Exhibit 10.4
EXECUTION COPY
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT, dated as of May 6,
2002, among JPMORGAN CHASE BANK, as Credit Agent,
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as
Trustee, ON SEMICONDUCTOR CORPORATION and
SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC.
W I T N E S S E T H :
WHEREAS, the Companies (such term and each other capitalized
term used herein having the meanings set forth in Section 1 below), certain
lenders, 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, are parties
to the Credit Agreement dated as of August 4, 1999, as amended and restated as
of April 3, 2000, as amended (as further amended, supplemented or otherwise
modified from time to time, the "Existing Credit Agreement");
WHEREAS, the Obligations of the Companies under the Credit
Agreement are secured (together with certain other obligations) by various
assets of the Companies and certain Subsidiaries thereof;
WHEREAS, the Companies and the Trustee have entered into the
Indenture dated as of May 6, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Indenture"), pursuant to which the Companies
intend to issue the Notes;
WHEREAS, the Companies and certain lenders under the Existing
Credit Agreement have entered into an Amendment dated as of April 17, 2002 (the
"Amendment"), to the Existing Credit Agreement that, among other things,
permits, subject to certain terms and conditions, (a) the issuance of the Notes
by the Companies and (b) a second priority Lien on the Common Collateral to
secure the Noteholder Claims; and
WHEREAS, it is a condition precedent to the effectiveness of
the Amendment that the parties hereto enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and for other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
SECTION 1. (A) DEFINITIONS. As used in this Agreement, the
following terms have the meanings specified below:
"Agreement" means this Agreement, as amended, renewed,
extended, supplemented or otherwise modified from time to time in accordance
with the terms hereof.
"Amendment" has the meaning set forth in the recitals hereto.
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"Bank Indebtedness" means any and all amounts payable under or
in respect of the Credit Agreement and any Refinancing Indebtedness (as defined
in the Indenture) 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
either Company 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 (as defined in the
Indenture) in respect of the Credit Agreement may be Incurred (as defined in the
Indenture) from time to time after termination of the Credit Agreement.
"Bankruptcy Law" means Title 11 of the United States Code and
any similar Federal, state or foreign law for the relief of debtors.
"Business Day" means any day other than a Saturday, a Sunday
or a day that is a legal holiday under the laws of the State of New York or on
which banking institutions in the State of New York are required or authorized
by law or other governmental action to close.
"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 any automated clearing house
transfers of funds or any similar transactions.
"Commodity Hedge Obligations " means, with respect to any
Person, all Obligations of such Person in respect of any commodity price
protection agreement or other commodity price hedging arrangement or other
similar agreement or arrangement.
"Common Collateral" means all of the assets of any Grantor,
whether real, personal or mixed, constituting both Senior Lender Collateral and
Noteholder Collateral.
"Companies" means Holdings and SCI.
"Comparable Noteholder Collateral Document" means, in relation
to any Common Collateral subject to any Lien created under any Senior Collateral
Document, that Noteholder Collateral Document which creates a Lien on the same
Common Collateral, granted by the same Grantor.
"Credit Agent" means JPMorgan Chase Bank in its capacity as
collateral agent under the Existing Credit Agreement and the Security Documents
(as defined therein) and also includes its successors hereunder as collateral
agent for the Senior Lenders (or if there is more than one agent, a majority of
them) under the Senior Lender Documents exercising substantially the same rights
and powers, or if there is no acting Credit Agent under the Senior Credit
Agreement, the Required Lenders.
"Credit Agreement" means the Existing Credit Agreement and all
other Loan Documents (as defined therein) 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
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the terms of the 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 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.
"Discharge of Senior Lender Claims" means, except to the
extent otherwise provided in Section 5.6, payment in full in cash of (a) the
principal of and interest and premium, if any, on all Indebtedness outstanding
under the First-Lien Credit Facilities or, with respect to letters of credit
outstanding thereunder, delivery of cash collateral or backstop letters of
credit in respect thereof in compliance with such First-Lien Credit Facilities,
as applicable, in each case after or concurrently with termination of all
commitments to extend credit thereunder and (b) any other Senior Lender Claims
that are due and payable or otherwise accrued and owing at or prior to the time
such principal and interest are paid.
"Existing Credit Agreement" has the meaning set forth in the
recitals hereto.
"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
(as defined in the Indenture) described in clause (a) of the definition thereof
and (except for the Credit Facilities provided pursuant to the Existing Credit
Agreement) is designated by the Companies as a "First-Lien Credit Facility" for
purposes of the Indenture.
"Future First-Lien Credit Facility" means any First-Lien
Credit Facility (other than the Existing Credit Agreement) that is designated by
the Companies as a "First-Lien Credit Facility" for purposes of the Indenture,
provided that the Required Lenders under any Senior Credit Agreement then in
effect have consented to such designation.
"Future Other First-Lien Obligations" means all Obligations of
either Company or any other Grantor in respect of Cash Management Obligations or
Hedging Obligations that are designated by the Companies as "Credit Agreement
Obligations" for purposes of the Indenture (other than any Senior Lender Cash
Management Obligations and Senior Lender Hedging Obligations); provided that the
Required Lenders under any Senior Credit Agreement then in effect have consented
to such designation.
"Grantors" means each of the Companies and the Subsidiaries
that has executed and delivered a Noteholder Collateral Document or a Senior
Collateral Document.
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"Hedging Obligations" means, with respect to any Person, the
Obligations of such Person in respect of (a) interest rate or currency swap
agreements, interest rate or currency cap agreements, interest rate or currency
collar agreements, (b) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates and/or currency exchange rates or
(c) Commodity Hedge Obligations.
"Holdings" means ON Semiconductor Corporation, a Delaware
corporation.
"Indebtedness" means and includes all Obligations that
constitute "Indebtedness" within the meaning of the Indenture or the Senior
Credit Agreement.
"Indenture" has the meaning set forth in the recitals hereto.
"Insolvency or Liquidation Proceeding" means (a) any voluntary
or involuntary case or proceeding under any Bankruptcy Law with respect to any
Grantor, (b) any other voluntary or involuntary insolvency, reorganization or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding with respect to any Grantor or with respect
to any of their respective assets, (c) any liquidation, dissolution,
reorganization or winding up of any Grantor whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy or (d) any assignment for the
benefit of creditors or any other marshalling of assets and liabilities of any
Grantor.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Noteholder Claims" means all Obligations in respect of the
Notes or arising under the Noteholder Documents or any of them.
"Noteholder Collateral" means all of the assets of any
Grantor, whether real, personal or mixed, with respect to which a Lien is
granted as security for any Noteholder Claim.
