Exhibit 4.01
INDENTURE dated as of March 11, 1997, among
FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware
corporation (the "Company"), FSC SEMICONDUCTOR
CORPORATION ("Parent"), as Guarantor, 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 the Company's 10-1/8%
Senior Subordinated Notes Due 2007 (the "Initial Securities") and, if and
when issued pursuant to a registered exchange for Initial Securities, the
Company's 10-1/8% Senior Subordinated Notes Due 2007 (the "Exchange
Securities") and, if and when issued pursuant to a private exchange for
Initial Securities, the Company's 10-1/8% Senior Subordinated Notes Due 2007
(the "Private Exchange Securities", together with the Exchange Securities and
the Initial Securities, the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; (ii) the Capital Stock
of a Person that becomes a Restricted Subsidiary as a result of the
acquisition of such Capital Stock by the Company or another Restricted
Subsidiary; or (iii) Capital Stock constituting a minority interest in any
Person that at such time is a Restricted Subsidiary; PROVIDED, HOWEVER, that
any such Restricted Subsidiary described in clauses (ii) or (iii) above is
primarily engaged in a Related Business.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of Sec-tions 4.04, 4.06 and 4.07 only, "Affiliate"
shall also mean any beneficial owner of Capital Stock representing 10% or
more of the total voting power of the Voting Stock (on a fully diluted basis)
of the Company or of rights or warrants to purchase such Capital Stock
(whether or not currently exercisable) and any Person who would be an
Affiliate of any such beneficial owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions)
by the Company or any Restricted Subsidiary, including any disposition by
means of a merger, consolidation or similar transaction (each referred to for
the purposes of this definition as a "disposition"), of (i) any shares of
Capital Stock of a Restricted Subsidiary (other than directors' qualifying
shares or shares required by applicable law to be held by a Person other than
the Company or a Restricted Subsidiary), (ii) all or substantially all the
assets of any division or line of business of the Company or any Restricted
Subsidiary or (iii) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or such
Restricted Subsidiary (other than, in the case of (i), (ii) and (iii) above,
(x) a disposition by a Restricted Subsidiary to the Company or by the Company
or a Restricted Subsidiary to a Wholly Owned Subsidiary, (y) for purposes of
Section 4.06 only, a disposition that constitutes a Restricted Payment
permitted by Section 4.04 and (z) disposition of assets with a fair market
value of less than $100,000).
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period
for which such lease has been extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing (i)
the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled
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principal payment of such Indebtedness or redemption or similar payment with
respect to such Preferred Stock multiplied by the amount of such payment by
(ii) the sum of all such payments.
"Banks" has the meaning specified in the Credit Agreement.
"Bank Indebtedness" means all Obligations pursuant to the Credit
Agreement.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means an obligation that is required to
be classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented
by such obligation shall be the capitalized amount of such obligation
determined in accordance with GAAP; and the Stated Maturity thereof shall be
the date of the last payment of rent or any other amount due under such lease
prior to the first date upon which such lease may be terminated by the lessee
without payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of
or interests in (however designated) equity of such Person, including any
Preferred Stock, but excluding any debt securities convertible into such
equity.
"Change of Control" means the occurrence of any of the following
events:
(i) prior to the earlier to occur of (A) the first
public offering of common stock of Parent or (B) the first
public offering of common stock of the Company, the
Permitted Holders cease to be the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of a majority in the aggregate of
the total voting power of the Voting Stock of the Company,
whether as a result of
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issuance of securities of the Parent or the Company,
any merger, consolidation, liquidation or dissolution
of the Parent or the Company, any direct or indirect
transfer of securities by Parent or otherwise (for
purposes of this clause (i) and clauses (ii) and (iv) below,
the Permitted Holders shall be deemed to beneficially own
any Voting Stock of a Person (the "specified entity") held
by any other Person (the "parent entity") so long as the
Permitted Holders beneficially own (as so defined), directly
or indirectly, in the aggregate a majority of the voting
power of the Voting Stock of the parent entity) 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
corporations, 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);
(ii) after the earlier to occur of (A) the first public
offering of common stock of Parent or (B) the first public
offering of common stock of the Company, any "person" (as
such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more Permitted Holders, is
or becomes the beneficial owner (as defined in clause (i)
above, except that for purposes of this clause (ii) such
person shall be deemed to have "beneficial ownership" of all
shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than
35% of the total voting power of the Voting Stock of the
Company; PROVIDED, HOWEVER, that the Permitted Holders
beneficially own (as defined in clause (i) above), directly
or indirectly, in the aggregate a lesser percentage of the
total voting power of the Voting Stock of the Company than
such other person and do not have the right or ability by
voting power, contract or otherwise to elect or designate
for election a majority of the Board of Directors (for the
purposes of this clause (ii), such other person shall be
deemed to beneficially own any Voting Stock of a specified
entity held by a parent entity, if such other
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person is the beneficial owner (as defined in this clause
(ii)), directly or indirectly, of more than 35% of the
voting power of the Voting Stock of such parent entity
and the Permitted Holders beneficially own (as defined
in clause (i) above), directly or indirectly, in the
aggregate a lesser percentage of the voting power of
the Voting Stock of such parent entity and do not have
the right or ability by voting power, contract or otherwise
to elect or designate for election a majority of the board
of directors of such parent entity);
(iii) during any period of two consecutive years,
individuals who at the beginning of such period constituted
the Board of Directors (together with any new directors (a)
whose election by such Board of Directors or whose
nomination for election by the stockholders of the Company
was approved by a vote of a majority of the directors of the
Company then still in office who were either directors at
the beginning of such period or whose election or nomination
for election was previously so approved or (b) who were
elected to the Board of Directors pursuant to the
Stockholders' Agreement) cease for any reason to constitute
a majority of the Board of Directors then in office; or
(iv) the merger or consolidation of the Company with or
into another Person or the merger of another Person with or
into the Company, or the sale of all or substantially all
the assets of the Company to another Person (other than a
Person that is controlled by the Permitted Holders), if the
securities of the Company that are outstanding immediately
prior to such transaction and which represent 100% of the
aggregate voting power of the Voting Stock of the Company
are changed into or exchanged for cash, securities or
property, unless pursuant to such transaction such
securities are changed into or exchanged for, in addition to
any other consideration, securities of the surviving Person
or transferee that represent, immediately after such
transaction, at least a majority of the aggregate voting
power of the Voting Stock of the surviving Person or
transferee.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes
of any provision contained herein and required by the TIA, each other obligor
on the indenture securities.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days (or, if less,
the number of days after the end of such fiscal quarter as the consolidated
financial statements of the Company shall be provided to the Securityholders
pursuant hereto) prior to the date of such determination to (ii) Consolidated
Interest Expense for such four fiscal quarters; PROVIDED, HOWEVER, that (1)
if the Company or any Restricted Subsidiary has Incurred any Indebtedness
since the beginning of such period that remains outstanding or if the
transaction giving rise to the need to calculate the Consolidated Coverage
Ratio is an Incurrence of Indebtedness, or both, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving effect on a
pro forma basis to such Indebtedness as if such Indebtedness had been
Incurred on the first day of such period and the discharge of any other
Indebtedness repaid, repurchased, defeased or otherwise discharged with the
proceeds of such new Indebtedness as if such discharge had occurred on the
first day of such period, (2) if the Company or any Restricted Subsidiary has
repaid, repurchased, defeased or otherwise discharged any Indebtedness since
the beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio, EBITDA and Consolidated Interest Expense for such period
shall be calculated on a pro forma basis as if such discharge had occurred on
the first day of such period and as if the Company or such Restricted
Subsidiary has not earned the interest income actually earned during such
period in respect of cash or Temporary Cash Investments used to repay,
repurchase, defease or otherwise discharge such Indebtedness, (3) if since
the beginning of such period the Company or any Restricted Subsidiary shall
have made any Asset Disposition, the EBITDA for such period shall be reduced
by an amount equal to the EBITDA (if positive) directly
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attributable to the assets which are the subject of such Asset Disposition
for such period, or increased by an amount equal to the EBITDA (if negative),
directly attributable thereto for such period and Consolidated Interest
Expense for such period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of
the Company or any Restricted Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to the Company and its continuing
Restricted Subsidiaries in connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale), (4) if since the beginning of such period the Company or
any Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any acquisition
of assets occurring in connection with a transaction requiring a calculation
to be made hereunder, which constitutes all or substantially all of an
operating unit of a business, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period and (5) if since the
beginning of such period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) shall have made any Asset
Disposition, any Investment or acquisition of assets that would have required
an adjustment pursuant to clause (3) or (4) above if made by the Company or a
Restricted Subsidiary during such period, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition, Investment or acquisition occurred on
the first day of such period. For purposes of this definition, whenever pro
forma effect is to be given to an acquisition of assets, the amount of income
or earnings relating thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred in connection therewith, the pro
forma calculations shall be determined in good faith by a responsible
financial or accounting Officer of the Company. If any Indebtedness bears a
floating rate of interest and is being given pro
7
forma effect, the interest of such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for
the entire period (taking into account any Interest Rate Agreement applicable
to such Indebtedness if such Interest Rate Agreement has a remaining term in
excess of 12 months).
"Consolidated Current Liabilities" as of the date of determination
means the aggregate amount of liabilities of the Company and its consolidated
Restricted Subsidiaries which may properly be classified as current
liabilities (including taxes accrued as estimated), on a consolidated basis,
after eliminating (i) all intercompany items between the Company and any
Restricted Subsidiary and (ii) all current maturities of long-term
Indebtedness, all as determined in accordance with GAAP consistently applied.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Company or its Restricted Subsidiaries, without
duplication, (i) interest expense attributable to Capital Lease Obligations
and the interest expense attributable to leases constituting part of a
Sale/Leaseback Transaction, (ii) amortization of debt discount and debt
issuance cost, (iii) capitalized interest, (iv) non-cash interest expenses,
(v) commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, (vi) net costs
associated with Hedging Obligations (including amortization of fees), (vii)
Preferred Stock dividends accrued by Consolidated Restricted Subsidiaries in
respect of all Preferred Stock held by Persons other than the Company or a
Restricted Subsidiary, (viii) interest incurred in connection with
Investments in discontinued operations, (ix) interest accruing on any
Indebtedness of any other Person to the extent such Indebtedness is
Guaranteed by (or secured by the assets of) the Company or any Restricted
Subsidiary and (x) the cash contributions to any employee stock ownership
plan or similar trust to the extent such contributions are used by such plan
or trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net income of
the Company and its consolidated Subsidi-
8
aries; PROVIDED, HOWEVER, that there shall not be included in such
Consolidated Net Income:
(i) any net income of any Person (other than the
Company) if such Person is not a Restricted Subsidiary,
except that (A) subject to the exclusion contained in
clause (iv) below, the Company's equity in the net income of
any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to
the Company or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or
other distribution paid to a Restricted Subsidiary, to the
limitations contained in clause (iii) below) and (B) the
Company's equity in a net loss of any such Person for such
period shall be included in determining such Consolidated
Net Income;
(ii) any net income (or loss) of any Person acquired by
the Company or a Subsidiary in a pooling of interests
transaction for any period prior to the date of such
acquisition;
(iii) any net income of any Restricted Subsidiary if
such Restricted Subsidiary is subject to restrictions,
directly or indirectly, on the payment of dividends or the
making of distributions by such Restricted Subsidiary,
directly or indirectly, to the Company, except that
(A) subject to the exclusion contained in clause (iv)
below, the Company's equity in the net income of any such
Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of
cash that could have been distributed by such Restricted
Subsidiary consistent with such restrictions during such
period to the Company or another Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a
dividend or other distribution paid to another Restricted
Subsidiary, to the limitation contained in this clause) and
(B) the Company's equity in a net loss of any such
Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;
(iv) any gain (or loss) realized upon the sale or other
disposition of any assets of the Company or its
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consolidated Subsidiaries (including pursuant to any
sale-and-leaseback arrangement) which is not sold or
otherwise disposed of in the ordinary course of business
and any gain (or loss) realized upon the sale or other
disposition of any Capital Stock of any Person;
(v) extraordinary gains or losses; and
(vi) the cumulative effect of a change in accounting
principles.
Notwithstanding the foregoing, for the purpose of Section 4.04 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries
to the Company or a Restricted Subsidiary to the extent such dividends,
repayments or transfers increase the amount of Restricted Payments permitted
under such Section pursuant to clause (a)(3)(D) thereof.
"Consolidated Net Tangible Assets" as of any date of determination,
means the total amount of assets (less accumulated depreciation and
amortization, allowances for doubtful receivables, other applicable reserves
and other properly deductible items) which would appear on a consolidated
balance sheet of the Company and its consolidated Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP, and after giving
effect to purchase accounting and after deducting therefrom Consolidated
Current Liabilities and, to the extent otherwise included, the amounts of :
(i) minority interests in consolidated Subsidiaries held by Persons other
than the Company or a Restricted Subsidiary; (ii) excess of cost over fair
value of assets of businesses acquired, as determined in good faith by the
Board of Directors; (iii) any revaluation or other write-up in book value of
assets subsequent to the Issue Date as a result of a change in the method of
valuation in accordance with GAAP consistently applied; (iv) unamortized debt
discount and expenses and other unamortized deferred charges, goodwill,
patents, trademarks, service marks, trade names, copyrights, licenses,
organization or developmental expenses and other intangible items; (v)
treasury stock; (vi) cash set apart and held in a sinking or other analogous
fund established for the purpose of redemption or other retirement of Capital
Stock to the extent such obligation is not reflected in
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Consolidated Current Liabilities; and (vii) Investments in and assets of
Unrestricted Subsidiaries.
"Consolidated Net Worth" means the total of the amounts shown on
the balance sheet of the Company and its consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP, as of the end of
the most recent fiscal quarter of the Company ending at least 45 days prior
to the taking of any action for the purpose of which the determination is
being made, as (i) the par or stated value of all outstanding Capital Stock
of the Company plus (ii) paid-in capital or capital surplus relating to such
Capital Stock plus (iii) any retained earnings or earned surplus less (A) any
accumulated deficit and (B) any amounts attributable to Disqualified Stock.
"Credit Agreement" means the Credit Agreement to be entered into by
and among Parent, the Company, certain of its Subsidiaries, the lenders
referred to therein, Bankers Trust Company, as Administrative Agent, Credit
Suisse First Boston, as Syndication Agent, and Canadian Imperial Bank of
Commerce, as Documentation Agent, together with the related documents thereto
(including without limitation the term loans and revolving loans thereunder,
any guarantees and security documents), as amended, extended, renewed,
restated, supplemented or otherwise modified (in whole or in part, and
without limitation as to amount, terms, conditions, covenants and other
provisions) from time to time, and any agreement (and related document)
governing Indebtedness incurred to refund or refinance, in whole or in part,
the borrowings and commitments then outstanding or permitted to be
outstanding under such Credit Agreement or a successor Credit Agreement,
whether by the same or any other lender or group of lenders.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement to
which such Person is a party or beneficiary.
"CVC" means Citicorp Venture Capital Ltd.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
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"Designated Senior Indebtedness" means (i) the Bank Indebtedness;
PROVIDED, HOWEVER, that Bank Indebtedness outstanding under any Credit
Agreement that Refinanced in part, but not in whole, the previously
outstanding Bank Indebtedness shall only constitute Designated Senior
Indebtedness if it meets the requirements of succeeding clause (ii); and (ii)
any other Senior Indebtedness of the Company which, at the date of
determination, has an aggregate principal amount outstanding of, or under
which, at the date of determination, the holders thereof are committed to
lend up to, at least $10 million and is specifically designated by the
Company in the instrument evidencing or governing such Senior Indebtedness as
"Designated Senior Indebtedness" for purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any
event (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness
or Disqualified Stock or (iii) is redeemable at the option of the holder
thereof, in whole or in part, in each case on or prior to the first
anniversary of the Stated Maturity of the Securities; PROVIDED, HOWEVER, that
any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset
sale" or "change of control" occurring prior to the first anniversary of the
Stated Maturity of the Securities shall not constitute Disqualified Stock if
the "asset sale" or "change of control" provisions applicable to such Capital
Stock are not more favorable to the holders of such Capital Stock than the
provisions of Sections 4.06 and 4.09.
