means a written opinion from Xxxxxxx, Phleger &
Xxxxxxxx L.L.P., Hooper, Hathaway, Price, Beuche & Xxxxxxx or any other legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee.
"PEI Guarantee" means the guarantee of the Securities by the
Guarantor.
"Permitted Holders" means Genstar Capital Corporation, its Affiliates
and its stockholders and the Company's executive officers as of the Issue Date.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) the Company, a Restricted Subsidiary or a Person
which will, upon the making of such Investment, become a Restricted Subsidiary;
provided, however, that the primary business of such Restricted Subsidiary is a
Related Business; (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, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related Business;
(iii) Temporary Cash Investments; (iv) receivables owing to the Company or any
Restricted Subsidiary, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances; (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 practice of the Company or such Restricted Subsidiary;
(vii) stock, obligations or securities received in settlement of debts created
in the ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments; (viii) any Person (including a joint
venture) to the extent such investment represents the non-cash portion of the
consideration received for an Asset Disposition as permitted pursuant to Section
4.7; (ix) Xxxxx Argentina in connection with the exercise by the Company of the
Xxxxx Argentina Option; (x) joint ventures in Related Businesses made in
exchange for or conversion of Investments existing on the Issue Date in other
joint ventures in Related Businesses; and (xi) joint ventures in an aggregate
amount at any one time outstanding not to exceed $10.0 million, provided that
such joint ventures are engaged in a Related Business.
16
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases
to which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits or cash or United States government bonds
to secure surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in
each case incurred in the ordinary course of business; (b) Liens imposed by law,
such as carriers', warehousemen's and mechanics' Liens, in each case for sums
not yet due or being contested in good faith by appropriate proceeding 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; (c) Liens for property taxes not yet subject to penalties for non-
payment, which are being contested in good faith by appropriate proceedings or
with respect to which adequate reserves have been recorded in accordance with
GAAP; (d) 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; (e) survey exceptions, 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 properties or liens
incidental to the conduct of the business of such Person or to the ownership of
its properties; (f) Liens securing Hedging Obligations so long as the related
Indebtedness is, and is permitted to be under this Indenture, secured by a Lien
on the same property securing such Hedging Obligations; (g) leases and subleases
of real property which do not interfere with the ordinary conduct of the
business of the Company or any of its Restricted Subsidiaries, and which are
made on customary and usual terms applicable to similar properties; (h) Liens
existing as of the Issue Date and Liens created by this Indenture; (i) Liens
created solely for the purpose of securing the payment of all or a part of the
purchase price of assets or property acquired or constructed in the ordinary
course of business after the date on which the Securities are originally issued;
provided, however, that (A) the aggregate principal amount of Indebtedness
secured by such Liens shall not exceed the lesser of cost or fair market value
of the assets or property so acquired or constructed, (B) the Indebtedness
secured by such Liens shall have otherwise been permitted to be issued under
this Indenture and (C) such Liens shall not encumber any other assets or
property of the Company or any of its Restricted Subsidiaries and shall attach
to such assets or property within 180 days of the construction or acquisition of
such assets or property; (j) Liens on the assets or property of a Restricted
Subsidiary of the Company existing at the time such Restricted Subsidiary became
a Subsidiary of the Company and not incurred as a result of (or in connection
with or in anticipation of) such Restricted Subsidiary
17
becoming a Subsidiary of the Company; provided, however, that (A) any such Lien
does not by its terms cover any property or assets after the time such
Restricted Subsidiary becomes a Subsidiary which were not covered immediately
prior to such transaction, (B) the incurrence of the Indebtedness secured by
such Lien shall have otherwise been permitted to be issued under this Indenture,
and (C) such Liens do not extend to or cover any other property or assets of the
Company or any of its Restricted Subsidiaries; (k) Liens to secure Capitalized
Lease Obligations permitted to be Incurred under this Indenture; (l) Liens on
accounts receivable, inventory and general intangibles securing Indebtedness
outstanding or committed under the New U.S. Credit Facility and the South Africa
Credit Facility and Liens securing Indebtedness outstanding or committed under
the Argentina Credit Facility and the U.K. Credit Facility; (m) Liens extending,
renewing or replacing in whole or in part a Lien permitted by this Indenture;
provided, however, that (A) such Liens do not extend beyond the property subject
to the existing Lien and improvements and construction on such property and (B)
the Indebtedness secured by the Lien may not exceed the Indebtedness secured at
the time by the existing Lien; (n) Liens on inventory deemed to arise by reason
of the consignment of inventory in the ordinary course of business of the
Company and its Restricted Subsidiaries; and (o) Liens on the assets or property
of a Restricted Subsidiary of the Company to secure Indebtedness of such
Restricted Subsidiary owing to and held by the Company.
"Person" means any individual, corporation, partnership joint venture,
association, joint-stock company, trust, limited liability company,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"Principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time; provided, however, that for purposes of calculating
any such premium, the term "principal" shall not include the premium with
respect to which such calculation is being made.
"Public Equity Offering" means an underwritten primary public offering
of common stock of the Guarantor or the Company pursuant to an effective
registration statement under the Securities Act.
"Recapitalization" means any one or more of the following
transactions, any one or more of which may occur on or
18
following the Issue Date: (i) the payment of a dividend by the Company to
Guarantor; (ii) the making by the Guarantor of an Investment in a Wholly Owned
Subsidiary for the purpose of effecting a repurchase of the Capital Stock of the
Guarantor, (iii) the purchase by the Guarantor or such Wholly Owned Subsidiary
of shares of Capital Stock of the Guarantor from the holders thereof, (iv) the
purchase by the Guarantor of options or warrants to purchase shares of Capital
Stock of the Guarantor from the holders thereof, and/or (v) the payment by the
Guarantor of certain additional amounts to the holders of options to purchase
shares of Capital Stock of the Guarantor; provided, however, that the total of
the payments referred to in clauses (i) through (v), net of any amounts received
from the holders of such shares, options or warrants in connection with such
transactions, shall not exceed $30.1 million in the aggregate.
"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, and shall
include the Refinancing of multiple facilities with a single facility and the
Refinancing of a single facility with multiple facilities. 'Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture (including Indebtedness of
the Company that Refinances Indebtedness of any Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary that Refinances Indebtedness of
another Restricted Subsidiary) including Indebtedness 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 and (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 sum of the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding or
committed (plus fees and expenses, including any premium and defeasance costs)
under the Indebtedness being Refinanced; provided further, however, that
Refinancing Indebtedness shall not include (x) Indebtedness of a Subsidiary that
Refinances Indebtedness of the Company or (y) Indebtedness of the Company or a
Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary.
"Related Business" means any business related, ancillary or
complementary to the business of the Company and the Restricted Subsidiaries on
the date of this Indenture.
19
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving such Person) or similar payment to the direct
or indirect holders of its Capital Stock (other than dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock) and
dividends or distributions payable solely to the Company or a Restricted
Subsidiary, and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or
owners of an equivalent interest in the case of a Subsidiary that is an entity
other than a corporation)), (ii) the purchase, redemption or other acquisition
or retirement for value of any Capital Stock of the Company held by any Person
or of any Capital Stock of a Restricted Subsidiary held by any Person (other
than a Restricted Subsidiary), including the exercise of any option to exchange
any Capital Stock (other than into Capital Stock of the Company that is not
Disqualified Stock), (iii) the purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any Subordinated
Obligations (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) the making of any Investment in any
Person (other than a Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases such property from such Person.
"SEC" means the U.S. Securities and Exchange Commission, or any
successor agency.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
"Securities" means the Initial Securities, the Exchange Securities and
the Private Exchange Securities issued or to be issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means (i) Indebtedness of the Company, whether
outstanding on the Issue Date or thereafter
20
Incurred, and (ii) accrued and unpaid interest (including interest accruing on
or after the filing of any petition in bankruptcy or for reorganization relating
to the Company to the extent post-filing interest is allowed in such proceeding)
in respect of (A) indebtedness of the Company for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which the Company is responsible or liable unless, in the
case of (i) and (ii), in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is provided that such obligations
are subordinate in right of payment to the Company; provided, however, that
Senior Indebtedness shall not include (1) any obligation of the Company to any
Subsidiary, (2) any liability for Federal, state, local or other taxes owed or
owing by the Company, (3) any Trade Payables arising in the ordinary course of
business, (4) any Indebtedness of the Company (and any accrued and unpaid
interest respect thereof) which is subordinate or junior in any respect to any
other Indebtedness or other obligation of the Company, (5) that portion of any
Indebtedness which at the time of Incurrence is Incurred in violation of this
Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"South Africa Credit Facility" means one or more credit facilities to
be entered into on or after the Issue Date among Xxxxx Holdings South Africa
(Proprietary) Limited, or any successor entity, and the lenders from time to
time party thereto, including any collateral documents, instruments and
agreements executed in connection therewith, and the term South Africa Credit
Facility shall also include any amendments, supplements, modifications,
extensions, renewals, restatements or refundings thereof and any credit
facilities that replace, refund or refinance any part of the loans, other credit
facilities or commitments thereunder, including any such replacement, refunding
or refinancing facility that increases the amount borrowable thereunder or
alters the maturity thereof.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the 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 the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement.
21
"Subsidiary" of any Person means any corporation, association,
partnership, limited liability company 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 of America or any agency
thereof or obligations Guaranteed by the United States of America 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 company which is organized under the laws of
the United States of America, any state thereof or any foreign country
recognized by the United States of America having capital, surplus and undivided
profits aggregating in excess of $50.0 million (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) or any
money market fund sponsored by a registered broker dealer or mutual fund
distributor including those offered by the Trustee or an affiliate of the
Trustee, (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 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 a Company)
organized and in existence under the laws of the United States of America or any
foreign country recognized by the United States of America with a rating at the
time as of which any investment therein is made of "P-1" (or higher) according
to Xxxxx'x Investors Service, Inc. or "A-1" (or higher) according to Standard &
Poor's Ratings Group, (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 of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's Ratings Group or "A" by Xxxxx'x Investors Service, Inc.; and
(vi) investments in mutual funds, whose investment guidelines restrict such
funds' investments to investments which are substantially similar to those
described in clauses (i)-(v).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
------
77bbbb) as in effect on the date of this Indenture; provided, however, that, in
the event the Trust Indenture Act of 1939 is amended after such date, "TIA"
means, to the extent required by any such amendments, the Trust Indenture Act of
1939 as so amended.
22
"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 such successor.
"Trust Officer" means any trust officer, assistant vice president, or
vice president of the Trustee assigned by the Trustee to administer this
Indenture.
"U.K. Credit Facility" means one or more credit facilities to be
entered into or on or after the Issue Date among Prestolite Electric Limited, or
any successor entity, or any of its Wholly Owned Subsidiaries and the lenders
from time to time party thereto, including any collateral documents, instruments
and agreements executed in connection therewith, and the term U.K. Credit
Facility shall also include any amendments, supplements, modifications,
extensions, renewals, restatements or refundings thereof and any credit
facilities that replace, refund or refinance any part of the loans, other credit
facilities or commitments thereunder, including any such replacement, refunding
or refinancing facility that increases the amount borrowable thereunder or
alters the maturity thereof.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any other Subsidiary of the Company that
is not a Subsidiary of the Subsidiary to be so designated; provided, however,
that 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 4.5. The Board
of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such
designation (x) the Company could Incur $1.00 of additional Indebtedness under
Section 4.3(a) and (y) no Default shall have occurred and
23
be continuing. Any such designation by the Board of Directors shall be evidenced
to the Trustee by promptly filing with the Trustee a copy of the Board
Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership of interests) of such Person then outstanding
and normally entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers, or trustee thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the Company
all the Capital Stock of which (other than directors' qualifying shares or
similar shares and, in the case of a Non-U.S./U.K. Subsidiary, shares required
to be owned by citizens of such Subsidiary's jurisdiction of organization) is
owned by the Company or one or more other Wholly Owned Subsidiaries; provided
that, notwithstanding the foregoing, the term "Wholly Owned Subsidiary" shall be
deemed to include Xxxxx Argentina, unless the Company shall not have exercised
the Xxxxx Argentina Option prior to August 31, 1998.
SECTION I.2. Other Definitions.
-----------------
Defined in
Term Section
---- ----------
"Affiliate Transaction"....... 4.8
"Appendix".................... 2.1
"Authenticating Agent......... 2.2
"Bankruptcy Law".............. 6.1
"covenant defeasance option".. 8.1(b)
"Custodian"................... 6.1
"Event of Default"............ 6.1
"Exchange Transaction"........ 4.7(a)
"Guaranteed Obligations"...... 10.1
"legal defeasance option"..... 8.1(b)
"Offer"....................... 4.7(b)
"Offer Amount"................ 4.7(b)
"Offer Period"................ 4.7(b)
"Paying Agent"................ 2.3
"Purchase Date................ 4.7(b)
"Registrar"................... 2.3
"Successor Company"........... 5.1
24
SECTION 1.3. Incorporation by Reference of Trust Indenture Act. The
-------------------------------------------------
mandatory provisions of the TIA are incorporated by reference in and made a part
of this Indenture. The following TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the Guarantor
and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by the TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the context otherwise
---------------------
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation preference of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater; and
25
(9) all references to the date the Securities were originally issued
shall refer to the date the Initial Securities were originally issued.
SECTION 1.5. One Class of Securities. The Initial Securities, the
-----------------------
Private Exchange Securities and the Exchange Securities shall vote and consent
together on all matters as one class and none of the Initial Securities, the
Private Exchange Securities or the Exchange Securities shall have the right to
vote or consent as a separate class on any matter.
ARTICLE II
The Securities
--------------
SECTION 2.1. Form and Dating. Provisions relating to the Initial
---------------
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in the Rule 144A/Regulation S Appendix attached hereto (the "Appendix"),
--------
which is hereby incorporated in and expressly made a part of this Indenture.