"Noteholder Collateral Assignment" means the Collateral
Assignment, dated as of May 6, 2002, between SCI and the Trustee.
"Noteholder Collateral Documents" means the Noteholder Pledge
Agreement, the Noteholder Security Agreement, the Noteholder Collateral
Assignment, the Noteholder Mortgages and any other document or instrument
pursuant to which a Lien is granted by any Grantor to secure any Noteholder
Claims or under which rights or remedies with respect to any such Lien are
governed.
"Noteholder Documents" means (a) the Indenture, the Notes, the
Noteholder Collateral Documents and any document or instrument evidencing or
governing any Other Second-Lien Obligations (as defined in the Indenture) and
any (b) other related document or
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instrument executed and delivered pursuant to any Noteholder Document described
in clause (a) above evidencing or governing any Obligations thereunder.
"Noteholder Mortgages" means a collective reference to each
mortgage, deed of trust and any other document or instrument under which any
Lien on real property owned by any Grantor is granted to secure any Noteholder
Claims or under which rights or remedies with respect to any such Liens are
governed.
"Noteholder Pledge Agreement" means Pledge Agreement, dated as
of May 6, 2002, among the Companies, the other Grantors and the Trustee.
"Noteholder Security Agreement" means the Security Agreement,
dated as of May 6, 2002, among the Companies, the other Grantors and the
Trustee.
"Noteholders" means the Persons holding Noteholder Claims.
"Notes" means (a) the 12% Senior Secured Notes due 2008 to be
issued by the Companies as co-issuers, (b) the exchange notes issued in exchange
therefor as contemplated by the Registration Rights Agreement dated as of May 6,
2002, among Holdings, SCI and the Initial Purchasers (as defined therein) and
(c) any additional notes issued under the Indenture by the Companies as
co-issuers, to the extent permitted by the Indenture and the Senior Credit
Agreement.
"Obligations" means any and all obligations with respect to
the payment of (a) any principal of or interest (including interest accruing on
or after the commencement of any Insolvency or Liquidation Proceeding, whether
or not a claim for post-filing interest is allowed in such proceeding) or
premium on any Indebtedness, including any reimbursement obligation in respect
of any letter of credit, (b) any fees, indemnification obligations, expense
reimbursement obligations or other liabilities payable under the documentation
governing any Indebtedness, (c) any obligation to post cash collateral in
respect of letters of credit and any other obligations or (d) any Cash
Management Obligations or Hedging Obligations.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
entity or other party, including any government and any political subdivision,
agency or instrumentality thereof.
"Pledged Collateral" means (a) the "Pledged Securities" under,
and as defined in, the Noteholder Pledge Agreement, and (b) any other Common
Collateral in the possession of the Credit Agent (or its agents or bailees), to
the extent that possession thereof is necessary to perfect a Lien thereon under
the Uniform Commercial Code.
"Recovery" has the meaning set forth in Section 6.5 hereof.
"Required Lenders" means, with respect to any amendment or
modification of the Senior Credit Agreement, or any termination or waiver of any
provision of the Senior Credit Agreement, or any consent or departure by
Holdings, the SCI or any of the Subsidiaries therefrom, those Senior Lenders the
approval of which is required to approve such amendment or modification,
termination or waiver or consent or departure.
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"SCI" means Semiconductor Components Industries, LLC, a
Delaware limited liability company.
"Senior Collateral Documents" means the Security Documents (as
defined in the Existing Credit Agreement) and any other agreement, document or
instrument pursuant to which a Lien is granted securing any Senior Lender Claims
or under which rights or remedies with respect to such Liens are governed.
"Senior Credit Agreement" means the Existing Credit Agreement;
provided that if at any time a Discharge of Senior Lender Claims occurs with
respect to the Existing Credit Agreement (without giving effect to Section 5.6),
then, to the extent provided in Section 5.6, the term "Senior Credit Agreement"
means the Future First-Lien Credit Facility designated by the Companies as the
"Senior Credit Agreement" in accordance with such Section.
"Senior Lender Cash Management Obligations" means any Cash
Management Obligations secured by any Common Collateral under the same Senior
Collateral Documents that secure Obligations under the Senior Credit Agreement.
"Senior Lender Claims" means (a) all Bank Indebtedness and all
other Indebtedness outstanding under one or more of the Senior Lender Documents,
including any Future First-Lien Credit Facilities, the Indebtedness under each
of which (i) constitutes Permitted Debt (as defined in the Indenture) or is
otherwise permitted by the Indenture, (ii) is designated by the Companies as
"Credit Agreement Obligations" for purposes of the Indenture and (iii) is
secured by a Permitted Lien (as defined in the Indenture) described in clause
(a) of the definition thereof, (b) all other Obligations (not constituting
Indebtedness) of either Company or any Grantor under the Senior Lender Documents
or any such other Future First-Lien Credit Facility, including all Senior Lender
Hedging Obligations and Senior Lender Cash Management Obligations and (c) all
Future Other First-Lien Obligations. Senior Lender Claims shall include all
interest accrued or accruing (or which would, absent the commencement of an
Insolvency or Liquidation Proceeding, accrue) after the commencement of an
Insolvency or Liquidation Proceeding in accordance with and at the rate
specified in the relevant senior Lender Document whether or not the claim for
such interest is allowed as a claim in such Insolvency or Liquidation
Proceeding. To the extent any payment with respect to the Senior Lender Claims
(whether by or on behalf of any Grantor, as proceeds of security, enforcement of
any right of set-off or otherwise) is declared to be fraudulent or preferential
in any respect, set aside or required to be paid to a debtor in possession,
trustee, receiver or similar Person, then the obligation or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred. Notwithstanding anything to the
contrary contained in the first sentence of this definition, any Obligation
under the Senior Lender Documents or any Future First-Lien Credit Facility
(including any Cash Management Obligations or Hedging Obligations) shall
constitute a "Senior Lender Claim" if the Credit Agent or the relevant Senior
Lender or Senior Lenders shall have received a written representation from
either Company in or in connection with the Senior Lender Documents evidencing
such Obligation that such Obligation constitutes a "Credit Agreement Obligation"
under and as defined in the Indenture (whether or not such Obligation is at any
time determined not to have been permitted to be incurred under the Indenture).
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"Senior Lender Collateral" means all of the assets of any
Grantor, whether real, personal or mixed, with respect to which a Lien is
granted as security for any Senior Lender Claim.
"Senior Lender Documents" means the Senior Credit Agreement,
the Senior Collateral Documents, and each of the other agreements, documents and
instruments (including each agreement, document or instrument providing for or
evidencing a Senior Lender Hedging Obligation or Senior Lender Cash Management
Obligation) providing for or evidencing any other Obligation under the Credit
Agreement or any Future First-Lien Credit Facility or any Future Other
First-Lien Obligations, and any other related document or instrument executed or
delivered pursuant to any Senior Lender Document at any time or otherwise
evidencing any Senior Lender Claims.