"EBITDA" for any period means the sum of Consolidated Net Income,
plus Consolidated Interest Expense plus the following to the extent deducted
in calculating such Consolidated Net Income: (a) all income tax expense of
the Company and its consolidated Restricted Subsidiaries, (b) depreciation
expense of the Company and its consolidated Restricted Subsidiaries, (c)
amortization expense of the Company and its consolidated Restricted
Subsidiaries (excluding amortization expense attributable to a prepaid
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cash item that was paid in a prior period) and (d) all other non-cash charges
of the Company and its consolidated Restricted Subsidiaries (excluding any
such non-cash charge to the extent that it represents an accrual of or
reserve for cash expenditures in any future period), in each case for such
period. Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization and non-cash
charges of, a Restricted Subsidiary shall be added to Consolidated Net Income
to compute EBITDA only to the extent (and in the same proportion) that the
net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted
at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to such Restricted Subsidiary or its stockholders.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Foreign Subsidiary" means any Restricted Subsidiary not created or
organized in the United States of America or any State thereof and that
conducts substantially all its operations outside of the United States.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set
forth in (i) the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants, (ii)
statements and pronouncements of the Financial Accounting Standards Board,
(iii) such other statements by such other entity as approved by a significant
segment of the accounting profession and (iv) the rules and regulations of
the SEC governing the inclusion of financial statements (including pro forma
financial statements) in periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements in
staff accounting bulletins and similar written statements from the accounting
staff of the SEC. All ratios and computations based on GAAP contained in
this Indenture shall be computed in conformity with GAAP.
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"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other
Person and any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such Person
(whether arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to take-or-pay
or to maintain financial statement conditions or otherwise) or (ii) entered
into for the purpose of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); PROVIDED, HOWEVER, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning. The term "Guarantor" shall mean any Person
Guaranteeing any obligation.
"Guarantor" means the Parent and each Subsidiary Guarantor.
"Guaranty" means the Parent Guaranty or any Subsidiary Guaranty.
"Guaranty Agreement" means a supplemental indenture, in a form
satisfactory to the Trustee, pursuant to which a successor to Parent, or any
Subsidiary Guarantor, becomes subject to the applicable terms and conditions
hereof.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Subsidiary at the time it becomes a Subsidiary. The term
"Incurrence" when used as a noun shall
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have a correlative meaning. The accretion of principal of a non-interest
bearing or other discount security shall not be deemed the Incurrence of
Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(i) the principal of and premium (if any) in respect of
(A) indebtedness of such Person for money borrowed and
(B) indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which such
Person is responsible or liable;
(ii) all Capital Lease Obligations of such Person and
all Attributable Debt in respect of Sale/Leaseback
Transactions entered into by such Person;
(iii) all obligations of such Person issued or assumed
as the deferred purchase price of property, all conditional
sale obligations of such Person and all obligations of such
Person under any title retention agreement (but excluding
trade accounts payable arising in the ordinary course of
business);
(iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction (other
than obligations with respect to letters of credit securing
obligations (other than obligations described in
clauses (i) through (iii) above) entered into in the
ordinary course of business of such Person to the extent
such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than
the tenth Business Day following payment on the letter of
credit);
(v) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of
any Disqualified Stock or, with respect to any Subsidiary of
such Person, the liquidation preference with respect to, any
Preferred Stock (but excluding, in each case, any accrued
dividends);
(vi) all obligations of the type referred to in clauses
(i) through (v) of other Persons and all dividends of other
Persons for the payment of which, in either case, such
Person is responsible or liable,
15
directly or indirectly, as obligor, guarantor or otherwise,
including by means of any Guarantee;
(vii) all obligations of the type referred to in
clauses (i) through (vi) of other Persons secured by any
Lien on any property or asset of such Person (whether or not
such obligation is assumed by such Person), the amount of
such obligation being deemed to be the lesser of the value
of such property or assets or the amount of the obligation
so secured; and
(viii) to the extent not otherwise included in this
definition, Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and
the maximum liability, upon the occurrence of the contingency giving rise to
the obligation, of any contingent obligations at such date; PROVIDED,
HOWEVER, that the amount outstanding at any time of any Indebtedness issued
with original issue discount shall be deemed to be the face amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such indebtedness at such time as determined in accordance with
GAAP.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Interest Rate Agreement" means in respect of a Person any interest
rate swap agreement, interest rate cap agreement or other financial agreement
or arrangement designed to protect such Person against fluctuations in
interest rates.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business
that are recorded as accounts receivable on the balance sheet of the lender)
or other extensions of credit (including by way of Guarantee or similar
arrangement) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by such Person. For
purposes of the definition of "Unrestricted Subsidiary", the definition of
"Restricted Payment" and
16
Section 4.04, (i) "Investment" shall include the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; PROVIDED, HOWEVER, that
upon a redesignation of such Subsidiary as a Restricted Subsidiary, the
Company shall be deemed to continue to have a permanent "Investment" in an
Unrestricted Subsidiary equal to an amount (if positive) equal to (x) the
Company's "Investment" in such Subsidiary at the time of such redesignation
less (y) the portion (proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets of such Subsidiary at
the time of such redesignation; and (ii) any property transferred to or from
an Unrestricted Subsidiary shall be valued at its fair market value at the
time of such transfer, in each case as determined in good faith by the Board
of Directors.
"Issue Date" means the date on which the Initial Securities are
originally issued.
"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).
"Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or
otherwise and proceeds from the sale or other disposition of any securities
received as consideration, but only as and when received, but excluding any
other consideration received in the form of assumption by the acquiring
Person of Indebtedness or other obligations relating to such properties or
assets or received in any other non-cash form), in each case net of (i) all
legal, title and recording tax expenses, commissions and other fees and
expenses incurred, and all Federal, state, provincial, foreign and local
taxes required to be accrued as a liability under GAAP, as a consequence of
such Asset Disposition, (ii) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in accordance with
the terms of any Lien upon or other security agreement of any kind with
respect to such assets, or which must by its terms, or in order to obtain a
17
necessary consent to such Asset Disposition, or by applicable law, be repaid
out of the proceeds from such Asset Disposition, (iii) all distributions and
other payments required to be made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset Disposition and (iv)
the deduction of appropriate amounts provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the property or
other assets disposed in such Asset Disposition and retained by the Company
or any Restricted Subsidiary after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Obligations" means with respect to any Indebtedness all
obligations for principal, premium, interest, penalties, fees,
indemnifications, reimbursements and other amounts payable pursuant to the
documentation governing such Indebtedness.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel
to the Company or the Trustee.
"Parent" means FSC Semiconductor Corporation, a Delaware
corporation.
"Parent Guaranty" means the Guaranty by Parent of the Company's
obligations with respect to the Securities contained herein.
"Permitted Holders" means (i) CVC, (ii) any officer, employee or
director of CVC or any trust,
18
partnership or other entity established solely for the benefit of such
officers, employees or directors, (iii) any officer, employee or director of
Parent, the Company 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
of such individual (as defined in the Stockholders' Agreement), except a
Permitted Transferee by virtue of Section 3.4(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 Parent or the Company.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) a Restricted Subsidiary or a Person that will,
upon the making of such Investment, become a Restricted Subsidiary; PROVIDED,
HOWEVER, that the primary business of such Restricted Subsidiary is a Related
Business; (ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Restricted Subsidiary;
PROVIDED, HOWEVER, that such Person's primary business is a Related Business;
(iii) Temporary Cash Investments; (iv) receivables owing to the Company or
any Restricted Subsidiary if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms; PROVIDED, HOWEVER, that such trade terms may include such
concessionary trade terms as the Company or any such Restricted Subsidiary
deems reasonable under the circumstances; (v) payroll, travel and similar
advances to cover matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting purposes and that are
made in the ordinary course of business; (vi) loans or advances to employees
made in the ordinary course of business consistent with past practices of the
Company or such Restricted Subsidiary; and (vii) stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments; and (viii) any Person to the extent such
Investment represents the non-cash portion of the consideration received for
an Asset Disposition as permitted pursuant to Section 4.06.
19
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class
of such Person.
"principal" of a Security means the principal of the Security plus
the premium, if any, payable on the Security which is due or overdue or is to
become due at the relevant time.
"Public Equity Offering" means an underwritten primary public
offering of common stock of (i) the Company or (ii) the Parent (to the extent
the proceeds thereof are contemporaneously contributed to the Company), in
each case pursuant to an effective registration statement under the
Securities Act.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the
Issue Date or Incurred in compliance with this Indenture, including
Indebtedness that Refinances Refinancing Indebtedness; PROVIDED, HOWEVER,
that (i) such Refinancing Indebtedness has a Stated Maturity no earlier than
the Stated Maturity of the Indebtedness being Refinanced, (ii) such
Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of
the Indebtedness being Refinanced and (iii) such Refinancing Indebtedness has
an aggregate principal amount (or if Incurred with original issue discount,
an aggregate issue price) that is equal to or less than the aggregate
20
principal amount (or if Incurred with original issue discount, the aggregate
accreted value) then outstanding or committed (plus fees and expenses,
including any premium and defeasance costs) under the Indebtedness being
Refinanced; PROVIDED FURTHER, HOWEVER, that Refinancing Indebtedness shall
not include (x) Indebtedness of a Subsidiary that Refinances Indebtedness of
the Company or (y) Indebtedness of the Company or a Restricted Subsidiary
that Refinances Indebtedness of an Unrestricted Subsidiary.
"Registration Rights Agreement" means the Registration Rights
Agreement dated March 6, 1997, among Parent, the Company and Credit Suisse
First Boston Corporation, BT Securities Corporation and CIBC Wood Gundy
Securities Corp., as Initial Purchasers.
"Related Business" means any business related, ancillary or
complementary to the businesses of the Company and the Restricted
Subsidiaries on the Issue Date.
"Representative" means any trustee, agent or representative (if
any) for an issue of Senior Indebtedness of the Company; PROVIDED, HOWEVER,
that if and for so long as any Senior Indebtedness lacks such a
representative, then the Representative for such Senior Indebtedness shall at
all times be the holders of a majority in outstanding principal amount of
such Senior Indebtedness.
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any
sort in respect of its Capital Stock (including any payment in connection
with any merger or consolidation involving such Person) or similar payment to
the direct or indirect holders of its Capital Stock (other than dividends or
distributions payable solely in its Capital Stock (other than Disqualified
Stock) and dividends or distributions payable solely to the Company or a
Restricted Subsidiary, and other than pro rata dividends or other
distributions made by a Subsidiary that is not a Wholly Owned Subsidiary to
minority stockholders (or owners of an equivalent interest in the case of a
Subsidiary that is an entity other than a corporation)), (ii) the purchase,
redemption or other acquisition or retirement for value of any Capital Stock
of the Company held by any Person or of any Capital Stock of a Restricted
Subsidiary held by any Affiliate of the Company (other than a Restricted
Subsidiary), including the exercise of any option to
21
exchange any Capital Stock (other than into Capital Stock of the Company that
is not Disqualified Stock), (iii) the purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value, prior to scheduled
maturity, scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of acquisition) or
(iv) the making of any Investment in any Person (other than a Permitted
Investment).
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.
"Revolving Credit Facilities" means the revolving credit facility
contained in the Credit Agreement and any other facility or financing
arrangement that Refinances or replaces, in whole or in part, any such
revolving credit facility.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a
Restricted Subsidiary leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company
secured by a Lien.
"Securities" means the Securities issued under this Indenture.
"Senior Indebtedness" of any Person means all (i) Bank Indebtedness
of or guaranteed by such Person, whether outstanding on the Issue Date or
thereafter Incurred, and (ii) Indebtedness of such Person, whether
outstanding on the Issue Date or thereafter Incurred, including interest
thereon, in respect of (A) Indebtedness for money borrowed, (B) Indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable and (C) Hedging
Obligations, unless, in the case of (i) and
22
(ii), in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such obligations are subordinate
in right of payment to the obligations under the Securities; PROVIDED,
HOWEVER, that Senior Indebtedness shall not include (1) any obligation of
such Person to any subsidiary of such Person, (2) any liability for Federal,
state, local or other taxes owed or owing by such Person, (3) any accounts
payable or other liability to trade creditors arising in the ordinary course
of business (including guarantees thereof or instruments evidencing such
liabilities), (4) any Indebtedness of such Person (and any accrued and unpaid
interest in respect thereof) which is subordinate or junior by its terms to
any other Indebtedness or other obligation of such Person or (5) that portion
of any Indebtedness which at the time of Incurrence is Incurred in violation
of this Indenture (but as to any such Indebtedness under the Credit
Agreement, no such violation shall be deemed to exist if the Representative
of the Lenders thereunder shall have received an officers' certificate of the
Company to the effect that the issuance of such Indebtedness does not violate
such covenant and setting forth in reasonable detail the reasons therefor).
"Senior Subordinated Indebtedness" means (i) with respect to the
Company, the Securities and any other Indebtedness of the Company that
specifically provides that such Indebtedness is to rank PARI PASSU with the
Securities in right of payment and is not subordinated by its terms in right
of payment to any Indebtedness or other obligation of the Company which is
not Senior Indebtedness of the Company and (ii) with respect to the Parent or
a Subsidiary Guarantor, their respective Guarantees of the Notes and any
other indebtedness of such Person that specifically provides that such
Indebtedness rank PARI PASSU with such Guarantee in respect of payment and is
not subordinated by its terms in respect of payment to any Indebtedness or
other obligation of such Person which is not Senior Indebtedness of such
Person.
"Significant Subsidiary" means any Restricted Subsidiary that would
be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed
23
date on which the final payment of principal of such security is due and
payable, including pursuant to any mandatory redemption provision (but
excluding any provision providing for the repurchase of such security at the
option of the holder thereof upon the happening of any contingency unless
such contingency has occurred).
"Sterling" means Sterling Holding Company LLC, a Delaware limited
liability company.
"Stockholders' Agreement" means the Securities Purchase and Holders
Agreement among the stockholders of Parent, as in effect on the Issue Date.
"Subordinated Obligation" means any Indebtedness of the Company or
any Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to, in the case
of the Company, the Securities or, in the case of such Subsidiary Guarantor,
its Subsidiary Guaranty, pursuant to a written agreement to that effect.
"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 (i) such Person, (ii) such Person and one or more Subsidiaries of such
Person or (iii) one or more Subsidiaries of such Person.
"Subsidiary Guarantor" means any subsidiary of the Company that
guarantees the Company's obligations with respect to the Securities.
"Subsidiary Guaranty" means a Guarantee by a Subsidiary Guarantor
of the Company's obligations with respect to the Securities.
"Temporary Cash Investments" means any of the following: (i) any
investment in direct obligations of the United States of America or any
agency thereof or obligations guaranteed by the United States of America or
any agency thereof, (ii) investments in time deposit accounts, certificates
of deposit and money market deposits
24
maturing within 180 days of the date of acquisition thereof issued by a bank
or trust company which is organized under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States of America, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $50,000,000 (or the foreign
currency equivalent thereof) and has outstanding debt that is rated "A" (or
such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by a registered broker
dealer or mutual fund distributor, (iii) repurchase obligations with a term
of not more than 30 days for underlying securities of the types described in
clause (i) above entered into with a bank meeting the qualifications
described in clause (ii) above, (iv) investments in commercial paper,
maturing not more than 90 days after the date of acquisition, issued by a
corporation (other than an Affiliate of the Company) organized and in
existence under the laws of the United States of America or any foreign
country recognized by the United States of America with a rating at the time
as of which any investment therein is made of "P-1" (or higher) according to
Moody's Investors Service, Inc. or "A-1" (or higher) according to Standard
and Poor's Ratings Group, and (v) investments in securities with maturities
of six months or less from the date of acquisition issued or fully guaranteed
by any state, commonwealth or territory of the United States of America, or
by any political subdivision or taxing authority thereof, and rated at least
"A" by Standard & Poor's Ratings Group or "A" by Moody's Investors Service,
Inc.
"Term Loan Facilities" means the term loan facilities contained in
the Credit Agreement and any other facility or financing arrangement that
Refinances in whole or in part any such term loan facility.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
------
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.