The Initial Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to the Appendix, which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities, the Private Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is hereby
incorporated by reference and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, rule of
any securities exchange or over-the-counter market on which such Securities are
then listed or quoted, or usage, in addition to those set forth on the Appendix
and Exhibit A. The Company and the Trustee shall approve the forms of the
Securities and any notation, endorsement or legend on them. Each Security shall
be dated the date of its authentication. The terms of the Securities set forth
in the Appendix and Exhibit A are part of the terms of this Indenture and, to
the extent applicable, the Company, the Guarantor and the Trustee, by their
execution and delivery of this Indenture, expressly agree to be bound by such
terms.
SECTION 2.2. Execution and Authentication. Two Officers shall sign
----------------------------
the Securities for the Company by manual or facsimile signature and may be
imprinted or otherwise reproduced.
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 authenticates the Security. The signature of the Trustee on a
Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture.
26
The Trustee may appoint an agent (the "Authenticating Agent")
--------------------
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such 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.
SECTION 2.3. Registrar and Paying Agent. The Company shall maintain
--------------------------
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
---------
Securities may be presented for payment (the "Paying Agent"). The Registrar
------------
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any such additional paying agent.
In the event the Company shall retain any Person not a party to this
Indenture as an agent hereunder, the Company shall enter into an appropriate
agency agreement with any Registrar, Paying Agent or co-registrar not a party to
this Indenture, which shall incorporate the terms of the TIA. The agreement
shall implement the provisions of this Indenture that relate to such agent. The
Company shall notify the Trustee of the name and address of each such agent. If
the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act
as such and shall be entitled to appropriate compensation therefor pursuant to
Section 7.7. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities.
SECTION 2.4. Paying Agent To Hold Money in Trust. By at least 11:00
-----------------------------------
a.m. (New York City time) on the date on which any Principal or interest on any
Security is due and payable, the Company shall deposit with the Paying Agent a
sum sufficient to pay such Principal or interest when due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that such
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by such Paying Agent for the payment of Principal of or
interest on the Securities and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying Agent
(other than the Trustee) to pay all money held by it to the Trustee and to
account for any funds disbursed by such Paying Agent. Upon complying with this
Section, the Paying Agent (if other than the Company or a Subsidiary) shall have
no further liability for the money delivered to the Trustee. Upon any
bankruptcy,
27
reorganization or similar proceeding with respect to the Company,
the Trustee shall serve as Paying Agent for the Securities.
SECTION 2.5. Securityholder Lists. The Trustee shall preserve in as
--------------------
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall cause the Registrar to furnish to the Trustee, in
writing at least five Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of Securityholders.
SECTION 2.6. [Intentionally Omitted]
-----------------------
SECTION 2.7. Replacement Securities. If a mutilated Security is
----------------------
surrendered to the Registrar or if the Holder of a Security shall provide the
Company and the Trustee with evidence to their satisfaction that the Security
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the requirements of Section
8-405 of the Uniform Commercial Code are met and the Holder satisfies any other
reasonable requirements of the Trustee. If required by the Trustee or the
Company, such Holder shall furnish an indemnity bond sufficient in the judgment
of the Company and the Trustee to protect the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss which any of them may
suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security, including reasonable fees and
expenses of counsel. Every replacement Security is an additional obligation of
the Company.
SECTION 2.8. Outstanding Securities. Securities outstanding at any
----------------------
time are all Securities authenticated by the Trustee except for those canceled,
those delivered for cancellation and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all Principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, 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
28
portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.9. Temporary Securities. Until definitive Securities are
--------------------
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities. After
the preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and deliver in exchange therefor, one or more
definitive Securities representing an equal principal amount of Securities.
Until so exchanged, the Holder of temporary Securities shall in all respects be
entitled to the same benefits under this Indenture as a Holder of definitive
Securities.
SECTION 2.10. Cancellation. The Company at any time may deliver
------------
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee for cancellation any Securities surrendered to them
for registration of transfer or exchange or payment. The Trustee and no one
else shall cancel and destroy (subject to the record retention requirements of
the Exchange Act) all Securities surrendered for registration of transfer or
exchange, payment or cancellation and deliver a certificate of such destruction
to the Company unless the Company directs the Trustee to deliver canceled
Securities to the Company. The Company may not issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
------------------
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) at the rate
specified therefor in the Securities in any lawful manner. The Company may pay
the defaulted interest to the Persons who are Securityholders on a subsequent
special record date. The Company shall fix or cause to be fixed (or upon the
Company's failure to do so the Trustee shall fix) any such special record date
and payment date to the reasonable satisfaction of the Trustee which specified
record date shall not be less than 10 days prior to the payment date for such
defaulted interest and shall promptly mail or cause to be mailed to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Security and the date of the proposed payment, and at the same time
29
the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such defaulted interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when so deposited to be held in
trust for the benefit of the Person entitled to such defaulted interest as
provided in this Section 2.11.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Securities
-------------
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders,
provided, however, that any such notice may state that no representation is made
-------- -------
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
ARTICLE III
Redemption
----------
SECTION 3.1. Notices to Trustee. If the Company elects to redeem
------------------
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date and the principal amount of Securities
to be redeemed.
The Company shall give each notice to the Trustee provided for in this
Section 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 from the Company to the effect that such redemption will comply with
the conditions herein. The record date relating to such redemption shall be
selected by the Company and set forth in the related notice given to the
Trustee, which record date shall be not less than 15 days prior to the date
selected for redemption by the Company.
SECTION 3.2. Selection of Securities To Be Redeemed. If fewer than
--------------------------------------
all the Securities then outstanding are to be redeemed, the Trustee shall select
the Securities to be redeemed pro rata or by lot or by a method that complies
with applicable legal and securities exchange requirements, if any, and that the
Trustee in its sole discretion considers to be fair and appropriate. The
Trustee shall make the selection from outstanding Securities not previously
called for redemption. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than $1,000. Securities
and portions of them the Trustee selects shall be in amounts of $1,000 or a
whole multiple of $1,000. Provisions of
30
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. Upon request of the Company, the
Trustee shall notify the Company of the Securities or portions of Securities to
be redeemed.
SECTION 3.3. Notice of Redemption. At least 30 days but not more
--------------------
than 60 days before a date for redemption of Securities, the Trustee at the
expense of the Company shall mail a notice of redemption by first-class mail to
each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price plus accrued and unpaid
interest, if any;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption date;
(7) the CUSIP number, if any, printed on the Securities being
redeemed; and
(8) 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.
The Trustee shall give the notice of redemption in the Company's name
and at the Company's expense. In such event, the Company shall provide the
Trustee with the information required by this Section 3.3.
SECTION 3.4. Effect of Notice of Redemption. Once notice of
------------------------------
redemption is mailed, Securities called for redemption shall become due and
payable on the redemption date and at the redemption price stated in the notice.
Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price stated in the notice, plus accrued and unpaid interest to the
redemption date; provided that the Company shall have
31
deposited the redemption price with the Paying Agent or the Trustee on or before
11:00 a.m. (New York City time) on the date of redemption; provided, further,
that if the redemption date is after a regular record date and on or prior to
the interest payment date, the accrued and unpaid 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 3.5. Deposit of Redemption Price. By at least 11:00 a.m.
---------------------------
(New York City time) on the date on which any Principal of or interest on any
Security is due and payable, the Company shall deposit with the Paying Agent
(or, if the Company or a Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued and
unpaid interest on all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which are owned by
the Company or a Subsidiary and have been delivered by the Company or such
Subsidiary to the Trustee for cancellation.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such redemption price, interest on the
Securities to be redeemed will cease to accrue on and after the applicable
redemption date, whether or not such Securities are presented for payment.
SECTION 3.6. Securities Redeemed in Part. Upon surrender of a
---------------------------
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in a principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE IV
Covenants
---------
SECTION 4.1. Payment of Securities. The Company shall promptly pay
---------------------
the Principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on or before 11:00 a.m. (New York City
time) on such date the Trustee or the Paying Agent holds (or, if the Company or
a Subsidiary is the Paying Agent, the segregated account or separate trust fund
maintained by the Company or such Subsidiary pursuant to Section 2.4) in
accordance with this Indenture money sufficient to pay all Principal and
interest then due and the Trustee or the Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, the Company or such Subsidiary), as the case may
be, is not prohibited from paying such money to the Securityholders on that date
pursuant to the terms of this Indenture.
32
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful as provided in
Section 2.11.
Notwithstanding anything to the contrary contained in this Indenture,
the Company or the Paying Agent may, to the extent it is required to do so by
law, deduct or withhold income or other similar taxes imposed by the United
States of America or other domestic or foreign taxing authorities from Principal
or interest payments hereunder.
SECTION 4.2. SEC Reports. Notwithstanding that the Guarantor and the
-----------
Company may not be subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Guarantor and the Company will file with the SEC
(unless the SEC will not accept such a filing) and provide within 15 days the
Trustee and Securityholders with the annual reports and such information,
documents and other reports as are specified in Sections 13 and 15(d) of the
Exchange Act and applicable to a U.S. corporation subject to such Sections, such
information, documents and other reports to be so filed at the times specified
for the filing of such information, documents and reports under such Sections
and so provided within 15 days thereafter. In lieu of filing and providing
separate reports as set forth above, the Guarantor and the Company may, so long
as the Guarantor owns 100% of the Capital Stock of the Company and if permitted
by the SEC, include in the reports filed and provided by the Guarantor as set
forth above such financial information and narrative disclosure regarding the
Company and the PEI Guarantee as required by the SEC in lieu of filing such
separate reports. The Guarantor and the Company also will comply with the other
provisions of TIA Section 314(a).
SECTION 4.3. Limitation on Indebtedness. (a) The Company will not
--------------------------
Incur, directly or indirectly, any Indebtedness unless, on the date of such
Incurrence and after giving effect to such Incurrence and the application of the
net proceeds therefrom, the Consolidated Coverage Ratio would exceed 2.00:1 if
such Incurrence shall occur prior to February 1, 2000 or would exceed 2.25:1 if
such Incurrence shall occur thereafter.
(b) Notwithstanding the foregoing paragraph (a), the Company may
Incur any or all of the following Indebtedness:
(i) Indebtedness of the Company Incurred under the New U.S.
Credit Facility in an aggregate principal amount outstanding at any time
not to exceed the greater of (A) $23.0 million and (B) the sum of (x) 50%
of the book value of the inventory of the Company and its Restricted
Subsidiaries and (y) 85% of the book value of the accounts receivable of
the Company and its Restricted Subsidiaries, provided that the amount in
clause (A) shall be reduced by the aggregate amount of all proceeds from
all Asset
33
Dispositions that have been applied since the Issue Date to permanently
reduce the outstanding amount of such Indebtedness pursuant to Section 4.7
and less the aggregate amount of all mandatory prepayments of principal of
term loans thereunder that have been made since the Issue Date;
(ii) Indebtedness of the Company owing to and held by any
Wholly Owned Subsidiary; provided, however, that any subsequent issuance or
transfer of any Capital Stock or any other event which results in any such
Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any
subsequent transfer of any such Indebtedness (except to another Wholly
Owned Subsidiary) will be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the Company unless such Indebtedness is
assumed by the buyer of such Wholly Owned Subsidiary or otherwise
discharged in connection with such transaction and such Wholly Owned
Subsidiary is fully released in connection therewith;
(iii) Indebtedness represented by the Securities;
(iv) Indebtedness of the Company (other than the Indebtedness
described in clauses (i), (ii) or (iii) above) outstanding on the Issue
Date;
(v) Indebtedness (including Capitalized Lease Obligations) of
the Company Incurred to finance the acquisition, construction or
improvement of fixed or capital assets in an aggregate principal amount at
any one time outstanding not to exceed $10.0 million, provided that such
Indebtedness is Incurred within 180 days after the date of such
acquisition, construction or improvement and does not exceed the fair
market value of such acquired, constructed or improved assets, as
determined in good faith by the Board of Directors of the Company and
evidenced by a board resolution certified by the Secretary of the Company
and furnished to the Trustee;
(vi) Refinancing Indebtedness Incurred in respect of any
Indebtedness Incurred pursuant to Section 4.3(a) or pursuant to clause
(iii), (iv) or this clause (vi) of this Section 4.3(b);
(vii) Indebtedness (A) in respect of performance bonds, bankers'
acceptances, letters of credit and surety or appeal bonds provided by the
Company in the ordinary course of its business and which do not secure
Indebtedness other than the Indebtedness and the obligations with respect
to which such instruments were issued and (B) under Currency Agreements and
Interest Rate Agreements Incurred which, at the time of Incurrence, is in
the ordinary course of business; provided, however, that, in the case of
Currency Agreements which relate to Indebtedness and Interest Rate
Agreements, such Currency Agreements and Interest Rate
34
Agreements are directly related to Indebtedness permitted to be Incurred by
the Company pursuant to this Indenture;
(viii) Indebtedness represented by Guarantees by the Company
of Indebtedness otherwise permitted to be Incurred pursuant to this Section
4.3 or Section 4.4; and
(ix) other Indebtedness in an aggregate principal amount
outstanding at any one time not to exceed $10.0 million.
(c) Notwithstanding the foregoing, the Company shall not Incur any
Indebtedness pursuant to Section 4.3(b) if the proceeds thereof are used,
directly or indirectly, to Refinance any Subordinated Obligations unless such
new Indebtedness shall be subordinated to the Securities to at least the same
extent as such Subordinated Obligations being Refinanced.
(d) For purposes of determining compliance with this Section 4.3,
(i) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described above, the Company, in its sole
discretion, will classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of the above clauses in
Section 4.3(b) and (ii) an item of Indebtedness may be divided and classified in
more than one of the types of Indebtedness described in Section 4.3(b).