"Senior Lender Hedging Obligations" means any Hedging
Obligations secured by any Common Collateral under the same Senior Collateral
Documents that secure Obligations under the Senior Credit Agreement.
"Senior Lenders" means the Persons holding Senior Lender
Claims, including the Credit Agent.
"Subsidiary" means any "Subsidiary" of either Company, as
defined in the Indenture or the Senior Credit Agreement.
"Trustee" means Xxxxx Fargo Bank Minnesota, National
Association, in its capacity as trustee under the Indenture and collateral agent
under the Noteholder Collateral Documents, and also includes its successors
hereunder as collateral agent for the Noteholders under the Noteholder
Collateral Documents.
"Uniform Commercial Code" or "UCC" means the Uniform
Commercial Code as from time to time in effect in the State of New York.
(b) Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified, (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Sections shall be
construed to refer to Sections of this Agreement and (e) the words "asset" and
"property" shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
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SECTION 2. LIEN PRIORITIES.
2.1 Subordination. Notwithstanding the date, manner or order
of grant, attachment or perfection of any Liens granted to the Trustee or the
Noteholders on the Common Collateral or of any Liens granted to the Credit Agent
or the Senior Lenders on the Common Collateral and notwithstanding any provision
of the UCC, or any applicable law or the Noteholder Documents or the Senior
Lender Documents or any other circumstance whatsoever, the Trustee, on behalf of
itself and the Noteholders, hereby agrees that: (a) any Lien on the Common
Collateral securing any Senior Lender Claims now or hereafter held by or on
behalf of the Credit Agent or any Senior Lenders or any agent or trustee
therefor shall be senior in all respects and prior to any Lien on the Common
Collateral securing any of the Noteholder Claims; and (b) any Lien on the Common
Collateral now or hereafter held by or on behalf of the Trustee or any
Noteholders or any agent or trustee therefor regardless of how acquired, whether
by grant, statute, operation of law, subrogation or otherwise, shall be junior
and subordinate in all respects to all Liens on the Common Collateral securing
any Senior Lender Claims. All Liens on the Common Collateral securing any Senior
Lender Claims shall be and remain senior in all respects and prior to all Liens
on the Common Collateral securing any Noteholder Claims for all purposes,
whether or not such Liens securing any Senior Lender Claims are subordinated to
any Lien securing any other obligation of either Company, any other Grantor or
any other Person.
2.2 Prohibition on Contesting Liens. Each of the Trustee, for
itself and on behalf of each Noteholder, and the Credit Agent, for itself and on
behalf of each Senior Lender, agrees that it shall not (and hereby waives any
right to) contest or support any other Person in contesting, in any proceeding
(including any Insolvency or Liquidation Proceeding), the priority, validity or
enforceability of a Lien held by or on behalf of any of the Senior Lenders in
the Senior Lender Collateral or by or on behalf of any of the Noteholders in the
Common Collateral, as the case may be; provided that nothing in this Agreement
shall be construed to prevent or impair the rights of the Credit Agent or any
Senior Lender to enforce this Agreement, including the priority of the Liens
securing the Senior Lender Claims as provided in Section 2.1.
2.3 No New Liens. So long as the Discharge of Senior Lender
Claims has not occurred, (a) the parties hereto agree that, after the date
hereof, if the Trustee shall hold any Lien on any assets of either Company or
any other Grantor securing any Noteholder Claims that are not also subject to
the first-priority Lien of the Credit Agent under the Senior Lender Documents,
the Trustee, upon demand by the Credit Agent or the Companies, will either
release such Lien or assign it to the Credit Agent as security for the Senior
Lender Claims, and (b) each of the Companies agrees that it will not, and will
not permit any Subsidiary to, grant or permit to exist any Lien on any assets of
either Company or any of its Subsidiaries to secure any Noteholder Claim unless
a perfected prior Lien on the same assets has been granted to secure the Senior
Lender Claims.
SECTION 3. ENFORCEMENT.
3.1 Exercise of Remedies.
(a) So long as the Discharge of Senior Lender Claims has not
occurred, whether or not any Insolvency or Liquidation Proceeding has been
commenced by or against either
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Company or any other Grantor, (i) the Trustee and the Noteholders will not
exercise or seek to exercise any rights or remedies (including set-off) with
respect to any Common Collateral, institute any action or proceeding with
respect to such rights or remedies (including any action of foreclosure),
contest, protest or object to any foreclosure proceeding or action brought by
the Credit Agent or any Senior Lender, the exercise of any right under any
lockbox agreement, landlord waiver or bailee's letter or similar agreement or
arrangement to which the Trustee or any Noteholder is a party, or any other
exercise by any such party, of any rights and remedies relating to the Common
Collateral under the Senior Lender Documents or otherwise, or object to the
forbearance by the Senior Lenders from bringing or pursuing any foreclosure
proceeding or action or any other exercise of any rights or remedies relating to
the Common Collateral and (ii) the Credit Agent and the Senior Lenders shall
have the exclusive right to enforce rights, exercise remedies (including set-off
and the right to credit bid their debt) and make determinations regarding the
release, disposition, or restrictions with respect to the Common Collateral
without any consultation with or the consent of the Trustee or any Noteholder;
provided, that (A) in any Insolvency or Liquidation Proceeding commenced by or
against either Company or any Grantor, the Trustee may file a claim or statement
of interest with respect to the Noteholder Claims, and (B) the Trustee may take
any action (not adverse to the prior Liens on the Common Collateral securing the
Senior Lender Claims, or the rights of the Credit Agent or the Senior Lenders to
exercise remedies in respect thereof) in order to preserve or protect its Lien
on the Common Collateral. In exercising rights and remedies with respect to the
Common Collateral, the Credit Agent and the Senior Lenders may enforce the
provisions of the Senior Lender Documents and exercise remedies thereunder, all
in such order and in such manner as they may determine in the exercise of their
sole discretion. Such exercise and enforcement shall include the rights of an
agent appointed by them to sell or otherwise dispose of Common Collateral upon
foreclosure, to incur expenses in connection with such sale or disposition, and
to exercise all the rights and remedies of a secured lender under the Uniform
Commercial Code of any applicable jurisdiction and of a secured creditor under
Bankruptcy Laws of any applicable jurisdiction.
