EXHIBIT 10.06
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INTERSIL HOLDING CORPORATION,
Issuer
11.13% Subordinated Pay-In-Kind Notes Due 2010
INDENTURE
Dated as of August 13, 0000
Xxxxxx Xxxxxx Trust Company of New York,
Trustee
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- ---------
310(a)(1).............................................................7.10
(a)(2).............................................................7.10
(a)(3).............................................................N.A.
(a)(4).............................................................N.A.
(b)................................................................7.8; 7.10
(c)................................................................N.A.
311(a)................................................................7.11
(b)................................................................7.11
(c)................................................................N.A.
312(a)................................................................2.5
(b)................................................................11.3
(c)................................................................11.3
313(a)................................................................7.6
(b)(1).............................................................N.A.
(b)(2).............................................................7.6
(c)................................................................11.2
(d)................................................................7.6
314(a)................................................................4.2; 11.2
(b)................................................................N.A.
(c)(1).............................................................11.4
(c)(2).............................................................11.4
(c)(3).............................................................N.A.
(d)................................................................N.A.
(e)................................................................11.5
(f)................................................................N.A.
315(a)................................................................7.01
(b)................................................................7.05; 11.2
(c)................................................................7.1
(d)................................................................7.1
(e)................................................................6.11
316(a)(last sentence).................................................11.6
(a)(1)(A)..........................................................6.5
(a)(1)(B)..........................................................6.4
(a)(2).............................................................N.A.
(b)................................................................6.7
317(a)(1).............................................................6.8
(a)(2).............................................................6.9
(b)................................................................2.4
318(a)................................................................11.1
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1 Definitions and Incorporation by Reference.........................1
Section 1.1. Definitions.................................................1
Section 1.2. Other Definitions...........................................8
Section 1.3. Incorporation by Reference of Trust Indenture Act...........8
Section 1.4. Rules of Construction.......................................9
ARTICLE 2 The Securities....................................................10
Section 2.1. Form and Dating............................................10
Section 2.2. Execution and Authentication...............................10
Section 2.3. Registrar and Paying Agent.................................10
Section 2.4. Paying Agent To Hold Money in Trust........................11
Section 2.5. Securityholder Lists.......................................11
Section 2.6. Transfer and Exchange......................................11
Section 2.7. Replacement Securities.....................................12
Section 2.8. Outstanding Securities.....................................12
Section 2.9. Temporary Securities.......................................13
Section 2.10. Cancellation..............................................13
Section 2.11. Defaulted Interest........................................13
Section 2.12. CUSIP Numbers.............................................13
Section 2.13. Issuance of Additional Securities.........................14
ARTICLE 3 Redemption........................................................15
Section 3.1. Notices to Trustee.........................................15
Section 3.2. Selection of Securities To Be Redeemed.....................15
Section 3.3. Notice of Redemption.......................................15
Section 3.4. Effect of Notice of Redemption.............................16
Section 3.5. Deposit of Redemption Price................................16
Section 3.6. Securities Redeemed in Part................................16
ARTICLE 4 Covenants.........................................................17
Section 4.1. Payment of Securities......................................17
Section 4.2. SEC Reports................................................17
Section 4.3. Preservation of Corporate Existence; etc...................17
Section 4.4. Payment of Taxes, Assessment, Charges and Claims...........17
Section 4.5. Limitation on Restricted Payments..........................18
Section 4.6. Compliance with Laws.......................................19
Section 4.7. Limitation on Payment Restrictions.........................19
Section 4.8. Compliance Certificate.....................................19
Section 4.9. Further Instruments and Acts...............................20
Section 4.10. Transactions with Affiliates..............................20
ARTICLE 5 Successor Companies...............................................20
Section 5.1. When Company May Merge or Transfer Assets..................20
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ARTICLE 6 Defaults and Remedies.............................................21
Section 6.1. Events of Default..........................................21
Section 6.2. Acceleration...............................................22
Section 6.3. Other Remedies.............................................23
Section 6.4. Waiver of Past Defaults....................................23
Section 6.5. Control by Majority........................................23
Section 6.6. Limitation on Suits........................................23
Section 6.7. Rights of Holders To Receive Payment.......................24
Section 6.8. Collection Suit by Trustee.................................24
Section 6.9. Trustee May File Proofs of Claim...........................24
Section 6.10. Priorities................................................24
Section 6.11. Undertaking for Costs.....................................25
Section 6.12. Waiver of Stay or Extension Laws..........................25
ARTICLE 7 Trustee...........................................................25
Section 7.1. Duties of Trustee..........................................25
Section 7.2. Rights of Trustee..........................................27
Section 7.3. Individual Rights of Trustee...............................27
Section 7.4. Trustee's Disclaimer.......................................27
Section 7.5. Notice of Defaults.........................................28
Section 7.6. Reports by Trustee to Holders..............................28
Section 7.7. Compensation and Indemnity.................................28
Section 7.8. Replacement of Trustee.....................................29
Section 7.9. Successor Trustee by Merger................................30
Section 7.10. Eligibility; Disqualification.............................30
Section 7.11. Preferential Collection of Claims Against Company.........30
ARTICLE 8 Discharge of Indenture; Defeasance................................30
Section 8.1. Discharge of Liability on Securities; Defeasance...........30
Section 8.2. Conditions to Defeasance...................................31
Section 8.3. Application of Trust Money.................................32
Section 8.4. Repayment to Company.......................................33
Section 8.5. Indemnity for Government Obligations.......................33
Section 8.6. Reinstatement..............................................33
ARTICLE 9 Amendments........................................................33
Section 9.1. Without Consent of Holders.................................33
Section 9.2. With Consent of Holders....................................34
Section 9.3. Compliance with Trust Indenture Act........................35
Section 9.4. Revocation and Effect of Consents and Waivers..............35
Section 9.5. Notation on or Exchange of Securities......................36
Section 9.6. Trustee To Sign Amendments.................................36
Section 9.7. Payment for Consent........................................36
ARTICLE 10 Subordination....................................................36
Section 10.1. Subordinated Debt Subordinated to Senior Debt.............36
Section 10.2. No Payment on Subordinated Debt in
Certain Circumstances...................................37
Section 10.3. Subordinated Debt Subordinated to Prior Payment of
All Senior Debt on Dissolution..........................38
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Section 10.4. Holders to be Subrogated to Rights of
Holders of Senior Debt..................................39
Section 10.5. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Debt................39
Section 10.6. In Furtherance of Subordination...........................40
Section 10.7. Obligations of Company Unconditional......................41
Section 10.8. Holder Entitled to Assume Payments Not Prohibited
in Absence of Notice....................................41
Section 10.9. Rights in Insolvency Proceedings..........................42
Section 10.10. Waiver of Consolidation..................................42
Section 10.11. Miscellaneous............................................42
Section 10.12. Subrogation..............................................44
Section 10.13. Relative Rights..........................................44
Section 10.14. Rights of Trustee and Paying Agent.......................45
Section 10.15. Distribution or Notice to Representative.................45
Section 10.16. Article 10 Not To Prevent Events of Default or
Limit Right To Accelerate..............................45
Section 10.17. Trust Moneys Not Subordinated............................45
Section 10.18. Trustee Entitled To Rely.................................45
Section 10.19. Trustee To Effectuate Subordination......................46
Section 10.20. Trustee Not Fiduciary for Holders
of Senior Indebtedness.................................46
Section 10.21. Reliance by Holders of Senior
Indebtedness on Subordination Provisions...............46
ARTICLE 11 Miscellaneous....................................................47
Section 11.1. Trust Indenture Act Controls..............................47
Section 11.2. Notices...................................................47
Section 11.3. Communication by Holders with Other Holders...............48
Section 11.4. Certificate and Opinion as to Conditions Precedent........48
Section 11.5. Statements Required in Certificate or Opinion.............48
Section 11.6. When Securities Disregarded...............................49
Section 11.7. Rules by Trustee, Paying Agent and Registrar..............49
Section 11.8. Legal Holidays............................................49
Section 11.9. Governing Law.............................................49
Section 11.10. No Recourse Against Others...............................49
Section 11.11. Successors...............................................50
Section 11.12. Multiple Originals.......................................50
Section 11.13. Table of Contents; Headings..............................50
Exhibit A - Form of Security
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INDENTURE dated as of August 13, 1999, between INTERSIL HOLDING
CORPORATION, a Delaware corporation (the "Company" or "Issuer"), and United
States Trust Company of New York, a New York banking corporation (the
"Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of (1) the Company's 11.13%
Subordinated Pay-In-Kind Notes Due 2010 (the "Initial Securities") and (2) if
and when issued any Additional Securities (as defined herein, and together with
the Initial Securities, the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Acceleration Notice" shall have the meaning set forth in Section 6.2
"Additional Securities" means 11.13% Subordinated Pay-In-Kind Notes Due
2010 issued from time to time after the Issue Date under the terms of this
Indenture (other than pursuant to Section 2.6, 2.7, 2.9 or 3.6).
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means Credit Suisse First Boston, as administrative agent for the
Lenders party to the Credit Agreement, any successor agent and any agent for the
Lenders with respect to any amendment, extension, supplement, increase, renewal,
refunding, replacement, refinancing (including successive refinancings) or other
modification of the Bank Debt. If no such agent exists, "Agent" shall mean the
holders of a majority of the outstanding Bank Debt.
"Asset Disposition" means any sale, lease, transfer or other disposition
(or series of related sales, leases, transfers or dispositions) by the Company
or any Subsidiary, including any disposition by means of a merger, consolidation
or similar transaction (each referred to for the purposes of this definition as
a "disposition"), of (1) any shares of Capital Stock of a Subsidiary (other than
directors' qualifying shares or shares required by applicable law to be held by
a Person other than the Company or a Subsidiary), (2) all or substantially all
of the assets of any division or line of business of the Company or any
Subsidiary or (3) any other assets of the Company or any Subsidiary outside of
the ordinary course of business of the Company or such Subsidiary (other than,
in the case of (1), (2) and (3) above, (x) a disposition by a Subsidiary to the
Company or by the Company or a Subsidiary to a Wholly Owned Subsidiary, (y) for
purposes of Section 4.06 of the Intersil Corporation Indenture only, a
disposition that constitutes
a Restricted Payment permitted by Section 4.04 of the Intersil Corporation
Indenture and (z) a disposition of assets with a fair market value of less than
$100,000).
"Bank Debt" means all obligations of the Subsidiaries and of the Company as
guarantor, now or hereafter existing (a) under the Credit Agreement as it may
hereafter be amended, extended, supplemented, increased, renewed, refunded,
replaced, refinanced (including successive refinancings) or otherwise modified
from time to time, whether for principal, interest, premium, reimbursement of
amounts drawn under letters of credit issued pursuant to the Credit Agreement,
fees, expenses, indemnities or otherwise and (b) under any of the Senior Loan
Documents, as they may hereafter be amended, extended, supplemented, increased,
renewed, refunded, replaced, refinanced (including successive refinancings) or
otherwise modified from time to time.
"Bankruptcy Law" shall mean Xxxxx 00, Xxxxxx Xxxxxx Code or any similar
federal or state law for the relief of debtors.
"Business Day" means each day which is not a Legal Holiday.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"CMP" means Citicorp Mezzanine Partners, L.P., a Delaware limited
partnership.
"CMP Debt" means all obligations of the Corporation and the Subsidiaries
now or hereafter, existing (a) under the CMP Subordinated Credit Agreement as it
may hereafter be amended, extended, supplemented, increased, renewed, refunded,
replaced, refinanced (including successive refinancings) or otherwise modified
from time to time, whether for principal, interest, premium, reimbursement of
amounts drawn under letters of credit issued pursuant to the CMP Subordinated
Credit Agreement, fees, expenses, indemnities or otherwise and (b) under any of
the CMP Loan Documents, as they may hereafter be amended, extended,
supplemented, increased, renewed, refunded, replaced, refinanced (including
successive refinancings) or otherwise modified from time to time.