SECTION 4.4. Limitation on Indebtedness and Preferred Stock of
-------------------------------------------------
Restricted Subsidiaries. The Company shall not permit any Restricted Subsidiary
-----------------------
to Incur, directly or indirectly, any Indebtedness or Preferred Stock except:
(a) Indebtedness (1) Incurred under the U.K. Credit Facility
(including Guarantees thereof by Wholly-Owned Subsidiaries of Prestolite
Electric Limited) in an aggregate principal amount outstanding at any time not
to exceed the greater of (A) (Pounds)9.0 million and (B) the sum (such sum, the
"Borrowing Base") of (x) 50% of the book value of the inventory of Prestolite
Electric Limited (or any successor entity) and its Restricted Subsidiaries and
(y) 80% of the book value of the accounts receivable of such entities, (2)
Incurred under the Argentina Credit Facility in an aggregate principal amount
outstanding at any time not to exceed the greater of (A) $8.0 million and (B)
the Borrowing Base of Xxxxx Argentina or any other Non-U.S./U.K. Subsidiary
having more than 66-2/3% of its tangible assets located in Argentina or Brazil,
and its Restricted Subsidiaries and (3) Incurred under the South Africa Credit
Facility in an aggregate principal amount outstanding at any time not to exceed
the greater of (A) $3.0 million and (B) the Borrowing Base of Xxxxx Holdings
South Africa (Proprietary) Ltd. (or any successor entity) and its Restricted
Subsidiaries, provided that each of the amounts in clauses (1)(A), (2)(A) and
(3)(A) shall be reduced by the aggregate amount of all proceeds
35
from all Asset Dispositions that have been applied since the Issue Date to
permanently reduce the outstanding amount of such Indebtedness pursuant to
Section 4.7 and less the aggregate amount of all mandatory prepayments of
principal of term loans thereunder that have been made since the Issue Date;
(b) Indebtedness or Preferred Stock of a Restricted Subsidiary issued
to and held by the Company or a Wholly Owned Subsidiary; provided, however, that
any subsequent issuance or transfer of any Capital Stock which results in any
such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any
subsequent transfer of such Indebtedness or Preferred Stock (other than to the
Company or a Wholly Owned Subsidiary) shall be deemed, in each case, to
constitute the issuance of such Indebtedness or Preferred Stock by the issuer
thereof unless such Indebtedness is assumed by the buyer of such Wholly Owned
Subsidiary or otherwise discharged in connection with such transaction and such
Wholly Owned Subsidiary is fully released in connection therewith;
(c) Indebtedness or Preferred Stock of a Restricted Subsidiary
Incurred and outstanding on or prior to the date on which such Restricted
Subsidiary was acquired by the Company (other than Indebtedness or Preferred
Stock Incurred in connection with, or to provide all or any portion of the funds
or credit support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company); provided, however, that on the date
of such acquisition and after giving effect thereto, the Company would have been
able to Incur at least $1.00 of additional Indebtedness pursuant to clause (a)
of Section 4.3;
(d) Indebtedness or Preferred Stock outstanding on the Issue Date,
including (i) any such Indebtedness acquired or assumed in connection with the
Xxxxx Acquisition and (ii) promissory notes issued by Xxxxx Argentina in
connection with any contingent obligations of Xxxxx Argentina pursuant to the
terms of the Xxxxx Acquisition, (in each case other than Indebtedness described
in clauses (a) and (b) of this Section 4.4);
(e) Refinancing Indebtedness Incurred in respect of Indebtedness or
Preferred Stock referred to in clauses (c) or (d)(i) of this Section 4.4 or this
clause (e); provided, however, that to the extent such Refinancing Indebtedness
directly or indirectly Refinances Indebtedness or Preferred Stock of a
Subsidiary described in clause (c) of this Section 4.4, such Refinancing
Indebtedness shall be Incurred only by such Subsidiary; and
(f) Indebtedness (A) in respect of performance bonds, bankers'
acceptances, letters of credit and surety or appeal bonds provided by a
Restricted Subsidiary in the ordinary course
36
of its business and which do not secure Indebtedness other than the Indebtedness
and obligations with respect to which they were issued and (B) under Currency
Agreements which relate to other Indebtedness and Interest Rate Agreements
Incurred which, at the time of Incurrence, is in the ordinary course of
business; provided, however, that, in the case of Currency Agreements and
Interest Rate Agreements, such Currency Agreements and Interest Rate Agreements
are directly related to Indebtedness permitted to be Incurred by a Restricted
Subsidiary pursuant to this Indenture.
(g) The Company will not permit any Unrestricted Subsidiary to Incur
any Indebtedness other than Non-Recourse Debt, provided, however, if any such
Indebtedness ceases to be Non-Recourse Debt, such event shall be deemed to
constitute an Incurrence of Indebtedness by the Company or a Restricted
Subsidiary.
(h) For purposes of determining compliance with this Section 4.4,
(i) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described above, the Company, in its sole
discretion, will classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of the above clauses in
this Section 4.4 and (ii) an item of Indebtedness may be divided and classified
in more than one of the types of Indebtedness described in this Section 4.4.
SECTION 4.5. Limitation on Restricted Payments. (a) The Company
---------------------------------
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, make any Restricted Payment if at the time of such Restricted
Payment:
(1) a Default or Event of Default shall have occurred and be
continuing (or would result therefrom);
(2) the Company could not Incur at least $1.00 of additional
Indebtedness under Section 4.3(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 the Company, whose
determination will be evidenced by a resolution of such Board of Directors
certified in an Officers' Certificate to the Trustee) declared or made
subsequent to the Issue 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 Issue Date occurs to the end
of the most recent fiscal quarter ending prior to the date of such
Restricted Payment for which financial statements are available (or, in
case such Consolidated Net Income will be a deficit, minus 100% of such
deficit); (B)
37
the aggregate Net Cash Proceeds received by the Company from
the issue or sale of Capital Stock (other than Disqualified Stock) or other
cash contributions from the Guarantor to its capital subsequent to the
Issue Date (other than an issuance or sale to a Subsidiary of the Company
and other than a sale or issuance to a trust established by the Company, or
any of its Restricted Subsidiaries); (C) the amount by which Indebtedness
of the Company is reduced on the Company's balance sheet upon the
conversion or exchange (other than by a Restricted Subsidiary) subsequent
to the Issue Date of any Indebtedness of the Company convertible or
exchangeable for Capital Stock (other than Disqualified Stock) of the
Company (less the amount of any cash, or the fair value of any other
property, distributed by the Company upon such conversion or exchange); and
(D) an amount equal to the sum of (i) the net reduction in Investments in
Unrestricted Subsidiaries resulting from dividends, repayments of the
principal of loans or advances or other transfers of assets to the Company
or any Restricted Subsidiary from Unrestricted Subsidiaries and (ii) the
portion (proportionate to the Company's equity interest in such Subsidiary)
of the fair market value of the net assets of an Unrestricted Subsidiary at
the time such Unrestricted Subsidiary is designated a Restricted
Subsidiary; provided, that the foregoing sum shall not exceed, in the case
of any Unrestricted Subsidiary, the amount of Investments previously made
by the Company or any Restricted Subsidiary in such Unrestricted
Subsidiary, which amount was included in the calculation of the amount of
Restricted Payments.
(b) The provisions of Section 4.5(a) will not prohibit:
(i) any purchase, redemption, defeasance or other acquisition of
Capital Stock of the Company or Subordinated Obligations made by exchange
for, or out of the net proceeds of the substantially concurrent sale of,
Capital Stock of the Company (other than Disqualified Stock and other than
Capital Stock issued or sold to a Subsidiary of the Company or to a trust
established by the Company or any of its Subsidiaries); provided, however,
that (A) such purchase, redemption, defeasance or other acquisition will be
excluded in the calculation of the amount of Restricted Payments pursuant
to Section 4.5(a)(3) and (B) the Net Cash Proceeds from such sale will be
excluded from Section 4.5(a)(3)(B);
(ii) any purchase, redemption, defeasance or other acquisition of
Subordinated Obligations made by exchange for, or out of the net proceeds
of the substantially concurrent sale of, Subordinated Obligations of the
Company; provided, however, that (A) the principal amount of such new
Indebtedness does not exceed the principal amount of the Subordinated
Obligations being so redeemed, repurchased, acquired or retired for value
(plus the amount of any
38
premium required to be paid under the terms of the instrument governing the
Subordinated Obligations so redeemed, repurchased acquired or retired), (B)
such new Indebtedness is subordinated to the Securities at least to the
same extent as such Subordinated Obligations so purchased, exchanged,
redeemed, repurchased, acquired or retired for value, (C) such new
Indebtedness has a final scheduled maturity date later than the earlier of
the final scheduled maturity date of the Subordinated Obligations being so
redeemed and the final scheduled maturity date of the Securities and (D)
such new Indebtedness has an Average Life equal to or greater than the
Average Life of the Securities; provided further, however, that such
purchase, redemption, defeasance or other acquisition will be excluded in
the calculation of the amount of Restricted Payments;
(iii) the purchase by the Company or a Wholly Owned Subsidiary of
shares of Xxxxx Argentina pursuant to the Xxxxx Argentina Option; provided
that the amount of any such purchase shall be excluded from the calculation
of the amount of Restricted Payments;
(iv) the purchase by the Company or a Wholly Owned Subsidiary of any
of the approximately 1% of the outstanding shares of Xxxxx Argentina not
owned by the Company, directly or indirectly, on or after the Issue Date
and not subject to the Xxxxx Argentina Option for an aggregate purchase
price not to exceed $300,000; provided that the amount of any such purchase
shall be excluded from the calculation of the amount of Restricted
Payments;
(v) any dividend, distribution, purchase or payment made to the
Guarantor on or after the Issue Date in connection with the
Recapitalization in an aggregate amount not to exceed $30.1 million;
provided that the amount of any such dividend shall be excluded from the
calculation of the amount of Restricted Payments;
(vi) any dividend paid to the Guarantor the proceeds of which are
used for repurchases by the Guarantor of Common Stock of the Guarantor from
employees, officers and directors of the Guarantor, the Company or any of
their respective Subsidiaries or their authorized representatives upon the
death, disability or termination of employment of such employees, in an
aggregate amount not to exceed the sum of (A) $1.0 million in any calendar
year plus (B) to the extent previously received by the Company, the
aggregate net cash proceeds from any reissuance during such calendar year
of Common Stock of the Guarantor to employees, officers or directors of the
Guarantor, the Company and their respective Subsidiaries plus (C) to the
extent previously received by the Company, the aggregate net cash proceeds
from any payments on life insurance policies with respect to any employees,
officers or directors of the Guarantor, the
39
Company and their respective Subsidiaries which proceeds are used to
purchase the Common Stock of the Guarantor held by any such employees,
officers or directors; provided that the amount of any such dividend shall
be included in the calculation of the amount of Restricted Payments;
(vii) any dividend paid to the Guarantor in respect of overhead
expenses, tax liabilities and legal, accounting and other professional fees
and expenses that are directly attributable to the operations of the
Company and its Restricted Subsidiaries, provided that the amount of any
such dividends will be excluded from the calculation of the amount of
Restricted Payments; and
(viii) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this covenant; provided, however, that the amount of such dividend
will be included in the calculation of the amount of Restricted Payments;
and, provided further, that, at the time of, and after giving effect to, any
Restricted Payment permitted by clauses (i), (ii), (iv) and (vi) of this Section
4.5(b) no Default or Event of Default shall have occurred and be continuing.
SECTION 4.6. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries. The Company will not, and will 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 to the Company or a Restricted Subsidiary or pay any
Indebtedness or other obligation owed to the Company, (ii) make any loans or
advances to the Company or (iii) transfer any of its property or assets to the
Company or any Restricted Subsidiary, except:
(1) any encumbrance or restriction pursuant to an agreement in effect at or
entered into on the Issue Date;
(2) any encumbrance or restriction with respect to the Argentina Credit
Facility, the South Africa Credit Facility or the U.K. Credit Facility;
provided, however, that, except during a period when a default or an event of
default under such facilities shall have occurred and be continuing, no such
encumbrance or restriction shall limit the ability of the applicable borrower
under any such facility to dividend, loan, advance or otherwise transfer funds
to the Company required to pay interest, including additional cash interest and
Principal on the Securities;
(3) any encumbrance or restriction with respect to a Restricted Subsidiary
pursuant to an agreement relating to any Indebtedness Incurred by such
Restricted Subsidiary on or prior
40
to the date on which such Restricted Subsidiary was acquired by the Company 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 or was acquired by the Company or
a Restricted Subsidiary) and outstanding on such date;
(4) any encumbrance or restriction pursuant to an agreement effecting a
Refinancing of Indebtedness Incurred pursuant to an agreement referred to in
clause (1), (2) or (3) of this Section 4.6 or contained in any amendment to an
agreement referred to in clause (1), (2) or (3) of this Section 4.6; provided,
however, that the encumbrances and restrictions with respect to such Restricted
Subsidiary contained in any such refinancing agreement or amendment are no less
favorable to the Securityholders than the encumbrances and restrictions with
respect to such Restricted Subsidiary contained in any such predecessor
agreements, as determined in good faith by the Company and evidenced by an
Officers' Certificate;
(5) in the case of clause (iii) of this Section 4.6, any encumbrance or
restriction 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;
(6) in the case of clause (iii) of this Section 4.6, contained in security
agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the
extent such encumbrance or restrictions restrict the transfer of the property
subject to such security agreements or mortgages;
(7) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition; and
(8) any such encumbrance or restriction imposed by applicable law.
