Exhibit 4.2
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ON SEMICONDUCTOR CORPORATION
SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC
12% Senior Secured Notes due 2008
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INDENTURE
Dated as of May 6, 2002
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Xxxxx Fargo Bank Minnesota, National Association,
as Trustee
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions ............................................... 1
SECTION 1.02. Other Definitions ......................................... 23
SECTION 1.03. Incorporation by Reference of Trust Indenture Act ......... 24
SECTION 1.04. Rules of Construction ..................................... 24
SECTION 1.05. Designated Senior Indebtedness ............................ 25
ARTICLE II
THE NOTES
SECTION 2.01. Amount of Notes; Issuable in Series ....................... 25
SECTION 2.02. Form and Dating ........................................... 26
SECTION 2.03. Execution and Authentication .............................. 26
SECTION 2.04. Registrar and Paying Agent ................................ 27
SECTION 2.05. Paying Agent to Hold Money in Trust ....................... 27
SECTION 2.06. Holder Lists .............................................. 28
SECTION 2.07. Transfer and Exchange ..................................... 28
SECTION 2.08. Replacement Notes ......................................... 28
SECTION 2.09. Outstanding Notes ......................................... 29
SECTION 2.10. Temporary Notes ........................................... 29
SECTION 2.11. Cancelation ............................................... 29
SECTION 2.12. Defaulted Interest ........................................ 30
SECTION 2.13. CUSIP and "ISIN" Numbers .................................. 30
SECTION 2.14. Computation of Interest ................................... 30
ARTICLE III
REDEMPTION
SECTION 3.01. Notices to Trustee ........................................ 30
SECTION 3.02. Selection of Notes To Be Redeemed ......................... 30
SECTION 3.03. Notice of Redemption ...................................... 31
SECTION 3.04. Effect of Notice of Redemption ............................ 32
SECTION 3.05. Deposit of Redemption Price ............................... 32
SECTION 3.06. Notes Redeemed in Part .................................... 32
ARTICLE IV
COVENANTS
SECTION 4.01. Payment of Notes .......................................... 32
SECTION 4.02. Commission Reports ........................................ 33
SECTION 4.03. Limitation on Incurrence of Additional Indebtedness ....... 33
SECTION 4.04. Limitation on Restricted Payments ......................... 36
SECTION 4.05. Limitation on Restrictions on Distributions from Restricted
Subsidiaries ............................................. 40
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock ........ 41
SECTION 4.07. Limitation on Transactions with Affiliates ................ 44
SECTION 4.08. Repurchase of Notes at the Option of the Holder Upon a
Change of Control ........................................ 45
SECTION 4.09. Compliance Certificate .................................... 46
SECTION 4.10. Further Instruments and Acts .............................. 47
SECTION 4.11. Additional Note Guarantees and Liens ...................... 47
SECTION 4.12. Limitation on Lines of Business ........................... 48
SECTION 4.13. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries .................................. 48
SECTION 4.14. Limitation on Liens ....................................... 49
SECTION 4.15. Sale/Leaseback Transactions ............................... 49
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.01. When Company May Merge or Transfer Assets ................. 49
ARTICLE VI
EVENTS OF DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default ......................................... 51
SECTION 6.02. Acceleration .............................................. 53
SECTION 6.03. Other Remedies ............................................ 53
SECTION 6.04. Waiver of Past Defaults ................................... 54
SECTION 6.05. Control by Majority ....................................... 54
SECTION 6.06. Limitation on Suits ....................................... 54
SECTION 6.07. Rights of Holders to Receive Payment ...................... 55
SECTION 6.08. Collection Suit by Trustee ................................ 55
SECTION 6.09. Trustee May File Proofs of Claim .......................... 55
SECTION 6.10. Priorities ................................................ 55
SECTION 6.11. Undertaking for Costs ..................................... 55
SECTION 6.12. Waiver of Stay or Extension Laws .......................... 56
ARTICLE VII
TRUSTEE
SECTION 7.01. Duties of Trustee ......................................... 56
SECTION 7.02. Rights of Trustee ......................................... 57
SECTION 7.03. Individual Rights of Trustee .............................. 58
SECTION 7.04. Trustee's Disclaimer ...................................... 58
SECTION 7.05. Notice of Defaults ........................................ 58
SECTION 7.06. Reports by Trustee to Holders ............................. 58
SECTION 7.07. Compensation and Indemnity ................................ 58
SECTION 7.08. Replacement of Trustee .................................... 59
SECTION 7.09. Successor Trustee by Merger ............................... 60
SECTION 7.10. Eligibility; Disqualification ............................. 60
SECTION 7.11. Preferential Collection of Claims Against the Issuers ..... 60
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes; Defeasance ............... 61
SECTION 8.02. Conditions to Defeasance .................................. 62
SECTION 8.03. Application of Trust Money ................................ 63
SECTION 8.04. Repayment to the Issuers .................................. 63
SECTION 8.05. Indemnity for Government Obligations ...................... 63
SECTION 8.06. Reinstatement ............................................. 63
ARTICLE IX
AMENDMENTS
SECTION 9.01. Without Consent of Holders ................................ 64
SECTION 9.02. With Consent of Holders ................................... 65
SECTION 9.03. Compliance with Trust Indenture Act ....................... 66
SECTION 9.04. Revocation and Effect of Consents and Waivers ............. 66
SECTION 9.05. Notation on or Exchange of Notes .......................... 66
SECTION 9.06. Trustee to Sign Amendments ................................ 66
SECTION 9.07. Payment for Consent ....................................... 67
ARTICLE X
COLLATERAL AND SECURITY
SECTION 10.01. Security Documents ....................................... 67
SECTION 10.02. Recording and Opinions ................................... 67
SECTION 10.03. Release of Collateral .................................... 68
SECTION 10.04. Certificates and Opinions of Counsel ..................... 69
SECTION 10.05. Certificates of the Trustee .............................. 70
SECTION 10.06. Authorization of Actions to Be Taken by the Trustee Under
the Security Documents ................................... 70
SECTION 10.07. Authorization of Receipt of Funds by the Trustee Under the
Security Documents ....................................... 70
SECTION 10.08. Termination of Security Interest ......................... 70
SECTION 10.09. Collateral Agent ......................................... 71
SECTION 10.10. Designations ............................................. 72
ARTICLE XI
NOTE GUARANTEES
SECTION 11.01. Note Guarantees .......................................... 72
SECTION 11.02. Limitation on Liability .................................. 74
SECTION 11.03. Releases of Note Guarantees .............................. 74
SECTION 11.04. Successors and Assigns ................................... 75
SECTION 11.05. No Waiver ................................................ 75
SECTION 11.06. Modification ............................................. 75
SECTION 11.07. Execution of Supplemental Indenture for Future Guarantors. 75
SECTION 11.08. Non-Impairment ........................................... 75
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls ............................. 76
SECTION 12.02. Notices .................................................. 76
SECTION 12.03. Communication by Holders with Other Holders .............. 77
SECTION 12.04. Certificate and Opinion as to Conditions Precedent ....... 77
SECTION 12.05. Statements Required in Certificate or Opinion ............ 77
SECTION 12.06. When Notes Disregarded ................................... 77
SECTION 12.07. Rules by Trustee, Paying Agent and Registrar ............. 78
SECTION 12.08. Legal Holidays ........................................... 78
SECTION 12.09. GOVERNING LAW ............................................ 78
SECTION 12.10. No Recourse Against Others ............................... 78
SECTION 12.11. Successors ............................................... 78
SECTION 12.12. Multiple Originals ....................................... 78
SECTION 12.13. Table of Contents; Headings .............................. 78
SECTION 12.14. Tax Treatment of the Notes ............................... 78
Appendix A - Provisions Relating to Original Notes, Additional Notes,
Private Exchange Notes and Exchange Notes
Exhibit A - Form of Initial Note and Private Exchange Note
Exhibit B - Form of Exchange Note
Exhibit C - Form of Supplemental Indenture
INDENTURE dated as of May 6, 2002, among ON
SEMICONDUCTOR CORPORATION, a Delaware corporation (the
"Company"), SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC, a
Delaware limited liability company and a wholly-owned
subsidiary of the Company ("SCI LLC" and, together with the
Company, the "Issuers"), SCG (MALAYSIA SMP) HOLDING
CORPORATION, SCG (CZECH) HOLDING CORPORATION, SCG (CHINA)
HOLDING CORPORATION, SEMICONDUCTOR COMPONENTS INDUSTRIES
PUERTO RICO, INC., SCG INTERNATIONAL DEVELOPMENT LLC,
SEMICONDUCTOR COMPONENTS INDUSTRIES OF RHODE ISLAND, INC. and
SEMICONDUCTOR COMPONENTS INDUSTRIES INTERNATIONAL OF RHODE
ISLAND, INC., as guarantors (collectively, the "Guarantors"),
and XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of (a) the Issuers' 12%
Senior Secured Notes due 2008 issued on the date hereof (the "Original Notes"),
(b) any Additional Notes (as defined herein) that may be issued on any Issue
Date (all such Notes in clauses (a) and (b) being referred to collectively as
the "Initial Notes"), (c) if and when issued as provided in a Registration
Rights Agreement (as defined in Appendix A hereto (the "Appendix")), the
Issuers' 12% Senior Secured Notes due 2008 (the "Exchange Notes") issued in an
Exchange Offer in exchange for any Initial Notes and (d) if and when issued as
provided in a Registration Rights Agreement, the Private Exchange Notes (such
term and each other term used but not defined herein has the meaning assigned to
such term in Sections 1.01 and 1.02; the Private Exchange Notes, together with
the Initial Notes and any Exchange Notes issued hereunder, the "Notes") issued
in a Private Exchange. On the date hereof, $300,000,000 in aggregate principal
amount of Notes will be initially issued. Subject to the conditions and in
compliance with the covenants set forth herein, the Issuers may issue an
unlimited aggregate principal amount of Additional Notes from time to time.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Acquired Debt" means, with respect to any specified Person, (a)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including Indebtedness Incurred in connection with, or in contemplation of, such
other Person merging with or into or becoming a Restricted Subsidiary of such
specified Person and (b) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Additional Assets" means (a) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Permitted Business; (b) 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 (c) 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 (b) or (c) above is primarily engaged in a Permitted Business.
"Additional Interest" means any additional interest payable under a
Registration Rights Agreement.
"Additional Notes" means any 12% Senior Secured Notes due 2008,
issued under the terms of this Indenture subsequent to the Closing Date.
"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 Sections 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of shares representing more than 10% of the total voting power
of the Voting Stock (on a fully diluted basis) of the Company or of rights or
warrants to purchase such Voting Stock (whether or not currently exercisable)
and any Person who would be an Affiliate of any such beneficial owner pursuant
to the first sentence hereof.
"Asset Disposition" means any sale, lease (other than an operating
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 (a) 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) that have
a Fair Market Value in excess of $5 million, (b) all or substantially all the
assets of any division or line of business of the Company or any Restricted
Subsidiary or (c) 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 (a), (b) and (c) above, (i) a disposition
by the Company to a Restricted Subsidiary or by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary, (ii) an issuance of Capital Stock
by a Subsidiary to the Company or to a Restricted Subsidiary, (iii) for purposes
of Section 4.06 only, a disposition that constitutes a Restricted Payment
permitted by Section 4.04, (iv) a disposition of assets with a Fair Market Value
of less than $5 million, (v) a Sale/Leaseback Transaction with respect to any
assets within 90 days of the acquisition of such assets, (vi) a disposition of
Temporary Cash Investments, the proceeds of which are used within five business
days to make another Permitted Investment, (vii) a disposition of obsolete,
uneconomical, negligible, worn out or surplus property or equipment in the
ordinary course of business and the periodic clearance of aged inventory, (viii)
any exchange of like-kind property of the type described in Section 1031 of the
Code for use in a Permitted Business, (ix) the sale or disposition
of any assets or property received as a result of a foreclosure by the Company
or any of its Restricted Subsidiaries of any secured Investment or any other
transfer of title with respect to any secured Investment in default, (x) the
licensing of intellectual property in the ordinary course of business or in
accordance with industry practice, (xi) the sale or discount, in each case
without recourse, of accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof and
(xii) a sale of accounts receivable and related assets pursuant to a Receivables
Facility. Notwithstanding the foregoing, the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole will be governed by the provisions of Sections
4.08 and 5.01 and not by the provisions of Section 4.06.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate implicit in such transaction, determined in accordance with GAAP)
of the total obligations of the lessee for net 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 or may be, at the
option of the lessor, extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the number of years obtained by dividing
(a) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or scheduled redemption or similar payment with respect to
such Preferred Stock multiplied by the amount of such payment by (b) the then
outstanding sum of all such payments.
"Bank Indebtedness" means any and all amounts payable under or in
respect of the Credit Agreement and any Refinancing Indebtedness with respect
thereto, as amended from time to time, including principal, premium (if any),
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or SCI LLC whether or
not a claim for post-filing interest is allowed in such proceedings), fees,
charges, expenses, reimbursement obligations, guarantees and all other amounts
payable thereunder or in respect thereof. It is understood and agreed that
Refinancing Indebtedness in respect of the Credit Agreement may be Incurred from
time to time after termination of 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 the Board of Directors
of the Company.
"Business Day" means each day which is not a Legal Holiday.
"Capitalized Lease Obligations" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with 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 prepaid by the lessee
without payment of a penalty.
"Capital Stock" of any Person means any and all shares, partnership,
membership or other interests, 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) and any
rights to purchase, warrants, options or similar interests with respect to the
foregoing.
"Cash Management Obligations" means, with respect to any Person, all
obligations of such Person in respect of overdrafts and related liabilities owed
to any other Person that arise from treasury, depositary or cash management
services in connection with automated clearing house transfers of funds or any
similar transactions.
"Change of Control" means the occurrence of any of the following
events:
(a) (i) any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act), other than one or more Permitted Holders, becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a 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 40% of the total voting power of the Voting Stock of
the Company or SCI LLC, whether as a result of issuance of securities of the
Company or SCI LLC, any merger, consolidation, liquidation or dissolution of the
Company or SCI LLC, any direct or indirect transfer of securities by any
Permitted Holder or otherwise, and (ii) 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
or SCI LLC, than such other person and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the board of directors of the Company or the similar governing body
of SCI LLC, as the case may be;
(b) during any period of two consecutive years, individuals who at
the beginning of such period constituted the board of directors of the Company
or the similar governing body of SCI LLC, as the case may be (together with any
new directors or members of such governing body, as the case may be, whose
election by such board of directors of the Company or governing body of SCI LLC,
as the case may be, or whose nomination for election by the shareholders of the
Company or the members of SCI LLC, as the case may be, was approved by a vote of
a majority of the directors of the Company or a majority of the members of the
governing body of SCI LLC, as the case may be, then still in office who were
either directors or members of such governing body, as the case may be, at the
beginning of such period or whose election or nomination for election was
previously so approved), cease for any reason to constitute a majority of the
board of directors of the Company or a majority of the members of the governing
body of SCI LLC, as the case may be, then in office;
(c) the adoption of a plan relating to the liquidation or
dissolution of the Company or SCI LLC (other than a plan with respect to SCI LLC
adopted solely for the purpose of reorganizing SCI LLC as a corporation); or
(d) the merger or consolidation of the Company or SCI LLC with or
into another Person or the merger of another Person with or into the Company or
SCI LLC, or the sale of all
or substantially all the assets of the Company or SCI LLC to another Person
(other than a Person that is controlled by the Permitted Holders), and, in the
case of any such merger or consolidation, the securities of the Company or SCI
LLC that are outstanding immediately prior to such transaction and which
represent 100% of the aggregate voting power of the Voting Stock of the Company
or SCI LLC 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 or a Person controlling such
surviving Person or transferee.
"China JV" means the Company's joint venture in Leshan, China.
"Closing Date" means the date of this Indenture.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all property and assets of any Issuer or
Guarantor with respect to which from time to time a Lien is granted as security
for the Notes pursuant to the applicable Security Documents.
"Collateral Agent" means the Trustee in its capacity as the
"Collateral Agent" under and as defined in the Security Documents and any
successor thereto in such capacity.
"Collateral Assignment" means the Collateral Assignment dated as of
May 6, 2002, between SCI LLC and the Collateral Agent.
"Commission" means the Securities and Exchange Commission.
"Commodity Hedge Obligations" means with respect to any Person any
commodity price protection agreement or other commodity price hedging
arrangement or other similar agreement or arrangement as to which such Person is
party.
"Common Collateral Agent" means a bank or trust company authorized
to exercise corporate trust powers that has been appointed by the Issuers, and
has agreed, to act as collateral agent for the equal and ratable benefit of both
the holders of obligations secured by the Liens Securing Note Obligations and
the holders of all other obligations secured by Liens Securing Other Second-Lien
Obligations, in its capacity as such collateral agent.
"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 (a) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters for which internal financial statements
are available prior to the date of such determination to (b) Consolidated
Interest Expense for such four fiscal quarters; provided, however, that (i) if
the Company or any Restricted Subsidiary has Incurred any Indebtedness since the
beginning of such period that remains outstanding on such date of determination
or if
the transaction giving rise to the need to calculate the Consolidated Coverage
Ratio is an Incurrence of Indebtedness, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving effect on a pro forma basis to
such Indebtedness as if such Indebtedness had been Incurred on the first day of
such period (in each case other than Indebtedness Incurred under any revolving
credit facility, in which case interest expense shall be computed based upon the
average daily balance of such Indebtedness during the applicable 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, (ii) 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 if such
Indebtedness has been permanently repaid and has not been replaced, other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness is permanently reduced, in which case interest expense shall be
computed based upon the average daily balance of such Indebtedness during the
applicable period) 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 any 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, (iii) if
since the beginning of such period the Company or any Restricted Subsidiary
shall have made any Asset Disposition, EBITDA for such period shall be reduced
by an amount equal to EBITDA (if positive) directly attributable to the assets
that are the subject of such Asset Disposition for such period or increased by
an amount equal to 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), (iv) 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 that becomes a Restricted Subsidiary)
or an acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit of a business, EBITDA
and Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any Indebtedness)
as if such Investment or acquisition occurred on the first day of such period
and (v) 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 or any Investment or acquisition of assets that would have
required an adjustment pursuant to clause (iii) or (iv) above if made by the
Company or a Restricted Subsidiary during such period, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro forma
effect thereto as if such Asset Disposition, Investment or acquisition of assets
occurred on the first day
of such period. For purposes of this definition, whenever pro forma effect is to
be given to an acquisition of assets, the amount of income or earnings relating
thereto and the amount of Consolidated Interest Expense associated with any
Indebtedness Incurred in connection therewith, the pro forma calculations shall
be determined in good faith by a responsible financial or accounting Officer of
the Company. Any such pro forma calculations shall reflect any pro forma expense
and cost reductions attributable to such acquisitions, to the extent such
expense and cost reduction would be permitted by the Commission to be reflected
in pro forma financial statements included in a registration statement filed
with the Commission. If any Indebtedness bears a floating rate of interest and
is being given pro forma effect, the interest expense on such Indebtedness shall
be calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any Interest Rate
Agreement applicable to such Indebtedness if such Interest Rate Agreement has a
remaining term as at the date of determination in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its Consolidated Restricted Subsidiaries,
plus, to the extent Incurred by the Company or its Restricted Subsidiaries in
such period but not included in such interest expense, without duplication (a)
interest expense attributable to Capitalized Lease Obligations and the imputed
interest with respect to Attributable Debt, (b) amortization of debt discount,
(c) amortization of debt issuance costs (other than any such costs associated
with the Bank Indebtedness, the Initial Notes, the Exchange Notes, the Senior
Subordinated Notes, the Junior Subordinated Note or otherwise associated with
the Refinancing), (d) capitalized interest, (e) noncash interest expense other
than any noncash interest expense in connection with the Junior Subordinated
Note, (f) commissions, discounts and other fees and charges attributable to
letters of credit and bankers' acceptance financing, (g) interest accruing on
any Indebtedness of any other Person to the extent such Indebtedness is
Guaranteed by the Company or any Restricted Subsidiary, (h) net costs associated
with Hedging Obligations (including amortization of fees) (other than any such
costs associated with the Bank Indebtedness, the Initial Notes, the Exchange
Notes, the Senior Subordinated Notes, the Junior Subordinated Note or otherwise
associated with the Refinancing), (i) dividends in respect of all Disqualified
Stock of the Company and all Preferred Stock of any of the Restricted
Subsidiaries of the Company, to the extent held by Persons other than the
Company or another Restricted Subsidiary, other than accumulated but unpaid
dividends on the TPG Preferred Stock, (j) interest Incurred in connection with
investments in discontinued operations and (k) 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.
Notwithstanding anything to the contrary contained herein, commissions,
discounts, yield and other fees and charges Incurred in connection with any
transaction (including in connection with a Receivables Facility) pursuant to
which the Company or any Subsidiary of the Company may sell, convey or otherwise
transfer or grant a security interest in any accounts receivable or related
assets as contemplated by the definition of "Receivables Facility" shall be
included in Consolidated Interest Expense.
"Consolidated Net Income" means, for any period, the net income of
the Company and its Consolidated Subsidiaries for such period determined in
accordance with GAAP; provided, however, that:
(a) any net income of any Person (other than the Company), if such
Person is not a Restricted Subsidiary, shall be excluded from such Consolidated
Net Income, except that (i) subject to the limitations contained in clause (d)
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 made to a Restricted Subsidiary, to the
limitations contained in clause (c) below) and (ii) the Company's equity in a
net loss of any such Person for such period shall be included in determining
such Consolidated Net Income;
(b) 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 shall be excluded from such Consolidated Net
Income;
(c) any net income (or loss) of any Restricted Subsidiary, to the
extent that the declaration of dividends or similar distributions by such
Restricted Subsidiary of that income is not at the date of determination
permitted without any prior governmental approval (that has not been obtained)
or is, directly or indirectly, restricted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary or its
stockholders or other holders of its equity, shall be excluded from such
Consolidated Net Income, except that (i) subject to the limitations contained in
clause (d) below, the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash actually distributed by such Restricted
Subsidiary during such period to the Company or another Restricted Subsidiary as
a dividend or other distribution (subject, in the case of a dividend or other
distribution made to another Restricted Subsidiary, to the limitation contained
in this clause) and (ii) 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;
(d) any gain (or loss) realized upon the sale or other disposition
of any asset of the Company or its Consolidated Subsidiaries (including pursuant
to any Sale/Leaseback Transaction) that is not sold or otherwise disposed of in
the ordinary course of business and any gain (or loss) realized upon the sale or
other disposition of any Capital Stock of any Person shall be excluded from such
Consolidated Net Income (without regard to abandonments or reserves related
thereto);
(e) any extraordinary gain or loss shall be excluded from such
Consolidated Net Income;
(f) the cumulative effect of a change in accounting principles shall
be excluded from such Consolidated Net Income;
(g) gains or losses due solely to fluctuations in currency values
and the related tax effects according to GAAP shall be excluded from such
Consolidated Net Income;
(h) only for the purposes of the definition of EBITDA, one-time cash
charges recorded in accordance with GAAP resulting from any merger,
recapitalization or acquisition transaction shall be excluded from such
Consolidated Net Income; and
(i) the amortization of any premiums, fees or expenses incurred in
connection with the Refinancing or any amounts required or permitted by
Accounting Principles Board Opinions Nos. 16 (including noncash write-ups and
noncash charges relating to inventory and fixed assets, in each case arising in
connection with the Refinancing) and 17, in each case in connection with the
Refinancing, shall be excluded from such Consolidated Net Income.
"Consolidation" means the consolidation of the amounts of each of
the Restricted Subsidiaries with those of the Company in accordance with GAAP
consistently applied; provided, however, that "Consolidation" shall not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Company or any Restricted Subsidiary in an Unrestricted Subsidiary shall
be accounted for as an investment. The term "Consolidated" has a correlative
meaning.
"Credit Agent" means JPMorgan Chase Bank, in its capacity as
administrative and collateral agent for the lenders party to the Credit
Agreement or any successor thereto, or any Person otherwise designated the
"Credit Agent" pursuant to the Intercreditor Agreement.
"Credit Agreement" means the credit agreement dated as of August 4,
1999, as amended and restated as of April 3, 2000, and as subsequently amended,
among SCI LLC, the Company, the lenders named therein and JPMorgan Chase Bank,
as administrative agent, collateral agent and syndication agent, and Credit
Lyonnais New York Branch, Credit Suisse First Boston and Xxxxxx Commercial Paper
Inc., as co-documentation agents, including any guarantees, collateral
documents, instruments and agreements executed in connection therewith, and any
amendments, supplements, modifications, extensions, renewals, restatements or
refundings thereof (except to the extent that any such amendment, supplement,
modification, extension, renewal, restatement or refunding would be prohibited
by the terms of this Indenture, unless otherwise agreed to by the Holders of at
least a majority in aggregate principal amount of Notes at the time outstanding)
and any indentures or credit facilities or commercial paper facilities with
banks or other institutional lenders that replace, refund or refinance any part
of the loans, notes, other credit facilities or commitments thereunder,
including any such replacement, refunding or refinancing facility or indenture
that increases the amount borrowable thereunder or alters the maturity thereof.
"Credit Agreement Obligations" means (a) all Bank Indebtedness and
all other Indebtedness outstanding under one or more of any other First-Lien
Credit Facilities that constitutes Permitted Debt or is otherwise permitted
under Section 4.03 and that is designated by the Issuers as "Credit Agreement
Obligations" for purposes of this Indenture and is secured by a Permitted Lien
described in clause (a) of the definition thereof, (b) all other obligations
(not constituting Indebtedness) of an Issuer or Guarantor under the Credit
Agreement or any such other First-Lien Credit Facility and (c) all other
obligations of an Issuer or any Guarantor in
respect of Hedging Obligations, Commodity Hedge Obligations or Cash Management
Obligations that are designated by the Issuers to be "Credit Agreement
Obligations" for purposes of this Indenture.
"Credit Facilities" means one or more debt facilities (including the
Credit Agreement) or commercial paper facilities, providing for revolving credit
loans, term loans, receivables financing (including through the sale of
receivables to lenders or to special purpose entities formed to borrow from
lenders against such receivables) or letters of credit, or any debt securities
or other form of debt financing (including convertible or exchangeable debt
instruments), in each case, as amended, supplemented, modified, extended,
renewed, restated or refunded in whole or in part from time to time.