(b) The Trustee, on behalf of itself and the Noteholders,
agrees that it will not take or receive any Common Collateral or any proceeds of
Common Collateral in connection with the exercise of any right or remedy
(including set-off) with respect to any Common Collateral, unless and until the
Discharge of Senior Lender Claims has occurred. Without limiting the generality
of the foregoing, unless and until the Discharge of Senior Lender Claims has
occurred, except as expressly provided in the proviso in clause (ii) of Section
3.1(a) above, the sole right of the Trustee and the Noteholders with respect to
the Common Collateral is to hold a Lien on the Common Collateral pursuant to the
Noteholder Documents for the period and to the extent granted therein and to
receive a share of the proceeds thereof, if any, after the Discharge of the
Senior Lender Claims has occurred.
(c) Subject to the proviso in clause (ii) of Section 3.1(a)
above, (i) the Trustee, for itself or on behalf of the Noteholders, agrees that
the Trustee and the Noteholders will not take any action that would hinder any
exercise of remedies undertaken by the Credit Agent under the Senior Loan
Documents, including any sale, lease, exchange, transfer or other disposition of
the Common Collateral, whether by foreclosure or otherwise, and (ii) the
Trustee, for itself and on behalf of the Noteholders, hereby waives any and all
rights it or the Noteholders may have as a junior lien creditor or otherwise to
object to the manner in which the Credit Agent or the Senior
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Lenders seek to enforce or collect the Senior Lender Claims or the Liens granted
in any of the Senior Lender Collateral, regardless of whether any action or
failure to act by or on behalf of the Credit Agent or Senior Lenders is adverse
to the interest of the Noteholders.
(d) The Trustee hereby acknowledges and agrees that no
covenant, agreement or restriction contained in any Noteholder Document shall be
deemed to restrict in any way the rights and remedies of the Credit Agent or the
Senior Lenders with respect to the Common Collateral as set forth in this
Agreement and the Senior Lender Documents.
3.2 Cooperation. Subject to the proviso in clause (ii) of
Section 3.1(a) above, the Trustee, on behalf of itself and the Noteholders,
agrees that, unless and until the Discharge of Senior Lender Claims has
occurred, it will not commence, or join with any Person (other than the Senior
Lenders and the Credit Agent upon the request thereof) in commencing, any
enforcement, collection, execution, levy or foreclosure action or proceeding
with respect to any Lien held by it under any of the Noteholder Documents or
otherwise.
SECTION 4. PAYMENTS.
4.1 Application of Proceeds. As long as the Discharge of
Senior Lender Claims has not occurred, the Common Collateral or proceeds thereof
received in connection with the sale or other disposition of, or collection on,
such Common Collateral upon the exercise of remedies, shall be applied by the
Credit Agent to the Senior Lender Claims in such order as specified in the
relevant Senior Lender Documents until the Discharge of Senior Lender Claims has
occurred. Upon the Discharge of the Senior Lender Claims, the Credit Agent shall
deliver to the Trustee any proceeds of Common Collateral held by it in the same
form as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct to be applied by the Trustee to the Noteholder
Claims in such order as specified in the relevant Noteholder Documents.
4.2 Payments Over. Any Common Collateral or proceeds thereof
received by the Trustee or any Noteholder in connection with the exercise of any
right or remedy (including set-off) relating to the Common Collateral in
contravention of this Agreement shall be segregated and held in trust and
forthwith paid over to the Credit Agent for the benefit of the Senior Lenders in
the same form as received, with any necessary endorsements or as a court of
competent jurisdiction may otherwise direct. The Credit Agent is hereby
authorized to make any such endorsements as agent for the Trustee or any such
Noteholder. This authorization is coupled with an interest and is irrevocable.
SECTION 5. OTHER AGREEMENTS.
5.1 Releases.
(a) If in connection with:
(i) the exercise of the Credit Agent's remedies in
respect of the Common Collateral provided for in Section 3.1, including
any sale, lease, exchange, transfer or other disposition of any such
Common Collateral;
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(ii) any sale, lease, exchange, transfer or other
disposition of any Common Collateral permitted under the terms of the
Senior Credit Agreement (whether or not an event of default thereunder,
and as defined therein, has occurred and is continuing) and permitted
or not prohibited under Section 4.06 of the Indenture (Asset Sales); or
(iii) any agreement between the Credit Agent and
either Company or any other Grantor to release the Credit Agent's Lien
on any portion of the Common Collateral or to release any Grantor from
its obligations under its guaranty of the Senior Lender Claims,
provided that after giving effect to the release, Obligations secured
by the first priority Liens on the remaining Common Collateral remain
outstanding;
the Credit Agent, for itself or on behalf of any of the Senior Lenders, releases
any of its Liens on any part of the Common Collateral (or any Grantor from its
obligations under its guaranty of the Senior Lender Claims), the Liens, if any,
of the Trustee, for itself or for the benefit of the Noteholders, on such Common
Collateral (and the obligations of such Grantor under its guaranty of the
Noteholder Claims) shall be automatically, unconditionally and simultaneously
released and the Trustee, for itself or on behalf of any such Noteholder,
promptly shall execute and deliver to the Credit Agent or such Grantor such
termination statements, releases and other documents as the Credit Agent or such
Grantor may request to effectively confirm such release; provided that a Grantor
shall not be released from its guaranty of the Noteholder Claims pursuant to
this Section if such Grantor will remain liable under a guaranty in respect of
the Senior Subordinated Notes (as defined in the Indenture).
(b) The Trustee, for itself and on behalf of the Noteholders,
hereby irrevocably constitutes and appoints the Credit Agent and any officer or
agent of the Credit Agent, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Trustee or such holder or in the Credit Agent's own name, from
time to time in the Credit Agent's discretion, for the purpose of carrying out
the terms of this Section 5.1, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Section 5.1, including any
termination statements, endorsements or other instruments of transfer or
release.
5.2 Insurance. Unless and until the Discharge of Senior Lender
Claims has occurred, the Credit Agent and the Senior Lenders shall have the sole
and exclusive right, subject to the rights of the Grantors under the Senior
Lender Documents, to adjust settlement for any insurance policy covering the
Common Collateral in the event of any loss thereunder and to approve any award
granted in any condemnation or similar proceeding affecting the Common
Collateral. Unless and until the Discharge of Senior Lender Claims has occurred,
all proceeds of any such policy and any such award if in respect to the Common
Collateral shall be paid to the Credit Agent for the benefit of the Senior
Lenders to the extent required under the Senior Lender Documents and thereafter
to the Trustee for the benefit of the Noteholders to the extent required under
the applicable Noteholder Documents and then to the owner of the subject
property or as a court of competent jurisdiction may otherwise direct. If the
Trustee or any Noteholder shall, at any time, receive any proceeds of any such
insurance policy or any such award in contravention of this Agreement, it shall
pay such proceeds over to the Credit Agent in accordance with the terms of
Section 4.2.