SECTION 4.7. Limitation on Sale of Assets and Subsidiary Stock. (a)
-------------------------------------------------
The Company will not, and will not permit any Restricted Subsidiary to, directly
or indirectly, consummate any Asset Disposition unless (i) the Company or such
Restricted Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value of the shares and assets
subject to such Asset Disposition (including as to the value of all non cash
consideration), as determined in good faith by the Board of Directors of the
Company and evidenced by a board resolution certified by the Secretary of the
Company and furnished to the Trustee, (ii) at least 75% of the consideration
thereof received by the Company or such Restricted Subsidiary is
41
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 the Company or such
Restricted Subsidiary, as the case may be, (A) first, to the extent the Company
or any Restricted Subsidiary, as the case may be, elects (or is required by the
terms of any Senior Indebtedness), to prepay, repay, redeem or purchase Senior
Indebtedness of the Company or Indebtedness (other than Disqualified Stock) of a
Restricted Subsidiary (in each case other than Indebtedness owed to the Company
or an Affiliate of the Company) within 180 days from the later of the date of
such Asset Disposition or the receipt of such Net Available Cash; provided,
however, that any temporary prepayment or temporary repayment of amounts
outstanding under the New U.S. Credit Facility pending application pursuant to
clause (B) shall not constitute a prepayment or repayment of Senior Indebtedness
pursuant to this clause (A); (B) second, to the extent of the balance of Net
Available Cash after application in accordance with clause (A), to the extent
the Company or such Restricted Subsidiary, as the case may be, elects, to the
investment by the Company or any Wholly Owned Subsidiary in Additional Assets
within 360 days from the later of the date of such Asset Disposition or the
receipt of such Net Available Cash; (C) third, to the extent of the balance of
such Net Available Cash after application in accordance with clauses (A) and (B)
of this Section 4.7(a), to make an Offer (as defined below) to Holders of the
Securities to purchase Notes pursuant to and subject to the conditions set forth
in paragraph (b) of this Section 4.7; and (D) fourth, to the extent of the
balance of such Net Available Cash after application in accordance with clauses
(A), (B) and (C) of this Section 4.7(a), to (x) the acquisition by the Company
or any Wholly Owned Subsidiary of Additional Assets or (y) the prepayment,
repayment or purchase of Indebtedness of the Company (other than Indebtedness
owed to an Affiliate of the Company and other than Disqualified Stock of the
Company) or Indebtedness of any Restricted Subsidiary (other than Indebtedness
owed to the Company or an Affiliate of the Company), in each case within 360
days from the later of the receipt of such Net Available Cash and the date the
Offer is consummated; provided, however that in connection with any prepayment,
repayment or purchase of Indebtedness pursuant to clause (A) or (C) of this
Section 4.7(a), the Company or such Restricted Subsidiary will permanently
retire such Indebtedness and will cause any related loan commitment or
availability (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 4.7(a), the
Company and its Restricted Subsidiaries shall not be required to apply any Net
Available Cash in accordance herewith except to the extent that the aggregate
Net Available Cash from all Asset Dispositions which are not applied in
accordance with this Section 4.7 exceeds $5,000,000. Pending application of Net
Available Cash pursuant to this Section 4.7, such Net Available Cash shall be
invested in Permitted
42
Investments or to reduce outstanding loans under any working capital facility.
For the purposes of this Section 4.7(a) but not for purposes of the
definition of "Net Available Cash", the following are deemed to be cash: (x) the
assumption by the transferee of Indebtedness of the Company (other than
Disqualified Stock of the Company and other than Indebtedness that is
subordinated to the Securities) or Indebtedness of any Restricted Subsidiary and
the release of the Company or such Restricted Subsidiary from all liability on
such Indebtedness in connection with such Asset Disposition and (y) securities
received by the Company or any Restricted Subsidiary from the transferee that
are promptly converted by the Company or such Restricted Subsidiary into cash.
Notwithstanding the requirement in clause (ii) of Section 4.7(a) that
at least 75% of the consideration received in connection with an Asset
Disposition consist of cash or cash equivalents, the Company or its Restricted
Subsidiaries may sell or cause to be sold (A) assets of Xxxxx Argentina or its
Subsidiaries or (B) shares of Capital Stock of Xxxxx Argentina or its
Subsidiaries representing less than 50% of the total voting power of the Capital
Stock thereof in exchange for Additional Assets, equity interests in joint
ventures or other Persons engaged in a Related Business; provided that (1) in
the event such exchange transaction or series of related exchange transactions
(each an "Exchange Transaction") involves an aggregate value in excess of $1.0
million, the terms of such Exchange Transaction shall have been approved by a
majority of the members of the Board of Directors of the Company having no
personal stake in such Exchange Transaction, (2) in the event such Exchange
Transaction involves an aggregate value in excess of $5.0 million, the Company
shall have received a written opinion from a nationally recognized independent
investment banking firm that the Company has received consideration equal to the
fair market value of the assets or Capital Stock being disposed of and (3) the
fair market value (as determined in good faith by the Board of Directors of the
Company as of the date of each such Exchange Transaction) of all such Exchange
Transactions made since the Issue Date is no more than $10.0 million in the
aggregate.
(b) In the event of an Asset Disposition that requires the purchase of
Securities pursuant to Section 4.7(a)(iii)(C), the Company will be required to
purchase Securities tendered pursuant to an offer by the Company for the
Securities (the "Offer") at a purchase price of 100% of their principal amount
(without premium) plus accrued interest to the date of purchase in accordance
with the procedures (including prorating in the event of oversubscription) set
forth in this Indenture. If the aggregate purchase price of Securities tendered
pursuant to the Offer is less than the Net Available Cash allotted to the
purchase of the Securities, the Company will apply the remaining Net Available
Cash in accordance with Section 4.7(a)(iii)(D).
43
The Company shall not be required to make an Offer for Notes pursuant to this
Section 4.7(b) if the Net Available Cash available therefor (after application
of the proceeds as provided in clauses (A) and (B) of Section 4.7(a)) are less
than $10.0 million for all Asset Dispositions (which lesser amounts 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).
(c)(1) Promptly, and in any event within 30 days after the Company
becomes obligated to make an Offer, the Company shall be obligated to deliver to
the Trustee and send, by first-class mail to each Holder, at the address
appearing in the security register, a written notice stating that the Holder may
elect to have his Securities purchased by the Company either in whole or in part
(subject to prorationing as hereinafter described in the event the Offer is
oversubscribed) in integral multiples of $1,000 of principal amount, at the
applicable purchase price. The notice shall specify a purchase date not less
than 30 days nor more than 60 days after the date of such notice (the "Purchase
Date") and shall contain all instructions and materials necessary to tender
Securities pursuant to the Offer.
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided below, the Company 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 4.7(a). Upon
the expiration of the period for which the Offer remains open (the "Offer
Period"), the Company shall deliver to the Trustee for cancellation the
Securities or portions thereof which have been properly tendered to and are
to be accepted by the Company. Not later than 11:00 a.m. (New York City
time) on the Purchase Date, the Company shall irrevocably deposit with the
Trustee or with a paying agent (or, if the Company is acting as Paying
Agent, segregate and hold in trust) an amount in cash sufficient to pay the
Offer Amount for all Securities properly tendered to and accepted by the
Company. The Trustee shall, on the Purchase Date, mail or deliver payment
to each tendering Holder in the amount of the purchase price.
(3) Holders electing to have a Security purchased will be required to
surrender the Security, together with all necessary endorsements and other
appropriate materials duly completed, to the Company at the address
specified in the notice at least three Business Days prior to the Purchase
Date. Holders will be entitled to withdraw their election in whole or in
part if the Trustee or the Company receives not later than one Business Day
prior to the Purchase Date,
44
a facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Security (which shall be $1,000 or an integral
multiple thereof) which was delivered for purchase by the Holder, the
aggregate principal amount of such Security (if any) that remains subject
to the original notice of the Offer and that has been or will be delivered
for purchase by the Company 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 surrendered by
Holders exceeds the Offer Amount, the Company shall select the Securities
to be purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only securities in denominations of
$1,000, or integral multiples thereof, shall be purchased). Holders whose
Securities are purchased only in part will be issued new Securities equal
in principal amount to the unpurchased portion of the Securities
surrendered.
(4) A Security shall be deemed to have been accepted for purchase at
the time the Trustee, directly or through an agent, mails or delivers
payment therefor to the surrendering Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.7. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.7, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.7 by virtue
thereof.
SECTION 4.8. Limitation on Transactions With Affiliates. (a) The
------------------------------------------
Company will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into or conduct any transaction or series of transactions
(including the purchase, sale, lease or exchange of any property, employee
compensation arrangements or the rendering of any service) with any Affiliate of
the Company (an "Affiliate Transaction") unless (i) the terms of such
transaction are no less favorable to the Company 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) in the event such Affiliate Transaction involves an aggregate amount in
excess of $1,000,000, the terms of such transaction are set forth in writing and
shall have been approved by a majority of the members of the Board of Directors
of the Company having no personal stake in such Affiliate Transaction (and such
majority determines that such Affiliate Transaction satisfies the criteria in
clause (i) of this Section 4.8(a)) and (iii) in the event such Affiliate
Transaction involves an aggregate amount in excess of $5,000,000, the Company
has
45
received a written opinion from a nationally recognized independent investment
banking firm that such Affiliate Transaction is fair to the Company and its
Restricted Subsidiaries from a financial point of view.
(b) The foregoing provisions of Section 4.8(a) shall not prohibit:
(i) any Restricted Payment permitted to be made pursuant to
Section 4.5;
(ii) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans approved
by the Board of Directors of the Company;
(iii) the grant of stock options or similar rights to employees
and directors of the Company pursuant to plans approved by the Board of
Directors of the Company;
(iv) loans or advances to employees in the ordinary course of
business in accordance with the past practices of the Company or its
Restricted Subsidiaries, but in any event not to exceed $1.5 million in the
aggregate outstanding at any one time;
(v) the payment of reasonable fees and indemnities to
directors of the Company and its Restricted Subsidiaries who are not
employees of the Company or its Restricted Subsidiaries;
(vi) any transaction between the Company and a Wholly Owned
Subsidiary or between Wholly Owned Subsidiaries;
(vii) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company; and
(viii) the payment to Genstar Investment Corporation or an
affiliate of an annual management fee not to exceed an amount per annum
equal to the greater of $900,000 and 0.3% of the Company's consolidated net
sales, plus, in each case, the reimbursement of reasonable out-of-pocket
expenses.
SECTION 4.9. Change of Control. (a) Upon the occurrence of a
-----------------
Change of Control, each Holder shall have the right to require that the Company
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, 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 related
interest payment date), in accordance with the terms contemplated in Section
4.9(b).
46
(b) (i) Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder at its registered address with a copy to the
Trustee stating:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase any or all of such Holder's
Securities in denominations of $1,000 or any integral multiple thereof at a
purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the date of repurchase (subject to
the right of Holders of record on the relevant record date to receive
interest on the relevant interest payment date);
(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical income,
cash flow and capitalization after giving effect to 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 mailed); and
(4) the instructions determined by the Company, consistent with this
covenant, that a Holder must follow in order to have its Securities
purchased by the Company.
(c) Holders electing to have a Security purchased will be required to
surrender the Security, together with all necessary endorsements and other
appropriate materials duly completed, to the Company at the address specified in
the notice at least three Business Days prior to the purchase date. Holders
will be entitled to withdraw their election if the Trustee or the Company
receives not later than one Business Day prior to the purchase date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security which was delivered for purchase by the Holder as to
which such notice of withdrawal is being submitted 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 Company
under this Section shall be delivered to the Trustee for cancellation, and the
Company shall pay the purchase price, including premium, if any, plus accrued
and unpaid interest, if any, to the Holders entitled thereto.
(e) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.9. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.9, the Company will
comply with the applicable securities laws and regulations and
47
will not be deemed to have breached its obligations under this Section 4.9 by
virtue thereof.
(f) Notwithstanding the occurrence of a Change of Control, the
Company shall not be obligated to repurchase the Securities or otherwise comply
with this Section if the Company has irrevocably elected to redeem all the
Securities in accordance with Article 3; provided that the Company does not
default in its redemption obligations pursuant to such election.
SECTION 4.10. Limitation on Sale or Issuance of Capital Stock of
--------------------------------------------------
Restricted Subsidiaries. The Company (i) will not, and will not permit any
-----------------------
Restricted Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Restricted Subsidiary to any
Person (other than to the Company or a Wholly Owned Subsidiary), unless (a) such
transfer, conveyance, sale, lease or other disposition is of all the Capital
Stock of such Restricted Subsidiary (or, (x) in the case of a non-Wholly Owned
Subsidiary, all of the Capital Stock of such Subsidiary owned by the Company and
(y) in the case of Xxxxx Argentina and its Subsidiaries, shares of Capital Stock
in Exchange Transactions in accordance with Section 4.7 so long as after any
such sale Xxxxx Argentina continues to constitute a Restricted Subsidiary) and
(b) the net cash proceeds from such transfer, conveyance, sale, lease or other
disposition are applied in accordance with Section 4.7 and (ii) will not permit
any Restricted Subsidiary to issue any of its Capital Stock (other than, if
necessary, shares of its Capital Stock constituting directors' qualifying shares
or similar shares and, in the case of a Non-U.S./U.K. Subsidiary, shares
required to be owned by citizens of such Subsidiary's jurisdiction of
organization) to any Person other than to the Company or a Wholly Owned
Subsidiary or to officers or employees of such Restricted Subsidiary in
connection with stock options or stock ownership or other benefit plans approved
by the Board of Directors of the Company.
SECTION 4.11. Limitation on Liens. The Company will not, and will
-------------------
not permit any Restricted Subsidiary of the Company to, directly or indirectly,
create or permit to exist any Lien on any of its property or assets (including
Capital Stock), whether owned on the Issue Date or thereafter acquired, securing
any obligation, other than Permitted Liens, unless contemporaneously therewith
effective provision is made to secure the Securities equally and ratably with
(or on a senior basis to, in the case of Subordinated Obligations) such
obligation for so long as such obligation is so secured.