"CMP Loan Documents" means all Loan Documents (as defined in the CMP
Subordinated Credit Agreement).
"CMP Subordinated Credit Agreement" means the Subordinated Credit
Agreement, dated as of August 13, 1999, by and between the Corporation and CMP
(the "CMP Subordinated Credit Agreement").
"Code" means the Internal Revenue Code of 1986, as amended.
2
"Company" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
indenture securities.
"Credit Agreement" means the Credit Agreement dated as of the date hereof
(as such Agreement may hereafter be amended, extended, supplemented, increased,
renewed, refunded, replaced, refinanced (including successive refinancings) or
otherwise modified), among the Company, as borrower, the Lenders party thereto,
Credit Suisse First Boston, as administrative agent for the Lenders, and as
collateral agent, swingline lender and an issuing bank, Xxxxxxx Xxxxx Xxxxxx
Inc., as syndication agent, and Xxxxxx Guaranty Trust Company of New York, as
documentation agent.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law or in connection with any
insolvency proceeding.
"CVC" shall mean Citicorp Venture Capital Ltd. or Citicorp N.A.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Equity Swap" shall have the meaning set forth in Section 4.5.
"Event of Default" shall have the meaning set forth in Section 6.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United States
of America, including those set forth in (i) the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants, (ii) statements and pronouncements of the Financial Accounting
Standards Board, (iii) such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States and (iv) the rules and regulations of the SEC governing the inclusion of
financial statements (including pro forma financial statements) in periodic
reports required to be filed pursuant to Section 13 of the Exchange Act,
including opinions and pronouncements in staff accounting bulletins and similar
written statements from the accounting staff of the SEC, as in effect on the
date of this Indenture. All ratios and computations based on GAAP contained in
this Indenture shall be computed in conformity with GAAP.
"Xxxxxx" shall mean Xxxxxx Corporation, a Delaware corporation.
"Holder" or "Securityholder" means the Person in whose name a Security is
registered on the Registrar's books.
3
"Intersil Corporation Indenture" means the Indenture dated the date hereof
between Intersil Corporation, a Delaware corporation, and the Intersil
Corporation Trustee relating to the Intersil Corporation Notes.
"Intersil Corporation Notes" means the 13.25% Senior Subordinated Notes
issued under the Intersil Corporation Indenture as it may hereafter be amended,
extended, supplemented, increased, renewed, refunded, replaced, refinanced or
otherwise modified from time to time, whether for principal, interest, premium,
fees, expenses, indemnities or otherwise.
"Intersil Corporation Trustee" means United States Trust Company of New
York, a New York banking corporation, as trustee under the Intersil Corporation
Indenture until a successor replaces it and, thereafter, means the successor.
"Indebtedness" means, without duplication, with respect to any person, (a)
the principal of and premium (if any) in respect of all indebtedness of such
person for borrowed money, (b) the principal of and premium (if any) in respect
of all obligations of such person evidenced by notes, bonds, debentures or other
similar instruments, (c) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (d) all obligations of such person as lessee under
leases that have been or should be, in accordance with generally accepted
accounting principles, recorded as capital leases, (e) all obligations,
contingent or otherwise, of such person under acceptance, letter of credit or
similar facilities, (f) all indebtedness of the type referred to in clauses (a)
through (e) above guaranteed directly or indirectly in any manner by such
person, or in effect guaranteed directly or indirectly by such person through an
agreement (1) to pay or purchase such indebtedness or to advance or supply funds
for the payment or purchase of such indebtedness, (2) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily for
the purpose of enabling the debtor to make payment of such indebtedness or to
assure the holder of such indebtedness against loss, (3) to supply funds to or
in any other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or such
services are rendered) or (4) otherwise to assure a creditor against loss, and
(i) all indebtedness of the type referred to in clauses (a) through (e) above
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any lien on property (including,
without limitation, accounts and contract rights) owned by such person, even
though such person has not assumed or become liable for the payment of such
indebtedness, but excluding trade and other accounts payable in the ordinary
course of business in accordance with customary trade terms and which are not
overdue for more than 90 days, or as to which a dispute exists and adequate
reserves in conformity with generally accepted accounting principles have been
established on the books of such person.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Initial Securities" shall have the meaning set forth in the second
paragraph of this Indenture.
4
"Insolvency Proceeding" shall have the meaning set forth in Section 10.9.
"Issue Date" means the date on which the Initial Securities are originally
issued.
"Issuer" shall have the meaning set forth in the first paragraph of this
Indenture.
"Junior Indebtedness" shall mean any Indebtedness of the Company whether
outstanding on the date hereof or incurred thereafter, that is subordinated in
right of payment to the Securities either by its terms or by operation of law,
including without limitation, any junior subordinated debentures issued by the
Company.
"Lenders" means the Lenders as defined in the Credit Agreement.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Loan Parties" shall mean the Company and any Subsidiary which is an
obligor under the Credit Agreement or the Securities.
"Non-payment Default" means any default or event of default (other than a
Payment Default) under any agreement or instrument relating to Senior Debt. For
purposes of the immediately preceding sentence, an "event of default" shall
exist when as a result thereof the holders of the pertinent Senior Debt are then
permitted (whether or not with the requirement that notice be given) to cause
such Senior Debt to become due prior to its scheduled maturity.
"Officer" means the Chief Executive Officer, the President, the Chief
Operating Officer, any Vice President, the Treasurer or the Secretary of the
Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Payment Blockage Period" shall have the meaning set forth in Section
10.2(3).
"Payment Default" means any default in the payment of principal of,
premium, if any, interest on, or other amounts payable on, or in connection
with, Senior Debt, irrespective of whether such default in payment results from
a failure to pay any amount when originally scheduled to be paid or upon
acceleration or otherwise.
"Person" shall mean any individual, partnership, corporation, trust or
unincorporated organization or a government or agency or political subdivision
thereof.
5
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
"Remedies Blockage Period" shall have the meaning set forth in Section
10.2.
"Representative" shall mean (i) the Agent for so long as the Bank Debt is
outstanding, (ii) at such time as the Bank Debt is no longer outstanding, the
Intersil Corporation Trustee, for so long as the Intersil Corporation Notes are
outstanding, and (iii) at such time as the Bank Debt and the Intersil
Corporation Notes are no longer outstanding, the representative selected by
holders of more than 50% of the Senior Debt of the applicable Senior Creditor.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the second paragraph of
this Indenture.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Senior Creditors" means (i) the Lenders and the Agent under the Senior
Loan Documents until the Bank Debt (including all refinancings and successive
refinancings thereof) has been finally and indefeasibly paid in full, (ii) CMP
until the CMP Debt (including all refinancings and successive refinancings
thereof) has been finally and indefeasibly paid in full, (iii) thereafter, the
holders of the Intersil Corporation Notes until they have been finally and
indefeasibly paid in full and (iv) thereafter, the holders of other Senior Debt
on a pro rata basis.
"Senior Debt" means (a) all Indebtedness of the Company and the
Subsidiaries, including principal, premium, if any, and interest on such
Indebtedness, whether outstanding on the date hereof or thereafter created,
incurred or assumed, except for Indebtedness which is expressly by its terms or
the terms of the instrument creating or evidencing such Indebtedness made equal
in right of payment with the Securities or subordinate in right of payment to
the Securities, including, without limitation, Indebtedness under the CMP
Subordinated Credit Agreement, (b) all other amounts due on or in connection
with such Indebtedness, including all charges, fees, indemnities, and expenses
(including reasonable fees and expenses of counsel), (c) all post-petition
interest with respect to such Indebtedness, (d) all amendments, extensions,
supplements, increases, renewals, refundings, replacements, refinancings,
modifications and deferrals of the Indebtedness referred to in clauses (a), (b)
and (c) above, and shall include without limiting the foregoing the Bank Debt,
the CMP Debt, the Intersil Corporation Notes, and all guaranties thereof by the
Company. Notwithstanding the foregoing, Senior Debt shall not include (i) any
Indebtedness of the Company to any Subsidiary of the Company, (ii) any
Indebtedness of the Company which, by its terms or the terms of any instrument
creating or evidencing it (including the terms of any instrument amending,
extending, supplementing, renewing, increasing, refunding, replacing,
refinancing, modifying or deferring the same) is
6
expressly made pari passu with or expressly subordinate in right of payment to
the Securities, (iii) Indebtedness to any employee of the Company; (iv) any
liability for taxes; (v) amounts payable to trade creditors for goods and
services provided in the ordinary course of business; (vi) that portion of any
Indebtedness which at the time of incurrence, creation or assumption is
incurred, created or assumed in violation of the Intersil Corporation Indenture
(as in effect on the date of issuance of the Intersil Corporation Notes and
irrespective of whether any Indebtedness is then outstanding thereunder); or
(vii) Indebtedness under the Intersil Corporation Notes (or the terms of any
instrument amending, extending, supplementing, renewing, increasing, refunding,
replacing, refinancing, modifying or deferring the same) in excess of the
principal amount outstanding on the date of original issuance of the Intersil
Corporation Notes plus any interest thereon or other Indebtedness in respect
thereof.
"Senior Default" means a Payment Default or a Non-payment Default.
"Senior Loan Documents" means all Credit Documents (as defined in the
Credit Agreement).
"Series A Preferred" shall mean the Company's 12% Series A Cumulative
Compounding Preferred stock.
"Significant Subsidiary" means any Subsidiary of the Company that would be
a "significant subsidiary" as defined in Rule 1.02(w) of Regulation S-X
promulgated pursuant to the Securities Act.
"Sterling" shall mean Sterling Holding Company, LLC, a Delaware limited
liability company.
"Stockholders Agreement" shall mean the Securities Purchase and Holders
Agreement dated as of August 13, 1999, by and among the Company, CMP, Manatee
Investment Corporation, Intersil Prism, LLC, Xxxxxxx X. Xxxxx and the Management
Investors (as defined in the Stockholders Agreement).
"Subordinated Debt" means (a) all obligations of the Company now or
hereafter existing under or with respect to the Securities (whether created
directly or acquired by assignment or otherwise), as it may hereafter be
amended, extended, supplemented or otherwise modified from time to time, whether
for principal, interest (including, without limitation, post-petition interest),
fees, expenses, indemnities, reimbursements, damages, liabilities or otherwise,
and (b) all obligations of any of the Loan Parties in respect of (i) any
Indebtedness (but in no event constituting Bank Debt or CMP Debt) incurred by
any of the Loan Parties to amend, extend, supplement, increase, renew, refund,
replace, refinance or otherwise modify, in whole or in part, the Subordinated
Debt, including interest and premium on any such Indebtedness, (ii) any loan or
credit agreement entered into by any of the Loan Parties in connection with any
such Indebtedness, as such agreement may be amended, extended, supplemented or
otherwise modified from time to time, and (iii) all other amounts payable in
respect of any such
7
Indebtedness or agreement, including, without limitation, amounts payable (A) in
respect of any indemnity and (B) in respect of any breach of a representation or
a warranty.
"Subsidiary" means, in respect of any Person, any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (1) such Person, (2) such Person
and one or more Subsidiaries of such Person or (3) one or more Subsidiaries of
such Person.
"Successor Company" shall have the meaning set forth in Section 5.1.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.77aaa-77bbbb)
as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor.
"Uniform Commercial Code" means the New York Uniform Commercial Code as in
effect from time to time.
"United States Government Obligations" mean direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock of which
(other than directors' qualifying shares) is owned by the Company or one or more
Wholly Owned Subsidiaries.
Section 1.2. Other Definitions.
Defined in
Term Section
---- ----------
"Legal Holiday"................................11.8
"Paying Agent"..................................2.3
"Registrar".....................................2.3
"Successor Company".............................5.1
Section 1.3. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
8
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
Section 1.4. Rules of Construction. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater; and
(9) all references to the date the Securities were originally issued
shall refer to the date the Initial Securities were originally issued.