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5.3 Amendments to Noteholder Collateral Documents.
(a) Without the prior written consent of the Credit Agent and
the Required Lenders, no Noteholder Collateral Document may be amended,
supplemented or otherwise modified or entered into to the extent such amendment,
supplement or modification, or the terms of any new Noteholder Collateral
Document, would be prohibited by or inconsistent with any of the terms of the
Senior Lender Documents. The Trustee agrees that each Noteholder Collateral
Document shall include the following language (or language to similar effect
approved by the Credit Agent):
"Notwithstanding anything herein to the contrary, the lien and
security interest granted to the Trustee pursuant to this
Agreement and the exercise of any right or remedy by the
Trustee hereunder are subject to the provisions of the
Intercreditor Agreement, dated as of May 6, 2002 (as amended,
supplemented or otherwise modified from time to time, the
"Intercreditor Agreement"), among ON Semiconductor
Corporation, Semiconductor Components Industries, LLC,
JPMorgan Chase Bank, as Credit Agent, and Xxxxx Fargo Bank
Minnesota, National Association, as Trustee. In the event of
any conflict between the terms of the Intercreditor Agreement
and this Agreement, the terms of the Intercreditor Agreement
shall govern."
In addition, the Trustee agrees that each Noteholder Mortgage covering any
Common Collateral shall contain such other language as the Credit Agent may
reasonably request to reflect the subordination of such Noteholder Mortgage to
the Senior Collateral Document covering such Common Collateral.
(b) In the event the Credit Agent or the Senior Lenders enter
into any amendment, waiver or consent in respect of any of the Senior Collateral
Documents for the purpose of adding to, or deleting from, or waiving or
consenting to any departures from any provisions of, any Senior Collateral
Document or changing in any manner the rights of the Credit Agent, the Senior
Lenders, either Company or any other Grantor thereunder, then such amendment,
waiver or consent shall apply automatically to any comparable provision of the
Indenture and the Comparable Noteholder Collateral Document without the consent
of the Trustee or the Noteholders and without any action by the Trustee, either
Company or any other Grantor, provided, that (A) no such amendment, waiver or
consent shall have the effect of removing assets subject to the Lien of the
Noteholder Collateral Documents, except to the extent that a release of such
Lien is permitted by Section 5.1 and (B) notice of such amendment, waiver or
consent shall have been given to the Trustee.
5.4 Rights As Unsecured Creditors. Notwithstanding anything to
the contrary in this Agreement, the Trustee and the Noteholders may exercise
rights and remedies as an unsecured creditor against either Company or any
Subsidiary that has guaranteed the Noteholder Claims in accordance with the
terms of the Noteholder Documents and applicable law. Nothing in this Agreement
shall prohibit the receipt by the Trustee or any Noteholders of the required
payments of interest and principal so long as such receipt is not the direct or
indirect result of the exercise by the Trustee or any Noteholder of rights or
remedies as a secured creditor or enforcement in contravention of this Agreement
of any Lien held by any of them. In the event the Trustee or any Noteholder
becomes a judgment lien creditor in respect of Common Collateral
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as a result of its enforcement of its rights as an unsecured creditor, such
judgment lien shall be subordinated to the Liens securing Senior Lender Claims
on the same basis as the other Liens securing the Noteholder Claims are so
subordinated to such Senior Lender Claims under this Agreement. Nothing in this
Agreement impairs or otherwise adversely affects any rights or remedies the
Credit Agent or the Senior Lenders may have with respect to the Senior Lender
Collateral.
5.5 Bailee for Perfection.
(a) The Credit Agent agrees to hold the Pledged Collateral
that is part of the Common Collateral in its possession or control (or in the
possession or control of its agents or bailees) as bailee for the Trustee and
any assignee solely for the purpose of perfecting the security interest granted
in such Pledged Collateral pursuant to the Noteholder Pledge Agreement, subject
to the terms and conditions of this Section 5.5.
(b) Until the Discharge of Senior Lender Claims has occurred,
the Credit Agent shall be entitled to deal with the Pledged Collateral in
accordance with the terms of the Senior Lender Documents as if the Liens of the
Trustee under the Noteholder Collateral Documents did not exist. The rights of
the Trustee shall at all times be subject to the terms of this Agreement and to
the Credit Agent's rights under the Senior Lender Documents.
(c) The Credit Agent shall have no obligation whatsoever to
the Trustee or any Noteholder to assure that the Pledged Collateral is genuine
or owned by any of the Grantors or to preserve rights or benefits of any Person
except as expressly set forth in this Section 5.5. The duties or
responsibilities of the Credit Agent under this Section 5.5 shall be limited
solely to holding the Pledged Collateral as bailee for the Trustee for purposes
of perfecting the Lien held by the Trustee.
(d) The Credit Agent shall not have by reason of the
Noteholder Collateral Documents or this Agreement or any other document a
fiduciary relationship in respect of the Trustee or any Noteholder.
(e) Upon the Discharge of Senior Lender Claims, the Credit
Agent shall deliver to the Trustee the remaining Pledged Collateral (if any)
together with any necessary endorsements (or otherwise allow the Trustee to
obtain control of such Pledged Collateral) or as a court of competent
jurisdiction may otherwise direct.
5.6 When Discharge of Senior Lender Claims Deemed to Not Have
Occurred. If at any time after the Discharge of Senior Lender Claims has
occurred the Companies designate any Future First-Lien Credit Facility to be the
"Senior Credit Agreement" hereunder, then such Discharge of Senior Lender Claims
shall automatically be deemed not to have occurred for all purposes of this
Agreement (other than with respect to any actions taken prior to the date of
such designation as a result of the occurrence of such first Discharge of Senior
Lender Claims), and such Future First-Lien Credit Facility shall automatically
be treated as the Senior Credit Agreement for all purposes of this Agreement,
including for purposes of the Lien priorities and rights in respect of Common
Collateral set forth herein. Upon receipt of notice of such designation
(including the identity of the new Credit Agent), the Trustee shall promptly (i)
enter
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into such documents and agreements (including amendments or supplements to this
Agreement) as either Company or such new Credit Agent shall request in order to
provide to the new Credit Agent the rights of the Credit Agent contemplated
hereby and (ii) deliver to the Credit Agent the Pledged Collateral together with
any necessary endorsements (or otherwise allow such Credit Agent to obtain
control of such Pledged Collateral).
SECTION 6. INSOLVENCY OR LIQUIDATION PROCEEDINGS.
6.1 Financing Issues. If either Company or any other Grantor
shall be subject to any Insolvency or Liquidation Proceeding and the Credit
Agent shall desire to permit the use of cash collateral or to permit either
Company or any other Grantor to obtain financing under Section 363 or Section
364 of Title 11 of the United States Code or any similar Bankruptcy Law ("DIP
Financing"), then the Trustee, on behalf of itself and the Noteholders, agrees
that it will raise no objection to such use of cash collateral or DIP Financing
and will not request adequate protection or any other relief in connection
therewith (except to the extent permitted by Section 6.3) and, to the extent the
Liens securing the Senior Lender Claims are subordinated or pari passu with such
DIP Financing, will subordinate its Liens in the Common Collateral to such DIP
Financing (and all Obligations relating thereto) on the same basis as the other
Liens securing the Noteholder Claims are so subordinated to Senior Lender Claims
under this Agreement.
6.2 Relief from the Automatic Stay. Until the Discharge of
Senior Lender Claims has occurred, the Trustee, on behalf of itself and the
Noteholders, agrees that none of them shall seek relief from the automatic stay
or any other stay in any Insolvency or Liquidation Proceeding in respect of the
Common Collateral, without the prior written consent of the Credit Agent and the
Required Lenders.
6.3 Adequate Protection. The Trustee, on behalf of itself and
the Noteholders, agrees that none of them shall contest (or support any other
Person contesting) (a) any request by the Credit Agent or the Senior Lenders for
adequate protection or (b) any objection by the Credit Agent or the Senior
Lenders to any motion, relief, action or proceeding based on the Credit Agent or
the Senior Lenders claiming a lack of adequate protection. Notwithstanding the
foregoing contained in this Section 6.3, in any Insolvency or Liquidation
Proceeding, (i) if the Senior Lenders (or any subset thereof) are granted
adequate protection in the form of additional collateral in connection with any
DIP Financing or use of cash collateral under Section 363 or Section 364 of
Title 11 of the United States Code or any similar Bankruptcy Law, then the
Trustee, on behalf of itself or any of the Noteholders, may seek or request
adequate protection in the form of a replacement Lien on such additional
collateral, which Lien is subordinated to the Liens securing the Senior Lender
Claims and such DIP Financing (and all Obligations relating thereto) on the same
basis as the other Liens securing the Noteholder Claims are so subordinated to
the Senior Lender Claims under this Agreement, and (ii) in the event the
Trustee, on behalf of itself and the Noteholders, seeks or requests adequate
protection and such adequate protection is granted in the form of additional
collateral, then the Trustee, on behalf of itself or any of the Noteholders,
agrees that the Credit Agent shall also be granted a senior Lien on such
additional collateral as security for the Senior Lender Claims and any such DIP
Financing and that any Lien on such additional collateral securing the
Noteholder Claims shall be subordinated to the Liens on such collateral securing
the Senior Lender Claims and any such DIP Financing (and all Obligations
relating thereto) and any other Liens granted to the Senior Lenders as adequate
14
protection on the same basis as the other Liens securing the Noteholder Claims
are so subordinated to such Senior Lender Claims under this Agreement.
6.4 No Waiver. Nothing contained herein shall prohibit or in
any way limit the Credit Agent or any Senior Lender from objecting in any
Insolvency or Liquidation Proceeding or otherwise to any action taken by the
Trustee or any of the Noteholders, including the seeking by the Trustee or any
Noteholder of adequate protection or the asserting by the Trustee or any
Noteholder of any of its rights and remedies under the Noteholder Documents or
otherwise.
6.5 Preference Issues. If any Senior Lender is required in any
Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay
to the estate of either Company or any other Grantor any amount (a "Recovery"),
then the Senior Lender Claims shall be reinstated to the extent of such Recovery
and the Senior Lenders shall be entitled to a Discharge of Senior Lender Claims
with respect to all such recovered amounts. If this Agreement shall have been
terminated prior to such Recovery, this Agreement shall be reinstated in full
force and effect, and such prior termination shall not diminish, release,
discharge, impair or otherwise affect the obligations of the parties hereto from
such date of reinstatement.
SECTION 7. RELIANCE; WAIVERS; ETC.
7.1 Reliance. The consent by the Senior Lenders to the
execution and delivery of the Noteholder Documents and the grant to the Trustee
on behalf of the Noteholders of a Lien on the Common Collateral and all loans
and other extensions of credit made or deemed made on and after the date hereof
by the Senior Lenders to either Company or any Grantor shall be deemed to have
been given and made in reliance upon this Agreement. The Trustee, on behalf of
itself and the Noteholders, acknowledges that it and the Noteholders have,
independently and without reliance on the Credit Agent or any Senior Lender, and
based on documents and information deemed by them appropriate, made their own
credit analysis and decision to enter into the Indenture, this Agreement and the
transactions contemplated hereby and thereby and they will continue to make
their own credit decision in taking or not taking any action under the Indenture
or this Agreement.
7.2 No Warranties or Liability. The Trustee, on behalf of
itself and Noteholders, acknowledges and agrees that each of the Credit Agent
and the Senior Lenders have made no express or implied representation or
warranty, including with respect to the execution, validity, legality,
completeness, collectibility or enforceability of any of the Senior Lender
Documents, the ownership of any Common Collateral or the perfection or priority
of any Liens thereon. The Senior Lenders will be entitled to manage and
supervise their respective loans and extensions of credit under the Senior
Lender Documents in accordance with law and as they may otherwise, in their sole
discretion, deem appropriate, and the Senior Lenders may manage their loans and
extensions of credit without regard to any rights or interests that the Trustee
or any of the Noteholders have in the Common Collateral or otherwise, except as
otherwise provided in this Agreement. Neither the Credit Agent nor any Senior
Lender shall have any duty to the Trustee or any of the Noteholders to act or
refrain from acting in a manner which allows, or results in, the occurrence or
continuance of an event of default or default under
15
any agreements with either Company or any Subsidiary thereof (including the
Noteholder Documents), regardless of any knowledge thereof which they may have
or be charged with.