SECTION 4.12. Limitation on Sale/Leaseback Transactions. The
-----------------------------------------
Company will not, and will not permit any Restricted Subsidiary of the Company
to, enter into any Sale/Leaseback Transaction with respect to any property
unless (i) the Company or such Restricted Subsidiary would be entitled to (A)
Incur Indebtedness in an amount equal to the Attributable
48
Indebtedness with respect to such Sale/Leaseback Transaction pursuant to Section
4.3 and (B) create a Lien on such property securing such Attributable
Indebtedness without equally and ratably securing the Securities pursuant to
Section 4.11, (ii) the net cash proceeds received by the Company or any
Restricted Subsidiary in connection with such Sale/Leaseback Transaction are at
least equal to the fair value (as determined in good faith by the Board of
Directors of the Company and certified in an Officers' Certificate to the
Trustee) of such property and (iii) the transfer of such property is permitted
by, and the Company or such Restricted Subsidiary applies the proceeds of such
transaction in compliance with Section 4.7.
SECTION 4.13. Limitation on Business Activities and Investments of
----------------------------------------------------
the Guarantor and Existing Non-Company Guarantor Subsidiaries. (a) The
-------------------------------------------------------------
Guarantor shall not (i) engage in any activities or hold any assets other than
the Capital Stock of the Company and of the Existing Non-Company Guarantor
Subsidiaries or (ii) Incur any liabilities other than (A) liabilities under the
PEI Guarantee, (B) liabilities under Guarantees by the Guarantor of amounts
under the New U.S. Credit Facility, (C) liabilities under Guarantees by the
Guarantor of the performance of the Company's obligations in connection with the
Xxxxx Acquisition and (D) liabilities for overhead expenses, taxes and legal,
accounting and other professional fees and expenses. The Guarantor shall not
make any Investment other than in (i) the Voting Stock of the Company and of the
Existing Non-Company Guarantor Subsidiaries, (ii) Guarantees permitted by this
Section 4.13 (iii) Temporary Cash Investments and (iv) connection with the
Recapitalization; provided, however, that if the Guarantor merges into the
Company, the covenant in this Section 4.13(a) shall no longer be applicable.
(b) The Guarantor shall cause each Existing Non-Company Guarantor
Subsidiary not to (i) engage in any activities other than activities conducted
by such Existing Non-Company Guarantor Subsidiary as of the Issue Date or (ii)
Incur any liabilities; provided, however, that if any Existing Non-Company
Guarantor Subsidiary shall merge into the Company or any Wholly Owned
Subsidiary, the covenant in this Section 4.3(b) shall no longer be applicable
with respect to such Existing Non-Company Guarantor Subsidiary.
SECTION 4.14. Compliance Certificate. The Company and the Guarantor
----------------------
shall deliver to the Trustee within 120 days after the end of each fiscal year
of the Company an Officers' Certificate signed by the chief executive officer,
the chief financial officer or the chief accounting officer stating that in the
course of the performance by the signers of their duties as Officers of the
Company they would normally have knowledge of any Default or Event of Default
and whether or not the signers know of any Default or Event of Default that
occurred during such period. If they do, the certificate shall describe the
Default or Event of Default, its status and what action the Company is
49
taking or proposes to take with respect thereto. The Company also shall comply
with TIA (S) 314(a)(4).
SECTION 4.15. Further Instruments and Acts. Upon reasonable request
----------------------------
of the Trustee, the Company will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
SECTION 4.16. Maintenance of Office or Agency. The Company shall
-------------------------------
maintain the office or agency required under Section 2.3. The Company shall
give prior written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 11.2.
SECTION 4.17. Corporate Existence. Except as otherwise permitted by
-------------------
Article V and Section 4.9, the Company shall do or cause to be done, at its own
cost and expense, all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate existence of each of its
Subsidiaries in accordance with the respective organizational documents of each
such Subsidiary and the material rights (charter and statutory) and franchises
of the Company and each such Subsidiary; provided, however, that the Company
shall not be required to preserve, with respect to itself, any material right or
franchise and, with respect to any of its Subsidiaries, any such existence,
material right or franchise, if the Board of Directors of the Company shall
determine in good faith (such determination to be evidenced by a board
resolution certified by the Secretary of the Company and furnished to the
Trustee), that the preservation thereof is no longer desirable in the conduct of
the business of the Company and the Subsidiaries, taken as a whole.
SECTION 4.18. Payment of Taxes and Other Claims. The Company shall
---------------------------------
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to taxes)
levied or imposed upon it or any of its Subsidiaries or properties of it or any
of its Subsidiaries and (ii) all lawful claims for labor, materials and supplies
that, if unpaid, might by law become a Lien upon the property of it or any of
its Subsidiaries; provided, however, that the Company shall not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings properly instituted and diligently
conducted for which adequate reserves, to the extent required under GAAP, have
been taken.
50
SECTION 4.19. Maintenance of Properties and Insurance. (a) The Company
---------------------------------------
shall, and shall cause each of its Subsidiaries to, maintain its material
properties in good working order and condition (subject to ordinary wear and
tear) and make or cause to be made all necessary repairs, renewals,
replacements, additions, betterments and improvements thereto and actively
conduct and carry on its business, all as in the reasonable judgment of the
Company as is necessary so that the business carried on by Company and its
Subsidiaries may be actively conducted; provided, however, that nothing in this
Section 4.19 shall prevent the Company or any of its Subsidiaries from
discontinuing the operation and maintenance of any of its properties, if such
discontinuance is, in the good faith judgment of the Board of Directors of the
Company or the Subsidiary, as the case may be (such judgment to be evidenced by
a board resolution certified by the Secretary of the Company and furnished to
the Trustee), desirable in the conduct of their respective businesses and is not
disadvantageous in any material respect to the Holders.
(b) The Company shall provide or cause to be provided, for itself and
each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the good faith judgment of the
Board of Directors of the Company, are adequate and appropriate for the conduct
of the business of the Company and such Subsidiaries in a prudent manner, with
reputable insurers or with the government of the United States of America, any
state thereof or any agency or instrumentality of such governments, in such
amounts, with such deductibles, and by such methods as shall be customary, in
the good faith judgment of the Board of Directors of the Company, for companies
similarly situated in the industry.
ARTICLE V
Successor Company
-----------------
SECTION 5.1. When the Company May Merge or Transfer Assets. The
---------------------------------------------
Company will not consolidate with or merge with or into, or convey, transfer or
lease, in one transaction or a series of transactions, all or substantially all
its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") will be a Person organized and existing under the laws
------------------
of the United States of America, any State thereof or the District of
Columbia and the Successor Company (if not the Company) will expressly
assume, by supplemental indenture, executed and delivered to the Trustee,
in form satisfactory to the Trustee, all the obligations of the Company
under the Securities and this Indenture;
51
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any 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 or Event of Default will 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 under Section 4.3(a);
(iv) immediately after giving effect to such transaction, the
Successor Company will have a Consolidated Net Worth in an amount which is
not less than the Consolidated Net Worth of the Company immediately prior
to such transaction; and
(v) the Company will have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture, as set forth in this Indenture.
The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture, but the
predecessor Company in the case of a conveyance, transfer or lease of all its
assets or substantially all its assets will not be released from the obligation
to pay the Principal of and interest on the Securities.
ARTICLE VI
Defaults and Remedies
---------------------
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
-----------------
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, and such default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity, upon
optional redemption, upon required repurchase, upon declaration or
otherwise;
(3) the Company fails to comply with Article V;
(4) the Guarantor or the Company fails to comply with Section 4.2,
4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12 or 4.13 (other than a
failure to repurchase Securities when required pursuant to Section 4.7 or
4.9 which failure
52
shall constitute an Event of Default under Section 6.1(2)) and such failure
continues for 30 days after the notice specified below;
(5) the Company or the Guarantor 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) the Company or the Guarantor or any Significant Subsidiary of the
Company fails to pay any interest or Principal on any Indebtedness within
any applicable grace period provided in such Indebtedness after final
maturity or the acceleration of any such Indebtedness by the holders
thereof because of a default and the total amount of such Indebtedness
unpaid or accelerated exceeds $10.0 million or its foreign currency
equivalent at the time;
(7) the Company, the Guarantor or a Significant Subsidiary of the
Company 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 in which it is the debtor;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company, the Guarantor or any
Significant Subsidiary of the Company in an involuntary case;
(B) appoints a Custodian of the Company, the Guarantor or any
Significant Subsidiary or for any substantial part of its property of
the Company, the Guarantor or Significant Subsidiary; or
(C) orders the winding up or liquidation of the Company, the
Guarantor or any Significant Subsidiary of the Company;
53
(or any similar relief is granted under any foreign laws) and the order,
decree or relief remains unstayed and in effect for 60 days; or
(9) any judgment or decree by a court of competent jurisdiction for
the payment of money in excess of $10.0 million or its foreign currency
equivalent at the time is entered against the Company, the Guarantor or any
Significant Subsidiary of the Company and either (A) an enforcement
proceeding has been commenced by any creditor upon such judgment or decree
and is not discharged, waived or stayed within 10 days after notice and is
not covered by an insurance company which has accepted coverage or (B) such
judgment or decree remains unpaid and outstanding for a period of 60 days
following such judgment and is not discharged, waived or stayed within 10
days after notice and is not covered by an insurance company which has
accepted coverage.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means 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), (6) and (9) of this Section 6.1 is
not an Event of Default until the Trustee by notice to the Company or the
Holders of at least 25% in aggregate principal amount of the outstanding
Securities by notice to the Company gives notice of the Default and the Company
does not cure such Default within the time specified in said clause (4), (5),
(6) 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 Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) of this Section 6.1 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) of this Section 6.1 and what action the Company is
taking or proposes to take with respect thereto. In addition, the Company is
required to deliver to the Trustee, within 120 days after the end of each fiscal
year, a certificate indicating whether the signers thereof know of any Default
that occurred during the previous year.
54
SECTION 6.2. Acceleration. If an Event of Default (other than an
------------
Event of Default specified in Section 6.1(7) or (8) with respect to the Company)
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in aggregate principal amount of the outstanding Securities by
notice to the Company and the Trustee, may declare the Principal of and accrued
but unpaid interest on all the Securities to be due and payable. Upon such a
declaration, such Principal and interest shall be due and payable immediately.
If an Event of Default specified in Section 6.1(7) or (8) with respect to the
Company occurs and is continuing, the Principal of and accrued interest on all
the Securities shall ipso facto become and be immediately due and payable
---- -----
without any declaration or other act on the part of the Trustee or any Holders.
The Holders of a majority in aggregate principal amount of the outstanding
Securities by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of Principal or interest that has become due solely because of
acceleration and the Trustee has been paid all amounts due to it pursuant to
Section 7.7. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.3. 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, to the extent
permitted by law, cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in
-----------------------
aggregate principal amount of the Securities then outstanding by notice to the
Trustee may waive any past or existing Default and its consequences except (i) a
Default in the payment of the Principal of or interest on a Security or (ii) a
Default in respect of a provision that under Section 9.2 cannot be amended
without the consent of each Securityholder affected. When a Default is waived,
it is deemed cured, and any Event of Default arising therefrom shall be deemed
to have been cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 6.5. Control by Majority. Upon provision of reasonable
-------------------
indemnity to the Trustee satisfactory to the Trustee, the Holders of a majority
in aggregate principal amount of the
55
Securities then outstanding 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,
which may rely on opinions of counsel, may refuse to follow any direction that
conflicts with law or this Indenture or, subject to Section 7.1, 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.
SECTION 6.6. Limitation on Suits. A Holder may not pursue any
-------------------
remedy with respect to this Indenture or the Securities unless:
(i) the Holder gives to the Trustee previous written notice
stating that an Event of Default is continuing;
(ii) the Holders of at least 25% in aggregate principal amount
of the Securities then outstanding make a written request to the Trustee to
pursue the remedy;
(iii) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or indemnity;
and
(v) the Holders of a majority in aggregate principal amount of
the Securities then outstanding 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 6.7. Rights of Holders To Receive Payment. Notwithstanding
------------------------------------
any other provision of this Indenture, the right of any Holder to receive
payment of Principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default
--------------------------
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid
56
interest to the extent lawful) and the amounts provided for in Section
7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file
--------------------------------
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or
----------
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for Principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for Principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.
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 and expenses,
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
6.7 or a suit by Holders of more than 10% in aggregate principal amount of the
outstanding Securities.
57
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
--------------------------------
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE VII
Trustee
-------
SECTION 7.1. 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:
(i) 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
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 7.1;
(ii) 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
58
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(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.
(e) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(f) 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.
(g) 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 7.1 and to the provisions of the TIA.
SECTION 7.2. Rights of Trustee. (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 the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
-------- -------
misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the 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.
59
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(g) The Trustee shall not be charged with knowledge of any Default or
Event of Default with respect to the Securities unless either (1) a Trust
Officer shall have actual knowledge of such Default or Event of Default or (2)
written notice of such Default or Event of Default shall have been given to the
Trustee by the Company or any other obligor on the Securities or by any Holder
of the Securities.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its respective Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent, Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be
--------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture, the Securities or the PEI Guarantee, it shall not be accountable
for the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company or any Subsidiary Guarantor 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 7.5. Notice of Defaults. If a Default or an Event of
------------------
Default occurs and is continuing and if it is known to the Trustee, the Trustee
shall mail to each Securityholder notice of the Default within 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 of or interest on any
Security, the Trustee may withhold the notice if and so long as a committee of
its Trust Officers in good faith determines that withholding the notice is not
opposed to the interests of Securityholders.
SECTION 7.6. Reports by Trustee to Holders. As promptly as
-----------------------------
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such May 15 that
complies with TIA (S) 313(a). The Trustee also shall comply with TIA (S)
313(b). The Trustee shall promptly deliver to the Company a copy of any report
it delivers to Holders pursuant to this Section 7.6.
