Exhibit 4.1
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INTEGRATED CIRCUIT SYSTEMS, INC.
Issuer
11 1/2% SENIOR SUBORDINATED NOTES DUE 2009
INDENTURE
___________________________
Dated as of May 11, 1999
___________________________
CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION
Trustee
___________________________
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CROSS-REFERENCE TABLE*
Act Section Indenture Section
----------- -----------------
310 (a)(1)................................................................. 7.10
(a)(2)..................................................................... 7.10
(a)(3)..................................................................... N.A.
(a)(4)..................................................................... N.A.
(a)(5)............................................................... 7.08, 7.10
(i)(b)........................................................ 7.08, 7.10, 12.02
(ii)(c).................................................................... N.A.
311(a)..................................................................... 7.11
(b)........................................................................ 7.11
(iii)(c)................................................................... N.A.
312 (a).................................................................... 2.05
(b)....................................................................... 12.03
(iv)(c)................................................................... 12.03
313(a)..................................................................... 7.06
(b)(2)..................................................................... 7.07
(v)(c).............................................................. 7.06; 12.02
(vi)(d).................................................................... 7.06
314(a).............................................................. 4.03, 12.02
(c)(1).................................................................... 12.04
(c)(2).................................................................... 12.04
(c)(3)..................................................................... N.A.
(vii)(e).................................................................. 11.05
(f)........................................................................ N.A.
315 (a).................................................................... 7.01
(b)................................................................. 7.05, 12.02
(A)(c)..................................................................... 7.01
(d)........................................................................ 7.01
(e)........................................................................ 6.11
316 (a)(last sentence)..................................................... 2.09
(a)(1)(A).................................................................. 6.05
(a)(1)(B).................................................................. 6.04
(a)(2)..................................................................... N.A.
(b)........................................................................ 6.07
(B)(c)..................................................................... 9.04
317 (a)(1)................................................................. 6.08
(a)(2)..................................................................... 6.09
(b)........................................................................ 2.04
318 (a)................................................................... 12.01
I
(b)........................................................................ N.A.
(c)....................................................................... 12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of this Indenture.
II
TABLE OF CONTENTS
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PAGE
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE................. 1
Section 1.01. Definitions................................................ 1
Section 1.02. Certain Other Definitions.................................. 22
Section 1.03. Trust Indenture Act Definitions............................ 22
Section 1.04. Rules of Construction...................................... 23
Section 1.05. One Class of Securities.................................... 23
ARTICLE 2. THE NOTES.................................................. 24
Section 2.01. Form and Dating............................................ 24
Section 2.02. Execution and Authentication; Aggregate Principal Amount... 24
Section 2.03. Registrar and Paying Agent................................. 25
Section 2.04. Paying Agent to Hold Money in Trust........................ 26
Section 2.05. Holder Lists............................................... 26
Section 2.06. [Intentionally Omitted].................................... 26
Section 2.07. Replacement Notes.......................................... 26
Section 2.08. Outstanding Notes.......................................... 27
Section 2.09. Treasury Notes............................................. 27
Section 2.10. Temporary Notes............................................ 27
Section 2.11. Cancellation............................................... 28
Section 2.12. Defaulted Interest......................................... 28
Section 2.13. CUSIP Numbers.............................................. 28
Section 2.14. Issuance of Additional Notes............................... 29
ARTICLE 3. REDEMPTION AND PREPAYMENT.................................. 29
Section 3.01. Notices to Trustee......................................... 29
Section 3.02. Selection of Notes to Be Redeemed.......................... 30
Section 3.03. Notice of Redemption....................................... 30
Section 3.04. Effect of Notice of Redemption............................. 31
Section 3.05. Deposit of Redemption Price................................ 31
Section 3.06. Notes Redeemed in Part..................................... 32
Section 3.07. Optional Redemption........................................ 32
Section 3.08. Mandatory Redemption....................................... 33
III
Section 3.09. Offer to Purchase by Application of Net Proceeds
Offer Amount......................................... 33
ARTICLE 4. COVENANTS.................................................. 35
Section 4.01. Payment of Notes........................................... 35
Section 4.02. Maintenance of Office or Agency............................ 36
Section 4.03. Reports.................................................... 37
Section 4.04. Compliance Certificate..................................... 37
Section 4.05. Taxes...................................................... 38
Section 4.06. Stay, Extension and Usury Laws............................. 38
Section 4.07. Restricted Payments........................................ 39
Section 4.08. Dividend and Other Payment Restrictions
Affecting Subsidiaries............................... 42
Section 4.09. Incurrence of Indebtedness and Issuance of
Preferred Stock...................................... 43
Section 4.10. Asset Sales................................................ 47
Section 4.11. Transactions with Affiliates............................... 49
Section 4.12. Liens...................................................... 51
Section 4.13. Conduct of Business........................................ 51
Section 4.14. Corporate Existence........................................ 51
Section 4.15. Offer to Repurchase Upon Change of Control................. 52
Section 4.16. No Senior Subordinated Debt................................ 53
Section 4.17. Additional Note Guarantees................................. 53
ARTICLE 5. SUCCESSORS................................................. 54
Section 5.01. Merger, Consolidation, or Sale of Assets................... 54
Section 5.02. Successor Corporation Substituted.......................... 55
ARTICLE 6. DEFAULTS AND REMEDIES...................................... 55
Section 6.01. Events of Default.......................................... 55
Section 6.02. Acceleration............................................... 57
Section 6.03. Other Remedies............................................. 58
Section 6.04. Waiver of Past Defaults.................................... 58
Section 6.05. Control by Majority........................................ 59
Section 6.06. Limitation on Suits........................................ 59
Section 6.07. Rights of Holders of Notes to Receive Payment.............. 60
Section 6.08. Collection Suit by Trustee................................. 60
Section 6.09. Trustee May File Proofs of Claim........................... 60
Section 6.10. Priorities................................................. 61
Section 6.11. Undertaking for Costs...................................... 61
IV
ARTICLE 7. TRUSTEE.................................................... 62
Section 7.01. Duties of Trustee.......................................... 62
Section 7.02. Rights of Trustee.......................................... 63
Section 7.03. Individual Rights of Trustee............................... 64
Section 7.04. Trustee's Disclaimer....................................... 64
Section 7.05. Notice of Defaults......................................... 65
Section 7.06. Reports by Trustee to Holders of the Notes................. 65
Section 7.07. Compensation and Indemnity................................. 65
Section 7.08. Replacement of Trustee..................................... 67
Section 7.09. Successor Trustee by Merger, etc........................... 68
Section 7.10. Eligibility; Disqualification.............................. 68
Section 7.11. Preferential Collection of Claims Against Company.......... 68
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE................... 69
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance... 69
Section 8.02. Legal Defeasance and Discharge............................. 69
Section 8.03. Covenant Defeasance........................................ 69
Section 8.04. Conditions to Legal or Covenant Defeasance................. 70
Section 8.05. Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions............. 72
Section 8.06. Repayment to Company....................................... 72
Section 8.07. Reinstatement.............................................. 73
Section 8.08. Survival................................................... 73
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER........................... 73
Section 9.01. Without Consent of Holders of Notes........................ 73
Section 9.02. With Consent of Holders of Notes........................... 74
Section 9.03. Compliance with Trust Indenture Act........................ 76
Section 9.04. Revocation and Effect of Consents.......................... 76
Section 9.05. Notation on or Exchange of Notes........................... 77
Section 9.06. Trustee to Sign Amendments, etc............................ 77
ARTICLE 10. SUBORDINATION.............................................. 77
Section 10.01. Agreement to Subordinate................................... 77
Section 10.02. Certain Definitions........................................ 78
Section 10.03. Liquidation; Dissolution; Bankruptcy....................... 79
V
Section 10.04. Default on Designated Senior Debt.......................... 79
Section 10.05. Acceleration of Securities................................. 80
Section 10.06. When Distribution Must Be Paid Over........................ 80
Section 10.07. Notice by Company.......................................... 81
Section 10.08. Subrogation................................................ 81
Section 10.09. Relative Rights............................................ 81
Section 10.10. Subordination May Not Be Impaired by Company............... 82
Section 10.11. Distribution or Notice to Representative................... 82
Section 10.12. Rights of Trustee and Paying Agent......................... 83
Section 10.13. Authorization to Effect Subordination...................... 83
Section 10.14. Amendments................................................. 83
Section 10.15. Changes in Senior Debt..................................... 83
ARTICLE 11. NOTE GUARANTEES............................................ 84
Section 11.01. Guarantee.................................................. 84
Section 11.02. Subordination Of Note Guarantee............................ 85
Section 11.03. Limitation On Subsidiary Guarantor Liability............... 85
Section 11.04. Execution And Delivery Of Note Guarantee................... 86
Section 11.05. Subsidiary Guarantors May Consolidate, Etc.,
On Certain Terms..................................... 87
Section 11.06. Releases Following Sale Of Assets.......................... 88
ARTICLE 12. MISCELLANEOUS.............................................. 88
Section 12.01. Trust Indenture Act Controls............................... 88
Section 12.02. Notices.................................................... 89
Section 12.03. Communication By Holders Of Notes With Other
Holders Of Notes..................................... 90
Section 12.04. Certificate And Opinion As To Conditions Precedent......... 90
Section 12.05. Statements Required in Certificate or Opinion.............. 91
Section 12.06. Rules By Trustee And Agents................................ 91
Section 12.07. No Personal Liability Of Directors, Officers, Employees
And Stockholders..................................... 91
Section 12.08. Governing Law.............................................. 92
Section 12.09. No Adverse Interpretation Of Other Agreements.............. 92
Section 12.10. Successors................................................. 92
Section 12.11. Severability............................................... 92
Section 12.12. Counterpart Originals...................................... 92
Section 12.13. Table Of Contents, Headings, Etc........................... 92
VI
Appendix..................................................................... I
EXHIBITS
Exhibit A FORM OF INITIAL NOTE
Exhibit B FORM OF EXCHANGE NOTE AND PRIVATE EXCHANGE NOTE
Exhibit C FORM OF NOTE GUARANTEE
Exhibit D FORM OF SUPPLEMENTAL INDENTURE
VII
INDENTURE dated as of May 11, 1999 by and among Integrated Circuit
Systems, Inc., a Pennsylvania corporation (the "Company"), the Subsidiary
Guarantors (as herein defined) and Chase Manhattan Trust Company, National
Association, as trustee (the "Trustee").
The Company has duly authorized the creation of an issue of $100,000,000
11 1/2% Senior Subordinated Notes Due 2009 in the form of Initial Notes (as
defined below) and, if and when issued in connection with a registered exchange
for such Initial Notes, 11 1/2% Senior Subordinated Exchange Notes Due 2009 in
the form of Exchange Notes (as defined below) and, if and when issued in
connection with a private exchange for such Initial Notes, 11 1/2% Senior
Subordinated Private Exchange Notes Due 2009 in the form of Private Exchange
Notes (as defined below), and such Additional Notes (as defined below) that the
Company may from time to time choose to issue pursuant to this Indenture, and,
to provide therefor, the Company and each of the Subsidiary Guarantors has duly
authorized the execution and delivery of this Indenture. The Subsidiary
Guarantors have agreed to guarantee the Notes on a senior subordinated basis.
Each party agrees as follows for the benefit of each other party and for
the equal and ratable benefit of the Holders of the Notes.
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.0. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Company or that is assumed by the Company or any of its Restricted
Subsidiaries in connection with the acquisition of assets from such Person, in
each case excluding any Indebtedness incurred by such Person in connection with,
or in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary of the Company or such acquisition.
"Additional Notes" means, subject to the Company's compliance with Section
4.09, 11 1/2% Senior Subordinated Notes Due 2009 issued from time to time after
May 11, 1999 under the terms of this Indenture (other than those issued pursuant
to Section 2.07, 2.10, 3.06, 3.09, 4.15 or 9.05 of this Indenture or Section 2.3
of the Appendix and other than Exchange Notes or Private Exchange Notes issued
pursuant to an exchange offer for other Notes outstanding under this Indenture).
"Affiliate" means a Person who directly or indirectly through one or more
intermediaries controls, or controlled by, or is under common control with, the
Company. The term "control" means the possession directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Premium" means, with respect to any Note on any Redemption
Date, the greater of (i) 1.0% of the principal amount of such Note or (ii) the
excess of (A) the present value at the Redemption Date of (1) the redemption
price of such Note at May 15, 2004 (such redemption price being set forth in
Section 3.07 hereof) plus (2) all required interest payments due on such Note
through May 15, 2004 (excluding accrued but unpaid interest), computed using a
discount rate equal to the Treasury Rate at the Redemption Date plus 75 basis
points over (B) the principal amount of such Note, if greater.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person if, as a result of such
Investment, such Person shall become a Restricted Subsidiary of the Company, or
shall be merged with or into the Company or any Restricted Subsidiary of the
Company, or (b) the acquisition by the Company or any Restricted Subsidiary of
the Company of all or substantially all of the assets of any other Person or any
division or line of business of any other Person.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Restricted Subsidiaries to any Person other than the Company or a Restricted
Subsidiary of the Company of (a) any Capital Stock of any Restricted Subsidiary
of the Company or (b) any other property or assets of the Company or any
Restricted Subsidiary of the Company other than in the ordinary course of
business; provided, however, that Asset Sales shall not include (i) a
transaction or series of related transactions for which the Company or its
Restricted Subsidiaries receive aggregate consideration of less than $1.0
million, (ii) the sale, lease, conveyance, disposition or other transfer of all
substantially all of the assets of the Company as permitted by Section 5.01
hereof or any disposition that constitutes a Change of Control, (iii) the sale
or discount, in each case without recourse, of accounts receivable arising in
the ordinary course of business, but only in connection with the compromise or
collection thereof, (iv) the factoring of accounts receivable arising in the
ordinary course of business pursuant to arrangements customary in the industry,
(v) disposals or replacements of obsolete, uneconomical, negligible, worn out or
surplus property in the ordinary course of business, (vi) the licensing of
intellectual property in the ordinary course of business or in accordance
2
with industry practice, and (vii) the sale, lease conveyance, disposition or
other transfer by the Company or any Restricted Subsidiary of assets or property
to one or more Restricted Subsidiaries in connection with Investments permitted
by Section 4.07 hereof.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company, or any
authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Cash Equivalents" means: (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either S&P or Moody's; (iii) commercial paper maturing no more
than one year from the date of creation thereof and at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances (or, with respect to foreign
banks, similar instruments) maturing within one year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States of America or any state thereof or the District of Columbia, Japan or any
member of the European Economic Community or any U.S. branch of a foreign bank
having at the date of acquisition thereof combined capital and surplus of not
less than $200.0 million; provided that instruments issued by
3
banks not having one of the two highest ratings obtainable from either S&P or
Moody's or by banks organized under the laws of Japan or any member of the
European Economic Community shall not constitute Cash Equivalents for purposes
of the subordination provisions of this Indenture; (v) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company to any Person or group of related Persons, as defined in Section 13(d)
of the Exchange Act (a "Group"), whether or not otherwise in compliance with the
provisions hereof, other than the Principals and their respective Related
Parties and members of the Permitted Group; (ii) the approval by the holders of
Capital Stock of the Company of any plan or proposal for the liquidation or
dissolution of the Company (whether or not otherwise in compliance with the
provisions hereof); (iii) any Person or Group (other than the Principals and
their respective Related Parties and members of the Permitted Group) shall
become the owner, directly or indirectly, beneficially or of record, of shares
representing more than 50% of the aggregate ordinary voting power represented by
the issued and outstanding Voting Stock of the Company or any successor to all
or substantially all of its assets; or (iv) the first day on which a majority of
the members of the Board of Directors of the Company are not Continuing
Directors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Consolidated EBITDA" means, with respect to any Person, for any period,
the sum (without duplication) of such Person's (i) Consolidated Net Income and
(ii) to the extent Consolidated Net Income has been reduced thereby, (A) all
income taxes (including, without limitation, any state single business, unitary
or similar taxes) and foreign withholding taxes of such Person and its
Restricted Subsidiaries paid or accrued in accordance with GAAP for such period,
(B) Consolidated Interest Expense, (C) Consolidated Noncash Charges, and (D) all
one-time cash compensation payments made in connection with the
Recapitalization.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the most recent
four
4
full fiscal quarters for which internal financial statements are available (the
"Four-Quarter Period") ending on or prior to the date of the transaction giving
rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (the
"Transaction Date") to Consolidated Fixed Charges of such Person for the Four-
Quarter Period. In addition to and without limitation of the foregoing, for
purposes of this definition, Consolidated EBITDA and Consolidated Fixed Charges
shall be calculated after giving effect on a pro forma basis for the period of
such calculation to (i) the incurrence of any Indebtedness or the issuance of
any preferred stock of such Person or any of its Restricted Subsidiaries (and
the application of the proceeds thereof) and any repayment of other Indebtedness
or redemption of other preferred stock occurring during the Four-Quarter Period
or at any time subsequent to the last day of the Four-Quarter Period and on or
prior to the Transaction Date, as if such incurrence, repayment, issuance or
redemption, as the case may be (and the application of the proceeds thereof),
occurred on the first day of the Four-Quarter Period and (ii) any Asset Sale or
Asset Acquisition (including, without limitation, any Asset Acquisition giving
rise to the need to make such calculation as a result of such Person or one of
its Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of the Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including any Pro Forma Cost Savings) associated with any
such Asset Acquisition) occurring during the Four-Quarter Period or at any time
subsequent to the last day of the Four-Quarter Period and on or prior to the
Transaction Date, as if such Asset Sale or Asset Acquisition (including the
incurrence of, or assumption or liability for any such Indebtedness or Acquired
Indebtedness) occurred on the first day of the Four-Quarter Period. If such
Person or any of its Restricted Subsidiaries directly or indirectly Guarantees
Indebtedness of a third Person, the preceding sentence shall give effect to the
incurrence of such guaranteed Indebtedness as if such Person or any Restricted
Subsidiary of such Person had directly incurred or otherwise assumed such
guaranteed Indebtedness. Furthermore, in calculating Consolidated Fixed Charges
for purposes of determining the denominator (but not the numerator) of this
Consolidated Fixed Charge Coverage Ratio, (1) interest on outstanding
Indebtedness determined on a fluctuating basis as of the Transaction Date and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date; (2) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the Transaction Date will be deemed to have been in effect during the
Four-Quarter Period; and (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to Interest Swap Obligations, shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation of
such agreements.