7.3 No Waiver of Lien Priorities.
(a) No right of the Senior Lenders, the Credit Agent or any of
them to enforce any provision of this Agreement or any Senior Lender Document
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of either Company or any other Grantor or by any act or failure
to act by any Senior Lender or the Credit Agent, or by any noncompliance by any
Person with the terms, provisions and covenants of this Agreement, any of the
Senior Lender Documents or any of the Noteholder Documents, regardless of any
knowledge thereof which the Credit Agent or the Senior Lenders, or any of them,
may have or be otherwise charged with;
(b) Without in any way limiting the generality of the
foregoing paragraph (but subject to the rights of the Companies and the other
Grantors under the Senior Lender Documents), the Senior Lenders, the Credit
Agent and any of them, may, at any time and from time to time, without the
consent of, or notice to, the Trustee or any Noteholder, without incurring any
liabilities to the Trustee or any Noteholder and without impairing or releasing
the Lien priorities and other benefits provided in this Agreement (even if any
right of subrogation or other right or remedy of the Trustee or any Noteholder
is affected, impaired or extinguished thereby) do any one or more of the
following:
(i) change the manner, place or terms of payment or
change or extend the time of payment of, or amend, renew, exchange,
increase or alter, the terms of any of the Senior Lender Claims or any
Lien on any Senior Lender Collateral or guaranty thereof or any
liability of either Company or any other Grantor, or any liability
incurred directly or indirectly in respect thereof (including any
increase in or extension of the Senior Lender Claims, without any
restriction as to the amount, tenor or terms of any such increase or
extension) or otherwise amend, renew, exchange, extend, modify or
supplement in any manner any Liens held by the Credit Agent or any of
the Senior Lenders, the Senior Lender Claims or any of the Senior
Lender Documents;
(ii) sell, exchange, release, surrender, realize
upon, enforce or otherwise deal with in any manner and in any order any
part of the Senior Lender Collateral or any liability of either Company
or any other Grantor to the Senior Lenders or the Credit Agent, or any
liability incurred directly or indirectly in respect thereof;
(iii) settle or compromise any Senior Lender Claim
or any other liability of either Company or any other Grantor or any
security therefor or any liability incurred directly or indirectly in
respect thereof and apply any sums by whomsoever paid and however
realized to any liability (including the Senior Lender Claims) in any
manner or order; and
(iv) exercise or delay in or refrain from exercising
any right or remedy against either Company or any security or any other
Grantor or any other Person, elect any remedy and otherwise deal freely
with either Company, any other Grantor or any
16
Senior Lender Collateral and any security and any guarantor or any
liability of either Company or any other Grantor to the Senior Lenders
or any liability incurred directly or indirectly in respect thereof.
(c) The Trustee, on behalf of itself and the Noteholders, also
agrees that the Senior Lenders and the Credit Agent shall have no liability to
the Trustee or any Noteholder, and the Trustee, on behalf of itself and the
Noteholders, hereby waives any claim against any Senior Lender or the Credit
Agent, arising out of any and all actions which the Senior Lenders or the Credit
Agent may take or permit or omit to take with respect to: (i) the Senior Lender
Documents, (ii) the collection of the Senior Lender Claims or (iii) the
foreclosure upon, or sale, liquidation or other disposition of, any Senior
Lender Collateral. The Trustee, on behalf of itself and the Noteholders, agrees
that the Senior Lenders and the Credit Agent have no duty to them in respect of
the maintenance or preservation of the Senior Lender Collateral, the Senior
Lender Claims or otherwise; and
(d) The Trustee, on behalf of itself and the Noteholders,
agrees not to assert and hereby waives, to the fullest extent permitted by law,
any right to demand, request, plead or otherwise assert or otherwise claim the
benefit of, any marshalling, appraisal, valuation or other similar right that
may otherwise be available under applicable law or any other similar rights a
junior secured creditor may have under applicable law.
7.4 Obligations Unconditional. All rights, interests,
agreements and obligations of the Credit Agent and the Senior Lenders and the
Trustee and the Noteholders, respectively, hereunder shall remain in full force
and effect irrespective of:
(a) any lack of validity or enforceability of any Senior
Lender Documents or any Noteholder Documents;
(b) any change in the time, manner or place of payment of, or
in any other terms of, all or any of the Senior Lender Claims or Noteholder
Claims, or any amendment or waiver or other modification, including any increase
in the amount thereof, whether by course of conduct or otherwise, of the terms
of the Senior Credit Agreement or any other Senior Lender Document or of the
terms of the Indenture or any other Noteholder Document;
(c) any exchange of any security interest in any Common
Collateral or any other collateral, or any amendment, waiver or other
modification, whether in writing or by course of conduct or otherwise, of all or
any of the Senior Lender Claims or Noteholder Claims or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation
Proceeding in respect of either Company or any other Grantor; or
(e) any other circumstances which otherwise might constitute a
defense available to, or a discharge of, either Company or any other Grantor in
respect of the Senior Lender Claims, or of the Trustee or any Noteholder in
respect of this Agreement.
17
SECTION 8. MISCELLANEOUS.
8.1 Conflicts. In the event of any conflict between the
provisions of this Agreement and the provisions of the Senior Lender Documents
or the Noteholder Documents, the provisions of this Agreement shall govern.
8.2 Continuing Nature of this Agreement; Severability. This
Agreement shall continue to be effective until the Discharge of Senior Lender
Claims shall have occurred. This is a continuing agreement of lien subordination
and the Senior Lenders may continue, at any time and without notice to the
Trustee or any Noteholder, to extend credit and other financial accommodations
and lend monies to or for the benefit of either Company or any Grantor
constituting Senior Lender Claims on reliance hereof. The Trustee, on behalf of
itself and the Noteholders, hereby waives any right it may have under applicable
law to revoke this Agreement or any of the provisions of this Agreement. The
terms of this Agreement shall survive, and shall continue in full force and
effect, in any Insolvency or Liquidation Proceeding. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall not
invalidate the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.3 Amendments; Waivers. No amendment, modification or waiver
of any of the provisions of this Agreement by the Trustee or the Credit Agent
shall be deemed to be made unless the same shall be in writing signed on behalf
of the party making the same or its authorized agent and each waiver, if any,
shall be a waiver only with respect to the specific instance involved and shall
in no way impair the rights of the parties making such waiver or the obligations
of the other parties to such party in any other respect or at any other time.
The Companies and other Grantors shall not have any right to consent to or
approve any amendment, modification or waiver of any provision of this Agreement
except to the extent their rights are directly affected.
8.4 Information Concerning Financial Condition of the
Companies and the Subsidiaries. The Credit Agent and the Senior Lenders, on the
one hand, and the Trustee and the Noteholders, on the other hand, shall each be
responsible for keeping themselves informed of (a) the financial condition of
the Companies and the Subsidiaries and all endorsers and/or guarantors of the
Noteholder Claims or the Senior Lender Claims and (b) all other circumstances
bearing upon the risk of nonpayment of the Noteholder Claims or the Senior
Lender Claims. The Credit Agent and the Senior Lenders shall have no duty to
advise the Trustee or any Noteholder of information known to it or them
regarding such condition or any such circumstances or otherwise. In the event
the Credit Agent or any of the Senior Lenders, in its or their sole discretion,
undertakes at any time or from time to time to provide any such information to
the Trustee or any Noteholder, it or they shall be under no obligation (w) to
make, and the Credit Agent and the Senior Lenders shall not make, any express or
implied representation or warranty, including with respect to the accuracy,
completeness, truthfulness or validity of any such information so provided, (x)
to provide any additional information or to provide any such information on any
subsequent occasion, (y) to undertake any investigation or (z) to disclose any
information which, pursuant to accepted or reasonable commercial finance
practices, such party wishes to maintain confidential or is otherwise required
to maintain confidential.