25
"Trust Officer" means the Chairman of the Board, the President or
any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial
Code as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii)
any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may
designate any Subsidiary of the Company (including any newly acquired or
newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary
unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or
Indebtedness of, or owns or holds any Lien on any property of, the Company or
any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; PROVIDED, HOWEVER, that either (A) the
Subsidiary to be so designated has total assets of $1,000 or less or (B) if
such Subsidiary has assets greater than $1,000, such designation would be
permitted under Section 4.04. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER,
that immediately after giving effect to such designation (x) the Company
could Incur $1.00 of additional Indebtedness under Section 4.03(a) and (y) no
Default shall have occurred and be continuing. Any such designation by the
Board of Directors shall be evidenced to the Trustee by promptly filing with
the Trustee a copy of the resolution of the Board of Directors giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof)
for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the issuer's
option.
"Voting Stock" of a Person means all classes of Capital Stock or
other interests (including partnership
26
interests) of such Person then outstanding and normally entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by
the Company or one or more Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- -----------
"Affiliate Transaction" ................ 4.08
"Bankruptcy Law" ....................... 6.01
"Blockage Notice" ...................... 10.03
"covenant defeasance option" ........... 8.01(b)
"Custodian" ............................ 6.01
"Event of Default" ..................... 6.01
"legal defeasance option" .............. 8.01(b)
"Legal Holiday" ........................ 13.08
"Offer" ................................ 4.07(b)
"Offer Amount" ......................... 4.07(c)(2)
"Offer Period" ......................... 4.07(c)(2)
"pay the Securities" ................... 10.03
"Paying Agent" ......................... 2.03
"Payment Blockage Period" .............. 10.03
"Purchase Date" ........................ 4.07(c)(1)
"Registrar"............................. 2.03
"Successor Company" .................... 5.01
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The
following TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
27
"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 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with 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.
28
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating. Provisions relating to the Initial
Securities, the Private Exchange Securities and the Exchange Securities are
set forth in the Rule 144A/Regulation S Appendix attached hereto (the
"Appendix") which is hereby incorporated in and expressly made part of this
Indenture. The Initial Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to the
Appendix which is hereby incorporated in and expressly made a part of this
Indenture. The Exchange Securities, the Private Exchange Securities and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A, which is hereby incorporated in and expressly made a part of this
Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Company is
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Security shall be
dated the date of its authentication. The terms of the Securities set forth
in the Appendix and Exhibit A are part of the terms of this Indenture.
SECTION 2.02. 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.
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
29
Company. Such order shall specify the amount of the Securities to be
authenticated (not to exceed $300,000,000) and the date on which the original
issue of Securities is to be authenticated. The aggregate principal amount
of Securities outstanding at any time may not exceed that amount except as
provided in Section 2.07.
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 2.03. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the "Registrar") and an office or
agency where Securities may be presented for payment (the "Paying Agent").
The Registrar shall keep a register of the Securities and of their transfer
and exchange. The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement
the provisions of this Indenture that relate to such agent. The Company
shall notify the Trustee of the name and address of any such agent. If the
Company fails to maintain a Registrar or Paying Agent, the Trustee shall act
as such and shall be entitled to appropriate compensation therefor pursuant
to Section 7.07. The Company or any 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 2.04. Paying Agent To Hold Money in Trust. Prior to each
due date of the principal and interest
30
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 2.05. Securityholder Lists. The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not
the Registrar, the 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 2.06. Transfer and Exchange. The Securities shall be
issued in registered form and shall be transferable only upon the surrender
of a Security for registration of transfer. When a Security is presented to
the Registrar 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
31
any transfer or exchange pursuant to this Section. The 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 2.07. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the 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.
32
SECTION 2.08. Outstanding Securities. Securities outstanding at
any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for 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 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser, 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 date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. 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
33
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.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities or is required to redeem
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.
If the Company is required to redeem Securities pursuant to
paragraph 6 of the Securities, it may reduce the principal amount of
Securities required to be redeemed to the extent it is permitted a credit by
the terms of the Securities and it notifies the Trustee of the amount of the
34
credit and the basis for it. If the reduction is based on a credit for
redeemed or canceled Securities that the Company has not previously delivered
to the Trustee for cancellation, it shall deliver such Securities with the
notice.
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 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 3.02. Selection of Securities To Be Redeemed. If fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed 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 3.03. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities
to be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
35
(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.
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 3.04. 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 3.05. 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
36
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 3.06. 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 4.01. 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 4.02. SEC Reports. The Company shall file with the
Trustee and provide Securityholders, within 15 days after it files them with
the SEC, copies of its annual report and the information, documents and other
reports which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. Notwithstanding that the Company
may not be required to remain subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall continue to file
with the SEC and provide the Trustee and Securityholders with such annual
reports and such information, documents and other reports as are specified in
Sections 13
37
and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to
such Sections, such information, documents and other reports to be so filed
and provided at the times specified for the filing of such information,
documents and reports under such Sections; provided, however, that the
Company shall not be required to file any report, document or other
information with the SEC if the SEC does not permit such filing. The Company
also shall comply with the other provisions of TIA Section 314(a).
SECTION 4.03. Limitation on Indebtedness. (a) The Company shall
not, and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness unless, on the date of such Incurrence and after
giving effect thereto, the Consolidated Coverage Ratio exceeds 2.0 to 1.0.
(b) Notwithstanding the foregoing paragraph (a), the Company and
its Restricted Subsidiaries may Incur any or all of the following
Indebtedness:
(1) Indebtedness of the Company or any Restricted
Subsidiary Incurred pursuant to the Revolving Credit
Facilities; provided, however, that, immediately after
giving effect to any such Incurrence, the aggregate
principal amount of all Indebtedness incurred under this
clause (1) and then outstanding does not exceed the greater
of (A) $75 million and (B) the sum of 50% of the book value
of the inventory of the Company and its Restricted
Subsidiaries and 65% of the book value of the accounts
receivables of the Company and its Restricted Subsidiaries;
(2) Indebtedness of the Company Incurred pursuant to
the Term Loan Facilities; provided, however, that, after
giving effect to any such Incurrence, the aggregate
principal amount of all Indebtedness Incurred under this
clause (2) and then outstanding does not exceed $120 million
less the aggregate sum of all principal payments actually
made from time to time after the Issue Date with respect to
such Indebtedness (other than principal payments made from
any permitted Refinancings thereof);
(3) Indebtedness of the Company or any Restricted
Subsidiary owed to and held by the Company or a Wholly Owned
Subsidiary; provided, however, that any
38
subsequent issuance or transfer of any Capital Stock which
results in any such Wholly Owned Subsidiary ceasing to be a
Wholly Owned Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Company or another Wholly Owned
Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the issuer thereof;
(4) Indebtedness of the Company or any Restricted
Subsidiary owed to and held by any Restricted Subsidiary
(other than a Wholly Owned Subsidiary); provided, however,
that (i) any such Indebtedness shall be Subordinated
Obligations of the Company or such Restricted Subsidiary, as
applicable, and (ii) any subsequent issuance or transfer of
any Capital Stock of such Restricted Subsidiary or any
subsequent transfer of such Indebtedness (other than to the
Company, a Wholly Owned Subsidiary or another Restricted
Subsidiary) shall be deemed to constitute the Incurrence of
such Indebtedness by the issuer thereof;
(5) the Securities;
(6) Indebtedness outstanding on the Issue Date (other
than Indebtedness described in clause (1), (2), (3), (4) or
(5) of this Section 4.03(b));
(7) Refinancing Indebtedness in respect of
Indebtedness Incurred pursuant to Section 4.03(a) or
pursuant to clause (5) or (6) of this Section 4.03(b) or
this clause (7);
(8) Hedging Obligations of the Company or any
Restricted Subsidiary under or with respect to Interest Rate
Agreements and Currency Agreements entered into in the
ordinary course of business and not for the purpose of
speculation;
(9) Indebtedness of the Company or any Restricted
Subsidiary in respect of performance bonds and surety or
appeal bonds entered into by the Company and the Restricted
Subsidiaries in the ordinary course of their business;
(10) Indebtedness consisting of the Subsidiary
Guaranties and the Guarantees of Indebtedness Incurred
39
pursuant to paragraph (a) or pursuant to clause (1), (2),
(5), (6) or (7) above or (14) below;
(11) Indebtedness of the Company or any Restricted
Subsidiary arising from the honoring by a bank or other
financial institution of a check, draft or similar
instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary
course of business, provided that such Indebtedness is
satisfied within five business days of Incurrence;
(12) Indebtedness of the Company or any Restricted
Subsidiary consisting of indemnification, adjustment of
purchase price or similar obligations, in each case incurred
in connection with the disposition of any assets of the
Company or any Restricted Subsidiary in a principal amount
not to exceed the gross proceeds actually received by the
Company or any Restricted Subsidiary in connection with such
disposition;
(13) Indebtedness of a Foreign Subsidiary Incurred to
finance the purchase, lease or improvement of property (real
or personal) or equipment, in each case incurred no more
than 180 days after such purchase, lease or improvement of
such property, and any Refinancing Indebtedness in respect
of such Indebtedness; provided, however, that, except in the
case of the Incurrence of any such Refinancing Indebtedness,
at the time of the Incurrence of such Indebtedness and after
giving effect thereto, (i) the Company would be able to
Incur an additional $1.00 of Indebtedness pursuant to
paragraph (a) above and (ii) the aggregate amount of all
Indebtedness Incurred pursuant to this clause (13) and then
outstanding (including any such Refinancing Indebtedness)
shall not exceed 20% of Consolidated Net Tangible Assets as
of the end of the most recent fiscal quarter ending at least
45 days prior to the date of such Incurrence; and
((14) Indebtedness of the Company in an aggregate
principal amount which, together with all other Indebtedness
of the Company and the Restricted Subsidiaries outstanding
on the date of such Incurrence (other than Indebtedness
permitted by clauses (1) through (13) of this
Section 4.03(b) or Section 4.03(a)) does not exceed $50
million.
40
(c) Notwithstanding the foregoing, the Company shall not, and
shall not permit any Restricted Subsidiary to, Incur any Indebtedness
pursuant to Section 4.03(b) if the proceeds thereof are used, directly or
indirectly, to Refinance any Subordinated Obligations unless such
Indebtedness shall be subordinated to the Securities or the relevant
Subsidiary Guaranty, as applicable, to at least the same extent as such
Subordinated Obligations.
(d) For purposes of determining compliance with this Section 4.03,
(i) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described herein, the Company, in its sole
discretion, will classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of the above clauses
and (ii) an item of Indebtedness may be divided and classified in more than
one of the types of Indebtedness described herein.
(e) Notwithstanding Section 4.03(a) or 4.03(b), the Company shall
not, and shall not permit any Subsidiary Guarantor to, Incur (i) any
Indebtedness if such Indebtedness is subordinate or junior in ranking in any
respect to any Senior Indebtedness of the Company or such Subsidiary
Guarantor, as applicable, unless such Indebtedness is Senior Subordinated
Indebtedness or is expressly subordinated in right of payment to Senior
Subordinated Indebtedness or (ii) any Secured Indebtedness (other than trade
payables incurred in the ordinary course of business) that is not Senior
Indebtedness unless contemporaneously therewith effective provision is made
to secure the Securities or the relevant Subsidiary Guaranty, as applicable,
equally and ratably with such Secured Indebtedness for so long as such
Secured Indebtedness is secured by a Lien.
SECTION 4.04. Limitation on Restricted Payments. (a) The Company
shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to make a Restricted Payment if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or
would result therefrom);
(2) the Company is not able to Incur an additional
$1.00 of Indebtedness under Section 4.03(a); or
41
(3) the aggregate amount of such Restricted Payment and
all other Restricted Payments since the Issue Date would
exceed the sum of:
(A) 50% of the Consolidated Net Income accrued
during the period (treated as one accounting period)
from the beginning of the fiscal quarter immediately
following the fiscal quarter during which the
Securities are originally issued to the end of the most
recent fiscal quarter ending at least 45 days (or, if
less, the number of days after the end of such fiscal
quarter as the consolidated financial statements of the
Company shall be provided to Securityholders hereunder)
prior to the date of such Restricted Payment (or, in
case such Consolidated Net Income shall be a deficit,
minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received by
the Company from the issuance or sale of its Capital
Stock (other than Disqualified Stock) subsequent to the
Issue Date (other than an issuance or sale to a
Subsidiary of the Company and other than an issuance or
sale to an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries
for the benefit of their employees to the extent that
the purchase by such plan or trust is financed by
Indebtedness of such plan or trust to the Company or
any Subsidiary or Indebtedness Guaranteed by the
Company or any Subsidiary);
(C) the amount by which Indebtedness of the
Company or any Restricted Subsidiary is reduced on the
Company's consolidated balance sheet upon the
conversion or exchange (other than by a Subsidiary of
the Company) subsequent to the Issue Date of any
Indebtedness of the Company or any Restricted
Subsidiary convertible or exchangeable for Capital
Stock (other than Disqualified Stock) of the Company
(less the amount of any cash, or the fair value of any
other property, distributed by the Company or any
Restricted Subsidiary upon such conversion or
exchange); and
(D) an amount equal to the sum of (i) the net
reduction in Investments in Unrestricted Sub-
42
sidiaries resulting from dividends, repayments of loans or
advances or other transfers of assets subsequent to the
Issue Date, in each case to the Company or any
Restricted Subsidiary from Unrestricted Subsidiaries,
and (ii) the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market
value of the net assets of an Unrestricted Subsidiary
at the time such Unrestricted Subsidiary is designated
a Restricted Subsidiary; provided, however, that the
foregoing sum shall not exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments
previously made (and treated as a Restricted Payment)
by the Company or any Restricted Subsidiary in such
Unrestricted Subsidiary.
(b) The provisions of Section 4.04(a) shall not
prohibit:
(i) any Restricted Payment made by exchange for, or out
of the proceeds of the substantially concurrent sale of,
Capital Stock of the Company (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary
of the Company or an employee stock ownership plan or to a
trust established by the Company or any of its Subsidiaries
for the benefit of their employees to the extent that the
purchase by such plan or trust is financed by Indebtedness
of such plan or trust to the Company or any Subsidiary of
the Company or Indebtedness Guaranteed by the Company or any
Subsidiary of the Company); provided, however, that (A) such
Restricted Payment shall be excluded in the calculation of
the amount of Restricted Payments and (B) the Net Cash
Proceeds from such sale shall be excluded from the
calculation of amounts under clause (3)(B) of
Section 4.04(a);
(ii) any purchase, repurchase, redemption, defeasance
or other acquisition or retirement for value of Subordinated
Obligations made by exchange for, or out of the proceeds of
the substantially concurrent sale of, Indebtedness which is
permitted to be Incurred pursuant to Section 4.03; provided,
however, that such purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value
shall be excluded in the calculation of the amount of
Restricted Payments;
43
(iii) any purchase or redemption of Disqualified Stock
of the Company or a Restricted Subsidiary made by exchange
for, or out of the proceeds of the substantially concurrent
sale of, Disqualified Stock of the Company or a Restricted
Subsidiary which is permitted to be Incurred pursuant to
Section 4.03; provided, however, that such purchase or
redemption shall be excluded in the calculation of the
amount of Restricted Payments;
(iv) any purchase or redemption of Subordinated
Obligations from Net Available Cash to the extent permitted
by Section 4.06; provided, however, that such purchase or
redemption shall be excluded in the calculation of the
amount of Restricted Payments;
(v) upon the occurrence of a Change of Control and
within 60 days after the completion of the offer to
repurchase the Securities pursuant to Section 4.09
(including the purchase of the Securities tendered), any
purchase or redemption of Subordinated Obligations required
pursuant to the terms thereof as a result of such Change of
Control at a purchase or redemption price not to exceed the
outstanding principal amount thereof, plus accrued and
unpaid interest (if any); provided, however, that (A) at the
time of such purchase or redemption no Default shall have
occurred and be continuing (or would result therefrom), (B)
the Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a) after giving pro
forma effect to such Restricted Payment and (C) such
purchase or redemption shall be included in the calculation
of the amount of Restricted Payments;
(vi) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such
dividend would have complied with Section 4.04(a));
provided, however, that at the time of payment of such
dividend, no other Default shall have occurred and be
continuing (or result therefrom); provided further, however,
that such dividend shall be included in the calculation of
the amount of Restricted Payments
(vii) the repurchase or other acquisition of shares of,
or options to purchase shares of, common stock of the
Company or any of its Subsidiaries from employees,
44
former employees, directors or former directors of the
Company or any of its Subsidiaries (or permitted transferees
of such employees, former employees, directors or former
directors), pursuant to the terms of the agreements (including
employment agreements) or plans (or amendments thereto)
approved by the Board of Directors under which such
individuals purchase or sell or are granted the option to
purchase or sell, shares of such common stock; provided,
however, that the aggregate amount of such repurchases and
other acquisitions shall not exceed the sum of $7.0 million
and the Net Cash Proceeds from the sale of Capital Stock to
members of management or directors of the Company and its
Subsidiaries that occurs after the Issue Date (to the extent
the Net Cash Proceeds from the sale of such Capital Stock
have not otherwise been applied to the payment of Restricted
Payments by virtue of clause (3)(B) of Section 4.04(a);
provided further, however, that (A) such repurchases shall
be excluded in the calculation of the amount of Restricted
Payments and (B) the Net Cash Proceeds from such sale shall
be excluded from the calculation of amounts under
clause (3)(B) of Section 4.04(a);
(viii) dividends or advances to Parent in an amount
necessary to pay holding company expenses, such amount not
to exceed $500,000 in any fiscal year of the Company;
provided, however, that such dividends and advances shall be
excluded in the calculation of the amount of Restricted
Payments; or
(ix) Restricted Payments not exceeding $25.0 million in
the aggregate; provided, however, that (A) at the time of
such Restricted Payments, no Default shall have occurred and
be continuing (or would result therefrom) and (B) such
Restricted Payments shall be included in the calculation of
the amount of Restricted Payments.