"Currency Agreement" means with respect to any Person any foreign
exchange contract, currency swap agreements or other similar agreement or
arrangement to which such Person is a party.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Discharge of Credit Agreement Obligations" means payment in full in
cash of the principal of and interest and premium, if any, on all Indebtedness
outstanding under the First-Lien Credit Facilities or, with respect to Hedging
Obligations, Commodity Hedge Obligations or letters of credit outstanding
thereunder, delivery of cash collateral or backstop letters of credit in respect
thereof in compliance with such First-Lien Credit Facility, in each case after
or concurrently with termination of all commitments to extend credit thereunder,
and payment in full of any other Credit Agreement Obligations that are due and
payable or otherwise accrued and owing at or prior to the time such principal,
interest and premium, if any, are paid.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event (a) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (b) is convertible or exchangeable for
Indebtedness or Disqualified Stock or (c) is redeemable at the option of the
holder thereof, in whole or in part, in the case of clauses (a), (b) and (c) on
or prior to 90 days after the Stated Maturity of the Notes (or the Senior
Subordinated Notes, but only as the term "Disqualified Stock" is used in the
definition of the term "Qualified Preferred Stock"); provided, however, that
only the portion of Capital Stock that so matures or is mandatorily redeemable,
is so convertible or exchangeable or is so redeemable at the option of the
holder thereof prior to the Stated Maturity of the Notes shall be deemed
Disqualified Stock; provided further, however, that (i) 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 90 days after the Stated Maturity of the Notes (or the Senior
Subordinated Notes, but only as the term "Disqualified Stock" is used in the
definition of the term "Qualified Preferred Stock") shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more favorable to the holders of such
Capital Stock than the provisions of Sections 4.06 and 4.08, (ii) a class of
Capital Stock shall not be Disqualified Stock
hereunder solely as a result of any maturity or redemption that is conditioned
upon, and subject to, compliance with the Section 4.04 and (iii) Capital Stock
issued to any plan for the benefit of employees shall not constitute
Disqualified Stock solely because it may be required to be repurchased by the
Company in order to satisfy applicable statutory or regulatory obligations.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company
other than a Foreign Subsidiary.
"EBITDA" for any period means the Consolidated Net Income for such
period, plus, without duplication, the following to the extent deducted in
calculating such Consolidated Net Income: (a) provision for taxes based on
income or profits of the Company and its Consolidated Restricted Subsidiaries,
(b) Consolidated Interest Expense, (c) depreciation expense of the Company and
its Consolidated Restricted Subsidiaries, (d) amortization expense (including
amortization of goodwill and other intangibles) of the Company and its
Consolidated Restricted Subsidiaries (excluding amortization expense
attributable to a prepaid cash item that was paid in a prior period), (e) all
other noncash expenses or losses of the Company and its Consolidated Restricted
Subsidiaries for such period (including but not limited to, such expenses or
losses in connection with restructuring activities, whether incurred before or
after the Closing Date), determined on a consolidated basis in accordance with
GAAP (excluding any such charge that constitutes an accrual of or a reserve for
cash charges for any future period), (f) any non-recurring fees, expenses or
charges realized by the Company and its Restricted Subsidiaries for such period
related to (i) any offering of Capital Stock or Incurrence of Indebtedness
permitted to be Incurred under this Indenture, or (ii) during 2001 and the first
six months of 2002, the Profitability Enhancement Program, provided the fees,
expenses and charges referred to in this clause (ii) shall not exceed $150.4
million in 2001 or $20.0 million in the first six months of 2002, and (g)
noncash dividends on TPG Preferred Stock; and minus all noncash items increasing
Consolidated Net Income of such Person for such Period (excluding any items
which represent the reversal of any accrual of, or cash reserve for, anticipated
cash charges in any prior period). Notwithstanding the foregoing, the provision
for taxes based on the income or profits of, and the depreciation and
amortization and noncash charges of, a Restricted Subsidiary of the Company
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 or
similarly distributed to the Company by such Restricted Subsidiary without prior
governmental approval (that has not been obtained) or is not, directly or
indirectly, restricted by operation of 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 or other holders of its equity.
"Equity Offering" means a primary offering of common stock of the
Company, other than public offerings with respect to the Company's common stock
registered on Form S-8.
"Exchange Act" means the Securities Exchange Act of 1934.
"Fair Market Value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of whom
is under undue pressure or compulsion to
complete the transaction. For all purposes of this Indenture, Fair Market Value
will be determined in good faith by the Board of Directors, whose determination
will be conclusive and evidenced by a resolution of the Board of Directors.
"First Lien Credit Facilities" means (a) the Credit Facilities
provided pursuant to the Credit Agreement and (b) any other Credit Facility
that, in the case of both clauses (a) and (b), is secured by a Permitted Lien
described in clause (a) of the definition thereof and, except for the Credit
Facilities provided pursuant to the Credit Agreement, is designated by the
Issuers as a "First-Lien Credit Facility" for the purposes of this Indenture.
"Foreign Subsidiary" means any Restricted Subsidiary of the Company
that is not organized under the laws of the United States of America or any
State thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, including those set forth in
(a) the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (b) statements and
pronouncements of the Financial Accounting Standards Board, (c) such other
statements by such other entities as approved by a significant segment of the
accounting profession and (d) the rules and regulations of the Commission
governing the inclusion of financial statements (including pro forma financial
statements) in periodic reports required to be filed pursuant to Section 13 of
the Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
Commission. All ratios and computations based on GAAP contained in this
Indenture shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (b) entered into for purposes 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.
"Guarantor" means any Subsidiary that has issued a Note Guarantee.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" means the Person in whose name a Note is registered on the
Registrar's books.
"Incur" means, with respect to any Indebtedness or other obligation
of any Person, to issue, assume, Guarantee, incur or otherwise become liable
for; provided, however, that any
Indebtedness or Capital Stock of a Person existing immediately after the time
such Person becomes a Subsidiary (whether by merger, consolidation, acquisition
or otherwise) shall be deemed to be Incurred by such Person at the time it
becomes a Subsidiary. The term "Incurrence" when used as a noun shall have a
correlative meaning. The accretion of principal of a non-interest bearing or
other discount security shall not be deemed the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination, without duplication, the following items if and to the extent
that any of them (other than items specified under clauses (c), (h), (i) and (j)
below) would appear as a liability or, in the case of clause (f) only, Preferred
Stock on the balance sheet of such Person, prepared in accordance with GAAP, on
such date:
(a) the principal amount of and premium (if any) in respect of
indebtedness of such Person for borrowed money;
(b) the principal amount of and premium (if any) in respect of
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(c) all obligations of such Person in respect of letters of credit
or other similar instruments (including reimbursement obligations with respect
thereto but excluding obligations in respect of letters of credit issued in
respect of Trade Payables);
(d) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables), which purchase
price is due more than twelve months after the date of placing such property in
service or taking delivery and title thereto or the completion of such services;
(e) all Capitalized Lease Obligations and all Attributable Debt of
such Person;
(f) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or, with
respect to any Subsidiary of such Person, any Preferred Stock (but excluding, in
each case, any accrued dividends);
(g) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the amount of Indebtedness of such Person shall be the
lesser of (i) the Fair Market Value of such asset at such date of determination
and (ii) the amount of such Indebtedness of such other Persons;
(h) Hedging Obligations of such Person;
(i) all obligations of such Person in respect of a Receivables
Facility; and
(j) all obligations of the type referred to in clauses (a) through
(i) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations described above, at such
date; provided, however, that the amount outstanding at any time of any
Indebtedness issued with original issue discount will be deemed to be the face
amount of such Indebtedness less the remaining unaccreted 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.
"Indenture Documents" means (a) the Indenture, the Notes and the
Security Documents and (b) any other related document or instrument executed and
delivered pursuant to any Indenture Document described in clause (a) of this
definition evidencing or governing Obligations.
"Intercreditor Agreement" means (a) the intercreditor agreement,
dated as of the date of this Indenture, among the Issuers, the Credit Agent and
the Trustee, as amended (including any amendment and restatement thereof),
supplemented or otherwise modified from time to time, and (b) any substantially
identical agreement hereafter entered into pursuant to Section 10.09(c).
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business that
are recorded as accounts receivable on the balance sheet of the lender) or other
extension of credit (including by way of Guarantee or similar arrangement but
excluding commission, travel and similar advances to officers, consultants and
employees made in the ordinary course of business) or capital contribution to
(by means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition of Capital Stock, Indebtedness or other similar instruments issued
by such Person. For purposes of the definition of "Unrestricted Subsidiary" and
Section 4.04, (a) "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 in an amount (if positive) equal to (i) the Company's "Investment" in
such Subsidiary at the time of such redesignation less (ii) 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 (b) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its Fair Market Value at the time of such
transfer.
"Issue Date" means the date on which the Original Notes are
originally issued.
"Junior Subordinated Note" means the 10% junior subordinated note
due 2011 issued by SCI LLC on August 4, 1999.
"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).
"Mortgaged Property" means, initially, the parcel of real property
located at 0000 Xxxx XxXxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000 and the improvements
thereto owned by SCI LLC and the parcel of real property located at 0000 Xxxxx
Xxxxxx Xxxxx, Xxxx Xxxxxxxxx, Xxxxx Xxxxxx 00000 owned by Semiconductor
Components Industries of Rhode Island, Inc., and includes each other parcel of
real property and the improvements thereto with respect to which a Mortgage is
granted pursuant to Section 4.11.
"Mortgages" means a mortgage, deed of trust, assignment of leases
and rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and proceeds
from the sale or other disposition of any securities received as consideration,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to the properties or assets that are the subject of such
Asset Disposition or received in any other noncash form) therefrom, in each case
net of (a) all direct costs relating to such Asset Disposition, including all
legal, title, accounting and investment banking fees, and recording tax
expenses, sales and other commissions and other fees and relocation expenses
incurred, and all Federal, state, provincial, foreign and local taxes required
to be paid or accrued as a liability under GAAP, (b) all payments made on any
Indebtedness that (i) 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 (ii) must, by its terms,
or in order to obtain a necessary consent to such Asset Disposition, or by
applicable law, be repaid out of the proceeds from such Asset Disposition, (c)
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 (d) appropriate amounts to be provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the property or
other assets disposed of 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.
"Note Guarantee" means each Guarantee of the obligations with
respect to the Notes issued by a Subsidiary of the Company pursuant to the terms
of this Indenture.
"Notes" means the Notes issued under this Indenture.
"Obligations" means all obligations of the Issuers and the
Guarantors under the Indenture, the Notes and the other Indenture Documents,
including obligations to the Trustee and the Collateral Agent, whether for
payment of principal of, interest, including Additional Interest, if any, on the
Notes and all other monetary obligations of the Issuers and the Guarantors under
the Indenture, the Notes and the other Indenture Documents, whether for fees,
expenses, indemnification or otherwise.
"Offering Circular" means the offering circular relating to the
issuance of the Original Notes dated May 1, 2002.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company. "Officer" of SCI LLC and of a Guarantor has a correlative meaning.
"Officers' Certificate" means a certificate signed by two Officers
of each Person issuing such certificate. For the avoidance of doubt, any
Officers' Certificate to be delivered by the Issuers pursuant to this Indenture
shall be signed by two Officers of each Issuer.
"Opinion of Counsel" means a written opinion (subject to customary
assumptions and exclusions) from legal counsel who is reasonably acceptable to
the Trustee. The counsel may be an employee of or counsel to the Company, SCI
LLC, a Guarantor or the Trustee.
"Other Second-Lien Obligations" means any Indebtedness of any Issuer
or Restricted Subsidiary, other than the Notes, that is secured by a Permitted
Lien described in clause (a) of the definition thereof, which is secured equally
and ratably with the Notes by a second-priority security interest in the
Collateral, granted to a Common Collateral Agent and designated by the Issuers
as "Other Second-Lien Obligations" for the purposes of this Indenture.
"Permitted Business" means any business engaged in by the Issuers or
any Restricted Subsidiary on the Closing Date and any Related Business.
"Permitted Holders" means TPG Partners II, L.P. and its Affiliates
and any Person acting in the capacity of an underwriter in connection with a
public or private offering of the Company's or SCI LLC's Capital Stock.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary (a) in the Company, 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
Permitted Business; (b) in 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 Permitted Business;
(c) in Temporary Cash Investments; (d) in 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; (e) in 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;
(f) in loans or advances to employees made in the ordinary course of business
consistent with prudent business practice and not exceeding $5 million in the
aggregate outstanding at any one time; (g) in 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; (h) in any Person to the extent such Investment represents the
noncash portion of the consideration received for an Asset Disposition that was
made pursuant to and in compliance with Section 4.06 or a transaction not
constituting an Asset Disposition by reason of the $1 million threshold
contained in the definition thereof; (i) that constitutes a Hedging Obligation
or commodity hedging arrangement entered into for bona fide hedging purposes of
the Company in the ordinary course of business and otherwise in accordance with
this Indenture; (j) in securities of any trade creditor or customer received in
settlement of obligations or pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of such trade creditor or
customer; (k) acquired as a result of a foreclosure by the Company or such
Restricted Subsidiary with respect to any secured Investment or other transfer
of title with respect to any secured Investment in default; (l) existing as of
the Closing Date or an Investment consisting of any extension, modification or
renewal of any Investment existing as of the Closing Date (excluding any such
extension, modification or renewal involving additional advances, contributions
or other investments of cash or property or other increases thereof unless it is
a result of the accrual or accretion of interest or original issue discount or
payment-in-kind pursuant to the terms, as of the Closing Date, of the original
Investment so extended, modified or renewed); (m) consisting of purchases and
acquisitions of inventory, supplies, materials and equipment or licenses or
leases of intellectual property, in any case, in the ordinary course of business
and otherwise in accordance with this Indenture; (n) in a trust, limited
liability company, special purpose entity or other similar entity in connection
with a Receivables Facility permitted under Section 4.03; provided that, in the
good faith determination of the Board of Directors, such Investment is necessary
or advisable to effect such Receivables Facility; (o) consisting of intercompany
Indebtedness permitted under Section 4.03; (p) the consideration for which
consists solely of shares of common stock of the Company; and (q) so long as no
Default shall have occurred and be continuing (or result therefrom), in any
Person engaged in a Permitted Business having an aggregate Fair Market Value
(measured on the date made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to this
clause (q) that are at the time outstanding (and measured on the date made and
without giving effect to subsequent changes in value), not to exceed $15
million.
"Permitted Liens" means any of the following Liens: (a) Liens upon
any property of any Issuer or Restricted Subsidiary securing any Indebtedness
permitted under Sections 4.03(a), 4.03(b)(i) or 4.03(b)(xiv) hereof and all
other obligations of any Issuer or Restricted Subsidiary in respect of such
Indebtedness not constituting Indebtedness; (b) Liens securing the Notes and the
Note Guarantees; (c) Liens in favor of the Company or any Restricted Subsidiary;
(d) Liens on property of a Person existing at the time such Person is merged
with or into or consolidated with or acquired by the Company or any Restricted
Subsidiary; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation or acquisition and do not extend
to any assets other than those of the Person merged into or consolidated with
or acquired by the Company or the Restricted Subsidiary; (e) Liens on property
existing at the time of acquisition of the property by the Company of any
Restricted Subsidiary; provided that such Liens were in existence prior to the
contemplation of such acquisition; (f) Liens to secure Indebtedness (including
Capitalized Lease Obligations) permitted under Section 4.03(b)(x) hereof
covering only the assets acquired with such Indebtedness or additions or
improvements to such assets; (g) Liens for taxes, assessments or governmental
charges or claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and diligently
concluded; provided that any reserve or other appropriate provision as is
required in conformity with GAAP has been made therefor; (h) Liens incurred in
the ordinary course of business including judgment and attachment liens of the
Company or any Restricted Subsidiary of the Company with respect to obligations
that do not exceed in the aggregate $25.0 million at any one time outstanding
and that are not incurred in connection with the borrowing of money or the
obtaining of advances of credit (other than trade credit in the ordinary course
of business, not evidenced by a note and not past due); (i) Liens in favor of
the Trustee; (j) Liens incurred in connection with Refinancing Indebtedness, but
only if such Liens extend to no more assets than the Liens securing the
Indebtedness being refinanced; (k) Liens securing Hedging Obligations; (l)
statutory Liens of landlords and carriers', warehousemen's, mechanics',
suppliers', materialmen's, repairmen's, or other like Liens (including
contractual landlords liens) arising in the ordinary course of business and with
respect to amounts not yet delinquent by more than 30 days or being contested in
good faith by appropriate proceedings, if a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor; (m) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security; (n) Liens to secure Indebtedness of any
Restricted Subsidiary that is a Foreign Subsidiary, provided that such
Indebtedness is used by such Restricted Subsidiary to finance operations of such
Foreign Subsidiary outside the United States; (o) easements, zoning
restrictions, rights-of-way, restrictions, minor defects or irregularities in
title and other similar charges or encumbrances not interfering in any material
respect with the business of the Company or any of its Restricted Subsidiaries;
(p) Liens on specific items of inventory or other goods and proceeds thereof of
any Person securing such Person's obligations in respect of bankers' acceptances
issued or created for the account of such Person to facilitate the purchase,
shipment or storage of such inventory or other goods; (q) Liens securing
reimbursement obligations with respect to commercial letters of credit which
encumber documents and the property relating to such letters of credit and
products and proceeds thereof; (r) any interest or title of a lessor in the
property subject to any lease or arising from filing UCC financing statements
regarding leases; (s) judgment Liens in respect of judgments that do not
constitute an Event of Default; (t) Liens existing on the date hereof; (u) Liens
incurred or deposits made to secure the performance of tenders, bids, leases,
statutory obligations, surety and appeal bonds, government contracts,
performance and return of money bonds and other obligation of a like nature
incurred in the ordinary course of business; (v) Liens securing obligations in
respect of Cash Management Obligations; (w) ground leases in respect of real
property on which facilities owned or leased by the Company or any of its
Restricted Subsidiaries are located; (x) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (y) leases or subleases granted to
other Persons and not interfering in any material respect with the business of
the Company and its Restricted Subsidiaries, taken as a whole; (z) Liens in
connection with a Receivables Facility
incurred in compliance with Sections 4.03(b)(i) and 4.03(b)(ii) hereof; (aa)
Liens arising solely by virtue of any statutory or common law provision relating
to banker's liens, rights of setoff or similar rights; and (bb) Liens on the
assets of the China JV securing Indebtedness incurred in compliance with Section
4.03 hereof.
"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.
"Pledge Agreement" means the Pledge Agreement dated as of May 6,
2002, among the Issuers, the Grantors (as defined therein) and the Collateral
Agent.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.
"Profitability Enhancement Program" means the Profitability
Enhancement Program described in the Offering Circular.
"Purchase Money Indebtedness" means Indebtedness (a) consisting of
the deferred purchase price of an asset, conditional sale obligations,
obligations under any title retention agreement and other purchase money
obligations, in each case where the maturity of such Indebtedness does not
exceed the anticipated useful life of the asset being financed, and (b) Incurred
to finance the acquisition by the Company or a Restricted Subsidiary of all or a
portion of such asset, including additions and improvements; provided, however,
that such Indebtedness is Incurred within 180 days after the acquisition by the
Company or such Restricted Subsidiary of such asset or the relevant addition or
improvement.
"Qualified Preferred Stock" means any preferred stock that (i) is
not Disqualified Stock, (ii) does not entitle the holder to receive cash
dividends prior to November 1, 2009 (prior to such date, dividends may accrue or
be paid in kind), (iii) is convertible into common stock and (iv) is issued to
one or more financial sponsors, such as Texas Pacific Group or any other private
equity firm or similar entity.
"Qualified Proceeds" means any of the following or any combination
of the following: (a) cash, (b) Temporary Cash Investments, (c) the Fair Market
Value of assets that are used or useful in the Permitted Business and (d) the
Fair Market Value of the Capital Stock of any Person engaged primarily in a
Permitted Business if, in connection with the receipt by the Company or any
Restricted Subsidiary of the Company of such Capital Stock, (i) such Person
becomes a Restricted Subsidiary or (ii) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or any Restricted Subsidiary.
"Receivables Facility" means one or more receivables financing
facilities, as amended from time to time, pursuant to which the Company and/or
any of its Restricted Subsidiaries sells its accounts receivable to a Person
that is not a Restricted Subsidiary pursuant to arrangements customary in the
industry.
"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.
"Refinancing" means the Company's offering and sale of the Original
Notes and the application of the proceeds therefrom as described in the Offering
Circular.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) any Indebtedness of the Company or any
Restricted Subsidiary (including Indebtedness of the Company that Refinances
Refinancing Indebtedness); provided, however, that (a) the Refinancing
Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the
Indebtedness being Refinanced, (b) the Refinancing Indebtedness has an Average
Life at the time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being refinanced, (c) such
Refinancing Indebtedness is Incurred in an aggregate principal amount (or if
issued with original issue discount, an aggregate issue price) that is equal to
or less than the aggregate principal amount (or if issued with original issue
discount, the aggregate accreted value) then outstanding of the Indebtedness
being Refinanced and (d) if the Indebtedness being refinanced is subordinated in
right of payment to the Notes, such Refinancing Indebtedness is subordinated in
right of payment to the Notes at least to the same extent as the Indebtedness
being Refinanced; provided further, however, that Refinancing Indebtedness shall
not include (i) Indebtedness of a Restricted Subsidiary that Refinances
Indebtedness of the Company or (ii) Indebtedness of the Company or a Restricted
Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.
"Related Business" means any business related, ancillary or
complementary to any of the businesses of the Company and the Restricted
Subsidiaries on the Closing Date.
"Restricted Subsidiary" means any Subsidiary of the Company
(including SCI LLC) other than an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired by the Company or a Restricted
Subsidiary whereby the Company or a Restricted Subsidiary transfers such
property to a Person and the Company or such Restricted Subsidiary leases it
from such Person, other than leases between the Company and a Wholly-Owned
Subsidiary or between Wholly-Owned Subsidiaries.
"SCI LLC" means Semiconductor Components Industries, LLC until a
successor replaces it and, thereafter, means the successor.
"Securities Act" means the Securities Act of 1933.
"Security Agreement" means the Security Agreement dated as of May 6,
2002, among the Issuers, the Grantors (as defined therein) and the Collateral
Agent.
"Security Documents" means the Security Agreement, the Pledge
Agreement, the Collateral Assignment, the Mortgages and any other document or
instrument pursuant to which a Lien is granted by any Issuer or any Guarantor to
secure any Obligations or under which rights
or remedies with respect to such Lien are governed, as such agreements may be
amended, modified or supplemented from time to time.
"Senior Subordinated Notes" means the 12% senior subordinated notes
due 2009 issued by the Company and SCI LLC on July 28, 1999.
"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 Commission.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subordinated Indebtedness" means any Indebtedness of the Company
(whether outstanding on the Closing Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Notes pursuant to a written
agreement. "Subordinated Indebtedness" of SCI LLC or a Guarantor has a
correlative meaning.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total Voting
Stock is at the time owned or controlled, directly or indirectly, by (a) such
Person, (b) such Person and one or more Subsidiaries of such Person or (c) one
or more Subsidiaries of such Person. Notwithstanding the foregoing, with respect
to the Company, the term "Subsidiary" also shall include the following Persons:
Tesla Sezam, a.s., Terosil, a.s. and Leshan-Phoenix Semiconductor Co. Ltd, so
long as the Company directly or indirectly owns more than 50% of the Voting
Stock or economic interests of such Person.
"Temporary Cash Investments" means any of the following: (a) 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, (b) investments in time deposit accounts, certificates of deposit and
money market deposits maturing not more than one year from the date of
acquisition thereof, bankers' acceptances with maturities not exceeding one year
and overnight bank deposits, in each case with a bank or trust company that is
organized under the laws of the United States of America, any state thereof
(including any foreign branch of any of the foregoing) or any foreign country
recognized by the United States of America having capital, surplus and undivided
profits aggregating in excess of $250,000,000 (or the foreign currency
equivalent thereof), (c) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (a) above or
clause (e) below entered into with a bank meeting the qualifications described
in clause (b) above, (d) investments in commercial paper, maturing not more than
one year 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 having at the time as of which any investment therein is made one of
the two highest
ratings obtainable from either Xxxxx'x Investors Service, Inc. ("Moody's") or
Standard and Poor's Ratings Service, a division of The XxXxxx-Xxxx Companies,
Inc. ("S&P"), (e) 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 foreign
government or any state, commonwealth or territory or by any political
subdivision or taxing authority thereof, and, in each case, having one of the
two highest ratings obtainable from either S&P or Moody's; and (f) investments
in funds investing exclusively in investments of the types described in clauses
(a) and (e) above.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the Closing Date.
"TPG Preferred Stock" means the preferred stock issued on September
7, 2001, and additional shares of such series issued thereafter.
"Trade Payables" means, with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
in connection with the acquisition of goods or services.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means any vice president, assistant vice president
or trust 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 (a) 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 (b) 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 (i) the Subsidiary to be so designated has total Consolidated assets
of $1,000 or less or (ii) if such Subsidiary has Consolidated assets greater
than $1,000, then 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 (a) the Company could Incur $1.00 of additional Indebtedness under
Section 4.03(a) and (b) no Default shall have occurred and be continuing. Any
such designation of a Subsidiary as a Restricted Subsidiary or Unrestricted
Subsidiary by the Board of Directors 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 interests) of such Person then
outstanding and normally entitled at the time to vote in the election of
directors, managers or trustees thereof.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the
Company all the Capital Stock of which (other than directors' qualifying shares)
is owned by the Company or another Wholly-Owned Subsidiary.
SECTION 1.02. Other Definitions. The following terms have
the definitions set forth in the Sections listed below.
Defined in
Term Section
---- -------
"Affiliate Transaction".............................. 4.07(a)
"Appendix"........................................... Preamble
"Bankruptcy Law"..................................... 6.01
"Change of Control Offer"............................ 4.08(b)
"covenant defeasance option"......................... 8.01(b)
"Custodian".......................................... 6.01
"Definitive Notes"................................... Appendix
"Event of Default"................................... 6.01
"Excess Proceeds".................................... 4.06(b)
"Exchange Offer"..................................... Appendix
"Exchange Notes"..................................... Preamble
"Global Notes"....................................... Appendix
"Guaranteed Obligations"............................. 11.01
"incorporated provision"............................. 12.01
"Initial Notes"...................................... Preamble
"legal defeasance option"............................ 8.01(b)
"Legal Holiday"...................................... 12.08
"Liens Securing Note Obligations".................... 10.09(d)
"Liens Securing Other Second-Lien Obligations"....... 10.09(d)
"Notice of Default".................................. 6.01
"Offer".............................................. 4.06(b)
"Offer Amount"....................................... 4.06(c)(ii)
"Offer Period"....................................... 4.06(c)(ii)
"Original Notes"..................................... Preamble
"Notes Custodian".................................... Appendix
Defined in
Term Section
---- -------
"Paying Agent"....................................... 2.04
"Permitted Debt"..................................... 4.03(b)
"Private Exchange"................................... Appendix
"Private Exchange Notes"............................. Appendix
"protected purchaser"................................ 2.08
"Purchase Date"...................................... 4.06(c)(i)
"Registrar".......................................... 2.04
"Registration Rights Agreement"...................... Appendix
"Required Information"............................... 4.02
"Restricted Payment"................................. 4.04(a)
"Successor Company".................................. 5.01(a)
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 Commission.
"indenture securities" means the Notes and the Note Guarantees.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the
Guarantors and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context
otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
(e) words in the singular include the plural and words in the plural
include the singular;
(f) 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; and
(g) 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.
SECTION 1.05. Designated Senior Indebtedness. For purposes of the
indenture that governs the Senior Subordinated Notes, the Notes shall constitute
Designated Senior Indebtedness (as such term is defined in such indenture).