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A copy of each report at the time of its mailing to Securityholders
shall be filed by the Trustee with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.7. Compensation and Indemnity. The Company shall pay to
--------------------------
the Trustee from time to time such compensation for its services as the Company
and the Trustee shall from time to time agree in writing. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to such compensation for its services, except any such
expense, disbursement or advance as may arise from its negligence, wilful
misconduct or bad faith, unless the Trustee shall have complied with the
applicable standard of care required by the TIA. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Trustee shall provide
the Company reasonable notice of any expenditure not in the ordinary course of
business; provided that prior approval by the Company of any such expenditure
--------
shall not be a requirement for the making of such expenditure nor for
reimbursement by the Company thereof. The Company shall indemnify each of the
Trustee and any predecessor Trustees against any and all loss, damage, claim,
liability or expense (including attorneys' fees and expenses) (other than taxes
applicable to the Trustee's compensation hereunder) incurred by it in connection
with the acceptance or administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee may have separate counsel, and the Company will
pay the reasonable fees and expenses of such counsel. The Company need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own wilful misconduct, negligence
or bad faith, unless the Trustee shall have complied with the applicable
standard of care required by the TIA.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
Principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section 7.7 shall
survive the resignation or removal of the Trustee and discharge of this
Indenture. When the Trustee incurs expenses after the occurrence of a Default
specified in Section
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6.1(7) or (8) with respect to the Company, the expenses are intended to
constitute expenses of administration under the Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any
----------------------
time with 30 days notice to the Company. The Holders of a majority in principal
amount of the Securities then outstanding, may remove the Trustee with 30 days
notice to the Trustee and may appoint a successor Trustee. The Company shall
remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee
or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, 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 7.8, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
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SECTION 7.9. 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, provided that such corporation shall
--------
be eligible under this Article Seven and TIA Section 3.10(a).
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 $50,000,000 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 Company 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 Company.
-------------------------------------------------
The Trustee shall comply with (S) TIA 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.
ARTICLE VIII
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.1. Discharge of Liability on Securities; Defeasance.
------------------------------------------------
(a) When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.7) for cancellation or
(ii) all outstanding Securities have become due and payable, whether at maturity
or as a result of the mailing of a notice of redemption pursuant to Article 3
hereof or the Securities will become due and payable at their Maturity within 91
days, or the Securities are to be called
63
for redemption within 91 days under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company, and, in each case of this clause (ii), the Company
irrevocably deposits or causes to be deposited with the Trustee funds sufficient
to pay at maturity or upon redemption all outstanding Securities, including
interest thereon to maturity or such redemption date (other than Securities
replaced pursuant to Section 2.7), and if in either case the Company pays all
other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 8.1(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel from the
Company that all conditions precedent provided herein for relating to
satisfaction and discharge of this Indenture have been complied with and at the
cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any time may
terminate (i) all of its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations and the obligations of the
Guarantor under Sections 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11,
4.12 and 4.13 and the operation of Sections 6.1(4), 6.1(5), 6.1(6), 6.1(7) (but
only with respect to a Significant Subsidiary), 6.1(8) (but only with respect to
a Significant Subsidiary), 6.1(9), 5.1(iii) and 5.1(iv) ("covenant defeasance
option"). The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Section 6.1(4),
6.1(5), 6.1(6), 6.1(7) (but only with respect to a Significant Subsidiary),
6.1(8) (but only with respect to a Significant Subsidiary) or 6.1(9) or because
of the failure of the Company to comply with Sections 5.1(iii) and 5.1(iv). If
the Company exercises its legal defeasance option, the Guarantor will be
released from all of its obligations under the PEI Guarantee.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.3, 2.4, 2.5, 2.7, 4.1, 4.16, 4.17, 7.7, 7.8, 8.4, 8.5
and 8.6 shall survive until the Securities have been paid in full. Thereafter,
the Company's obligations in Sections 7.7, 8.4 and 8.5 shall survive.
64
SECTION 8.2. Conditions to Defeasance. The Company may exercise
------------------------
its legal defeasance option or its covenant defeasance option only if:
(i) the Company irrevocably deposits or causes to be deposited
in trust with the Trustee money or U.S. Government Obligations which
through the scheduled payment of Principal and interest in respect thereof
in accordance with their terms will provide cash at such times and in such
amounts as will be sufficient to pay Principal and interest when due on all
outstanding Securities (except Securities replaced pursuant to Section 2.7)
to maturity or redemption, as the case may be;
(ii) the Company delivers to the Trustee a certificate from a
nationally 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 will provide cash at such times and in
such amounts as will be sufficient to pay Principal and interest when due
on all outstanding Securities (except Securities replaced pursuant to
Section 2.7) to maturity or redemption, as the case may be;
(iii) 91 days pass after the deposit is made and during the 91-day
period no Default specified in Section 6.1(7) or (8) with respect to the
Company occurs which is continuing at the end of the period;
(iv) the deposit does not constitute a default under any other
material agreement binding on the Company;
(v) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not constitute,
or is qualified as, a regulated investment company under the Investment
Company Act of 1940;
(vi) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this Indenture there
has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Securityholders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such deposit
and defeasance had not occurred;
(vii) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of
65
Counsel to the effect that the Securityholders will not recognize income,
gain or loss for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such deposit and covenant defeasance had not occurred; and
(viii) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent to
the defeasance and discharge of the Securities as contemplated by this
Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.3. Application of Trust Money. The Trustee shall hold in
--------------------------
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations either directly or through the Paying Agent as the Trustee may
determine and in accordance with this Indenture to the payment of Principal of
and interest on the Securities.
SECTION 8.4. Repayment to Company. The Trustee and the Paying
--------------------
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of Principal or interest that remains unclaimed for two
years after the date of payment of such Principal and interest, and, thereafter,
Securityholders entitled to the money must look to the Company for payment as
general creditors.
SECTION 8.5. Indemnity for Government Obligations. The Company
------------------------------------
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
Principal and interest received on such U.S. Government Obligations other than
any such tax, fee or other charge which by law is for the account of the Holders
of the defeased Securities; provided that the Trustee shall be entitled to
charge any such tax, fee or other charge to such Holder's account.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is
-------------
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under
66
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, (a) if
-------- -------
the Company has made any payment of interest on or Principal of any Securities
following the reinstatement of their obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent and (b) unless otherwise required by any legal proceeding or any
order or judgment of any court or governmental authority, the Trustee or Paying
Agent shall return all such money and U.S. Government Obligations to the Company
promptly after receiving a written request therefor at any time, if such
reinstatement of the Company's obligations has occurred and continues to be in
effect.
ARTICLE IX
Amendments
----------
SECTION 9.1. Without Consent of Holders. The Company, the Guarantor
--------------------------
and the Trustee may amend this Indenture or the Securities without notice to or
consent of any Securityholder:
(i) to cure any ambiguity, omission, defect or inconsistency;
(ii) to comply with Article 5;
(iii) 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 as described in Section 163(f)(2)(B) of the Code;
(iv) to add Guarantees with respect to the Securities;
(v) to secure the Securities;
(vi) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(vii) to make any change that does not adversely affect the rights of
any Securityholder; and
(viii) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA.
67
After an amendment under this Section 9.1 becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section 9.1.
SECTION 9.2. With Consent of Holders. The Company, the Guarantor and
-----------------------
the Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the Securities then outstanding (including
consents obtained in connection with a tender offer or exchange for Securities).
However, without the consent of each Securityholder affected, an amendment may
not:
(i) reduce the amount of Securities whose Holders must consent to
an amendment, supplement or waiver;
(ii) reduce the rate of or extend the time for payment of interest
on any Security;
(iii) reduce the principal of or extend the Stated Maturity of any
Security;
(iv) 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;
(v) make any Security payable in money other than that stated in
the Security;
(vi) impair the right of any Holder to receive payment of Principal
of and interest on such Holder's Securities on or after the due dates
therefor or to institute suit for the enforcement of any payment on or with
respect to such Holder's Securities; or
(vii) make any change in the second sentence of this Section 9.2.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.2 becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section 9.2.
68
SECTION 9.3. Compliance with Trust Indenture Act. Every amendment to
-----------------------------------
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.4. 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. After an
amendment or waiver becomes effective, it shall bind every Securityholder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.5. Notation on or Exchange of Securities. If an amendment
-------------------------------------
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determine, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.6. 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 7.1) shall be fully protected in relying
upon, in addition to the documents required by Section 12.4, an Officers'
Certificate and an Opinion of Counsel stating that such amendment complies with
the provisions of this Article 9.
SECTION 9.7. Payment for Consent. Neither the Company nor any
-------------------
affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for, or as an inducement to any consent, waiver or amendment of any of the
69
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 X
PEI Guarantee
-------------
SECTION 10.1. PEI Guarantee. (a) The Guarantor, as primary obligor
-------------
and not merely as surety, hereby unconditionally and irrevocably guarantees on a
senior basis to each Holder and to the Trustee and its successors and assigns
(a) the full and punctual payment of Principal of and interest on the Securities
when due, whether at Stated Maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Company under this
Indenture (including obligations to the Trustee) and the Securities and (b) the
full and punctual performance within applicable grace periods of all other
obligations of the Company under this Indenture and the Securities (all the
foregoing being hereinafter collectively called the "Guaranteed Obligations").
The Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed, in whole or in part, without notice or further assent from the
Guarantor, and that the Guarantor will remain bound under this Article X
notwithstanding any extension or renewal or any Guaranteed Obligation.
(b) The Guarantor waives presentation to, demand of, payment from and
protest to the Company of any of the Guaranteed Obligations and also waives
notice of protest for nonpayment. The Guarantor waives notice of any default
under the Securities or the Guaranteed Obligations. The obligations of the
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 Company or any other Person under this Indenture, the Securities or
any other agreement or otherwise; (b) any extension or renewal of any thereof;
(c) any rescission, waiver, amendment or modification of any of the terms or
provisions of this Indenture, the Securities or any other agreement; (d) the
release of any security held by any Holder or the Trustee for the Guaranteed
Obligations or any of them; (e) the failure of any Holder or Trustee to exercise
any right or remedy against any other guarantor of the Guaranteed Obligations;
or (f) any change in the ownership of the Guarantor.
(c) The Guarantor further agrees that the PEI Guarantee herein
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Guaranteed Obligations.
70
(d) The PEI Guarantee is an unsecured senior obligation of the
Guarantor and ranks pari passu with other senior unsecured indebtedness of the
Guarantor.
(e) The obligations of the 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 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 this
Indenture, the Securities or any other agreement, by any waiver or modification
of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the obligations, or by any other act or thing or omission or
delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of the Guarantor or would otherwise operate as a discharge
of the Guarantor as a matter of law or equity.
(f) The Guarantor further agrees that the PEI 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 Company or otherwise.
(g) The PEI Guarantee is a continuing guarantee and shall (a) remain
in full force and effect until payment in full of all the Guaranteed
Obligations, (b) be binding upon the Guarantor and (c) enure to the benefit of
and be enforceable by the Trustee, the Holders and their successors, transferees
and assigns.
(h) 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
Guarantor by virtue hereof, upon the failure of the Company to pay the Principal
of or interest on any Guaranteed Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Guaranteed Obligation, the Guarantor hereby
promises to and will, 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 Guaranteed
Obligations of the Company to the Holders and the Trustee.
71
(i) The 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 Guarantor further agrees that, as between it, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
Guaranteed Obligations guaranteed hereby may be accelerated as provided in
Article VI for the purposes of the PEI Guarantee herein, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the Guaranteed Obligations hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article VI, such Guaranteed
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantor for the purposes of this Section 10.1.
(j) The Guarantor also agrees to pay any and all costs and expenses
(including reasonable counsel fees and expenses) incurred by the Trustee or any
Holder in enforcing any rights under this Section 10.1.
SECTION 10.2. Limitation on Liability. Any term or provision of
-----------------------
this Indenture to the contrary notwithstanding, the maximum, aggregate amount of
the obligations guaranteed hereunder by the Guarantor shall not exceed the
maximum amount that can be hereby guaranteed without rendering this Indenture,
as it relates to the Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer.
SECTION 10.3. Successors and Assigns. This Article X shall be
----------------------
binding upon the Guarantor and its successors and assigns and shall enure to the
benefit of the successors and assigns of the Trustee and the Holders and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 10.4. No Waiver. Neither a failure nor a delay on the part
---------
of either the Trustee or the Holders in exercising any right, power or privilege
under this Article X shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article X at law,
in equity, by statute or otherwise.
SECTION 10.5. Modification. No modification, amendment or waiver of
------------
any provision of this Article X, nor the consent to any departure by the
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed
72
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 Guarantor in any case shall entitle the Guarantor to any other or further
notice or demand in the same, similar or other circumstances.
ARTICLE XI
Miscellaneous
-------------
SECTION 11.1. 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 provision required by
the TIA shall control.
SECTION 11.2. Notices. Any notice or communication shall be in
-------
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Prestolite Electric Incorporated
0000 Xxxxxxxxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
if to the Guarantor:
PEI Holding, Inc.
0000 Xxxxxxxxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
if to the Trustee:
First Trust National Association
Xxxx Building, Suite 740
000 Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
The Company, the Guarantor, or the Trustee by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Xxxxxxxxx
00
and shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 11.3. Communication by Holders with other Holders. Security-
-------------------------------------------
holders may communicate pursuant to TIA (S) 312(b) with other Securityholders
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA (S) 312(c).
SECTION 11.4. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(i) 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
(ii) 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 11.5. 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:
(i) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(ii) 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;
(iii) 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
(iv) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
74
SECTION 11.6. When Securities Disregarded. In determining whether
---------------------------
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which a Trust Officer of the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
SECTION 11.7. Rules by Trustee, Paying Agent and Registrar. The
--------------------------------------------
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 11.8. Legal Holidays. A "Legal Holiday" is a Saturday, a
-------------- -------------
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period. If a regular record date is
a Legal Holiday, the record date shall not be affected.
SECTION 11.9. 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 of law to
the extent that the application of the laws of another jurisdiction would be
required thereby.