5
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense
(before amortization or write-off of debt issuance costs), plus (ii) the amount
of all cash dividend payments on (x) any series of preferred stock of such
Person, (y) any Refunding Capital Stock of such Person, to the extent paid
pursuant to the terms of clause (2) of the second paragraph of Section 4.07, and
(z) any series of preferred stock of any Restricted Subsidiary of such Person;
provided that with respect to any series of preferred stock or Refunding Capital
Stock that was not paid cash dividends during such period but that is eligible
to be paid cash dividends during any period, or matures or is mandatorily
redeemable, prior to the maturity date of the Notes, cash dividends shall be
deemed to have been paid with respect to such series of preferred stock or
Refunding Capital Stock during such period for purposes of clause (ii) of this
definition.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum of, without duplication, (i) the aggregate of all cash and non-
cash interest expense with respect to all outstanding Indebtedness of such
Person and its Restricted Subsidiaries, including the net costs associated with
Interest Swap Obligations, for such period determined on a consolidated basis in
conformity with GAAP, (ii) the consolidated interest expense of such Person and
its Restricted Subsidiaries that was capitalized during such period, and (iii)
the interest component of Capital Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by such Person and its Restricted Subsidiaries
during such period as determined on a consolidated basis in accordance with
GAAP.
"Consolidated Net Income" of the Company means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP,
provided that there shall be excluded therefrom (a) gains and losses from Asset
Sales (without regard to the $1.0 million limitation set forth in the definition
thereof) or abandonments or reserves relating thereto and the related tax
effects according to GAAP, (b) gains and losses due solely to fluctuations in
currency values and the related tax effects according to GAAP, (c) items
classified as a cumulative effect of an accounting change or as extraordinary,
unusual or nonrecurring gains and losses (including, without limitation,
severance, relocation and other restructuring costs), and the related tax
effects according to GAAP, (d) the net income (or loss) of any Person acquired
in a pooling of interests transaction accrued prior to the date it becomes a
Restricted Subsidiary of the Company or is merged or consolidated with the
Company or any Restricted Subsidiary of the Company, (e) the net income of any
Restricted Subsidiary of the Company to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of the Company
of that income is restricted by contract, operation, operation of law or
otherwise, (f) the net income of any Person, other than a Restricted Subsidiary
of the
6
Company, except to the extent of cash dividends or distributions paid to the
Company or a Restricted Subsidiary of the Company by such Person, (g) the net
loss of any Person, other than a Restricted Subsidiary, (h) only for purposes of
the definition of Consolidated EBITDA, one-time cash charges resulting from any
merger, recapitalization or acquisition transaction, and (i) only for purposes
of clause (c)(i) of the first paragraph of Section 4.07 hereof, any amounts
included pursuant to clause (c)(iii) of the first paragraph of Section 4.07
hereof. For purposes of clause (c)(i) of the first paragraph of Section 4.07,
Consolidated Net Income (A) shall be reduced by any cash dividends paid with
respect to any series of Designated Preferred Stock, and (B) shall be increased
by the proceeds of any (1) sale or other disposition of Restricted Investments
made by the Company and its Restricted Subsidiaries, or (2) dividend from, or
the sale of stock of, an Unrestricted Subsidiary; provided, however, that there
shall be deducted from such proceeds, in the case of clause (1), the amount of
such Restricted Investment previously made (and treated as a Restricted
Investment) by the Company or any Restricted Subsidiary and, in the case of
clause (2), the amount of Investments previously made (and treated as a
Restricted Payment) by the Company or any Restricted Subsidiary in such
Unrestricted Subsidiary.
"Consolidated Noncash Charges" means, with respect to any Person for any
period, the aggregate depreciation, amortization and other non-cash expenses of
such Person and its Restricted Subsidiaries reducing Consolidated Net Income of
such Person for such period, determined on a consolidated basis in accordance
with GAAP excluding any such non-cash charge constituting an extraordinary item
or loss or any such non-cash charge which requires an accrual of or a reserve
for cash charges for any future period.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of this Indenture or (ii) was nominated for election or
elected to such Board of Directors by any of the Principals or with the approval
of a majority of the Continuing Directors who were members of such Board at the
time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facilities" means one or more debt facilities (including, without
limitation, the Senior Credit Agreements) or commercial paper facilities with
banks or other institutional lenders providing for revolving credit loans, term
loans, receivables financing (including through the sale of receivables to such
lenders or to special purpose
7
entities formed to borrow from such lenders against such receivables) and/or
letters of credit.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Designated Preferred Stock" means Preferred Stock that is so designated
as Designated Preferred Stock, pursuant to an Officers' Certificate executed by
the principal executive officer and the principal financial officer of the
Company, on the issuance date thereof.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the Holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Notes mature; provided, however, that any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Company to repurchase such Capital Stock upon the occurrence of a
Change of Control or an Asset Sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Company may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with Section 4.07 hereof.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any offering of Qualified Capital Stock of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" has the meaning provided in the Appendix.
8
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Senior Credit Agreements) in
existence on the date hereof, until such amounts are repaid.
"Foreign Subsidiaries" means the Company's current and future non-U.S.
Subsidiaries which are Restricted Subsidiaries.
"Four-Quarter Period" has the meaning specified in the definition of
Consolidated Fixed Charge Coverage Ratio.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date hereof.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements (including Interest Swap
Obligations) and (ii) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates (including Currency Agreements).
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property, except any such balance that constitutes an
accrued expense or trade payable or
9
representing any Hedging Obligations, if and to the extent any of the foregoing
(other than letters of credit and Hedging Obligations) would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
as well as all Indebtedness of others secured by a Lien on any asset of such
Person (whether or not such Indebtedness is assumed by such Person) and, to the
extent not otherwise included, the Guarantee by such Person of any indebtedness
of any other Person. The amount of any Indebtedness outstanding as of any date
shall be (i) the accreted value thereof, in the case of any Indebtedness issued
with original issue discount, and (ii) the principal amount thereof, together
with any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Initial Notes" has the meaning provided in the Appendix.
"Interest Swap Obligations" means the obligations of any Person, pursuant
to any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Persons calculated
by applying a fixed or a floating rate of interest on the same notional amount.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Subsidiary of the Company sells or otherwise disposes of
any Equity Interests of any direct or indirect Subsidiary of the Company such
that, after giving effect to any such sale or disposition, such Person is no
longer a Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of Section 4.07.
"Issue Date" means the date of original issuance of the Notes.
10
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city of the Corporate Trust Office of
the Trustee or at a place of payment are authorized or required by law,
regulation or executive order to remain closed. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue on such
payment for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Marketable Securities" means publicly traded debt or equity securities
that are listed for trading on a national securities exchange and that were
issued by a corporation whose debt securities are rated in one of the three
highest rating categories by either S&P or Moody's.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements) and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"Non-Guarantor Subsidiaries" means the Foreign Subsidiaries.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; 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
11
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (iii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries.
"Note Guarantee" means the Guarantee by each Subsidiary Guarantor of the
Company's payment obligations under this Indenture and the Notes, executed
pursuant to the provisions of this Indenture.
"Notes" means the Initial Notes, the Exchange Notes and the Private
Exchange Notes treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Obligations" means any principal, interest (including, without
limitation, interest that, but for the filing of a petition in bankruptcy with
respect to an obligor, would accrue on such obligations), penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company.
"Offering Memorandum" means (i) with respect to the Initial Notes issued
on May 11, 1999, the Offering Circular dated May 5, 1999, pursuant to which the
$100.0 million of 11 1/2% Senior Subordinated Notes Due 2009 in the form of
Initial Notes were offered, and any supplement thereto and (ii) with respect to
each issuance of Additional Notes, the offering circular, prospectus or other
similar offering document pursuant to which such Additional Notes were offered,
and any supplement thereto.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 12.05 hereof.
The
12
counsel may be an employee of or counsel to the Company, any Subsidiary of the
Company or the Trustee.
"Paying Agency Office" means the office of the Paying Agent designated in
writing by the Paying Agent to the Company and the Trustee.
"Permitted Business" means any business (including stock or assets) that
derives a majority of its revenues from the manufacture, distribution or sale of
integrated circuits and activities that are reasonably similar, ancillary or
related to, or a reasonable extension, development or expansion of, the
businesses in which the Company and its Restricted Subsidiaries are engaged on
the date of this Indenture.
"Permitted Domestic Subsidiary Preferred Stock" means any series of
Preferred Stock of a domestic Subsidiary Guarantor that constitutes Qualified
Capital Stock and has a fixed dividend rate, the liquidation value of all series
of which, when combined with the aggregate amount of Indebtedness of the Company
and its Restricted Subsidiaries incurred pursuant to clause (xv) of Section 4.09
does not exceed $12.5 million.
"Permitted Group" means any group of investors if deemed to be a "person"
(as such terms is used in Section 13(d)(3) of the Exchange Act) by virtue of the
Shareholders Agreement, as the same may be amended, modified or supplemented
from time to time, provided that (i) the Principals are party to such
Shareholders Agreement, (ii) the persons party to the Shareholders Agreement as
so amended, supplemented or modified from time to time that were not parties,
and are not Affiliates of persons who were parties, to the Shareholders
Agreement as of the date of this Indenture, together with their respective
Affiliates (collectively, the "New Investors"), are not direct or indirect
beneficial owners (determined without reference to the Shareholders Agreement)
of more than 50% of the Voting Stock owned by all parties to the Shareholders
Agreement as so amended, supplemented or modified, and (iii) the New Investors,
individually or in the aggregate, do not, directly or indirectly, have the
right, pursuant to the Shareholders Agreement (as so amended, supplemented or
modified) or otherwise to designate more than 50% of the members of the Board of
Directors of the Company or any direct or indirect parent entity of the Company.
"Permitted Investments" means (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Restricted Subsidiary of the Company
that is a Subsidiary Guarantor or a Foreign Subsidiary (whether existing on the
date of this Indenture or created thereafter) or in any other Person (including
by means of any transfer of cash or other property) if as a result of such
Investment such Person shall become a Restricted Subsidiary of the Company that
is a Subsidiary Guarantor or a
13
Foreign Subsidiary and Investments in the Company by any Restricted Subsidiary
of the Company, (ii) cash and Cash Equivalents, (iii) Investments existing on
the date of this Indenture, (iv) loans and advances to employees and officers of
the Company and its Restricted Subsidiaries in the ordinary course of business,
(v) accounts receivable created or acquired in the ordinary course of business,
(vi) Currency Agreements and Interest Swap Obligations entered into in the
ordinary course of the Company's businesses and otherwise in compliance with
this Indenture, (vii) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers, (viii) guarantees
by the Company of Indebtedness otherwise permitted to be incurred by Restricted
Subsidiaries of the Company that are either Subsidiary Guarantors or Foreign
Subsidiaries under this Indenture, (ix) Investments the payment for which
consists exclusively of Qualified Capital Stock of the Company, (x) Investments
received by the Company or its Restricted Subsidiaries as consideration for
asset sales, including Asset Sales; provided that in the case of an Asset Sale,
such Asset Sale is effected in compliance with Section 4.10, and (xi) other
Investments that do not exceed in the aggregate $15.0 million at any one time
outstanding.
"Permitted Foreign Subsidiary Preferred Stock" means any series of
Preferred Stock of a foreign Restricted Subsidiary of the Company that
constitutes Qualified Capital Stock and has a fixed dividend rate, the
liquidation value of all series of which, when combined with the aggregate
amount of Indebtedness of foreign Restricted Subsidiaries of the Company
incurred pursuant to clause (iii) of the definition of Permitted Indebtedness,
does not exceed $15.0 million.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required
pursuant to GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not
yet delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have
been made in respect thereof;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance
14
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money);
(iv) judgment Liens not giving rise to an Event of Default;
(v) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of real property not
interfering in any material respect with the ordinary conduct of the
business of the Company or any of its Restricted Subsidiaries;
(vi) any interest or title of a lessor under any Capitalized
Lease Obligation;
(vii) purchase money Liens to finance property or assets of
the Company or any Restricted Subsidiary of the Company acquired in the
ordinary course of business; provided, however, that (a) the related
purchase money Indebtedness shall not exceed the cost of such property or
assets and shall not be secured by any property or assets of the Company
or any Restricted Subsidiary of the Company other than the property and
assets so acquired and (b) the Lien securing such Indebtedness shall be
created with 90 days of such acquisition;
(viii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment, or storage of such inventory or other
goods;
(ix) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(x) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset
and set-off;
15
(xi) Liens securing Interest Swap Obligations or Currency
Agreements which Interest Swap Obligations or Currency Agreements relate
to Indebtedness that is otherwise permitted under this Indenture;
(xii) Liens securing Indebtedness of foreign Restricted Subsidiaries
of the Company incurred in reliance on clause (iii) of the second
paragraph of Section 4.09;
(xiii) Liens securing Acquired Indebtedness incurred in reliance on
clause (viii) of the second paragraph of Section 4.09;
(xiv) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary with respect to obligations that do
not in the aggregate exceed $5.0 million at any one time outstanding;
(xv) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the Company and its
Restricted Subsidiaries;
(xvi) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(xvii) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customer duties in connection with the
importation of goods;
(xviii) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries; and
(xix) Liens existing on the date hereof, together with any Liens
securing Indebtedness incurred in reliance on clause (xiv) of the Section
4.09 in order to refinance the Indebtedness secured by Liens existing on
the date of this Indenture; provided that the Liens securing the
refinancing Indebtedness shall not extend to property other than that
pledged under the Liens securing the Indebtedness being refinanced.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
16
"Preferred Stock," of any person, means Capital Stock of such Person of
any class or series (however designated) that ranks prior, as to payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class or series of such Person.
"Principals" means Xxxx Capital, Inc. and Bear, Xxxxxxx & Co. Inc.
"Private Exchange Notes" has the meaning provided in the Appendix.
"Pro Forma Cost Savings" means, with respect to any period, the reduction
in costs that occurred during the Four-Quarter Period or after the end of the
Four-Quarter Period and on or prior to the Transaction Date that were (i)
directly attributable to an Asset Acquisition and calculated on a basis that is
consistent with Regulation S-X under the Securities Act as in effect and applied
as of May 1, 1999 or (ii) implemented by the business that was the subject any
such Asset Acquisition within six months of the date of the Asset Acquisition
and that are supportable and quantifiable by the underlying accounting records
of such business, as if, in the case of each of clause (i) and (ii), all such
reductions in costs had been effected as of the beginning of such period.
"Productive Assets" means assets (including Capital Stock) that are used
or usable by the Company and its Restricted Subsidiaries in Permitted
Businesses.
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Stock.
"Recapitalization" has the meaning set forth in the Purchase Agreement,
dated as of May 5, 1999, among the Company, the Subsidiary Guarantors and the
Initial Purchasers named therein.
"Registration Rights Agreement" has the meaning set forth in the Appendix.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Related Party" with respect to any Principal means (i) any controlling
stockholder, or 80% (or more) owned Subsidiary of such Principal, or (ii) any
trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of such Principal and/or such other
Persons referred to in the immediately preceding clause (i).
17
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"S&P" means Standard & Poor's Corporation.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Agreements" means that certain Credit Agreement, dated as
of the Issue Date, by and among the Company, the guarantors named therein,
Credit Suisse First Boston, as administrative agent and the financial
institutions party thereto, initially providing for up to $95.0 million of
revolving and term credit borrowings, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, and in each case as amended (including any amendment and restatement
thereof), modified, renewed, refunded, replaced, refinanced or restructured
(including, without limitation, any amendment increasing the amount of available
borrowing thereunder) from time to time and whether with the same or any other
agent, lender or group of lenders.
"Shareholders Agreement" means collectively that certain shareholders
agreement and that certain voting agreement, each dated as of the date of this
Indenture, among the Principals and the other shareholders of the Company named
as parties therein from time to time.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.
18
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof), but shall not include
any Unrestricted Subsidiary.
"Subsidiary Guarantors" means (i) ICS Technologies, Inc., a Pennsylvania
corporation, ICST Inc., a Pennsylvania corporation, and Microclock, Inc, a
Delaware corporation, and (ii) any other Subsidiary that executes a Note
Guarantee in accordance with the provisions hereof, including their respective
successors and assigns.
"Total Assets" means the total consolidated assets of the Company and its
Restricted Subsidiaries, as set forth on the Company's most recent consolidated
balance sheet, adjusted to give pro forma effect to any acquisitions or
dispositions since the date of the relevant balance sheet (including any
acquisitions for which any Indebtedness is proposed to be incurred).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under the
TIA.
"Treasury Rate" means, as of any Redemption Date, the yield to maturity as
of such Redemption Date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
Business Days prior to such Redemption Date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from such Redemption Date to May 15, 2004; provided,
however, that if the period from such Redemption Date to May 15, 2004 is less
than one year, the weekly average yield on
19
actually traded United States Treasury securities adjusted to a constant
maturity of one year shall be used.
"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Subsidiary" means any Subsidiary that is designated by the
Board of Directors as an Unrestricted Subsidiary pursuant to a resolution of the
Board of Directors, but only to the extent that such Subsidiary: (a) has no
Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Company; (c) is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (1) to subscribe for additional Equity Interests or (2) to
maintain or preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results; (d) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company or any of its Restricted Subsidiaries; and (e) has at least one
director on its board of directors that is not a director or executive officer
of the Company or any of its Restricted Subsidiaries and has at least one
executive officer that is not a director or executive officer of the Company or
any of its Restricted Subsidiaries. Any such designation by the Board of
Directors shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution of the Board of Directors giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions and was permitted by Section 4.07 hereof.
Notwithstanding the foregoing, no Subsidiary of the Company that was a
Subsidiary Guarantor as of the date hereof shall be permitted to become an
Unrestricted Subsidiary; provided, however, that any Subsidiary of the Company
that becomes a Subsidiary Guarantor after the date hereof shall be permitted to
become an Unrestricted Subsidiary and the Note Guarantee of any such Subsidiary
Guarantor shall be released upon such designation in accordance with the terms
hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date under Section 4.09 hereof, the Company
shall be in default of such covenant). The Board of Directors of the Company may
at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that such
20
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is permitted under Section 4.09 hereof, calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-quarter reference
period, (ii) such Subsidiary shall execute a Note Guarantee and deliver an
Opinion of Counsel, in accordance with the terms of this Indenture and (iii) no
Default or Event of Default would be in existence following such designation.
"U.S. Subsidiary" means any Subsidiary of the Company that is incorporated
in a State in the United States or the District of Columbia or that Guarantees
or otherwise becomes an obligor with respect to any Indebtedness of the Company
or another Subsidiary Guarantor.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries
of such Person.