ARTICLE II
The Notes
SECTION 2.01. Amount of Notes; Issuable in Series. The aggregate
principal amount of Notes which may be authenticated and delivered under this
Indenture is unlimited. The Notes may be issued in one or more series. All Notes
of any one series shall be substantially identical except as to denomination.
With respect to any Additional Notes issued after the Closing Date
(except for Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Notes pursuant to Section 2.07, 2.08,
2.09, 2.10 or 3.06 or the Appendix), there shall be (a) established in or
pursuant to a resolution of the Board of Directors and (b) (i) set forth or
determined in the manner provided in an Officer's Certificate or (ii)
established in one or more indentures supplemental hereto, prior to the issuance
of such Additional Notes:
(1) whether such Additional Notes shall be issued as part of a new
or existing series of Notes and the title of such Additional Notes (which
shall distinguish the Additional Notes of the series from Notes of any
other series);
(2) the aggregate principal amount of such Additional Notes which
may be authenticated and delivered under this Indenture, which may be in
an unlimited aggregate principal amount;
(3) the issue price and issuance date of such Additional Notes,
including the date from which interest on such Additional Notes shall
accrue; provided, however, that Additional Notes may be issued only if
they are fungible with the other Notes issued under this Indenture for
U.S. federal income tax purposes;
(4) if applicable, that such Additional Notes shall be issuable in
whole or in part in the form of one or more Global Notes and, in such
case, the respective depositaries for such Global Notes, the form of any
legend or legends which shall be borne by such
Global Notes in addition to or in lieu of those set forth in Exhibit A
hereto and any circumstances in addition to or in lieu of those set forth
in Section 2.3 of the Appendix in which any such Global Note may be
exchanged in whole or in part for Additional Notes registered, or any
transfer of such Global Note in whole or in part may be registered, in the
name or names of Persons other than the depositary for such Global Note or
a nominee thereof; and
(5) if applicable, that such Additional Notes shall not be issued in
the form of Initial Notes as set forth in Exhibit A, but shall be issued
in the form of Exchange Notes as set forth in Exhibit B.
If any of the terms of any Additional Notes are established by
action taken pursuant to a resolution of the Board of Directors, a copy of an
appropriate record of such action shall be certified by the Secretary or any
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate or the indenture supplemental hereto
setting forth the terms of the Additional Notes.
SECTION 2.02. Form and Dating. Provisions relating to the Original
Notes, the Additional Notes, the Private Exchange Notes and the Exchange Notes
are set forth in the Appendix, which is hereby incorporated in and expressly
made a part of this Indenture. The (a) Original Notes and the Trustee's
certificate of authentication, (b) Private Exchange Notes and the Trustee's
certificate of authentication and (c) any Additional Notes (if issued as
Transfer Restricted Notes) and the Trustee's certificate of authentication shall
each be substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange Notes
and any Additional Notes issued other than as Transfer Restricted Notes and the
Trustee's certificate of authentication shall each be substantially in the form
of Exhibit B hereto, which is hereby incorporated in and expressly made a part
of this Indenture. The Notes may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Issuers or any
Guarantor are subject, if any, or usage (provided that any such notation, legend
or endorsement is in a form acceptable to the Issuers). Each Note shall be dated
the date of its authentication. The Notes shall be issuable only in registered
form without interest coupons and only in denominations of $1,000 and integral
multiples thereof.
SECTION 2.03. Execution and Authentication. One Officer shall sign
the Notes for each of the Issuers by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery Notes
as set forth in the Appendix.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Issuers to authenticate the Notes. Any such appointment shall
be evidenced by an instrument signed by a Trust Officer, a copy of which shall
be furnished to the Issuers. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Notes 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 2.04. Registrar and Paying Agent. (a) The Issuers shall
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where Notes
may be presented for payment (the "Paying Agent"). The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Issuers may have
one or more co-registrars and one or more additional paying agents. The term
"Paying Agent" includes any additional paying agent, and the term "Registrar"
includes any co-registrars. The Issuers initially appoint the Trustee as (i)
Registrar and Paying Agent in connection with the Notes and (ii) the Notes
Custodian with respect to the Global Notes.
(b) The Issuers shall enter into an appropriate agency agreement
with any Registrar or Paying Agent not a party to this Indenture, which shall
incorporate the terms of the TIA. The agreement shall implement the provisions
of this Indenture that relate to such agent. The Issuers shall notify the
Trustee of the name and address of any such agent. If the Issuers fail to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Issuers or any of their domestically organized Wholly-Owned Subsidiaries may act
as Paying Agent or Registrar.
(c) The Issuers may remove any Registrar or Paying Agent upon
written notice to such Registrar or Paying Agent and to the Trustee; provided,
however, that no such removal shall become effective until (i) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Issuers and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above. The Registrar or Paying Agent may
resign at any time upon written notice to the Issuers and the Trustee.
SECTION 2.05. Paying Agent to Hold Money in Trust. Prior to each due
date of the principal of and interest, including Additional Interest, if any, on
any Note, the Issuers shall deposit with the Paying Agent (or if either of the
Issuers or a Subsidiary of the Issuers is acting as Paying Agent, segregate and
hold in trust for the benefit of the Persons entitled thereto) a sum sufficient
to pay such principal and interest when so becoming due. The Issuers 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 Holders or the Trustee all
money held by the Paying Agent for the payment of principal of or interest on
the Notes, shall notify the Trustee of any default by the Issuers in making any
such payment. If either of the Issuers or a Subsidiary of the Issuers acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Issuers at any time may require a Paying Agent
to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon complying with this Section, the Paying
Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.06. Holder Lists. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, the Issuers
shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at
least five Business Days before each 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
Holders.
SECTION 2.07. Transfer and Exchange. The Notes shall be issued in
registered form and shall be transferable only upon the surrender of a Note for
registration of transfer and in compliance with the Appendix. When a Note is
presented to the Registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if its requirements therefor are met.
When Notes are presented to the Registrar with a request to exchange them for an
equal principal amount of Notes of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Issuers shall execute and the
Trustee shall authenticate Notes at the Registrar's request. The Issuers may
require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges in connection with any transfer or exchange pursuant to
this Section. The Issuers shall not be required to make and the Registrar need
not register transfers or exchanges of Notes selected for redemption (except, in
the case of Notes to be redeemed in part, the portion thereof not to be
redeemed) or any Notes for a period of 15 days before a selection of Notes to be
redeemed.
Prior to the due presentation for registration of transfer of any
Note, the Issuers, the Guarantors, the Trustee, the Paying Agent, and the
Registrar may deem and treat the Person in whose name a Note is registered as
the absolute owner of such Note for the purpose of receiving payment of
principal of and (subject to paragraph 2 of the Notes) interest, if any, on such
Note and for all other purposes whatsoever, whether or not such Note is overdue,
and none of the Issuers, any Guarantor, the Trustee, the Paying Agent, or the
Registrar shall be affected by notice to the contrary.
Any Holder of a Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interest in such Global Note may be
effected only through a book-entry system maintained by (a) the Holder of such
Global Note (or its agent) or (b) any Holder of a beneficial interest in such
Global Note, and that ownership of a beneficial interest in such Global Note
shall be required to be reflected in a book entry.
All Notes 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 Notes surrendered upon such transfer or
exchange.
SECTION 2.08. Replacement Notes. If a mutilated Note is surrendered
to the Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall
authenticate a replacement Note if the requirements of Section 8-405 of the
Uniform Commercial Code are met, such that the Holder (a) satisfies the Issuers
or the Trustee within a reasonable time after he has notice of such loss,
destruction or wrongful taking and the Registrar does not register a transfer
prior to receiving such notification, (b) makes such request to the Issuers or
the Trustee prior to the Note being
acquired by a protected purchaser as defined in Section 8-303 of the Uniform
Commercial Code (a "protected purchaser") and (c) satisfies any other reasonable
requirements of the Trustee. If required by the Trustee or the Issuers, such
Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee
to protect the Issuers, the Trustee, the Paying Agent and the Registrar from any
loss that any of them may suffer if a Note is replaced. The Issuers and the
Trustee may charge the Holder for their expenses in replacing a Note. In the
event any such mutilated, lost, destroyed or wrongfully taken Note has become or
is about to become due and payable, the Issuers in their discretion may pay such
Note instead of issuing a new Note in replacement thereof.
Every replacement Note is an additional obligation of the Issuers.
Upon the issuance of any replacement Note under this Section 2.08,
the Issuers may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges that may be imposed in connection
therewith.
The provisions of this Section 2.08 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.
SECTION 2.09. Outstanding Notes. Notes outstanding at any time are
all authenticated by the Trustee except for those canceled by it, those
delivered to it for cancelation and those described in this Section as not
outstanding. Subject to Section 12.06, a Note does not cease to be outstanding
because the Issuers or an Affiliate of the Issuers hold the Note.
If a Note is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee and the Issuers receive proof satisfactory to
them that the replaced Note is held by a protected purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest, including Additional Interest, if any, payable
on that date with respect to the Notes (or portions thereof) to be redeemed or
maturing, as the case may be, then on and after that date such Notes (or
portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.10. Temporary Notes. In the event that Definitive Notes
are to be issued under the terms of this Indenture, until such Definitive Notes
are ready for delivery, the Issuers may prepare and the Trustee shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of Definitive Notes but may have variations that the Issuers consider
appropriate for temporary Notes. Without unreasonable delay, the Issuers shall
prepare and the Trustee shall authenticate Definitive Notes and deliver them in
exchange for temporary Notes upon surrender of such temporary Notes at the
office or agency of the Issuers, without charge to the Holder.
SECTION 2.11. Cancelation. The Issuers at any time may deliver Notes
to the Trustee for cancelation. The Registrar and the Paying Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer,
exchange or payment. The Trustee and no one else shall cancel all Notes
surrendered for registration of transfer, exchange, payment or
cancelation and shall dispose of canceled Notes in accordance with its customary
procedures or deliver canceled Notes to the Issuers pursuant to written
direction by an Officer. The Issuers may not issue new Notes to replace Notes it
has redeemed, paid or delivered to the Trustee for cancelation. The Trustee
shall not authenticate Notes in place of canceled Notes other than pursuant to
the terms of this Indenture.
SECTION 2.12. Defaulted Interest. If the Issuers default in a
payment of interest on the Notes, the Issuers shall pay the defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Issuers may pay the defaulted interest to the Persons who are
Holders on a subsequent special record date. The Issuers shall fix or cause to
be fixed any such special record date and payment date to the reasonable
satisfaction of the Trustee and shall promptly mail or cause to be mailed to
each Holder a notice that states the special record date, the payment date and
the amount of defaulted interest to be paid.
SECTION 2.13. CUSIP and "ISIN" Numbers. The Issuers in issuing the
Notes may use "CUSIP" and "ISIN" numbers (if then generally in use) and, if so,
the Trustee shall use "CUSIP" and "ISIN" 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 Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers.
SECTION 2.14. Computation of Interest. Interest on the Notes shall
be computed on the basis of a 360-day year comprised of twelve 30-day months.
ARTICLE III
Redemption
SECTION 3.01. Notices to Trustee. If the Issuers elect to redeem
Notes pursuant to paragraph 5 of the Notes, they shall notify the Trustee in
writing of the redemption date and the principal amount of Notes to be redeemed.
The Issuers 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 from the Issuers to the effect that such redemption will comply with
the conditions herein. Any such notice may be canceled at any time prior to
notice of such redemption being mailed to any Holder and shall thereby be void
and of no effect.
SECTION 3.02. Selection of Notes To Be Redeemed. If fewer than all
the Notes are to be redeemed, the Trustee shall select the Notes to be redeemed
pro rata or by lot or by a method that the Trustee in its sole discretion shall
deem to be fair and appropriate. The Trustee shall make the selection from
outstanding Notes not previously called for redemption. The Trustee may select
for redemption portions of the principal of Notes that have denominations larger
than $1,000. Notes 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 Notes
called for redemption also apply to portions of Notes called for redemption. The
Trustee shall notify the Issuers promptly of the Notes or portions of Notes to
be redeemed.
SECTION 3.03. Notice of Redemption. (a) At least 30 days but not
more than 60 days before a date for redemption of Notes, the Issuers shall mail
a notice of redemption by first-class mail to each Holder of Notes to be
redeemed at such Holder's registered address.
The notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price and the amount of accrued interest
to the redemption date;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(v) if fewer than all the outstanding Notes are to be
redeemed, the certificate numbers and principal amounts of the particular
Notes to be redeemed;
(vi) that, unless the Issuers default in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on Notes (or
portion thereof) called for redemption ceases to accrue on and after the
redemption date;
(vii) the CUSIP or ISIN number, if any, printed on the Notes
being redeemed; and
(viii) that no representation is made as to the correctness or
accuracy of the CUSIP or ISIN number, if any, listed in such notice or
printed on the Notes.
(b) At the Issuers' request, the Trustee shall give the notice of
redemption in the Issuers' name and at the Issuers' expense. In such event, the
Issuers shall provide the Trustee with the information required by this Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes 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 Notes shall be paid at the redemption price stated in
the notice, plus accrued interest, including Additional Interest, if any, to the
redemption date; provided, however, that if the redemption date is after a
regular record date and on or prior to the related interest payment date, the
accrued interest and Additional Interest, if any, shall be payable to the Holder
of the redeemed Notes registered on the relevant record date. Failure to give
notice or any defect in the notice to any Holder shall not affect the validity
of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m. on
the redemption date, the Issuers shall deposit with the Paying Agent (or, if
either of the Issuers or a Subsidiary of the Issuers is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the redemption price of and
accrued interest, including Additional Interest, if any, on all Notes to be
redeemed on that date other than Notes or portions of Notes called for
redemption that have been delivered by the Issuers to the Trustee for
cancelation. On and after the redemption date, interest will cease to accrue on
Notes or portions thereof called for redemption so long as the Issuers have
deposited with the Paying Agent funds sufficient to pay the principal of, plus
accrued and unpaid interest, including Additional Interest, if any, on the Notes
to be redeemed, unless the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture. The Paying Agent shall promptly return
to the Issuers upon their written request any money deposited with the Paying
Agent by the Issuers that is in excess of the amounts necessary to pay the
redemption price of and accrued interest, including Additional Interest, if any,
on all Notes to be redeemed.
SECTION 3.06. Notes Redeemed in Part. Upon surrender of a Note that
is redeemed in part, the Issuers shall execute and the Trustee shall
authenticate for the Holder (at the Issuers' expense) a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
ARTICLE IV
Covenants
SECTION 4.01. Payment of Notes. The Issuers shall promptly pay the
principal of and interest, including Additional Interest, if any, on the Notes
on the dates and in the manner provided in the Notes and in this Indenture.
Principal and interest, including Additional Interest, if any, 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 Holders on that date pursuant to
the terms of this Indenture.
The Issuers shall pay interest on overdue principal at the rate
specified therefor in the Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful. Notwithstanding
anything to the contrary contained in this Indenture, the Issuers
may, to the extent they are required to do so by law, deduct or withhold income
or other similar taxes imposed by the United States of America from principal or
interest payments hereunder.
SECTION 4.02. Commission Reports. If at any time the Company is no
longer subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall provide the Trustee and Holders and prospective
Holders (upon request) within 15 days after it files them with the Commission
(or would be required to file with the Commission), copies of its annual report
and the information, documents and other reports that are specified in Section
13 and 15(d) of the Exchange Act (collectively, the "Required Information");
provided, however, that if any of the Required Information is filed with the
Commission, the Company shall only be required to provide the Trustee copies of
such Required Information. In addition, the Company shall furnish to the
Trustee, promptly upon their becoming available, copies of the annual report to
shareholders and any other information provided by the Company to its public
shareholders generally. The Company also shall comply with the other provisions
of TIA Section 314(a).
SECTION 4.03. Limitation on Incurrence of Additional Indebtedness.
(a) The Company shall not, and shall not permit any Restricted Subsidiary to,
Incur, directly or indirectly, any Indebtedness; provided, however, that the
Company, SCI LLC or any Guarantor may Incur Indebtedness if on the date of such
Incurrence and after giving effect thereto, the Consolidated Coverage Ratio
would be greater than 2.25:1; provided further, however, that the Company, SCI
LLC or any Guarantor may Incur Indebtedness under any First Lien Credit
Facilities pursuant to this Section 4.03(a) only if on the date of such
Incurrence and after giving effect thereto (i) the Consolidated Coverage Ratio
would be greater than 2.75:1 and (ii) the total aggregate principal amount of
Indebtedness outstanding under all First Lien Credit Facilities and any unused
credit commitment thereunder does not exceed $400 million; provided further,
however, that the foregoing proviso shall not apply to any Incurrence of
Indebtedness under the First Lien Credit Facilities that results from a
consolidation, merger, conveyance, transfer or lease that is permitted by
Article V so long as such Indebtedness is not Incurred in connection with or in
contemplation of such transaction and the other Person involved in such
transaction is not an Affiliate of the Company.
(b) Notwithstanding Section 4.03(a), the Company and, to the extent
specified, its Restricted Subsidiaries may Incur the following Indebtedness
(collectively, the "Permitted Debt"):
(i) Bank Indebtedness of the Company, SCI LLC or any Guarantor
and any Receivables Facility in an aggregate principal amount not to
exceed $732.2 million less the aggregate amount of all prepayments of
principal applied to permanently reduce any such Indebtedness after the
date of issuance of the Original Notes and the application of the proceeds
therefrom;
(ii) Indebtedness in respect of a Receivables Facility in an
aggregate principal amount not to exceed the lesser of (1) the amount of
all prepayments of principal applied to permanently reduce Indebtedness
under Section 4.03(b)(i) and (2) $100 million;
(iii) Indebtedness of the Company owed to and held by any
Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to
and held by the Company or any other Restricted Subsidiary; provided,
however, that (1) any subsequent issuance or transfer of any Capital Stock
or any other event that results in any such Restricted Subsidiary ceasing
to be a Restricted Subsidiary or any subsequent transfer of any such
Indebtedness (except to the Company or another Restricted Subsidiary)
shall be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the issuer thereof, (2) if the Company or SCI LLC is the
obligor on such Indebtedness, such Indebtedness is expressly subordinated
to the prior payment in full in cash of all obligations with respect to
the Notes and (3) if a Guarantor is the obligor, such Indebtedness is
subordinated in right of payment to the Note Guarantee of such Guarantor;
(iv) Indebtedness represented by the Senior Subordinated
Notes, the Guarantees of the Senior Subordinated Notes, the Junior
Subordinated Note, the Notes (not including any Additional Notes), the
Note Guarantees, the Exchange Notes, Guarantees of the Exchange Notes and
any replacement Notes issued pursuant to this Indenture;
(v) Indebtedness outstanding on the Closing Date (other than
the Indebtedness described in clause (ii), (iii) or (iv) of this Section
4.03(b));
(vi) Indebtedness consisting of Refinancing Indebtedness
Incurred in respect of any Indebtedness described in Section 4.03(a) and
in clauses (iv), (v), (vi), (vii), (x) and (xiii) of this Section 4.03(b);
(vii) Indebtedness consisting of Guarantees of (1) any
Indebtedness permitted under Section 4.03(a), so long as the Person
providing the Guarantee is a Guarantor or (2) any Indebtedness permitted
under this Section 4.03(b);
(viii) Indebtedness of the Company or any of its Restricted
Subsidiaries in respect of worker's compensation claims, self-insurance
obligations, performance bonds, bankers' acceptances, letters of credit,
surety, appeal or similar bonds and completion guarantees provided by the
Company and the Restricted Subsidiaries in the ordinary course of their
business; provided, however, that upon the drawing of letters of credit
for reimbursement obligations, including with respect to workers'
compensation claims, or the Incurrence of other Indebtedness with respect
to reimbursement type obligations regarding workers' compensation claims,
such obligations are reimbursed within 30 days following such drawing or
Incurrence;
(ix) Indebtedness under Interest Rate Agreements and Currency
Agreements entered into for bona fide hedging purposes of the Company in
the ordinary course of business;
(x) Purchase Money Indebtedness, mortgage financings and
Capitalized Lease Obligations, in each case Incurred by the Company, SCI
LLC or any Restricted Subsidiary for the purpose of financing all or any
part of the purchase price or cost of construction or improvement of
property, plant or equipment used in a Permitted
Business, and in an aggregate principal amount not in excess of $25
million at any one time outstanding.
(xi) Indebtedness of the Company or any of its Restricted
Subsidiaries 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, however, that such Indebtedness
is extinguished within five business days of Incurrence;
(xii) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, Incurred or assumed
in connection with the disposition of any business, assets or Capital
Stock of the Company or any Restricted Subsidiary; provided that (1) the
maximum aggregate liability in respect of all such Indebtedness shall at
no time exceed the gross proceeds actually received by the Company and its
Subsidiaries in connection with such disposition and (2) such Indebtedness
is not reflected in the balance sheet of the Company or any Restricted
Subsidiary (contingent obligations referred to in a footnote to financial
statements and not otherwise reflected on the balance sheet will not be
deemed to be reflected on such balance sheet for purposes of this clause
(2));
(xiii) Indebtedness of the Company or any of its Restricted
Subsidiaries that is Acquired Debt in an aggregate principal amount at any
time outstanding not to exceed $25 million; and
(xiv) Indebtedness (other than Indebtedness permitted to be
Incurred pursuant to Section 4.03(a) or any other clause of Section
4.03(b)) of the Company or any Restricted Subsidiary in an aggregate
principal amount (or accreted value, as applicable) on the date of
Incurrence that, when added to all other Indebtedness Incurred pursuant to
this clause (xiv) and then outstanding, shall not exceed $50 million, of
which up to $25 million may be Incurred by Restricted Subsidiaries that
are not Guarantors.
(c) Notwithstanding the foregoing, neither the Company nor SCI LLC
shall Incur any Indebtedness pursuant to Section 4.03(b) above if the proceeds
thereof are used, directly or indirectly, to repay, prepay, redeem, defease,
retire, refund or refinance any Subordinated Indebtedness of such Person in
reliance on Section 4.04(b)(ii) unless such Indebtedness shall be subordinated
to the Notes to at least the same extent as such Subordinated Indebtedness.
(d) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that the Company or any Restricted Subsidiary may
Incur pursuant to this Section 4.03 shall not be deemed to be exceeded solely as
a result of fluctuations in the exchange rates of currencies. For purposes of
determining compliance with this Section 4.03, (i) Indebtedness Incurred
pursuant to the Credit Agreement prior to or on the Closing Date shall be
treated as Incurred pursuant to Section 4.03(b)(i), (ii) Indebtedness permitted
by this Section 4.03 need not be permitted solely by reference to one provision
permitting such Indebtedness but may be permitted in part by one such provision
and in part by one or more other provisions of this Section 4.03 permitting such
Indebtedness, (iii) in the event that Indebtedness meets the criteria of more
than one of the types of Indebtedness described in this
Section 4.03, the Company, in its sole discretion, shall classify such
Indebtedness and only be required to include the amount of such Indebtedness in
one of such clauses and (iv) the aggregate amount of any Indebtedness Guaranteed
pursuant to Section 4.03(b)(vii) will be included in the calculation of
Indebtedness, but the corresponding amount of the Guarantee will not be so
included.
(e) Accrual of interest, the accretion of accreted value and the
payment of interest in the form of additional Indebtedness will not be deemed to
be an Incurrence of Indebtedness for purposes of this Section 4.03.
(f) For purposes of determining compliance with any U.S.
dollar-denominated restriction on the Incurrence of Indebtedness, the U.S.
dollar-equivalent principal amount of Indebtedness denominated in a foreign
currency shall be calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was Incurred, in the case of term debt, or
first committed, in the case of revolving credit debt; provided that (i) the
U.S. dollar-equivalent principal amount of any such Indebtedness outstanding or
committed on the Closing Date shall be calculated based on the relevant currency
exchange rate in effect on the Issue Date, and (ii) if such Indebtedness is
Incurred to Refinance other Indebtedness denominated in a foreign currency, and
such Refinancing would cause the applicable U.S. dollar-denominated restriction
to be exceeded if calculated at the relevant currency exchange rate in effect on
the date of such Refinancing, such U.S. dollar-denominated restriction shall be
deemed not to have been exceeded so long as the principal amount of such
Refinancing Indebtedness does not exceed the principal amount of such
Indebtedness being Refinanced. The principal amount of any Indebtedness Incurred
to Refinance other Indebtedness, if Incurred in a different currency from the
Indebtedness being Refinanced, shall be calculated based on the currency
exchange rate applicable to the currencies in which such respective Indebtedness
is denominated that is in effect on the date of such Refinancing.
(g) The Company will not, and will not permit SCI LLC to, make any
amendment to the Senior Subordinated Notes or the Junior Subordinated Note which
(i) makes either the Senior Subordinated Notes or the Junior Subordinated Note
subordinated in right of payment to the Notes to a lesser extent than on the
Closing Date or (ii) results or could result in any cash payment of principal,
premium or interest in respect of either the Senior Subordinated Notes or the
Junior Subordinated Note becoming due at any time prior to the date such payment
would have been required in accordance with the terms of each of the Senior
Subordinated Notes or the Junior Subordinated Note as in effect on the Closing
Date.