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or restriction on the ability of
any Restricted Subsidiary to (a) pay dividends or make any other
distributions on its Capital Stock to the Company or a Restricted Subsidiary
or pay any Indebtedness
45
owed to the Company, (b) make any loans or advances to the Company or (c)
transfer any of its property or assets to the Company, except:
(i) any encumbrance or restriction pursuant to an
agreement in effect at or entered into on the Issue Date,
including the Credit Agreement as in effect on the Issue
Date;
(ii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to
any Indebtedness Incurred by such Restricted Subsidiary on
or prior to the date on which such Restricted Subsidiary was
acquired by the Company (other than Indebtedness Incurred as
consideration in, or to provide all or any portion of the
funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company) and outstanding
on such date;
(iii) any encumbrance or restriction pursuant to an
agreement effecting a Refinancing of Indebtedness Incurred
pursuant to an agreement referred to in clause (i) or (ii)
of this Section 4.05 or this clause (iii) or contained in
any amendment to an agreement referred to in clause (i) or
(ii) of this Section 4.05 or this clause (iii); provided,
however, that the encumbrances and restrictions with respect
to such Restricted Subsidiary contained in any such
refinancing agreement or amendment are no more restrictive
in any material respect than the encumbrances and
restrictions with respect to such Restricted Subsidiary
contained in such predecessor agreements;
(iv) any such encumbrance or restriction consisting of
customary nonassignment provisions in leases governing
leasehold interests to the extent such provisions restrict
the transfer of the lease or the property leased thereunder;
(v) in the case of clause (c) above, restrictions
contained in security agreements or mortgages securing
Indebtedness of a Restricted Subsidiary to the extent
46
such restrictions restrict the transfer of the property
subject to such security agreements or mortgages;
(vi) any restriction with respect to a Restricted
Subsidiary imposed pursuant to an agreement entered into for
the sale or disposition of all or substantially all the
Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition; and
(vii) any restriction in any agreement that is not more
restrictive than the restrictions under the terms of the
Credit Agreement as in effect on the Issue Date.
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate any Asset Disposition unless (i) the
Company or such Restricted Subsidiary receives consideration at the time of
such Asset Disposition at least equal to the fair market value (including as
to the value of all non-cash consideration), as determined in good faith by
the Board of Directors, of the shares and assets subject to such Asset
Disposition and at least 85% of the consideration thereof received by the
Company or such Restricted Subsidiary is in the form of cash or cash
equivalents and (ii) an amount equal to 100% of the Net Available Cash from
such Asset Disposition is applied by the Company (or such Restricted
Subsidiary, as the case may be) (A) first, to the extent the Company elects
(or is required by the terms of any Indebtedness), to prepay, repay, redeem
or purchase Senior Indebtedness or Indebtedness (other than any Disqualified
Stock) of a Wholly Owned Subsidiary (in each case other than Indebtedness
owed to the Company or an Affiliate of the Company) within one year from the
later of the date of such Asset Disposition and the receipt of such Net
Available Cash; (B) second, to the extent of the balance of such Net
Available Cash after application in accordance with clause (A), to the extent
the Company elects, to acquire Additional Assets within one year from the
later of the date of such Asset Disposition and the receipt of such Net
Available Cash; (C) third, to the extent of the balance of such Net Available
Cash after application in accordance with clauses (A) and (B), to make an
Offer to the holders of the Securities (and to holders of other Senior
Subordinated Indebtedness designated by the Company) to purchase Securities
(and such other Senior Subordinated Indebtedness)
47
pursuant to and subject to the conditions of Section 4.06(b); and (D) fourth,
to the extent of the balance of such Net Available Cash after application in
accordance with clauses (A), (B) and (C), to (x) the acquisition by the
Company or any Wholly Owned Subsidiary of Additional Assets or (y) the
prepayment, repayment or purchase of Indebtedness (other than any
Disqualified Stock) of the Company (other than Indebtedness owed to an
Affiliate of the Company) or Indebtedness of any Subsidiary (other than
Indebtedness owed to the Company or an Affiliate of the Company), in each
case within one year from the later of the receipt of such Net Available Cash
and the date the offer described in Section 4.06(b) is consummated; provided,
however, that in connection with any prepayment, repayment or purchase of
Indebtedness pursuant to clause (A), (C) or (D) above, the Company or such
Restricted Subsidiary shall permanently retire such Indebtedness and shall
cause the related loan commitment (if any) to be permanently reduced in an
amount equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section 4.06, the Company
and the Restricted Subsidiaries shall not be required to apply any Net
Available Cash in accordance with this Section 4.06(a) except to the extent
that the aggregate Net Available Cash from all Asset Dispositions which are
not applied in accordance with this Section 4.06(a) exceeds $10 million.
Pending application of Net Available Cash pursuant to this Section 4.06(a),
such Net Available Cash shall be invested in Permitted Investments or used to
reduce loans outstanding under any revolving credit facility.
For the purposes of this Section 4.06, the following are deemed to
be cash or cash equivalents: (x) the assumption of Indebtedness of the
Company or any Restricted Subsidiary and the release of the Company or such
Restricted Subsidiary from all liability on such Indebtedness in connection
with such Asset Disposition and (y) securities received by the Company or any
Restricted Subsidiary from the transferee that are promptly converted by the
Company or such Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the
purchase of Securities (and other Senior Subordinated Indebtedness) pursuant
to Section 4.06(a)(ii)(C), the Company shall be required to purchase
Securities tendered pursuant to an offer by the Company for the Securities
(and other Senior Subordinated
48
Indebtedness) (the "Offer") at a purchase price of 100% of their principal
amount (without premium) plus accrued but unpaid interest (or, in respect of
such other Senior Subordinated Indebtedness, such lesser price, if any, as
may be provided for by the terms of such Senior Subordinated Indebtedness) in
accordance with the procedures (including prorating in the event of
oversubscription) set forth in Section 4.06(c). If the aggregate purchase
price of Securities (and any other Senior Subordinated Indebtedness) tendered
pursuant to the Offer is less than the Net Available Cash allotted to the
purchase thereof, the Company shall be required to apply the remaining Net
Available Cash in accordance with Section 4.06(a)(ii)(D). The Company shall
not be required to make an Offer to purchase Securities (and other Senior
Subordinated Indebtedness) pursuant to this Section 4.06 if the Net Available
Cash available therefor is less than $10 million (which lesser amount shall
be carried forward for purposes of determining whether such an Offer is
required with respect to the Net Available Cash from any subsequent Asset
Disposition).
(c) (1) Promptly, and in any event within 10 days after the
Company becomes obligated to make an Offer, the Company shall be obligated to
deliver to the Trustee and send, by first-class mail to each Holder, a
written notice stating that the Holder may elect to have his Securities
purchased by the Company either in whole or in part (subject to prorating as
hereinafter described in the event the Offer is oversubscribed) in integral
multiples of $1,000 of principal amount, at the applicable purchase price.
The notice shall specify a purchase date not less than 30 days nor more than
60 days after the date of such notice (the "Purchase Date") and shall contain
such information concerning the business of the Company which the Company in
good faith believes will enable such Holders to make an informed decision
(which at a minimum will include (i) the most recently filed Annual Report on
Form 10-K (including audited consolidated financial statements) of the
Company, the most recent subsequently filed Quarterly Report on Form 10-Q and
any Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report, other than Current Reports describing Asset Dispositions
otherwise described in the offering materials (or corresponding successor
reports or, until such time as the Company shall become subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, a
corresponding report prepared pursuant to Section 4.02), (ii) a description
of material developments
49
in the Company's business subsequent to the date of the latest of such
Reports, and (iii) if material, appropriate pro forma financial information)
and all instructions and materials necessary to tender Securities pursuant to
the Offer, together with the information contained in clause (3).
(2) Not later than the date upon which written notice of an Offer
is delivered to the Trustee as provided above, the Company shall deliver to
the Trustee an Officers' Certificate as to (i) the amount of the Offer (the
"Offer Amount"), (ii) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (iii) the
compliance of such allocation with the provisions of Section 4.06(a). On
such date, the Company shall also irrevocably deposit with the Trustee or
with a paying agent other than the Company in Temporary Cash Investments,
maturing on the last day prior to the Purchase Date or on the Purchase Date
if funds are immediately available by open of business, an amount equal to
the Offer Amount to be held for payment in accordance with the provisions of
this Section. Upon the expiration of the period for which the Offer remains
open (the "Offer Period"), the Company shall deliver to the Trustee for
cancellation the Securities or portions thereof which have been properly
tendered to and are to be accepted by the Company. The Trustee shall, on the
Purchase Date, mail or deliver payment to each tendering Holder in the amount
of the purchase price. In the event that the aggregate purchase price of the
Securities delivered by the Company to the Trustee is less than the Offer
Amount, the Trustee shall deliver the excess to the Company immediately after
the expiration of the Offer Period for application in accordance with this
Section.
(3) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed,
to the Company at the address specified in the notice at least three Business
Days prior to the Purchase Date. Holders shall be entitled to withdraw their
election if the Trustee or the Company receives, not later than one Business
Day prior to the Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Security which was delivered for purchase by the Holder and a statement that
such Holder is withdrawing his election to have such Security purchased. If
at the expiration of the
50
Offer Period the aggregate principal amount of Securities (and any other
Senior Subordinated Indebtedness included in the Offer) surrendered pursuant
to the Offer exceeds the Offer Amount, the Company shall select the
Securities and other Senior Subordinated Indebtedness to be purchased on a
pro rata basis (with such adjustments as may be deemed appropriate by the
Company so that only Securities and other Senior Subordinated Indebtedness in
denominations of $1,000, or integral multiples thereof, shall be purchased).
Holders whose Securities are purchased only in part shall be issued new
Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section 4.06. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to
the surrendering Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant
to this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section by virtue thereof.
SECTION 4.07. Limitation on Affiliate Transactions. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, enter
into or permit to exist any transaction (including the purchase, sale, lease
or exchange of any property, employee compensation arrangements or the
rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") unless the terms thereof (i) are no less favorable to the
Company or such Restricted Subsidiary than those that could be obtained at
the time of such transaction in arm's-length dealings with a Person who is
not such an Affiliate, (ii) if such Affiliate Transaction involves an amount
in excess of $1.0 million, (1) are set forth in writing and (2) have been
51
approved by a majority of the members of the Board of Directors having no
personal stake in such Affiliate Transaction and (iii) if such Affiliate
Transaction involves an amount in excess of $10.0 million, have been
determined by (A) a nationally recognized investment banking firm to be fair,
from a financial standpoint, to the Company and its Restricted Subsidiaries
or (B) an accounting or appraisal firm nationally recognized in making such
determinations to be on terms that are not less favorable to the Company and
its Restricted Subsidiaries than the terms that could be obtained in an
arm's-length transaction from a Person that is not an Affiliate of the
Company.
(b) The provisions of Section 4.07(a) shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to Section 4.04, (ii) any
issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Board
of Directors, (iii) the grant of stock options or similar rights to employees
and directors of the Company pursuant to plans approved by the Board of
Directors, (iv) loans or advances to employees in the ordinary course of
business in accordance with the past practices of the Company or its
Restricted Subsidiaries, but in any event not to exceed $5.0 million in the
aggregate outstanding at any one time, (v) reasonable fees, compensation or
employee benefit arrangements to and indemnity provided for the benefit of
directors, officers or employees of the Company or any Subsidiary in the
ordinary course of business, (vi) any Affiliate Transaction between the
Company and a Wholly Owned Subsidiary or between Wholly Owned Subsidiaries,
(vii) any Affiliate Transaction with National Semiconductor pursuant to
written agreements in effect on the Issue Date and as amended, renewed or
extended from time to time; provided, however, that any such amendment,
renewal or extension shall not contain terms which are materially less
favorable to the Company than those in the agreements in effect on the Issue
Date, and (viii) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company.
SECTION 4.08. Limitation on the Sale or Issuance of Capital Stock
of Restricted Subsidiaries. The Company shall not sell or otherwise dispose
of any Capital Stock of a Restricted Subsidiary, and shall not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell or
52
otherwise dispose of any of its Capital Stock except (i) to the Company or a
Wholly Owned Subsidiary, (ii) if, immediately after giving effect to such
issuance, sale or other disposition, neither the Company nor any of its
Subsidiaries own any Capital Stock of such Restricted Subsidiary, (iii) if,
immediately after giving effect to such issuance, sale or other disposition,
such Restricted Subsidiary would no longer constitute a Restricted Subsidiary
and any Investment in such Person remaining after giving effect thereto would
have been permitted to be made under the covenant described in Section 4.04
if made on the date of such issuance, sale or other disposition or (iv)
directors' qualifying shares.
SECTION 4.09. Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder shall have the right to require that the
Company repurchase such Holder's Securities at a purchase price in cash equal
to 101% of the principal amount thereof plus accrued and unpaid interest, if
any, to the date of purchase (subject to the right of holders of record on
the relevant record date to receive interest due on the relevant interest
payment date), in accordance with the terms contemplated in Section 4.09(b).
In the event that at the time of such Change of Control the terms of any
Senior Indebtedness of the Company restrict or prohibit any offer pursuant to
this Section or the repurchase of Securities pursuant to this Section, then
prior to the mailing of the notice to Holders provided for in Section 4.09(b)
below but in any event within 30 days following any Change of Control, the
Company shall (i) repay in full all such Senior Indebtedness or offer to
repay in full all such Senior Indebtedness and repay such Senior Indebtedness
of each lender who has accepted such offer or (ii) obtain the requisite
consent under the agreements governing such Senior Indebtedness to permit the
repurchase of the Securities as provided for in Section 4.09(b). The Company
must first comply with the covenant described in the preceding sentence
before it will be required to purchase Notes in the event of a Change of
Control; provided, however, that the Company's failure to comply with the
covenant described in the preceding sentence or to make a Change of Control
offer because of any such failure shall constitute a Default described in
Section 6.01(4) (and not under Section 6.01(2)).
53
(b) Within 30 days following any Change of Control but subject to
the provisions of Section 4.09(a), the Company shall mail a notice to each
Holder with a copy to the Trustee stating:
(1) that a Change of Control has occurred and that such
Holder has the right to require the Company to purchase such
Holder's Securities at a purchase price in cash equal to
101% of the principal amount thereof plus accrued and unpaid
interest (if any) to the date of purchase (subject to the
right of Holders of record on the relevant record date to
receive interest on the relevant interest payment date);
(2) the circumstances and relevant facts regarding such
Change of Control;
(3) the repurchase date (which shall be no earlier than
30 days nor later than 60 days from the date such notice is
mailed); and
(4) the instructions determined by the Company,
consistent with this Section, that a Holder must follow in
order to have its Securities purchased.
(c) Holders electing to have a Security purchased will be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business
Day prior to the purchase date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Security which was delivered for purchase by the Holder and a statement that
such Holder is withdrawing his election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the Company
under this Section shall be delivered by the Trustee for cancellation, and
the Company shall pay the purchase price plus accrued and unpaid interest, if
any, to the Holders entitled thereto.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations
54
in connection with the repurchase of Securities pursuant to this Section. To
the extent that the provisions of any securities laws or regulations conflict
with provisions of this Section, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section by virtue thereof.
SECTION 4.10. Future Guarantors. In the event that, after the
Issue Date, any Restricted Subsidiary (other than a Foreign Subsidiary)
Incurs (i) any Indebtedness pursuant to paragraph (a) or pursuant to clause
(1) or (10) of Section 4.3(b) and (ii) until the termination of the Credit
Agreement, either has Guaranteed or will as a result of such Incurrence be
required to Guarantee any Obligations under the Credit Agreement, the Company
shall cause such Restricted Subsidiary to Guarantee the Notes by executing a
supplemental indenture hereto and shall cause all Indebtedness of such
Restricted Subsidiary owing to the Company or any other Subsidiary of the
Company and not previously discharged to be converted into Capital Stock of
such Restricted Subsidiary (other than Disqualified Stock).
SECTION 4.11. 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 officer 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 Section
314(a)(4).
SECTION 4.12. 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.
55
ARTICLE 5
Successor Companies
SECTION 5.01. 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 transactions, 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, by an
indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Securities and this
Indenture;
(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;
(iii) immediately after giving effect to such
transaction, the Successor Company would be able to Incur an
additional $1.00 of Indebtedness pursuant to
Section 4.03(a);
(iv) immediately after giving effect to such
transaction, the Successor Company shall have Consolidated
Net Worth in an amount that is not less than the
Consolidated Net Worth of the Company immediately prior to
such transaction; and
(v) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with this Indenture;
provided, however, that clauses (iii) and (iv) above shall not
apply if, in the good faith determination of
56
the Board of Directors, whose determination shall be evidenced by a
resolution of the Board of Directors, the principal purpose and effect of
such transaction is to change the jurisdiction of incorporation of the
Company.
The Successor Company shall be the successor to the Company and
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture, 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 Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or series of transactions, all or substantially all of its assets
to any Person unless: (i) the resulting, surviving or transferee Person (if
not such Subsidiary) shall be a Person organized and existing under the laws
of the jurisdiction under which such Subsidiary was organized or under the
laws of the United States of America, or any State thereof or the District of
Columbia, and such Person shall expressly assume, by an amendment to this
Indenture, in a form acceptable to the Trustee, all the obligations of such
Subsidiary, if any, under its Subsidiary Guaranty; (ii) immediately after
giving effect to such transaction or transactions on a pro forma basis (and
treating any Indebtedness which becomes an obligation of the resulting,
surviving or transferee Person as a result of such transaction as having been
issued by such Person at the time of such transaction), no Default shall have
occurred and be continuing; and (iii) the Company delivers to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such amendment to this Indenture, if
any, complies with this Indenture. 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 4.06.
(c) Parent will not merge with or into, or convey, transfer or
lease, in one transaction or a series of transactions, all or substantially
all of its assets to any Person unless: (i) the resulting, surviving or
transferee Person (if not Parent) shall be a Person organized and existing
under the laws of the jurisdiction under which
57
Parent was organized or under the laws of the United States of America, or
any State thereof or the District of Columbia, and such Person shall
expressly assume, by an amendment to this Indenture, in a form acceptable to
the Trustee, all the obligations of Parent, if any, under the Parent
Guaranty; (ii) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person as a
result of such transaction as having been issued by such Person at the time
of such transaction), no Default shall have occurred and be continuing; and
(iii) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer
and such amendment to this Indenture, if any, complies with this Indenture.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on
any Security when the same becomes due and payable, whether
or not such payment shall be prohibited by Article 10, and
such default continues for a period of 30 days;
(2) the Company (i) defaults in the payment of the
principal of any Security when the same becomes due and
payable at its Stated Maturity, upon redemption, upon
declaration or otherwise, whether or not such payment shall
be prohibited by Article 10, or (ii) fails to redeem or
purchase Securities when required pursuant to this Indenture
or the Securities, whether or not such redemption or
purchase shall be prohibited by Article 10;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02,
4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09 or 4.10 (other than
a failure to purchase Securities when required
58
under Section 4.06 or 4.09) and such failure continues for
30 days after the notice specified below;
(5) the Company fails to comply with any of its
agreements in the Securities or this Indenture (other than
those referred to in clause (1), (2), (3) or (4) above) and
such failure continues for 60 days after the notice
specified below;
(6) Indebtedness of the Company or any Significant
Subsidiary is not paid within any applicable grace period
after final maturity or is accelerated by the holders
thereof because of a default and the total amount of such
Indebtedness unpaid or accelerated exceeds $10.0 million, or
its foreign currency equivalent at the time;
(7) the Company or any Significant Subsidiary pursuant
to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of
it or for any substantial part of its property; or
(D) makes a general assignment for the benefit of
its creditors;
or takes any comparable action under any foreign laws
relating to insolvency;
(8) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for any substantial part of
its property; or
59
(C) orders the winding up or liquidation of the
Company or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and
the order or decree remains unstayed and in effect for
60 days;
(9) any judgment or decree for the payment of money in
excess of $10.0 million or its foreign currency equivalent
at the time is entered against the Company or any
Significant Subsidiary, remains outstanding for a period of
60 days following the entry of such judgment or decree and
is not discharged, waived or the execution thereof stayed
within 10 days after the notice specified below; or
(10) the Parent Guaranty or any Subsidiary Guaranty
ceases to be in full force and effect (other than in
accordance with the terms of such Guaranty) or Parent or any
Subsidiary Guarantor denies or disaffirms its obligations
under the Parent Guaranty or its Subsidiary Guaranty, as
applicable.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or
is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Title 11, United States Code, or
any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (4), (5), or (9) is not an Event of Default
until the Trustee or the holders of at least 25% in principal amount of the
outstanding Securities notify the Company of the Default and the Company does
not cure such Default within the time specified after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state
that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the
60
form of an Officers' Certificate of any Event of Default under clause (6) or
(10) and any event which with the giving of notice or the lapse of time would
become an Event of Default under clause (4), (5) or (9), its status and what
action the Company is taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or
the Holders of at least 25% in principal amount of the Securities by notice
to the Company and the Trustee, may declare the principal of and accrued but
unpaid interest on all the Securities to be due and payable. Upon such a
declaration, such principal and interest shall be due and payable
immediately; provided, however, that if upon such declaration there are any
amounts outstanding under the Credit Agreement and the amounts thereunder
have not been accelerated, such principal and interest shall be due and
payable upon the earlier of the time such amounts are accelerated and five
Business Days after receipt by the Company and the Representative under the
Credit Agreement of such declaration. If an Event of Default specified in
Section 6.01(7) or (8) with respect to the Company occurs, the principal of
and interest on all the Securities shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the
Trustee or any Securityholders. The Holders of a majority in principal
amount of the outstanding Securities by notice to the Trustee may rescind an
acceleration with respect to the Securities and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of acceleration. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce
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any of them in the proceeding. A delay or omission by the Trustee or any
Securityholder in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority
in principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (i) a Default in the payment of
the principal of or interest on a Security or (ii) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of
each Securityholder affected. When a Default is waived, it is deemed cured,
but no such waiver shall extend to any subsequent or other Default or impair
any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
or, subject to Section 7.01, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the
Trustee in personal liability; provided, however, that the Trustee may take
any other action deemed proper by the Trustee that is not inconsistent with
such direction. Prior to taking any action hereunder, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
SECTION 6.06. 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;
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(3) such Holder or Holders offer to the Trustee
reasonable security or indemnity against any loss, liability
or expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of
security or indemnity; and
(5) the Holders of a majority in principal amount of
the Securities do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Securities held
by such Holder, on or after the respective due dates expressed in the
Securities, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against
the 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 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the
Securityholders allowed in any judicial 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
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Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due
it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and its counsel, and any other amounts due the
Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property
in the following order:
FIRST: to the Trustee for amounts due under Section
7.07;
SECOND: to holders of Senior Indebtedness 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 6.07 or a suit by Holders of more than 10% in principal amount of the
Securities.
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SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to
the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and shall not hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and
skill in 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.
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(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 wilful
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 6.05.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c)
of this Section.
(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.
(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 7.02. 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
66
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 7.01(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 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the 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 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the
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 connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee,
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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 7.06. 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 Section 313(a). The Trustee also shall
comply with TIA Section 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 7.07. 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 7.07) 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
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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 wilful 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.
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 Section 6.01(7) or (8) 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 7.08. 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.
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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 7.07.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Securities may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, 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 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee 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
70
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 Section 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 Section 310(b); provided, however, that there shall be
excluded from the operation of TIA Section 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 Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or
been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance.
(a) When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07) for cancellation or
(ii) all outstanding Securities have become due and payable, whether at
maturity or as a result of the mailing of a notice of redemption pursuant to
Article 3 hereof 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
71
redemption date (other than Securities replaced pursuant to Section 2.07),
and if in either case the Company pays all other sums payable hereunder by
the Company, then this Indenture shall, subject to Sections 8.01(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 8.01(c) and 8.02, the Company
at any time may terminate (i) all its obligations under the
Securities and this Indenture ("legal defeasance option") or
(ii) its obligations under Sections 4.02 (subject to any
requirements of the TIA), 4.03, 4.04, 4.05, 4.06, 4.07, 4.08,
4.09 and 4.10 and the operation of Sections 6.01(4), 6.01(6),
6.01(7), 6.01(8) and 6.01(9) (but, in the case of
Sections 6.01(7) and (8), with respect only to Significant
Subsidiaries) and the limitations contained in
Sections 5.01(a)(iii) and (iv) ("covenant defeasance option").
The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance
option.
If the Company exercises its legal defeasance option, payment of
the Securities may not be accelerated because of an Event of Default 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 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9)
(but, in the case of Sections 6.01(7) and (8), with respect only to
Significant Subsidiaries) or because of the failure of the Company to comply
with Section 5.01(a)(iii) or (iv). If the Company exercises its legal
defeasance option or its covenant defeasance option, Parent shall be released
from all its obligations with respect to the Parent Guaranty and each
Subsidiary Guarantor, if any, shall be released from all its obligations with
respect to its Subsidiary Guaranty.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the
discharge of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the
Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
2.08, 7.07, 7.08, 8.04, 8.05 and 8.06 shall
72
survive until the Securities have been paid in full. Thereafter, the
Company's obligations in Sections 7.07, 8.04 and 8.05 shall survive.
SECTION 8.02. Conditions to Defeasance. The Company may exercise
its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations 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
U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such
amounts as will be sufficient to pay principal and interest
when due on all the Securities to maturity or redemption, as
the case may be;
(3) 123 days pass after the deposit is made and during
the 123-day period no Default specified in Sections 6.01(7)
or (8) with respect to the Company occurs which is
continuing at the end of the period;
(4) the deposit does not constitute a default under any
other agreement binding on the Company 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
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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 8.03. Application of Trust Money. The Trustee shall hold
in trust money or U.S. Government Obligations deposited with it pursuant to
this Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
Money and securities so held in trust are not subject to Article 10.
SECTION 8.04. Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money
or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to
the Company for payment as general creditors.
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SECTION 8.05. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations
or the principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
this Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with this Article 8; provided, however,
that, if the Company has made any payment of interest on or principal of any
Securities because of the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 9
Amendments
SECTION 9.01. 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;
75
(4) to make any change in Article 10 that would limit
or terminate the benefits available to any holder of Senior
Indebtedness (or Representatives therefor) under Article 10;
(5) to add guarantees with respect to the Securities,
including any Subsidiary Guaranties, 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;
(7) to comply with any requirements of the SEC in
connection with qualifying, or maintaining the qualification
of, this Indenture under the TIA;
(8) to make any change that does not adversely affect
the rights of any Securityholder; or
(9) to release a Subsidiary Guaranty when permitted by
the terms of this Indenture.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness
(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 9.02. 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
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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) make any change in Article 10 that adversely
affects the rights of any Securityholder under Article 10;
(7) make any change in Section 6.04 or 6.07 or the
second sentence of this Section; or
(8) make any change in the Parent Guaranty or any
Subsidiary Guaranty (including the subordination provisions
of any such Guaranty) that would adversely affect the
Securityholders.
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
Indebtedness then outstanding unless the holders of such Senior Indebtedness
(or any group or representative thereof authorized to give a consent) consent
to such change.
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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 9.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in
effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same debt as the consenting Holder's Security,
even if notation of the consent or waiver is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent or
waiver as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date the amendment or waiver
becomes effective. After an amendment or waiver becomes effective, it shall
bind every Securityholder. An amendment or waiver becomes effective 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 9.05. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder
of the Security to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security regarding the changed terms and return
it to the Holder. Alternatively, if the Company or the Trustee so determines,
the Company in exchange for the
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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 9.06. Trustee To Sign Amendments. The Trustee shall sign
any amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing any
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that such amendment is authorized or permitted by this
Indenture.
SECTION 9.07. 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 10.01. Agreement To Subordinate. The Company agrees, and
each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities is subordinated in right of payment, to the
extent and in the manner provided in this Article 10, to the prior payment in
full in cash of all Obligations with respect to Senior Indebtedness of the
Company and that the subordination is for the benefit of and enforceable by
the holders of such Senior Indebtedness. The Securities shall in all
respects rank pari passu with all other Senior Subordinated Indebtedness of
the Company and only Indebtedness of the Company which is Senior Indebtedness
shall rank senior to the Securities in accordance with the
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provisions set forth herein. All provisions of this Article 10 shall be
subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company to creditors upon a
total or partial liquidation or a total or partial dissolution or winding up
of the Company or upon any assignment for the benefit of creditors or
marshalling of assets of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property, whether voluntary or involuntary:
(1) the holders of Senior Indebtedness of the Company
shall be entitled to receive payment in full in cash of all
Obligations with respect to such Senior Indebtedness
(including all interest accruing subsequent to the filing of
a petition in bankruptcy at the rate provided for in the
documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) before
Securityholders shall be entitled to receive any payment or
distribution with respect to the Securities; and
(2) until all Obligations with respect to such Senior
Indebtedness are paid in full in cash, any payment or
distribution to which Securityholders would be entitled but
for this Article 10 shall be made to holders of such Senior
Indebtedness as their interests may appear, except that
Securityholders may receive, in exchange for the Securities
in any proceeding of the type described above in this
Section 10.02, (x) equity securities of the Company which,
in any case, do not provide for any mandatory redemption or
similar retirement prior to the maturity of the Securities
or (y) unsecured debt securities of the Company which are
subordinated to at least the same extent as the Securities
to the payment of all Senior Indebtedness of the Company and
which, in any case, do not mature or become subject to a
mandatory redemption obligation prior to the maturity of the
Securities.
SECTION 10.03. Default on Senior Indebtedness. The Company may
not pay (in cash, property or other assets) the principal of, premium, if
any, or interest on the Securities or make any deposit pursuant to Section
8.01 and may not repurchase, redeem or (except for Securities
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delivered to the Trustee pursuant to the second sentence of paragraph 6 of
the Securities) otherwise retire any Securities (collectively, "pay the
Securities") if (i) any Obligations with respect to Senior Indebtedness are
not paid when due or (ii) any other default on Senior Indebtedness occurs and
the maturity of such Senior Indebtedness is accelerated in accordance with
its terms unless, in either case, (x) the default has been cured or waived
and any such acceleration has been rescinded or (y) such Senior Indebtedness
has been paid in full in cash; provided, however, that the Company may pay
the Securities without regard to the foregoing if the Company and the Trustee
receive written notice approving such payment from the Representative of such
Senior Indebtedness. During the continuance of any default (other than a
default described in clause (i) or (ii) of the preceding sentence) with
respect to any Designated Senior Indebtedness pursuant to which the maturity
thereof may be accelerated immediately without further notice (except such
notice as may be required to effect such acceleration) or the expiration of
any applicable grace periods, the Company may not pay the Securities for a
period (a "Payment Blockage Period") commencing upon the receipt by the
Company and the Trustee of written notice (a "Blockage Notice") of such
default from the Representative of such Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period and ending 179
days thereafter (or earlier if such Payment Blockage Period is terminated (i)
by written notice to the Trustee and the Company from the Person or Persons
who gave such Blockage Notice, (ii) because no defaults continue in existence
which would permit the acceleration of the maturities of any Designated
Senior Indebtedness at such time) or (iii) because such Designated Senior
Indebtedness has been repaid in full in cash). Notwithstanding the
provisions described in the immediately preceding sentence (but subject to
the provisions contained in the first sentence of this Section), unless the
holders of such Designated Senior Indebtedness or the Representative of such
holders shall have accelerated the maturity of such Designated Senior
Indebtedness, the Company may resume payments on the Securities after
termination of such Payment Blockage Period. Not more than one Blockage
Notice may be given in any consecutive 360-day period, irrespective of the
number of defaults with respect to Designated Senior Indebtedness during such
period. For purposes of this Section, no default or event of default which
existed or was continuing on the date of the commencement of any Payment
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Blockage Period with respect to the Designated Senior Indebtedness initiating
such Payment Blockage Period shall be, or be made, the basis of the
commencement of a subsequent Payment Blockage Period by the Representative of
such Designated Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such default or event of default shall have been
cured or waived for a period of not less than 90 consecutive days (it being
acknowledged and agreed that (x) any default or event of default as a result
of a continued failure to meet a financial covenant or test for a period
ended subsequent to the commencement of a Payment Blockage Period shall
constitute a new default or event of default, as the case may be, and shall
be deemed not to be a continuing default or event of default, as the case may
be, for purposes of this sentence and (y) any subsequent action which would
give rise to a default or an event of default pursuant to any provision under
which a default or event of default previously existed or was continuing
shall constitute a new default or event of default, as the case may be, for
this purpose and shall be deemed not to be a continuing default or event of
default, as the case may be, for purposes of this sentence).
SECTION 10.04. Acceleration of Payment of Securities. If payment
of the Securities is accelerated because of an Event of Default, the Company
or the Trustee shall promptly notify the holders of the Designated Senior
Indebtedness (or their Representatives) of the acceleration.
SECTION 10.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article 10
should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness of the
Company and pay it over to them as their interests may appear.
SECTION 10.06. Subrogation. After all Senior Indebtedness 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
Indebtedness to receive distributions applicable to such Senior Indebtedness.
A distribution made under this Article 10 to holders of such Senior
Indebtedness which otherwise would have been made to Securityholders is not,
as between the Company and Securityholders, a payment by the Company on such
Senior Indebtedness.
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SECTION 10.07. Relative Rights. This Article 10 defines the
relative rights of Securityholders and holders of Senior Indebtedness 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 Indebtedness of the Company
to receive distributions otherwise payable to
Securityholders.
SECTION 10.08. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of the Company to enforce the
subordination of the Indebtedness evidenced by the Securities shall be
impaired by any act or failure to act by the Company or by its failure to
comply with this Indenture.
SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 10.03, 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 Indebtedness may give
the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness 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 Indebtedness of the Company
which may at any time be held by it, to the same extent as any other holder
of such Senior Indebtedness; and nothing in Article 7 shall deprive the
Trustee of any of its rights as such holder. Nothing in
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this Article 10 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07.
SECTION 10.10. Distribution or Notice to Representative. Whenever
a distribution is to be made or a notice given to holders of Senior
Indebtedness of the Company, the distribution may be made and the notice
given to their Representative (if any).
SECTION 10.11. 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.
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the
proceeds of U.S. 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 Indebtedness 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 Indebtedness 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 10.13. 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 10.02 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 Indebtedness of the Company for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders
of such Senior Indebtedness and other Indebtedness of the Company, the
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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 Indebtedness 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
Indebtedness 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 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 10.
SECTION 10.14. 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 Indebtedness of the Company as provided in this Article
10 and appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness 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 Indebtedness of the Company shall be entitled by virtue of this
Article 10 or otherwise.
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness of the Company, whether such Senior Indebtedness 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 Indebtedness 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
85
Indebtedness and such holder of such Senior Indebtedness shall be
deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior
Indebtedness.
ARTICLE 11
Guaranties
SECTION 11.01. Guaranties. Each Guarantor hereby unconditionally
and irrevocably guarantees, jointly and severally, to each Holder and to the
Trustee and its successors and assigns (a) the full and punctual payment of
principal of and interest on the Securities when due, whether at maturity, by
acceleration, by redemption or otherwise, and all other monetary obligations
of the Company under this Indenture and the Securities and (b) the full and
punctual performance within applicable grace periods of all other obligations
of the Company under this Indenture and the Securities (all the foregoing
being hereinafter collectively called the "Indenture Obligations"). Each
Guarantor further agrees that the Indenture Obligations may be extended or
renewed, in whole or in part, without notice or further assent from such
Guarantor and that such Guarantor will remain bound under this Article 11
notwithstanding any extension or renewal of any Indenture Obligation.
Each Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Indenture
Obligations and also waives notice of protest for nonpayment.
Each Guarantor waives notice of any default under the Securities
or the Indenture Obligations. The obligations of each Guarantor
hereunder shall not be affected by (a) the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any
right or remedy against the Company or any other Person under
this Indenture, the Securities or any other agreement or
otherwise; (b) any extension or renewal of any thereof; (c) any
rescission, waiver, amendment or modification of any of the terms
or provisions of this Indenture, the Securities or any other
agreement; (d) the release of any security held by any Holder or
the Trustee for the Indenture Obligations or any of them; (e) the
failure of any Holder or the Trustee to exercise any right or
remedy against any other guarantor of
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the Indenture Obligations; or (f) any change in the ownership of such
Guarantor.
Each Guarantor further agrees that its Guaranty herein constitutes
a guarantee of payment, performance and compliance when due (and not a
guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Indenture Obligations.
Each Guaranty is, to the extent and in the manner set forth in
Article 12, subordinated and subject in right of payment to the prior payment
in full in cash of all Obligations with respect to all Senior Indebtedness of
the Guarantor giving such Guaranty and each Guaranty is made subject to such
provisions of this Indenture.
Except as expressly set forth in Sections 8.01(b), 11.02 and 11.06,
the obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall
not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Indenture Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Guarantor herein
shall not be discharged or impaired or otherwise affected by the failure of
any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the obligations, or by any other
act or thing or omission or delay to do any other act or thing which may or
might in any manner or to any extent vary the risk of such Guarantor or would
otherwise operate as a discharge of such Guarantor as a matter of law or
equity.
Each Guarantor further agrees that its Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Indenture
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
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In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Company to pay the
principal of or interest on any Indenture Obligation when and as the same
shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Indenture Obligation, each
Guarantor hereby promises to and will, upon receipt of written demand by the
Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the
Trustee an amount equal to the sum of (i) the unpaid amount of such Indenture
Obligations, (ii) accrued and unpaid interest on such Indenture Obligations
(but only to the extent not prohibited by law) and (iii) all other monetary
Indenture Obligations of the Company to the Holders and the Trustee.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in respect of any Indenture Obligations guaranteed hereby until
payment in full of all Indenture Obligations and all obligations to which the
Indenture Obligations are subordinated as provided in Article 12. Each
Guarantor further agrees that, as between it, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the Indenture
Obligations Guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of such Guarantor's Guaranty herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of
the Indenture Obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such obligations as provided in Article 6,
such Indenture Obligations (whether or not due and payable) shall forthwith
become due and payable by such Guarantor for the purposes of this Section.
Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any Holder
in enforcing any rights under this Section.
SECTION 11.02. Limitation on Liability. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum, aggregate amount
of the Indenture Obligations guaranteed hereunder by any Subsidiary Guarantor
shall not exceed the maximum amount that can be hereby guaranteed without
rendering this Indenture, as it
88
relates to such Subsidiary Guarantor, voidable under applicable law relating
to fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.
SECTION 11.03. Successors and Assigns. This Article 11 shall be
binding upon each Guarantor and its successors and assigns and shall inure to
the benefit of the successors and assigns of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested
in such transferee or assignee, all subject to the terms and conditions of
this Indenture.
SECTION 11.04. No Waiver. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 11 shall operate as a waiver thereof, nor shall
a single or partial exercise thereof preclude any other or further exercise
of any right, power or privilege. The rights, remedies and benefits of the
Trustee and the Holders herein expressly specified are cumulative and not
exclusive of any other rights, remedies or benefits which either may have
under this Article 11 at law, in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or waiver
of any provision of this Article 11, nor the consent to any departure by any
Guarantor therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Trustee, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Guarantor in any case shall entitle
such Guarantor to any other or further notice or demand in the same, similar
or other circumstances.
SECTION 11.06. Release of Subsidiary Guarantor. Upon the sale
(including any sale pursuant to any exercise of remedies by a holder of
Senior Indebtedness) or other disposition (including by way of consolidation
or merger) of a Subsidiary Guarantor or the sale or disposition of all or
substantially all the assets of such Subsidiary Guarantor (in each case other
than to the Company or an Affiliate of the Company), such Subsidiary
Guarantor shall be deemed
89
released from all obligations under this Article 11 without any further
action required on the part of the Trustee or any Holder. At the request of
the Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such release.
ARTICLE 12
Subordination of Guaranties
SECTION 12.01. Agreement To Subordinate. Each Guarantor agrees,
and each Securityholder by accepting a Security agrees, that the Indenture
Obligations (as used in this Article 12, the "Indenture Obligations" of each
Guarantor shall mean all Indenture Obligations guaranteed by such Guarantor
pursuant to Article 11 hereof) of such Guarantor are subordinated in right of
payment, to the extent and in the manner provided in this Article 12, to the
prior payment in full in cash of all Obligations with respect to Senior
Indebtedness of such Guarantor and that the subordination is for the benefit
of and enforceable by the holders of such Senior Indebtedness. The Indenture
Obligations of a Guarantor shall in all respects rank pari passu with all
other Senior Subordinated Indebtedness of such Guarantor and only Senior
Indebtedness of such Guarantor (including such Guarantor's Guarantee of
Senior Indebtedness of the Company) shall rank senior to the Indenture
Obligations of such Guarantor in accordance with the provisions set forth
herein.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of any Guarantor to creditors upon a
total or partial liquidation or a total or partial dissolution or winding up
of such Guarantor or upon any assignment for the benefit of creditors or
marshalling of assets for such Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to such Guarantor or
its property, whether voluntary or involuntary:
(1) the holders of Senior Indebtedness of such
Guarantor shall be entitled to receive payment in full in
cash of all Obligations with respect to such Senior
Indebtedness (including all interest accruing subsequent to
the filing of a petition in bankruptcy at the rate provided
for in the documentation with respect
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thereto, whether or not such interest is an allowed claim under applicable
law) before Securityholders shall be entitled to receive any
payment or distribution with respect to any Indenture
Obligations of such Guarantor; and
(2) until all Obligations with respect to the Senior
Indebtedness of any Guarantor is paid in full in cash, any
payment or distribution to which Securityholders would be
entitled but for this Article 12 shall be made to holders of
such Senior Indebtedness as their interests may appear,
except that securityholders may, in any proceeding of the
type described in Section 10.02 with respect to such
Guarantor, receive securities of the Parent and/or the
Company as provided in clause (2) of Section 10.02, which,
in the case of debt securities of the Company, may be
guaranteed by the Guarantors on substantially the same basis
as provided in Article 11, so long as such guarantees are
expressly subordinated to all Senior Indebtedness at least
to the same extent as provided in this Article 12.
SECTION 12.03. Default on Senior Indebtedness of Guarantor. No
Guarantor may make any payment (in cash, property or other assets) pursuant
to any of its Indenture Obligations or repurchase, redeem or otherwise retire
or defease any Securities or other Indenture Obligations (collectively, "pay
its Guaranty") if (i) any Obligations with respect to Senior Indebtedness of
the Company is not paid when due or (ii) any other default on Senior
Indebtedness of the Company occurs and the maturity of such Senior
Indebtedness is accelerated in accordance with its terms unless, in either
case, (x) the default has been cured or waived and any such acceleration has
been rescinded or (y) such Senior Indebtedness has been paid in full in cash;
provided, however, that any Guarantor may pay its Guaranty without regard to
the foregoing if such Guarantor and the Trustee receive written notice
approving such payment from the Representatives of such Senior Indebtedness.
No Guarantor may pay its Guaranty during the continuance of any Payment
Blockage Period after receipt by the Company and the Trustee (with a copy to
the Company) of a Blockage Notice under Section 10.03. Notwithstanding the
provisions described in the immediately preceding sentence (but subject to
the provisions contained in the first sentence of this Section), unless the
holders of Designated Senior
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Indebtedness giving such Blockage Notice or the Representative of such
holders shall have accelerated the maturity of such Designated Senior
Indebtedness, any Guarantor may resume payments pursuant to its Guaranty
after termination of such Payment Blockage Period.
SECTION 12.04. Demand for Payment. If a demand for payment is
made on a Guarantor pursuant to Article 11, the Trustee shall promptly notify
the holders of the Designated Senior Indebtedness (or their Representatives)
of such demand.
SECTION 12.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article 12
should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of the relevant Senior
Indebtedness and pay it over to them or their Representatives as their
interests may appear.
SECTION 12.06. Subrogation. After all Senior Indebtedness of a
Guarantor 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
Indebtedness to receive distributions applicable to Senior Indebtedness. A
distribution made under this Article 12 to holders of such Senior
Indebtedness which otherwise would have been made to Securityholders is not,
as between the relevant Guarantor and Securityholders, a payment by such
Guarantor on such Senior Indebtedness.
SECTION 12.07. Relative Rights. This Article 12 defines the
relative rights of Securityholders and holders of Senior Indebtedness of a
Guarantor. Nothing in this Indenture shall:
(1) impair, as between a Guarantor and Securityholders,
the obligation of such Guarantor, which is absolute and
unconditional, to pay the Indenture Obligations to the
extent set forth in Article 11 or the relevant Guaranty; or
(2) prevent the Trustee or any Securityholder from
exercising its available remedies upon a default by such
Guarantor under the Indenture Obligations, subject to the
rights of holders of Senior Indebtedness of such
92
Guarantor to receive distributions otherwise payable to
Securityholders.
SECTION 12.08. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of any Guarantor to enforce the
subordination of the Indenture Obligations of such Guarantor shall be
impaired by any act or failure to act by such Guarantor or by its failure to
comply with this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 12.03, the Trustee or Paying Agent may continue to make payments on
any Guaranty 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 written notice satisfactory to it that payments may not
be made under this Article 12. The Company, the relevant Guarantor, the
Registrar or co-registrar, the Paying Agent, a Representative or a holder of
Senior Indebtedness of the relevant Guarantor may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not the 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 12 with respect to any Senior Indebtedness of any Guarantor which may
at any time be held by it, to the same extent as any other holder of Senior
Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article 12 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.07.
SECTION 12.10. Distribution or Notice to Representative. Whenever
a distribution is to be made or a notice given to holders of Senior
Indebtedness of any Guarantor, the distribution may be made and the notice
given to their Representative (if any).
SECTION 12.11. Article 12 Not To Prevent Defaults Under a Guaranty
or Limit Right To Demand Payment. The failure to make a payment pursuant to
a Guaranty by reason of any provision in this Article 12 shall not be
construed as preventing the occurrence of a default under such
93
Guaranty. Nothing in this Article 12 shall have any effect on the right of
the Securityholders or the Trustee to make a demand for payment on any
Guarantor pursuant to Article 11 or the relevant Guaranty.
SECTION 12.12. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 12, 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 12.02 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 Indebtedness of any Guarantor for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders
of such Senior Indebtedness and other indebtedness of such Guarantor, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 12. 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 Indebtedness of
any Guarantor to participate in any payment or distribution pursuant to this
Article 12, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness of such Guarantor 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 12, 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 7.01 and 7.02 shall be
applicable to all actions or omissions of actions by the Trustee pursuant to
this Article 12.
SECTION 12.13. 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 Indebtedness of any Guarantor as provided in this
Article 12 and appoints the Trustee as attorney-in-fact for any and all such
purposes.
94
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness of Guarantor. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of any Guarantor 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 such Senior Indebtedness shall be entitled by
virtue of this Article 12 or otherwise.
SECTION 12.15. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness of any Guarantor, whether such Senior Indebtedness 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
Indebtedness and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness.
ARTICLE 13
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to Parent, the Company or any Subsidiary Guarantor:
Fairchild Semiconductor Corporation
333 Western Avenue
South Portland, Maine 04106
Attention of General Counsel
95
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
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 13.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 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 Section 312(c).
SECTION 13.04. 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.
96
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such
certificate or opinion has read such covenant or condition;
(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 13.06. When Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the
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 13.07. 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 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in
the State of New York. If a payment date is a Legal Holiday, payment shall
be made
97
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 13.09. Governing Law. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State
of New York but without giving effect to applicable principles of conflicts
of law to the extent that the application of the laws of another jurisdiction
would be required thereby.
SECTION 13.10. 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 this Indenture or
for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Security, each Securityholder shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Securities.
SECTION 13.11. 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.
SECTION 13.12. 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 13.13. 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.
IN WITNESS WHEREOF, the parties have caused this
Indenture to be duly executed as of the date first written above.
FAIRCHILD SEMICONDUCTOR
98
CORPORATION,
by
________________________
Joseph R. Martin
Executive Vice President
and Chief Financial
Officer
FSC SEMICONDUCTOR CORPORATION,
as Guarantor,
by
________________________
Joseph R. Martin
Executive Vice President
and Chief Financial
Officer
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee,
by
________________________
Name:
Title:
99
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY OR PRIVATE EXCHANGE SECURITY]
*
**
No. $
10-1/8% Senior Subordinated Notes Due 2007
FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware corporation, promises to
pay to , or registered assigns, the principal sum
of Dollars on March 15, 2007.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
Additional provisions of this Security are set forth on the other side of
this Security.
Dated:
FAIRCHILD SEMICONDUCTOR
CORPORATION,
by
_______________________
President
_______________________
Secretary
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee,
[Seal] certifies that this is one
of the Securities referred
to in the Indenture.
by
_____________________________
Authorized Signatory
*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to the Rule 144A/Regulation S Appendix and the
attachment from such Exhibit 1 captioned
"[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR DECREASES
IN GLOBAL SECURITY".
**/ If the Security is a Private Exchange Security issued in a Private
Exchange to an Initial Purchaser holding an unsold portion of its initial
allotment, add the Restricted Securities Legend from Exhibit 1 to the Rule
144A/Regulation S Appendix and replace the Assignment Form included in this
Exhibit A with the Assignment Form included in such Exhibit 1.
2
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY OR PRIVATE EXCHANGE SECURITY]
10-1/8% Senior Subordinated Note Due 2007
1. Interest
Fairchild Semiconductor 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;
provided, however, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, additional interest will accrue on
this Security at a rate of 0.50% per annum, increasing by 0.50% per annum on
the 90th day after such Registration Default and on every 90th day thereafter
during the continuation of any Registration Default, to but excluding the
date on which all Registration Defaults have been cured; provided, however,
that such additional interest shall not exceed 2.0% per annum. The Company
will pay interest semiannually on March 15 and September 15 of each year,
commencing September 15, 1997. 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 March 11, 1997. 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 plus 1% per annum, 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 the March 1 or September 1 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 will pay principal
and interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts. Payments in respect of
Securities (including principal,
3
premium and interest) will be made by wire transfer of immediately available
funds to the accounts specified by the holders thereof or, if no U.S. 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.
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
March 11, 1997 ("Indenture"), among the Company, FSC Semiconductor
Corporation ("Parent"), as Guarantor and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections
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
limited to $300,000,000 aggregate principal amount (subject to Section 2.07
of the Indenture). The Indenture limits, among other things, (i) the
incurrence of additional debt by the Company and its subsidiaries, (ii) the
payment of dividends on capital stock of the Company and the purchase,
redemption or retirement of capital stock or subordinated indebtedness, (iii)
certain transactions with affiliates, (iv) sales of assets, including capital
stock of subsidiaries, and (v) certain consolidations, mergers and transfers
of assets. The Indenture also prohibits certain restrictions on distributions
from subsidiaries. All of these limitations
4
and prohibitions, however, are subject to a number of important
qualifications contained in the Indenture.
5. Optional Redemption
Except as set forth in the next paragraph, the Securities may not
be redeemed prior to March 15, 2002. On and after that date, the Company may
redeem the Securities in whole at any time or in part from time to time at
the following redemption prices (expressed in percentages of principal
amount), plus accrued interest to the redemption date (subject to the right
of Holders of record on the relevant record date to receive interest due on
the related interest payment date), if redeemed during the 12-month period
beginning March 15 of the years set forth below:
Period Percentage
------ ----------
2002 ........................................... 105.063%
2003 ........................................... 103.375
2004 ........................................... 101.688
2005 and thereafter............................. 100.000
In addition, at any time prior to March 15, 2000, the Company may
redeem up to $105.0 million of the aggregate principal amount of Securities
with the proceeds of a Public Equity Offering, at any time or from time to
time, at a redemption price (expressed as a percentage of principal amount)
of 110% plus accrued interest to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
related interest payment date); provided, however, that at least $150.0
million aggregate principal amount of the Securities must remain outstanding
after each such redemption.
6. Mandatory Redemption
On March 15, 2005 the Company will redeem $150.0 million principal
amount of Securities and on March 15, 2006 the Company will redeem $75.0
million principal amount of the Securities, in each case at a redemption
price of 100% of the principal amount plus accrued interest to the redemption
date (subject to the right of Holders of record on the relevant record date
to receive interest due on the related interest payment date). The Company
may receive a credit against the principal amount of the Securities required
to be redeemed pursuant to this paragraph equal to the principal amount
(excluding premium) of any Securities that the Company has acquired or
5
redeemed other than pursuant to this paragraph and has delivered to the
Trustee for cancellation. The Company may receive the credit only once for
any Security.
7. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder 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 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. Put Provisions
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions, to cause the Company to repurchase all
or any part of the Securities of such Holder at a repurchase price equal to
101% of the principal amount of the Securities to be repurchased plus accrued
interest to the date of repurchase (subject to the right of holders of record
on the relevant record date to receive interest due on the related interest
payment date) as provided in, and subject to the terms of, the Indenture.
9. Subordination; Guaranties
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness 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 them effect and appoints the Trustee as attorney-in-fact for
such purpose.
Parent has agreed to guarantee the obligations of the Company under
the Securities, and certain domestic subsidiaries of the Company may in the
future be required to guarantee such obligations. Any such guarantees will
be subordinated to any Senior Indebtedness of Parent or such subsidiaries, as
applicable.
6
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. 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.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
13. 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 U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
14. 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.
7
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 release any guarantee of the Securities by
the Company's subsidiaries, when permitted by the Indenture, or to make any
change that does not adversely affect the rights of any Securityholder.
15. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to
paragraph 5 or 6 of the Securities, upon acceleration or otherwise, or
failure by the Company to redeem or purchase Securities when required; (iii)
failure by the Company to comply with other agreements in the Indenture or
the Securities, in certain cases subject to notice and lapse of time; (iv)
certain accelerations (including failure to pay within any grace period after
final maturity) of other Indebtedness of the Company if the amount
accelerated (or so unpaid) exceeds $10 million; (v) certain events of
bankruptcy or insolvency with respect to the Company and the Significant
Subsidiaries, (vi) certain judgments or decrees for the payment of money in
excess of $10 million; and (viii) certain events with respect to the
guarantees of the Securities by the Parent and certain Restricted
Subsidiaries of the Company. 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
8
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.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise
deal with the Company or its Affiliates with the same rights it would have if
it were not Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or
by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
18. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by
the entireties), JT TEN (=joint tenants with rights of survivorship and not
as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
9
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP
numbers to be printed on the Securities and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Securityholders.
No representation is made as to the accuracy of such numbers either as
printed on the Securities or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed
thereon.
21. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including,
without limitation, the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided
therein.
22. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written request
and without charge to the Security
10
holder a copy of the Indenture which has in it the text of this Security in
larger type. Requests may be made to:
Attention of
_____________________________________________________________________________
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.
11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security
purchased by the Company pursuant to Section 4.06 or 4.09 of the
Indenture, check the box:
/ /
If you want to elect to have only part of this
Security purchased by the Company pursuant to Section 4.06 or
4.09 of the Indenture, state the amount:
$
Date: __________________ Your Signature: __________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a
member firm of the New York Stock
Exchange or a commercial bank or trust
company)
12
RULE 144A/REGULATION S APPENDIX
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO RULE
144A, INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7)) AND TO CERTAIN PERSONS IN OFFSHORE
TRANSACTIONS IN RELIANCE ON REGULATION S.
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Definitive Security" means a certificated Initial Security bearing
the restricted securities legend set forth in Section 2.3(d) and which is
held by an IAI in accordance with Section 2.1(c).
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Exchange Securities" means the 10-1/8% Senior Subordinated Notes
Due 2007 to be issued pursuant to this Indenture in connection with a
Registered Exchange Offer pursuant to the Registration Rights Agreement.
"IAI" means an institutional "accredited investor" as described in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Credit Suisse First Boston Corporation,
BT Securities Corporation and CIBC Wood Gundy Securities Corp.
"Initial Securities" means the 10-1/8% Senior Subordinated Notes
Due 2007, issued under this Indenture on or about the date hereof.
"Private Exchange" means the offer by the Company, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver
to each Initial Purchaser, in exchange for the Initial Securities held by
such Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Purchase Agreement" means the Purchase Agreement dated March 6,
1997, between the Company and FSC
Semiconductor Corporation, on the one hand, and the Initial Purchasers, on
the other.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to the Registration Rights Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for the Initial
Securities, a like aggregate principal amount of Exchange Securities
registered under the Securities Act.
"Registration Rights Agreement" means the Registration Rights
Agreement dated March 6, 1997, between the Company and FSC Semiconductor
Corporation, on the one hand, and the Initial Purchasers, on the other.
"Securities" means the Initial Securities, the Exchange Securities
and the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor person thereto
and shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement
issued by the Company, in connection with the offer and sale of Initial
Securities or Private Exchange Securities, pursuant to the Registration
Rights Agreement.
"Transfer Restricted Securities" means Definitive Securities and
Securities that bear or are required to bear the legend set forth in Section
2.3(d)hereto.
2
1.2 Other Definitions
Defined in
----------
Term Section:
---- --------
"Agent Members".........................................................2.1(b)
"Global Security".......................................................2.1(a)
"Regulation S"..........................................................2.1(a)
"Rule 144A".............................................................2.1(a)
2. The Securities.
2.1 Form and Dating.
The Initial Securities are being offered and sold by the Company
pursuant to the Purchase Agreement.
(a) Global Securities. Initial Securities offered and sold to a
QIB in reliance on Rule 144A under the Securities Act ("Rule 144A") or in
reliance on Regulation S under the Securities Act ("Regulation S"), in each
case as provided in the Purchase Agreement, shall be issued initially in the
form of one or more permanent global Securities in definitive, fully
registered form without interest coupons with the global securities legend
and restricted securities legend set forth in Exhibit 1 hereto (each, a
Global Security"), which shall be deposited on behalf of the purchasers of
the Initial Securities represented thereby with the Trustee, at its New York
office, as custodian for the Depository (or with such other custodian as the
Depository may direct), and registered in the name of the Depository or a
nominee of the Depository, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of the
Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depository or its
nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only
to a Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary for
such Global Security or Global Securities or the nominee of such Depositary
and (b) shall be delivered by the Trustee to such
3
Depositary or pursuant to such Depositary's instructions or held by the
Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary or by the Trustee as the custodian of
the Depositary or under such Global Security, and the Depositary may be
treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished
by the Depositary or impair, as between the Depositary and its Agent Members,
the operation of customary practices of such Depositary governing the
exercise of the rights of a holder of a beneficial interest in any Global
Security.
(c) Certificated Securities. Except as provided in this Section
2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global
Securities will not be entitled to receive physical delivery of certificated
Securities. Purchasers of Initial Securities who are IAIs and are not QIBs
and did not purchase Initial Securities sold in reliance on Regulation S will
receive Definitive Securities; provided, however, that upon transfer of such
Definitive Securities to a QIB, such Definitive Securities will, unless the
Global Security has previously been exchanged, be exchanged for an interest
in a Global Security pursuant to the provisions of Section 2.3.
2.2 Authentication. The Trustee shall authenticate and deliver:
(1) Initial Securities for original issue in an aggregate principal amount of
$300,000,000 and (2) Exchange Securities or Private Exchange Securities for
issue only in a Registered Exchange Offer or a Private Exchange,
respectively, pursuant to the Registration Rights Agreement, for a like
principal amount of Initial Securities, in each case upon a written order of
the Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company. Such order shall specify
the amount of the Securities to be authenticated and the date on which the
original issue of Securities is to be authenticated and whether the
Securities are to be Initial Securities, Exchange Securities or Private
Exchange Securities. The aggregate
4
principal amount of Securities outstanding at any time may not exceed
$300,000,000 except as provided in Section 2.07 of this Indenture.
2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive
Securities. When Definitive Securities are presented to the Registrar or a
co-registrar with a request:
(x) to register the transfer of such Definitive
Securities; or
(y) to exchange such Definitive Securities for an
equal principal amount of Definitive Securities of other
authorized denominations,
the Registrar or co-registrar shall register the transfer or make the
exchange as requested if its reasonable requirements for such transaction are
met; provided, however, that the Definitive Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to
the Company and the Registrar or co-registrar, duly executed
by the Holder thereof or his attorney duly authorized in
writing; and
(ii) are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act,
pursuant to Section 2.3(b) or pursuant to clause (A), (B) or
(C) below, and are accompanied by the following additional
information and documents, as applicable:
(A) if such Definitive Securities are being
delivered to the Registrar by a Holder for registration
in the name of such Holder, without transfer, a
certification from such Holder to that effect (in the
form set forth on the reverse of the Security); or
(B) if such Definitive Securities are being
transferred to the Company, a certification to that
effect (in the form set forth on the reverse of the
Security); or
(C) if such Definitive Securities are being
transferred (w) pursuant to an exemption from
registration in accordance with Rule 144; or (x) in
5
reliance on another exemption from the registration
requirements of the Securities Act: (i) a certification
to that effect (in the form set forth on the reverse of
the Security) and (ii) if the Company or Registrar so
requests, an opinion of counsel or other evidence
reasonably satisfactory to them as to the compliance
with the restrictions set forth in the legend set forth
in Section 2.3(d)(i).
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the
Trustee of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the
reverse of the Security, that such Definitive Security is
being transferred (A) to a QIB in accordance with Rule 144A,
or (B) outside the United States in an offshore transaction
within the meaning of Regulation S and in compliance with
Rule 904 under the Securities Act; and
(ii) written instructions directing the Trustee to
make, or to direct the Securities Custodian to make, an
adjustment on its books and records with respect to such
Global Security to reflect an increase in the aggregate
principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding
the Depositary account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct
the Securities Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Securities Custodian, the aggregate principal amount of Securities
represented by the Global Security to be increased by the aggregate principal
amount of the Definitive Security to be exchanged and shall credit or cause
to be credited to the account of the Person specified in such instructions a
beneficial interest in the Global Security equal to the principal amount of
the Definitive Security so cancelled. If no Global Securities are then
outstanding, the Company shall issue and the Trustee shall authenticate, upon
written order of the Company in the
6
form of an Officers' Certificate, a new Global Security in the appropriate
principal amount.
(c) Transfer and Exchange of Global Securities. (i) The transfer
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the
procedures of the Depositary therefor. A transferor of a beneficial interest
in a Global Security shall deliver to the Registrar a written order given in
accordance with the Depositary's procedures containing information regarding
the participant account of the Depositary to credited with a beneficial
interest in the Global Security. The Registrar shall, in accordance with such
instructions instruct the Depositary to credit to the account of the Person
specified in such instructions a beneficial interest in the Global Security
and to debit the account of the Person making the transfer the beneficial
interest in the Global Security being transferred.
(ii) Notwithstanding any other provisions of this
Appendix (other than the provisions set forth in
Section 2.4), a Global Security may not be transferred as a
whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(iii) In the event that a Global Security is exchanged
for Securities in definitive registered form pursuant to
Section 2.4 or Section 2.09 of the Indenture, prior to the
consummation of a Registered Exchange Offer or the
effectiveness of a Shelf Registration Statement with respect
to such Securities, such Securities may be exchanged only in
accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the
reverse of the Initial Securities intended to ensure that
such transfers comply with Rule 144A or Regulation S, as the
case may be) and such other procedures as may from time to
time be adopted by the Company.
(d) Legend.
(i) Except as permitted by the following
paragraphs (ii), (iii) and (iv), each Security certificate
7
evidencing the Global Securities and the Definitive
Securities (and all Securities issued in exchange therefor
or in substitution thereof) shall bear a legend in
substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE
UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES
ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE
SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE
COMPANY THAT, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") ON WHICH THE HOLDING
PERIOD WITH RESPECT TO THE NOTES SET FORTH IN
CLAUSE (K) OF RULE 144A PROMULGATED UNDER THE
SECURITIES ACT HAS EXPIRED, (A) THIS NOTE MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER
THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (IV) TO THE COMPANY
OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH
(V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE." THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE.
Each Definitive Security will also bear the following additional
legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
8
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer Restricted
Security represented by a Global Security) pursuant to
Rule 144 under the Securities Act:
(A) in the case of any Transfer Restricted
Security that is a Definitive Security, the Registrar
shall permit the Holder thereof to exchange such
Transfer Restricted Security for a certificated
Security that does not bear the legend set forth above
and rescind any restriction on the transfer of such
Transfer Restricted Security; and
(B) in the case of any Transfer Restricted
Security that is represented by a Global Security, the
Registrar shall permit the Holder thereof to exchange
such Transfer Restricted Security for a certificated
Security that does not bear the legend set forth above
and rescind any restriction on the transfer of such
Transfer Restricted Security, if the Holder certifies
in writing to the Registrar that its request for such
exchange was made in reliance on Rule 144 (such
certification to be in the form set forth on the
reverse of the Security).
(iii) After a transfer of any Initial Securities or
Private Exchange Securities during the period of the
effectiveness of a Shelf Registration Statement with respect
to such Initial Securities or Private Exchange Securities,
as the case may be, all requirements pertaining to legends
on such Initial Security or such Private Exchange Security
will cease to apply, the requirements requiring that any
such Initial Security or such Private Exchange Security
issued to certain Holders be issued in global form will
cease to apply, and a certificated Initial Security or
Private Exchange Security without legends will be available
to the transferee of the Holder of such Initial Securities
or Private Exchange Securities upon exchange of such
transferring Holder's certificated Initial Security or
Private Exchange Security or directions to transfer such
Holder's interest in the Global Security, as applicable.
9
(iv) Upon the consummation of a Registered Exchange
Offer with respect to the Initial Securities pursuant to
which Holders of such Initial Securities are offered
Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders
be issued in global form will cease to apply and
certificated Initial Securities with the restricted
securities legend set forth in Exhibit 1 hereto will be
available to Holders of such Initial Securities that do not
exchange their Initial Securities, and Exchange Securities
in certificated or global form will be available to Holders
that exchange such Initial Securities in such Registered
Exchange Offer.
(v) Upon the consummation of a Private Exchange with
respect to the Initial Securities pursuant to which Holders
of such Initial Securities are offered Private Exchange
Securities in exchange for their Initial Securities, all
requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in
global form will still apply, and Private Exchange
Securities in global form with the Restricted Securities
Legend set forth in Exhibit 1 hereto will be available to
Holders that exchange such Initial Securities in such
Private Exchange.
(e) Cancellation or Adjustment of Global Security. At such time
as all beneficial interests in a Global Security have either been exchanged
for certificated or Definitive Securities, redeemed, repurchased or canceled,
such Global Security shall be returned to the Depositary for cancellation or
retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged
for certificated or Definitive Securities, redeemed, repurchased or canceled,
the principal amount of Securities represented by such Global Security shall
be reduced and an adjustment shall be made on the books and records of the
Trustee (if it is then the Securities Custodian for such Global Security)
with respect to such Global Security, by the Trustee or the Securities
Custodian, to reflect such reduction.
(f) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee
10
shall authenticate certificated Securities, Definitive
Securities and Global Securities at the Registrar's or
co-registrar's request.
(ii) No service charge shall be made for any
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer
tax, assessments, or similar governmental charge payable in
connection therewith (other than any such transfer taxes,
assessments or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.06, 4.09 and
9.05).
(iii) The Registrar or co-registrar shall not be
required to register the transfer of or exchange of (a) any
certificated or Definitive Security selected for redemption
in whole or in part pursuant to Article 3 of this Indenture,
except the unredeemed portion of any certificated or
Definitive Security being redeemed in part, or (b) any
Security for a period beginning 15 Business Days before the
mailing of a notice of an offer to repurchase or redeem
Securities or 15 Business Days before an interest payment
date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the
Paying Agent, the Registrar or any co-registrar may deem and
treat the person in whose name a Security is registered as
the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such
Security and for all other purposes whatsoever, whether or
not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar
shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or
exchange pursuant to the terms of this Indenture shall
evidence the same debt and shall be entitled to the same
benefits under this Indenture as the Securities surrendered
upon such transfer or exchange.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Security, a
member of, or a participant in the Depositary or other
Person with respect to the accuracy of the records of the
11
Depositary or its nominee or of any participant or member
thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any
participant, member, beneficial owner or other Person (other
than the Depositary) of any notice (including any notice of
redemption) or the payment of any amount, under or with
respect to such Securities. All notices and communications
to be given to the Holders and all payments to be made to
Holders under the Securities shall be given or made only to
or upon the order of the registered Holders (which shall be
the Depositary or its nominee in the case of a Global
Security). The rights of beneficial owners in any Global
Security shall be exercised only through the Depositary
subject to the applicable rules and procedures of the
Depositary. The Trustee may rely and shall be fully
protected in relying upon information furnished by the
Depositary with respect to its members, participants and any
beneficial owners.
(ii) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or
among Depositary participants, members or beneficial owners
in any Global Security) other than to require delivery of
such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and to examine the
same to determine substantial compliance as to form with the
express requirements hereof.
2.4 Certificated Securities.
(a) A Global Security deposited with the Depositary or with the
Trustee as custodian for the Depositary pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for such
Global Security or if at any time such Depositary ceases to be a "clearing
agency" registered under the Exchange Act and a successor depositary is not
appointed by the Company within 90 days of such notice, or (ii) an Event of
Default has occurred and is continuing or
12
(iii) the Company, in its sole discretion, notifies the Trustee in writing
that it elects to cause the issuance of certificated Securities under this
Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section shall be surrendered by the
Depositary to the Trustee located in the Borough of Manhattan, The City of
New York, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Security, an equal aggregate
principal amount of certificated Initial Securities of authorized
denominations. Any portion of a Global Security transferred pursuant to this
Section shall be executed, authenticated and delivered only in denominations
of $1,000 and any integral multiple thereof and registered in such names as
the Depositary shall direct. Any certificated Initial Security delivered in
exchange for an interest in the Global Security shall, except as otherwise
provided by Section 2.3(d), bear the restricted securities legend set forth
in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under
this Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a), the Company will promptly make available to the
Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.
13
EXHIBIT 1
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT, PRIOR TO
THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") ON WHICH THE HOLDING PERIOD WITH RESPECT TO THE NOTES SET
FORTH IN CLAUSE (K) OF RULE 144A PROMULGATED UNDER THE SECURITIES ACT HAS
EXPIRED, (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (IV) TO THE COMPANY OR (V)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT
OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.](1)
- -------------------------
(1) Include if a Definitive Security to be held by an institutional
"accredited investor" (as defined in Rule 501(a), (1), (2), (3) or (7) under
the Securities Act).
2
No. $
10-1/8% Senior Subordinated Notes Due 2007
FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware corporation,
promises to pay to , or registered
assigns, the principal sum of Dollars on
March 15, 2007.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
Additional provisions of this Security are set forth on
the other side of this Security.
Dated:
FAIRCHILD SEMICONDUCTOR
CORPORATION,
by
---------------------------------
President
---------------------------------
Secretary
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
UNITED STATES TRUST COMPANY
OF NEW YORK,
as Trustee, certifies
[Seal] that this is one of
the Securities referred
to in the Indenture.
by
---------------------------------
Authorized Signatory
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[FORM OF REVERSE SIDE OF INITIAL SECURITY]
10-1/8% Senior Subordinated Note Due 2007
1. Interest
FAIRCHILD SEMICONDUCTOR 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;
provided, however, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, additional interest will accrue on
this Security at a rate of 0.50% per annum, increasing by 0.50% per annum on
the 90th day after such Registration Default and on every 90th day thereafter
during the continuation of any Registration Default, to but excluding the
date on which all Registration Defaults have been cured; provided, however,
that such additional interest shall not exceed 2.0% per annum. The Company
will pay interest semiannually on March 15 and September 15 of each year,
commencing September 15, 1997. 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 March 11, 1997. 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 plus 1% per annum, 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 the March 1 or September 1 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 will pay principal
and interest in money of the United States that at the time of payment is
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legal tender for payment of public and private debts. Payments in respect of
the Securities represented by a Global Security (including principal, premium
and interest) will be made by wire transfer of immediately available funds to
the accounts specified by The Depository Trust Company. The Company will
make all payments in respect of a certificated Security (including principal,
premium and interest) by mailing a check to the registered address of each
Holder thereof; provided, however, that payments on a certificated Security
will be made by wire transfer to a U.S. dollar account maintained by the
payee with a bank in the United States if such Holder elects payment by wire
transfer by giving written notice to the Trustee or the Paying Agent to such
effect designating such account no later than 30 days immediately preceding
the relevant due date for payment (or such other date as the Trustee may
accept in its discretion).
3. Paying Agent and Registrar
Initially, 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
March 11, 1997 ("Indenture"), among the Company, FSC Semiconductor
Corporation ("Parent") as guarantor, and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections
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
limited to $300,000,000 aggregate principal amount (subject to Section 2.07
of the Indenture). The
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Indenture limits, among other things (i) the incurrence of additional debt by
the Company and its subsidiaries, (ii) the payment of dividends on capital
stock of the Company and the purchase, redemption or retirement of capital
stock or subordinated indebtedness, (iii) certain transactions with
affiliates, (iv) sales of assets, including capital stock of subsidiaries,
and (v) 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.
5. Optional Redemption
Except as set forth in the next paragraph, the Securities may not
be redeemed prior to March 15, 2002. On and after that date, the Company may
redeem the Securities in whole at any time or in part from time to time at
the following redemption prices (expressed in percentages of principal
amount), plus accrued interest to the redemption date (subject to the right
of Holders of record on the relevant record date to receive interest due on
the related interest payment date), if redeemed during the 12-month period
beginning March 15 of the year set forth below:
Period Percentage
------ ----------
2002.............................. 105.063%
2003.............................. 103.375
2004.............................. 101.688
2005 and thereafter............... 100.000
In addition, at any time prior to March 15, 2000, the Company may
redeem up to $105.0 million of the aggregate principal amount of Securities
with the proceeds of a Public Equity Offering, at any time or from time to
time, at a redemption price (expressed as a percentage of principal amount)
of 110% plus accrued interest to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
related interest payment date); provided, however, that at least $150.0
million aggregate principal amount of the Securities must remain outstanding
after each such redemption.
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6. Mandatory Redemption
On March 15, 2005 the Company will redeem $150.0 million principal
amount of Securities and on March 15, 2006 the Company will redeem $75.0
million principal amount of the Securities, in each case at a redemption
price of 100% of the principal amount, plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the related interest payment date).
The Company may receive a credit against the principal amount of the
Securities required to be redeemed pursuant to this paragraph equal to the
principal amount (excluding premium) of any Securities that the Company has
acquired or redeemed other than pursuant to this paragraph and has delivered
to the Trustee for cancellation. The Company may receive the credit only
once for any Security.
7. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder 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 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. Put Provisions
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions, to cause the Company to repurchase all
or any part of the Securities of such Holder at a repurchase price equal to
101% of the principal amount of the Securities to be repurchased plus accrued
interest to the date of repurchase (subject to the right of holders of record
on the relevant record date to receive interest due on the related interest
payment date) as provided in, and subject to the terms of, the Indenture.
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9. Subordination; Guaranties
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness 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 them effect and appoints the Trustee as attorney-in-fact for
such purpose.
Parent has agreed to guarantee the obligations of the Company under
the Securities, and certain domestic subsidiaries of the Company may in the
future be required to guarantee such obligations. Any such guarantees will
be subordinated to any Senior Indebtedness of Parent or such subsidiaries, as
applicable.
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 (or in the case of Definitive Securities sold to
institutional accredited investors as described in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act, minimum denominations of $200,000 and 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.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
8
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
13. 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 U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
14. 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 release any
guarantee of the Securities by the Company's Subsidiaries then permitted by
the Indenture, or to make any change that does not adversely affect the
rights of any Securityholder.
9
15. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to
paragraph 5 or 6 of the Securities, upon acceleration or otherwise, or
failure by the Company to redeem or purchase Securities when required; (iii)
failure by the Company to comply with other agreements in the Indenture or
the Securities, in certain cases subject to notice and lapse of time; (iv)
certain accelerations (including failure to pay within any grace period after
final maturity) of other Indebtedness of the Company if the amount
accelerated (or so unpaid) exceeds $10 million; (v) certain events of
bankruptcy or insolvency with respect to the Company and the Significant
Subsidiaries; (vi) certain judgments or decrees for the payment of money in
excess of $10 million; and (viii) certain events with respect to the
guarantees of the Securities by the Parent and certain Restricted
Subsidiaries of the Company. 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.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations
10
owed to it by the Company or its Affiliates and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or
by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
18. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by
the entireties), JT TEN (=joint tenants with rights of survivorship and not
as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
22. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including,
without limitation, the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided
therein.
21. 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
11
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written request
and without charge to the Security
12
holder a copy of the Indenture which has in it the text of this Security in
larger type. Requests may be made to:
Attention of
- ------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to
transfer this Security on the books of the Company. The agent
may substitute another to act for him.
- ------------------------------------------------------------------------------
- ---------
Date: Your Signature:
--------------------------- -----------------------------
- ------------------------------------------------------------------------------
- ---------
Sign exactly as your name appears on the other side of this
Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in
Rule 144(k) under the Securities Act after the later of the date of original
issuance of such Securities and the last date, if any, on which such
Securities were owned by the Company or any Affiliate of the Company, the
undersigned confirms that such Securities are being transferred in accordance
with its terms:
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CHECK ONE BOX BELOW
(1) / / to the Company; or
(2) / / pursuant to an effective registration statement
under the Securities Act of 1933; or
(3) / / inside the United States to a "qualified
institutional buyer" (as defined in Rule 144A
under the Securities Act of 1933) that purchases
for its own account or for the account of a
qualified institutional buyer to whom notice is
given that such transfer is being made in reliance
on Rule 144A, in each case pursuant to and in
compliance with Rule 144A under the Securities Act
of 1933; or
(4) / / outside the United States in an offshore
transaction within the meaning of Regulation S
under the Securities Act in compliance with
Rule 904 under the Securities Act of 1933; or
(5) / / pursuant to another available exemption from
registration provided by Rule 144 under the
Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse
to register any of the Securities evidenced by this
certificate in the name of any person other than the
registered holder thereof; provided, however, that if box
(4) or (5) is checked, the Trustee may require, prior to
registering any such transfer of the Securities, such legal
opinions, certifications and other information as the
Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in
a transaction not subject to, the registration requirements
of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
---------------------------------------
Signature
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Signature Guarantee:
- ---------------------------- ------------------------------------
Signature must be guaranteed Signature
- ------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:
--------------------- ------------------------------------------------
NOTICE: To be executed by
an executive officer
15
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global
Security have been made:
Date of Amount of decrease Amount of increase Principal amount Signature of
Exchange in Principal in Principal of this Global authorized officer
Amount of this Amount of this Security following of Trustee or
Global Security Global Security such decrease or Securities
increase Custodian
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by
the Company pursuant to Section 4.06 or 4.09 of the Indenture,
check the box:
----
----
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.09 of the
Indenture, state the amount: $
Date: Your Signature:
------------------------------ -------------------------
(Sign exactly as your
name appears on the other
side of this Security.)
Signature Guarantee:
--------------------------------------------
(Signature must be guaranteed)
17