9
ARTICLE 2
THE SECURITIES
Section 2.1 Form and Dating. The Trustee's certificate of authentication
shall be substantially in the form of Exhibit A, which is hereby incorporated in
and expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). Each Security
shall be dated the date of its authentication. The terms of the Securities set
forth in Exhibit A are part of the terms of this Indenture.
Section 2.2 Execution and Authentication. Two Officers shall sign the
Securities for the Company by manual or facsimile signature. The Company's seal
shall be impressed, affixed, imprinted or reproduced on the Securities and may
be in facsimile form.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
On the Issue Date, the Trustee shall authenticate and deliver $90,000,000
of 11.13% Subordinated Pay-In-Kind Notes Due 2010 and, at any time and from time
to time thereafter, the Trustee shall authenticate and deliver Securities for
original issue upon a written order of the Company signed by two Officers or by
an Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company. Such order shall specify the amount of the Securities to be
authenticated. The maximum aggregate principal amount of Securities which the
Trustee shall be permitted to authenticate is the sum of (a) $90,000,000, plus
(b) the amount of Additional Securities which the Company may issue from time to
time in lieu of cash payment of any or all of the accrued interest on any
Security.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate the Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
Section 2.3 Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"). The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent.
10
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying Agent in
connection with the Securities.
Section 2.4 Paying Agent To Hold Money in Trust. Prior to each due date of
the principal and interest on any Security, the Company shall deposit with the
Paying Agent a sum sufficient to pay such principal and interest when so
becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company in making any such payment, and while any
such default continues, the Trustee may require the Paying Agent to pay all
money held by it to the Trustee. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and to account for any funds disbursed by
the Paying Agent. Upon complying with this Section, the Paying Agent shall have
no further liability for the money delivered to the Trustee.
Section 2.5 Securityholder Lists. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of Securityholders. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee, in writing at least five Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.
Section 2.6 Transfer and Exchange. The Securities shall be issued in
registered form and shall be transferable only upon the surrender of a Security
for registration of transfer. When a Security is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of Section 8-401(1) of the
Uniform Commercial Code are met. When Securities are presented to the Registrar
or a co-registrar with a request to exchange them for an equal principal amount
of Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registration of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's or co-registrar's request. The Company may require
payment of a sum sufficient to pay all taxes, assessments or other governmental
charges in connection with any transfer or exchange pursuant to this Section.
The
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Company shall not be required to make and the Registrar need not register
transfers or exchanges of Securities selected for redemption (except, in the
case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment date.
Prior to the due presentation for registration of transfer of any Security,
the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar
may deem and treat the person in whose name a Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and (subject to the provisions of the Securities with respect to
record dates) 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.
All Securities issued upon any transfer or exchange pursuant to the terms
of this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Securities surrendered upon such transfer
or exchange.
Section 2.7 Replacement Securities. If a mutilated Security is surrendered
to the Registrar or if the Holder of a Security claims that the Security has
been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the requirements of Section
8-405 of the Uniform Commercial Code are met and the Holder satisfies any other
reasonable requirements of the Trustee. If required by the Trustee or the
Company, such Holder shall furnish an indemnity bond sufficient in the judgment
of the Company and the Trustee to protect the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss which any of them may
suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
Section 2.8 Outstanding Securities. Securities outstanding at any time are
all Securities authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation and those described in this Section as
not outstanding. A Security does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser, in which case
the replacement Security shall cease to be outstanding, subject to the
provisions of Section 8-405 of the Uniform Commercial Code.
If the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to pay all
principal and interest payable on that date with respect to the Securities (or
portions thereof) to be redeemed or maturing, as the case may be, and the Paying
Agent is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture, then on and after that
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date such Securities (or portions thereof) cease to be outstanding and interest
on them ceases to accrue.
Section 2.9 Temporary Securities. Until definitive Securities are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
Section 2.10 Cancellation. The Company at any time may deliver Securities
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy all Securities surrendered for registration of transfer, exchange,
payment or cancellation and deliver a certificate of such destruction to the
Company unless the Company directs the Trustee to deliver canceled Securities to
the Company. The Company may not issue new Securities to replace Securities it
has redeemed, paid or delivered to the Trustee for cancellation.
Section 2.11 Defaulted Interest. If the Company defaults in a payment of
interest on the Securities, the Company shall pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) in any lawful manner.
The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
Section 2.12 CUSIP Numbers. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.
Section 2.13 Issuance of Additional Securities. The Company shall be
entitled to issue Additional Securities under this Indenture which shall have
identical terms as the Initial Securities issued on the Issue Date, other than
with respect to the date of issuance, issue price and amount of interest payable
on the first payment date applicable thereto. The Initial Securities issued on
the Issue Date and any Additional Securities shall be treated as a single class
for all purposes under this Indenture. The Company may at its option and in its
sole discretion issue Additional Securities in lieu of cash payment of any or
all of the interest due on any Security on any interest payment date; provided,
however, that interest shall not be so payable in whole or in part in Additional
Securities in lieu of cash from and after the date of any deposit of
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money pursuant to Section 8.1. If the Company elects pursuant to this Section to
issue Additional Securities in lieu of cash payment of interest due on any
Security on any interest payment date, the Company shall give written notice of
such election to the Trustee on or before, but not more than 45 days prior to,
the record date for the applicable interest payment date; provided, however,
that without limiting the Company's obligation to make interest payments on the
dates provided therefor in cash or Additional Securities, the failure to give
such notice shall not obligate the Company to make an interest payment in cash
if it would otherwise be permitted to make such payment with Additional
Securities; provided further, however, that the Trustee receives notice of such
election by the Company 10 days prior to the relevant interest payment date.
Such notice to the Trustee shall have attached a copy, certified by the
Secretary or Assistant Secretary of the Company, of the resolution adopted by
the Board of Directors of the Company authorizing the issuance of the
appropriate principal amount of Additional Securities. The Company shall also
deliver an Officer's Certificate setting forth the denominations and series of
Securities to be issued, the issue date and yield to maturity and demonstrating
the computation of the principal amount of Additional Securities issuable to
each Holder of outstanding Securities to the Trustee no later than 3 days after
the record date relating to such interest payment date. Following receipt of
such notice and certificates, the Trustee shall authenticate for original issue
on such interest payment date Additional Securities in an aggregate principal
amount equal to the amount of cash interest due but not paid in cash on such
interest payment date. The issuance of such Additional Securities shall
constitute payment in full of the interest in lieu of cash payment of which such
Additional Securities are issued. With respect to each series, the Company shall
notify the Trustee of the amount of original issue discount per $1,000 of
principal amount of Securities which will be set forth on the face of each
Security and such other information as may be required by United States Treasury
Regulations with respect to original issue discount. Each issuance of Additional
Securities in lieu of payment of interest in cash shall be made pro rata with
respect to the outstanding Securities; provided that the Company may at its
option pay cash in lieu of issuing Additional Securities in any denomination of
less than $1,000 as selected by the Company. Each Additional Security shall be
subject to the same terms and conditions, including, without limitation, the
provisions of Article 10 of this Indenture, as the Initial Securities.
ARTICLE 3
Redemption
Section 3.1 Notices to Trustee. If the Company elects to redeem the
Securities pursuant to paragraph 5 of the Securities or is required to redeem
the Securities pursuant to paragraph 6 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
Except as described under the second paragraph of Section 3.3, the Company
shall give each notice to the Trustee provided for in this Section at least 45
days before the redemption date unless the Trustee consents to a shorter period.
Such notice shall be
14
accompanied by an Officers' Certificate and an Opinion of Counsel from the
Company to the effect that such redemption will comply with the conditions
herein.
Section 3.2 Selection of Securities To Be Redeemed. If fewer than all the
Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed pro rata or by lot or by a method that complies with applicable legal
and securities exchange requirements, if any, and that the Trustee in its sole
discretion considers to be fair and appropriate. The Trustee shall make the
selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in amounts of $1,000 or a whole multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be redeemed.
Section 3.3 Notice of Redemption. At least 30 days but not more than 60
days before a date for an optional redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
15
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense. In such event, the Company
shall provide the Trustee with the information required by this Section.
Section 3.4 Effect of Notice of Redemption. Once notice of redemption is
mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Securities shall be paid at the redemption price
stated in the notice, plus accrued interest to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date). Failure to give notice or any defect
in the notice to any Holder shall not affect the validity of the notice to any
other Holder.
Section 3.5 Deposit of Redemption Price. Prior to the redemption date, the
Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary
is the Paying Agent, shall segregate and hold in trust) money sufficient to pay
the redemption price of and accrued interest (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date) on all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which have been
delivered by the Company to the Trustee for cancellation.
Section 3.6 Securities Redeemed in Part. Upon surrender of a Security that
is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder (at the Company's expense) a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
Section 4.1 Payment of Securities. The Company shall promptly pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate specified
therefor in the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
Section 4.2 SEC Reports. The Company shall deliver to the Trustee and
Securityholder promptly (and in any event within 5 days after it files them with
the SEC), copies of the annual reports, quarterly reports and other periodic
reports which the Company may be required to file with the SEC pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
16
To the extent that the Company is required to prepare and deliver any
periodic reports to the holders of Senior Debt or to CVC or Sterling, the
Company shall deliver copies of such reports to the Trustee and Securityholder,
at the same time the Company is required to deliver such reports to the holders
of the Senior Debt or to CVC or Sterling, as applicable. The Company shall, upon
reasonable notice, provide officers, employees and representatives of the
Trustee and Securityholder and the proposed transferees with reasonable access
to the Company's premises, properties, books, records and personnel as may
reasonably be requested in connection with a potential transfer of a Security or
any portion thereof. The Company also shall comply with the other provisions of
TIA xx.xx. 314(a).
Section 4.3 Preservation of Corporate Existence; etc. Subject to Section
5.1, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect the corporate existence and the material
rights (charter and statutory) and franchises of the Company and of the
Significant Subsidiaries; provided, however, that the Company shall not be
required to preserve or cause to be preserved any such material right or
franchise if the board of directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not, and will not be, adverse in any
material respect to any Holder.
Section 4.4 Payment of Taxes, Assessment, Charges and Claims. The Company
will and will cause the Subsidiaries to duly pay or discharge or cause to be
paid or discharged the following before they shall become delinquent: (i) all
material taxes, assessments and governmental charges levied or imposed upon the
Company or any of the Subsidiaries or upon the income, profit or property of the
Company or any of the Subsidiaries, and (ii) all material lawful claims for
labor, materials and supplies which, if unpaid, might by law become a material
lien upon the property of the Company or any of the Subsidiaries; provided,
however, that the Company or any of the Subsidiaries shall not be required to
pay or discharge or cause to be paid or discharged (but shall make adequate
provision for) any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which adequate provision has been made.
Section 4.5 Limitation on Restricted Payments.
(a) The Company (A) shall not effect the declaration, payment or setting
apart for payment of any dividend on any part of its Capital Stock or any cash
interest payment on any Junior Indebtedness or effect or make any payment on
account of or set apart for payment money for a sinking or other similar fund
for, the purchase, prepayment, redemption or other retirement of, any of its
Capital Stock (or any rights, warrants or options to purchase or acquire any
such capital stock) or Junior Indebtedness, or make any distribution of any
nature whatsoever in respect of any thereof, either directly or indirectly, and
whether in cash, or other obligations of the Company or other property (except
dividends or distributions payable solely in shares, rights, warrants or options
of capital stock and except dividends or distributions payable solely to the
Company or its Wholly Owned Subsidiaries), (B) shall not make any payment of
cash interest on Indebtedness that is pari passu with the Securities at any time
when the payment of cash interest
17
on the Securities is prohibited by the terms of any Senior Debt, and shall not
make any payment of non-cash interest on such pari passu Indebtedness at any
time when the payment of non-cash interest on the Securities is prohibited by
the terms of any Senior Debt, (C) shall not voluntarily prepay any Indebtedness
that is pari passu with the Securities, (D) shall not permit a Subsidiary or any
other company or other entity directly or indirectly controlled by the Company
to purchase, redeem or otherwise acquire any of the Company's capital stock or
Junior Indebtedness or any Indebtedness that is pari passu with the Securities
and (E) shall not permit any Subsidiary that is not a Wholly Owned Subsidiary to
make any payment or distribution in respect of the capital stock of such
Subsidiary that the Company would be prohibited from making in respect of the
capital stock of the Company. The provisions of this Section 4.5(a) shall not
prohibit (x) the repurchase of securities of the Company from employees, former
employees, directors or former directors of the Company or any Subsidiary (or
permitted transferees of such individuals) pursuant to the terms of Article VII
of the Stockholders Agreement; provided, further, however, that the aggregate
amount of such repurchases shall not exceed the sum of (1) $5.0 million and (2)
the aggregate amount of cash received by the Company after the date hereof from
the sale of such securities to, or the exercise of options to purchase such
securities by, employees or directors of the Company or any Subsidiary, (y) the
exchange of the Series A Preferred for Junior Indebtedness pursuant to the terms
thereof, or (z) the retirement, redemption or exchange of Junior Indebtedness or
Series A Preferred with or for shares of capital stock of the Company (an
"Equity Swap").