SECTION 4.04. Limitation on Restricted Payments. (a) The Company
shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on or in
respect of the Company's or any Restricted Subsidiary's Capital Stock (including
any payment in connection with any merger or consolidation involving the
Company) or similar payment to the direct or indirect holders of its Capital
Stock except dividends or distributions payable solely in its Capital Stock
(other than Disqualified Stock) and except dividends or distributions payable to
the Company or another Restricted Subsidiary (and, if such Restricted Subsidiary
has shareholders other than the Company or other Restricted Subsidiaries, to its
other shareholders on a pro rata basis), (ii) purchase, redeem, retire or
otherwise acquire for value any Capital Stock of the Company or
any Restricted Subsidiary held by Persons other than the Company or another
Restricted Subsidiary, other than the making of a Permitted Investment, (iii)
purchase, repurchase, redeem, defease or otherwise acquire or retire for value,
prior to scheduled maturity, scheduled repayment or scheduled sinking fund
payment any Subordinated Indebtedness (other than the purchase, repurchase or
other acquisition of Subordinated Indebtedness 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), (iv) make any
Investment (other than a Permitted Investment) in any Person or (v) make or pay
any interest or other distribution on the Junior Subordinated Note except
interest or other distributions payable solely in Capital Stock (other than
Disqualified Stock) or additional Junior Subordinated Note (any such dividend,
distribution, purchase, redemption, repurchase, defeasance, other acquisition,
retirement or Investment described in and not excluded from clauses (i) through
(v) being herein referred to as 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 could not Incur at least $1.00 of additional
Indebtedness under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments (the amount so expended, if other than in cash, to be
determined in good faith by the Board of Directors, whose determination
shall be conclusive and evidenced by a resolution of the Board of
Directors) declared or made subsequent to the Closing Date would exceed
the sum of, without duplication:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the fiscal
quarter immediately following the fiscal quarter during which the Closing
Date occurs to the end of the most recent fiscal quarter for which
internal financial statements are available 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 Qualified Proceeds received by the Company from
the issue or sale of its Capital Stock (other than Disqualified Stock)
subsequent to the Closing Date (other than an issuance or sale to (x) a
Subsidiary of the Company or (y) an employee stock ownership plan or other
trust established by the Company or any of its Subsidiaries for the
benefit of its employees to the extent that the purchase by such plan or
trust is financed by Indebtedness of such plan or trust owed to the
Company or any of its Subsidiaries or Indebtedness Guaranteed by the
Company or any of its Subsidiaries);
(C) 100% of the aggregate Qualified Proceeds received by the Company
from the issuance or sale of debt securities of the Company or
Disqualified Stock of the Company that after the Closing Date have been
converted into or exchanged for Capital Stock (other than Disqualified
Stock) of the Company (other than an issuance or sale to a Subsidiary of
the Company or an employee stock ownership plan or other trust established
by the Company or any of its Subsidiaries for the benefit of its employees
to
the extent that the purchase by such plan or trust is financed by
Indebtedness of such plan or trust owed to the Company or any of its
Subsidiaries or Indebtedness Guaranteed by the Company or any of its
Subsidiaries (less the amount of any cash or the Fair Market Value of any
property distributed by the Company or any Restricted Subsidiary upon such
conversion or exchange); provided, however, that no amount will be
included in this clause (C) to the extent it is already included in
Consolidated Net Income;
(D) in the case of any Investment by the Company or any Restricted
Subsidiary (other than any Permitted Investment) made after the Closing
Date, the disposition of such Investment by, or repayment of such
Investment to, the Company or a Restricted Subsidiary or the receipt by
the Company or any Restricted Subsidiary of any dividends or distributions
from such Investment, an aggregate amount equal to the lesser of (x) the
aggregate amount of such Investment treated as a Restricted Payment
pursuant to clause (iv) above and (y) the aggregate amount in cash
received by the Company or any Restricted Subsidiary upon such
disposition, repayment, dividend or distribution; provided, however, that
no amount will be included in this clause (iv) to the extent it is already
included in Consolidated Net Income;
(E) in the event the Company or any Restricted Subsidiary makes any
Investment in a Person that, as a result of or in connection with such
Investment, becomes a Restricted Subsidiary, an amount equal to the
Company's or any Restricted Subsidiary's existing Investment in such
Person that was previously treated as a Restricted Payment pursuant to
clause (iv) above; provided, however, that such Person is engaged in a
Permitted Business; and
(F) the amount equal to the sum of (x) the net reduction in
Investments in Unrestricted Subsidiaries resulting from payments of
dividends, repayments of the principal of loans or advances or other
transfers of assets to the Company or any Restricted Subsidiary from
Unrestricted Subsidiaries and (y) 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 redesignated 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 by the Company or
any Restricted Subsidiary in such Unrestricted Subsidiary and treated as a
Restricted Payment pursuant to clause (iv) above.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) any purchase, repurchase, redemption or other acquisition
or retirement for value of Capital Stock of the Company or any Restricted
Subsidiary made by exchange for, or out of the proceeds of the
substantially concurrent sale of, other 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
other trust established by the Company or any of its Subsidiaries for the
benefit of its employees to the extent that the purchase by such plan or
trust is financed by Indebtedness of such plan or trust owed to the
Company or any of its Subsidiaries or Indebtedness Guaranteed by the
Company or any of its Subsidiaries); provided, however, that (1) such
Restricted
Payment shall be excluded from the calculation of the amount of Restricted
Payments and (2) the Net Cash Proceeds from such sale applied in the
manner set forth in this clause (i) shall be excluded from the calculation
of amounts under Section 4.04(a)(3)(B);
(ii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Indebtedness of the
Company or any Restricted Subsidiary, other than the Junior Subordinated
Note, made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness that is permitted to be Incurred pursuant
to Section 4.03(b); provided, however, that such purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value shall
be excluded from the calculation of the amount of Restricted Payments;
(iii) the repurchase, redemption or other acquisition or
retirement for value of Disqualified Stock of the Company or any
Restricted Subsidiary made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Disqualified Stock of the Company or any
Restricted Subsidiary that is permitted to be Incurred pursuant to Section
4.03; provided, however, that such repurchase, redemption or other
acquisition or retirement for value will be excluded from the calculation
of the amount of Restricted Payments;
(iv) any purchase or redemption of Subordinated Indebtedness
from Net Available Cash to the extent permitted by Section 4.06; provided,
however, that such purchase or redemption shall be excluded from 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 Notes pursuant to
Section 4.08 (including the purchase of the Notes tendered), any purchase
or redemption of Subordinated Indebtedness 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 any
accrued and unpaid interest; provided, however, that (1) at the time of
such purchase, no Default or Event of Default shall have occurred and be
continuing (or would result therefrom), (2) the Company would be able to
Incur at least $1.00 of additional Indebtedness under Section 4.03 (a)
above after giving pro forma effect to such Restricted Payment and (3)
such purchase or redemption will 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 such dividend
shall be included in the calculation of the amount of Restricted Payments
(without duplication for declaration);
(vii) the repurchase, redemption or other acquisition or
retirement for value of Capital Stock of the Company or any of its
Subsidiaries from employees, 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 Capital Stock; provided, however, that
the aggregate amount of such repurchases shall not exceed $2 million in
any calendar year; provided further, however, that such repurchases,
redemptions and other acquisitions or retirements for value shall be
excluded from the calculation of the amount of Restricted Payments;
(viii) the declaration and payment of any dividend (or the
making of any similar distribution or redemption) to the holders of any
class or series of Disqualified Stock of the Company, or SCI LLC or a
Guarantor issued or Incurred after the Closing Date in accordance with
Section 4.03; provided that no Default or Event of Default shall have
occurred and be continuing immediately after making such declaration or
payment; and provided further, that such payment will be excluded from the
calculation of the amount of Restricted Payments;
(ix) cash payments in lieu of fractional shares issuable as
dividends on Preferred Stock of the Company or any of its Restricted
Subsidiaries; provided that such cash payments shall not exceed $20,000 in
the aggregate in any twelve-month period and no Default or Event of
Default shall have occurred and be continuing immediately after such cash
payments; and provided further, that such cash payments will be excluded
from the calculation of the amount of Restricted Payments; or
(x) other Restricted Payments in an aggregate amount not to
exceed $20 million.
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 or pay any Indebtedness or other obligations owed to the
Company or any of its Restricted Subsidiaries, (b) make any loans or advances to
the Company or any of its Restricted Subsidiaries or (c) transfer any of its
property or assets to the Company or any of its Restricted Subsidiaries, except:
(i) any encumbrance or restriction pursuant to applicable law,
regulation, order or an agreement in effect at or entered into on the
Closing 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 prior to the date on
which such Restricted Subsidiary was acquired by the Company (other than
Indebtedness Incurred as consideration in, in contemplation of, or to
provide all or any portion of the funds or credit support utilized to
consummate the transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Restricted Subsidiary or was
otherwise acquired by 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 (c)
(i) or (c) (ii) of this Section 4.05 or this clause (iii) or contained in
any amendment to an agreement referred to in clause (c)(i) or (c)(ii) of
this Section 4.05 or this clause (iii); provided, however, that the
encumbrances and restrictions contained in any agreement or amendment
relating to such Refinancing are no less favorable to the Holders than the
encumbrances and restrictions contained in the agreements relating to the
Indebtedness so Refinanced;
(iv) any encumbrance or restriction (1) that restricts in a
customary manner the subletting, assignment or transfer of any property or
asset that is subject to a lease, license or similar contract or (2) that
is contained in security agreements securing Indebtedness of a Restricted
Subsidiary to the extent such encumbrance or restriction restricts the
transfer of the property subject to such security agreements;
(v) with respect to a Restricted Subsidiary, any restriction
imposed pursuant to an agreement entered into for the sale or disposition
of all or substantially all the Capital Stock or assets of such Restricted
Subsidiary pending the closing of such sale or disposition;
(vi) contracts for the sale of assets containing customary
restrictions with respect to a Subsidiary pursuant to an agreement that
has been entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary;
(vii) agreements for the sale of assets containing customary
restrictions with respect to such assets;
(viii) restrictions relating to the common stock of
Unrestricted Subsidiaries or Persons other than Subsidiaries;
(ix) encumbrances or restrictions existing under or by reason
of provisions with respect to the disposition or distribution of assets or
property in joint venture agreements and other similar agreements entered
into in the ordinary course of business;
(x) encumbrances or restrictions existing under or by reason
of restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
and
(xi) any encumbrance or restriction existing under or by
reason of a Receivables Facility or other contractual requirements of a
Receivables Facility permitted pursuant to Section 4.03; provided that
such restrictions apply only to such Receivables Facility.
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock.
(a) The Company shall not, and shall not permit any Restricted Subsidiary to,
make any Asset Disposition unless (i) the Company or such Restricted Subsidiary,
as the case may be, receives consideration (including by way of relief from, or
by any other Person assuming sole responsibility for, any liabilities,
contingent or otherwise) at the time of such Asset Disposition at least equal to
the Fair Market Value of the shares and assets subject to such Asset Disposition
and (ii) at least 80% of the consideration thereof received by the Company or
such Restricted Subsidiary is in the form of cash, Temporary Cash Investments or
other Qualified Proceeds
(provided that the aggregate Fair Market Value of Qualified Proceeds (other than
cash and Temporary Cash Investments) shall not exceed $10 million since the
Closing Date).
Within 365 days after the receipt of any Net Available Cash from
such Asset Disposition, the Company or such Restricted Subsidiary may apply an
amount equal to 100% of the Net Available Cash from such Asset Disposition (w)
to repay or cash collateralize any Credit Agreement Obligations, to repay
Indebtedness of the Company or any of its Restricted Subsidiaries secured by
assets not in the Collateral, or to repay any Indebtedness of any Restricted
Subsidiary that is not a Guarantor; (x) to acquire all or substantially all of
the assets of another Permitted Business; (y) to make a capital expenditure; or
(z) to acquire other long-term assets that are used or useful in the Permitted
Business; provided, however, that in connection with any prepayment, repayment
or purchase of Indebtedness pursuant to clause (x) above, the Company or such
Restricted Subsidiary shall 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.
For the purposes of clause (a)(ii) of this Section 4.06 only, the
following are deemed to be cash: (A) the assumption of any liabilities (as shown
on the Company's or a Restricted Subsidiary's most recent balance sheet) of the
Company or any such Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any Note
Guarantee) pursuant to a customary novation agreement that releases the Company
or such Restricted Subsidiary from further liability in connection with such
Asset Disposition and (B) any securities or other obligations received by the
Company or any Restricted Subsidiary from the transferee that are converted
within 90 days of receipt by the Company or such Restricted Subsidiary into
cash.
Pending the final application of any Net Available Cash, the Company
or such Restricted Subsidiary may temporarily reduce revolving credit borrowings
or otherwise invest the Net Available Cash in any manner that is not prohibited
by this Indenture.
(b) Any Net Available Cash from Asset Dispositions that are not
applied or invested as provided in the preceding paragraphs of this Section 4.06
shall constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Issuers shall make an Asset Disposition offer (the
"Offer") to all Holders of Notes and all holders of other Indebtedness that is
pari passu in right of payment with the Notes containing provisions similar to
those set forth in Section 4.06(c) with respect to offers to purchase or redeem
with the proceeds of sales of assets to purchase the maximum principal amount of
Notes and such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Offer shall be equal to 100% of
principal amount plus accrued and unpaid interest, including Additional
Interest, if any, to the date of purchase, and shall be payable in cash. If any
Excess Proceeds remain after consummation of an Offer, the Issuers may use those
Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If
the aggregate principal amount of Notes and other pari passu Indebtedness
tendered into such Offer exceeds the amount of Excess Proceeds, the Trustee
shall select the Notes and such other pari passu Indebtedness to be purchased on
a pro rata basis; provided, however, that the Issuers shall not be obligated to
purchase Notes in denominations other than integral multiples of $1,000
principal amount at maturity. Upon completion of each Offer, the amount of
Excess Proceeds shall be reset at zero.
(c) (i) 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 Notes 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 shall include (1) 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), (2) a description of material developments in
the Company's business subsequent to the date of the latest of such reports, and
(3) if material, appropriate pro forma financial information) and all
instructions and materials necessary to tender Notes pursuant to the Offer,
together with the address referred to in clause (iii).
(ii) 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 (1) the amount of the Offer (the "Offer
Amount"), (2) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (3) the compliance
of such allocation with the provisions of Section 4.06(a) and (b). Not later
than one Business Day before the Purchase Date, the Company shall also
irrevocably deposit with the Trustee or with a paying agent (or, if the Company
is acting as its own paying agent, segregate and hold in trust) an amount equal
to the Offer Amount with written instructions for investment in Temporary Cash
Investments and to be held for payment in accordance with the provisions of this
Section 4.06. Upon the expiration of the period for which the Offer remains open
(the "Offer Period"), the Company shall deliver to the Trustee for cancelation
the Notes or portions thereof that have been properly tendered to and are to be
accepted by the Company. The Trustee (or the Paying Agent, if not the Trustee)
shall, on the date of purchase, mail or deliver payment to each tendering Holder
in the amount of the purchase price. In the event that the Offer Amount
delivered by the Company to the Trustee is greater than the purchase price of
the Notes (and such other pari passu Indebtedness) tendered, the Trustee shall
deliver the excess to the Company immediately after the expiration of the Offer
Period for application in accordance with this Section 4.06.
(iii) Holders electing to have a Note purchased shall be required to
surrender the Note, 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 Note or Notes which were
delivered by the Holder for purchase and a statement that such Holder is
withdrawing his election to have such Note or Notes purchased. If at the
expiration of the Offer Period the aggregate principal amount
of Notes and any such other pari passu Indebtedness included in the Offer
surrendered by holders thereof exceeds the Offer Amount, the Company shall
select the Notes and such other pari passu Indebtedness to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the Company so
that only Notes and such other pari passu Indebtedness in denominations of
$1,000, or integral multiples thereof, shall be purchased). Holders whose Notes
are purchased only in part will be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered
(iv) At the time the Company delivers Notes to the Trustee which are
to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Notes are to be accepted by the Company pursuant
to and in accordance with the terms of this Section. A Note 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.
(v) The Issuers shall comply in all material respects with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent those laws and regulations are
applicable in connection with each repurchase of Notes pursuant to an Offer. To
the extent that the provisions of any securities laws or regulations conflict
with the Asset Disposition provisions of this Indenture, the Issuers shall
comply in all material respects with the applicable securities laws and
regulations and shall not be deemed to have breached their obligations under the
Asset Disposition provisions of this Indenture by virtue of such conflict.
SECTION 4.07. Limitation on Transactions with Affiliates. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, enter into or conduct any transaction (including, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any Affiliate of the Company (an "Affiliate Transaction") unless such Affiliate
Transaction is on terms (i) that are no less favorable (other than in immaterial
respects) to the Company or such Restricted Subsidiary, as the case may be, than
those that could be obtained at the time of such transaction in comparable
arm's-length dealings with a Person who is not such an Affiliate, (ii) that, in
the event that such Affiliate Transaction involves an aggregate amount in excess
of $5 million, (1) are set forth in writing and (2) have been approved by a
majority of the members of the Board of Directors having no personal stake in
such Affiliate Transaction and (iii) that, in the event that such Affiliate
Transaction involves an amount in excess of $15 million, have been determined by
a nationally recognized appraisal or investment banking firm to be fair, from a
financial standpoint, to the Company and its Restricted Subsidiaries.
(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 officers, employees, consultants and
directors of the Company pursuant to plans approved by the Board of Directors
and the payment of amounts or the issuance of securities pursuant thereto, (iv)
loans or advances to employees consistent with prudent business practice, but in
any event not to exceed $5 million in the aggregate outstanding at any one time,
(v) the payment of reasonable fees, compensation or
employee benefit arrangements to and any indemnity provided for the benefit of
directors, officers, consultants or employees of the Company or any Restricted
Subsidiary in the ordinary course of business, (vi) any transaction between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries, (vii)
the payment of management, consulting and advisory fees to TPG Partners II, L.P.
or its Affiliates made pursuant to any financial advisory, financing,
underwriting or placement agreement or in respect of other investment banking
activities, including in connection with acquisitions or divestitures, in an
amount not to exceed $2 million in any calendar year and any related
out-of-pocket expenses, (viii) transactions with customers, suppliers,
contractors, joint venture partners or purchasers or sellers of goods or
services, in each case which are in the ordinary course of business (including
pursuant to joint venture agreements) and otherwise in compliance with the terms
of this Indenture, and which are fair to the Company or its Restricted
Subsidiaries, as applicable, in the reasonable determination of the Board of
Directors or the senior management of the Company or its Restricted
Subsidiaries, as applicable or are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated party, or (ix)
any transaction effected in connection with a Receivables Facility permitted
under Section 4.03.
SECTION 4.08. Repurchase of Notes at the Option of the Holder Upon a
Change of Control. (a) Upon a Change of Control, each Holder shall have the
right to require that the Issuers repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of such Holder's Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
including Additional Interest, thereon, if any, to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) in accordance with
the terms contemplated in Section 4.08(b); provided, however, that
notwithstanding the occurrence of a Change of Control, the Issuers shall not be
obligated to purchase the Notes pursuant to this Section 4.08 in the event that
they have exercised their right to redeem all the Notes under paragraph 5 of the
Notes. In the event that at the time of such Change of Control the terms of the
Bank Indebtedness restrict or prohibit the repurchase of Notes pursuant to this
Section 4.08, then prior to the mailing of the notice to Holders provided for in
Section 4.08(b) below but in any event within 30 days following any Change of
Control, SCI LLC shall (i) repay in full all Bank Indebtedness or (ii) obtain
the requisite consent under the agreements governing the Bank Indebtedness to
permit the repurchase of the Notes as provided for in Section 4.08(b).
(b) Within 30 days following any Change of Control (except as
provided in the proviso to the first sentence of Section 4.08(a)), the Issuers
shall mail a notice to each Holder with a copy to the Trustee (the "Change of
Control Offer") stating:
(i) that a Change of Control has occurred and that such Holder
has the right to require the Issuers to purchase all or a portion (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes at a
purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, including Additional Interest, if any, to the
date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest
payment date);
(ii) the circumstances and relevant facts and financial
information regarding such Change of Control;
(iii) the repurchase date (which shall be no earlier than 30
days (or such shorter time period as may be permitted under applicable
laws, rules and regulations) nor later than 60 days from the date such
notice is mailed); and
(iv) the instructions determined by the Issuers, consistent
with this Section 4.08, that a Holder must follow in order to have its
Notes purchased.
(c) Holders electing to have a Note purchased shall be required to
surrender the Note, 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 Note which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Note purchased. Holders whose Notes are purchased only in
part will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered.
(d) On the purchase date, all Notes purchased by the Company under
this Section 4.08 shall be delivered to the Trustee for cancelation, and the
Company shall pay the purchase price plus accrued and unpaid interest, including
Additional Interest, if any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section 4.08,
the Issuers will not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in Section
4.08(b) applicable to a Change of Control Offer made by the Issuers and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
(f) In connection with any Change of Control Offer, the Company
shall deliver to the Trustee an Officers' Certificate stating that all
conditions precedent contained herein to the right of the Company to make such
offer have been complied with.
(g) The Issuers shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Indenture relating to Change of Control Offers,
the Issuers 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 4.09. Compliance Certificate. The Issuers shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Issuers an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Issuers they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Issuers are taking or propose to take
with respect thereto. The Issuers also shall comply with Section 314(a)(4) of
the TIA.
SECTION 4.10. Further Instruments and Acts. Upon request of the
Trustee, the Issuers shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.11. Additional Note Guarantees and Liens. If (x) any
Domestic Subsidiary shall, after the date hereof, become a guarantor (i) of any
Credit Agreement Obligations or (ii) so long as the Senior Subordinated Notes
are outstanding, the Senior Subordinated Notes, or (y) any Foreign Subsidiary
shall, after the date hereof, become a guarantor of any of the Indebtedness of
the Company or any Domestic Subsidiary, and the aggregate principal amount of
Indebtedness of the Company and its Domestic Subsidiaries guaranteed by all
Foreign Subsidiaries exceeds $25 million, then the Issuers shall, at the time,
cause such Subsidiary to (a) execute a Guarantee of the obligations of the
Issuers under the Notes substantially in the form set forth in Exhibit C hereto,
and (b) if such Subsidiary grants any Lien upon any of its assets and property
as security for any Credit Agreement Obligations, execute any and all further
Security Documents, financing statements, agreements and instruments, upon
substantially the same terms as the security documents in respect of such Credit
Agreement Obligations, but subject to the Intercreditor Agreement, that grants
the Trustee a second-priority Lien upon such assets and property for the benefit
of the Holders and take all such actions (including the filing and recording of
financing statements, fixture filings, Mortgages and other documents) that may
be required under any applicable law, or which the Trustee may reasonably
request to create such second-priority Lien, all at the expense of the Issuers,
including all reasonable fees and expenses of counsel incurred by the Trustee in
connection therewith; provided that such Subsidiary shall not be required to
grant a second-priority Lien upon such property for the benefit of the Holders
if (i) a second-priority security interest in such property cannot be granted or
perfected under applicable law or (ii) such grant requires the consent of any
third party, which consent such Subsidiary is unable to obtain using
commercially reasonable efforts, and (c) deliver to the Trustee an Opinion of
Counsel, reasonably satisfactory to the Trustee, that such Guarantee and any
such Security Documents, as the case may be, are valid, binding and enforceable
obligations of such Subsidiary, subject to customary exceptions for bankruptcy,
fraudulent conveyance and equitable principles.
From and after the date of this Indenture, if any Issuer or any
Guarantor creates any additional security interest upon any of its assets and
property to secure any Credit Agreement Obligations or any Other Second-Lien
Obligations (other than security interests granted solely to secure Hedging
Obligations, Commodity Hedge Obligations or Cash Management Obligations), it
shall concurrently grant a second-priority security interest (subject to
Permitted Liens) upon such assets and property as security for the Notes and
execute any and all further Security Documents, financing statements, agreements
and instruments, but subject to the Intercreditor Agreement, that grant the
Trustee a second-priority Lien upon such assets and property for the benefit of
the Holders and take all such actions (including the filing and recording of
financing statements, fixture filings, Mortgages and other documents) that may
be required under any applicable law, or which the Trustee may reasonably
request to create such second-priority Lien, all at the expense of the Issuers,
including all reasonable fees and expenses of counsel incurred by the Trustee in
connection therewith; provided that such Issuer or Guarantor shall not be
required to grant a second-priority Lien upon such property as security for the
Notes if (i) a second-priority security interest in such property cannot be
granted or perfected
under applicable law or (ii) such grant requires the consent of any third party,
which consent such Issuer or Guarantor is unable to obtain using commercially
reasonable efforts.
In addition, the Issuers shall, with respect to each parcel of real
property in the United States owned by any Issuer or Guarantor that secures the
Credit Agreement Obligations, use commercially reasonable efforts to deliver to
the Collateral Agent, for the benefit of or addressed to the Trustee or the
Collateral Agent, as applicable, the following:
(a) a fully executed, acknowledged, and recorded Mortgage similar to
that provided for the benefit of the Credit Agent except that such
mortgage or deed of trust shall be subject to the terms of the
Intercreditor Agreement;
(b) an opinion of local counsel in a form substantially similar to
the opinion provided for the benefit of the Credit Agent, or otherwise
reasonably acceptable to the Initial Purchasers and the Trustee;
(c) a fully-paid title insurance policy (including such endorsements
as the Credit Agent obtained in its title insurance policy) with no
exceptions other than (i) Permitted Liens and exceptions included under
the title insurance policy in favor of the Credit Agent, (ii) the Credit
Agent's existing Lien on such property and (iii) other changes reasonably
acceptable to the Initial Purchasers;
(d) the most recent survey of each property together with either (i)
an updated survey certification from the applicable surveyor stating that,
based on a visual inspection of the property and the knowledge of the
surveyor, there has been no change in the facts depicted in the survey or
(ii) an affidavit from the Issuers stating that there has been no change,
other than, in each case, changes reasonably acceptable to the Initial
Purchasers, in the facts depicted in the survey; and
(e) such other related deliveries and deliverables as the Trustee
and the Initial Purchasers shall reasonably require.
The Issuers shall provide each of the foregoing described in clauses
(a) through (e) above at their own expense and shall pay all reasonable fees and
expenses of counsel incurred by the Trustee in connection with each of the
foregoing.
Each Note Guarantee will be limited in amount to an amount not to
exceed the maximum amount that can be guaranteed by the applicable Guarantor
without rendering the Note Guarantee, as it relates to such Guarantor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
SECTION 4.12. Limitation on Lines of Business. The Company shall
not, and shall not permit any Restricted Subsidiary (other than a Receivables
Subsidiary) to, engage in any business, other than a Permitted Business.
SECTION 4.13. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries. The Company shall not sell or otherwise dispose of any
shares of Capital Stock of a Restricted Subsidiary, and shall not permit any
Restricted Subsidiary, directly or indirectly, to
issue or sell or otherwise dispose of any shares of its Capital Stock except:
(a) to the Company or another Restricted Subsidiary; (b) if, immediately after
giving effect to such issuance, sale or other disposition, neither the Company
nor any of its Restricted Subsidiaries own any Capital Stock of such Restricted
Subsidiary; (c) if, immediately after giving effect to such issuance or sale,
such Restricted Subsidiary would no longer constitute a Restricted Subsidiary
and any Investment in such Person remaining after giving effect thereto would
have been permitted to be made under Section 4.04 if made on the date of such
issuance, sale or other disposition; (d) directors' qualifying shares or shares
required by applicable law to be held by a Person other than the Company or a
Restricted Subsidiary; or (e) in the case of a Restricted Subsidiary other than
a wholly-owned Restricted Subsidiary, the issuance by that Restricted Subsidiary
of Capital Stock on a pro rata basis to the Company and its Restricted
Subsidiaries, on the one hand, and minority shareholders of the Restricted
Subsidiary, on the other hand (or on less than a pro rata basis to any minority
shareholder if the minority holder does not acquire its pro rata amount), so
long as the Company or another Restricted Subsidiary owns and controls at least
the same percentage of the Voting Stock of, and economic interest in, such
Restricted Subsidiary as prior to such issuance. The cash proceeds of any sale
of Capital Stock permitted under clauses (b) and (c) shall be treated as Net
Available Cash from an Asset Disposition and shall be applied in accordance with
Section 4.06.
SECTION 4.14. Limitation on Liens. The Company shall not, and shall
not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur, assume or suffer to exist any Lien of any kind on any asset now
owned or hereafter acquired by the Company or its Restricted Subsidiaries,
except Permitted Liens.
SECTION 4.15. Sale/Leaseback Transactions. The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, enter into any
Sale/Leaseback Transaction; provided that the Company or any Restricted
Subsidiary may enter into a Sale/Leaseback transaction if: (a) the Company or
that Restricted Subsidiary, as applicable, could have Incurred Indebtedness in
an amount equal to the Attributable Debt relating to such Sale/Leaseback
Transaction under Section 4.03 hereof; (b) the gross cash proceeds of the
Sale/Leaseback Transaction are at least equal to the fair market value (in the
case of gross cash proceeds in excess of $5.0 million as determined in good
faith by the Board of Directors and set forth in the Officers' Certificate
delivered to the Trustee), of the property that is the subject of that
Sale/Leaseback Transaction; and (c) the transfer of assets in that
Sale/Leaseback Transaction is permitted by, and the Company applies the proceeds
of such transaction in compliance with, Section 4.06 hereof.