21
Section 1.02. Certain Other Definitions.
Term Section
---- -------
"Affiliate Transaction"................ 4.11
"Change of Control Offer".............. 4.15
"Change of Control Payment"............ 4.15
"Change of Control Payment Date"....... 4.15
"Covenant Defeasance".................. 8.03
"Event of Default"..................... 6.01
"incur"................................ 4.09
"Legal Defeasance"..................... 8.02
"Net Proceeds Offer"................... 4.10
"Net Proceeds Offer Amount"............ 4.10
"Net Proceeds Offer Payment Date"...... 4.10
"Net Proceeds Offer Trigger Date"...... 4.10
"Offer Period"......................... 3.09
"Payment Blockage Notice"............. 10.04
"Paying Agent"......................... 2.03
"Permitted Indebtedness................ 4.09
"Purchase Date"........................ 3.09
"Refunding Capital Stock".............. 4.07
"Registrar"............................ 2.03
"Restricted Payments".................. 4.07
"Retired Capital Stock"................ 4.07
Section 1.03. Trust Indenture Act Definitions.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
22
"obligor" on the Notes and the Note Guarantees means the Company and the
Subsidiary Guarantors, respectively, and any successor obligor upon the Notes
and the Note Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) 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) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections
or rules adopted by the SEC from time to time.
Section 1.05. One Class of Securities.
The Initial Notes, the Private Exchange Notes and the Exchange
Notes shall be treated as a single class for all purposes under this Indenture
and shall vote and consent together on all matters as one class. None of the
Initial Notes, the Private Exchange Notes or the Exchange Notes shall have the
right to vote or consent as a separate class on any matter.
23
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(a) Provisions relating to the Initial Notes, the Private Exchange Notes
and the Exchange Notes 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 Notes and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit A hereto. The
Exchange Notes, the Private Exchange Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit B hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or depository
rule or usage. The Company shall approve the forms of the Notes and any
notation, legend or endorsement on them. Each Note shall be dated the date of
its issuance and shall show the date of its authentication.
(b) The terms and provisions contained in the Appendix and in the forms
of the Notes, annexed hereto as Exhibits A and B, shall constitute, and are
hereby expressly made, a part of this Indenture and, to the extent applicable,
the Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Section 2.02. Execution and Authentication; Aggregate Principal Amount.
Two Officers, or an Officer and an Assistant Secretary, shall
sign, or one Officer shall sign and one Officer or an Assistant Secretary (each
of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to, the Notes for the Company by manual or
facsimile signature.
If an Officer or Assistant Secretary whose signature is on a
Note was an Officer or Assistant Secretary at the time of such execution but no
longer holds that office or position at the time the Trustee authenticates the
Note, the Note shall nevertheless be valid.
On May 11, 1999, the Trustee shall authenticate and deliver
$100.0 million of 11 1/2% Senior Subordinated Notes Due 2009 in the form of
Initial Notes. In addition, the Trustee shall authenticate Exchange Notes and
Private Exchange Notes, as applicable, for original issue in the aggregate
principal amount not to exceed $100.0 million, in each case upon a written order
of the Company in the form of an Officers' Certificate, provided that such
Exchange Notes and Private Exchange Notes shall be
24
issuable only upon the valid surrender for cancellation of such Initial Notes of
a like aggregate principal amount. Further, at any time and from time to time
thereafter, the Trustee shall authenticate and deliver Notes for original issue
in an aggregate principal amount specified, in each case in a written order of
the Company in the form of an Officers' Certificate. Such order shall specify
the amount of the Notes to be authenticated and the date on which the original
issue of Notes is to be authenticated and, in the case of an issuance of
Additional Notes pursuant to Section 2.14 after May 11, 1999, shall certify that
such issuance will not be prohibited by Section 4.09.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee may appoint an authenticating agent (the
"Authenticating Agent") reasonably acceptable to the Company to authenticate
Notes. Unless otherwise provided in the appointment, an Authenticating Agent may
authenticate Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
Authenticating Agent. An Authenticating Agent has the same rights as an Agent to
deal with the Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only,
without coupons, in denominations of $1,000 and any integral multiple thereof.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity
as Registrar or Paying Agent, the Trustee shall act as such. The Company or any
of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent with respect to the Notes. The Paying Agency Office of the Trustee
is located at the address set forth in Section 12.02.
25
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or interest on the Notes, and will notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent,
it shall segregate and hold in a separate trust fund for the benefit of the
Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA (S) 312(a).
Section 2.06. [Intentionally Omitted]
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
Authenticating Agent of the Trustee from any loss that any of them may suffer if
a Note is replaced. The Company may charge for its expenses in replacing a Note.
26
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section as
not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note; however, Notes held by the Company or a Subsidiary of the Company
shall not be deemed to be outstanding for purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
Section 2.10. Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate
27
temporary Notes. Temporary Notes shall be substantially in the form of
certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall return
canceled Notes to the Company. Certification of the destruction of all canceled
Notes shall be delivered to the Company. The Company may not issue new Notes to
replace Notes that it has paid or that have been delivered to the Trustee for
cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13. CUSIP Numbers.
The Company in issuing the Notes 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 that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the
28
Notes or as contained in any notice of a redemption and that reliance may be
placed only on the other identification numbers printed on the Notes, and any
such redemption shall not be affected by any defect in or the omission of such
numbers. The Company will promptly notify the Trustee of any change in the CUSIP
numbers.
Section 2.14. Issuance of Additional Notes.
The Company shall be entitled to issue Additional Notes under
this Indenture which shall have identical terms as the Notes issued on May 11,
1999, other than with respect to the date of issuance, issue price and amount of
interest payable on the first payment date applicable thereto (and, if such
Additional Notes shall be issued in the form of Exchange Notes, other than with
respect to transfer restrictions); provided, that such issuance is not
prohibited by Section 4.09.
With respect to any Additional Notes, the Company shall set
forth in a resolution of the Board of Directors and in an Officers' Certificate,
a copy of each which shall be delivered to the Trustee, the following
information:
(A) the aggregate principal amount of such Additional
Notes to be authenticated and delivered pursuant to this
Indenture;
(B) the issue price, the issue date and the CUSIP number
of such Additional Notes and the amount of interest payable on
the first payment date applicable thereto; provided, however,
that no Additional Notes may be issued at a price that would
cause such Additional Notes to have "original issue discount"
within the meaning of Section 1273 of the Code; and
(C) whether such Additional Notes shall be transfer
restricted securities and issued in the form of Initial Notes or
shall be registered securities issued in the form of Exchange
Notes as set forth in the Appendix.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the
29
clause of this Indenture pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the
redemption price, (v) the CUSIP numbers of the Notes to be redeemed.
Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee shall select the Notes to be redeemed or
purchased among the Holders of the Notes in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address and to the Trustee.
The notice shall identify the Notes to be redeemed, including CUSIP
numbers, and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date upon
surrender of such
30
Note, a new Note or Notes in principal amount equal to the unredeemed portion
shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant
to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall have delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05. Deposit of Redemption Price.
Prior to 9 a.m. on the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price of
and accrued interest on all Notes to be redeemed on that date. The Trustee or
the Paying Agent shall promptly return to the Company any money deposited with
the Trustee or the Paying Agent by the Company in excess of the amounts
necessary to pay the redemption price of, and accrued interest on, all Notes to
be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions
31
of Notes called for redemption. If a Note is redeemed on or after an interest
record date but on or prior to the related interest payment date, then any
accrued and unpaid interest shall be paid to the Person in whose name such Note
was registered at the close of business on such record date. If any Note called
for redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and, upon the Company's written request, the Trustee shall authenticate for the
Holder at the expense of the Company a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as provided below, the Notes will not be redeemable at the
Company's option prior to May 15, 2004. Thereafter, the Notes will be subject
to redemption at any time at the option of the Company, in whole or in part,
upon not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest thereon to the applicable redemption date, if redeemed during
the twelve-month period beginning on May 15 of the years indicated below:
Year Amount
---- --------
2004.................. 105.750%
2005.................. 103.833%
2006.................. 101.916%
2007 and thereafter... 100.000%
(b) Notwithstanding the foregoing, during the first 36 months after May
15, 1999, the Company may on any one or more occasions redeem up to 35% of the
aggregate principal amount of Notes originally issued under this Indenture
(including the original principal amount of any Additional Notes) at a
redemption price of 111.500% of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the redemption date, with the net cash
proceeds from one or more Equity Offerings, provided that at least $65.0 million
of the original aggregate principal amount of Notes (including the original
principal amount of any Additional Notes) remains
32
outstanding immediately after the occurrence of such redemption (excluding Notes
held by the Company and its Subsidiaries); and provided, further, that such
redemption shall occur within 120 days of the date of the closing of any such
Equity Offering.
(c) At any time prior to May 15, 2004, the Notes may also be redeemed,
as a whole but not in part, at the option of the Company upon the occurrence of
a Change of Control, upon not less than 30 nor more than 60 days prior notice
(but in no event may any such redemption occur more than 90 days after the
occurrence of such Change of Control) mailed by first-class mail to each
Holder's registered address, at a redemption price equal to 100% of the
principal amount thereof plus the Applicable Premium as of, and accrued and
unpaid interest, if any, to, the date of redemption (the "Redemption Date").
(d) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Section 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemption.
The Company shall not be required to make mandatory redemption payments or
sinking fund payments with respect to the Notes.
Section 3.09. Offer to Purchase by Application of Net Proceeds Offer Amount.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence a Net Proceeds Offer, it shall follow the procedures
specified below.
The Net Proceeds Offer shall be mailed to the record Holders within 25
days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee,
and shall remain open for a period of at least 20 (but not more than 30)
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the Net Proceeds Offer Amount or,
if less than the Net Proceeds Offer Amount has been tendered, all Notes tendered
in response to the Net Proceeds Offer. Payment for any Notes so purchased shall
be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no
33
additional interest shall be payable to Holders who tender Notes pursuant to the
Net Proceeds Offer.
Upon the commencement of a Net Proceeds Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Net Proceeds
Offer. The Net Proceeds Offer shall be made to all Holders. The notice, which
shall govern the terms of the Net Proceeds Offer, shall state:
(a) that the Net Proceeds Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Net Proceeds Offer shall
remain open;
(b) the Net Proceeds Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment shall continue to
accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to a Net
Proceeds Offer may elect to have all of such Note or only a portion of such Note
purchased;
(f) that Holders electing to have a Note purchased pursuant to any Net
Proceeds Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing its election to have such Note purchased;
34
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Net Proceeds Offer Amount, the Company shall select the
Notes to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).
On or before 9:00 a.m. on the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Net Proceeds Offer Amount of Notes or portions thereof tendered pursuant to
the Net Proceeds Offer, or if less than the Net Proceeds Offer Amount has been
tendered, all Notes tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 3.09. The
Company, the Depositary or the Paying Agent, as the case may be, shall promptly
(but in any case not later than five days after the Purchase Date) mail or
deliver to each tendering Holder an amount equal to the purchase price of the
Notes tendered by such Holder and accepted by the Company for purchase, and the
Company shall promptly issue a new Note, and the Trustee, upon written request
from the Company shall authenticate and mail or deliver such new Note to such
Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Net Proceeds Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Company or a Subsidiary Guarantor shall pay or cause to be paid the
principal of, premium, if any, and interest on the Notes on the dates and in the
manner provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof,
35
holds as of 9:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. All references in this
Indenture, the Notes or any Note Guarantee to "interest" on the Notes shall be
deemed, for all purposes, to include Additional Interest or other liquidated
damages required to be paid on all or a portion of the Notes pursuant to the
terms of a Registration Rights Agreement.
The Company or a Subsidiary Guarantor shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to 1% per annum in excess of the then applicable
interest rate on the Notes to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace period)
at the same rate to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Company hereby designates the Paying Agency Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03.
36
Section 4.03. Reports.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall furnish to the Holders of
Notes (i) all quarterly and annual financial information that would be required
to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company
were required to file such forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" that describes the
financial condition and results of operations of the Company and its
consolidated Subsidiaries (showing in reasonable detail, either on the face of
the financial statements or in the footnotes thereto and in Management's
Discussion and Analysis of Financial Condition and Results of Operations, the
financial condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company) and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports, in each
case, within the time periods specified in the SEC's rules and regulations. In
addition, following consummation of the Registered Exchange Offer, whether or
not required by the rules and regulations of the SEC, the Company shall file a
copy of all such information and reports with the SEC for public availability
within the time periods specified in the SEC's rules and regulations (unless the
SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. The Company shall
at all times comply with TIA (S) 314(a).
(b) For so long as any Notes remain outstanding, the Company and the
Subsidiary Guarantors shall furnish to the Holders and to securities analysts
and prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Section 4.04. Compliance Certificate.
(a) The Company and each Subsidiary Guarantor (to the extent that such
Subsidiary Guarantor is so required under the TIA) shall deliver to the Trustee,
within 90 days after the end of each fiscal year, an Officers' Certificate
stating that a review of the activities of the Company and its Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company and the
Subsidiary Guarantors have kept, observed, performed and fulfilled their
respective obligations under this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of his or her knowledge
the Company and the Subsidiary Guarantors have kept, observed, performed and
fulfilled
37
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company and the Subsidiary Guarantors are taking or propose to
take with respect thereto) and that to the best of his or her knowledge no event
has occurred and remains in existence by reason of which payments on account of
the principal of or interest, if any, on the Notes is prohibited or if such
event has occurred, a description of the event and what action the Company and
the Subsidiary Guarantors are taking or propose to take with respect thereto.
For purposes of this paragraph, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company and the
Subsidiary Guarantors have violated any provisions of Article 4 or Article 5
hereof or, if any such violation has occurred, specifying the nature and period
of existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain knowledge
of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.05. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Company and each of the Subsidiary Guarantors covenants (to the extent
that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any
38
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Subsidiary Guarantors (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
Section 4.07. Restricted Payments.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Equity Interests of the
Company or any Restricted Subsidiary (including, without limitation, any payment
in connection with any merger or consolidation involving the Company or any
Restricted Subsidiary) or to the direct or indirect holders of the Equity
Interests of the Company or any Restricted Subsidiary in their capacity as such
(other than dividends or distributions payable in Qualified Capital Stock of the
Company and dividends or distributions payable solely to the Company or a
Restricted Subsidiary); (ii) purchase, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any merger or
consolidation involving the Company or any Restricted Subsidiary) any Equity
Interests of the Company or any Restricted Subsidiary or any direct or indirect
parent of the Company; or (iii) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iii) above being
collectively referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable Four-Quarter Period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Consolidated
Fixed Charge Coverage Ratio test set forth in the first paragraph of Section
4.09 hereof; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted Subsidiaries
after the date of this Indenture (excluding Restricted Payments permitted by
clauses (2)(i), (3), (6) and (7) of the next succeeding paragraph), is less than
the sum, without duplication, of (i) 50% of the Consolidated Net Income of the
Company for the period (taken as one
39
accounting period) from the beginning of the first fiscal quarter commencing
after the date of this Indenture to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are available at the time
of such Restricted Payment (or, if such Consolidated Net Income for such period
is a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net
cash proceeds (including the fair market value (as determined in good faith by a
resolution of the Board of Directors of the Company) of property other than cash
that would constitute Marketable Securities or a Permitted Business) received by
the Company since the date of this Indenture as a contribution to its common
equity capital (other than from a Subsidiary or that were financed with loans
from the Company or any Restricted Subsidiary) or from the issue or sale of
Qualified Capital Stock (including Capital Stock issued upon the conversion of
convertible Indebtedness or in exchange for outstanding Indebtedness) of the
Company (excluding any net proceeds from an Equity Offering or capital
contribution to the extent used to redeem Notes in accordance with the optional
redemption provisions of the Notes) or from the issue or sale of Disqualified
Stock or debt securities of the Company that have been converted into Qualified
Capital Stock (other than Qualified Capital Stock (or Disqualified Stock or
convertible debt securities) sold to a Subsidiary of the Company), plus (iii) an
amount equal to the aggregate net proceeds (including the fair market value (as
determined in good faith by a resolution of the Board of Directors of the
Company) of property other than cash that would constitute Marketable Securities
or a Permitted Business) of any (A) sale or other disposition of Restricted
Investments made by the Company and its Restricted Subsidiaries or (B) dividend
from, or the sale of the stock of, an Unrestricted Subsidiary, provided,
however, that the foregoing amount shall not exceed, in the case of clause (A),
the amount of such Restricted Investment previously made (and treated as a
Restricted Investment) by the Company or any Restricted Subsidiary, and, in the
case of any such clause (B), the amount of Investments previously made (and
treated as a Restricted Payment) by the Company or any Restricted Subsidiary in
such Unrestricted Subsidiary.
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph will not prohibit (1) the payment of any dividend or the
consummation of any irrevocable redemption within 60 days after the date of
declaration of such dividend or notice of such redemption if the dividend or
payment of the redemption price, as the case may be, would have been permitted
on the date of declaration or notice; (2) if no Event of Default shall have
occurred and be continuing or shall occur as a consequence thereof, the
acquisition of any shares of Capital Stock of the Company (the "Retired Capital
Stock"), either (i) solely in exchange for shares of Qualified Capital Stock of
the Company (the "Refunding Capital Stock"), or (ii) through the application of
the net proceeds of a substantially concurrent sale for cash (other than to a
Subsidiary of the Company) of shares of Qualified Capital Stock of the Company,
and, in the case of subclause (i) of this clause (2), if immediately prior to
the retirement
40
of the Retired Capital Stock the declaration and payment of dividends thereon
was permitted under clause (3) of this paragraph, the declaration and payment of
dividends on the Refunding Capital Stock in an aggregate amount per year no
greater than the aggregate amount of dividends per annum that was declarable and
payable on such Retired Capital Stock immediately prior to such retirement;
provided that at the time of the declaration of any such dividends on the
Refunding Capital Stock, no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof; (3) if no Default or
Event of Default shall have occurred and be continuing or would occur as a
consequence thereof, the declaration and payment of dividends to holders of any
class or series of Designated Preferred Stock (other than Disqualified Stock)
issued after the date of this Indenture (including, without limitation, the
declaration and payment of dividends on Refunding Capital Stock in excess of the
dividends declarable and payable thereon pursuant to clause (2) of this
paragraph); provided that, at the time of such issuance, the Company, after
giving effect to such issuance on a pro forma basis, would have had a
Consolidated Fixed Charge Coverage Ratio of at least 2.0 to 1.0 for the most
recent Four-Quarter Period; (4) payments to redeem or repurchase the Company's
common equity or options in respect thereof, in each case in connection with the
repurchase provisions of employee stock option or stock purchase agreements or
other agreements to compensate management and other employees and consultants;
provided that all such redemptions or repurchases pursuant to this clause (4)
shall not exceed $10.0 million in the aggregate since the date of this Indenture
(which amount shall be increased by the amount of any net cash proceeds received
from the sale since the date of this Indenture of Equity Interests (other than
Disqualified Stock) to members of the Company's management and other employees
and consultants that have not otherwise been applied to the payment of
Restricted Payments pursuant to the terms of the preceding paragraph (c) and by
the cash proceeds of any "key-man" life insurance policies which are used to
make such redemptions or repurchases); provided, however, notwithstanding the
foregoing limitations, that (A) for so long as any Indebtedness is outstanding
under the Senior Credit Agreements, the Company shall be permitted to make any
redemptions or repurchases not prohibited by the terms of such Senior Credit
Agreements, and (B) after payment in full of all Indebtedness outstanding under
the Senior Credit Agreements, the aggregate limitation set forth above shall
increase to an amount equal to the greater of (x) $10.0 million, and (y) 7.5% of
Total Assets, provided, further, however, that the cancellation of Indebtedness
owing to the Company from members of management of the Company or any of its
Restricted Subsidiaries in connection with such a repurchase of Capital Stock of
Parent will not be deemed to constitute a Restricted Payment under this
Indenture; (5) if no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof and the Company would be
permitted to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.09, other Restricted
Payments in an aggregate amount not to exceed $7.5 million since
41
the date of this Indenture; (6) repurchases of Capital Stock deemed to occur
upon the exercise of stock options if such Capital Stock represents a portion of
the exercise price thereof; and (7) payments in connection with the
Recapitalization and related transactions made on or subsequent to the date of
this Indenture.
In determining the aggregate amount of Restricted Payments made subsequent
to the date of this Indenture in accordance with clause (c) of the immediately
preceding paragraph, (a) amounts expended pursuant to clauses (1), (2)(ii), (4),
and (5) shall be included in such calculation; provided such expenditures
pursuant to clause (4) shall not be included to the extent of the cash proceeds
received by the Company from any "key man" life insurance policies and (b)
amounts expended pursuant to clauses (2)(i), (3), (6), or (7) shall be excluded
from such calculation.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated will be deemed to be Restricted Payments at the
time of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of this covenant. All such outstanding
Investments will be deemed to constitute Investments in an amount equal to the
fair market value of such Investments at the time of such designation. Such
designation will only be permitted if such Restricted Payment would be permitted
at such time and if such Restricted Subsidiary otherwise meets the definition of
an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment.
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any Restricted Subsidiary to (a) pay dividends or make any
other distributions on or in respect of its Capital Stock, (b) make loans or
advances or to pay any Indebtedness or other obligation owed to the Company or
any other Restricted Subsidiary of the Company or (c) transfer any of its
property or assets to the Company or any other Restricted Subsidiary of the
Company, except for such encumbrances or restrictions existing under or by
reason of: (1) applicable law; (2) this Indenture; (3) non-assignment provisions
of any contract or
42
any lease entered into in the ordinary course of business; (4) any instrument
governing Acquired Indebtedness, which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person or the properties or assets of the Person so acquired; (5) agreements
existing on the date of this Indenture (including, without limitation, the
Senior Credit Agreements); (6) restrictions on the transfer of assets subject to
any Lien permitted under this Indenture imposed by the holder of such Lien; (7)
restrictions imposed by any agreement to sell assets or Capital Stock permitted
under this Indenture to any Person pending the closing of such sale; (8) any
agreement or instrument governing Capital Stock of any Person that is in effect
on the date such Person is acquired by the Company or a Restricted Subsidiary of
the Company; (9) any agreement or instrument governing Indebtedness or Permitted
Foreign Subsidiary Preferred Stock (whether or not outstanding) of Foreign
Subsidiaries of the Company that was permitted by this Indenture to be incurred;
(10) restrictions on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business; (11) purchase
money obligations for property acquired in the ordinary course of business that
impose restrictions on the property so acquired of the nature described in
clause (c) above; (12) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements and other similar
agreements entered into in the ordinary course of business; (13) Indebtedness
incurred after the date of this Indenture in accordance with the terms of this
Indenture; provided that the restrictions contained in the agreements governing
such new Indebtedness are, in the good faith judgment of the Board of Directors
of the Company, not materially less favorable, taken as a whole, to the Holders
of the Notes than those contained in the agreements governing Indebtedness
outstanding on the date of this Indenture; and (14) any encumbrances or
restrictions imposed by any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of the
contracts, instruments or obligations referred to in clauses (1) through (13)
above; provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are, in the
good faith judgment of the Company's Board of Directors, no more restrictive
with respect to such dividend and other payment restrictions than those
contained in the dividend or other payment restrictions prior to such amendment,
modification, restatement, renewal, increase, supplement, refunding, replacement
or refinancing.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness and, the Company shall
not issue any Disqualified Stock and shall not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock;
43
provided, however, that the Company may incur Indebtedness (including Acquired
Indebtedness) or issue shares of Disqualified Stock and any Subsidiary Guarantor
may issue shares of preferred stock (provided, that either (x) such Subsidiary
Guarantor is a Wholly Owned Restricted Subsidiary or (y) if such series of
preferred stock does not pay cash dividends during any period prior to the
maturity date of the Notes, such preferred stock is Qualified Capital Stock) if
(i) no Default or Event of Default shall have occurred and be continuing at the
time or as a consequence of the incurrence of any such Indebtedness or the
issuance of any such Disqualified Stock and (ii) the Consolidated Fixed Charge
Coverage Ratio for the Company's most recently ended Four-Quarter Period would
have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock had been issued, at
the beginning of such Four-Quarter Period.
The provisions of the first paragraph of this covenant will not apply to
the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Indebtedness"):
(i) the Notes (other than Additional Notes) and the Note
Guarantees thereof;
(ii) Indebtedness incurred pursuant to one or more Credit
Facilities in an aggregate principal amount at any time outstanding (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and its Subsidiaries
thereunder) not to exceed at any given date, the greater of (A) $110.0
million, or (B) $95.0 million, multiplied by a fraction (1) the numerator
of which shall be the Consolidated EBITDA of the Company for its most
recently ended fiscal year, and (2) the denominator of which shall be the
Consolidated EBITDA of the Company for its fiscal year ended July 3, 1999;
provided that the amount of Indebtedness permitted to be incurred pursuant
to the Senior Credit Agreements in accordance with this clause (ii) shall
be in addition to any Indebtedness permitted to be incurred pursuant to
the Senior Credit Agreements in reliance on, and in accordance with, the
first paragraph of this Section or clauses (x) and (xv) below;
(iii) the incurrence of Indebtedness and/or the issuance of
Permitted Foreign Subsidiary Preferred Stock by Foreign Subsidiaries of
the Company, which together with the aggregate principal amount of
Indebtedness incurred pursuant to this clause (iii) and the aggregate
liquidation value of all Permitted Foreign Subsidiary Preferred Stock
issued pursuant to this clause (iii), does not exceed $15.0 million at any
one time outstanding;
44
(iv) other Indebtedness of the Company and its Subsidiaries
outstanding on the date of this Indenture for so long as such Indebtedness
remains outstanding;
(v) Hedging Obligations of the Company covering Indebtedness of
the Company; provided that any Indebtedness to which any such Hedging
Obligations correspond is otherwise permitted to be incurred under this
Indenture; and provided, further, that such Hedging Obligations are
entered into, in the judgment of the Company, to protect the Company from
fluctuation in interest rates on its outstanding Indebtedness;
(vi) Indebtedness of the Company under Currency Agreements;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; provided, however, that (a) if the
Company is the obligor on such Indebtedness, such Indebtedness is
expressly subordinated to the prior payment in full in cash of all
Obligations with respect to the Notes, (b) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness being
held by a Person other than the Company or a Subsidiary thereof and (c)
any sale or other transfer of any such Indebtedness to a Person that is
not either the Company or a Restricted Subsidiary thereof shall be deemed,
in each case, to constitute an incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (vii);
(viii) the incurrence of Acquired Indebtedness of Restricted
Subsidiaries of the Company to the extent the Company could have incurred
such Indebtedness in accordance with the first paragraph of this covenant
on the date such Indebtedness became Acquired Indebtedness;
(ix) Guarantees by the Company and the Subsidiary Guarantors of
each other's Indebtedness; provided that such Indebtedness is permitted to
be incurred under this Indenture;
(x) Indebtedness (including Capital Lease Obligations) incurred
by the Company or any of its Restricted Subsidiaries to finance the
purchase, lease or improvement of property (real or personal) or equipment
(whether through the direct purchase of assets or the Capital Stock of any
Person owning such assets) in an aggregate principal amount outstanding
not to exceed 7.5% of
45
Total Assets at the time of any incurrence thereof (including any
Refinancing Indebtedness with respect thereto) (which amount may, but need
not, be incurred in whole or in part under the Senior Credit Agreements);
(xi) Indebtedness incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to
letters of credit issued in the ordinary course of business, including,
without limitation, letters of credit in respect of workers' compensation
claims or self-insurance, or other Indebtedness with respect to
reimbursement type obligations regarding workers' compensation claims;
(xii) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price, earn out or other similar obligations, in
each case, incurred or assumed in connection with the disposition of any
business, assets or a Restricted Subsidiary of the Company, other than
guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or Restricted Subsidiary for the purpose
of financing such acquisition; provided that the maximum assumable
liability in respect of all such Indebtedness shall at no time exceed the
gross proceeds actually received by the Company and its Restricted
Subsidiaries in connection with such disposition;
(xiii) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary
of the Company in the ordinary course of business;
(xiv) any refinancing, modification, replacement, renewal,
restatement, refunding, deferral, extension, substitution, supplement,
reissuance or resale (collectively, "Refinances," and "Refinanced" shall
have a correlative meaning) of existing or future Indebtedness (other than
intercompany Indebtedness), including any additional Indebtedness incurred
to pay interest or premiums required by the instruments governing such
existing or future Indebtedness as in effect at the time of issuance
thereof ("Required Premiums") and fees in connection therewith
("Refinancing Indebtedness"); provided that any such event shall not (1)
directly or indirectly result in an increase in the aggregate principal
amount of Permitted Indebtedness of the Company and its Restricted
Subsidiaries, except to the extent such increase is a result of a
simultaneous incurrence of additional Indebtedness (A) to pay Required
Premiums and related fees, or (B) otherwise permitted to be incurred under
this Indenture; or (2) create Indebtedness with a
46
Weighted Average Life to Maturity at the time such Indebtedness is
incurred that is less than the Weighted Average Life to Maturity at such
time of the Indebtedness being Refinanced (except that this subclause (2)
will not apply in the event the Indebtedness being Refinanced, was
originally incurred in reliance upon clauses (ii) or (xv) of this
paragraph); provided, further, however, that (x) Refinancing Indebtedness
shall not include (1) Indebtedness of a Subsidiary that is not a
Subsidiary Guarantor that Refinances Indebtedness of the Company, or (2)
Indebtedness of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary, (y) if the Indebtedness being
Refinanced is not Senior Debt, then such Refinancing Indebtedness shall
rank no more senior than, and shall be at least as subordinated in right
of payment, to the Notes as the Indebtedness being Refinanced, and (z)
Refinancing Indebtedness shall be secured only by assets of a similar type
and in a similar amount to those that secured the Indebtedness so
refinanced; and
(xv) the incurrence of additional Indebtedness by the Company or
any of its Restricted Subsidiaries and/or the issuance of Permitted
Domestic Subsidiary Preferred Stock by the Company's U.S. Subsidiaries,
which together with the aggregate principal amount of other Indebtedness
incurred pursuant to this clause (xv) and the aggregate liquidation value
of all other Permitted Domestic Subsidiary Preferred Stock issued pursuant
to this clause (xv), does not exceed $12.5 million at any one time
outstanding (which amount, in the case of Indebtedness, may, but need not,
be incurred in whole or in part under the Senior Credit Agreements).
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (i) through (xv) above
or is entitled to be incurred pursuant to the first paragraph of this covenant,
the Company shall, in its sole discretion, classify such item of Indebtedness in
any manner that complies with this covenant. Accrual of interest and accretion
or amortization of original issue discount will not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of
this covenant; provided, in each such case, that the amount thereof is included
in Consolidated Fixed Charges of the Company as accrued.
Section 4.10. Asset Sales.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or the
applicable Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at
47
least equal to the fair market value of the assets sold or otherwise disposed of
(as determined in good faith by the Company's Board of Directors), (ii) at least
75% of the consideration received by the Company or the Restricted Subsidiary,
as the case may be, from such Asset Sale shall be cash or Cash Equivalents;
provided that the amount of (a) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet) of the Company or any
such Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Notes) that are assumed by the transferee of any such
assets, and (b) any notes or other obligations received by the Company or any
such Restricted Subsidiary from such transferee that are immediately converted
by the Company or such Restricted Subsidiary into cash (to the extent of the
cash received), shall be deemed to be cash for the purposes of this provision,
and (iii) upon the consummation of an Asset Sale, the Company shall apply, or
cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to
such Asset Sale within 365 days of receipt thereof either (A) to repay any
Senior Debt and, in the case of any Senior Debt under any revolving credit
facility, effect a commitment reduction under such revolving credit facility,
(B) to reinvest in Productive Assets, or (C) a combination of prepayment,
repurchase and investment permitted by the foregoing clauses (iii)(A) and
(iii)(B). Pending the final application of any such Net Cash Proceeds, the
Company or such Restricted Subsidiary may temporarily reduce Indebtedness under
a revolving credit facility, if any, or otherwise invest such Net Cash Proceeds
in Cash Equivalents. On the 366th day after an Asset Sale or such earlier date,
if any, as the Board of Directors of the Company or of such Restricted
Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset
Sale as set forth in clauses (iii)(A), (iii)(B) or (iii)(C) of the next
preceding sentence (each, a "Net Proceeds Offer Trigger Date"), the aggregate
amount of Net Cash Proceeds that have not been applied on or before such Net
Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B) and
(iii)(C) of the next preceding sentence (each a "Net Proceeds Offer Amount")
shall be applied by the Company or such Restricted Subsidiary to make an offer
to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer
Payment Date") not less than 30 nor more than 45 days following the applicable
Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis that
amount of Notes equal to the Net Proceeds Offer Amount at a price equal to 100%
of the principal amount of the Notes to be purchased, plus accrued and unpaid
interest thereon to the date of purchase; provided, however, that if at any time
any non-cash consideration received by the Company or any Restricted Subsidiary
of the Company, as the case may be, in connection with any Asset Sale is
converted into or sold or otherwise disposed of for cash (other than interest
received with respect to any such non-cash consideration), then such conversion
or disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Cash Proceeds thereof shall be applied in accordance with this covenant.
48
Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than
$5.0 million, the application of the Net Cash Proceeds constituting such Net
Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as
such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds
Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating
to such initial Net Proceeds Offer Amount from all Asset Sales by the Company
and its Restricted Subsidiaries aggregates at least $5.0 million, at which time
the Company or such Restricted Subsidiary shall apply all Net Cash Proceeds
constituting all Net Proceeds Offer Amounts that have been so deferred to make a
Net Proceeds Offer (the first date the aggregate of all such deferred Net
Proceeds Offer Amounts is equal to $5.0 million or more shall be deemed to be a
"Net Proceeds Offer Trigger Date"). Upon the completion of any Net Proceeds
Offer in accordance with the terms of this Indenture, the Net Proceeds Offer
Amount shall be reset at zero.
Notwithstanding the two immediately preceding paragraphs, the Company and
its Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with such paragraphs to the extent (i) at least 75% of the
consideration for such Asset Sale constitutes Productive Assets, cash, Cash
Equivalents and/or Marketable Securities and (ii) such Asset Sale is for fair
market value (as determined in good faith by the Company's Board of Directors);
provided that any consideration not constituting Productive Assets received by
the Company or any of its Restricted Subsidiaries in connection with any Asset
Sale permitted to be consummated under this paragraph shall be subject to the
provisions of the two preceding paragraphs.
To the extent that the provisions of any securities laws or regulations
conflict with the Asset Sale provisions of this Indenture, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under the Asset Sale provisions of this
Indenture by virtue thereof.
Section 4.11. Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to occur any
transaction or series or related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates involving aggregate
consideration in excess of $2.5 million (an "Affiliate Transaction"), other than
(x) Affiliate Transactions permitted under paragraph (b) below and (y) Affiliate
Transactions on terms that are not materially less favorable than those that
might reasonably have been obtained in a comparable transaction at such time on
an arm's-length basis from a Person that is not an Affiliate of the Company and,
at the Company's option, either (i) a majority of the disinterested members of
the Board
49
of Directors of the Company shall determine in good faith that such Affiliate
Transaction is on terms that are not materially less favorable than those that
might reasonably have been obtained in a comparable transaction at such time on
an arm's-length basis from a Person that is not an Affiliate of the Company or
(ii) the Board of Directors of the Company or any such Restricted Subsidiary
party to such Affiliate Transaction shall have received an opinion from a
nationally recognized investment banking firm that such Affiliate Transaction is
on terms not materially less favorable than those that might reasonably have
been obtained in a comparable transaction at such time on an arm's-length basis
from a Person that is not an Affiliate of the Company; and provided, further,
that for an Affiliate Transaction with an aggregate value of $5.0 million or
more the Board of Directors of the Company or any such Restricted Subsidiary
party to such Affiliate Transaction shall have received an opinion from a
nationally recognized investment banking firm that such Affiliate Transaction is
on terms not materially less favorable than those that might reasonably have
been obtained in a comparable transaction at such time on an arm's-length basis
from a Person that is not an Affiliate of the Company.
(b) The foregoing restrictions shall not apply to (i) reasonable fees
and compensation paid to and indemnity provided on behalf of, officers,
directors, employees or consultants of the Company or any Subsidiary as
determined in good faith by the Company's Board of Directors or senior
management; (ii) transactions exclusively between or among the Company and any
of its Restricted Subsidiaries or exclusively between or among such Restricted
Subsidiaries, provided such transactions are not otherwise prohibited by this
Indenture; (iii) any agreement as in effect as of the date of this Indenture or
any amendment or replacement thereto or any transaction contemplated thereby
(including pursuant to any amendment or replacement thereto) so long as any such
amendment or replacement agreement is not more disadvantageous to the Holders in
any material respect than the original agreement as in effect on the date of
this Indenture; (iv) Restricted Payments permitted by this Indenture; (v) the
payment of customary management, consulting and advisory fees and related
expenses to the Principals and their Affiliates made pursuant to any financial
advisory, financing, underwriting or placement agreement or in respect of other
investment banking activities, including, without limitation, in connection with
acquisitions or divestitures which fees and expenses are approved by the Board
of Directors of the Company or such Restricted Subsidiary in good faith; (vi)
payments or loans to employees or consultants that are approved by the Board of
Directors of the Company in good faith; (vii) the existence of, or the
performance by the Company or any of its Restricted Subsidiaries of its
obligations under the terms of, any shareholders agreement (including any
registration rights agreement or purchase agreement related thereto) to which it
is a party as of the date of this Indenture and any similar agreements which it
may enter into thereafter; provided, however, that the existence of, or the
performance by the Company
50
or any of its Restricted Subsidiaries of obligations under, any future amendment
to any such existing agreement or under any similar agreement entered into after
the date of this Indenture shall only be permitted by this clause (vii) to the
extent that the terms of any such amendment or new agreement are not
disadvantageous to the Holders of the applicable series of Notes in any material
respect; and (viii) transactions with customers, clients, suppliers, joint
venture partners or purchasers or sellers of goods or services, in each case in
the ordinary course of business (including, without limitation, pursuant to
joint venture agreements) and otherwise in compliance with the terms of this
Indenture which are fair to the Company or its Restricted Subsidiaries, in the
reasonable determination of the Board of Directors of the Company or the senior
management thereof, or are on terms at least as favorable as might reasonably
have been obtained at such time from an unaffiliated party.
Section 4.12. Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens of any kind
against or upon any of its property or assets, or any proceeds therefrom, unless
(i) in the case of Liens securing Indebtedness that is expressly subordinate or
junior in right of payment to the Notes, the Notes are secured by a Lien on such
property, assets or proceeds that is senior in priority to such Liens and (ii)
in all other cases, the Notes are equally and ratably secured, except for (A)
Liens existing as of the date of this Indenture and any extensions, renewals or
replacements thereof, (B) Liens securing Senior Debt, (C) Liens securing the
Notes, (D) Liens securing Indebtedness that is incurred to refinance
Indebtedness that was secured by a Lien permitted under this Indenture that was
incurred in accordance with the provisions of this Indenture; provided, however,
that such Liens do not extend to or cover any property or assets of the Company
or any of its Restricted Subsidiaries not securing the Indebtedness so
refinanced, and (E) Permitted Liens.
Section 4.13. Conduct of Business.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any businesses a majority of whose revenues are not
derived from the same or reasonably similar, ancillary or related to, or a
reasonable extension, development or expansion of, the businesses in which the
Company and its Restricted Subsidiaries are engaged on the date of this
Indenture.
Section 4.14. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its corporate
existence,
51
and the corporate, partnership or other existence of each of its Subsidiaries,
in accordance with the respective organizational documents (as the same may be
amended from time to time) of the Company or any such Subsidiary and (ii) the
rights (charter and statutory), licenses and franchises of the Company and its
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders of the Notes.
Section 4.15. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
will have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer price in
cash (the "Change of Control Payment") equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest to the date of purchase. Within
30 days following any Change of Control, the Company shall mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Notes on the date specified in such notice,
which date shall be no earlier than 30 days and no later than 60 days from the
date such notice is mailed (the "Change of Control Payment Date"), pursuant to
the procedures required by this Indenture and described in such notice. The
Company shall comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such laws
and regulations are applicable in connection with the repurchase of the Notes as
a result of a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce
52
the results of the Change of Control Offer on or as soon as practicable after
the Change of Control Payment Date. Other than as specifically provided in this
Section 4.15 and unless the context otherwise requires, any purchase pursuant to
this Section 4.15 shall be made pursuant to the provisions of Section 3.01
through 3.06 hereof.
Prior to the mailing of any notice required by this Indenture, but in any
event within 30 days following any Change of Control, the Company shall (i)
repay in full in cash and terminate all commitments under Indebtedness under the
Senior Credit Agreements and all other Senior Debt the terms of which require
repayment upon a Change of Control or offer to repay in full in cash and
terminate all commitments under all Indebtedness under the Senior Credit
Agreements and all other such Senior Debt and to repay the Indebtedness owed to
each lender under the Senior Credit Agreements that has accepted such offer or
(ii) obtain the requisite consents under the Senior Credit Agreements and all
such other Senior Debt to permit the repurchase of the Notes as provided above.
The Company shall first comply with this covenant before it shall be required to
repurchase Notes pursuant to the provisions described herein. The Company's
failure to comply with the immediately preceding sentence shall constitute an
Event of Default described in clause (c) and not in clause (b) under "Events of
Default" below.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if (i) a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer or (ii) the Company exercises its option to
purchase all the Notes upon a Change of Control as described in Section 3.07(c).
Section 4.16. No Senior Subordinated Debt.
Notwithstanding the provisions of Section 4.09 hereof, (i) the Company
shall not incur, create, issue, assume, Guarantee or otherwise become liable for
any Indebtedness that is subordinate or junior in right of payment to any Senior
Debt and senior in any respect in right of payment to the Notes, and (ii) no
Subsidiary Guarantor shall incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any Senior Debt of any Subsidiary Guarantor and senior in any respect
in right of payment to the Note Guarantees.
53
Section 4.17. Additional Note Guarantees.
If the Company or any of its Restricted Subsidiaries shall acquire or
create another U.S. Subsidiary after the date of this Indenture, or if any
Subsidiary becomes a U.S. Subsidiary after the date of this Indenture, then such
newly acquired or created Subsidiary, shall execute a Note Guarantee and deliver
an Opinion of Counsel, in accordance with the terms hereof; provided, that all
Subsidiaries that have properly been designated as Unrestricted Subsidiaries in
accordance herewith shall not be subject to the requirements of this covenant
for so long as they continue to constitute Unrestricted Subsidiaries.
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under any
Registration Rights Agreement, the Notes and this Indenture pursuant to a
supplemental indenture in form reasonably satisfactory to the Trustee; (iii)
immediately after such transaction no Default or Event of Default exists; and
(iv) except in the case of a merger of the Company with or into a Wholly Owned
Subsidiary of the Company and except in the case of a merger entered into solely
for the purpose of reincorporating the Company in another jurisdiction, the
Company or the entity or Person formed by or surviving any such consolidation or
merger (if other than the Company), or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made will, at the time of
such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable Four-Quarter Period,
be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Consolidated Fixed Charge Coverage Ratio test set forth in the first paragraph
of Section 4.09 hereof. This Section
54
5.01 shall not apply to a sale, assignment, transfer, conveyance or other
disposition of assets between or among the Company and any of its Wholly Owned
Restricted Subsidiaries which are Subsidiary Guarantors.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
"Event of Defaults" are:
(a) the failure to pay interest on any Notes when the same becomes due
and payable if the default continues for a period of 30 days, whether or not
such payment shall be prohibited by Article 10 hereof;
(b) the failure to pay the principal on any Notes when such principal
becomes due and payable, at maturity, upon redemption or otherwise (including
the failure to make a payment to purchase Notes tendered pursuant to a Change of
Control Offer or a Net Proceeds Offer), whether or not such payment shall be
prohibited by Article 10 hereof;
(c) a default in the observance or performance of any other covenant or
agreement contained herein if the default continues for a period of 30 days
after the Company receives written notice specifying the default (and demanding
that such
55
default be remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Notes;
(d) the failure to pay at final stated maturity (giving effect to any
extensions thereof) the principal amount of any Indebtedness of the Company or
any Restricted Subsidiary, which failure continues for at least 10 days, or the
acceleration of the maturity of any such Indebtedness, which acceleration
remains uncured and unrescinded for at least 10 days, if the aggregate principal
amount of such Indebtedness, together with the principal amount of any other
such Indebtedness in default for failure to pay principal at final maturity or
which has been accelerated, aggregates $7.5 million or more at any time;
(e) one or more judgments in an aggregate amount in excess of $7.5
million shall have been rendered against the Company or any of its Significant
Subsidiaries and such judgments remain undischarged, unpaid or unstayed for a
period of 60 days after such judgment or judgments become final and non-
appealable;
(f) the Company or any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary
pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) generally is not paying its debts as they become due; or
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an involuntary case;
56
(ii) appoints a custodian of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary or for all or substantially all of the
property of the Company or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days;
or
(h) except as permitted by this Indenture, any Note Guarantee of a
Significant Subsidiary is held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Subsidiary Guarantor which is a Significant Subsidiary, or any Person acting on
behalf of any such Subsidiary Guarantor, shall deny or disaffirm its obligations
under its Note Guarantee.
Section 6.02. Acceleration.
If any Event of Default (other than an Event of Default specified in
clause (f) or (g) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Significant Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately
and the same (i) shall become immediately due and payable or (ii) if there are
any amounts outstanding under either of the Senior Credit Agreements, shall
become immediately due and payable upon the first to occur of an acceleration
under either of the Senior Credit Agreements or five Business Days after receipt
by the Company and the Representative under the applicable Senior Credit
Agreement of such Acceleration Notice but only if such Event of Default is then
continuing. Notwithstanding the foregoing, if an Event of Default specified in
clause (f) or (g) of Section 6.01 hereof occurs with respect to the Company, any
of its Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary, all outstanding Notes shall be
due and payable immediately without further action or notice. The Holders of a
majority in aggregate principal amount of the then outstanding Notes by written
notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except
57
nonpayment of principal, interest or premium that has become due solely because
of the acceleration) have been cured or waived.
If an Event of Default occurs on or after May 15, 2004 by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium
shall also become and be immediately due and payable, to the extent permitted by
law, anything in this Indenture or in the Notes to the contrary notwithstanding.
If an Event of Default occurs prior to May 15, 2004 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding the prohibition on redemption of the Notes prior to
such date, then, upon acceleration of the Notes, an additional premium shall
also become and be immediately due and payable in an amount, for each of the
years beginning on May 15 of the years set forth below, as set forth below
(expressed as a percentage of the aggregate principal amount to the date of
payment that would otherwise be due but for the provisions of this sentence):
Year Percentage
---- ----------
1999..................... 115.332%
2000..................... 113.416%
2001..................... 111.500%
2002..................... 109.582%
2003..................... 107.666%
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
58
Section 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and interest on, the Notes (including in
connection with an offer to purchase) (provided, however, that the Holders of a
majority in aggregate principal amount of the then outstanding Notes may rescind
an acceleration and its consequences, including any related payment default that
resulted from such acceleration). Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee security or indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
security or indemnity; and
59
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and interest on the
Note, on or after the respective due dates expressed in the Note (including in
connection with an offer to purchase), or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal, premium and interest remaining unpaid on the Notes and interest on
overdue principal and, to the extent lawful, interest and such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses,
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disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties that the Holders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expenses,
disbursements and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal,
premium and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
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 a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
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This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee shall be required to
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied duties, covenants, liabilities 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
accept and conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon notices, resolutions,
requests, consents, orders, certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the notices, resolutions, requests, consents,
orders, certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
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(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee or affects the liability
of or affords protection to the Trustee is subject to this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) The Trustee shall not be required to give any bond or security with
respect to the execution of its rights and duties under this Indenture.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in any such document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any attorney or agent
appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) 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 unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
(g) If any payment under this Indenture is to be made by the Trustee to
the Company or its designees by wire transfer, the Company agrees to enter into
an Agreement For Issuance Of Payment Instructions with the Trustee in a form to
be provided by the Trustee. Until the Company executes such agreement, the
Trustee shall not be required to make any payment under this Indenture to the
Company or its designees by wire transfer.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or any Affiliate of
the Company with the same rights it would have if it were not Trustee. However,
in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes
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including any Offering Memorandum or pursuant to this Indenture other than its
certificate of authentication.
Section 7.05. Notice of Defaults.
(a) The Trustee shall not be required to take notice or be deemed to
have notice of any Default or Event of Default unless it is notified of such
default by written notice of any event which is in fact such a default from the
Company or a Holder is received by the Trustee at the Corporate Trust Office of
the Trustee, and such notice references the Notes and this Indenture; provided
that the Trustee shall be required to take and shall be deemed to take notice of
any failure to receive payments pursuant to Section 2.04.
(b) If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium, if
any, or interest on any Note, the Trustee may withhold the notice if and so long
as a committee of its Responsible Officers in good faith reasonably determines
that withholding the notice is in the interests of the Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 1 beginning with the May 1 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA (S) 313(a) (but if no event described in TIA (S)
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA (S)
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA (S) 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA (S) 313(d). The Company shall
promptly notify the Trustee when the Notes are listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company and the Subsidiary Guarantors shall pay to the Trustee from
time to time such compensation for its acceptance of this Indenture and services
hereunder as the parties shall agree from time to time. The Trustee's
compensation shall
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not be limited by any law on compensation of a trustee of an express trust. The
Company and the Subsidiary Guarantors shall reimburse the Trustee promptly upon
request for all reasonable disbursements, advances and expenses incurred or made
by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company and the Subsidiary Guarantors hereby agree to indemnify and
hold the Trustee and its directors, officers, agents and employees
(collectively, the "Indemnitees") harmless from and against any and all claims,
liabilities, losses, damages, fines, penalties, and expenses, including out-of-
pocket, incidental expenses, legal fees and expenses, and the allocated costs
and expenses of in-house counsel and legal staff ("Losses") that may be imposed
on, incurred by, or asserted against, the Indemnitees or any of them for
following any instruction or other direction upon which the Trustee is
authorized to rely pursuant to the terms of this Indenture. In addition to and
not in limitation of the immediately preceding sentence, the Company and the
Subsidiary Guarantors also agree to indemnify and hold the Indemnitees and each
of them harmless from and against any and all Losses that may be imposed on,
incurred by, or asserted against the Indemnitees or any of them in connection
with or arising out of the Trustee's performance under this Indenture, including
its acceptance of its duties under this Indenture and the costs and expenses of
enforcing this Indenture against the Company and the Subsidiary Guarantors
(including this Section 7.07.), provided the Trustee has not acted with
negligence or engaged in willful misconduct. The provisions of this Section
7.07 shall survive the termination of this Indenture and the resignation or
removal of the Trustee for any reason. The Trustee shall notify the Company and
the Subsidiary Guarantors 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
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
and the Subsidiary Guarantors need not pay for any settlement made without their
consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Subsidiary Guarantors under this
Section 7.07 shall survive the satisfaction and discharge of this Indenture.
To secure the Company's and the Subsidiary Guarantors' payment obligations
in this Section, the Trustee shall have a Lien prior to the Notes on all money
or property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
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When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(f) or (g) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to the
extent applicable.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the expense of
the Company), the Company, or the Holders of Notes of at least 10% in principal
amount of the then outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
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If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with Section 7.10,
such Holder of a Note may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 hereof shall continue
for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee in its individual capacity consolidates, merges or converts
into, or transfers all or substantially all of its corporate trust business to,
another corporation or association, the successor corporation or association
without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation or
association organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $100.0 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA /S/ 310(a)(1), (2) and (5). The Trustee is subject to TIA /S/ 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA /S/ 311(a), excluding any creditor
relationship listed in TIA /S/ 311(b). A Trustee who has resigned or been
removed shall be subject to TIA /S/ 311(a) to the extent indicated therein.
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ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article Eight.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest on such Notes when such payments
are due, (b) the Company's obligations with respect to such Notes under Article
2 and Section 4.02 hereof and under the Appendix, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article Eight. Subject to
compliance with this Article Eight, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16 and 4.17 hereof with respect to the outstanding
Notes on and after the date the conditions set
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forth in Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and
the Notes shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(d) and 6.01(e) hereof shall not constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the written opinion of a nationally recognized firm of
independent public accountants delivered to the Trustee, to pay the principal
of, premium and interest on the outstanding Notes on the stated date for payment
thereof or on the applicable redemption date, as the case may be;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the 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 Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
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income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default resulting
from the incurrence of Indebtedness all or a portion of the proceeds of which
will be used to defease the Notes pursuant to this Article Eight concurrently
with such incurrence) or insofar as Sections 6.01(f) or 6.01(g) hereof is
concerned, at any time in the period ending on the 91st day after the date of
deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, the Senior Credit
Agreements or any other material agreement or instrument (other than a default
under this Indenture resulting from the incurrence of Indebtedness all or a
portion of the proceeds of which will be used to defease the Notes pursuant to
this Article Eight concurrently with such incurrence) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel reasonably acceptable to the Trustee (which may be subject to customary
exceptions) to the effect that on the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel reasonably acceptable to the Trustee, each
stating that all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.
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Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 8.06. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such principal,
premium, if any, or interest has become due and payable shall be paid to the
Company on its written request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
secured creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
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to make any such repayment, may at the expense of the Company cause to be
published once, in The New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Subsidiary Guarantors' obligations under
this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that,
if the Company makes any payment of principal of, premium, if any, or interest
on any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
Section 8.08. Survival.
The Trustee's rights under Article 8 shall survive termination of this
Indenture.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Subsidiary Guarantors and the Trustee may amend or supplement this Indenture,
the Note Guarantees or the Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 hereof or the
Appendix (including the related definitions) in a manner that does not
materially adversely affect any Holder;
73
(c) to provide for the assumption of the Company's or a Subsidiary
Guarantor's obligations to the Holders of the Notes by a successor to the
Company or a Subsidiary Guarantor pursuant to Article 5 or Article 11 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) to provide for the issuance of Additional Notes in accordance with
the limitations set forth in this Indenture as of the date hereof; or
(g) to allow any Subsidiary Guarantor to execute a supplemental
indenture and/or a Note Guarantee with respect to the Notes.
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02(b) hereof, the Trustee shall join with the Company and the Subsidiary
Guarantors in the execution of any amended or supplemental Indenture authorized
or permitted by the terms of this Indenture and in the making of any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the Trustee
may amend or supplement this Indenture (including Section 3.09, 4.10 and 4.15
hereof), the Note Guarantees and the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
Notes (including Additional Notes, if any) then outstanding voting as a single
class (including consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07
hereof, any existing Default or Event of Default (other than a Default or Event
of Default in the payment of the principal of, premium, if any, or interest on
the Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture, the Note
Guarantees or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including Additional
Notes,
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if any) voting as a single class (including consents obtained in connection with
a tender offer or exchange offer for, or purchase of, the Notes). Without the
consent of at least 75% in aggregate principal amount of the Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, such Notes), no waiver or amendment to this
Indenture may make any change in the provisions of Article 10 or Section 11.02
hereof that adversely affects the rights of any Holder of Notes. Any amendment
to the provisions of Article 10 or Section 11.02 hereof or the related
definitions will also require the consent of the holders of a majority of
Indebtedness then outstanding under each of the Senior Credit Agreements.
Section 2.08 hereof shall determine which Notes are considered to be
"outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02(b) hereof, the Trustee
shall join with the Company in the execution of such amended or supplemental
Indenture unless such amended or supplemental Indenture directly affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes (including Additional Notes,
if any) then outstanding voting as a single class may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a non-
consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
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(b) reduce the principal of or change the fixed maturity of any Note or
alter or waive any of the provisions with respect to the redemption of the
Notes, other than provisions relating to Sections 3.09 or 4.15 hereof;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes (including Additional Notes, if
any) and a waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of or interest on the Notes;
(g) waive a redemption payment with respect to any Note, other than a
payment required by Section 3.09 or 4.15;
(h) make any change in the foregoing amendment and waiver provisions; or
(i) release any Subsidiary Guarantor from any of its obligations under
its Note Guarantee or this Indenture, except in accordance with the terms of
this Indenture.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a amended or supplemental Indenture that complies with the TIA as then
in effect and the Trustee may rely on an Opinion of Counsel to such effect in
executing any amendment or supplement.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the
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consent as to its Note if the Trustee receives written notice of revocation
before the date the waiver, supplement or amendment becomes effective. An
amendment, supplement or waiver becomes effective in accordance with its terms
and thereafter binds every Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article Nine if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
12.04 hereof, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE 10.
SUBORDINATION
Section 10.01. Agreement to Subordinate.
The Company agrees, and each Holder by accepting a Note agrees, that the
Company's Obligations with respect to the Notes are subordinated in right of
payment, to the extent and in the manner provided in this Article 10, to the
prior payment in full in cash or Cash Equivalents of all Senior Debt (whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt. The foregoing provisions regarding subordination are solely for
the purpose of defining the relative rights of the holders of the Senior Debt on
the one hand and the Holders on the other hand. Such provisions
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shall be enforceable by the holders of Senior Debt directly against the Holders
(and their successors and assigns). This Article 10 shall constitute a
continuing offer to all persons who become holders of, or continue to hold,
Senior Debt (whether such Senior Debt was created or acquired before or after
the issuance of the Notes).
Section 10.02. Certain Definitions.
"Designated Senior Debt" means (i) any Indebtedness outstanding under the
Senior Credit Agreements and (ii) after payment in full of all Indebtedness
outstanding under the Senior Credit Agreements, any other Senior Debt permitted
under this Indenture, the principal amount of which is $25.0 million or more and
that has been designated by the Company as "Designated Senior Debt."
"Permitted Junior Securities" means Equity Interests in the Company or any
Subsidiary Guarantor or debt securities that are unsecured and are subordinated
to all Senior Debt (and any debt securities issued in exchange for Senior Debt)
to substantially the same extent as, or to a greater extent than, the Notes are
subordinated to Senior Debt pursuant to Article 10 hereof (without limiting the
generality of the foregoing, such securities shall have no required principal
payments until after the final maturity of all Senior Debt).
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt.
"Senior Debt" means (i) all Indebtedness of the Company or any of the
Subsidiary Guarantors outstanding under Credit Facilities and all Hedging
Obligations with respect thereto, (ii) any other Indebtedness permitted to be
incurred by the Company or the Subsidiary Guarantors under the terms of this
Indenture, unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to the Notes or the relevant Note Guarantee, as the case may be, and
(iii) all Obligations with respect to the foregoing. Notwithstanding anything to
the contrary in the foregoing, Senior Debt will not include (v) any liability
for foreign, federal, state, local or other taxes owed or owing by the Company
or any Subsidiary Guarantor, (w) any Indebtedness of the Company or any
Subsidiary Guarantor to any of its Subsidiaries or other Affiliates, (x) any
trade payables, (y) any Indebtedness that is incurred in violation of this
Indenture, or (z) any Capital Lease Obligations.
A distribution may consist of cash, securities or other property, by set-
off or otherwise.
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Section 10.03. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities:
(1) holders of Senior Debt shall be entitled to receive payment
in full in cash or Cash Equivalents of all Obligations due in respect of
such Senior Debt (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Debt) before
Holders of the Notes shall be entitled to receive any payment with respect
to the Notes (except that Holders may receive (i) Permitted Junior
Securities and (ii) payments and other distributions made from any
defeasance trust created pursuant to Article Eight hereof); and
(2) until all Obligations with respect to Senior Debt (as
provided in subsection (1) above) are paid in full in cash or Cash
Equivalents, any distribution to which Holders would be entitled but for
this Article 10 shall be made to holders of Senior Debt (except that
Holders of Notes may receive (i) Permitted Junior Securities and (ii)
payments and other distributions made from any defeasance trust created
pursuant to Article Eight hereof), as their interests may appear.
Section 10.04. Default on Designated Senior Debt.
The Company may not make any payment or distribution to the Trustee or any
Holder in respect of Obligations with respect to the Notes and may not acquire
from the Trustee or any Holder any Notes for cash or property (other than (a)
Permitted Junior Securities and (b) payments and other distributions made from
any defeasance trust created pursuant to Article Eight hereof) until all
principal and other Obligations with respect to the Senior Debt have been paid
in full if:
(i) a default in the payment of any principal or other
Obligations with respect to Designated Senior Debt occurs and is
continuing beyond any applicable grace period in the agreement, indenture
or other document governing such Designated Senior Debt; or
(ii) a default, other than a payment default, on Designated Senior
Debt occurs and is continuing that then permits holders of the Designated
Senior Debt to accelerate its maturity and the Trustee receives a notice
of the default
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(a "Payment Blockage Notice") from the trustee, agent or other
representative of the holders of Designated Senior Debt, or the holders of
Designated Senior Debt or the Company. If the Trustee receives any such
Payment Blockage Notice, no subsequent Payment Blockage Notice shall be
effective for purposes of this Section unless and until (A) at least 360
days shall have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice and (B) all scheduled payments of principal,
premium, if any, and interest on the Notes that have come due have been
paid in full in cash. No nonpayment default that existed or was continuing
on the date of delivery of any Payment Blockage Notice to the Trustee
shall be, or be made, the basis for a subsequent Payment Blockage Notice
unless such default shall have been waived for a period of not less than
180 days.
The Company may and shall resume payments on and distributions in respect
of the Notes and may acquire them upon the earliest of:
(1) the date upon which the default is cured or waived,
(2) in the case of a default referred to in Section 10.04(ii)
hereof, 179 days pass after the Payment Blockage Notice is received if the
maturity of such Designated Senior Debt has not been accelerated, if this
Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition, or
(3) in the case of a default referred to in Section 10.04(ii)
hereof, the Trustee receiving notice from the representative in respect of
such Designated Senior Debt rescinding such Payment Blockage Notice.
Section 10.05. Acceleration of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the
acceleration.
Section 10.06. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes at a time when the Trustee or such Holder,
as applicable, has actual knowledge that such payment is prohibited by Section
10.03 or 10.04 hereof, such payment shall be held by the Trustee or such Holder,
in trust for the benefit of, and shall be paid forthwith over and delivered,
upon written request, to, the holders of Senior Debt as their interests may
appear or their Representative under the
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indenture or other agreement (if any) pursuant to which such Senior Debt may
have been issued, as their respective interests may appear, for application to
the payment of all Obligations with respect to Senior Debt remaining unpaid to
the extent necessary to pay such Obligations in full in cash or Cash Equivalents
in accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
Section 10.07. Notice by Company.
The Company shall promptly notify the Trustee and the Paying Agent of any
facts known to the Company that would cause a payment of any Obligations with
respect to the Notes to violate this Article 10, but failure to give such notice
shall not affect the subordination of the Notes to the Senior Debt as provided
in this Article 10.
Section 10.08. Subrogation.
After all Senior Debt is paid in full and all commitments to lend
thereunder have been terminated and until the Notes are paid in full, Holders of
Notes shall be subrogated (equally and ratably with all other Indebtedness pari
passu with the Notes) to the rights of holders of Senior Debt to receive
distributions applicable to Senior Debt to the extent that distributions
otherwise payable to the Holders of Notes have been applied to the payment of
Senior Debt. A distribution made under this Article 10 to holders of Senior Debt
that otherwise would have been made to Holders of Notes is not, as between the
Company and Holders, a payment by the Company on the Notes.
Section 10.09. Relative Rights.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture shall:
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(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders of Notes and creditors
of the Company other than their rights in relation to holders of Senior
Debt; or
(3) prevent the Trustee or any Holder of Notes from exercising
its available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of or
interest on a Note on the due date, the failure shall nevertheless be a Default
or Event of Default.
Section 10.10. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.
Section 10.11. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee and the Holders of Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders of Notes
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
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Section 10.12. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice from the Company or any representative of the holders of
any Senior Debt of facts that would cause the payment of any Obligations with
respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
Nothing in this Section 10.12 is intended to or shall relieve any Holder of
Notes from the obligations imposed under Section 10.06 with respect to other
distributions received in violation of the provisions hereof.
The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights.
Section 10.13. Authorization to Effect Subordination.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Representatives are hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.
Section 10.14. Amendments.
The provisions of this Article 10 and Section 11.02 below shall not be
amended or modified without the written consent of the holders of a majority of
the Indebtedness then outstanding under each of the Senior Credit Agreements.
Section 10.15. Changes in Senior Debt.
Any holder of Senior Debt may at any time and from time to time without
the consent of or notice to any Holder or the Trustee: (a) extend, renew,
modify, waive or
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amend the terms of the Senior Debt; (b) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior Debt; (c)
release any guarantor or any other person (except the Company) liable in any
manner for the Senior Debt or amend or waive the terms of any guaranty of Senior
Debt; (d) exercise or refrain from exercising any rights against the Company or
any other Person; (e) apply any sums by whomever paid or however realized to
Senior Debt; and (f) take any other action which otherwise might be deemed to
impair the rights of the holders of Senior Debt without incurring any
responsibility to any Holder or the Trustee and without impairing or releasing
the obligations of any Holder or the Trustee to the holders of Senior Debt.
ARTICLE 11.
NOTE GUARANTEES
Section 11.01. Guarantee.
Subject to this Article 11, each of the Subsidiary Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of the Company hereunder or thereunder, that: (a)
the principal of and interest on the Notes will be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and interest
on the overdue principal of and interest on the Notes, if any, if lawful, and
all other obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Subsidiary Guarantors shall
be jointly and severally obligated to pay the same immediately. Each Subsidiary
Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.
The Subsidiary Guarantors hereby agree that their obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Subsidiary Guarantor hereby waives diligence, presentment,
84
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenant that this Note
Guarantee shall not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Subsidiary Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
the Subsidiary Guarantors any amount paid either to the Trustee or such Holder,
then this Note Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.
Each Subsidiary Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Subsidiary Guarantor further agrees that, as between the Subsidiary
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article 6 hereof for the purposes of this Note Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article 6 hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Subsidiary Guarantors for the purpose of
this Note Guarantee. The Subsidiary Guarantors shall have the right to seek
contribution from any non-paying Subsidiary Guarantor so long as the exercise of
such right does not impair the rights of the Holders under the Note Guarantee.
Section 11.02. Subordination Of Note Guarantee.
The Obligations of each Subsidiary Guarantor under its Note Guarantee
pursuant to this Article 11 shall be junior and subordinated to the Senior Debt
of such Subsidiary Guarantor on the same basis as the Notes are junior and
subordinated to Senior Debt of the Company. For the purposes of the foregoing
sentence, the Trustee and the Holders shall have the right to receive and/or
retain payments by any of the Subsidiary Guarantors only at such times as they
may receive and/or retain payments in respect of the Notes pursuant to this
Indenture, including Article 11 hereof.
Section 11.03. Limitation On Subsidiary Guarantor Liability.
Each Subsidiary Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the Note
Guarantee of
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such Subsidiary Guarantor not constitute a fraudulent transfer or conveyance for
purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to any Note Guarantee. To effectuate the foregoing intention, the
Trustee, the Holders and the Subsidiary Guarantors hereby irrevocably agree that
the obligations of such Subsidiary Guarantor under its Note Guarantee and this
Article 11 shall be limited to the maximum amount as will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Subsidiary Guarantor that are relevant under such laws, and after giving effect
to any collections from, rights to receive contribution from or payments made by
or on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under this Article 11, result in the obligations
of such Subsidiary Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.
Section 11.04. Execution And Delivery Of Note Guarantee.
To evidence its Note Guarantee set forth in Section 11.01, each Subsidiary
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form included in Exhibit C shall be endorsed by an Officer of such
Subsidiary Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Subsidiary Guarantor by
one of its Officers (other than any Assistant Treasurer, Controller or
Secretary).
Each Subsidiary Guarantor hereby agrees that its Note Guarantee set forth
in Section 11.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Note Guarantee set forth in this
Indenture on behalf of the Subsidiary Guarantors.
In the event that the Company creates or acquires any new Subsidiaries
subsequent to the date of this Indenture, if required by Section 4.17 hereof,
the Company shall cause such Subsidiaries to execute supplemental indentures to
this Indenture (substantially in the form included in Exhibit D to this
Indenture) and Note Guarantees in accordance with Section 4.17 hereof and this
Article 11, to the extent applicable.
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Section 11.05. Subsidiary Guarantors May Consolidate, Etc., On Certain Terms.
No Subsidiary Guarantor may consolidate with or merge with or into
(whether or not such Subsidiary Guarantor is the surviving Person) another
Person whether or not affiliated with such Subsidiary Guarantor unless:
(a) subject to the last paragraph of this Section 11.05, the Person
formed by or surviving any such consolidation or merger (if other than a
Subsidiary Guarantor or the Company) unconditionally assumes all the obligations
of such Subsidiary Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Notes, the
Indenture, any Registration Rights Agreement and the Note Guarantee on the terms
set forth herein or therein;
(b) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(c) either (i) the Company would be permitted, immediately after giving
effect to such transaction, to incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.09 hereof, or (ii) immediately after giving effect
to such transaction, the Consolidated Fixed Charge Coverage Ratio of the Company
shall be higher than the Consolidated Fixed Charge Coverage Ratio of the Company
immediately prior to such transaction.
In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Subsidiary
Guarantor, such successor Person shall succeed to and be substituted for the
Subsidiary Guarantor with the same effect as if it had been named herein as a
Subsidiary Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Note Guarantees to be endorsed upon all of the Notes issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee. All the Note Guarantees so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Note
Guarantees theretofore and thereafter issued in accordance with the terms of
this Indenture as though all of such Note Guarantees had been issued at the date
of the execution hereof.
Except as set forth in Articles 4 and 5 hereof and in this Section 11.05,
nothing contained in this Indenture or in any of the Notes shall prevent any
consolidation or
87
merger of a Restricted Subsidiary with or into the Company or another Restricted
Subsidiary, or shall prevent any sale or conveyance of the property of a
Restricted Subsidiary as an entirety or substantially as an entirety to the
Company or another Restricted Subsidiary.
Section 11.06. Releases Following Sale Of Assets.
In the event of a sale or other disposition of all of the assets of any
Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a sale or
other disposition of all of the capital stock of any Subsidiary Guarantor, then
such Subsidiary Guarantor (in the event of a sale or other disposition, by way
of merger, consolidation or otherwise, of all of the capital stock of such
Subsidiary Guarantor) or the corporation acquiring the property (in the event of
a sale or other disposition of all or substantially all of the assets of such
Subsidiary Guarantor) will be released and relieved of any obligations under its
Note Guarantee; provided that the Net Proceeds of such sale or other disposition
are applied in accordance with the applicable provisions of this Indenture,
including without limitation Section 4.10 hereof. Upon delivery by the Company
to the Trustee of an Officers' Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the Company in accordance
with the applicable provisions of this Indenture, including without limitation
Section 4.10 hereof, the Trustee shall execute any documents reasonably required
in order to evidence the release of any Subsidiary Guarantor from its
obligations under its Note Guarantee.
Any Subsidiary Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Subsidiary Guarantor under
this Indenture as provided in this Article 11.
ARTICLE 12.
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA (S) 318(c), the imposed duties shall control.
88
Section 12.02. Notices.
Any notice or communication by the Company, any Subsidiary Guarantor or
the Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company and/or any Subsidiary Guarantor:
Integrated Circuit Systems, Inc.
0000 Xxxxxxxxx xx xxx Xxxxxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Chief Financial Officer
With a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, XX 00000-000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxx, Esq.
If to the Trustee:
Corporate Trust Office:
Chase Manhattan Trust Company, National Association
One Liberty Place
0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Telecopier No.:(000) 000-0000
Attention: Corporate Trust Administration
Paying Agency Office:
Chase Bank of Texas
Corporate Trust Services
0000 Xxxx Xxxxxx 000XX
Xxxxxx, XX 00000
89
The Company, any Subsidiary Guarantor or the Trustee, by notice to the
others may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
Section 12.03. Communication By Holders Of Notes With Other Holders Of Notes.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA (S)
312(c).
Section 12.04. Certificate And Opinion As To Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
90
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
Section 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA (S) 314(a)(4)) shall comply with the provisions of TIA (S)
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has or
they have 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 satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 12.06. Rules By Trustee And Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07. No Personal Liability Of Directors, Officers, Employees
And Stockholders.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Subsidiary Guarantor, as such, shall have any
liability for any obligations of the Company or such Subsidiary Guarantor under
the Notes, the Note Guarantees, this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note
91
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
Section 12.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES 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 12.09. No Adverse Interpretation Of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 12.10. Successors.
All agreements of the Company and the Subsidiary Guarantors in this
Indenture, the Notes and the Note Guarantees shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
Section 12.11. Severability.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 12.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 12.13. Table Of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
92
[Indenture signature pages(s) follow]
93
Dated as of the date listed above
ISSUER:
INTEGRATED CIRCUIT SYSTEMS, INC.
by:/s/Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman of the Board
SUBSIDIARY GUARANTORS:
ICS TECHNOLOGIES, INC.
by:/s/Xxxx X. Xxx
--------------------------------
Name: Xxxx X. Xxx
Title: President
ICST, INC.
by:/s/Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
MICROCLOCK, INC.
by:/s/Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
94
TRUSTEE:
CHASE MANHATTAN TRUST COMPANY,
NATIONAL ASSOCIATION
by:/s/illegible
--------------------------------
Name:
Title:
95
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 NOTES,
------------------------------------
PRIVATE EXCHANGE NOTES
----------------------
AND EXCHANGE NOTES
------------------
1. Definitions.
-----------
1.1 Definitions.
-----------
For the purposes of this Appendix the following terms shall have the
meanings indicated below, provided that all capitalized terms used but not
defined shall have the meanings given such terms in the Indenture:
"Depositary" means The Depository Trust Company, its nominees and
their respective successors and assigns.
"Exchange Notes" means (i) the 11 1/2% Senior Subordinated Exchange
Notes Due 2009 to be issued pursuant to this Indenture in connection with a
Registered Exchange Offer pursuant to a Registration Rights Agreement and (ii)
Additional Notes, if any, issued in the form of 11 1/2% Senior Subordinated
Notes Due 2009 or other series of 11 1/2% Senior Subordinated Notes Due 2009
pursuant to a registration statement filed with the SEC under the Securities
Act.
"Initial Purchasers" means (i) with respect to the Initial Notes
issued on May 11, 1999, Bear, Xxxxxxx & Co., Inc. and Credit Suisse First Boston
Corporation and (ii) with respect to each issuance of Additional Notes, the
Persons purchasing such Additional Notes under the related Purchase Agreement.
"Initial Notes" means (i) $100.0 million principal amount of 11 1/2%
Senior Subordinated Notes Due 2009, issued on May 11, 1999 and (ii) Additional
Notes, if any, issued in the form of 11 1/2% Senior Subordinated Notes Due 2009
or other series of 11 1/2% Senior Subordinated Notes Due 2009 in a transaction
exempt from the registration requirements of the Securities Act.
"Private Exchange" means the offer by the Company, pursuant to a
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in
I
exchange for the Initial Notes held by the Initial Purchaser as part of its
initial distribution, a like aggregate principal amount of Private Exchange
Notes.
"Private Exchange Notes" means the 11 1/2% Senior Subordinated Private
Exchange Notes Due 2009, if any, to be issued pursuant to this Indenture to the
Initial Purchasers in a Private Exchange.
"Purchase Agreement" means (i) with respect to the Initial Notes
issued on May 11, 1999, the Purchase Agreement dated May 5, 1999, among the
Company, the Subsidiary Guarantors and the Initial Purchasers named therein and
(ii) with respect to each issuance of Additional Notes, the purchase agreement
or underwriting agreement among the Company, the Subsidiary Guarantors and the
Persons purchasing such Additional Notes.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to a Registration Rights Agreement, to certain Holders of Initial Notes, to
issue and deliver to such Holders, in exchange for such Initial Notes, a like
aggregate principal amount of Exchange Notes registered under the Securities
Act.
"Registration Rights Agreement" means (i) with respect to the Initial
Notes issued on May 11, 1999, the Registration Rights Agreement dated May 11,
1999 among the Company, the Subsidiary Guarantors and the Initial Purchasers
named therein, and (ii) with respect to each issuance of Additional Notes issued
in a transaction exempt from the registration requirements of the Securities
Act, the registration rights agreement, if any, among the Company, the
guarantors thereunder and the Persons purchasing such Additional Notes under the
related Purchase Agreement.
"Securities" means the Initial Notes, the Exchange Notes and the
Private Exchange Notes, 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 shelf registration statement
filed by the Company, in connection with the offer and sale of Initial Notes,
Exchange Notes or Private Exchange Notes, pursuant to a Registration Rights
Agreement.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.3(b) hereto.
II
1.2 Other Definitions
-----------------
Term Defined in 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.
On May 11, 1999, $100.0 million of the Initial Notes are being offered
and sold by the Company pursuant to the Purchase Agreement.
(a) Global Securities. Initial Notes 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, and Additional Notes, if any, issued in the form of
Exchange Notes, 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, in the case of Notes issued in the form
of Initial Notes, the 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 Notes or Additional Notes, as applicable, 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 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
III
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 of this Appendix, 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) On May
11, 1999, $100.0 million 11 1/2% Senior Subordinated Notes Due 2009, (2) any
Additional Notes for original issue in an aggregate principal amount specified
in the written order of the Company pursuant to Section 2.02 of the Indenture,
and (3) Exchange Notes or Private Exchange Notes for issue in a Registered
Exchange Offer or a Private Exchange, respectively, in exchange for a like
principal amount of Initial Notes, in each case upon a written order of the
Company in the form of an Officers' Certificate. 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 Notes, Exchange Notes or Private Exchange Notes and in the case of an
issuance of Additional Notes pursuant to Section 2.14 of the Indenture, shall
certify, among other things that such issuance will not be prohibited by Section
4.09 of the 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.
IV
(ii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4 of this Appendix), a Global
Security may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
(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 2.10 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 Notes 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 Initial Notes and Private
Exchange Notes (and all Securities issued in exchange therefor or in
substitution thereof, other than Exchange Notes) 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 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
V
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, 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 Notes or Private Exchange Notes
during the period of the effectiveness of a Shelf Registration Statement
with respect to such Initial Notes or Private Exchange Notes, as the case
may be, all requirements pertaining to legends on such Initial Notes or
such Private Exchange Notes will cease to apply, but the requirements
requiring such Initial Notes or such Private Exchange Notes issued to
certain Holders be issued in global form will continue to apply, and
Initial Notes or Private Exchange Notes in global form without legends will
be available to the transferee of the Holder of such Initial Notes or
Private Exchange Notes upon exchange of such transferring Holder's Initial
Notes or Private Exchange Notes 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 Notes pursuant to which Holders of such Initial
Notes are offered Exchange Notes in exchange for their Initial Notes, all
requirements pertaining to such Initial Notes that Initial Notes issued to
certain Holders be issued in global form will continue to apply and Initial
Notes in global form with the restricted securities legend set forth in
Exhibit 1 hereto will be available to Holders of such Initial Notes that do
not exchange their Initial Notes, and Exchange Notes in global form without
the restricted securities legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Notes in such Registered
Exchange Offer.
VI
(v) Upon the consummation of a Private Exchange with respect to the
Initial Notes pursuant to which Holders of such Initial Notes are offered
Private Exchange Notes in exchange for their Initial Notes, all
requirements pertaining to such Initial Notes that Initial Notes issued to
certain Holders be issued in global form will still apply, and Private
Exchange Notes in global form with the restricted securities legend set
forth in Exhibit 1 hereto will be available to Holders that exchange such
Initial Notes 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.
(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 2.10, 3.06, 3.09, 4.15 and Section 9.05 of this Indenture).
(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, (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 (c) any security between a record date and the next
succeeding 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
VII
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 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
VIII
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 and a successor depositary is not appointed by the Company within 90
days of such notice or if at any time such Depositary ceases to be a "clearing
agency" registered under the Exchange Act, 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 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 Note delivered in exchange for an interest in the Global Security shall,
except as otherwise provided by Section 2.3(b), bear the restricted securities
legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered Holder
of a Global Security may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a) above, the Company will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
IX
EXHIBIT 1
TO RULE 144A/REGULATION S
APPENDIX
[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
X
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.
XI
[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:
Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Principal Amount of this Principal Amount of this Global Security following such officer of Trustee or
Date of Exchange Global Security Global Security decrease or increase Securities Custodian
XII
EXHIBIT A
FORM OF INITIAL NOTE
CUSIP/CINS _________ No. _______
$________
11 1/2% SENIOR SUBORDINATED NOTES DUE 2009
INTEGRATED CIRCUIT SYSTEMS, INC. promises to pay to _________________ or
registered assigns, the principal sum of __________________ Dollars on May 15,
2009.
Interest Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
INTEGRATED CIRCUIT SYSTEMS, INC.
By: /s/ Xxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chairman of the Board
By: /s/ Xxxx X. Xxx
-------------------------------
Name: Xxxx X. Xxx
Title: Senior Vice President, Chief
Financial Officer and Chief
Operating Officer
This is one of the 11 1/2% Senior Subordinated
Notes Due 2009 referred to in the
within-mentioned Indenture:
CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
By:________________________ Dated:______________
Name:
Title:
A-1
(Back of Note)
11 1/2% Senior Subordinated Note Due 2009
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. Integrated Circuit Systems, Inc., a Pennsylvania corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at the rate per annum shown above; [provided, however, that if a Registration
Default (as defined in the Registration Rights Agreement) occurs, additional
interest will accrue on this Note 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 Note 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 Note.]/1/ Interest on the Notes
will accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from [May 11, 1999] [date of issuance of Additional
Notes]. The Company will pay interest semi-annually in arrears on each Interest
Payment Date, commencing [November 15, 1999] [first Interest Payment Date after
issuance of Additional Notes]. Interest will be computed on the basis of a 360-
day year of twelve 30-day months.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1% per annum in excess of the
rate then in effect; the Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful.
2. Method Of Payment. The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the May 1 or November 1 next preceding the Interest Payment
Date, even if such Notes are canceled after such record date and on or before
such Interest Payment Date, except as provided in Section 2.12 of the Indenture
with respect to defaulted interest. The Notes will be payable as to principal,
premium and interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, and provided that payment
by wire transfer of immediately available funds will be required with respect to
principal, interest and premium on all Global Securities and all other Notes the
Holders of which shall
------------------------------
/1/ To be included in the Initial Notes issues on the Issue Date and, to the
extent applicable, any Additional Notes issued in the form of Initial
Notes.
A-2
have provided wire transfer instructions to the Company or the Paying Agent.
Such payment shall be in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts.
3. Paying Agent And Registrar. Initially, Chase Manhattan Trust Company,
National Association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture. This Note is one of a duly authorized issue of Initial
Notes of the Company designated as its 11 1/2% Senior Subordinated Notes Due
2009. The Company shall be entitled to issue Additional Notes pursuant to
Section 2.14 of the Indenture; provided, that such issuance is not prohibited by
Section 4.09 of the Indenture. The Initial Notes issued on May 11, 1999 and any
Additional Notes, and any Private Exchange Notes and Exchange Notes issued
pursuant to the Indenture, are treated as a single class of securities under the
Indenture. The Company issued the Notes under an Indenture dated as of May 11,
1999 ("Indenture") between the Company, certain Subsidiary Guarantors and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code (S)(S) 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the indenture shall govern and be
controlling. To the extent of any conflict between the terms of the Notes or any
Note Guarantee and the Indenture, the applicable terms of the Indenture will
govern.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) or (c) of this Paragraph 5,
the Notes will not be redeemable at the Company's option prior to May 15, 2004.
Thereafter, the Notes will be subject to redemption at any time at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on May 15
of the years indicated below:
Percentage of
Year Principal Amount
---- ----------------
2004....................... 105.750%
2005....................... 103.833%
2006....................... 101.916%
2007 and thereafter........ 100.000%
A-3
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph
5, during the first 36 months after May 15, 1999, the Company may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Notes
originally issued under this Indenture (including the original principal amount
of any Additional Notes) at a redemption price of 111.500% of the principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
redemption date, with the net cash proceeds from one or more Equity Offerings,
provided that at least $65.0 million of the original aggregate principal amount
of Notes (including the original principal amount of any Additional Notes)
remains outstanding immediately after the occurrence of such redemption
(excluding Notes held by the Company and its Subsidiaries); and provided,
further, that such redemption shall occur within 120 days of the date of the
closing of any such Equity Offering.
(c) At any time prior to May 15, 2004, the Notes may also be redeemed, as
a whole but not in part, at the option of the Company upon the occurrence of a
Change of Control, upon not less than 30 nor more than 60 days prior notice (but
in no event may any such redemption occur more than 90 days after the occurrence
of such Change of Control) mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the principal amount
thereof plus the Applicable Premium as of, and accrued and unpaid interest, if
any, to, the date of redemption (the "Redemption Date").
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Company shall not be required
to make mandatory redemption payments with respect to the Notes.
7. Repurchase At Option Of Holder.
(a) If there is a Change of Control, the Company shall be required to make
an offer (a "Change of Control Offer") to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company shall mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales, at any
time when the aggregate amount of Net Proceeds Offer Amount exceeds $5.0
million, the Company shall commence an offer to all Holders of Notes (as "Net
Proceeds Offer") pursuant to Sections 3.09 and 4.10 of the Indenture to purchase
the maximum principal amount of Notes (including any Additional Notes) that may
be purchased out of the Net Proceeds Offer Amount at an offer price in cash in
an amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest to the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate amount
of
A-4
Notes (including any Additional Notes) tendered pursuant to an Net Proceeds
Offer is less than the Net Proceeds Offer Amount, the Company (or such
Subsidiary) may use such deficiency for general corporate purposes. If the
aggregate principal amount of Notes surrendered by Holders thereof exceeds the
amount of Net Proceeds Offer Amount, the Trustee shall select the Notes to be
purchased on a pro rata basis. Holders of Notes that are the subject of an offer
to purchase will receive a Net Proceeds Offer from the Company prior to any
related purchase date and may elect to have such Notes purchased by completing
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes.
8. Notice Of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
[9. Registration Rights. Pursuant to the Registration Rights Agreement
(as defined in the Indenture), the Company will be obligated to consummate an
exchange offer pursuant to which the Holder of this Note shall have the right to
exchange this Note for the Company's 11 1/2% Senior Subordinated Exchange Notes
Due 2009 in the form of Exchange Notes, which shall have been registered under
the Securities Act, or the Company's 11 1/2% Senior Subordinated Private
Exchange Notes Due 2009 (the "Private Exchange Notes"), in each case in like
principal amount and having terms identical in all material respects to the
Initial Notes. The Holders of the Initial Notes shall be entitled to receive
certain additional interest payments if such exchange offer is not consummated
and upon certain other conditions, all pursuant to and in accordance with the
terms of the Registration Rights Agreement. The Company shall notify the Trustee
of the amount of any such payments.]/2/
10. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
----------------------------
/2/ To be included in the Initial Notes issued on the Issue Date and, to the
extent applicable, any Additional Notes issued in the form of Initial
Notes.
A-5
11. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes and shall be so treated by the Trustee.
12. Amendment, Supplement And Waiver. Subject to certain exceptions, the
Indenture, the Note Guarantees or the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
then outstanding Notes and Additional Notes, if any, voting as a single class,
and any existing default or compliance with any provision of the Indenture, the
Note Guarantees or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes and Additional Notes,
if any, voting as a single class. Without the consent of any Holder of a Note,
the Indenture, the Note Guarantees or the Notes may be amended or supplemented
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's or any Subsidiary Guarantor's obligations to Holders
of the Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture of any such
Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, to
provide for the issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, or to allow any Subsidiary Guarantor to execute a
supplemental indenture to the Indenture and/or a Note Guarantee with respect to
the Notes.
13. Defaults And Remedies.
Events of Default include: (i) the failure to pay interest on any Notes
when the same becomes due and payable if the default continues for a period of
30 days, whether or not such payment shall be prohibited by Article 10 hereof;
(ii) the failure to pay the principal on any Notes when such principal becomes
due and payable, at maturity, upon redemption or otherwise (including the
failure to make a payment to purchase Notes tendered pursuant to a Change of
Control Offer or a Net Proceeds Offer), whether or not such payment shall be
prohibited by Article 10 of the Indenture; (iii) a default in the observance or
performance of any other covenant or agreement contained herein if the default
continues for a period of 30 days after the Company receives written notice
specifying the default (and demanding that such default be remedied) from the
Trustee or the Holders of at least 25% of the outstanding principal amount of
the Notes; (iv) the failure to pay at final stated maturity (giving effect to
any extensions thereof) the principal amount of any Indebtedness of the Company
or any Restricted Subsidiary, which failure continues for at least 10 days, or
the acceleration of the maturity of any such Indebtedness, which acceleration
remains uncured and unrescinded for at least 10 days, if the aggregate principal
amount of such Indebtedness, together with the principal amount of any other
such Indebtedness in default for failure to pay principal at final maturity or
which has been accelerated, aggregates $7.5 million or more at any time; (v) one
or more judgments in an aggregate amount in excess of $7.5 million shall have
been rendered against the Company or any of its Significant Subsidiaries and
such judgments
A-6
remain undischarged, unpaid or unstayed for a period of 60 days after such
judgment or judgments become final and non-appealable; (vi) certain events of
bankruptcy or insolvency with respect to the Company or any of its Significant
Subsidiaries; and (vii) except as permitted by the Indenture, any Note Guarantee
of a Significant Subsidiary is held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Subsidiary Guarantor which is a Significant Subsidiary, or any
Person acting on behalf of any such Subsidiary Guarantor, shall deny or
disaffirm its obligations under its Note Guarantee. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes may declare all the
Notes to be due and payable. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it in good faith reasonably
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
14. Trustee Dealings With Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
15. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company or any of the Subsidiary Guarantors,
as such, shall not have any liability for any obligations of the Company or such
Subsidiary Guarantor under the Notes, the Note Guarantees or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
16. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an Authenticating Agent.
A-7
17. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
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 Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
[19. Holders' Compliance with Registration Rights Agreement. Each Holder
of a Note, by acceptance hereof, acknowledges and agrees to the provisions of
the Registration Rights Agreement, including, without limitation, the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.]/3/
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Integrated Circuit Systems, Inc.
0000 Xxxxxxxxx xx xxx Xxxxxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Chief Financial Officer
------------------------------
/3/ To be included in the Initial Notes issued on the Issue Date and, to the
extent applicable, any Additional Notes issued in the form of Initial
Notes.
A-8
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _______________________, agent to transfer this Note on
the books of the Company. The agent may substitute another to act for him.
Date: __________ Signed: ______________________________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee: _______________
(Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended).
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) [two years from date of original issuance], the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with the transfer and that this Note is being
transferred:
A-9
[Check One]
---------
(1) __ to the Company or a subsidiary thereof; or
(2) __ pursuant to and in compliance with Rule 144A under the Securities Act;
or
(3) __ outside the United States to a "foreign person" in compliance with Rule
904 of Regulation S under the Securities Act; or
(4) __ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(5) __ pursuant to an effective registration statement under the Securities
Act; or
(6) __ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4) or (6) is checked, the
Company or the Trustee may require, prior to registering any such transfer of
the Notes, in its sole discretion, such legal opinions, certifications and other
information as the Trustee or 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.
A-10
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in the Appendix to the Indenture shall have been satisfied.
Dated: _________ Signed: ______________________________________________________
(Sign exactly as name
appears on the other side
of this Security)
Signature Guarantee: ___________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note 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
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
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.15 of the Indenture, check the box below:
[_] Section 4.10 [_] Section 4.15
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased: $________
Date:__________
Your Signature:___________________________________
(Sign exactly as your name appears on the face of
this Note)
Tax Identification No:____________________________
SIGNATURE GUARANTEE:
_________________________________
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
A-12
EXHIBIT B
FORM OF EXCHANGE NOTE AND PRIVATE EXCHANGE NOTE
CUSIP/CINS _________ No. _______
$________
11 1/2% SENIOR SUBORDINATED NOTES DUE 2009
INTEGRATED CIRCUIT SYSTEMS, INC. promises to pay to _________________ or
registered assigns, the principal sum of __________________ Dollars on May 15,
2009.
Interest Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
INTEGRATED CIRCUIT SYSTEMS, INC.
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
This is one of the 11 1/2% Senior Subordinated
[Exchange] [Private Exchange] Notes Due 2009
referred to in the within-mentioned Indenture:
CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
By:________________________ Dated: _______________
Name:
Title:
[If the Note is to be issued in global form add the Global Securities Legend
from Exhibit 1 to the Appendix and the attachment form such Exhibit 1 captioned
"[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR DECREASES IN
GLOBAL SECURITY".]
[If the Note is a Private Exchange Note 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 with that included in Exhibit A]
B-1
(Back of Note)
11 1/2% Senior Subordinated [Exchange] [Private Exchange] Note Due 2009
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. Integrated Circuit Systems, Inc., a Pennsylvania corporation
(the "Company"), promises to pay interest on the principal amount of this Note
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 Note 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 Note 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 Note.]/4/. Interest on the Notes
will accrue from [the most recent date on which interest has been paid on the
Initial Note in exchange for which this [Exchange Note] [Private Exchange Note]
was issued] [date of issuance of Additional Notes]. The Company will pay
interest semi-annually in arrears on each Interest Payment Date, commencing
[November 15, 1999] [first interest payment date after issuance of Additional
Notes]. Interest will be computed on the basis of a 360-day year of twelve 30-
day months.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; the Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful.
2. Method Of Payment. The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the May 1 or November 1 next preceding the Interest Payment
Date, even if such Notes are canceled after such record date and on or before
such Interest Payment Date, except as provided in Section 2.12 of the Indenture
with respect to defaulted interest. The Notes will be payable as to principal,
premium and interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest may be made by check mailed to the
--------------------------------
/4/ Insert if at the time of issuance of the Exchange Note or Private Exchange
Note (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 a Registration Rights Agreement.
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Holders at their addresses set forth in the register of Holders, and provided
that payment by wire transfer of immediately available funds will be required
with respect to principal, interest and premium on all Global Securities and all
other Notes the Holders of which shall have provided wire transfer instructions
to the Company or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3. Paying Agent And Registrar. Initially, Chase Manhattan Trust Company,
National Association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture. [This Note is one of a duly authorized issue of Exchange
Notes of the Company designated as its 11 1/2% Senior Subordinated Exchange
Notes Due 2009.] [This Note is one of a duly authorized issue of Private
Exchange Notes of the Company designated as its 11 1/2% Senior Subordinated
Private Exchange Notes Due 2009.] The Company shall be entitled to issue
Additional Notes pursuant to Section 2.14 of the Indenture; provided, that such
issuance is not prohibited by Section 4.09 of the Indenture. The Initial Notes
issued on May 11, 1999, and any Additional Notes, and any Private Exchange Notes
and Exchange Notes issued pursuant to the Indenture, are treated as a single
class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code (S)(S)
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. To the extent of
any conflict between the terms of the Notes or any Note Guarantee and the
Indenture, the applicable terms of the Indenture will govern.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) or (c) of this Paragraph 5,
the Notes will not be redeemable at the Company's option prior to May 15, 2004.
Thereafter, the Notes will be subject to redemption at any time at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on May 15
of the years indicated below:
Percentage of
Year Principal Amount
---- ----------------
2004....................... 105.750%
2005....................... 103.833%
2006....................... 101.916%
2007 and thereafter........ 100.000%
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(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph
5, during the first 36 months after May 15, 1999, the Company may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Notes
originally issued under this Indenture (including the original principal amount
of any Additional Notes) at a redemption price of 111.500% of the principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
redemption date, with the net cash proceeds from one or more Equity Offerings,
provided that at least $65.0 million of the original aggregate principal amount
of Notes (including the original principal amount of any Additional Notes)
remains outstanding immediately after the occurrence of such redemption
(excluding Notes held by the Company and its Subsidiaries); and provided,
further, that such redemption shall occur within 120 days of the date of the
closing of any such Equity Offering.
(c) At any time prior to May 15, 2004, the Notes may also be redeemed, as
a whole but not in part, at the option of the Company upon the occurrence of a
Change of Control, upon not less than 30 nor more than 60 days prior notice (but
in no event may any such redemption occur more than 90 days after the occurrence
of such Change of Control) mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the principal amount
thereof plus the Applicable Premium as of, and accrued and unpaid interest, if
any, to, the date of redemption (the "Redemption Date").
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Company shall not be required
to make mandatory redemption payments with respect to the Notes.
7. Repurchase At Option Of Holder.
(a) If there is a Change of Control, the Company shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company shall mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales, at any
time when the aggregate amount of Net Proceeds Offer Amount exceeds $5.0
million, the Company shall commence an offer to all Holders of Notes (as "Net
Proceeds Offer") pursuant to Sections 3.09 and 4.10 of the Indenture to purchase
the maximum principal amount of Notes (including any Additional Notes) that may
be purchased out of the Net Proceeds Offer Amount at an offer price in cash in
an amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest to the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate amount
of Notes (including any Additional Notes) tendered pursuant to an Net Proceeds
Offer is less
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than the Net Proceeds Offer Amount, the Company (or such Subsidiary) may use
such deficiency for general corporate purposes. If the aggregate principal
amount of Notes surrendered by Holders thereof exceeds the amount of Net
Proceeds Offer Amount, the Trustee shall select the Notes to be purchased on a
pro rata basis. Holders of Notes that are the subject of an offer to purchase
will receive a Net Proceeds Offer from the Company prior to any related purchase
date and may elect to have such Notes purchased by completing the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Notes.
8. Notice Of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
11. Amendment, Supplement And Waiver. Subject to certain exceptions, the
Indenture, the Note Guarantees or the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
then outstanding Notes and Additional Notes, if any, voting as a single class,
and any existing default or compliance with any provision of the Indenture, the
Note Guarantees or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes and Additional Notes,
if any, voting as a single class. Without the consent of any Holder of a Note,
the Indenture, the Note Guarantees or the Notes may be amended or supplemented
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's or any Subsidiary Guarantor's obligations to Holders
of the Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture of any such
Holder, to comply with the requirements of the SEC in order to
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effect or maintain the qualification of the Indenture under the Trust Indenture
Act, to provide for the issuance of Additional Notes in accordance with the
limitations set forth in the Indenture, or to allow any Subsidiary Guarantor to
execute a supplemental indenture to the Indenture and/or a Note Guarantee with
respect to the Notes.
12. Defaults And Remedies.
Events of Default include: (i) the failure to pay interest on any Notes
when the same becomes due and payable if the default continues for a period of
30 days, whether or not such payment shall be prohibited by Article 10 hereof;
(ii) the failure to pay the principal on any Notes when such principal becomes
due and payable, at maturity, upon redemption or otherwise (including the
failure to make a payment to purchase Notes tendered pursuant to a Change of
Control Offer or a Net Proceeds Offer), whether or not such payment shall be
prohibited by Article 10 of the Indenture; (iii) a default in the observance or
performance of any other covenant or agreement contained herein if the default
continues for a period of 30 days after the Company receives written notice
specifying the default (and demanding that such default be remedied) from the
Trustee or the Holders of at least 25% of the outstanding principal amount of
the Notes; (iv) the failure to pay at final stated maturity (giving effect to
any extensions thereof) the principal amount of any Indebtedness of the Company
or any Restricted Subsidiary, which failure continues for at least 10 days, or
the acceleration of the maturity of any such Indebtedness, which acceleration
remains uncured and unrescinded for at least 10 days, if the aggregate principal
amount of such Indebtedness, together with the principal amount of any other
such Indebtedness in default for failure to pay principal at final maturity or
which has been accelerated, aggregates $7.5 million or more at any time; (v) one
or more judgments in an aggregate amount in excess of $7.5 million shall have
been rendered against the Company or any of its Significant Subsidiaries and
such judgments remain undischarged, unpaid or unstayed for a period of 60 days
after such judgment or judgments become final and non-appealable; (vi) certain
events of bankruptcy or insolvency with respect to the Company or any of its
Significant Subsidiaries; and (vii) except as permitted by the Indenture, any
Note Guarantee of a Significant Subsidiary is held in any judicial proceeding to
be unenforceable or invalid or shall cease for any reason to be in full force
and effect or any Subsidiary Guarantor which is a Significant Subsidiary, or any
Person acting on behalf of any such Subsidiary Guarantor, shall deny or
disaffirm its obligations under its Note Guarantee. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes may declare all the
Notes to be due and payable. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it in good faith reasonably
determines that withholding notice is in their best interest. The Holders of a
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majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
13. Trustee Dealings With Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company or any of the Subsidiary Guarantors,
as such, shall not have any liability for any obligations of the Company or such
Subsidiary Guarantor under the Notes, the Note Guarantees or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
15. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
[18. Registration Rights. Pursuant to the Registration Rights Agreement
(as defined in the Indenture), the Company will have certain obligations to the
Holders of the Exchange Notes and the Private Exchange Notes. The Holders of
the Exchange Notes and the Private Exchange Notes shall be entitled to receive
certain additional interest payments upon certain conditions, all pursuant to
and in accordance with the terms of the Registration
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Rights Agreement. The Company shall notify the Trustee of the amount of any such
payments.]/5/
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Integrated Circuit Systems, Inc
0000 Xxxxxxxxx xx xxx Xxxxxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Chief Financial Officer
-----------------------------
/5/ To be included to the extent applicable.
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ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _______________________, agent to transfer this Note on
the books of the Company. The agent may substitute another to act for him.
Date: __________ Signed: _____________________________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee: _____________
(Signature must be guaranteed by an "eligible guarantor institution," that is, a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended).
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.15 of the Indenture, check the box below:
[_] Section 4.10 [_] Section 4.15
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased: $________
Date:__________
Your Signature:___________________________________
(Sign exactly as your name appears on the face of
this Note)
Tax Identification No:____________________________
SIGNATURE GUARANTEE:
_________________________________
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
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EXHIBIT C
FORM OF NOTATION OF GUARANTEE
For value received, each Subsidiary Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in the Indenture and subject
to the provisions in the Indenture dated as of May 11, 1999 (the "Indenture")
among Integrated Circuit Systems, Inc., the Subsidiary Guarantors listed on
Schedule I thereto and Chase Manhattan Trust Company, National Association, as
trustee (the "Trustee"), (a) the due and punctual payment of the principal of,
premium, if any, and interest on the Notes (as defined in the Indenture),
whether at maturity, by acceleration, redemption or otherwise, the due and
punctual payment of interest on overdue principal and premium, and, to the
extent permitted by law, interest, and the due and punctual performance of all
other obligations of the Company to the Holders or the Trustee all in accordance
with the terms of the Indenture and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at stated maturity, by acceleration or
otherwise. The obligations of the Subsidiary Guarantors to the Holders of Notes
and to the Trustee pursuant to the Note Guarantee and the Indenture are
expressly set forth in Article 11 of the Indenture and reference is hereby made
to the Indenture for the precise terms of the Note Guarantee. Each Holder of a
Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee, on behalf of such Holder, to
take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (c) appoints the Trustee
attorney-in-fact of such Holder for such purpose; provided, however, that the
Indebtedness evidenced by this Note Guarantee shall cease to be so subordinated
and subject in right of payment upon any defeasance of this Note in accordance
with the provisions of the Indenture.
[Name of Guarantor(s)]
By:________________________________
Name:
Title:
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EXHIBIT D
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
Supplemental Indenture (this "Supplemental Indenture"), dated as of
________________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of Integrated Circuit Systems, Inc. (or its permitted successor), a
Pennsylvania corporation (the "Company"), the Company, the other Subsidiary
Guarantors (as defined in the Indenture referred to herein) and Chase Manhattan
Trust Company, National Association, as trustee under the indenture referred to
below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of May 11, 1999 providing, among other
things, for the issuance of 11 1/2% Senior Subordinated Notes Due 2009 (the
"Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto mutually covenant and agree for the equal and ratable benefit of the
Holders of the Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. Agreement To Guarantee. The Guaranteeing Subsidiary hereby agrees as
follows:
(a) Along with all Subsidiary Guarantors named in the Indenture, to
jointly and severally Guarantee to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that:
D-1
(i) the principal of and interest on the Notes will be promptly paid
in full when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in
full or performed, all in accordance with the terms hereof and thereof; and
(ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Subsidiary Guarantors shall be jointly
and severally obligated to pay the same immediately.
(b) The obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor.
(c) The following is hereby waived: diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever.
(d) This Note Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Subsidiary Guarantors, or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
the Subsidiary Guarantors any amount paid either to the Trustee or such Holder,
this Note Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby.
(g) As between the Subsidiary Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 of the Indenture
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in
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respect of the obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such obligations as provided in Article 6 of the
Indenture, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Subsidiary Guarantors for the purpose of the Note
Guarantees.
(h) The Subsidiary Guarantors shall have the right to seek contribution
from any non-paying Subsidiary Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Note Guarantee.
(i) Pursuant to Section 11.03 of the Indenture, the obligations of the
Guaranteeing Subsidiary under its Notes Guarantee shall be limited to the
maximum amount as will, after giving effect to any maximum amount and any other
contingent and fixed liabilities that are relevant under any applicable
Bankruptcy Laws or fraudulent conveyance laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Subsidiary Guarantor in respect of the obligations of such
other Subsidiary Guarantor under Article 11 of the Indenture, result in the
obligations of such Subsidiary Guarantor under its Note Guarantee not
constituting a fraudulent transfer or conveyance.
3. Execution And Delivery. Each Guaranteeing Subsidiary agrees that the
Note Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
4. Guaranteeing Subsidiary May Consolidate, Etc. On Certain Terms.
(a) The Guaranteeing Subsidiary may not consolidate with or merge with or
into (whether or not such Guaranteeing Subsidiary is the surviving Person)
another corporation, Person or entity whether or not affiliated with such
Guaranteeing Subsidiary unless:
(i) subject to the last paragraph of Section 11.05 of the Indenture, the
Person formed by or surviving any such consolidation or merger (if other than a
Subsidiary Guarantor or the Company) unconditionally assumes all the obligations
of such Guaranteeing Subsidiary, pursuant to a supplemental indenture in form
and substance reasonably satisfactory to the Trustee, under the Notes, the
Indenture and the Note Guarantee on the terms set forth herein or therein;
(ii) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(iii) either (A) the Company would be permitted, immediately after giving
effect to such transaction, to incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.09 of the Indenture, or (B) immediately after
giving effect to such transaction, the Consolidated Fixed Charge Coverage Ratio
of the Company shall be higher than the
D-3
Consolidated Fixed Charge Coverage Ratio of the Company immediately prior to
such transaction.
(b) In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor corporation, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
Note Guarantee endorsed upon the Notes and the due and punctual performance of
all of the covenants and conditions of the Indenture to be performed by the
Guaranteeing Subsidiary, such successor corporation shall succeed to and be
substituted for the Guaranteeing Subsidiary with the same effect as if it had
been named herein as a Subsidiary Guarantor. Such successor corporation
thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the Note
Guarantees so issued shall in all respects have the same legal rank and benefit
under the Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of the Indenture as though all of such Note Guarantees
had been issued at the date of the execution hereof.
(c) Except as set forth in Articles 4 and 5 and Section 11.05 of the
Indenture, nothing contained in the Indenture or in any of the Notes shall
prevent any consolidation or merger of a Restricted Subsidiary with or into the
Company or another Restricted Subsidiary, or shall prevent any sale or
conveyance of the property of a Restricted Subsidiary as an entirety or
substantially as an entirety to the Company or another Restricted Subsidiary.
5. Releases.
(a) In the event of a sale or other disposition of all of the assets of
any Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a
sale or other disposition of all to the capital stock of any Subsidiary
Guarantor, then such Subsidiary Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of the capital
stock of such Subsidiary Guarantor) or the corporation acquiring the property
(in the event of a sale or other disposition of all or substantially all of the
assets of such Subsidiary Guarantor) will be released and relieved of any
obligations under its Note Guarantee; provided that the Net Proceeds of such
sale or other disposition are applied in accordance with the applicable
provisions of the Indenture, including without limitation Section 4.10 of the
Indenture. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of the
Indenture, including without limitation Section 4.10 of the Indenture, the
Trustee shall execute any documents reasonably required in order to evidence the
release of any Subsidiary Guarantor from its obligations under its Note
Guarantee.
(b) Any Subsidiary Guarantor not released from its obligations under its
Note Guarantee shall remain liable for the full amount of principal of and
interest on the Notes
D-4
and for the other obligations of any Subsidiary Guarantor under the Indenture as
provided in Article 11 of the Indenture.
6. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or Subsidiary Guarantor under the Notes, any Note Guarantees, the Indenture or
this Supplemental Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE 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.
8. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. Effect Of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
10. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals and statements contained herein,
all of which recitals and statements are made solely by the Guaranteeing
Subsidiary and the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: May 11, 1999
_____________
INTEGRATED CIRCUIT SYSTEMS, INC.
by:/s/Xxxxxx X. Xxxxxxx
----------------------------
Name:Xxxxxx X. Xxxxxxx
Title:Chairman of the Board
SUBSIDIARY GUARANTORS:
ICS TECHNOLOGIES, INC.
by:/s/Xxxx X. Xxx
----------------------------
Name:Xxxx X. Xxx
Title:President
ICST, INC.
by:/s/Xxxxx X. Xxxxxx
----------------------------
Name:Xxxxx X. Xxxxxx
Title:President
MICROCLOCK, INC.
by:/s/Xxxxx X. Xxxxxx
----------------------------
Name:Xxxxx X. Xxxxxx
Title:President
D-6
CHASE MANHATTAN TRUST
COMPANY, NATIONAL ASSOCIATION
as Trustee
By:/s/illegible
----------------------------
Name:
Title:
D-7
SCHEDULE I
SCHEDULE OF SUBSIDIARY GUARANTORS
The following schedule lists each Subsidiary Guarantor under the Indenture
as of the Issue Date:
1. ICS Technologies, Inc., a Delaware corporation
2. ICST, Inc., a Pennsylvania corporation
3. Microclock, Inc., a Delaware corporation
S-1