SECTION 11.10. No Recourse Against Others. A director, officer,
--------------------------
employee or stockholder, as such, of the Company or the Guarantor shall not have
any liability for any obligations of the Company or the Guarantor under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 11.11. Successors. All agreements of the Company and the
----------
Guarantor in this Indenture and the Securities shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 11.12. 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.
75
SECTION 11.13. Variable Provisions. The Company initially appoints
-------------------
the Trustee as Paying Agent and Registrar and custodian with respect to any
Global Securities.
SECTION 11.14. Qualification of Indenture. The Company shall qualify
--------------------------
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Rights Agreement and shall pay all reasonable costs and expenses
(including attorneys' fees for the Company, the Trustee and the Holders)
incurred in connection therewith, including, but not limited to, costs and
expenses of qualification of this Indenture and the Securities and printing this
Indenture and the Securities. The Trustee shall be entitled to receive from the
Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 11.15. 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.
76
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
PRESTOLITE ELECTRIC INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxxxx
______________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President and
Chief Financial Officer
PEI HOLDING, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
______________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President and
Chief Financial Officer
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxx X. Xxxxx
______________________________
Name: Xxxxx X. Xxxxx
Title: Vice President
RULE 144A/REGULATION S APPENDIX
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO
RULE 144A AND TO CERTAIN PERSONS IN OFFSHORE TRANSACTIONS IN
RELIANCE ON REGULATION S.
PROVISIONS RELATING TO INITIAL SECURITIES,
------------------------------------------
PRIVATE EXCHANGE SECURITIES
---------------------------
AND EXCHANGE SECURITIES
-----------------------
1. Definitions.
-----------
1.1 Definitions.
-----------
For the purposes of this Appendix the following terms shall have
the meanings indicated below:
"Depositary" means The Depository Trust Company, its nominees and
their respective successors and assigns.
"Exchange Securities" means the 9-5/8% Senior Notes Due 2008 to be
issued pursuant to this Indenture in connection with a Registered Exchange Offer
pursuant to the Registration Rights Agreement.
"Initial Purchasers" means Credit Suisse First Boston Corporation and
BT Alex.Xxxxx Incorporated.
"Initial Securities" means the 9-5/8% Senior Notes Due 2008, issued
under this Indenture on or about the date hereof.
"Private Exchange" means the offer by the Company, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means the 9-5/8% Senior Notes Due 2008,
if any, to be issued pursuant to this Indenture to the Initial Purchasers in a
Private Exchange.
"Purchase Agreement" means the Purchase Agreement dated January 16,
1998, among the Company, the Guarantor and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to the Registration Rights Agreement, to certain Holders of Initial Securities,
to issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
2
"Registration Rights Agreement" means the Registration Rights
Agreement dated January 22, 1998 among the Company, the Guarantor and the
Initial Purchasers.
"Securities" means the Initial Securities, the Exchange Securities and
the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depositary), or any successor person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement issued
by the Company, in connection with the offer and sale of Initial Securities or
Private Exchange Securities, pursuant to the Registration Rights Agreement.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.3(d) hereto.
1.2 Other Definitions
-----------------
Defined in
----------
Term Section:
---- -------
"Agent Members"............................................ 2.1(b)
"Global Security".......................................... 2.1(a)
"Regulation S"............................................. 2.1(a)
"Rule 144A"................................................ 2.1(a)
2. The Securities.
--------------
2.1 Form and Dating.
---------------
The Initial Securities are being offered and sold by the Company
pursuant to the Purchase Agreement.
(a) Global Securities. Initial Securities offered and sold to a
-----------------
QIB in reliance on Rule 144A under the Securities Act ("Rule 144A") or in
reliance on Regulation S under the Securities Act ("Regulation S"), in each case
as provided in the Purchase Agreement, shall be issued initially in the form of
one or more permanent global Securities in definitive, fully registered form
without interest coupons with the global securities legend and restricted
securities legend set forth in Exhibit 1 hereto (each, a "Global Security"),
which shall be deposited on behalf of the purchasers of the Initial Securities
represented thereby with the Trustee as custodian for the Depositary (or with
such other custodian as the Depositary may direct), and registered in the name
of the Depositary or a
3
nominee of the Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. 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.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the 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 custodian for the
Depositary.
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 the custodian of the
Depositary or under such Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or 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) Certificated Securities. Except as provided in this Section 2.1
-----------------------
or Section 2.3 or 2.4, owners of beneficial interests in Global Securities will
not be entitled to receive physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
--------------
Initial Securities for original issue in an aggregate principal amount of U.S.
$125.0 million and (2) Exchange Securities or Private Exchange Securities for
issue only in a Registered Exchange Offer or a Private Exchange, respectively,
pursuant to the Registration Rights Agreement, for a like principal amount of
Initial Securities, in each case upon a written order of the Company signed by
two Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company. Such order shall specify the amount of the Securities
to be authenticated and the date on which the original issue of Securities is to
be authenticated and whether the Securities are to be Initial Securities,
Exchange Securities
4
or Private Exchange Securities. The aggregate principal amount of Securities
outstanding at any time may not exceed U.S. $125 million except as provided in
Section 2.7 of this Indenture.
2.3 Transfer and Exchange. (a) 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 to the Registrar 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 the Global Security. The Registrar shall, in
accordance with such instructions instruct the Depositary to credit to the
account of the Person specified in such instructions a beneficial interest in
the Global Security and to debit the account of the Person making the transfer
the beneficial interest in the Global Security being transferred.
(ii) 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 of another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(iii) In the event that a Global Security is exchanged for Securities
in definitive registered form pursuant to Section 2.4 of this Appendix or
Section 2.9 of this Indenture, prior to the consummation of a Registered
Exchange Offer or the effectiveness of a Shelf Registration Statement with
respect to such Securities, such Securities may be exchanged only in
accordance with such procedures as are substantially consistent with the
provisions of this Section 2.3 (including the certification requirements
set forth on the reverse of the Initial Securities intended to ensure that
such transfers comply with Rule 144A or Regulation S, as the case may be)
and such other procedures as may from time to time be adopted by the
Company.
(b) Legend.
------
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Security certificate evidencing the Global Securities (and all
Securities issued in exchange therefor or in substitution thereof) shall
bear a legend in substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE
5
UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS
NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS
NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A)
THIS NOTE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(i) INSIDE THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (ii) OUTSIDE THE UNITED STATES IN A TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (iii) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i)
THROUGH (iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act, in the case of any
Transfer Restricted Security that is represented by a Global Security, the
Registrar shall permit the Holder thereof to exchange such Transfer
Restricted Security for a certificated Security that does not bear the
legend set forth above and rescind any restriction on the transfer of such
Transfer Restricted Security, if the 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
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 legends on
such Initial Securities or such Private Exchange Securities will cease to
apply, but the requirements requiring such Initial Securities or such
Private Exchange Securities issued to certain Holders be issued in global
form will continue to apply, and Initial Securities or Private Exchange
Securities in global form without legends
6
will be available to the transferee of the Holder of such Initial
Securities or Private Exchange Securities upon exchange of such
transferring Holder's Initial Securities or Private Exchange Securities or
directions to transfer such Holder's interest in the Global Security, as
applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which Holders of such Initial
Securities are offered Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in global form will
continue to apply and Initial Securities in global form with the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders of such Initial Securities that do not exchange their Initial
Securities, and Exchange Securities in global form will be available to
Holders that exchange such Initial Securities in such Registered Exchange
Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Securities 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 that
Initial Securities issued to certain Holders be issued in global form will
still apply, and Private Exchange Securities in global form with the
Restricted Securities Legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Securities in such Private
Exchange.
(c) Cancellation or Adjustment of Global Security. At such time as
---------------------------------------------
all beneficial interests in a Global Security have either been exchanged for
certificated Securities, redeemed, repurchased or canceled, such Global Security
shall be returned to the Depositary for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for certificated Securities, redeemed,
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.
(d) Obligations with Respect to Transfers and Exchanges of Securities.
-----------------------------------------------------------------
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate certificated
Securities and Global Securities at the Registrar's or any co-registrar's
request.
7
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge payable
in connection therewith (other than any such transfer taxes, assessments or
similar governmental charge payable upon exchange or transfer pursuant to
Sections 3.6, 4.9 and Section 9.5.
(iii) The Registrar or any co-registrar shall not be required to
register the transfer of or exchange of (a) any certificated Security
selected for redemption in whole or in part pursuant to Article III of this
Indenture, except the unredeemed portion of any certificated Security being
redeemed in part, or (b) any Security for a period beginning 15 Business
Days before the mailing of a notice of an offer to repurchase or redeem
Securities or 15 Business Days before an interest payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of Principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) 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.
(e) 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 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 the payment of any amount, under or with respect to such
Securities. All notices and communications to be given to the Holders and
all payments to be made to Holders under the Securities shall be given or
made only to or upon the order of the registered Holders (which shall be
the Depositary or its nominee in the case of a Global Security). The rights
of beneficial owners in any
8
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.
2.4 Certificated Securities.
-----------------------
(a) A Global Security deposited with the Depositary or with the
Trustee as custodian for the Depositary pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is not appointed by
the Company within 90 days of such notice, or (ii) an Event of Default has
occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section shall be surrendered by the 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
certificated Initial Securities of authorized denominations. Any portion of a
Global Security transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 and any integral
multiple thereof and registered in such names as the Depositary shall direct.
Any certificated Initial Security delivered in exchange for an interest in the
Global Security shall, except as otherwise provided by Section 2.3(d), bear the
restricted securities legend set forth in Exhibit 1 hereto.
9
(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 either of the events specified
in Section 2.4(a), the Company will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
EXHIBIT 1
TO RULE 144A/REGULATION S
APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THIS
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE
MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i) INSIDE THE
UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE UNITED
STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH
(iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE."
2
PRESTOLITE ELECTRIC INCORPORATED
No. __ Principal Amount $_____________
CUSIP NO. _________
9-5/8% Senior Note Due 2008
Prestolite Electric Incorporated, a Delaware corporation, promises to
pay to __________, or registered assigns, the principal sum of
________________________ Dollars on February 1, 2008.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated: January 22, 1998 PRESTOLITE ELECTRIC INCORPORATED
by__________________________________________
by__________________________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities
referred to in the Indenture.
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
by
Authorized Signatory
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
(Reverse of Security)
9-5/8% Senior Note Due 2008
1. Interest
--------
Prestolite Electric Incorporated, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, additional cash interest will accrue on this Security at a
rate of 0.50% per annum from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured, calculated on the principal amount of
this Security as of the date on which such interest is payable. Such interest
is payable in addition to any other interest payable from time to time with
respect to this Security. The Trustee will not be deemed to have notice of a
Registration Default until it shall have received actual notice of such
Registration Default.
The Company will pay interest semiannually on February 1 and August 1
of each year, commencing August 1, 1998. Interest on the Securities will accrue
from the most recent date to which interest has been paid on the Securities or,
if no interest has been paid, from January 22, 1998. The Company shall pay
interest on overdue Principal at 1% per annum in excess of the rate borne by the
Securities to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment
-----------------
By at least 11:00 a.m. (New York City time) on the date on which any
Principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such Principal and/or interest. The Company will pay interest (except defaulted
interest) to the Persons who are registered Holders of Securities at the close
of business on the January 15 or July 15 next preceding the interest payment
date even if Securities are cancelled, repurchased or redeemed after the record
date and on or before the interest payment date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Company will pay
Principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. However, the Company
may pay Principal
3
and interest by check payable in such money. It may mail an interest check to a
Holder's registered address.
3. Paying Agent and Registrar
--------------------------
Initially, First Trust National Association, a national banking
association (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice to any Securityholder. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of
January 22, 1998 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Company, PEI
Holding, Inc., the parent corporation of the Company (the "Guarantor") and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture (the
------
"Act"). Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and the Act for a
statement of those terms.
The Securities are unsecured senior obligations of the Company limited
to $125.0 million aggregate principal amount (subject to Section 2.7 of the
Indenture). The Security is one of the Initial Securities referred to in the
Indenture. The Securities include the Initial Securities and any Private
Exchange Securities and Exchange Securities issued in exchange for the Initial
Securities pursuant to the Indenture and the Registration Rights Agreement. The
Initial Securities, the Private Exchange Securities and the Exchange Securities
are treated as a single class of securities under the Indenture. The Indenture
imposes certain limitations on the Incurrence of Indebtedness by the Company and
its Restricted Subsidiaries, the payment of dividends and other distributions on
the Capital Stock of the Company and its Restricted Subsidiaries, the purchase
or redemption of Capital Stock of the Company and Capital Stock of such
Restricted Subsidiaries, certain purchases or redemptions of Subordinated
Obligations, the sale or transfer of assets and Capital Stock of Restricted
Subsidiaries, the issuance or sale of Capital Stock of Restricted Subsidiaries,
the investments of the Company and its Subsidiaries and transactions with
Affiliates. In addition, the Indenture limits the ability of the Company and
its Restricted Subsidiaries to restrict distributions and dividends from
Restricted Subsidiaries.
4
To guarantee the due and punctual payment of the Principal and
interest, if any, on the Securities and all other amounts payable by the Company
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, the Guarantor, as primary obligor and
not merely as surety, has unconditionally and irrevocably guaranteed such
obligations on a senior basis pursuant to the terms of Article X the Indenture.
5. Optional Redemption
-------------------
Except as set forth in this paragraph 5, the Securities will not be
redeemable at the option of the Company prior to February 1, 2003. On and after
such date, the Securities will be redeemable, at the Company's option, in whole
or in part, upon not less than 30 nor more than 60 days' prior notice mailed by
first class mail to each Holder's registered address, at the following
redemption prices (expressed as percentages of principal amount) plus accrued
and unpaid interest, if any, to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date):
If redeemed during the 12-month period commencing on February 1 of the
years set forth below:
Year Redemption Price
---- ----------------
2003 ............................... 104.8125%
2004 ............................... 103.2083%
2005 ............................... 101.6042%
2006 and thereafter................. 100.0000%
Notwithstanding the foregoing, at any time or from time to time prior
to February 1, 2001, the Company may redeem in the aggregate up to 35% of the
aggregate principal amount of the Securities originally issued with the proceeds
of one or more Public Equity Offerings to the extent that, in the case of a
Public Equity Offering of the Guarantor, the net cash proceeds thereof are
contributed to the equity capital of the Company, at a redemption price
(expressed as a percentage of principal amount thereof) of 109.625% plus accrued
and unpaid interest, if any, to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date); provided, however, that after giving effect to
-------- -------
such redemption, at least $81.25 million principal amount of the Securities
remain outstanding after each such redemption.
6. Notice of Redemption
--------------------
5
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date by first-class mail to each Holder of
Securities to be redeemed at his registered address. Securities in denominations
of principal amount 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 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.
7. Put Provisions
--------------
Upon a Change of Control, any Holder of Securities will have the right
to cause the Company to repurchase all or any part of the Securities of such
Holder at a repurchase price equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, to the date of repurchase as provided in, and
subject to the terms of, the Indenture.
8. Registration Rights
-------------------
The Company is party to a Registration Rights Agreement, dated as of
January 22, 1998, among the Company, the Guarantor, Credit Suisse First Boston
Corporation and BT Alex.Xxxxx Incorporated pursuant to which it is obligated to
pay Liquidated Damages (as defined therein) upon the occurrence of certain
Registration Defaults (as defined therein).
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of principal amount of $1,000 and whole multiples of $1,000. A Holder may
register, transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange (i) 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)
for a period beginning 15 days before a selection of Securities to be redeemed
and ending on the date of such selection or (ii) any Securities for a period
beginning 15 days before an interest payment date and ending on such interest
payment date.
10. Persons Deemed Owners
---------------------
6
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 or interest remains unclaimed
for two years after the date of payment of Principal and interest, the Trustee
or Paying Agent shall pay the money back to the Company at its request unless an
abandoned property law designates another Person. After any such payment,
Holders entitled to the money must look only to the Company and not to the
Trustee for payment.
12. Defeasance
----------
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of Principal of 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 with the written consent of the
Holders of at least a majority in principal amount of the outstanding Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company, the Guarantor
and the Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the Securities or
to secure the Securities, or to add additional covenants of or surrender rights
and powers conferred on the Company, or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder.
14. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
Principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the
7
Securities, upon required repurchase, upon declaration or otherwise; (iii)
failure by the Company or the Guarantor to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations (including failure to pay within any grace
period after final maturity) of other indebtedness of the Company, the Guarantor
or the Company's Restricted Subsidiaries if the amount accelerated (or so
unpaid) exceeds $10.0 million; (v) certain events of bankruptcy or insolvency
with respect to the Company, the Guarantor or any Significant Subsidiary; and
(vi) certain judgments or decrees for the payment of money in excess of $10.0
million against the Company, the Guarantor or any Significant Subsidiary. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in aggregate principal amount of the Securities may declare all the
Securities to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Securities being due
and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of Principal
or interest) if it determines that withholding notice is not opposed to their
interest.
15. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations set forth in this Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Company
or the Guarantor shall not have any liability for any obligations of the Company
or the Guarantor under the Securities or this Indenture or for any claim based
on, in respect of or by reason of such obligations or their creation. By
accepting a Security, each Securityholder waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Securities.
8
17. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) 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
entirety), 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. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. Governing Law
-------------
This Security 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.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to: Prestolite
Electric Incorporated, 0000 Xxxxxxxxxxxx Xxxxxxxxx, Xxx Xxxxx, Xxxxxxxx 00000,
Attention: Chief Financial Officer.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
________________________________________________________________________________
Date: ____________________ Your Signature: ___________________
Signature Guarantee: _________________________________________
(Signature must be guaranteed by a participant in a recognized Signature
Guarantee Medallion Program or other signature guarantor program reasonably
acceptable to the Trustee)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being transferred:
CHECK ONE BOX BELOW:
(1) [_]1 to the Company; or
(2) [_]2 pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) [_]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) [_]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
(5) [_]5 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 will refuse to register any of
the Securities evidenced by this certificate in the name of any Person other
than the registered holder thereof; provided, however, that if box (4) or (5) is
-------- -------
checked, the trustee may require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
______________________________
Signature
Signature Guarantee:
_____________________________ ______________________________
Signature
(Signature must be guaranteed by a
participant in a recognized Signature
Guarantee Medallion Program or other
signature guarantor program reasonably
acceptable to the Trustee)
_______________________________________________________________________
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated: ________________ ______________________________
NOTICE: To be executed by
an executive officer
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.7 or 4.9 of the Indenture, check the box:
[_]6
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.7 or 4.9 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
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
Guarantee Medallion Program or other signature guarantor program reasonably
acceptable to the Trustee)
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global
Security have been made:
Date of Amount of decrease in Amount of increase in Principal Amount of Signature of
Exchange Principal Amount of Principal Amount of this Global Security authorized officer of
this Global Security this Global Security following such Trustee or
decrease or increase Securities Custodian
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY [OR PRIVATE
EXCHANGE SECURITY]]
*/
**/
PRESTOLITE ELECTRIC INCORPORATED
No. __ Principal Amount $_____________
CUSIP NO. _________
9-5/8% Senior Note Due 2008
Prestolite Electric Incorporated, a Delaware corporation, promises to
pay to __________, or registered assigns, the principal sum of
___________________________ Dollars on February 1, 2008.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated: __________ PRESTOLITE ELECTRIC INCORPORATED
by_____________________________________
by_____________________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities
referred to in this Indenture.
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
by
Authorized Signatory
________________
*/ [If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]
**/ [If the Security is a Private Exchange Security issued in a Private
Exchange to an Initial Purchaser holding an unsold portion of its initial
allotment, add the Restricted Securities Legend from Exhibit 1 to Appendix
A and replace the Assignment Form included in such Exhibit 1.]
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY [OR
PRIVATE EXCHANGE SECURITY]]
9-5/8% Senior Note Due 2008
1. Interest
--------
Prestolite Electric Incorporated, a Delaware corporation (such
corporation, and its successors and assigns under this Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above[; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, additional cash interest will accrue on this Security at a
rate of 0.50% per annum from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured, calculated on the principal amount of
this Security as of the date on which such interest is payable. Such interest
is payable in addition to any other interest payable from time to time with
respect to this Security. The Trustee will not be deemed to have notice of a
Registration Default until it shall have received actual notice of such
Registration Default]./***/
The Company will pay interest semiannually on February 1 and August 1
of each year, commencing August 1, 1998 Interest on the Securities will accrue
from the most recent date to which interest has been paid on the Securities or,
if no interest has been paid, from January 22, 1998. The Company shall pay
interest on overdue Principal at 1% per annum in excess of the rate borne by the
Securities to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment
-----------------
By at least 11:00 a.m. (New York City time) on the date on which any
Principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such Principal and/or interest. The Company will pay interest (except defaulted
interest) to the Persons who are registered Holders of Securities at the close
of business on the January 15 or July 15 next preceding the interest payment
date even if Securities are cancelled, repurchased or redeemed after the record
date and on
________________
/***/ Insert if at the time of issuance of the Exchange Security or Private
Exchange Security (as the case may be) neither the Registered Exchange
Offer has been consummated nor a Shelf Registration Statement has been
declared effective in accordance with the Registration Rights Agreement.
2
or before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay Principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
Principal and interest by check payable in such money. It may mail an interest
check to a Holder's registered address.
3. Paying Agent and Registrar
--------------------------
Initially, First Trust National Association, a national banking
association (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice to any Securityholder. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of
January 22, 1998 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Company, PEI
Holding, Inc., the parent corporation of the Company (the "Guarantor") and the
Trustee. The terms of the Securities include those stated in this Indenture and
those made part of this 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 this Indenture
------
(the "Act"). Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in this Indenture. The Securities are subject to all
such terms, and Securityholders are referred to this Indenture and the Act for a
statement of those terms.
The Securities are unsecured senior subordinated obligations of the
Company limited to $125.0 million aggregate principal amount (subject to Section
2.7 of the Indenture). The Security is one of the Exchange Securities referred
to in the Indenture. The Securities include the Initial Securities and any
Private Exchange Securities and Exchange Securities issued in exchange for the
Initial Securities pursuant to the Indenture and the Registration Rights
Agreement. The Initial Securities, the Private Exchange Securities and the
Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the Incurrence of
Indebtedness by the Company and its Restricted Subsidiaries, the payment of
dividends and other distributions on the Capital Stock of the Company and its
Restricted Subsidiaries, the purchase or redemption of Capital Stock of the
Company and Capital Stock of such Restricted Subsidiaries, certain purchases or
redemptions of Subordinated Obligations, the sale or transfer of assets and
Capital Stock of Restricted Subsidiaries, the issuance or sale of Capital Stock
of Restricted Subsidiaries, the investments of the
3
Company and its Subsidiaries and transactions with Affiliates. In addition, the
Indenture limits the ability of the Company and its Restricted Subsidiaries to
restrict distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the Principal and
interest, if any, on the Securities and all other amounts payable by the Company
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, the Guarantor, as primary obligor and
not merely as surety, has unconditionally and irrevocably guaranteed such
obligations on a senior basis pursuant to the terms of Article X of the
Indenture.
5. Optional Redemption
-------------------
Except as set forth in this paragraph 5, the Securities will not be
redeemable at the option of the Company prior to _______ __, 2003. On and after
such date, the Securities will be redeemable, at the Company's option, in whole
or in part, upon not less than 30 nor more than 60 days' prior notice mailed by
first class mail to each Holder's registered address, at the following
redemption prices (expressed as percentages of principal amount) plus accrued
and unpaid interest, if any, to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date):
If redeemed during the 12-month period commencing on _______ __ of the
years set forth below:
Year Redemption Price
---- ----------------
2003 .............................. 104.8125%
2004 .............................. 103.2083%
2005 .............................. 101.6042%
2006 and thereafter................ 100.0000%
Notwithstanding the foregoing, at any time or from time to time prior
to February 1, 2001, the Company may redeem in the aggregate up to 35% of the
aggregate principal amount of the Securities originally issued with the proceeds
of one or more Public Equity Offerings to the extent that, in the case of a
Public Equity Offering of the Guarantor, the net cash proceeds thereof are
contributed to the equity capital of the Company, at a redemption price
(expressed as a percentage of principal amount thereof) of 109.625% plus accrued
and unpaid interest, if any, to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date); provided, however, that after giving effect to
-------- -------
such redemption, at least $81.25 million principal
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amount of the Securities remain outstanding after each such redemption.
6. Notice of Redemption
--------------------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date by first-class mail to each Holder of
Securities to be redeemed at his registered address. Securities in
denominations of principal amount 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 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.
7. Put Provisions
--------------
Upon a Change of Control, any Holder of Securities will have the right
to cause the Company to repurchase all or any part of the Securities of such
Holder at a repurchase price equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, to the date of repurchase as provided in, and
subject to the terms of, the Indenture.
8. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of principal amount of $1,000 and whole multiples of $1,000. A Holder may
register transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange (i) 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)
for a period beginning 15 days before a selection of Securities to be redeemed
and ending on the date of such selection or (ii) any Securities for a period
beginning 15 days before an interest payment date and ending on such interest
payment date.
9. Persons Deemed Owners
---------------------
The registered holder of this Security may be treated as the owner of
it for all purposes.
5
10. Unclaimed Money
---------------
If money for the payment of Principal or interest remains unclaimed
for two years after the date of payment of Principal and interest, the Trustee
or Paying Agent shall pay the money back to the Company at its request unless an
abandoned property law designates another Person. After any such payment,
Holders entitled to the money must look only to the Company and not to the
Trustee for payment.
11. Defeasance
----------
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of Principal of and interest on the
Securities to redemption or maturity, as the case may be.
12. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the outstanding Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company, the Guarantor
and the Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the Securities or
to secure the Securities, or to add additional covenants of or surrender rights
and powers conferred on the Company, or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder.
13. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon required repurchase, upon declaration or otherwise;
(iii) failure by the Company or the Guarantor to comply with other agreements in
the Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv)
6
certain accelerations (including failure to pay within any grace period after
final maturity) of other indebtedness of the Company, the Guarantor or the
Company's Restricted Subsidiaries if the amount accelerated (or so unpaid)
exceeds $10.0 million; (v) certain events of bankruptcy or insolvency with
respect to the Company, the Guarantor or any Significant Subsidiary; and (vi)
certain judgments or decrees for the payment of money in excess of $10.0 million
against the Company, the Guarantor or any Significant Subsidiary. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Securities may declare all the Securities to
be due and payable immediately. Certain events of bankruptcy or insolvency are
Events of Default which will result in the Securities being due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of Principal
or interest) if it determines that withholding notice is not opposed to their
interest.
14. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations set forth in this Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
15. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Company
or the Guarantor shall not have any liability for any obligations of the Company
or the Guarantor under the Securities or this Indenture or for any claim based
on, in respect of or by reason of such obligations or their creation. By
accepting a Security, each Securityholder waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Securities.
7
16. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
17. 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
entirety), 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).
18. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Governing Law
-------------
This Security 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.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to: Prestolite
Electric Incorporated, 0000 Xxxxxxxxxxxx Xxxxxxxxx, Xxx Xxxxx, Xxxxxxxx 00000,
Attention: Chief Financial Officer.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: ____________________ Your Signature: ___________________
Signature Guarantee: ________________________________________
(Signature must be guaranteed by a participant in a recognized Signature
Guarantee Medallion Program or other signature guarantor program reasonably
acceptable to the Trustee)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.7 or 4.9 of the Indenture, check the box:
[_]7
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.7 or 4.9 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
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
Guarantee Medallion Program or other signature guarantor program reasonably
acceptable to the Trustee)