ARTICLE V
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets. (a) The
Company and SCI LLC each shall not consolidate with or merge with or into, or
convey, transfer or lease all or substantially all its assets to, any Person,
unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a corporation or, subject to the proviso
below, a partnership or a limited liability company, in each case
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 or SCI LLC, as the case may be) shall expressly assume, by
a supplemental indenture hereto, executed and delivered to the Trustee, in
form reasonably satisfactory to the Trustee, all the obligations of the
Company or SCI LLC, as the case may be under the Notes and this Indenture;
provided, however, that at all times, at least one Issuer must be a
corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Restricted Subsidiary as a result of such transaction as
having been Incurred by the Successor Company or such Restricted
Subsidiary at the time of such transaction), no Default shall have
occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur at least $1.00 of additional
Indebtedness pursuant to Section 4.03(a) (without giving effect to the
second proviso thereof); and
(iv) 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.
The Successor Company shall succeed to, and be substituted for, and
may exercise every right and power of, the Company or SCI LLC, as the case may
be, under this Indenture.
(b) The Company shall not permit any Guarantor to consolidate with
or merge with or into, or convey, transfer or lease all or substantially all of
its assets to any Person unless: (i) in the case of any Guarantor that is a
Domestic Subsidiary, the resulting, surviving or transferee Person will be a
corporation, partnership or limited liability company organized and existing
under the laws of the United States of America, any State thereof or the
District of Columbia, and such Person (if not such Guarantor) shall expressly
assume, by a supplemental indenture, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of such Guarantor under
its Note Guarantee; (ii) immediately after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the resulting,
surviving or transferee Person as a result of such transaction as having been
Incurred by such Person at the time of such transaction), no Default shall have
occurred and be continuing; and (iii) the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture; provided, however, that the foregoing shall not
apply to any such consolidation or merger with or into, or conveyance, transfer
or lease to, any Person if the resulting, surviving or transferee Person will
not be a Subsidiary of the Company and the other terms of this Indenture,
including Section 4.06 are complied with.
(c) Notwithstanding the foregoing, (i) any Restricted Subsidiary may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company or SCI LLC; (ii) the Company may merge with an Affiliate
incorporated or organized solely for the purpose of reincorporating or
reorganizing the Company in another jurisdiction to realize tax or other
benefits; (iii) nothing herein shall limit any conveyance, transfer or lease of
assets between or among any of the Company, SCI LLC and the Guarantors; and (iv)
the foregoing clause (a)(iii) of this Section 5.01 shall not prohibit (1) a
merger between the Company and a Person that owns all of the Capital Stock of
the Company created solely for the purpose of holding the Capital Stock of the
Company or (2) a merger between SCI LLC and a Person that owns all of the
Capital Stock of SCI LLC created solely for the purpose of holding the Capital
Stock of SCI LLC; provided, however, that the other terms of Section 5.01(a) are
complied with.
ARTICLE VI
Events of Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(a) the Company, SCI LLC or any Guarantor defaults in any payment of
interest on any Note or in any payment of Additional Interest with respect
thereto, and such default continues for a period of 30 days;
(b) the Company, SCI LLC or any Guarantor (i) defaults in the
payment of the principal of any Note when the same becomes due and payable at
its Stated Maturity, upon required redemption or repurchase, upon declaration or
otherwise, or (ii) fails to redeem or purchase Notes when required pursuant to
this Indenture or the Notes;
(c) the Company, SCI LLC or any Guarantor fails to comply with
Section 5.01;
(d) the Company, SCI LLC or any Guarantor fails to comply with
Section 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.11, 4.12, 4.13, 4.14 or 4.15
(other than a failure to purchase Notes when required under Section 4.06 or
4.08) and such failure continues for 30 days after the notice specified below;
(e) the Company, SCI LLC or any Guarantor fails to comply with any
of its agreements in the Notes or this Indenture, any Note Guarantee or any
Security Document (other than those referred to in (a), (b), (c) or (d) above)
and such failure continues for 60 days after the notice specified below;
(f) Indebtedness of the Company or any Restricted Subsidiary is not
paid within any applicable grace period after final maturity or the acceleration
by the holders thereof because of a default and the total amount of such
Indebtedness unpaid or accelerated exceeds $25 million or its foreign currency
equivalent at the time and such failure continues for 10 days after the notice
specified below;
(g) the Company, SCI LLC or any other Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it
in an involuntary case;
(iii) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(iv) makes a general assignment for the benefit of its
creditors;
(v) or takes any comparable action under any foreign laws
relating to insolvency;
(h) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company, SCI LLC or any other
Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company, SCI LLC or any other
Significant Subsidiary or for any substantial part of its property; or
(iii) orders the winding up or liquidation of the Company, SCI
LLC or any other 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;
(i) with respect to any judgment or decree for the payment of money
in excess of $25 million or its foreign currency equivalent against the Company
or any Restricted Subsidiary (i) an enforcement proceeding is commenced thereon
by any creditor if such judgment or decree is final and nonappealable and the
Company or such Restricted Subsidiary, as applicable, fails to stay such
proceeding within 10 days thereafter or (ii) the Company or such Restricted
Subsidiary, as applicable, fails to pay such judgment or decree, which judgment
or decree has remained outstanding for a period of 60 days following the entry
of such judgment or decree without being paid, discharged, waived or stayed; or
(j) (i) except as permitted by this Indenture, any Note Guarantee of
any Significant Subsidiary or any Security Document or any security interest
granted thereby shall be held in any judicial proceeding to be unenforceable or
invalid, or shall cease for any reason to be in full force and effect and such
default continues for 10 days after written notice, or (ii) any Issuer or
Guarantor that is a Significant Subsidiary, or any Person acting on behalf of
such Significant Subsidiary, shall deny or disaffirm its obligations under any
Note Guarantee or Security Document.
The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (d), (e), (f) or (j) above is not an Event of
Default until the Trustee notifies the Issuers or the Holders of at least 25% in
principal amount of the outstanding Notes notify the Issuers and the Trustee of
the Default and the Issuers or the relevant Guarantor, as applicable, do 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 Issuers shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice or the lapse of time would become an
Event of Default under clauses (c), (d), (e), (f), (i) or (j), its status and
what action the Issuers are taking or propose to take with respect thereto.
SECTION 6.02. Acceleration. (a) If an Event of Default (other than
an Event of Default specified in Section 6.01(g) or (h) with respect to the
Company or SCI LLC) occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the outstanding Notes, by notice to the
Issuers, may declare the principal of and accrued but unpaid interest on all the
Notes to be due and payable. Upon such a declaration, such principal and
interest shall be due and payable immediately. If an Event of Default specified
in Section 6.01(g) or (h) with respect to the Company or SCI LLC occurs, the
principal of and interest on all the Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders. The Holders of a majority in principal amount of the
Notes by notice to the Trustee may rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of acceleration. No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.
(b) In the event of a declaration of acceleration of the Notes
because an Event of Default has occurred and is continuing as a result of the
acceleration of any Indebtedness described in Section 6.01(f), the declaration
of acceleration of the Notes shall be automatically annulled if the holders of
any such Indebtedness have rescinded the declaration of acceleration in respect
of such Indebtedness within 30 days of the date of such acceleration and if (i)
the annulment of the acceleration of the Notes would not conflict with any
judgment or decree of a court of competent jurisdiction and (ii) all existing
Events of Default, except nonpayment of principal or interest on the Notes that
became due solely because of the acceleration of the Notes, have been cured or
waived.
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 Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder 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 Notes by notice to the Trustee may waive on behalf of
the Holders of all of the Notes an existing Default and its consequences except
(a) a Default in the payment of the principal of or interest on a Note, (b) a
Default arising from the failure to redeem or purchase any Note when required
pursuant to the terms of this Indenture or (c) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of each
Holder 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 Notes 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 Holders 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. (a) Except to enforce the right
to receive payment of principal, premium (if any) or interest when due, no
Holder may pursue any remedy with respect to this Indenture or the Notes unless:
(i) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(ii) the Holders of at least 25% in principal amount of the
Notes make a written request to the Trustee to pursue the remedy;
(iii) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or indemnity;
and
(v) the Holders of a majority in principal amount of the Notes
do not give the Trustee a direction inconsistent with the request during
such 60-day period.
(b) A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
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, including Additional Interest, on the
Notes held by such Holder, on or after the respective due dates expressed or
provided for in the Notes, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Issuers or any other obligor on the Notes for the whole amount then due and
owing (together with interest on overdue principal and (to the extent lawful) on
any unpaid interest at the rate provided for in the Notes) 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 Holders allowed in
any judicial proceedings relative to the Issuers, any Subsidiary or Guarantor,
their creditors or their property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, and any Additional Interest, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal and interest, including any Additional
Interest, respectively; and
THIRD: to the Issuers.
The Trustee may fix a record date and payment date for any payment
to Holders pursuant to this Section. At least 15 days before such record date,
the Trustee shall mail to each Holder and the Issuers 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 Notes.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Issuers
nor any Guarantor (to the extent it may lawfully do so) shall at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and each Issuer and each Guarantor (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and shall not hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE VII
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(iv) 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.
(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 Issuers.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Notes shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other paper or document unless requested in writing to do so
by the Holders of not less than a majority in principal amount of the Notes at
the time outstanding, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Issuers,
personally or by agent or attorney.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuers or their respective Affiliates with the same
rights it would have if it were not Trustee. Any Paying Agent, 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, any Note Guarantee or the Notes, it shall not be accountable for
the Issuers' use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Issuers or any Guarantor in this Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Trustee's certificate of authentication. The Trustee shall not be
charged with knowledge of any Default or Event of Default under Sections
6.01(c), (d), (e), (f), (i) or (j) or of the identity of any Significant
Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof
or (b) the Trustee shall have received notice thereof in accordance with Section
12.02 hereof from the Issuers, any Guarantor or any Holder.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Holder notice of the Default within the earlier of 90 days after it occurs or 30
days after it is known to a trust officer. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant to
the mandatory redemption provisions of such Note, 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 Holders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with May 15, 2003, the Trustee shall
mail to each Holder a brief report dated as of such May 15 that complies with
Section 313(a) of the TIA if and to the extent required thereby. The Trustee
shall also comply with Section 313(b) of the TIA.
A copy of each report at the time of its mailing to Holders shall be
filed with the Commission and each stock exchange (if any) on which the Notes
are listed. The Issuers agree to notify promptly the Trustee whenever the Notes
become listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Issuers shall pay to
the Trustee from time to time reasonable compensation for its services hereunder
as the Issuers and the Trustee shall from time to time agree in writing. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuers shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. Each of the Issuers and each Guarantor, jointly and severally shall
indemnify the Trustee against any and all loss, liability or expense (including
reasonable attorneys' fees) incurred by or in connection with the administration
of this trust and the performance of its duties hereunder. The Trustee shall
notify the Issuers of any claim for which it may seek indemnity promptly upon
obtaining actual knowledge thereof;
provided, however, that any failure so to notify the Issuers shall not relieve
the Issuers or any Guarantor of its indemnity obligations hereunder. The Issuers
shall defend the claim and the Trustee shall provide reasonable cooperation at
the Issuers' expense in the defense. The Trustee may have separate counsel and
the Issuers and the Guarantors, as applicable, shall pay the fees and expenses
of such counsel; provided, however, that the Issuers and the Guarantors shall
not be required to pay such fees and expenses if it assumes the Trustee's
defense and, in the reasonable judgment of the Trustee's outside counsel, there
is no conflict of interest between the Issuers and the Guarantors, on the one
hand, and the Trustee, on the other hand, in connection with such defense. The
Issuers need not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee through its own wilful misconduct, negligence
or bad faith.
To secure the Issuers' payment obligations in this Section, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest and Additional Interest, if any, on particular Notes.
The Issuers' payment obligations pursuant to this Section shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee. Without prejudice to any other rights available to the
Trustee under applicable law, when the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(g) or (h) with respect to the
Issuers, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. (a) The Trustee may resign at
any time by so notifying the Issuers. The Holders of a majority in principal
amount of the Notes may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Issuers shall remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns, is removed by the Issuers or by the
Holders of a majority in principal amount of the Notes and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuers shall promptly appoint a successor
Trustee.
(c) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to
Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided for in Section
7.07.
(d) 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 Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee fails to comply with Section 7.10, unless the
Trustee's duty to resign is stayed as provided in TIA Section 310(b), any Holder
who has been a bona fide holder of a Note for at least six months may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to this
Section, the Issuers' obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Notes 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 Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes 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 Notes 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 $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b), subject to its right to apply for a stay of its duty to resign
under the penultimate paragraph of 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 Issuers 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 the Issuers.
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.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Notes; Defeasance.
(a) Subject to Section 8.01(c), when (i) all outstanding Notes
(other than Notes replaced or paid pursuant to Section 2.08) have been canceled
or delivered to the Trustee for cancelation or (ii) all outstanding Notes not
previously delivered for cancelation 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 Issuers irrevocably deposit with the Trustee funds in
an amount sufficient or U.S. Government Obligations, the principal of and
interest on which will be sufficient, or a combination thereof sufficient, in
the written opinion of a nationally recognized firm of independent public
accountants delivered to the Trustee (which delivery shall only be required if
U.S. Government Obligations have been so deposited) to pay the principal of and
interest on the outstanding Notes when due at maturity or upon redemption of,
including interest thereon to maturity or such redemption date (other than Notes
replaced or paid pursuant to Section 2.08) and Additional Interest, if any, and
if in either case the Issuers pay all other sums payable hereunder by the
Issuers, then this Indenture shall, subject to Section 8.01(c), cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Issuers accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Issuers.
(b) Subject to Sections 8.01(c) and 8.02, the Issuers at any time
may terminate (i) all of their obligations under the Notes and this Indenture
("legal defeasance option") and (ii) their obligations under Sections 4.02,
4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.11, 4.12, 4.13, 4.14 or 4.15 and the
operation of Section 5.01(a)(iii), 6.01(d), 6.01(e), 6.01(f), 6.01(g) (with
respect to Significant Subsidiaries of the Company only), 6.01(h) (with respect
to Significant Subsidiaries of the Company only) and 6.01(i) ("covenant
defeasance option"). The Issuers may exercise their legal defeasance option
notwithstanding their prior exercise of their covenant defeasance option. In the
event that the Issuers terminate all of their obligations under the Notes and
this Indenture by exercising their legal defeasance option, the obligations
under the Note Guarantees shall each be terminated simultaneously with the
termination of such obligations.
If the Issuers exercise their legal defeasance option, payment of
the Notes may not be accelerated because of an Event of Default. If the Issuers
exercise their covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in Section 6.01(d),
6.01(e), 6.01(f), 6.01(g) (with respect to Significant Subsidiaries of the
Company only), 6.01(h) (with respect to Significant Subsidiaries of the Company
only) or 6.01(i) or because of the failure of the Company or SCI LLC to comply
with Section 5.01(a)(iii).
Upon satisfaction of the conditions set forth herein and upon
request of the Issuers, the Trustee shall acknowledge in writing the discharge
of those obligations that the Issuers terminate.
(c) Notwithstanding the provisions of Sections 8.01(a) and 8.01(b),
the Issuers' obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.07,
7.08 and in this Article 8 shall
survive until the Notes have been paid in full. Thereafter, the Issuers'
obligations in Sections 7.07, 8.04 and 8.05 shall survive.
SECTION 8.02. Conditions to Defeasance. (a) The Issuers may exercise
their legal defeasance option or their covenant defeasance option only if:
(i) the Issuers irrevocably deposit in trust with the Trustee
money in an amount sufficient or U.S. Government Obligations, the
principal of and interest on which will be sufficient, or a combination
thereof sufficient, to pay the principal, premium (if any) and interest on
the Notes when due at maturity or redemption, as the case may be,
including interest thereon to maturity or such redemption date and
Additional Interest, if any;
(ii) the Issuers deliver 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 Notes to maturity or redemption, as the case may be;
(iii) 91 days pass after the deposit is made and during the
91-day period no Default specified in Section 6.01(g) or (h) with respect
to the Issuers occurs which is continuing at the end of the period;
(iv) the deposit does not constitute a default under any other
agreement binding on the Issuers;
(v) the Issuers deliver to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under the
Investment Company Act of 1940;
(vi) in the case of the legal defeasance option, the Issuers
shall have delivered to the Trustee an Opinion of Counsel stating that (1)
the Issuers has received from, or there has been published by, the
Internal Revenue Service a ruling, or (2) since the date of this Indenture
there has been a change in the applicable Federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the Holders 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;
(vii) in the case of the covenant defeasance option, the
Issuers shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders 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
(viii) the Issuers deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Notes as contemplated by
this Article 8 have been complied with.
(b) Before or after a deposit, the Issuers may make arrangements
satisfactory to the Trustee for the redemption of Notes 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 Notes.
SECTION 8.04. Repayment to the Issuers. The Trustee and the Paying
Agent shall promptly turn over to the Issuers upon request any money or U.S.
Government Obligations held by it as provided in this Article which, in the
written opinion of nationally recognized firm of independent public accountants
delivered to the Trustee (which delivery shall only be required if U.S.
Government Obligations have been so deposited), are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
discharge or defeasance in accordance with this Article.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Issuers upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Holders entitled to the money must look to the Issuers
for payment as general creditors and the Trustee, and the Paying Agent shall
have no further liability with respect to such monies.
SECTION 8.05. Indemnity for Government Obligations. The Issuers
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited 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 Issuers' obligations under this
Indenture and the Notes 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 Issuers have
made any payment of interest on or principal of any Notes because of the
reinstatement of its obligations, the Issuers shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
Amendments
SECTION 9.01. Without Consent of Holders. (a) The Issuers,
the Guarantors and the Trustee may amend or supplement this Indenture, the
Notes, the Note Guarantees or the Security Documents without notice to or
consent of any Holder:
(i) to cure any ambiguity, omission, defect or inconsistency;
(ii) to comply with Article 5;
(iii) to provide for uncertificated Notes in addition to or in
place of certificated Notes; provided, however, that the uncertificated
Notes are issued in registered form for purposes of Section 163(f) of the
Code or in a manner such that the uncertificated Notes are described in
Section 163(f)(2)(B) of the Code;
(iv) to add additional Note Guarantees with respect to the
Notes;
(v) to add to the covenants of the Issuers for the benefit of
the Holders or to surrender any right or power herein conferred upon the
Issuers;
(vi) to make any change that does not adversely affect the
rights of any Holder;
(vii) to provide for the issuance of the Exchange Notes,
Private Exchange Notes or Additional Notes, which shall have terms
substantially identical in all material respects to the Original Notes
(except that the transfer restrictions contained in the Original Notes
shall be modified or eliminated, as appropriate), and which shall be
treated, together with any outstanding Original Notes, as a single issue
of securities;
(viii) to comply with any requirement of the Commission in
connection with qualifying, or maintaining the qualification of, this
Indenture under the TIA; or
(ix) if necessary, in connection with any addition or release
of Collateral permitted under the terms of this Indenture or Security
Documents.
In addition, without the consent of any Holder, any amendment,
waiver or consent agreed to by the Credit Agent or the holders of Credit
Agreement Obligations under any provision of any of the security documents
granting the first-priority lien on any Collateral to secure the Credit
Agreement Obligations shall automatically apply to the comparable provision of
the Indenture and the comparable Security Document entered into in connection
with the Notes. The Issuers shall also be entitled to other releases of the
Collateral or the Note Guarantees as described in Sections 10.03 and 11.03
hereof. If the Issuers wish under other circumstances to obtain an amendment or
waiver or seek a consent under any Security Document or Note Guarantee, the
Issuers may mail written notice of their request to the Trustee and the Holders,
specifying the amendment, waiver or consent, the reason it is being sought and
any other information requested for the Holders to reasonably consider such
matter. If the Issuers do
not receive written objections from Holders of at least 25% in aggregate
principal amount of the Notes within 20 Business Days after such mailing, such
amendment, waiver or consent shall be deemed granted. If the Issuers receive
such objections, then they shall not be entitled to effect such amendment or
waiver, and such consent shall not be effective, unless the Issuers obtain the
consent of the Holders of a majority in outstanding principal amount of the
Notes (including any Additional Notes) then outstanding voting as a single class
(including consents obtained in connection with a tender offer or exchange offer
for, or purchase of, the Notes).
(b) After an amendment under this Section becomes effective, the
Issuers shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.01.
SECTION 9.02. With Consent of Holders. (a) The Issuers, the
Guarantors and the Trustee may amend this Indenture, the Notes, the Note
Guarantees or the Security Documents without notice to any Holder but with the
written consent of the Holders of at least a majority in principal amount of the
Notes then outstanding (including consents obtained in connection with a tender
offer or exchange for the Notes). However, without the consent of each Holder
affected, an amendment may not:
(i) reduce the amount of Notes whose Holders must consent to
an amendment;
(ii) reduce the rate of or extend the time for payment of
interest or any Additional Interest on any Note;
(iii) reduce the principal of or extend the Stated Maturity of
any Note;
(iv) reduce the premium payable upon the redemption of any
Note or change the time at which any Note may be redeemed in accordance
with Article 3;
(v) make any Note payable in money other than that stated in
the Note;
(vi) impair the right of any Holder to receive payment of
principal of, and interest, including Additional Interest, on, such
Holder's Notes on or after the due dates therefor or to institute suit for
the enforcement of any payment on or with respect to such Holder's Notes;
(vii) make any change in Section 6.04 or 6.07 or the second
sentence of this Section 9.02; or
(viii) modify the Note Guarantees in any manner adverse to the
Holders.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the
Issuers shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.02.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Notes shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. (a) A
consent to an amendment or a waiver by a Holder of a Note shall bind the Holder
and every subsequent Holder of that Note or portion of the Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
or waiver is not made on the Note. However, any such Holder or subsequent Holder
may revoke the consent or waiver as to such Holder's Note or portion of the Note
if the Trustee receives the notice of revocation before the date on which the
Trustee receives an Officers' Certificate from the Issuers certifying that the
requisite number of consents have been received. After an amendment or waiver
becomes effective, it shall bind every Holder. An amendment or waiver becomes
effective upon the (i) receipt by the Issuers or the Trustee of the requisite
number of consents, (ii) satisfaction of conditions to effectiveness as set
forth in this Indenture and any indenture supplemental hereto containing such
amendment or waiver and (iii) execution of such amendment or waiver (or
supplemental indenture) by the Issuers and the Trustee.
(b) The Issuers may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders 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 Holders 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 Notes. If an amendment
changes the terms of a Note, the Trustee may require the Holder of the Note to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Note regarding the changed terms and return it to the Holder. Alternatively, if
the Issuers or the Trustee so determines, the Issuers in exchange for the Note
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Note
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 such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture and that such amendment
is the legal, valid and binding obligation of the Issuers and the Guarantors
enforceable against them in accordance with its
terms, subject to customary exceptions, and complies with the provisions hereof
(including Section 9.03).
SECTION 9.07. Payment for Consent. Neither the Issuers nor any
Affiliate of the Issuers shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Notes unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE X
Collateral and Security
SECTION 10.01. Security Documents. The due and punctual payment of
the principal of and interest and Additional Interest, if any, on the Notes when
and as the same shall be due and payable, whether on an interest payment date,
at maturity, by acceleration, repurchase, redemption or otherwise, and interest
on the overdue principal of and interest and Additional Interest, if any, on the
Notes and performance of all other obligations of the Issuers to the Holders or
the Trustee under this Indenture and the Notes, according to the terms hereunder
or thereunder, are secured as provided in the Security Documents which the
Issuers and the Guarantors have entered into simultaneously with the execution
of this Indenture, subject to the terms of the Intercreditor Agreement. Each
Holder, by its acceptance thereof, consents and agrees to the terms of the
Security Documents (including the provisions providing for foreclosure and
release of Collateral) as the same may be in effect or may be amended from time
to time in accordance with its terms and authorizes and directs the Collateral
Agent to enter into the Security Documents and to perform its obligations and
exercise its rights thereunder in accordance therewith. The Issuers shall
deliver to the Trustee (if it is not itself then the Collateral Agent) copies of
all documents delivered to the Collateral Agent pursuant to the Security
Documents, and will do or cause to be done all such acts and things as may be
required by the next sentence of this Section 10.01, to assure and confirm to
the Trustee and the Collateral Agent the security interest in the Collateral
contemplated hereby, by the Security Documents or any part thereof, as from time
to time constituted, so as to render the same available for the security and
benefit of this Indenture and of the Notes secured hereby, according to the
intent and purposes herein expressed. The Issuers shall take, and shall cause
their Restricted Subsidiaries to take, any and all actions reasonably required
to cause the Security Documents to create and maintain, as security for the
Obligations of the Issuers and the Guarantors hereunder, a valid and enforceable
perfected second-priority Lien and security interest in and on all the
Collateral, in favor of the Collateral Agent for the benefit of the Holders,
second in priority (subject to Permitted Liens) to any and all security
interests at any time granted in the Collateral to secure Credit Agreement
Obligations.
SECTION 10.02. Recording and Opinions. (a) The Issuers will furnish
to the Collateral Agent and the Trustee on May 15 in each year beginning with
May 15, 2003, an
Opinion of Counsel, which may be rendered by internal counsel to the Issuers,
dated as of such date, either:
(i) (A) stating that, in the opinion of such counsel, action has
been taken with respect to the recording, registering, filing,
re-recording, re-registering and re-filing of all supplemental indentures,
financing statements, continuation statements or other instruments of
further assurance as is necessary to maintain and perfect the Lien of the
Security Documents and reciting with respect to the security interests in
the Collateral the details of such action or referring to prior Opinions
of Counsel in which such details are given, and (B) stating that, in the
opinion of such counsel, based on relevant laws as in effect on the date
of such Opinion of Counsel, all financing statements and continuation
statements have been executed and filed that are necessary as of such date
and during the succeeding 12 months fully to preserve, perfect and
protect, to the extent such protection and preservation are possible by
filing, the rights of the Holders and the Collateral Agent and the Trustee
hereunder and under the Security Documents with respect to the security
interests in the Collateral; or
(ii) stating that, in the opinion of such counsel, no such action is
necessary to maintain and perfect such Lien and assignment.
(b) The Issuers will otherwise comply with the provisions of TIA
Section 314(b).