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8.5 Subrogation. The Trustee, on behalf of itself and the
Noteholders, hereby waives any rights of subrogation it may acquire as a result
of any payment hereunder until the Discharge of Senior Lender Claims has
occurred.
8.6 Application of Payments. All payments received by the
Senior Lenders may be applied, reversed and reapplied, in whole or in part, to
such part of the Senior Lender Claims as the Senior Lenders, in their sole
discretion, deem appropriate. The Trustee, on behalf of itself and the
Noteholders, assents to any extension or postponement of the time of payment of
the Senior Lender Claims or any part thereof and to any other indulgence with
respect thereto, to any substitution, exchange or release of any security which
may at any time secure any part of the Senior Lender Claims and to the addition
or release of any other Person primarily or secondarily liable therefor.
8.7 Consent to Jurisdiction; Waivers. The parties hereto
consent to the jurisdiction of any state or federal court located in New York,
New York, and consent that all service of process may be made by registered mail
directed to such party as provided in Section 8.8 below for such party. Service
so made shall be deemed to be completed three days after the same shall be
posted as aforesaid. The parties hereto waive any objection to any action
instituted hereunder based on forum non conveniens, and any objection to the
venue of any action instituted hereunder. Each of the parties hereto waives any
right it may have to trial by jury in respect of any litigation based on, or
arising out of, under or in connection with this Agreement or any other Loan
Document, or any course of conduct, course of dealing, verbal or written
statement or action of any party hereto.
8.8 Notices. All notices to the Noteholders and the Senior
Lenders permitted or required under this Agreement may be sent to the Trustee
and the Credit Agent, respectively. Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telecopied,
electronically mailed or sent by courier service or U.S. mail and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of a telecopy or electronic mail or four Business Days after deposit in
the U.S. mail (registered or certified, with postage prepaid and properly
addressed). For the purposes hereof, the addresses of the parties hereto shall
be as set forth below each party's name on the signature pages hereto, or, as to
each party, at such other address as may be designated by such party in a
written notice to all of the other parties.
8.9 Further Assurances. The Trustee, on behalf of itself and
the Noteholders, agrees that each of them shall take such further action and
shall execute and deliver to the Credit Agent and the Senior Lenders such
additional documents and instruments (in recordable form, if requested) as the
Credit Agent or the Senior Lenders may reasonably request to effectuate the
terms of and the lien priorities contemplated by this Agreement.
8.10 Governing Law. This Agreement has been delivered and
accepted at and shall be deemed to have been made at New York, New York and
shall be interpreted, and the rights and liabilities of the parties bound hereby
determined, in accordance with the laws of the State of New York.
19
8.11 Binding on Successors and Assigns. This Agreement shall
be binding upon the Credit Agent, the Senior Lenders, the Trustee, the
Noteholders, the Companies and their respective permitted successors and
assigns.
8.12 Specific Performance. The Credit Agent may demand
specific performance of this Agreement. The Trustee, on behalf of itself and the
Noteholders, hereby irrevocably waives any defense based on the adequacy of a
remedy at law and any other defense which might be asserted to bar the remedy of
specific performance in any action which may be brought by the Credit Agent.
8.13 Section Titles; Time Periods. The section titles
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of this Agreement.
8.14 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be an original and all of which shall
together constitute one and the same document.
8.15 Authorization. By its signature, each Person executing
this Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.
8.16 No Third Party Beneficiaries. This Agreement and the
rights and benefits hereof shall inure to the benefit of each of the parties
hereto and their respective successors and assigns and shall inure to the
benefit of each of the holders of Senior Lender Claims and Noteholder Claims. No
other Person shall have or be entitled to assert rights or benefits hereunder.
8.17 Effectiveness. This Agreement shall become effective when
executed and delivered by the parties hereto. This Agreement shall be effective
both before and after the commencement of any Insolvency or Liquidation
Proceeding. All references to the Companies or any other Grantor shall include
any Company or Grantor as debtor and debtor-in-possession and any receiver or
trustee for any Company or any other Grantor (as the case may be) in any
Insolvency or Liquidation Proceeding.
8.18 Credit Agent and Trustee. It is understood and agreed
that (a) JPMorgan Chase Bank is entering into this Agreement in its capacity as
Credit Agent and the provisions of Article VIII of the Existing Credit Agreement
applicable to JPMorgan Chase Bank as administrative agent thereunder shall also
apply to JPMorgan Chase Bank as Credit Agent hereunder, and (b) Xxxxx Fargo Bank
Minnesota, National Association is entering in this Agreement in its capacity as
Trustee and the provisions of Article 7 of the Indenture applicable to the
Trustee thereunder shall also apply to the Trustee hereunder.
8.19 Designations. For purposes of the provisions hereof and
the Indenture requiring the Companies to designate Indebtedness for the purposes
of the term "Credit Agreement Obligations" under the Indenture, "First-Lien
Credit Facilities" or any other designations for any other purposes hereunder or
under the Indenture, any such designation shall
20
be sufficient if the relevant designation is set forth in writing, signed on
behalf of the Companies by an officer thereof and delivered to the Trustee and
the Credit Agent. For all purposes hereof and the Indenture, the Companies
hereby designate the Credit Facilities provided pursuant to the Existing Credit
Agreement as the First-Lien Credit Facility and any Obligations in respect of
the Existing Credit Agreement as "Credit Agreement Obligations" under the
Indenture.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
Credit Agent:
JPMORGAN CHASE BANK, as Credit Agent,
By: /s/ Xxxxxx XxXxxxxx
-------------------------------------
Name: Xxxxxx XxXxxxxx
Title: Vice President
Address:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Banking
Telecopy No.: (000) 000-0000
Trustee:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Trustee,
By: /s/ Xxxxxx X. X'Xxxxxxx
-------------------------------------
Name: Xxxxxx X. X'Xxxxxxx
Title: Corporate Trust Officer
Address:
000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Services
Telecopy No.: (000) 000-0000
ON SEMICONDUCTOR CORPORATION,
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President, Chief Financial
Officer, and Treasurer
Address:
0000 Xxxx XxXxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
22
SEMICONDUCTOR COMPONENTS INDUSTRIES,
LLC,
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President, Chief Financial
Officer and Treasurer
Address:
0000 Xxxx XxXxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
23