(b) The Company will not permit any Subsidiary to effect the declaration,
payment or setting apart for payment of any dividend on any part of such
Subsidiary's Capital Stock (other than dividends or distributions in such
Subsidiary's Capital Stock) except for payments of any dividend to the Company
or a Wholly Owned Subsidiary.
(c) None of the Company's Junior Indebtedness or Capital Stock shall
provide for the mandatory payment of principal by way of redemption, sinking
fund or otherwise (including, without limitation, at the option of the holder
thereof) and the Company will make no optional payment with respect thereto,
prior to the payment of all principal of and interest on the Securities
(including accrued but unpaid interest), except that nothing herein shall
prohibit any Equity Swap. For the avoidance of doubt, the authorization of
Equity Swaps is an authorization of that particular retirement, redemption or
exchange, but not any subsequent act by the Company or any Subsidiary with
respect to the securities received by holders upon such retirement, redemption
or exchange.
Section 4.6 Compliance with Laws. The Company will, and will cause the
Subsidiaries to, comply in all material respects with all applicable statutes,
regulations, orders and restrictions of the United States, any state,
municipality or other governmental division thereof, and agencies and
instrumentalities of the foregoing, in respect of the conduct of its and their
businesses and the ownership of its and their properties (including, without
limitation, applicable statutes, regulations, orders and restrictions relating
to equal employment opportunities and environmental standards and controls),
except such as are being contested in good faith.
18
Section 4.7 Limitation on Payment Restrictions. Except as set forth herein,
the Company will not, and will not permit any of the Subsidiaries to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction (other than the Securities) on the ability of any
Subsidiary to (i) pay dividends or make any other distribution on its capital
stock or any other interests or participation in, or measured by, its profits,
owned by the Company or any Subsidiary of the Company, or pay any Indebtedness
owed to, the Company or a Subsidiary of the Company, (ii) make loans or advances
to the Company or (iii) transfer any of its properties or assets to the Company,
except for such encumbrances or restrictions existing under or by reason of (A)
applicable law, (B) Senior Debt or (C) Indebtedness existing on the date hereof.
Section 4.8 Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company a
certificate of the principal executive officer, the principal financial officer
or the principal accounting officer of the Company stating that in the course of
the performance by the signer of his or her duties as an officer of the Company
such office would normally have knowledge of any Default and whether or not the
signer knows of any Default that occurred during such period. If such signer
does, the certificate shall describe the Default, its status and what action the
Company is taking or proposes to take with respect thereto. The Company also
shall comply with TIA ss. 314(a)(4).
Section 4.9 Further Instruments and Acts. Upon request of the Trustee, the
Company will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purpose of this Indenture.
Section 4.10 Transactions with Affiliates. The Company shall not, and shall
not permit any of its Subsidiaries to, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any affiliate of the Company or any of its Subsidiaries (each of the
foregoing, an "Affiliate Transaction"), unless such Affiliate Transaction is on
terms that are no less favorable to the Company or the relevant Subsidiary than
those that would have been obtained in a comparable transaction by the Company
or such Subsidiary with an unrelated Person; provided that (A) any employment
agreement entered into by the Company or any of its Subsidiaries in the ordinary
course of business and consistent with past practice of the Company or such
Subsidiary, (B) transactions between or among the Company and/or its
Subsidiaries, (C) Restricted Payments that are permitted by the provisions of
Section 4.5 hereof and (D) the payment by the Company or its Subsidiaries of
reasonable and customary fees to members of their respective Board of Directors,
in each case, shall not be deemed Affiliate Transactions.
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ARTICLE 5
Successor Companies
Section 5.1 When Company May Merge or Transfer Assets.
(a) The Company shall not consolidate with or merge with or into, or
convey, transfer or lease, in one transaction or a series of transaction, all or
substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia and
the Successor Company (if not the Company) shall expressly assume, all the
obligations of the Company hereunder;
(ii) immediately after giving effect to such transaction (and treating
any Indebtedness which becomes an obligation of the Successor Company or
any Subsidiary as a result of such transaction as having been incurred by
the Successor Company or such Subsidiary at the time of such transaction),
no Default shall have occurred and be continuing; and
(iii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with the Securities.
The Successor Company shall be the successor to the Company and shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under the Securities, but the predecessor Company in the case of a
conveyance, transfer or lease shall not be released from the obligation to pay
the principal of and interest on the Securities.
(b) The Company shall not permit any Significant Subsidiary to consolidate
with or merge with or into, or convey, transfer or lease, in one transaction or
series of transaction, all or substantially all of its assets to any Person
unless: (i) the resulting, surviving or transferee Person (if not such
Significant Subsidiary) shall be a Person organized and existing under the laws
of the jurisdiction under which such Significant Subsidiary was organized or
under the laws of the United States of America, or any State thereof or the
District of Columbia; (ii) immediately after giving effect to such transaction
or transactions, no Default shall have occurred and be continuing; and (iii) the
Company delivers to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer complies with
the Securities. The provisions of clauses (i) and (ii) above shall not apply to
any one or more transactions which constitute an Asset Disposition if the
Company has complied with the applicable provisions of Section 5.01 of the
Intersil Corporation Indenture.
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ARTICLE 6
Defaults and Remedies
Section 6.1 Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of the principal or interest
of any Security when the same becomes due and payable at maturity, upon
acceleration, or otherwise, whether or not such payment shall be prohibited
by the provisions of Article 10;
(2) the Company or any Significant Subsidiary, pursuant to or within
the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding,
(ii) consents to the entry of an order for relief against it in
an involuntary case or proceeding,
(iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(iv) makes a general assignment for the benefit of its creditors;
(3) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Significant
Subsidiary in an involuntary case or proceeding,
(ii) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of its property, or
(iii) orders the liquidation of the Company or any Significant
Subsidiary;
and in the case of (i) above the order or decree remains unstayed and in effect
for 60 days;
(4) the Company fails to observe or perform any material covenant,
condition or agreement required on its part to be observed or performed
pursuant to this Indenture, such failure continues for a period of thirty
days after notice from the Trustee or a Holder and notice of such failure
shall have been given to the Representative (which notice may be given by
the Company, the Trustee or the Holder); or
21
(5) the Company fails to pay any Indebtedness of the Company within
any applicable grace period after final maturity or any such Indebtedness
is accelerated by the holders thereof and the total amount of such
Indebtedness unpaid or accelerated exceeds $10,000,000 and such failure
continues for 10 days after notice.
Section 6.2 Acceleration. Subject to the provisions of Article 10, if an
Event of Default (other than an Event of Default with respect to the Company
specified in clause (2) or (3) of Section 6.1) occurs and is continuing, the
Holders of 25% or more of the outstanding amount of the Company's 11.13%
Subordinated Pay-In-Kind Notes Due 2010, by written notice to the Company (an
"Acceleration Notice"), may declare the unpaid principal of and accrued interest
on the Securities to be immediately due and payable. Upon such declaration, if
there is at such time any Senior Debt outstanding, the principal, premium, if
any, and interest shall be due and payable upon the first to occur of an
acceleration under the Senior Loan Documents or the CMP Loan Documents or the
Intersil Corporation Indenture or thirty days after receipt by the Agent (or any
Representative of which the holder of the Securities has received notice if the
Bank Debt or the CMP Debt is not then outstanding) of such Acceleration Notice
given hereunder and there has been no cure by such 30th day. If an Event of
Default specified in clause (2) or (3) of Section 6.1 occurs with respect to the
Company, all principal of and interest on the Securities outstanding shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Holder. The Holders of a majority in principal amount of
the Securities by written notice to the Company may rescind an acceleration and
its consequences if (i) all existing Events of Default, other than the
nonpayment of principal of or interest on the Securities which has become due
solely because of the acceleration, have been cured or waived and (ii) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction. Any amounts received by Holder in connection with any
action taken pursuant to this Section 6.2 shall be subject to the provisions of
Article 10.
Section 6.3 Other Remedies. Subject to the provisions of Article 10, if an
Event of Default occurs and is continuing, the Trustee may pursue any available
remedy by proceeding at law or in equity to collect the payment of principal of
or interest on the Securities or to enforce the performance of any provision of
the Securities.
A delay or omission by the Trustee or any Holder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All remedies are cumulative to the extent
permitted by law.
Section 6.4 Waiver of Past Defaults. Subject to Section 6.2, the Holders of
a majority in principal amount of the Securities may waive an existing Default
or Event of Default and its consequences. 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 the Securities; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
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Section 6.5 Control by Majority. The Holders of a majority in principal
amount of the Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section 7.1,
that the Trustee determines is unduly prejudicial to the rights of other
Securityholders or would involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction. Prior to taking any action
hereunder, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by taking or not
taking such action.
Section 6.6 Limitation on Suits. Except to enforce the right to receive
payment of principal, premium (if any) or interest when due, no Securityholder
may pursue any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that
an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity;
and
(5) the Holders of a majority in principal amount of the
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
Section 6.7 Rights of Holders To Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 6.8 Collection Suit by Trustee. If an Event of Default specified in
Section 6.1(1) occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount then due and owing (together with interest on any unpaid interest to the
extent lawful) and the amounts provided for in Section 7.7.
23
Section 6.9 Trustee May File Proofs of Claim. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Securityholders allowed in
any judicial proceedings relative to the Company, its creditors or its property
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions. The Trustee 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 it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel, and any other amounts due the Trustee under
Section 7.7.
Section 6.10 Priorities. If the Trustee collects any money or property
pursuant to this Article 6, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to holders of Senior Debt of the Company to the extent required by
Article 10;
THIRD: to Securityholders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
Section 6.11 Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section does not apply to a suit by the Trustee, a suit
by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in
principal amount of the Securities.
Section 6.12 Waiver of Stay or Extension Laws. The Company (to the extent
it may lawfully do so) shall not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture;
24
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE 7
Trustee
Section 7.1 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 their
exercise, as a prudent Person would exercise or use under the circumstances in
the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, in the case of any such certificates or
opinions which, by any provision hereof, are required to be furnished
to the Trustee, the Trustee shall examine such certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee, other than paragraph (g) of this Section, is subject to paragraphs (a),
(b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company.
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(f) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(h) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.
Section 7.2 Rights of Trustee. (a) The Trustee may conclusively rely on any
document believed by it to be genuine and to have been signed or presented by
the proper Person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.
(d) Subject to Section 7.1(c), the Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
Section 7.3 Individual Rights of Trustee. The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
Section 7.4 Trustee's Disclaimer. The Trustee shall not be responsible for
and makes no representation as to the validity or adequacy of this Indenture or
the Securities, it shall not be accountable for the Company's use of the
proceeds from the Securities, and it shall not be responsible for any statement
of the Company in the Indenture or in any document issued in
26
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
Section 7.5 Notice of Defaults. If a Default occurs and is continuing and
if it is actually known to the Trustee, or upon written notice from the Company
or any Securityholder or upon a Payment Default, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Securityholders.