SECTION 10.03. Release of Collateral. (a) Subject to subsections
(b), (c) and (d) of this Section 10.03, Collateral may be released from the Lien
and security interest created by the Security Documents at any time or from time
to time in accordance with the provisions of the Security Documents, the
Intercreditor Agreement, or as provided hereby. Whether prior to or after the
Discharge of Credit Agreement Obligations, upon the request of the Issuers
pursuant to an Officers' Certificate certifying that all conditions precedent
hereunder have been met and without the consent of any Holder, the Issuers and
the Guarantors will be entitled to releases of assets included in the Collateral
from the Liens securing the Notes under any one or more of the following
circumstances:
(i) if all other Liens on that asset securing Credit Agreement
Obligations or any Other Second-Lien Obligations then secured by that
asset (including all commitments thereunder) are released; provided, that
after giving effect to the release, obligations secured by the
first-priority Liens on the remaining Collateral remain outstanding;
(ii) to enable the Issuers or any Guarantor to consummate any sale,
lease, conveyance or other disposition of any assets or rights permitted
or not prohibited under Section 4.06 hereof;
(iii) if the Issuers provide substitute collateral with at least an
equivalent fair value, as determined in good faith by the Board of
Directors;
(iv) in respect of assets subject to a permitted purchase money
lien;
(v) if all of the stock of any Subsidiary of the Company that is
pledged to the Collateral Agent is released or if any Subsidiary that is a
Note Guarantor is released from its Note Guarantee, such Subsidiary's
assets will also be released;
(vi) in respect of assets included in the Collateral with a fair
value, as determined in good faith by the Board of Directors, of up to
$2.0 million in any calendar year, subject to a cumulative carryover for
any amount not used in any prior calendar year; or
(vii) pursuant to an amendment, waiver or supplement in accordance
with Article 9 hereof.
Upon receipt of such Officers' Certificate, the Collateral Agent
shall execute, deliver or acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release of any Collateral
permitted to be released pursuant to this Indenture or the Security Documents.
(b) Except as otherwise provided in the Intercreditor Agreement, no
Collateral may be released from the Lien and security interest created by the
Security Documents pursuant to the provisions of the Security Documents unless
the Officers' Certificate required by this Section 10.03 has been delivered to
the Collateral Agent.
(c) At any time when a Default or Event of Default has occurred and
is continuing and the maturity of the Notes has been accelerated (whether by
declaration or otherwise) and the Trustee has delivered a notice of acceleration
to the Collateral Agent, no release of Collateral pursuant to the provisions of
the Security Documents will be effective as against the Holders, except as
otherwise provided in the Intercreditor Agreement.
(d) The release of any Collateral from the terms of this Indenture
and the Security Documents shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to the terms of the Security Documents and this
Indenture. To the extent applicable, the Issuers will cause TIA Section 313(b),
relating to reports, and TIA Section 314(d), relating to the release of property
or securities from the Lien and security interest of the Security Documents and
relating to the substitution therefor of any property or securities to be
subjected to the Lien and security interest of the Security Documents, to be
complied with. Any certificate or opinion required by TIA Section 314(d) may be
made by an Officer of the Issuers except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent Person,
which Person will be an independent engineer, appraiser or other expert selected
or approved by the Trustee and the Collateral Agent in the exercise of
reasonable care.
SECTION 10.04. Certificates and Opinions of Counsel. To the extent
applicable, the Issuers will furnish to the Trustee and the Collateral Agent,
prior to each proposed release of Collateral pursuant to the Security Documents:
(a) all documents required by TIA Section 314(d); and
(b) an Opinion of Counsel, which may be rendered by internal counsel
to the Issuers, to the effect that such accompanying documents constitute all
documents required by TIA Section 314(d).
The Trustee may, to the extent permitted by Sections 7.01 and 7.02
hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such documents and such
Opinion of Counsel.
SECTION 10.05. Certificates of the Trustee. In the event that the
Issuers wish to release Collateral in accordance with the Security Documents at
a time when the Trustee is not itself also the Collateral Agent and have
delivered the certificates and documents required by the Security Documents and
Sections 10.03 and 10.04 hereof, the Trustee will determine whether it has
received all documentation required by TIA Section 314(d) in connection with
such release and, based on such determination and the Opinion of Counsel
delivered pursuant to Section 10.04(b), will deliver a certificate to the
Collateral Agent setting forth such determination.
SECTION 10.06. Authorization of Actions to Be Taken by the Trustee
Under the Security Documents. Subject to the provisions of Section 7.01 and 7.02
hereof and the Intercreditor Agreement, the Trustee may, in its sole discretion
and without the consent of the Holders, direct, on behalf of the Holders, the
Collateral Agent to, take all actions it deems necessary or appropriate in order
to:
(a) enforce any of the terms of the Security Documents; and
(b) collect and receive any and all amounts payable in respect
of the Obligations of the Issuers hereunder.
Subject to Section 3 of the Intercreditor Agreement, the Trustee
will have power to institute and maintain such suits and proceedings as it may
deem expedient to prevent any impairment of the Collateral by any acts that may
be unlawful or in violation of the Security Documents or this Indenture, and
such suits and proceedings as the Trustee may deem expedient to preserve or
protect its interests and the interests of the Holders in the Collateral
(including power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest hereunder or be prejudicial to the interests of the
Holders or of the Trustee).
SECTION 10.07. Authorization of Receipt of Funds by the Trustee
Under the Security Documents. The Trustee is authorized to receive any funds for
the benefit of the Holders distributed under the Security Documents, and to make
further distributions of such funds to the Holders according to the provisions
of this Indenture.
SECTION 10.08. Termination of Security Interest. The Trustee will,
at the request of the Issuers, deliver a certificate to the Collateral Agent
stating that such Obligations have been paid in full, and instruct the
Collateral Agent to release the Liens pursuant to this Indenture and the
Security Documents upon (1) payment in full of the principal of, accrued and
unpaid interest and Additional Interest, if any, on the Notes and all other
Obligations under this
Indenture, the Note Guarantees and the Security Documents that are due and
payable at or prior to the time such principal, accrued and unpaid interest and
Additional Interest, if any, are paid, (2) a satisfaction and discharge of this
Indenture as described in Article 8 or (3) a legal defeasance or covenant
defeasance as described in Article 8. Upon receipt of such instruction, the
Collateral Agent shall execute, deliver or acknowledge any necessary or proper
instruments of termination, satisfaction or release to evidence the release of
all such Liens.
SECTION 10.09. Collateral Agent. (a) The Trustee shall act as
Collateral Agent and shall be authorized to appoint co-Collateral Agents as
necessary in its sole discretion. Except as otherwise explicitly provided herein
or in the Security Documents, neither the Collateral Agent nor any of its
respective officers, directors, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The Collateral
Agent shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers, and neither the Collateral Agent nor any
of its officers, directors, employees or agents shall be responsible for any act
or failure to act hereunder, except for its own willful misconduct, negligence
or bad faith.
(b) The Trustee, as Collateral Agent, is authorized and directed to
(i) enter into the Security Documents, (ii) enter into the Intercreditor
Agreement, (iii) bind the Holders on the terms as set forth in the Security
Documents and the Intercreditor Agreement and (iv) perform and observe its
obligations under the Security Documents and the Intercreditor Agreement.
(c) If the Issuers (i) incur Indebtedness constituting Credit
Agreement Obligations at any time when no Intercreditor Agreement is in effect
or at any time when Indebtedness constituting Credit Agreement Obligations
entitled to the benefit of an existing Intercreditor Agreement is concurrently
retired, and (ii) deliver to the Collateral Agent an Officers' Certificate so
stating and requesting the Collateral Agent to enter into an Intercreditor
Agreement in favor of a designated agent or representative for the holders of
the Indebtedness so incurred, the Collateral Agent shall (and is hereby
authorized and directed to) enter into such Intercreditor Agreement, bind the
Holders on the terms set forth therein, and perform and observe its obligations
thereunder.
(d) If (i) the Issuers at any time incur any Indebtedness
constituting Other Second-Lien Obligations, (ii) the indenture or agreement
governing such Indebtedness provides that, notwithstanding the date, manner or
order of grant, attachment or perfection of any Liens granted to the Collateral
Agent under the Security Documents (the "Liens Securing Note Obligations") or
granted to the holders of Other Second-Lien Obligations or any agent or
representative for the holders of Other Second-Lien Obligations (the "Liens
Securing Other Second-Lien Obligations"), the Liens Securing Note Obligations
and the Liens Securing Other Second-Lien Obligations shall be of equal dignity,
priority and rank, (iii) the Issuers deliver to the Collateral Agent an
Officer's Certificate so stating and requesting that the Collateral Agent assign
or transfer the Liens Securing Note Obligations to a Common Collateral Agent
identified therein and (iv) the Issuers deliver to the Collateral Agent and the
Common Collateral Agent an Opinion of Counsel stating that, in the opinion of
such counsel, the Common Collateral Agent is empowered and obligated (on
substantially the terms applicable to the Collateral Agent pursuant
to the Indenture Documents) to hold the Liens Securing Note Obligations and all
Liens Securing Other-Second Lien Obligations and all proceeds of all such Liens
for the equal and ratable benefit of the holders of all Obligations secured
thereby and further confirming as to all such Liens each of the matters referred
to in Section 10.02(a)(i), giving effect to the assignment or transfer requested
in such Officer's Certificate, then (A) the Liens Securing Note Obligations
shall be of equal dignity, priority and rank with all such Liens Securing Other
Second-Lien Obligations and (B) the Collateral Agent shall assign or transfer
the Liens Securing Note Obligations to the Common Collateral Agent as requested
in such Officer's Certificate.
SECTION 10.10. Designations. For purposes of the provisions hereof
and the Intercreditor Agreement requiring the Issuers to designate Indebtedness
for the purposes of the term "Credit Agreement Obligations", "First-Lien Credit
Facilities", "Other Second-Lien Obligations" or any other such designations
hereunder or under the Intercreditor Agreement, any such designation shall be
sufficient if the relevant designation is set forth in writing, signed on behalf
of the Issuers by an Officer and delivered to the Trustee, the Collateral Agent
and the Credit Agent. For all purposes hereof and the Intercreditor Agreement,
the Issuers hereby designate the Credit Facilities provided pursuant to the
Credit Agreement as the "First-Lien Credit Facility" and any Obligations in
respect of the Credit Agreement as "Credit Agreement Obligations".
ARTICLE XI
Note Guarantees
SECTION 11.01. Note Guarantees. (a) Each Guarantor hereby jointly
and severally irrevocably and unconditionally Guarantees, as a primary obligor
and not merely as a surety, to each Holder and to the Trustee and its successors
and assigns the full and punctual payment when due, whether at Stated Maturity,
by acceleration, by redemption or otherwise, of all obligations of the Issuers
under this Indenture (including obligations to the Trustee) and the Notes,
whether for payment of principal of, interest on or Additional Interest, if any,
in respect of the Notes and all other monetary obligations of the Issuers under
this Indenture and the Notes, whether for fees, expenses, indemnification or
otherwise (all the foregoing being hereinafter collectively called the
"Guaranteed Obligations"). Each Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from each such Guarantor, and that each such Guarantor shall
remain bound under this Article 11 notwithstanding any extension or renewal of
any Guaranteed Obligation.
(b) Each Guarantor waives presentation to, demand of payment from
and protest to the Issuers of any of the Guaranteed Obligations and also waives
notice of protest for nonpayment. Each Guarantor waives notice of any default
under the Notes or the Guaranteed Obligations. The obligations of each Guarantor
hereunder shall not be affected by (i) the failure of any Holder or the Trustee
to assert any claim or demand or to enforce any right or remedy against the
Issuers or any other Person under this Indenture, the Notes or any other
agreement or otherwise; (ii) any extension or renewal of any thereof; (iii) any
rescission, waiver, amendment or modification of any of the terms or provisions
of this Indenture, the Notes or any other
agreement; (iv) the release of any security held by any Holder or the Trustee
for the Guaranteed Obligations or any of them; (v) the failure of any Holder or
Trustee to exercise any right or remedy against any other Guarantor; or (vi) any
change in the ownership of such Guarantor, except as provided in Section 11.03.
(c) Each Guarantor hereby waives any right to which it may be
entitled to have its obligations hereunder divided among the Guarantors, such
that such Guarantor's obligations would be less than the full amount claimed.
Each Guarantor hereby waives any right to which it may be entitled to have the
assets of the Issuers first be used and depleted as payment of the Issuers' or
such Guarantor's obligations hereunder prior to any amounts being claimed from
or paid by such Guarantor hereunder. Each Guarantor hereby waives any right to
which it may be entitled to require that the Issuers be sued prior to an action
being initiated against such Guarantor.
(d) Each Guarantor further agrees that its Note Guarantee herein
constitutes a guarantee of payment when due (and not a guarantee of collection)
and waives any right to require that any resort be had by any Holder or the
Trustee to any security held for payment of the Guaranteed Obligations.
(e) Except as expressly set forth in Sections 8.01(b), 11.02, 11.03
and 11.07, the obligations of each Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason (other than
payment of the Guaranteed Obligations in full), including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Guaranteed
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of 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 Notes or any
other agreement, by any waiver or modification of any thereof, by any default,
failure or delay, wilful or otherwise, in the performance of the Guaranteed
Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
any Guarantor or would otherwise operate as a discharge of any Guarantor as a
matter of law or equity.
(f) Each Guarantor agrees that its Note Guarantee shall remain in
full force and effect until payment in full of all the Guaranteed Obligations.
Each Guarantor further agrees that its Note Guarantee herein shall continue to
be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any Guaranteed Obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Issuers or otherwise.
(g) 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 Issuers to pay the
Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, by redemption or otherwise, each Guarantor hereby
promises to and shall, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal
to the sum of (i) the unpaid
amount of such Guaranteed Obligations and (ii) accrued and unpaid interest on
such Guaranteed Obligations then due and owing (but only to the extent not
prohibited by law).
(h) Each Guarantor agrees that it shall not be entitled to any right
of subrogation in relation to the Holders in respect of any Guaranteed
Obligations guaranteed hereby until payment in full of all Guaranteed
Obligations. Each Guarantor further agrees that, as between it, on the one hand,
and the Holders and the Trustee, on the other hand, (i) the maturity of the
Guaranteed Obligations guaranteed hereby may be accelerated as provided in
Article 6 for the purposes of any Note Guarantee herein, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
Article 6, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section 11.01.
(i) Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Trustee or
any Holder in enforcing any rights under this Section 11.01.
(j) Upon request of the Trustee, each Guarantor shall execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 11.02. Limitation on Liability. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum aggregate amount of
the Guaranteed Obligations guaranteed hereunder by any Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
SECTION 11.03. Releases of Note Guarantees. A Note Guarantee shall
be released without any action required on the part of the Trustee or any
Holder: (a) if the Credit Agent releases the Guarantee of Credit Agreement
Obligations made by such Guarantor, unless such Guarantor remains a guarantor of
the Senior Subordinated Notes; (b) if (i) all of the capital stock of, or other
equity interests in, or all or substantially all of the assets of such Guarantor
is sold or otherwise disposed of (including by way of merger or consolidation)
to a Person other than the Company or any of the Domestic Subsidiaries or (ii)
such Guarantor ceases to be a Restricted Subsidiary, and the Issuers otherwise
comply, to the extent applicable, with Sections 4.06 and 5.01 hereof; (c) if the
Issuers designate such Guarantor as an Unrestricted Subsidiary; or (d) upon the
Issuers' request if the fair market value of the assets of the applicable
Guarantor (as determined in good faith by the Board of Directors of the
Company), together with the fair market value of the assets of other Guarantors
whose Note Guarantee was released in the same calendar year, do not exceed $2.0
million (subject to cumulative carryover for amounts not used in any prior
calendar year).
Upon delivery by the Issuers to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such release was made
by the Issuers in accordance with the provisions of this Indenture, the Trustee
will execute any documents reasonably required in
order to evidence the release of any Guarantor from its obligations under its
Subsidiary Guarantee.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 11.
SECTION 11.04. 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
Notes shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.
SECTION 11.05. 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 11.06. 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 11.07. Execution of Supplemental Indenture for Future
Guarantors.
Each Subsidiary which is required to become a Guarantor pursuant to
Section 4.11 shall promptly execute and deliver to the Trustee a supplemental
indenture in the form of Exhibit C hereto pursuant to which such Subsidiary
shall become a Guarantor under this Article 11 and shall guarantee the
Guaranteed Obligations. Concurrently with the execution and delivery of such
supplemental indenture, the Issuers shall deliver to the Trustee an Opinion of
Counsel and an Officers' Certificate to the effect that such supplemental
indenture has been duly authorized, executed and delivered by such Subsidiary
and that, subject to the application of bankruptcy, insolvency, moratorium,
fraudulent conveyance or transfer and other similar laws relating to creditors'
rights generally and to the principles of equity, whether considered in a
proceeding at law or in equity, the Note Guarantee of such Guarantor is a legal,
valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms and or to such other matters as the
Trustee may reasonably request.
SECTION 11.08. Non-Impairment. The failure to endorse a Note
Guarantee on any Note shall not affect or impair the validity thereof.
ARTICLE XII
Miscellaneous
SECTION 12.01. Trust Indenture Act Controls. If and to the extent
that any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by, or with another provision (an "incorporated provision")
included in this Indenture by operation of, TIA Sections 310 to 318,
inclusive, such imposed duties or incorporated provision shall control.
SECTION 12.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Issuers:
c/o ON Semiconductor Corporation
0000 X. XxXxxxxx Xxxx
Xxxxxxx, XX 00000
Attention of: President
with a copy to:
c/o ON Semiconductor Corporation
0000 X. XxXxxxxx Xxxx
Xxxxxxx, XX 00000
Attention of: General Counsel
if to the Trustee:
Xxxxx Fargo Bank Minnesota, National Association
Corporate Trust Services
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention of: Xxxxxx X. Xxxxxxxx
Corporate Trust Services
The Issuers or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed,
first class mail, to the Holder at the Holder'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 Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 12.03. Communication by Holders with Other Holders. Holders
may communicate pursuant to TIA Section 312(b) with other Holders with respect
to their rights under this Indenture or the Notes. The Issuers, the Trustee, the
Registrar and anyone else shall have the protection of TIA Section 312(c).
SECTION 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take or refrain
from taking any action under this Indenture (other than a request to
authenticate the Initial Notes in accordance with this Indenture), the Issuers
shall furnish to the Trustee:
(a) an Officers' Certificate in form 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
(b) an Opinion of Counsel in form reasonably satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
SECTION 12.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture (other than pursuant to Section 4.09) shall
include:
(a) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such 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
(d) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual
matters on an Officers' Certificate or on certificates of public officials.
SECTION 12.06. When Notes Disregarded. In determining whether the
Holders of the required principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Issuers, any Guarantor or by
any Person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Issuers or any Guarantor shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes which the Trustee knows are so owned
shall be so disregarded. Subject to the foregoing,
only Notes outstanding at the time shall be considered in any such
determination. Notwithstanding the foregoing, Notes that are to be acquired by
the Issuers, any Guarantor or by any Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Issuers or
any Guarantor pursuant to an exchange offer, tender offer or other agreement
shall not be deemed to be owned by such entity until legal title to such Notes
passes to such entity.
SECTION 12.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 12.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or other day on which banking institutions are not required by law or
regulation to be open in the State of New York. If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. If a regular
record date is a Legal Holiday, the record date shall not be affected.
SECTION 12.09. GOVERNING LAW. THIS INDENTURE AND THE NOTES 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 12.10. No Recourse Against Others. A director, officer,
employee, stockholder or member, as such, of the Issuers or any of the
Guarantors, shall not have any liability for any obligations of the Issuers or
any of the Guarantors under the Notes or this Indenture or for any claim based
on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Holder shall waive and release all such liability. The
waiver and release shall be part of the consideration for the issue of the
Notes.
SECTION 12.11. Successors. All agreements of each of the Issuers and
each Guarantor in this Indenture and the Notes shall bind its successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 12.12. 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 12.13. 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.
SECTION 12.14. Tax Treatment of the Notes. The Issuers agree, and by
acceptance of a beneficial ownership interest in the Notes, each beneficial
holder of the Notes shall be deemed to have agreed, for United States federal
income tax purposes, (i) to treat the Notes as debt instruments that are subject
to Section 1.1275-4(b) of the United States Treasury
Regulations (the "Contingent Debt Regulations") and (ii) to be bound by the
Issuer's determination of the "comparable yield" and "projected payment
schedule," within the meaning of the Contingent Debt Regulations, with respect
to the Notes.
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
ON SEMICONDUCTOR CORPORATION,
SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC,
SCG (MALAYSIA SMP) HOLDING CORPORATION,
SCG (CZECH) HOLDING CORPORATION,
SCG (CHINA) HOLDING CORPORATION,
SEMICONDUCTOR COMPONENTS INDUSTRIES
PUERTO RICO, INC.
SCG INTERNATIONAL DEVELOPMENT LLC
SEMICONDUCTOR COMPONENTS INDUSTRIES
OF RHODE ISLAND, INC.
SEMICONDUCTOR COMPONENTS INDUSTRIES
INTERNATIONAL OF RHODE ISLAND, INC.
by /s/ Xxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Financial Officer
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
by /s/ Xxxxxx X. X'Xxxxxxx
-----------------------------------
Name: Xxxxxx X. X'Xxxxxxx
Title: Corporate Trust Officer
APPENDIX A
PROVISIONS RELATING TO ORIGINAL NOTES,
ADDITIONAL NOTES, PRIVATE EXCHANGE NOTES
AND EXCHANGE NOTES
1. Definitions
1.1 Definitions
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Regulation S Global Note or beneficial interest therein,
the rules and procedures of the Depositary for such Global Note, Euroclear and
Clearstream, in each case to the extent applicable to such transaction and as in
effect from time to time.
"Clearstream" means Clearstream Banking, S.A., or any successor
securities clearing agency.
"Definitive Note" means a certificated Initial Note, Private
Exchange Note or Exchange Note (bearing the Restricted Notes Legend if the
transfer of such Note is restricted by applicable law) that does not include the
Global Notes Legend.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Euroclear" means the Euroclear Clearance System or any successor
securities clearing agency.
"Exchange Offer" means an offer by the Issuers, pursuant to a
Registration Rights Agreement, to certain Holders of Initial Notes, to issue and
deliver to such Holders, in exchange for their Initial Notes, a like aggregate
principal amount of Exchange Notes registered under the Securities Act.
"Global Notes Legend" means the legend set forth under that caption
in Exhibit A to this Indenture.
"Initial Purchasers" means Credit Suisse First Boston
Corporation, Xxxxxx Xxxxxxx & Co. Incorporated, X. X. Xxxxxx Securities Inc.
and Xxxxxxx Xxxxx Xxxxxx Inc.
"Notes Custodian" means the custodian with respect to a Global Note
(as appointed by the Depositary) or any successor person thereto, who shall
initially be the Trustee.
2
"Private Exchange" means an offer by the Issuers, pursuant to a
Registration Rights Agreement, to issue and deliver to certain purchasers, in
exchange for the Initial Notes held by such purchasers as part of their initial
distribution, a like aggregate principal amount of Private Exchange Notes.
"Private Exchange Notes" means the Notes of the Issuers issued in
exchange for Initial Notes pursuant to this Indenture in connection with a
Private Exchange pursuant to a Registration Rights Agreement.
"Purchase Agreement" means (a) the Purchase Agreement dated May 1,
2002, among the Issuers, the Guarantors and the Initial Purchasers and (b) any
other similar Purchase Agreement relating to Additional Notes.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registration Rights Agreement" means (a) the Registration Rights
Agreement dated May 6, 2002, among the Issuers, the Guarantors and the Initial
Purchasers and (b) any other similar Registration Rights Agreement relating to
Additional Notes.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Notes" means all Initial Notes offered and sold
outside the United States in reliance on Regulation S.
"Restricted Period", with respect to any Notes, means the period of
40 consecutive days beginning on and including the later of (a) the day on which
such Notes are first offered to persons other than distributors (as defined in
Regulation S under the Securities Act) in reliance on Regulation S and (b) the
Issue Date with respect to such Notes, which commencement date shall be notified
by the Issuers to the Trustee.
"Restricted Notes Legend" means the legend set forth in Section
2.3(e)(i) herein.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Notes" means all Initial Notes offered and sold to QIBs
in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933.
"Shelf Registration Statement" means a registration statement filed
by the Issuers in connection with the offer and sale of Initial Notes pursuant
to a Registration Rights Agreement.
"Transfer Restricted Notes" means Definitive Notes and any other
Notes that bear or are required to bear the Restricted Notes Legend.
1.2 Other Definitions
3
Term: Defined in Section:
----- -------------------
"Agent Members"..................................... 2.1(c)
"Global Note"....................................... 2.1(b)
"Regulation S Global Note".......................... 2.1(b)
"Rule 144A Global Note"............................. 2.1(b)
2. The Notes
2.1 Form and Dating
(a) The Original Notes issued on the date hereof are being (i)
offered and sold by the Issuers pursuant to a Purchase Agreement and (ii)
resold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons
other than U.S. Persons (as defined in Regulation S) in reliance on Regulation
S. Such Original Notes may thereafter be transferred to, among others, QIBs and
purchasers in reliance on Regulation S. Additional Notes offered after the date
hereof may be offered and sold by the Company from time to time pursuant to one
or more Purchase Agreements in accordance with applicable law.
(b) Global Notes. Rule 144A Notes shall be issued initially in the
form of one or more permanent global Notes in definitive, fully registered form
(collectively, the "Rule 144A Global Note") and Regulation S Notes shall be
issued initially in the form of one or more global Notes (collectively, the
"Regulation S Global Note"), in each case without interest coupons and bearing
the Global Notes Legend and Restricted Notes Legend, which shall be deposited on
behalf of the purchasers of the Notes represented thereby with the Notes
Custodian, and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Issuers and authenticated by the Trustee as
provided in this Indenture. Beneficial ownership interests in the Regulation S
Global Note shall not be exchangeable for interests in the Rule 144A Global Note
or any other Note without a Restricted Notes Legend until the expiration of the
Restricted Period. The Rule 144A Global Note and the Regulation S Global Note
are each referred to herein as a "Global Note" and are collectively referred to
herein as "Global Notes"; provided that the term "Global Note" when used in
Sections 2.1(b), 2.1(c), 2.3(g)(i), 2.3(h)(i) and 2.4 of this Appendix shall
also include any Note in global form issued in connection with an Exchange Offer
or Private Exchange. The aggregate principal amount of the Global Notes may from
time to time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee and on the schedules thereto as
hereinafter provided.
(c) Book-Entry Provisions. This Section 2.1(c) shall apply only to a
Global Note deposited with or on behalf of the Depositary.
The Issuers shall execute and the Trustee shall, in accordance with
this Section 2.1(c) and Section 2.2 of this Appendix and pursuant to an order of
the Issuers signed by two Officers of each Issuer, authenticate and deliver
initially one or more Global Notes that (i) shall be registered in the name of
the Depositary for such Global Note or Global Notes or the nominee of such
Depositary and (ii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions or held by the Trustee as Notes
Custodian.
4
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depositary or by the Trustee as Notes Custodian or under
such Global Note, and the Depositary may be treated by the Issuers, the Trustee
and any agent of the Issuers or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Issuers, the Trustee or any agent of the Issuers or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices of such Depositary
governing the exercise of the rights of a holder of a beneficial interest in any
Global Note.
(d) Definitive Notes. Except as provided in Section 2.3 or 2.4 of
this Appendix, owners of beneficial interests in Global Notes will not be
entitled to receive physical delivery of certificated Notes.
2.2 Authentication. The Trustee shall authenticate and make available for
delivery upon a written order of the Issuers signed by two Officers of each
Issuer (a) Original Notes for original issue on the date hereof in an aggregate
principal amount of $300,000,000, (b) subject to the terms of this Indenture,
Additional Notes in an unlimited aggregate principal amount and (c) the (i)
Exchange Notes for issue only in an Exchange Offer and (ii) Private Exchange
Notes for issue only in a Private Exchange, in the case of each of (i) and (ii)
pursuant to a Registration Rights Agreement and for a like principal amount of
Initial Notes exchanged pursuant thereto. Such order shall specify the amount of
the Notes to be authenticated, the date on which the original issue of Notes is
to be authenticated and whether the Notes are to be Original Notes, Additional
Notes, Exchange Notes or Private Exchange Notes. The aggregate principal amount
of Notes outstanding at any time is unlimited.
2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive Notes.
When Definitive Notes are presented to the Registrar with a request:
(i) to register the transfer of such Definitive Notes; or
(ii) to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Definitive Notes surrendered for transfer or exchange:
(1) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Issuers and the Registrar,
duly executed by the Holder thereof or his attorney duly authorized in
writing; and
(2) in the case of Transfer Restricted Notes, are accompanied by the
following additional information and documents, as applicable:
5
(A) if such Definitive Notes are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect
(in the form set forth on the reverse side of the Initial Note); or
(B) if such Definitive Notes are being transferred to the
Issuers, a certification to that effect (in the form set forth on
the reverse side of the Initial Note); or
(C) if such Definitive Notes are being transferred pursuant to
an exemption from registration in accordance with Rule 144 under the
Securities Act or in reliance upon another exemption from the
registration requirements of the Securities Act, (x) a certification
to that effect (in the form set forth on the reverse side of the
Initial Note) and (y) if the Issuers so request, an opinion of
counsel or other evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the legend set forth
in Section 2.3(e)(i) of this Appendix.
(b) Restrictions on Transfer of a Definitive Note for a Beneficial
Interest in a Global Note. A Definitive Note may not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive Note,
duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Issuers and the Registrar, together with:
(i) certification (in the form set forth on the reverse side of the
Initial Note) that such Definitive Note is being transferred (1) to a QIB
in accordance with Rule 144A or (2) 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 Notes Custodian to make, an adjustment on its books and records
with respect to such Global Note to reflect an increase in the aggregate
principal amount of the Notes represented by the Global Note, such
instructions to contain information regarding the Depositary account to be
credited with such increase, then the Trustee shall cancel such Definitive
Note and cause, or direct the Notes Custodian to cause, in accordance with
the standing instructions and procedures existing between the Depositary
and the Notes Custodian, the aggregate principal amount of Notes
represented by the Global Note to be increased by the aggregate principal
amount of the Definitive Note 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 Note equal to the principal amount of
the Definitive Note so canceled. If no Global Notes are then outstanding
and the Global Note has not been previously exchanged for certificated
securities pursuant to Section 2.4 of this Appendix, the Issuers shall
issue and the Trustee shall authenticate, upon written order of the
Issuers in the form of an Officers' Certificate, a new Global Note in the
appropriate principal amount.
(c) Transfer and Exchange of Global Notes. (i) The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depositary, in
6
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 Note shall deliver a written
order given in accordance with the Depositary's procedures containing
information regarding the participant account of the Depositary to be credited
with a beneficial interest in such Global Note or another Global Note and such
account shall be credited in accordance with such order with a beneficial
interest in the applicable Global Note and the account of the Person making the
transfer shall be debited by an amount equal to the beneficial interest in the
Global Note being transferred. Transfers by an owner of a beneficial interest in
the Rule 144A Global Note to a transferee who takes delivery of such interest
through the Regulation S Global Note, whether before or after the expiration of
the Restricted Period, shall be made only upon receipt by the Trustee of a
certification in the form provided on the reverse of the Initial Notes from the
transferor to the effect that such transfer is being made in accordance with
Regulation S or (if available) Rule 144 under the Securities Act and that, if
such transfer is being made prior to the expiration of the Restricted Period,
the interest transferred shall be held immediately thereafter through Euroclear
or Clearstream.
(ii) If the proposed transfer is a transfer of a beneficial interest
in one Global Note to a beneficial interest in another Global Note, the
Registrar shall reflect on its books and records the date and an increase
in the principal amount of the Global Note to which such interest is being
transferred in an amount equal to the principal amount of the interest to
be so transferred, and the Registrar shall reflect on its books and
records the date and a corresponding decrease in the principal amount of
Global Note from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4 of this Appendix), a Global
Note may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary.
(iv) In the event that a Global Note is exchanged for Definitive
Notes pursuant to Section 2.4 of this Appendix prior to the consummation
of an Exchange Offer or the effectiveness of a Shelf Registration
Statement with respect to such Notes, such Notes may be exchanged only in
accordance with such procedures as are substantially consistent with the
provisions of this Section 2.3 (including the certification requirements
set forth on the reverse of the Initial Notes intended to ensure that such
transfers comply with Rule 144A, Regulation S or such other applicable
exemption from registration under the Securities Act, as the case may be)
and such other procedures as may from time to time be adopted by the
Issuers.
(d) Restrictions on Transfer of Regulation S Global Note. (i) Prior
to the expiration of the Restricted Period, interests in the Regulation S Global
Note may only be held through Euroclear or Clearstream. During the Restricted
Period, beneficial ownership interests in the Regulation S Global Note may only
be sold, pledged or transferred through Euroclear or Clearstream in accordance
with the Applicable Procedures and only (1) so long as such security is eligible
for resale pursuant to Rule 144A, to a person whom the selling holder reasonably
7
believes is a QIB that purchases for its own account or for the account of a QIB
to whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, (2) in an offshore transaction in accordance with
Regulation S, (3) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 (if applicable) under the Securities Act or
(4) pursuant to an effective registration statement under the Securities Act, in
each case in accordance with any applicable securities laws of any state of the
United States. Prior to the expiration of the Restricted Period, transfers by an
owner of a beneficial interest in the Regulation S Global Note to a transferee
who takes delivery of such interest through the Rule 144A Global Note shall be
made only in accordance with Applicable Procedures and upon receipt by the
Trustee of a written certification from the transferor of the beneficial
interest in the form provided on the reverse of the Initial Note to the effect
that such transfer is being made to a QIB within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A. Such written certification
shall no longer be required after the expiration of the Restricted Period.
(ii) Upon the expiration of the Restricted Period, beneficial
ownership interests in the Regulation S Global Note shall be transferable
in accordance with applicable law and the other terms of this Indenture.
(e) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii) or
(iv), each Note certificate evidencing the Global Notes and the Definitive
Notes (and all Notes issued in exchange therefor or in substitution
thereof) shall bear a legend in substantially the following form (each
defined term in the legend being defined as such for purposes of the
legend only):
"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 (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(II) OUTSIDE THE UNITED STATES IN 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) OR (IV) PURSUANT TO AN
8
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM
IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Note that is
a Definitive Note, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Note for a Definitive Note that does not
bear the legends set forth above and rescind any restriction on the
transfer of such Transfer Restricted Note if the Holder certifies in
writing to the Registrar that its request for such exchange was made in
reliance on Rule 144 (such certification to be in the form set forth on
the reverse of the Initial Note).
(iii) After a transfer of any Original or Additional Notes or
Private Exchange Notes during the period of the effectiveness of a Shelf
Registration Statement with respect to such Original or Additional Notes
or Private Exchange Notes, as the case may be, all requirements pertaining
to the Restricted Notes Legend on such Original or Additional Notes or
such Private Exchange Notes shall cease to apply and the requirements that
any such Original or Additional Notes or such Private Exchange Notes be
issued in global form shall continue to apply.
(iv) Upon the consummation of an Exchange Offer with respect to the
Original or Additional Notes pursuant to which Holders of such Original or
Additional Notes are offered Exchange Notes in exchange for their Original
or Additional Notes, all requirements pertaining to Original or Additional
Notes that Original or Additional Notes be issued in global form shall
continue to apply, and Exchange Notes in global form without the
Restricted Notes Legend shall be available to Holders that exchange such
Original or Additional Notes in such Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Original or Additional Notes pursuant to which Holders of such Original or
Additional Notes are offered Private Exchange Notes in exchange for their
Original or Additional Notes, all requirements pertaining to such Original
or Additional Notes that Original or Additional Notes be issued in global
form shall continue to apply, and Private Exchange Notes in global form
with the Restricted Notes Legend shall be available to Holders that
exchange such Original or Additional Notes in such Private Exchange.
(vi) Upon a sale or transfer after the expiration of the Restricted
Period of any Initial Note acquired pursuant to Regulation S, all
requirements that such Initial Note bear the Restricted Notes Legend shall
cease to apply and the requirements requiring any such Initial Note be
issued in global form shall continue to apply.
(vii) Any Additional Notes sold in a registered offering shall not
be required to bear the Restricted Notes Legend.
9
(f) Cancelation or Adjustment of Global Note. At such time as all
beneficial interests in a Global Note have either been exchanged for Definitive
Notes, transferred, redeemed, repurchased or canceled, such Global Note shall be
returned by the Depositary to the Trustee for cancelation or retained and
canceled by the Trustee. At any time prior to such cancelation, if any
beneficial interest in a Global Note is exchanged for Definitive Notes,
transferred in exchange for an interest in another Global Note, redeemed,
repurchased or canceled, the principal amount of Notes represented by such
Global Note shall be reduced and an adjustment shall be made on the books and
records of the Trustee (if it is then the Notes Custodian for such Global Note)
with respect to such Global Note, by the Trustee or the Notes Custodian, to
reflect such reduction.
(g) Obligations with Respect to Transfers and Exchanges of Notes.
(i) To permit registrations of transfers and exchanges, the Issuers
shall execute and the Trustee shall authenticate, Definitive Notes and
Global Notes at the Registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Issuers 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 exchanges
pursuant to Sections 2.07, 3.06, 4.06, 4.08 and 9.05 of this Indenture).
(iii) Prior to the due presentation for registration of transfer of
any Note, the Issuers, the Trustee, the Paying Agent or the Registrar may
deem and treat the person in whose name a Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Note and for all other purposes
whatsoever, whether or not such Note is overdue, and none of the Issuers,
the Trustee, the Paying Agent or the Registrar shall be affected by notice
to the contrary.
(iv) All Notes 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 Notes surrendered upon
such transfer or exchange.
(h) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Note, a member of, or a participant in the
Depositary or any other Person with respect to the accuracy of the records
of the Depositary or its nominee or of any participant or member thereof,
with respect to any ownership interest in the Notes or with respect to the
delivery to any participant, member, beneficial owner or other Person
(other than the Depositary) of any notice (including any notice of
redemption or repurchase) or the payment of any amount, under or with
respect to such Notes. All notices and communications to be given to the
Holders and all payments to be made to Holders under the Notes shall be
given or made only to the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Note). The rights of
10
beneficial owners in any Global Note 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 Note (including any transfers between or
among Depositary participants, members or beneficial owners in any Global
Note) 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 Definitive Notes
(a) A Global Note deposited with the Depositary or with the Trustee
as Notes Custodian pursuant to Section 2.1 or issued in connection with an
Exchange Offer or Private Exchange shall be transferred to the beneficial owners
thereof in the form of Definitive Notes in an aggregate principal amount equal
to the principal amount of such Global Note, in exchange for such Global Note,
only if such transfer complies with Section 2.3 and (i) the Depositary notifies
the Issuers that it is unwilling or unable to continue as a Depositary for such
Global Note or if at any time the Depositary ceases to be a "clearing agency"
registered under the Exchange Act, and a successor depositary is not appointed
by the Issuers within 90 days of such notice or after the Issuers become aware
of such cessation, or (ii) an Event of Default has occurred and is continuing or
(iii) the Issuers, in their sole discretion, notifies the Trustee in writing
that it elects to cause the issuance of certificated Notes under this Indenture.
(b) Any Global Note that is transferable to the beneficial owners
thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to
the Trustee, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Note, an equal aggregate principal
amount of Definitive Notes of authorized denominations. Any portion of a Global
Note transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depositary shall direct. Any certificated
Initial Note in the form of a Definitive Note delivered in exchange for an
interest in the Global Note shall, except as otherwise provided by Section
2.3(e), bear the Restricted Notes Legend.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Note 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 Notes.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a)(i), (ii) or (iii), the Issuers shall promptly make available to
the Trustee a reasonable supply of Definitive Notes in fully registered form
without interest coupons.
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE AND PRIVATE EXCHANGE NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE ISSUERS OR 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 NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD 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
(A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I)
IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES
2
ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH
(IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
3
No.________ $__________
12% Senior Secured Note due 2008
CUSIP No. ______
ISIN No._____
ON Semiconductor Corporation, a Delaware corporation, and
Semiconductor Components Industries, LLC, a Delaware limited liability company,
promise to pay to [Cede & Co.], or registered assigns, the principal sum [of
Dollars] [listed on the Schedule of Increases or Decreases in Global Note
attached hereto](1) on May 15, 2008.
Interest Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
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(1) Use the Schedule of Increases and Decreases language if Note is in
Global Form.
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Additional provisions of this Note are set forth on the other side
of this Note.
IN WITNESS WHEREOF, the parties have caused this instrument to be
duly executed.
ON SEMICONDUCTOR CORPORATION,
by
---------------------------------
Name:
Title:
SEMICONDUCTOR COMPONENTS
INDUSTRIES, LLC,
by
---------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee, certifies
that this is one of
the Notes referred
to in the Indenture.
By:_________________________
Authorized Signatory
-----------------
*/ If the Note is to be issued in global form, add the Global Notes Legend and
the attachment from Exhibit A captioned "TO BE ATTACHED TO GLOBAL NOTES -
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE".
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[FORM OF REVERSE SIDE OF INITIAL NOTE AND PRIVATE EXCHANGE NOTE]
12% Senior Secured Note due 2008
1. Interest
(a) ON Semiconductor Corporation, a Delaware corporation (the
"Company"), and Semiconductor Components Industries, LLC ("SCI LLC" and together
with the Company, and their successors and assigns under the Indenture
hereinafter referred to, being herein called the "Issuers"), promise to pay
interest on the principal amount of this Note at the rate per annum shown above;
provided that commencing on February 6, 2003, each Note shall accrue interest at
a rate of 13% per annum unless prior thereto the Issuers have issued common
stock or Qualified Preferred Stock generating at least $100 million in gross
cash proceeds and have used the net cash proceeds thereof to repay indebtedness
under the Credit Agreement or under any other credit facilities secured by a
first-priority lien on the Collateral and have permanently reduced the related
loan commitment equal to the amount prepaid. Such increase in interest rate, if
any, shall remain effective until such time as the Issuers have completed such
issuance of common stock or Qualified Preferred Stock and repayment, unless such
issuance and repayment of common stock or Qualified Preferred Stock occurs after
August 6, 2003, in which case such increase in interest rate will remain
effective. The Issuers shall pay interest semiannually on May 15 and November 15
of each year, commencing on November 15, 2002. Interest on the Notes shall
accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for, from May 6,
2002 until the principal hereof is due. Interest shall be computed on the basis
of a 360-day year comprised of twelve 30-day months. "Qualified Preferred Stock"
means any preferred stock that (i) is not Disqualified Stock, (ii) does not
entitle the holder to receive cash dividends prior to November 1, 2009 (prior to
such date, dividends may accrue or be paid in kind), (iii) is convertible into
common stock and (iv) is issued to one or more financial sponsors, such as Texas
Pacific Group or any other private equity firm or similar entity.
(b) Additional Interest. The Holder of this Note is entitled to the
benefits of a Registration Rights Agreement, dated as of May 6, 2002, among the
Issuers, SCG (Malaysia SMP) Holding Corporation, SCG (Czech) Holding
Corporation, SCG (China) Holding Corporation, Semiconductor Components
Industries Puerto Rico, Inc., SCG International Development LLC, Semiconductor
Components Industries of Rhode Island, Inc. and Semiconductor Components
Industries International of Rhode Island, Inc. (collectively, the "Guarantors")
and the Initial Purchasers named therein (the "Registration Rights Agreement").
Capitalized terms used in this paragraph (b) but not defined herein have the
meanings assigned to them in the Registration Rights Agreement. The Registration
Rights Agreement shall provide that (i) if the Issuers or the Guarantors fail to
file an Exchange Offer Registration Statement with the Commission on or prior to
150 days after the Issue Date; (ii) if the Exchange Offer Registration Statement
is not declared effective by the Commission within 270 days after the Issue
Date; (iii) if the Exchange Offer is not consummated within 300 days after the
Issue Date; (iv) if obligated to file the Shelf Registration Statement and the
Issuers and the Guarantors fail to file the same on or prior to 60 days after
such filing obligation arises or the Shelf Registration Statement is not
declared effective on or prior to 270 days after the Issue Date, or (v) if the
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Exchange Offer Registration Statement or the Shelf Registration Statement, as
the case may be, is declared effective within 270 days after the Issue Date (or
in the case of a Shelf Registration Statement to be filed in response to any
change in law or applicable interpretations thereof, within 60 days after the
publication of the change in law or interpretation) but shall thereafter cease
to be effective (at any time that the Issuers and the Guarantors are obligated
to maintain the effectiveness thereof) without being succeeded within 30 days by
an additional Registration Statement filed and declared effective (each such
event referred to in clauses (i) through (v), a "Registration Default"), the
Issuers and the Guarantors will be obligated to pay to each Holder of Transfer
Restricted Securities affected thereby additional interest ("Additional
Interest") at a rate of 0.50% per annum (the "Additional Interest Rate") for the
first 90-day period immediately following the occurrence of such Registration
Default. The Additional Interest Rate shall increase by an additional 0.50% per
annum with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum Additional Interest Rate of 2.0% per
annum. Any amounts of Additional Interest due will be payable in cash on the
regular interest payment dates with respect to the notes. Each obligation to pay
Additional Interest rate shall be deemed to commence accruing on the date of the
applicable Registration Default and to cease accruing when all Registration
Defaults have been cured.
The Trustee shall have no responsibility with respect to the
determination of the amount of any such Additional Interest. For purposes of the
foregoing, "Transfer Restricted Notes" means (i) each Initial Note until the
date on which such Initial Note has been exchanged for a freely transferable
Exchange Note in the Exchange Offer, (ii) each Initial Note or Private Exchange
Note until the date on which such Initial Note or Private Exchange Note has been
effectively registered under the Securities Act and is eligible to be disposed
of in accordance with a Shelf Registration Statement or (iii) each Initial Note
or Private Exchange Note until the date on which such Initial Note or Private
Exchange Note is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act.
2. Method of Payment
The Issuers shall pay interest on the Notes (except defaulted
interest) to the Persons who are registered Holders of Notes at the close of
business on the May 1 or November 1 next preceding the interest payment date
even if Notes are canceled after the record date and on or before the interest
payment date. Holders must surrender Notes to a Paying Agent to collect
principal payments. The Issuers shall pay principal, premium, Additional
Interest, if any, and interest in money of the United States of America that at
the time of payment is legal tender for payment of public and private debts.
Payments in respect of the Notes represented by a Global Note (including
principal, premium, interest, including Additional Interest, if any) shall be
made by wire transfer of immediately available funds to the accounts specified
by The Depository Trust Company. The Issuers will make all payments in respect
of a certificated Note (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on the Notes may also be made, in the case of a Holder of at least
$1,000,000 aggregate principal amount of Notes, 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).
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3. Paying Agent and Registrar
Initially, XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association (the "Trustee"), will act as Paying Agent and
Registrar. The Issuers may appoint and change any Paying Agent, Registrar or
co-registrar without notice. The Issuers or any of their domestically
incorporated Wholly-Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. Indenture
The Issuers issued the Notes under an Indenture dated as of May 6,
2002 (the "Indenture"), among the Issuers, the Guarantors and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"TIA"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Notes are subject to all terms and
provisions of the Indenture, and Holders are referred to the Indenture and the
TIA for a statement of such terms and provisions.
The Notes are senior secured obligations of the Issuers. This Note
is one of the [Original] [Additional] [Private Exchange] Notes referred to in
the Indenture. The Notes include the Original Notes, the Additional Notes and
any Exchange Notes and Private Exchange Notes issued in exchange for Initial
Notes pursuant to the Indenture. The Original Notes, the Additional Notes and
any Exchange Notes and Private Exchange Notes are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on the
ability of the Issuers and its Restricted Subsidiaries to, among other things,
make certain Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
issue or sell shares of capital stock of such Restricted Subsidiaries, enter
into or permit certain transactions with Affiliates and make asset dispositions.
The Indenture also imposes limitations on the ability of the Issuers and each
Guarantor to consolidate or merge with or into any other Person or convey,
transfer or lease all or substantially all of the property of the Issuers.
To guarantee the due and punctual payment of the principal and
interest, if any, on the Notes and all other amounts payable by the Issuers
under the Indenture and the Notes when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Notes and the Indenture, the Guarantors have, jointly and severally,
unconditionally guaranteed the Guaranteed Obligations on a senior subordinated
basis pursuant to the terms of the Indenture.
The Notes are secured on a second-priority basis by the Lien created
by the Security Documents pursuant to, and subject to the terms of, the
Indenture and the Intercreditor Agreement.
5. Optional Redemption
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Except as provided in paragraph 5 hereof, the Notes shall not be
redeemable at the option of the Issuers prior to May 15, 2006. On or after such
date, the Notes shall be redeemable at the option of the Issuers, in whole or in
part, on one or more occasions, on not less than 30 nor more than 60 days prior
notice, at the following redemption prices (expressed as percentages of
principal amount), plus accrued and unpaid interest, including Additional
Interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period commencing on May
15 of the years set forth below:
REDEMPTION
YEAR PRICE
---- -----
2006 106.0%
2007 103.0%
In addition, prior to May 15, 2005, the Issuers may, on one or more
occasions, redeem up to a maximum of 35% of the original aggregate principal
amount of the Notes (calculated giving effect to any issuance of Additional
Notes) at a redemption price equal to 112.0% of the principal amount thereof,
plus accrued and unpaid interest, including Additional Interest, if any, to the
applicable 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) with the Net Cash Proceeds of one or more Equity Offerings by the Company;
provided, however, that after giving effect to any such redemption, (a) at least
65% of the original aggregate principal amount of the Notes (calculated giving
effect to any issuance of Additional Notes) remains outstanding and (b) such
redemption is made within 90 days of the date of closing of the applicable
Equity Offering upon not less than 30 nor more than 60 days notice mailed to
each Holder of Notes being redeemed and otherwise in accordance with the
procedures set forth in the Indenture.
At any time on or prior to May 15, 2006, the Notes may also be
redeemed as a whole at the option of the Issuers upon the occurrence of a Change
of Control, upon not less than 30 nor more than 60 days' prior notice but in no
event more than 90 days after the occurrence of such Change of Control, mailed
by first-class mail to each Holder's registered address, at a redemption price
equal to 100% of the principal amount of Notes to be redeemed plus the
Applicable Premium as of, and accrued and unpaid interest, including Additional
Interest, if any, to the date of the redemption (the "Change of Control
Redemption Date"), except that installments of interest which are due and
payable on dates falling on or prior to the applicable redemption date will be
payable to the persons who were the Holders of record at the close of business
on the relevant record dates.
"Applicable Premium" means, with respect to the notes at any Change
of Control Redemption Date, the greater of:
(a) 1.0% of the principal amount of such Notes; and
(b) the excess of
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(i) The present value at such time of (A) the redemption price
of such Notes at May 15, 2006, plus (B) all accrued and unpaid
interest required to be paid on such notes from the date of
redemption through May 15, 2006, computed using a discount
rate equal to the Treasury Rate plus 0.5% per annum, over
(ii) the principal amount of such Notes.
"Treasury Rate" means the yield to maturity at the time of
computation of U.S. Treasury securities with a constant maturity (as compiled
and published in the most recent Federal Reserve Release H.15 (519) which has
become publicly available at least two Business Days prior to the Change of
Control Redemption Date (or, if such Statistical Release is no longer published,
any publicly available source or similar market data)) closest to the period
from the Change of Control Redemption Date to May 15, 2006; provided, however,
that if the period from the Change of Control Redemption Date to May 15, 2006,
is not equal to the constant maturity of a U.S. Treasury security for which a
weekly average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of one year) from the
weekly average yields of U.S. Treasury securities for which such yields are
given, except that, if the period from the Change of Control Redemption Date to
May 15, 2006, is less than one year, the weekly average yield on actually traded
U.S. Treasury securities adjusted to a constant maturity of one year shall be
used.
6. Sinking Fund
The Notes are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Notes to be redeemed at his or her registered address. Notes 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 and
unpaid interest, including Additional Interest, if any, on all Notes (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 Notes (or
such portions thereof) called for redemption.
8. Repurchase of Notes at the Option of Holders upon Change of Control
Upon a Change of Control, any Holder of Notes will have the right,
subject to certain conditions specified in the Indenture, to cause the Issuers
to repurchase all or any part of the Notes of such Holder at a purchase price
equal to 101% of the principal amount of the Notes to be repurchased plus
accrued and unpaid interest, including Additional Interest, if any, to the date
of repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date that is on or
prior to the date of purchase) as provided in, and subject to the terms of, the
Indenture.
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In accordance with Section 4.06 of the Indenture, the Issuers will
be required to offer to purchase Notes upon the occurrence of certain events.
9. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange Notes in
accordance with the Indenture. Upon any transfer or exchange, the Registrar and
the Trustee may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes required by law or
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Notes selected for redemption (except, in the case of a Note to be
redeemed in part, the portion of the Note not to be redeemed) or to transfer or
exchange any Notes for a period of 15 days prior to a selection of Notes to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
Except as provided in paragraph 2 hereof, the registered Holder of
this Note may be treated as the owner of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Issuers at their written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Issuers and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Issuers at any time may terminate
some of or all their obligations under the Notes and the Indenture if the
Issuers deposit with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Notes to redemption or maturity, as the
case may be.
13. Amendment, Supplement and Waiver
Subject to certain exceptions set forth in the Indenture, (a) the
Indenture, the Notes, the Note Guarantees or the Security Documents may be
amended without prior notice to any Holder but with the written consent of the
Holders of at least a majority in aggregate principal amount of the outstanding
Notes and (b) any default may be waived with the written consent of the Holders
of at least a majority in principal amount of the outstanding Notes. Subject to
certain exceptions set forth in the Indenture, without the consent of any
Holder, the Issuers and the Trustee may amend or supplement the Indenture, the
Notes, the Note Guarantees or the Security Documents (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) to comply with Article 5; (iii) to
provide for uncertificated Notes in addition to or in place of certificated
Notes; provided, however, that the uncertificated Notes are issued in registered
form for purposes of Section 163(f) of the Code or in a manner such that the
uncertificated Notes are described in Section 163(f)(2)(B) of the Code; (iv) to
add additional Note Guarantees with
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respect to the Notes; (v) to add to the covenants of the Issuers for the benefit
of the Holders or to surrender any right or power herein conferred upon the
Issuers; (vi) to make any change that does not adversely affect the rights of
any Holder; (vii) to provide for the issuance of the Exchange Notes, Private
Exchange Notes or Additional Notes, which shall have terms substantially
identical in all material respects to the Original Notes (except that the
transfer restrictions contained in the Original Notes shall be modified or
eliminated, as appropriate), and which shall be treated, together with any
outstanding Original Notes, as a single issue of securities; (viii) to comply
with any requirement of the Commission in connection with qualifying, or
maintaining the qualification of, this Indenture under the TIA; or (ix) if
necessary, in connection with any addition or release of Collateral permitted
under the terms of this Indenture or Security Documents.