Section 7.6 Reports by Trustee to Holders. By July 15 of each year,
beginning with the July 15 following the date of this Indenture, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 of each year
that complies with TIA ss. 313(a). The Trustee also shall comply with
TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be filed with the SEC and each stock exchange (if any) on which the Securities
are listed. The Company agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any delisting thereof.
Section 7.7 Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable out-of-pocket expenses, disbursements and
advances incurred or made by it, including costs of collection, in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. The Company shall indemnify the Trustee
against any and all loss, liability or expense (including attorneys' reasonable
fees) incurred by it in connection with the administration of this trust and the
performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture (including this Section 7.7) against the Company and
defending itself against any claim (whether asserted by any Securityholder or
any other Person) or liability in connection with the exercise or performance of
any of its powers or duties hereunder, except to the extent that any such loss,
liability or expense is attributable to its negligence or bad faith. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder unless such failure prejudices the Company. The
Company shall defend the claim and the Trustee may have separate counsel and the
Company shall pay the fees and expenses of such counsel. The Company need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own willful misconduct, negligence
or bad faith. The Company need not pay for any settlement made by the Trustee
without the Company's consent, such consent not to be unreasonably withheld.
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To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations, and the lien granted to the Trustee,
pursuant to this Section shall survive the discharge of this Indenture. When the
Trustee incurs expenses or renders services after the occurrence of a Default
specified in Sections 6.1(2) or (3) with respect to the Company, 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
the Bankruptcy Law.
Section 7.8 Replacement of Trustee. The Trustee may resign at any time by
so notifying the Company. The Holders of a majority in principal amount of the
Securities may remove the Trustee by so notifying the Trustee and may appoint a
successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, provided that the amounts owing to the Trustee hereunder
have been paid and subject to the lien provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
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If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section,
the Company's obligations under Section 7.7 shall continue for the benefit of
the retiring Trustee.
Section 7.9 Successor Trustee by Merger. If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee provided that such successor shall be eligible and
qualified under Section 7.10.
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
Section 7.10 Eligibility; Disqualification. The Trustee shall at all times
satisfy the requirements of TIA ss. 310(a). The Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA ss.
310(b); provided, however, that there shall be excluded from the operation of
TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in
TIA ss. 310(b)(1) are met.
Section 7.11 Preferential Collection of Claims Against Company. The Trustee
shall comply with TIA ss. 311(a), excluding any creditor relationship listed in
TIA ss. 311(b). A Trustee who has resigned or been removed shall be subject to
TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
Discharge of Indenture; Defeasance
Section 8.1 Discharge of Liability on Securities; Defeasance. (a) When (1)
the Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.7) for cancellation or (2) all
outstanding Securities have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Article 3 hereof and
the Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Securities, including interest
thereon to maturity or such
29
redemption date (other than Securities replaced pursuant to Section 2.7), and if
in either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Section 8.1(c), cease to be of further
effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any time may
terminate (1) all its obligations under the Securities and this Indenture
("legal defeasance option") or (2) its obligations under Sections 4.2 (subject
to any requirements of the TIA) and 4.5 and the operation of Sections 6.1(2),
(3), (4) and (5) (but, in the case of Section 6.1(2), with respect only to
Significant Subsidiaries) ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified in
Sections 6.1(2), (3), (4) and (5) (but, in the case of Section 6.1(2), with
respect only to Significant Subsidiaries).
Upon satisfaction of the conditions set forth herein and upon request of
the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's obligations in
Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 7.7, 7.8, 8.4, 8.5 and 8.6 shall survive
until the Securities have been paid in full. Thereafter, the Company's
obligations in Sections 7.7, 8.4 and 8.5 shall survive.
Section 8.2 Conditions to Defeasance. The Company may exercise its legal
defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or United States Government Obligations for the payment of
principal of and interest on the Securities to maturity or redemption,
as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited United States Government
Obligations plus any deposited money without investment will provide
cash at such times and in such amounts as will be sufficient to pay
principal and interest when due on all the Securities to maturity or
redemption, as the case may be;
30
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Section 6.1(2) with respect to
the Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities as
contemplated by this Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements satisfactory
to the Trustee for the redemption of Securities at a future date in accordance
with Article 3.
Section 8.3 Application of Trust Money. The Trustee shall hold in trust
money or United States Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from United States
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities. Money
and securities so held in trust are not subject to Article 10.
Section 8.4 Repayment to Company. The Trustee and the Paying Agent shall
promptly turn over to the Company upon request any excess money or securities
held by them at any time.
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Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Securityholders entitled to the money must look to the Company for
payment as general creditors.
Section 8.5 Indemnity for Government Obligations. The Company shall pay and
shall indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against deposited United States Government Obligations or the principal
and interest received on such United States Government Obligations.
Section 8.6 Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or United States Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or United States Government
Obligations in accordance with this Article 8; provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or United States Government Obligations held by the Trustee or Paying
Agent.
ARTICLE 9
Amendments
Section 9.1 Without Consent of Holders. The Company and the Trustee may
amend this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes
of Section 163(f) of the Code or in a manner such that the
uncertificated Securities are described in Section 163(f)(2)(B) of the
Code;
(4) to make any change in Article 10 that would limit or
terminate the benefits available to any holder of Senior Debt (or
Representatives therefor) under Article 10;
(5) to add guarantees with respect to the Securities or to secure
the Securities;
(6) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
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(7) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under
the TIA; or
(8) to make any change that does not adversely affect the rights
of any Securityholder.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of Senior Debt then
outstanding unless the holders of such Senior Debt (or any group or
representative thereof authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company shall
mail to Securityholders a notice briefly describing such amendment. The failure
to give such notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
Section 9.2 With Consent of Holders. The Company and the Trustee may amend
this Indenture or the Securities without notice to any Securityholder but with
the written consent of the Holders of at least a majority in principal amount of
the Securities then outstanding (including consents obtained in connection with
a tender offer or exchange for the Securities). However, without the consent of
each Securityholder affected thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to
an amendment;
(2) reduce the rate of or extend the time for payment of interest
on any Security;
(3) reduce the principal of or extend the stated maturity of any
Security;
(4) reduce the premium payable upon the redemption of any
Security or change the time at which any Security may or shall be
redeemed in accordance with Article 3;
(5) make any Security payable in money other than that stated in
the Security;
(6) impair the right of any Holder of the Securities to receive
payment of principal of and interest on such Holder's Securities on or
after the due dates therefor or to institute suit for the enforcement
of any payment on or with respect to such Holder's Securities;
(7) make any change in Article 10 that adversely affects the
rights of any Securityholder under Article 10;
33
(8) make any change in Section 6.4 or 6.7 or the second sentence
of this Section; or
(9) make any change in the provisions described under
paragraph 6 of the Securities.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of Senior Debt then
outstanding unless the holders of such Senior Debt (or any group or
representative thereof authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company shall
mail to Securityholders a notice briefly describing such amendment. The failure
to give such notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
Section 9.3 Compliance with Trust Indenture Act. Every amendment to this
Indenture or the Securities shall comply with the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents and Waivers. A consent to an
amendment or a waiver by a Holder of a Security shall bind the Holder and every
subsequent Holder of that Security or portion of the Security that evidences the
same debt as the consenting Holder's Security, even if notation of the consent
or waiver is not made on the Security. However, any such Holder or subsequent
Holder may revoke the consent or waiver as to such Holder's Security or portion
of the Security if the Trustee receives the notice of revocation before the date
the amendment or waiver becomes effective. After an amendment or waiver becomes
effective, it shall bind every Securityholder. An amendment or waiver becomes
effective upon the execution of such amendment or waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
Section 9.5 Notation on or Exchange of Securities. If an amendment changes
the terms of a Security, the Trustee may require the Holder of the Security to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Security regarding the changed
34
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment.
Section 9.6 Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing any amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
Section 9.7 Payment for Consent. Neither the Company nor any Affiliate of
the Company shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
Subordination
Section 10.1 Subordinated Debt Subordinated to Senior Debt. The Company,
for itself and its successors, and each Holder, by its acceptance thereof,
agrees that the Subordinated Debt is and shall be subordinated in right of
payment, to the extent and in the manner provided in this Article 10, to the
prior payment in full of all Senior Debt. For the purposes of the Securities,
Senior Debt shall be deemed not to have been paid in full until the holders or
owners of the Senior Debt shall have received payment of all Senior Debt in cash
and as long as any lender shall have any obligation under the Senior Loan
Documents, the CMP Loan Documents, the Intersil Corporation Indenture or other
agreement or instrument evidencing any obligations under any Senior Debt. This
Article 10 shall constitute a continuing offer to all persons who, in reliance
upon such provisions, become holders of, or continue to hold, Senior Debt, and
such provisions are made for the benefit of the holders of Senior Debt, and such
holders are made obligees hereunder and any one or more of them may enforce such
provisions.
Section 10.2 No Payment on Subordinated Debt in Certain Circumstances.
(1) Upon the maturity of all or any part of any Senior Debt by
lapse of time, acceleration (unless waived in writing) or otherwise,
all Senior Debt then due shall first be paid in full, or such payment
duly provided for, in cash or cash equivalents in a manner
satisfactory to the holders of such Senior Debt, before any payment is
made on account of the Subordinated Debt, and until the Senior Debt is
paid in full, any distribution to which the Holders would be entitled
but for this Article 10 shall be made to holders of Senior Debt as
their interests may appear.
35
(2) In the event that any Payment Default shall have occurred and
be continuing, unless and until such default shall have been cured or
waived in writing, then no payment (including any payment which may be
payable by reason of the payment of any other Indebtedness of the
Company being subordinated to payment of the Subordinated Debt) shall
be made by or on behalf of the Company for or on account of any
Subordinated Debt, and the Holders shall not take or receive from the
Company or any Subsidiary, directly or indirectly, in cash or other
property, or by set-off or in any other manner, including, without
limitation, from or by way of collateral, payment of all or any of the
Subordinated Debt. The Holder shall immediately deliver to the
Representative any monies, securities or other property paid in
violation of the preceding sentence and received by the Holder or its
equivalent in cash, with proper endorsement or assignment if
necessary, and prior to such delivery shall hold in trust, such
monies, securities or other properties solely as trustee for and for
the benefit of the Senior Creditors as set forth in this sentence.
(3) Upon written notice from the Representative to the Company
(which shall give prompt notice to the Trustee and the Holders) of a
Non-payment Default and if such Non-payment Default shall not have
been cured or waived in writing, no payment (including any payment
which may be payable by reason of the payment of any other
Indebtedness of the Company being subordinated to payment of the
Subordinated Debt) shall be made by or on behalf of the Company for or
on account of any Subordinated Debt, and the Holders shall not take or
receive from the Company, directly or indirectly, in cash or other
property or by set-off or in any other manner, including, without
limitation, from or by way of collateral, payment of all or any of the
Subordinated Debt, during the period (the "Payment Blockage Period")
commencing on the date of receipt by the Company of such notice and
ending (unless earlier terminated by notice from the Representative to
the Company (which shall give prompt notice to the Trustee and any
Holder), on the earlier of (A) the date when all Non-payment Defaults
shall have been cured or waived in writing, (B) the date an Event of
Default occurs under Section 6.1(2) or 6.1(3), (C) the date on which
the Bank Debt, CMP Debt, or Intersil Corporation Notes are accelerated
and declared immediately due and payable and (D) the date which is 180
days after the receipt by the Company of such notice of such
Non-payment Default. The Securities shall not be subject to more than
one Payment Blockage Period for Non-payment Defaults in any one
360-day period.
(4) Nothing contained in this Article 10 will limit the right of
the Trustee and any Holder to take any action to accelerate the
maturity of the securities pursuant to Article 6 or to pursue, subject
to Article 6, any rights or remedies hereunder; provided that so long
as any Senior Debt remains outstanding neither the Trustee nor any
Holder shall take any such action during the period (the "Remedies
Blockage Period") commencing upon any Event of Default hereunder until
the earlier of (A) the date when all Events of Default hereunder shall
have been cured or waived in writing, (B) the date an Event of Default
occurs under Section 6.1(2) or 6.1(3), (C) the date on which the Bank
Debt, CMP Debt or Intersil Corporation Notes are accelerated and
declared immediately
36
due and payable and (D) the date which is 180 days after the date of
the Senior Default; provided, further, that in the event that any
Subordinated Debt is declared due and payable before its stated
maturity, the holders of all Senior Debt shall be entitled to receive
final and indefeasible payment in full of all amounts due or to become
due (whether or not accelerated) on or in respect of all Senior Debt
before the Holders are entitled to receive any payment (including any
payment which may be payable by reason of the payment of any other
indebtedness of the Company being subordinated to the payment of the
Subordinated Debt) by the Company on account of the Subordinated Debt.
Each of the Trustee and the Holders shall immediately deliver to the
Representative any monies, securities or other property received by
the Holder or its equivalent in cash, with proper endorsement or
assignment if necessary, and prior to such delivery shall hold in
trust, such monies, securities or other properties solely as trustee
for and for the benefit of the Senior Creditors as set forth in this
sentence. The Securities shall not be subject to one or more Remedies
Blockage Periods aggregating more than 180 days in any one 360-day
period.
(5) Nothing contained in this Article 10 shall prevent interest
from accruing to the Securities as provided above until the Securities
are paid in full.
Section 10.3 Subordinated Debt Subordinated to Prior Payment of All Senior
Debt on Dissolution. Upon any payment or distribution of all or any of the
assets or securities of the Company of any kind or character upon any
dissolution, winding up, liquidation, reorganization, arrangement, adjustment,
protection, relief or other similar case or proceeding under any federal or
state bankruptcy or similar law (whether voluntary or involuntary, in
bankruptcy, insolvency, receivership, arrangement, reorganization or relief
proceedings or upon any assignment for the benefit of creditors or any
marshaling of the assets and liabilities of the Company or otherwise):
(1) all Senior Debt shall first be entitled to be paid in full
before the Holders are entitled to receive any payment on account of
the Subordinated Debt; and
(2) any payment or distribution in respect of the Subordinated
Debt to which the Holders would be entitled except for the provisions
of this Article 10 (including any payment that may be payable by
reason of any other Indebtedness of the Company being subordinated to
the payment of the Subordinated Debt), shall be paid by the Company,
the liquidating trustee or agent or other person making such payment
or distribution directly to the Agent (in the case of the Bank Debt)
or to CMP (in the case of the CMP Debt) or to the holders of the other
Senior Debt or their Representative or to the trustee under any
indenture or other agreement (if any) pursuant to which Senior Debt
may have been issued, as the case may be, for application to (in the
case of cash), or as collateral (in the case of non-cash property or
securities) for, the payment or prepayment in full of all Senior Debt
remaining unpaid, after giving effect to any concurrent payment or
distribution (in the case of cash) to the holders of such Senior Debt.
37
Section 10.4 Holders to be Subrogated to Rights of Holders of Senior Debt.
Upon final and indefeasible payment in full of all Senior Debt, the Holders
shall be subrogated to the rights of the holders of Senior Debt to receive
payments or distributions of assets of the Company applicable to the Senior Debt
until all Subordinated Debt shall be paid in full, and for the purpose of such
subrogation no such payments or distributions to the holders of Senior Debt by
or on behalf of the Company or by or on behalf of the Holders by virtue of this
Article 10 which otherwise would have been made to the Holders shall, as among
the Company, its creditors other than the holders of Senior Debt and the
Holders, be deemed to be payment by the Company to or on account of the Senior
Debt, it being understood that the provisions of this Section 10.4 are and are
intended solely for the purpose of defining the relative rights of the Holders,
on the one hand, and the holders of Senior Debt, on the other hand.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article 10 shall have been applied,
pursuant to the provisions of this Article 10, to the payment of all amounts
payable under the Senior Debt, then and in such case, the Holders shall be
entitled to receive from the holders of such Senior Debt at the time outstanding
any payments or distributions received by such holders of Senior Debt in excess
of the amount sufficient to pay holders of Senior Debt all amounts payable under
or in respect of the Senior Debt in full unless the holders of Senior Debt are
otherwise directed by a court of competent jurisdiction.
Section 10.5 Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Debt. The Company agrees that it will not make any
payment of any Subordinated Debt, or take any other action, in contravention of
the provisions of this Article 10, and no right of any present or future holders
of any Senior Debt to enforce subordination as provided herein shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of the Securities,
regardless of any knowledge thereof which any such holder may have or with which
any such holder may be otherwise charged. The holders of Senior Debt may amend,
extend, supplement, increase, renew, refund, replace, refinance, restructure or
otherwise modify the terms of the Senior Debt or any instrument or agreement
evidencing or governing the same or any security therefor and release, sell or
exchange any security therefor and otherwise deal freely with any Loan Party,
all without affecting the liabilities and obligations of the Company and the
Holders hereunder (provided that any such increase shall be limited by the
restrictions contained in the definition of Senior Debt).
Section 10.6 In Furtherance of Subordination.
(1) All payments or distributions upon or with respect to the
Subordinated Debt which are received by a Holder contrary to the
provisions of this Article 10 shall be received and held by such
Holder, in trust for the benefit of, shall be segregated from other
funds and property held by such Holder for and shall be paid
immediately over and delivered to the Representative of Senior
Creditors in the same form as so received (with
38
any necessary endorsement), for application (in the case of cash) to,
or as collateral (in the case of non-cash property or securities) for,
the payment or prepayment in full of all Senior Debt of the Senior
Creditors remaining unpaid, after giving effect to any concurrent
payment or distribution (in the case of cash) to the holders of Senior
Debt and shall be applied (A) first to the final and indefeasible
payment in full of all Bank Debt, (B) next to the final and
indefeasible payment in full of all CMP Debt, (C) next to the final
and indefeasible payment in full of the Intersil Corporation Notes and
(D) finally to the payment of any other Senior Debt on a pro rata
basis.
(2) The Company shall give prompt written notice to the Trustee
and the Holders of any Senior Default under any Senior Debt or under
any agreement pursuant to which Senior Debt may have been issued or of
any dissolution, winding up, liquidation, reorganization or other
event described in Section 10.3 relating to the Company; provided
that, except as set forth in Section 10.8, the failure to give any
such notice shall in no way affect the obligations of the Holders
under, or the terms of subordination set forth in, this Article 10.
(3) The Agent or the holders of Senior Debt (including the
Trustee), as the case may be, are hereby authorized to demand specific
performance of the provisions of this Article 10, whether or not the
Company shall have complied with any of the provisions hereof
applicable to it, at any time when the Company or the Holders, as the
case may be, shall have failed to comply with any of the provisions of
this Article 10 applicable to it. The Holders hereby irrevocably waive
any defense based on the adequacy of a remedy at law that might be
asserted as a bar to such remedy of specific performance. The Holders
hereby acknowledge that the provisions of this Article 10 are intended
to be enforceable at all times, whether before or after the
commencement of a proceeding referred to in Section 10.3.
Section 10.7 Obligations of Company Unconditional. Nothing contained in
this Article 10 is intended to or shall impair, as between the Company and the
Holders, the obligations of the Company, which are absolute and unconditional,
to pay to the Holder the principal of, premium, if any, on and interest on the
Securities as and when the same shall become due and payable in accordance with
its terms or is intended to or shall affect the relative rights of the Holders
and creditors of the Company other than the holders of the Senior Debt, and,
except as otherwise expressly provided herein, nothing contained herein shall
prevent any Holder from exercising all remedies otherwise permitted by
applicable law upon Default, subject to the rights, if any, under this Article
10 of the holders of such Senior Debt in respect of cash, property, security or
securities of the Company received upon the exercise of any such remedy. Nothing
contained in this Article 10 or in the Securities shall, except during the
pendency of any dissolution, winding-up, liquidation, reorganization,
recapitalization or readjustment of the Company, affect the obligation of the
Company to make, or prevent the Company from making, at any time (except under
the circumstances described in Section 10.2) payment of principal of or interest
on the Securities.
39
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Holders shall be entitled to rely upon any unstayed, final,
nonappealable order or decree made by any court of competent jurisdiction or
upon any certificate of any agent or other person for the purpose of
ascertaining the persons entitled to participate in any 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.
Section 10.8 Holder Entitled to Assume Payments Not Prohibited in Absence
of Notice. No Holder shall at any time be charged with the knowledge of the
existence of any facts which would prohibit the making of any payment to such
Holder, unless and until the Holder shall have received written notice thereof
from the Company or one or more holders of Senior Debt or from the Agent or
Representative therefor; and, prior to the receipt of any such written notice
(and absent actual notice to the contrary on the part of the Holder), that
Holder shall be entitled to assume conclusively that no such facts exist.
Nothing contained in this Article 10 shall limit the right of the holders of
Senior Debt to recover payments as contemplated elsewhere in this Article 10.
Any Holder shall be entitled to rely on the delivery to it of, and upon such
delivery will be charged with knowledge of the existence of, a written notice by
a person representing himself or itself to be a holder of such Senior Debt (or a
trustee on behalf of, or other representative of, such holder) to establish that
such notice has been given by a holder of such Senior Debt or a trustee on
behalf of any such holder.
Section 10.9 Rights in Insolvency Proceedings. Each Holder irrevocably
authorizes and empowers the Representative of the Senior Creditors in any
proceeding defined in Sections 6.1(2) and (3) (an "Insolvency Proceeding")
involving or relating to the Subordinated Debt to file a proof of claim on
behalf of that Holder with respect to the Subordinated Debt if that Holder fails
to file proof of its claims prior to 30 days before the expiration of the time
period during which such claims must be submitted to accept and receive any
payment or distribution which may be payable or deliverable at any time upon or
in respect of the Subordinated Debt in an amount not in excess of the Agent's
portion of the Senior Debt then outstanding and to take such other action as may
be reasonably necessary to effectuate the foregoing. That Holder shall provide
to the Agent all information and documents reasonably necessary to present
claims or seek enforcement as aforesaid. Each Holder agrees that even though it
shall retain the right to vote its claims and otherwise act in any such
Insolvency Proceedings relative to the Company (including, without limitation,
the right to vote to accept or reject any plan of partial or complete
liquidation, reorganization, arrangement, composition or extension), that Holder
shall not take any action or vote in any way so as to contest (i) the validity
or the enforceability of the Credit Agreement, the Senior Loan Documents or the
liens and security interests to the extent granted to the Agent by the Company
with respect to the Bank Debt, (ii) the validity or the enforceability of the
CMP Subordinated Credit Agreement or the CMP Loan Documents, (iii) the validity
or enforceability of the Intersil Corporation Indenture, (iv) the rights of the
Lenders established in the Credit Agreement, the Senior Loan Documents or any
security documents with respect to such liens and security interests, (iv) the
rights of CMP established in the CMP Subordinated Credit Agreement or the CMP
Loan Documents, or (v)
40
the validity or enforceability of terms of subordination set forth herein or any
agreement or instrument to the extent evidencing or relating to the Senior Debt.
The holders of Senior Debt agree that as a condition to each Holder's
obligations in this paragraph, while they shall retain the right to vote the
Senior Debt and otherwise act in any such reorganization proceeding relative to
the Company (including, without limitation, the right to vote or accept or
reject any plan of partial or complete liquidation, reorganization, arrangement,
composition or extension), they shall not take any action or vote in any way so
as to contest the enforceability of the Securities or any other agreement or
instrument to the extent evidencing or relating to the Subordinated Debt.
Section 10.10 Waiver of Consolidation. Each Holder of the Securities agrees
that it will not at any time insist upon, plead, or in any manner whatsoever,
seek the entry of any order or judgment, or take the benefit or advantage of,
any substantive consolidation, piercing of the corporate veil or any other order
or judgment that causes an effective combination of the assets and liabilities
of the Company and any other individual, corporation, partnership or joint
venture in any Insolvency Proceeding.
Section 10.11 Miscellaneous.
(1) Each of the Holders and the Company will, at the Company's
expense and at any time and from time to time, promptly execute and
deliver all further instruments and documents, and take all further
action that may be reasonably necessary or desirable, or that the Agent
or any Representative of the Senior Creditors may reasonably request,
in order to protect any right or interest granted or purported to be
granted by the provisions of this Article 10 or to enable the Agent to
exercise and enforce its rights and remedies hereunder.
(2) All rights and interests under this Article 10 of the
holders of the Bank Debt, CMP Debt, the Agent or the holders of the
Intersil Corporation Notes and any other holder of Senior Debt, and all
agreements and obligations of the Holders and the Company under this
Article 10, shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any Senior
Loan Document, any CMP Loan Document or any other agreement or
instrument relating thereto or to any Senior Debt;
(b) any amendment, extension, renewal, increase, supplement,
refunding, replacement, refinancing or other modification in the
time, manner or place of payment of, or in any other term of, all
or any of the Bank Debt, CMP Debt, the Intersil Corporation Notes
or any other Senior Debt, or any other amendment, extension,
renewal or waiver of or any consent to any departure from any
Senior Loan Document or any CMP Loan Document or any other
agreement or instrument relating thereto or to any other Senior
Debt, including, without limitation, any increase in obligations
resulting from the extension of additional credit to any Loan
Party or any of its subsidiaries or otherwise (provided that
nothing in this paragraph shall operate to make any Indebtedness
that would not otherwise qualify as Senior Debt so qualify).
41
(c) any taking, exchange, release or non-perfection of any
other collateral, or any taking, release or amendment or waiver
of or consent to departure from any guaranty, for all or any of
the Bank Debt, CMP Debt, the Intersil Corporation Notes or any
other Senior Debt;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Bank Debt, CMP Debt or any other
Senior Debt, or any manner of sale or other disposition of any
collateral for all or any of the Bank Debt, CMP Debt, or any
other Senior Debt, or any other assets of any Loan Party or any
of its subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of any Loan Party or any of its
subsidiaries; or
(f) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, any Loan Party or a
subordinated creditor.
(3) The provisions of this Article 10 shall continue to be effective
or be reinstated, as the case may be, if at any time any payment of any
Senior Debt is rescinded or must otherwise be returned by the Agent, any
holder of Bank Debt or CMP Debt, any holder of the Intersil Corporation
Notes or any other holder of Senior Debt upon the insolvency, bankruptcy or
reorganization of any Loan Party or otherwise, all as though such payment
had not been made.
(4) Each of the Holders and the Company each hereby waives (to the
extent each may lawfully do so) promptness, diligence, notice of acceptance
and any other notice with respect to any of the Senior Debt and this
Article 10 and any requirement that the Agent, any holder of Bank Debt, any
holder of CMP Debt, or any other holder of Senior Debt protect, secure,
perfect or insure any security interest or lien or any property subject
thereto or exhaust any right or take any action against the Company or any
other person or entity or any collateral.
(5) No failure on the part of the Agent, any holder of Bank Debt, any
holder of CMP Debt, any holder of the Intersil Corporation Notes or any
other holder of Senior Debt to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies hereunder
provided are cumulative and not exclusive of any remedies provided by law.
(6) The provisions of this Article 10 constitute a continuing
agreement and shall (A) remain in full force and effect until all Senior
Debt shall have been finally and indefeasibly paid in full, (B) be binding
upon the Holders and the Company and their successors and assigns, and (C)
inure to the benefit of and be enforceable by any holders of Bank Debt, any
holders of CMP Debt, the Agent, the Intersil Corporation Trustee, any
holder of the Intersil Corporation Notes, any other holder of Senior Debt
and their successors, transferees and assigns.
42
Section 10.12 Subrogation. After all Senior Debt of the Company is paid in
full in cash and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of such Senior Debt to receive distributions
applicable to such Senior Debt. A distribution made under this Article 10 to
holders of such Senior Debt which otherwise would have been made to
Securityholders is not, as between the Company and Securityholders, a payment by
the Company on such Senior Debt.
Section 10.13 Relative Rights. This Article 10 defines the relative rights
of Securityholders and holders of Senior Debt of the Company. Nothing in this
Indenture shall:
(1) impair, as between the Company and Securityholders, the obligation
of the Company, which is absolute and unconditional, to pay principal of
and interest on the Securities in accordance with their terms; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Debt of the Company to receive distributions otherwise payable to
Securityholders.
Section 10.14 Rights of Trustee and Paying Agent. Notwithstanding Section
10.5, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article 10. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Debt may give the notice.
The Trustee in its individual or any other capacity may hold Senior Debt of
the Company with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 10 with respect to any Senior Debt of the Company which may at any time
be held by it, to the same extent as any other holder of such Senior Debt; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 10 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.7.
Section 10.15 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt of the
Company, the distribution may be made and the notice given to their
Representative (if any).
Section 10.16 Article 10 Not To Prevent Events of Default or Limit Right To
Accelerate. The failure to make a payment pursuant to the Securities by reason
of any provision in this Article 10 shall not be construed as preventing the
occurrence of a Default. Nothing in this Article 10 shall have any effect on the
right of the Securityholders or the Trustee to accelerate the maturity of the
Securities.
43
Section 10.17 Trust Moneys Not Subordinated. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of United
States Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Debt or subject to the
restrictions set forth in this Article 10, and none of the Securityholders shall
be obligated to pay over any such amount to the Company or any holder of Senior
Debt of the Company or any other creditor of the Company, so long as the
foregoing subordination provisions contained in this Article 10 were not
violated at the time the respective amounts were deposited pursuant to the
defeasance provisions of Article 8.
Section 10.18 Trustee Entitled To Rely. Upon any payment or distribution
pursuant to this Article 10, the Trustee and the Securityholders shall be
entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior Debt
of the Company for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of such 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. In the event that the Trustee determines, in good
faith, that evidence is required with respect to the right of any Person as a
holder of Senior Debt of the Company to participate in any payment or
distribution pursuant to this Article 10, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of such Senior Debt held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 10, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.1 and 7.2 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 10.
Section 10.19 Trustee To Effectuate Subordination. Each Securityholder by
accepting a Security authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Securityholders and the holders of Senior Debt of the
Company as provided in this Article 10 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
Section 10.20 Trustee Not Fiduciary for Holders of Senior Debt. 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 it shall mistakenly pay over or
distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of Senior Debt of the Company shall be entitled by
virtue of this Article 10 or otherwise.
Section 10.21 Reliance by Holders of Senior Debt on Subordination
Provisions. Each Securityholder by accepting a Security acknowledges and agrees
that the foregoing
44
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Debt of the Company, whether such
Senior Debt was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such Senior
Debt and such holder of such Senior Debt shall be deemed conclusively to have
relied on such subordination provisions in acquiring and continuing to hold, or
in continuing to hold, such Senior Debt.
ARTICLE 11
Miscellaneous
Section 11.1 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
Section 11.2 Notices. Any notice or communication shall be in writing and
delivered in person or mailed by first-class mail addressed as follows:
if to the Company:
Intersil Holding Corporation
0000 Xxxx Xxx Xxxx XX
Building 53 M/S 53/198
Xxxx Xxx, XX 00000
Telecopy number: (000) 000-0000
Attention: General Counsel
with required copies to:
Citicorp Venture Capital Ltd.
000 Xxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy number: (000) 000-0000
Attention: Xxxx X. ("Chip") Xxxxxx, IV
and
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopy number: (000) 000-0000
Attention: G. Xxxxxx X'Xxxxxxx
if to the Trustee:
00
Xxxxxx Xxxxxx Xxxxx Xxxxxxx xx Xxx Xxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy number: (000) 000-0000
Attention: Corporate Trust Division
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed to
the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 11.3 Communication by Holders with Other Holders. Securityholders
may communicate pursuant to TIA ss. 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities. The Company, the
Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
Section 11.4 Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
Section 11.5 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
46
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
Section 11.6 When Securities Disregarded. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
Section 11.7 Rules by Trustee, Paying Agent and Registrar. The Trustee may
make reasonable rules for action by or a meeting of Securityholders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
Section 11.8 Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or a
day on which banking institutions are not required to be open in the State of
New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.
Section 11.9 Governing Law. This Indenture and the Securities shall be
governed by, and construed in accordance with, the laws of the State of New York
but without giving effect to applicable principles of conflicts of law to the
extent that the application of the laws of another jurisdiction would be
required thereby.
Section 11.10 No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder shall waive and release all such liability. The
waiver and release shall be part of the consideration for the issue of the
Securities.
Section 11.11 Successors. All agreements of the Company in this Indenture
and the Securities shall bind its successors. All agreements of the Trustee in
this Indenture shall bind its successors.
47
Section 11.12 Multiple Originals. The parties may sign any number of copies
of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
Section 11.13 Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
48
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
INTERSIL HOLDING CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Xxxxxx X. Xxxxxxxx
Vice President
UNITED STATES TRUST COMPANY
OF NEW YORK
By: /s/ Xxxxxx Xxxxx
----------------------------
Xxxxxx Xxxxx
Xx. Vice President
49
EXHIBIT A
[FORM OF FACE OF SECURITY]
No. _______ $
11.13% Subordinated Pay-In-Kind Notes Due 2010
Intersil Holding Corporation, a Delaware corporation, promises to pay to
Xxxxxx Corporation, or registered assigns, the principal sum of ______________
on _________________, 2010.
Interest Payment Dates: January 31 and July 31
Record Dates: January 15 and July 15
Additional provisions of this Security are set forth on the other side of
this Security.
Dated: _____________________, _______
INTERSIL HOLDING CORPORATION,
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
United States Trust Company of New York
as Trustee, certifies that
this is one of the Securities
referred to in the Indenture.
By:
---------------------------
Authorized Signatory
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[FORM OF REVERSE SIDE OF SECURITY]
11.13% Subordinated Pay-In-Kind Note Due 2010
1. Interest
Intersil Holding Corporation, a Delaware corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above. The Company will pay
interest semiannually on January 31 and July 31 of each year (each date of
payment being an "Interest Payment Date"). Interest on the Securities will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from August 13, 1999. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. The Company shall pay interest
on overdue principal at the rate borne by the Securities, and it shall pay
interest on overdue installments of interest at the same rate to the extent
lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted interest)
to the Persons who are registered holders of Securities at the close of business
on January 15 or July 15 next preceding the interest payment date even if
Securities are canceled after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company shall pay principal, premium, if any, and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts, except that interest may, at the
option and in the sole discretion of the Company, be paid in additional
Securities (the "Additional Securities"). If the Company elects to issue
Additional Securities in lieu of cash payment of interest due on any Security on
any Interest Payment Date, the Company shall give written notice of such
election to the Trustee on or before, but not more than 45 days prior to, the
record date for the applicable Interest Payment Date, and execute Additional
Securities, dated the date of such Interest Payment Date, in a principal amount
equal to the amount of cash interest due but not paid in cash on such Interest
Payment Date; provided, however, that without limiting the Company's obligation
to make interest payments on the dates provided therefor in cash or Additional
Securities, the failure to give such notice shall not obligate the Company to
make an interest payment in cash if it would otherwise be permitted to make such
payment with Additional Securities which payment may be so made during any
permitted grace period; provided further, however that the Trustee receives
notice of such election by the Company 10 days prior to the Interest Payment
Date. The issuance of such
A-3
Additional Securities shall constitute payment in full of the interest in lieu
of cash payment of which such Additional Securities are issued. Each issuance of
Additional Securities in lieu of cash payments of interest on the Securities
shall be made pro rata with respect to the outstanding Securities, provided that
the Company may at its option pay cash in lieu of issuing Additional Securities
in any denomination of less than $1,000 as selected by the Company. Cash
payments in respect of Securities (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by the holders thereof or, if no United States dollar account
maintained by the payee with a bank in the United States is designated by any
holder to the Trustee or the Paying Agent at least 30 days prior to the relevant
due date for payment (or such other date as the Trustee may accept in its
discretion), by mailing a check to the registered address of such holder.
Each Additional Security shall be subject to the same terms and conditions
as the Securities, including, without limitation, the provisions of Article 10
of the Indenture.
3. Paying Agent and Registrar
Initially, United States Trust Company of New York, a New York banking
corporation ("Trustee"), will act as Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of August 13,
1999 ("Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the Company. The
Company shall be entitled to issue Additional Securities pursuant to Section
2.13 of the Indenture. The Initial Securities issued on the Issue Date and any
Additional Securities will be treated as a single class for all purposes under
the Indenture. The Indenture limits, among other things (i) the payment of
dividends on capital stock of the Company and the purchase, redemption or
retirement of capital stock or subordinated indebtedness, (ii) certain
transactions with Affiliates, (iii) sales of assets, including capital stock of
subsidiaries and (iv) certain consolidations, mergers and transfers of assets.
The Indenture also prohibits certain restrictions on distributions from
subsidiaries. All of these limitations and prohibitions, however, are subject to
a number of important qualifications contained in the Indenture.
A-4
5. Optional Redemption
The Company may, at any time and from time to time, redeem the Securities,
in whole or in part, at a redemption price equal to the principal amount being
redeemed plus accrued and unpaid interest, if any, to the date of redemption
(the "Redemption Price").
6. Special Redemption
(a) Change in Control. Upon the occurrence of a Change in Control, the
Company shall, upon the expiration of any offer to purchase or repayment or
redemption of any Senior Debt required as a result of such Change in Control,
redeem the Securities in full at the Redemption Price. For purposes of this
Paragraph 6(a), the term "Change in Control" shall mean (i) prior to the first
Public Equity Offering, the Permitted Holders cease to be the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of a majority in the aggregate of the total voting power of the
voting stock of the Company, whether as a result of issuance of securities of
the Company, any merger, consolidation, liquidation or dissolution of the
Company, any direct or indirect transfer of securities by the Permitted Holders
or otherwise (for purposes of this clause (i) and clauses (iii) and (v) below,
the Permitted Holders shall be deemed to beneficially own any voting stock of
any entity held by any other entity (the "parent entity") so long as the
Permitted Holders beneficially own (as so defined), directly or indirectly, in
the aggregate a majority of the voting power of the voting stock of the parent
entity; provided, however, that notwithstanding the foregoing CVC shall be
deemed to beneficially own a majority of the voting power of the voting stock of
Sterling (or any successor) so long as CVC, employees, officers and directors of
CVC and companies, partnerships and other entities at least a majority of the
equity in which is held in the aggregate by CVC and its employees, officers and
directors hold in the aggregate no less than a majority of the economic
interests in Sterling (or such successor)), or (ii) all or substantially all of
the assets of the Company and its Subsidiaries (taken as a whole) shall be
transferred or leased to any Person or group of Persons, or (iii) the Company
shall cease to own 100% of the outstanding capital stock of Intersil
Corporation, or (iv) a majority of the members of the Board of Directors of the
Company cease to be Continuing Directors, or (v) after a Public Equity Offering,
any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act), other than one or more Permitted Holders, is or becomes the beneficial
owner (as defined in clause (i) above, except that for purposes of this clause
(v) such person shall be deemed to have "beneficial ownership" of all shares
that any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than the greater of 35% of the aggregate voting common stock of the Company then
outstanding or the total voting power of the voting stock of the Company then
held by CVC and its Permitted Transferees (as defined in the Stockholders
Agreement). As used herein, (1) the term "Permitted Holders" shall mean (i) CVC,
(ii) any officer, employee or director of CVC or any trust, partnership or other
entity established solely for the benefit of such officers, employees or
directors, (iii) any officer, employee or director of the Company, Intersil
Corporation or any Subsidiary or any trust, partnership or other entity
established solely for the benefit of such officers, employees or directors, and
(iv) in the case of any individual, any Permitted Transferee
A-5
of such individual (as defined in the Stockholders Agreement), except a
Permitted Transferee by virtue of Section 4.4(b)(iv) thereof; provided, however,
that in no event shall individuals collectively be deemed to be "Permitted
Holders" with respect to more than 30% of the total voting power of the Company,
(2) the term "Public Equity Offering" shall mean a primary public offering of
Capital Stock (or securities convertible into or exchangeable for Capital Stock)
of the Company, Intersil Corporation, any direct or indirect parent of the
Company (except CVC or any direct or indirect parent of CVC) (each, a "Parent")
or any Subsidiary pursuant to an effective registration statement filed under
the Securities Act other than a registration statement filed on Form S-8 or any
successor form and other than any registration statement filed in connection
with any issuance of Capital Stock (or securities convertible into or
exchangeable for Capital Stock) in connection with the original issuance of the
Securities and (3) "Continuing Director" means any member of the Board of
Directors who (i) was a member of such Board of Directors on the date hereof, or
(ii) was nominated for election or elected to the Board of Directors with, or
whose election to the Board of Directors was approved by, the affirmative vote
of a majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election, or (iii) became a member
of the Board of Directors pursuant to the Stockholders Agreement.
(b) Primary Offerings. Upon the consummation of the initial Public Equity
Offering, the Company shall apply, or cause to be applied, the first $50,000,000
of net cash proceeds received from such initial Public Equity Offering to repay
Senior Debt to the extent required by such Senior Debt and to the extent then
outstanding, and the Company shall pay 50% of the net cash proceeds received by
the issuer from such initial Public Equity Offering in excess of the first
$50,000,000 of net cash proceeds to redeem all or part of the Securities to the
extent then outstanding at the Redemption Price. On the date on which any
subsequent Public Equity Offering is consummated, the Company shall pay an
amount equal to 50% of the net cash proceeds to the issuer from such Public
Equity Offering to redeem all or part of the Securities to the extent then
outstanding at the Redemption Price. Notwithstanding the foregoing, (i) the
Company or any direct or indirect Subsidiary or Parent of the Company shall be
permitted to sell in the aggregate up to 10% of such Person's Capital Stock
outstanding on the date hereof (after giving pro forma effect to such issuance)
to a qualified institutional buyer ("QIB") as such term is defined in Rule 144A
promulgated under the Securities Act ("Rule 144A") organized under the laws of
the United States or any State thereof, pursuant to Rule 144A without being
obligated to redeem the Securities and (ii) the Company shall be permitted to
issue and/or sell in the aggregate up to 30% of the amount of Capital Stock of
the Company outstanding as of the date hereof (after giving pro forma effect to
such issuance) to acquire all of the ownership interests in or all or
substantially all of the assets of any Person, provided that the Company shall
not issue and/or sell more than 15% (after giving pro forma effect to such
issuance) of the amount of the Capital Stock of the Company outstanding as of
the date hereof in connection with any one such acquisition.
(c) Secondary Sales of Capital Stock. So long as Xxxxxx Corporation or any
of its Affiliates is the holder of at least 50% of the Securities, the Company
shall redeem the Securities in full upon a Sale; provided that the Redemption
Price in respect of such
A-6
obligation shall not be deemed payable until 5 days after the Company receives
notice of, or the senior executive officers of the Company obtain knowledge of,
such Sale. The term "Sale" shall mean a direct or indirect transfer by any
Permitted Holder (including by means of a business combination transaction or a
redemption) of any Capital Stock of the Company (or any other securities of the
Company (or a successor to the Company) received on account of ownership of such
Capital Stock, including all securities issued in connection with any merger,
consolidation, stock dividend, stock distribution, stock split, stock
combination, recapitalization, reclassification, subdivision, conversion or
similar transaction in respect thereof) (the "Principal Securities") other than
(i) transfers to a Permitted Transferee (as defined in the Stockholders
Agreement (other than pursuant to Section 4.4(b)(iv) thereof)), (ii) transfers
to the Company pursuant to the Company's exercise of its option to purchase such
Principal Securities under Sections 6.3 or 6.4 of the Stockholders Agreement,
(iii) transfers by the Management Investors party to the Stockholders Agreement
of Principal Securities in one or more transactions (whether or not related) in
an aggregate amount not in excess of 3% of the amount of capital stock of the
Company outstanding as of the date hereof made following and in accordance with
the good faith determination by the Board of Directors of the Company that such
transfers are appropriate and (iv) transfer by Sterling or CVC of up to 3% of
the amount of capital stock of the Company outstanding as of the date hereof
including up to $3,000,000 in liquidation value of Series A Preferred to a QIB
if CVC determines that such transfers are advisable to assure compliance with
any regulatory requirements applicable to Sterling or CVC, based upon the advice
of CVC's internal regulatory counsel.
(d) Restricted Payments. The Company shall redeem the Securities in full to
the extent then outstanding immediately upon any violation of Section 4.5 of the
Indenture.
(e) Limitations on Redemption Obligations. Anything in this Paragraph 6 to
the contrary notwithstanding, except in the case of a redemption required by the
first sentence of Paragraph 6(b), the Company shall not be obligated to redeem
all or any of the Securities to the extent the Company is prohibited from doing
so by the terms of any Senior Debt outstanding at the time of the occurrence of
the event giving rise to such requirement to redeem.
(f) Interest on Securities Called for Redemption. On and after the
redemption date, interest will cease to accrue on the Securities or portion
thereof called for redemption.
7. Notice of Redemption
Except as set forth in paragraph 6 above, notice of optional redemption
will be mailed at least 30 days but not more than 60 days before the redemption
date to each Holder of Securities to be redeemed at his registered address.
Securities in denominations larger than $1,000 may be redeemed in part but only
in whole multiples of $1,000. If money sufficient to pay the redemption price of
and accrued interest on all Securities (or portions thereof) to be redeemed on
the redemption date is deposited with the Paying Agent on or before the
redemption
A-7
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
8. Subordination
The Securities are subordinated to Senior Debt, as defined in the
Indenture. To the extent provided in the Indenture, Senior Debt must be paid
before the Securities may be paid. The Company agrees, and each Securityholder
by accepting a Security agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give it effect and appoints the Trustee
as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000; provided, however, that Additional
Securities may be issued in denominations of less than $1,000 or in other than
whole multiples of $1,000. A Holder may transfer or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes and fees required by law or permitted by the Indenture. The Registrar need
not register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or any Securities for a period of 15 days before a
selection of Securities to be redeemed or 15 days before an interest payment
date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of it
for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to the Company at
its request unless an abandoned property law designates another Person. After
any such payment, Holders entitled to the money must look only to the Company
and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate some
or all of its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or United States Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
A-8
13. Amendment; Waiver
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended with the written consent of the Holders of at
least a majority in principal amount outstanding of the Securities and (ii) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Company and the Trustee may amend the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to add guarantees with respect to the Securities or to secure the Securities,
or to add additional covenants or surrender rights and powers conferred on the
Company, or to comply with any request of the SEC in connection with qualifying
the Indenture under the Act, or to make certain changes in the subordination
provisions or to make any change that does not adversely affect the rights of
any Securityholder.
14. Default and Remedies
Under the Indenture, Events of Default include (i) default in payment of
interest on the Securities; (ii) default in payment of principal on the
Securities at maturity, upon redemption pursuant to paragraph 5 of the
Securities, upon acceleration or otherwise; (iii) failure by the Company to
comply with other agreements in the Indenture or the Securities, subject to
notice and lapse of time; (iv) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the
Company if the amount accelerated (or so unpaid) exceeds $10,000,000, subject to
notice and lapse of time; and (v) certain events of bankruptcy or insolvency
with respect to the Company and the Significant Subsidiaries. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities to be due and
payable immediately, subject to certain conditions. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Securities
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default (except a Default
in payment of principal or interest) if it determines that withholding notice is
in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates
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with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company or
the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
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The Company will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Security in larger type. Requests may be made to:
Intersil Holding Corporation
0000 Xxxx Xxx Xxxx XX
Xxxx Xxx, XX 00000
Attention: Chief Financial Officer
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
Date: ________________ Your Signature: _____________________________________
____________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