14. Defaults and Remedies
If an Event of Default occurs (other than an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of the
Company or SCI LLC) and is continuing, the Trustee or the Holders of at least
25% in principal amount of the outstanding Notes may declare the principal of
and accrued but unpaid interest on all the Notes to be due and payable. If an
Event of Default relating to certain events of bankruptcy, insolvency or
reorganization of the Company or SCI LLC occurs, the principal of and interest
on all the Notes shall become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders. Under
certain circumstances, the Holders of a majority in principal amount of the
outstanding Notes may rescind any such acceleration with respect to the Notes
and its consequences.
If an Event of Default occurs and is continuing, the Trustee shall
be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the Holders unless such Holders
have offered to the Trustee reasonable indemnity or security against any loss,
liability or expense and certain other conditions are complied with. Except to
enforce the right to receive payment of principal, premium (if any) or interest
when due, no Holder may pursue any remedy with respect to the Indenture or the
Notes unless (i) such Holder has previously given the Trustee notice that an
Event of Default is continuing, (ii) Holders of at least 25% in principal amount
of the outstanding Notes have requested the Trustee in writing to pursue the
remedy, (iii) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense, (iv) the Trustee has not
complied with such request within 60 days after the receipt of the request and
the offer of security or indemnity and (v) the Holders of a majority in
principal amount of the outstanding Notes have not given the Trustee a direction
inconsistent with such request within such 60-day period. Subject to certain
restrictions, the Holders of a majority in principal amount of the outstanding
Notes are given the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee. The Trustee, however, may refuse to follow any
direction that conflicts with law or the Indenture or that the Trustee
determines is unduly prejudicial to the rights of any other Holder or that would
involve the Trustee in personal liability. Prior to taking any action under the
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by taking or not
taking such action.
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15. Trustee Dealings with the Issuers
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Issuers or their Affiliates and may otherwise deal with the Issuers or
their Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
A director, officer, employee, stockholder or member, as such, of
the Issuers or any of the Guarantors, shall not have any liability for any
obligations of the Issuers or any of the Guarantors under the Notes or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Holder shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Notes.
17. Authentication
This Note 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 Note.
18. Abbreviations
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
THIS NOTE 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.
20. CUSIP and ISIN Numbers
The Issuers may have caused CUSIP and ISIN numbers to be printed on
the Notes and directed the Trustee to use such CUSIP and ISIN numbers in notices
of redemption as a convenience to Holders. No representation is made as to the
accuracy of any such numbers either as printed on the Notes or as contained in
any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
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21. Designated Senior Indebtedness
For purposes of the indenture that governs the Senior Subordinated
Notes, the Notes shall constitute Designated Senior Indebtedness (as such term
is defined in such indenture).
22. Tax Treatment of the Notes
Pursuant to Section 12.14 of the Indenture, the Issuers agree, and
by acceptance of a beneficial ownership interest in the Notes, each beneficial
holder of the Notes shall be deemed to have agreed, for United States federal
income tax purposes, (i) to treat the Notes as debt instruments that are subject
to Section 1.1275-4(b) of the United States Treasury Regulations (the
"Contingent Debt Regulations") and (ii) to be bound by the Issuer's
determination of the "comparable yield" and "projected payment schedule," within
the meaning of the Contingent Debt Regulations, with respect to the Notes.
THE ISSUERS WILL FURNISH TO ANY HOLDER OF NOTES UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE
TEXT OF THIS NOTE.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note 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 Note
on the books of the Issuers. The agent may substitute another to act for him.
____________________________________________________________
Date: ________________ Your Signature: _____________________
____________________________________________________________________________
Sign exactly as your name appears on the other side of this Note. Signature must
be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER
RESTRICTED NOTES
This certificate relates to $_________ principal amount of Notes held in (check
applicable space) ____ book-entry or _____ definitive form by the undersigned.
The undersigned (check one box below):
- has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Note held by the Depositary a Note or
Notes in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global
Note (or the portion thereof indicated above);
- has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act, the undersigned confirms that such Notes are
being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) - to the Registrar for registration in the name of the
Holder, without transfer; 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 and such Note shall
be held immediately after the transfer through Euroclear or
Clearstream until the expiration of the Restricted Period (as
defined in the Indenture); 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 Notes evidenced by this certificate in the name of any Person
other than the registered Holder
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thereof; provided, however, that if box (4) or (5) is checked, the Trustee
may require, prior to registering any such transfer of the Notes, such
legal opinions, certifications and other information as the Issuers have
reasonably requested to confirm that such transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933.
_________________________
Your Signature
Signature Guarantee:
Date: ___________________ ______________________________
Signature must be guaranteed Signature of Signature
by a participant in a Guarantee
recognized signature guaranty
medallion program or other
signature guarantor acceptable
to the Trustee
____________________________________________________________
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Issuers as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated: ________________ ______________________________
NOTICE: To be executed by
an executive officer
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[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $[ ]. The following
increases or decreases in this Global Note have been made:
Principal amount of Signature of
Amount of decrease Amount of increase this Global Note authorized signatory
Date of in Principal Amount in Principal Amount following such of Trustee or Notes
Exchange of this Global Note of this Global Note decrease or increase Custodian
18
OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS NOTE PURCHASED BY THE
ISSUERS PURSUANT TO SECTION 4.06 (ASSET DISPOSITION) OR 4.08 (CHANGE OF CONTROL)
OF THE INDENTURE, CHECK THE BOX:
ASSET DISPOSITION - CHANGE OF CONTROL -
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS NOTE PURCHASED
BY THE ISSUERS PURSUANT TO SECTION 4.06 OR 4.08 OF THE INDENTURE, STATE THE
AMOUNT ($1,000 OR AN INTEGRAL MULTIPLE THEREOF):
$
DATE: __________________ YOUR SIGNATURE: __________________
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE OTHER SIDE OF THE NOTE)
SIGNATURE GUARANTEE:_______________________________________
SIGNATURE MUST BE GUARANTEED BY A PARTICIPANT IN A
RECOGNIZED SIGNATURE GUARANTY MEDALLION PROGRAM OR
OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE
EXHIBIT B
[FORM OF FACE OF EXCHANGE NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE ISSUERS OR 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 NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
2
No.________ $__________
12% Senior Secured Note due 2008
CUSIP No. ______
ISIN No.____
ON Semiconductor Corporation, a Delaware corporation, and
Semiconductor Components Industries, LLC, a Delaware limited liability company,
promise to pay to [Cede & Co.], or registered assigns, the principal sum [of
Dollars] [listed on the Schedule of Increases or Decreases in Global
Note attached hereto](2) on May 15, 2008.
Interest Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
______________
2 Use the Schedule of Increases and Decreases language if Note is in
Global Form.
3
Additional provisions of this Note are set forth on the other side
of this Note.
IN WITNESS WHEREOF, the parties have caused this instrument to be
duly executed.
ON SEMICONDUCTOR CORPORATION,
by
---------------------------------
Name:
Title:
SEMICONDUCTOR COMPONENTS
INDUSTRIES, LLC,
by
---------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee, certifies
that this is one of
the Notes referred
to in the Indenture.
By
-----------------------------
Authorized Signatory
--------------
*/ If the Note is to be issued in global form, add the Global Notes Legend and
the attachment from Exhibit A captioned "TO BE ATTACHED TO GLOBAL NOTES -
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE".
4
[FORM OF REVERSE SIDE OF EXCHANGE NOTE]
12% Senior Secured Note due 2008
1. Interest
ON Semiconductor Corporation, a Delaware corporation (the
"Company"), and Semiconductor Components Industries, LLC ("SCI LLC" and together
with the Company, and their successors and assigns under the Indenture
hereinafter referred to, being herein called the "Issuers"), promise to pay
interest on the principal amount of this Note at the rate per annum shown above;
provided that commencing on February 6, 2003, each Note shall accrue interest at
a rate of 13% per annum unless prior thereto the Issuers have issued common
stock or Qualified Preferred Stock generating at least $100 million in gross
cash proceeds and have used the net cash proceeds thereof to repay indebtedness
under the Credit Agreement or under any other credit facilities secured by a
first-priority lien on the Collateral and have permanently reduced the related
loan commitment equal to the amount prepaid. Such increase in interest rate, if
any, shall remain effective until such time as the Issuers have completed such
issuance of common stock or Qualified Preferred Stock and repayment, unless such
issuance and repayment of common stock or Qualified Preferred Stock occurs after
August 6, 2003, in which case such increase in interest rate will remain
effective. The Issuers shall pay interest semiannually on May 15 and November 15
of each year, commencing on November 15, 2002. Interest on the Notes shall
accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for, from May 6,
2002 until the principal hereof is due. Interest shall be computed on the basis
of a 360-day year comprised of twelve 30-day months. "Qualified Preferred Stock"
means any preferred stock that (i) is not Disqualified Stock, (ii) does not
entitle the holder to receive cash dividends prior to November 1, 2009 (prior to
such date, dividends may accrue or be paid in kind), (iii) is convertible into
common stock and (iv) is issued to one or more financial sponsors, such as Texas
Pacific Group or any other private equity firm or similar entity.
2. Method of Payment
The Issuers shall pay interest on the Notes (except defaulted
interest) to the Persons who are registered Holders of Notes at the close of
business on the May 1 or November 1 next preceding the interest payment date
even if Notes are canceled after the record date and on or before the interest
payment date. Holders must surrender Notes to a Paying Agent to collect
principal payments. The Issuers shall pay principal, premium, Additional
Interest, if any, and interest in money of the United States of America that at
the time of payment is legal tender for payment of public and private debts.
Payments in respect of the Notes represented by a Global Note (including
principal, premium, interest, including Additional Interest, if any) shall be
made by wire transfer of immediately available funds to the accounts specified
by The Depository Trust Company. The Issuers will make all payments in respect
of a certificated Note (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on the Notes may also be made, in the case of a Holder of at least
$1,000,000 aggregate principal amount of Notes, by wire transfer to a U.S.
5
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, XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association (the "Trustee"), will act as Paying Agent and
Registrar. The Issuers may appoint and change any Paying Agent, Registrar or
co-registrar without notice. The Issuers or any of their domestically
incorporated Wholly-Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. Indenture
The Issuers issued the Notes under an Indenture dated as of May 6,
2002 (the "Indenture"), among the Issuers, SCG (Malaysia SMP) Holding
Corporation, SCG (Czech) Holding Corporation, SCG (China) Holding Corporation,
Semiconductor Components Industries Puerto Rico, Inc., SCG International
Development LLC, Semiconductor Components Industries of Rhode Island, Inc. and
Semiconductor Components Industries International of Rhode Island, Inc.
(collectively, the "Guarantors") and the Trustee. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in
effect on the date of the Indenture (the "TIA"). Terms defined in the Indenture
and not defined herein have the meanings ascribed thereto in the Indenture. The
Notes are subject to all terms and provisions of the Indenture, and Holders are
referred to the Indenture and the TIA for a statement of such terms and
provisions.
The Notes are senior secured obligations of the Issuers. This Note
is one of the [Exchange] [Additional] Notes referred to in the Indenture. The
Notes include the Original Notes, the Additional Notes and any Exchange Notes
and Private Exchange Notes issued in exchange for Initial Notes pursuant to the
Indenture. The Original Notes, the Additional Notes and any Exchange Notes and
Private Exchange Notes are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the ability of the
Issuers and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
issue or sell shares of capital stock of such Restricted Subsidiaries, enter
into or permit certain transactions with Affiliates and make asset dispositions.
The Indenture also imposes limitations on the ability of the Issuers and each
Guarantor to consolidate or merge with or into any other Person or convey,
transfer or lease all or substantially all of the property of the Issuers.
To guarantee the due and punctual payment of the principal and
interest, if any, on the Notes and all other amounts payable by the Issuers
under the Indenture and the Notes when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Notes and the Indenture, the Guarantors have, jointly
6
and severally, unconditionally guaranteed the Guaranteed Obligations on a senior
subordinated basis pursuant to the terms of the Indenture.
The Notes are secured on a second-priority basis by the Lien created
by the Security Documents pursuant to, and subject to the terms of, the
Indenture and the Intercreditor Agreement.
5. Optional Redemption
Except as provided in paragraph 5 hereof, the Notes shall not be
redeemable at the option of the Issuers prior to May 15, 2006. On or after such
date, the Notes shall be redeemable at the option of the Issuers, in whole or in
part, on one or more occasions, on not less than 30 nor more than 60 days prior
notice, at the following redemption prices (expressed as percentages of
principal amount), plus accrued and unpaid interest, including Additional
Interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period commencing on May
15 of the years set forth below:
REDEMPTION
YEAR PRICE
---- -----
2006 106.0%
2007 103.0%
In addition, prior to May 15, 2005, the Issuers may, on one or more
occasions, redeem up to a maximum of 35% of the original aggregate principal
amount of the Notes (calculated giving effect to any issuance of Additional
Notes) at a redemption price equal to 112.0% of the principal amount thereof,
plus accrued and unpaid interest, including Additional Interest, if any, to the
applicable 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) with the Net Cash Proceeds of one or more Equity Offerings by the Company;
provided, however, that after giving effect to any such redemption, (a) at least
65% of the original aggregate principal amount of the Notes (calculated giving
effect to any issuance of Additional Notes) remains outstanding and (b) such
redemption is made within 90 days of the date of closing of the applicable
Equity Offering upon not less than 30 nor more than 60 days notice mailed to
each Holder of Notes being redeemed and otherwise in accordance with the
procedures set forth in the Indenture.
At any time on or prior to May 15, 2006, the Notes may also be
redeemed as a whole at the option of the Issuers upon the occurrence of a Change
of Control, upon not less than 30 nor more than 60 days' prior notice but in no
event more than 90 days after the occurrence of such Change of Control, mailed
by first-class mail to each Holder's registered address, at a redemption price
equal to 100% of the principal amount of Notes to be redeemed plus the
Applicable Premium as of, and accrued and unpaid interest, including Additional
Interest, if any, to the date of the redemption (the "Change of Control
Redemption Date"), except that installments of interest which are due and
payable on dates falling on or prior to the applicable redemption date will be
payable to the persons who were the Holders of record at the close of business
on the relevant record dates.
7
"Applicable Premium" means, with respect to the notes at any Change
of Control Redemption Date, the greater of:
(a) 1.0% of the principal amount of such Notes; and
(b) the excess of
(i) The present value at such time of (A) the redemption price
of such Notes at May 15, 2006, plus (B) all accrued and unpaid
interest required to be paid on such notes from the date of
redemption through May 15, 2006, computed using a discount
rate equal to the Treasury Rate plus 0.5% per annum, over
(ii) the principal amount of such Notes.
"Treasury Rate" means the yield to maturity at the time of
computation of U.S. Treasury securities with a constant maturity (as compiled
and published in the most recent Federal Reserve Release H.15 (519) which has
become publicly available at least two Business Days prior to the Change of
Control Redemption Date (or, if such Statistical Release is no longer published,
any publicly available source or similar market data)) closest to the period
from the Change of Control Redemption Date to May 15, 2006; provided, however,
that if the period from the Change of Control Redemption Date to May 15, 2006,
is not equal to the constant maturity of a U.S. Treasury security for which a
weekly average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of one year) from the
weekly average yields of U.S. Treasury securities for which such yields are
given, except that, if the period from the Change of Control Redemption Date to
May 15, 2006, is less than one year, the weekly average yield on actually traded
U.S. Treasury securities adjusted to a constant maturity of one year shall be
used.
6. Sinking Fund
The Notes are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Notes to be redeemed at his or her registered address. Notes 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 and
unpaid interest, including Additional Interest, if any, on all Notes (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 Notes (or
such portions thereof) called for redemption.
8. Repurchase of Notes at the Option of Holders upon Change of Control
Upon a Change of Control, any Holder of Notes will have the right,
subject to certain conditions specified in the Indenture, to cause the Issuers
to repurchase all or any part of
8
the Notes of such Holder at a purchase price equal to 101% of the principal
amount of the Notes to be repurchased plus accrued and unpaid interest,
including Additional Interest, if any, to the date of repurchase (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date that is on or prior to the date of
purchase) as provided in, and subject to the terms of, the Indenture.
In accordance with Section 4.06 of the Indenture, the Issuers will
be required to offer to purchase Notes upon the occurrence of certain events.
9. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange Notes in
accordance with the Indenture. Upon any transfer or exchange, the Registrar and
the Trustee may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes required by law or
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Notes selected for redemption (except, in the case of a Note to be
redeemed in part, the portion of the Note not to be redeemed) or to transfer or
exchange any Notes for a period of 15 days prior to a selection of Notes to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
Except as provided in paragraph 2 hereof, the registered Holder of
this Note may be treated as the owner of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Issuers at their written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Issuers and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Issuers at any time may terminate
some of or all their obligations under the Notes and the Indenture if the
Issuers deposit with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Notes to redemption or maturity, as the
case may be.
13. Amendment, Supplement and Waiver
Subject to certain exceptions set forth in the Indenture, (a) the
Indenture, the Notes, the Note Guarantees or the Security Documents may be
amended without prior notice to any Holder but with the written consent of the
Holders of at least a majority in aggregate principal amount of the outstanding
Notes and (b) any default may be waived with the written consent of the Holders
of at least a majority in principal amount of the outstanding Notes. Subject to
certain exceptions set forth in the Indenture, without the consent of any
Holder, the
9
Issuers and the Trustee may amend or supplement the Indenture, the Notes, the
Note Guarantees or the Security Documents (i) to cure any ambiguity, omission,
defect or inconsistency; (ii) to comply with Article 5; (iii) to provide for
uncertificated Notes in addition to or in place of certificated Notes; provided,
however, that the uncertificated Notes are issued in registered form for
purposes of Section 163(f) of the Code or in a manner such that the
uncertificated Notes are described in Section 163(f)(2)(B) of the Code; (iv) to
add additional Note Guarantees with respect to the Notes; (v) to add to the
covenants of the Issuers for the benefit of the Holders or to surrender any
right or power herein conferred upon the Issuers; (vi) to make any change that
does not adversely affect the rights of any Holder; (vii) to provide for the
issuance of the Exchange Notes, Private Exchange Notes or Additional Notes,
which shall have terms substantially identical in all material respects to the
Original Notes (except that the transfer restrictions contained in the Original
Notes shall be modified or eliminated, as appropriate), and which shall be
treated, together with any outstanding Original Notes, as a single issue of
securities; (viii) to comply with any requirement of the Commission in
connection with qualifying, or maintaining the qualification of, this Indenture
under the TIA; or (ix) if necessary, in connection with any addition or release
of Collateral permitted under the terms of this Indenture or Security Documents.
14. Defaults and Remedies
If an Event of Default occurs (other than an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of the
Company or SCI LLC) and is continuing, the Trustee or the Holders of at least
25% in principal amount of the outstanding Notes may declare the principal of
and accrued but unpaid interest on all the Notes to be due and payable. If an
Event of Default relating to certain events of bankruptcy, insolvency or
reorganization of the Company or SCI LLC occurs, the principal of and interest
on all the Notes shall become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders. Under
certain circumstances, the Holders of a majority in principal amount of the
outstanding Notes may rescind any such acceleration with respect to the Notes
and its consequences.
If an Event of Default occurs and is continuing, the Trustee shall
be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the Holders unless such Holders
have offered to the Trustee reasonable indemnity or security against any loss,
liability or expense and certain other conditions are complied with. Except to
enforce the right to receive payment of principal, premium (if any) or interest
when due, no Holder may pursue any remedy with respect to the Indenture or the
Notes unless (i) such Holder has previously given the Trustee notice that an
Event of Default is continuing, (ii) Holders of at least 25% in principal amount
of the outstanding Notes have requested the Trustee in writing to pursue the
remedy, (iii) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense, (iv) the Trustee has not
complied with such request within 60 days after the receipt of the request and
the offer of security or indemnity and (v) the Holders of a majority in
principal amount of the outstanding Notes have not given the Trustee a direction
inconsistent with such request within such 60-day period. Subject to certain
restrictions, the Holders of a majority in principal amount of the outstanding
Notes are given the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee.
10
The Trustee, however, may refuse to follow any direction that conflicts with law
or the Indenture or that the Trustee determines is unduly prejudicial to the
rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under the Indenture, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
15. Trustee Dealings with the Issuers
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Issuers or their Affiliates and may otherwise deal with the Issuers or
their Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
A director, officer, employee, stockholder or member, as such, of
the Issuers or any of the Guarantors, shall not have any liability for any
obligations of the Issuers or any of the Guarantors under the Notes or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Holder shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Notes.
17. Authentication
This Note 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 Note.
18. Abbreviations
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
THIS NOTE 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.
20. CUSIP and ISIN Numbers
The Issuers may have caused CUSIP and ISIN numbers to be printed on
the Notes and directed the Trustee to use such CUSIP and ISIN numbers in notices
of redemption as a
11
convenience to Holders. No representation is made as to the accuracy of any such
numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
21. Designated Senior Indebtedness
For purposes of the indenture that governs the Senior Subordinated
Notes, the Notes shall constitute Designated Senior Indebtedness (as such term
is defined in such indenture).
22. Tax Treatment of the Notes
Pursuant to Section 12.14 of the Indenture, the Issuers agree, and
by acceptance of a beneficial ownership interest in the Notes, each beneficial
holder of the Notes shall be deemed to have agreed, for United States federal
income tax purposes, (i) to treat the Notes as debt instruments that are subject
to Section 1.1275-4(b) of the United States Treasury Regulations (the
"Contingent Debt Regulations") and (ii) to be bound by the Issuer's
determination of the "comparable yield" and "projected payment schedule," within
the meaning of the Contingent Debt Regulations, with respect to the Notes.
THE ISSUERS WILL FURNISH TO ANY HOLDER OF NOTES UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE
TEXT OF THIS NOTE.
12
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note 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 Note
on the books of the Issuers. The agent may substitute another to act for him.
____________________________________________________________
Date: ________________ Your Signature: _____________________
____________________________________________________________
Sign exactly as your name appears on the other side of this Note. Signature must
be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.
13
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $[ ]. The
following increases or decreases in this Global Note have been made:
Principal amount of Signature of
Amount of decrease Amount of increase this Global Note authorized signatory
Date of in Principal Amount in Principal Amount following such of Trustee or Notes
Exchange of this Global Note of this Global Note decrease or increase Custodian
14
OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS NOTE PURCHASED BY THE ISSUERS
PURSUANT TO SECTION 4.06 (ASSET DISPOSITION) OR 4.08 (CHANGE OF CONTROL) OF THE
INDENTURE, CHECK THE BOX:
ASSET DISPOSITION - CHANGE OF CONTROL -
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS NOTE PURCHASED
BY THE ISSUERS PURSUANT TO SECTION 4.06 OR 4.08 OF THE INDENTURE, STATE THE
AMOUNT ($1,000 OR AN INTEGRAL MULTIPLE THEREOF):
$
DATE: __________________ YOUR SIGNATURE: __________________
(SIGN EXACTLY AS YOUR NAME APPEARS
ON THE OTHER SIDE OF THE NOTE)
SIGNATURE GUARANTEE:____________________________________________
SIGNATURE MUST BE GUARANTEED BY A PARTICIPANT IN A
RECOGNIZED SIGNATURE GUARANTY MEDALLION PROGRAM OR
OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE.
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture")
dated as of , among [GUARANTOR] (the "New Guarantor"), a
subsidiary of ON Semiconductor Corporation, a Delaware
corporation (the "Company"), the Company, Semiconductor
Components Industries, LLC ("SCI LLC" and, together with the
Company and their successors and assigns, the "Issuers") (or
their successors), SCG (Malaysia SMP) Holding Corporation, SCG
(Czech) Holding Corporation, SCG (China) Holding Corporation,
Semiconductor Components Industries Puerto Rico, Inc., SCG
International Development LLC, Semiconductor Components
Industries of Rhode Island, Inc., Semiconductor Components
Industries International of Rhode Island, Inc. and XXXXX FARGO
BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association, as trustee under the indenture referred to below
(the "Trustee").
W I T N E S S E T H :
WHEREAS the Issuers and SCG (Malaysia SMP) Holding Corporation, SCG
(Czech) Holding Corporation, SCG (China) Holding Corporation, Semiconductor
Components Industries Puerto Rico, Inc., SCG International Development LLC,
Semiconductor Components Industries of Rhode Island, Inc. and Semiconductor
Components Industries International of Rhode Island, Inc. (collectively, the
"Existing Guarantors") have heretofore executed and delivered to the Trustee an
Indenture (the "Indenture") dated as of May 6, 2002, providing for the issuance
of an unlimited aggregate principal amount of 12% Senior Secured Notes due 2008
(the "Notes");
WHEREAS Section 4.11 of the Indenture provides that under certain
circumstances the Issuers are required to cause the New Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the New
Guarantor shall unconditionally guarantee all the Issuers' obligations under the
Notes pursuant to a Note Guarantee on the terms and conditions set forth herein;
and
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the
Issuers and the Existing Guarantors are authorized to execute and deliver this
Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor, the Issuers, the Existing Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the holders of the Notes
as follows:
1. Agreement to Guarantee. The New Guarantor hereby agrees, jointly
and severally with all the Existing Guarantors, to unconditionally guarantee the
Issuers' obligations
2
under the Notes on the terms and subject to the conditions set forth in Article
11 of the Indenture and to be bound by all other applicable provisions of the
Indenture and the Notes.
2. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every holder of Notes heretofore or
hereafter authenticated and delivered shall be bound hereby.
3. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
4. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
5. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
6. Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR],
by
---------------------------------
Name:
Title:
ON SEMICONDUCTOR CORPORATION,
by
---------------------------------
Name:
Title:
3
SEMICONDUCTOR COMPONENTS INDUSTRIES LLC,
by
---------------------------------
Name:
Title:
SCG (MALAYSIA SMP) HOLDING CORPORATION,
by
---------------------------------
Name:
Title:
SCG (CZECH) HOLDING CORPORATION,
by
---------------------------------
Name:
Title:
SCG (CHINA) HOLDING CORPORATION,
by
---------------------------------
Name:
Title:
SEMICONDUCTOR COMPONENTS INDUSTRIES PUERTO
RICO, INC.,
by
---------------------------------
Name:
Title:
4
SCG INTERNATIONAL DEVELOPMENT LLC,
by
---------------------------------
Name:
Title:
SEMICONDUCTOR COMPONENTS INDUSTRIES OF RHODE
ISLAND, INC.,
by
---------------------------------
Name:
Title:
SEMICONDUCTOR COMPONENTS INDUSTRIES
INTERNATIONAL OF RHODE ISLAND, INC.,
by
---------------------------------
Name:
Title:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee,
by
---------------------------------
Name:
Title:
