EXHIBIT 4.18
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ON SEMICONDUCTOR CORPORATION
SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC
12% Senior Secured Notes due 2010
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INDENTURE
Dated as of March 3, 2003
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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.......................................................................... 25
SECTION 1.05. Designated Senior Indebtedness; Designation for Purposes of Senior
Secured Notes due 2008................................................................. 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................................................................... 27
SECTION 2.04. Registrar and Paying Agent..................................................................... 27
SECTION 2.05. Paying Agent to Hold Money in Trust............................................................ 28
SECTION 2.06. Holder Lists................................................................................... 28
SECTION 2.07. Transfer and Exchange.......................................................................... 28
SECTION 2.08. Replacement Notes.............................................................................. 29
SECTION 2.09. Outstanding Notes.............................................................................. 29
SECTION 2.10. Temporary Notes................................................................................ 30
SECTION 2.11. Cancelation.................................................................................... 30
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............................................................................. 31
SECTION 3.02. Selection of Notes To Be Redeemed.............................................................. 31
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
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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....................... 41
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock............................................. 42
SECTION 4.07. Limitation on Transactions with Affiliates..................................................... 45
SECTION 4.08. Repurchase of Notes at the Option of the Holder Upon a Change of Control....................... 45
SECTION 4.09. Compliance Certificate......................................................................... 47
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................................................................ 49
SECTION 4.13. Limitation on the Sale or Issuance of Capital Stock of Restricted Subsidiaries................. 49
SECTION 4.14. Limitation on Liens............................................................................ 50
SECTION 4.15. Sale/Leaseback Transactions.................................................................... 50
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.01. When Company May Merge or Transfer Assets...................................................... 50
ARTICLE VI
EVENTS OF DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.............................................................................. 52
SECTION 6.02. Acceleration................................................................................... 54
SECTION 6.03. Other Remedies................................................................................. 54
SECTION 6.04. Waiver of Past Defaults........................................................................ 55
SECTION 6.05. Control by Majority............................................................................ 55
SECTION 6.06. Limitation on Suits............................................................................ 55
SECTION 6.07. Rights of Holders to Receive Payment........................................................... 56
SECTION 6.08. Collection Suit by Trustee..................................................................... 56
SECTION 6.09. Trustee May File Proofs of Claim............................................................... 56
SECTION 6.10. Priorities..................................................................................... 56
SECTION 6.11. Undertaking for Costs.......................................................................... 56
SECTION 6.12. Waiver of Stay or Extension Laws............................................................... 57
ARTICLE VII
TRUSTEE
SECTION 7.01. Duties of Trustee.............................................................................. 57
SECTION 7.02. Rights of Trustee.............................................................................. 58
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SECTION 7.03. Individual Rights of Trustee................................................................... 59
SECTION 7.04. Trustee's Disclaimer........................................................................... 59
SECTION 7.05. Notice of Defaults............................................................................. 59
SECTION 7.06. Reports by Trustee to Holders.................................................................. 59
SECTION 7.07. Compensation and Indemnity..................................................................... 59
SECTION 7.08. Replacement of Trustee......................................................................... 60
SECTION 7.09. Successor Trustee by Merger.................................................................... 61
SECTION 7.10. Eligibility; Disqualification.................................................................. 61
SECTION 7.11. Preferential Collection of Claims Against the Issuers.......................................... 61
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes; Defeasance.................................................... 62
SECTION 8.02. Conditions to Defeasance....................................................................... 63
SECTION 8.03. Application of Trust Money..................................................................... 64
SECTION 8.04. Repayment to the Issuers....................................................................... 64
SECTION 8.05. Indemnity for Government Obligations........................................................... 64
SECTION 8.06. Reinstatement.................................................................................. 64
ARTICLE IX
AMENDMENTS
SECTION 9.01. Without Consent of Holders..................................................................... 65
SECTION 9.02. With Consent of Holders........................................................................ 66
SECTION 9.03. Compliance with Trust Indenture Act............................................................ 67
SECTION 9.04. Revocation and Effect of Consents and Waivers.................................................. 67
SECTION 9.05. Notation on or Exchange of Notes............................................................... 67
SECTION 9.06. Trustee to Sign Amendments..................................................................... 67
SECTION 9.07. Payment for Consent............................................................................ 68
ARTICLE X
COLLATERAL AND SECURITY
SECTION 10.01. Security Documents............................................................................ 68
SECTION 10.02. Recording and Opinions........................................................................ 69
SECTION 10.03. Release of Collateral......................................................................... 69
SECTION 10.04. Certificates and Opinions of Counsel.......................................................... 71
SECTION 10.05. Certificates of the Trustee................................................................... 71
SECTION 10.06. Authorization of Actions to Be Taken by the Trustee Under the Security Documents.............. 71
SECTION 10.07. Authorization of Receipt of Funds by the Trustee Under the Security
Documents and the Collateral Sharing Agreement; Distributions
by the Trustee under the Collateral Sharing Agreement and
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the Intercreditor Agreement............................................................ 72
SECTION 10.08. Termination of Security Interest.............................................................. 72
SECTION 10.09. Trustee Serving as Collateral Agent; Amendments or Supplements to,
or Replacements of, the Security Documents and the Collateral
Sharing Agreement...................................................................... 72
SECTION 10.10. Designations.................................................................................. 73
ARTICLE XI
NOTE GUARANTEES
SECTION 11.01. Note Guarantees............................................................................... 73
SECTION 11.02. Limitation on Liability....................................................................... 75
SECTION 11.03. Releases of Note Guarantees................................................................... 75
SECTION 11.04. Successors and Assigns........................................................................ 76
SECTION 11.05. No Waiver..................................................................................... 76
SECTION 11.06. Modification.................................................................................. 77
SECTION 11.07. Execution of Supplemental Indenture for Future Guarantors..................................... 77
SECTION 11.08. Non-Impairment................................................................................ 77
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls.................................................................. 77
SECTION 12.02. Notices....................................................................................... 77
SECTION 12.03. Communication by Holders with Other Holders................................................... 78
SECTION 12.04. Certificate and Opinion as to Conditions Precedent............................................ 78
SECTION 12.05. Statements Required in Certificate or Opinion................................................. 79
SECTION 12.06. When Notes Disregarded........................................................................ 79
SECTION 12.07. Rules by Trustee, Paying Agent and Registrar.................................................. 79
SECTION 12.08. Legal Holidays................................................................................ 79
SECTION 12.09. GOVERNING LAW................................................................................. 79
SECTION 12.10. No Recourse Against Others.................................................................... 80
SECTION 12.11. Successors.................................................................................... 80
SECTION 12.12. Multiple Originals............................................................................ 80
SECTION 12.13. Table of Contents; Headings................................................................... 80
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 March 3, 2003, 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 2010 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 2010 (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, $200,000,000 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.
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"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
2010, 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 $5.0 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 $5.0 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
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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/or 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.
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"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
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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 or a Person controlling such 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 or the Note Guarantees pursuant to the applicable Security
Documents.
"Collateral Agent" means JPMorgan Chase Bank, in its capacity
as collateral agent under the Security Documents and the Collateral Sharing
Agreement or any successor thereto, or any Person otherwise designated as the
"Collateral Agent" pursuant to the Collateral Sharing Agreement.
"Collateral Assignment" means the Collateral Assignment dated
August 4, 1999, as amended and restated as of March 3, 2003, between SCI LLC and
the Collateral Agent.
"Collateral Sharing Agreement" means (a) the Collateral
Sharing Agreement dated as of March 3, 2003, among the Collateral Agent, the
Trustee and the Issuers, as such agreement may be amended, supplemented or
otherwise modified from time to time pursuant to the terms thereof and this
Indenture and (b) any substantially identical agreement hereafter entered into
pursuant to Section 10.09(c).
"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.
"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
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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
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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 Secured Notes due 2008, the Senior Subordinated Notes or the
Junior Subordinated Note), (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 Secured Notes due 2008, the Senior
Subordinated Notes or the Junior Subordinated Note), (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.
8
"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;
9
(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 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 Agreement" means the credit agreement dated as of
August 4, 1999, as amended and restated as of February 14, 2003, 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) or clause (e) 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 to a creditor under any First-Lien
Credit Facilities 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
10
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; 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 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
11
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 the first six months of 2002, the Profitability
Enhancement Programs, provided the fees, expenses and charges referred to in
this clause (ii) shall not exceed $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) or clause (e) 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.
12
"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
13
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.
14
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Indenture Documents" means (a) this 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 May 6, 2002, among the Issuers, JPMorgan Chase Bank, as
credit agent, and Xxxxx Fargo Bank Minnesota, National Association, as trustee
for the Senior Secured Notes due 2008, 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 that is not
inconsistent with this Indenture and the Collateral Sharing Agreement.
"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).
15
"Mortgaged Property" means (a) 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 (b) 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
16
the Indenture, the Notes and the other Indenture Documents, whether for fees,
expenses, indemnification or otherwise.
"Offering Memorandum" means the offering memorandum relating
to the issuance of the Original Notes dated February 26, 2003.
"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.
"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 permitted by law and consistent with prudent business
practice and not exceeding $5.0 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 $1.0 million threshold contained in the
17
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 $15.0
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 Section 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 (not including any Additional Notes); (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 to secure Indebtedness existing at the time of a
consolidation or merger of another Person with or into the Company; provided
that (i) such consolidation or merger is permitted under Section 5.01, (ii) such
Indebtedness is not Incurred in connection with or in contemplation of such
consolidation or merger, (iii) the granting of such Liens is required by the
terms of such Indebtedness as a result of such consolidation or merger and (iv)
such other Person is not an affiliate of the Company; (f) Liens on property
existing at the time of acquisition of the property by the Company or any
Restricted Subsidiary; provided that such Liens were in existence prior to the
contemplation of such acquisition; (g) 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; (h) Liens for taxes,
18
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; (i) 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); (j) Liens in favor of the Trustee; (k) 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; (l) Liens securing Hedging
Obligations; (m) 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; (n) Liens incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security; (o) 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; (p) 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; (q) 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; (r) 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; (s) any interest or title
of a lessor in the property subject to any lease or arising from filing UCC
financing statements regarding leases; (t) judgment Liens in respect of
judgments that do not constitute an Event of Default; (u) Liens existing on the
date hereof; (v) 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; (w) Liens securing
obligations in respect of Cash Management Obligations; (x) ground leases in
respect of real property on which facilities owned or leased by the Company or
any of its Restricted Subsidiaries are located; (y) 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; (z) 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; (aa)
Liens in connection with a Receivables Facility incurred in compliance with
Sections 4.03(b)(i) and 4.03(b)(ii) hereof; (bb) Liens arising solely by virtue
of any statutory or common law provision relating to banker's liens, rights of
setoff or similar rights; (cc) Liens on the assets of the China JV securing
Indebtedness incurred in compliance with Section 4.03 hereof; (dd) Liens
securing the Senior Secured Notes due 2008 and the Guarantees in respect
thereof; provided that such Liens are junior to the Liens securing the Notes and
the Note Guarantees; and (ee) Liens that
19
secure Indebtedness permitted to be Incurred under Section 4.03; provided that
(i) the grantor has granted or concurrently grants a first-priority Lien upon
the property subject to such Lien as security for the Notes and the Note
Guarantees and (ii) the Liens in respect of such Indebtedness are junior to the
Liens securing the Notes and the Note Guarantees.
"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 August 4,
1999, as amended and restated as of March 3, 2003, 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 Programs" mean the Profitability
Enhancement Programs described in the Offering Memorandum.
"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 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.
"Refinanced" shall have a correlative meaning.
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"Refinancing" means the Company's offering and sale of the
Original Notes and the application of the proceeds therefrom as described in the
Offering Memorandum.
"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, (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, and (e) if the Indebtedness (other than any Indebtedness
permitted to be Incurred under Section 4.03(b)(i) or 4.03(b)(xiv)) being
Refinanced is secured with Liens junior to the Liens securing the Notes and the
Note Guarantees, any Liens securing such Refinancing Indebtedness are junior to
the Liens securing the Notes and the Note Guarantees; 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 August
4, 1999, as amended and restated as of March 3, 2003, among the Issuers, the
Grantors (as defined therein) and the Collateral Agent.
"Security Documents" means (a) the Security Agreement, the
Pledge Agreement, the Collateral Assignment, the Mortgages and any other
document or instrument pursuant to
21
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 and
(b) substantially identical agreements hereafter entered into pursuant to
Section 10.09(c). Prior to the Discharge of Credit Agreement Obligations, the
"Security Documents" will mean the Security Documents among the Issuers, the
Guarantors and the Collateral Agent, as such agreements may be amended, modified
or supplemented from time to time in accordance with their terms, this Indenture
and the Collateral Sharing Agreement.
"Senior Secured Notes due 2008" means the $300.0 million
aggregate principal amount of 12% senior secured notes due 2008 issued by the
Company and SCI LLC on May 6, 2002 and the exchange notes issued or to be issued
in exchange therefor.
"Senior Subordinated Notes" means the 12% senior subordinated
notes due 2009 issued by the Company and SCI LLC on July 28, 1999 and the
exchange notes issued in exchange therefor.
"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
22
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
23
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
24
Defined in
Term Section
---- ----------
"Initial Notes"........................... Preamble
"legal defeasance option"................. 8.01(b)
"Legal Holiday"........................... 12.08
"Notes"................................... Preamble
"Notes Custodian"......................... Appendix
"Notice of Default"....................... 6.01
"Offer"................................... 4.06(b)
"Offer Amount"............................ 4.06(c)(ii)
"Offer Period"............................ 4.06(c)(ii)
"Original Notes".......................... Preamble
"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.
25
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; Designation
for Purposes of Senior Secured Notes due 2008. (a) 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).
(b) For purposes of the indenture governing the
Senior Secured Notes due 2008 and the Intercreditor Agreement, the Issuers
hereby designate the Notes and the Note Guarantees as a "First-Lien Credit
Facility" (as such term is defined in the Intercreditor Agreement) and any
Obligations as "Credit Agreement Obligations" (as such term is defined in the
Intercreditor Agreement).
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, 3.06, 4.06, 4.08 or the Appendix), there shall be (a)
established in or pursuant to a resolution of the Board of Directors and (b) (i)
26
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
27
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,
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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
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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.
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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 either of them 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.
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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;
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(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,
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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.
(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, any Receivables Facility, any Indebtedness of the Company,
SCI LLC or any Guarantor under any First-Lien Credit Facilities and any
Additional Notes in an aggregate principal amount not to exceed $732.2
million less the lesser of (A) the sum of, without duplication, (x) the
aggregate amount of all prepayments of principal applied to permanently
reduce any such Indebtedness and (y) the aggregate net cash proceeds
received by the Company from the issuance of the Original Notes
(excluding any Additional Notes Incurred pursuant to this clause (i) of
this paragraph (b)) outstanding and (B) $332.2 million;
(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) $100.0 million;
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(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 Secured Notes due
2008, the Guarantees of the Senior Secured Notes due 2008, 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
35
construction improvement of property, plant or equipment used in a
Permitted Business, and in an aggregate principal amount not in excess
of $25.0 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 $25.0 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 $50.0
million, of which up to $25.0 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
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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 Secured Notes due 2008, 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 any of the Senior Secured Notes due 2008, 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 Secured Notes due 2008, 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
37
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 or Senior Secured
Notes due 2008 (other than the purchase, repurchase or other acquisition of
Subordinated Indebtedness or Senior Secured Notes due 2008 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 Notes (any
such dividend, distribution, purchase, redemption, repurchase, defeasance, other
acquisition, retirement or Investment described in and not excluded from clauses
(i) through (v) of this Section 4.04(a) 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 ending 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
38
(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 (D) 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
39
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 the Senior Secured Notes due
2008 or 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,
Refinancing Indebtedness that is permitted to be Incurred pursuant to
Section 4.03(b)(vi); 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 shall be excluded from the
calculation of the amount of Restricted Payments;
(iv) any purchase or redemption of the Senior Secured Notes
due 2008 or 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, any purchase
of Senior Secured Notes due 2008 required pursuant to the terms thereof
as a result of such Change of Control at a purchase price not to exceed
101% of the outstanding principal amount thereof, plus any accrued and
unpaid interest; provided, however, that prior to or concurrently with
consummating any such purchase, the Company has made the Change of
Control Offer required pursuant to Section 4.08 and has purchased all
Notes validly tendered in such Change of Control Offer; and provided
further, however, that such purchase will be included in the
calculation of the amount of Restricted Payments;
(vi) 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
40
Restricted Payment and (3) such purchase or redemption shall be
included in the calculation of the amount of Restricted Payments;
(vii) 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);
(viii) 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 $2.0 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;
(ix) 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;
(x) 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;
(xi) the optional redemption of up to 35% of the Senior
Secured Notes due 2008 with the Net Cash Proceeds of one or more Equity
Offerings by the Company provided that (1) such redemption is made at a
redemption price of 112.0% and otherwise in compliance with indenture
governing the Senior Secured Notes due 2008 and (2) prior to or
concurrently with any such redemption, the Company has redeemed 35% of
the original aggregate principal amount of the Notes (calculated giving
effect to any issuance of Additional Notes) with the Net Cash Proceeds
of such Equity Offerings at the price set forth in, and otherwise in
compliance with, the second paragraph of paragraph 5 of the Notes;
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 applied to purchase Senior Secured Notes due 2008 in
accordance with this clause (xi) shall be excluded from the calculation
of the amounts under Section 4.04(a)(3)(B) above; and
41
(xii) other restricted Payments in an aggregate amount not to
exceed $20.0 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;
42
(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 $10.0 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 or the
Notes, 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
43
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 is not
applied or invested as provided in Section 4.06(a) 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 (other than the Senior Secured Notes due 2008) 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).
44
(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
45
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 $5.0 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 $15.0 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 in the ordinary course of business permitted by
law and consistent with prudent business practice, but in any event not to
exceed $5.0 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 $2.0 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
46
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
47
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 their 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 of (i)
any Credit Agreement Obligations, (ii) so long as any Senior Secured Notes due
2008 are outstanding, the Senior Secured Notes due 2008, (iii) so long as any
Senior Subordinated Notes are outstanding, the Senior Subordinated Notes or (iv)
any other obligations, 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 $25.0 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, (b) if such
Subsidiary grants any Lien upon any of its assets and property as security for
(i) any Credit Agreement Obligations, (ii) so long as any Senior Secured Notes
due 2008 are outstanding, the Senior Secured Notes due 2008, (iii) so long as
any Senior Subordinated Notes are outstanding, the Senior Subordinated Notes, or
(iv) any other obligations (other than, in the case of this
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clause (iv), Permitted Liens), such Subsidiary shall concurrently grant a
first-priority Lien upon such assets and property as security for the Notes,
the Note Guarantees and any other Obligations and execute any and all further
Security Documents, financing statements, agreements and instruments, upon
substantially the same terms as the Security Documents and in a form reasonably
satisfactory to the Trustee, that grants the Collateral Agent a first-priority
Lien upon such assets and property for the benefit of the Holders that is equal
and ratable with any other first-priority Liens upon such assets and property
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 or Collateral Agent may
reasonably request to create such first-priority Lien, all at the expense of
the Issuers, including all reasonable fees and expenses of counsel incurred by
the Trustee in connection therewith 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 initial or additional Lien upon any of its assets and
property to secure (i) any Credit Agreement Obligations, (ii) so long as any
Senior Secured Notes due 2008 are outstanding, the Senior Secured Notes due
2008, (iii) so long as any Senior Subordinated Notes are outstanding, the Senior
Subordinated Notes or (iv) any other obligations (other than, in the case of
this clause (iv), Permitted Liens), it shall concurrently grant a first-priority
Lien upon such assets and property as security for the Notes, the Note
Guarantees and any other Obligations and execute any and all further Security
Documents, financing statements, agreements and instruments, upon substantially
the same terms as the Security Documents and in a form reasonably satisfactory
to the Trustee, that grant the Collateral Agent a first-priority Lien upon such
assets and property for the benefit of the Holders that is equal and ratable
with any other first-priority Liens upon such assets and property 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 or Collateral Agent may reasonably request
to create such first-priority Lien, all at the expense of the Issuers, including
all reasonable fees and expenses of counsel incurred by the Trustee in
connection therewith and deliver to the Trustee an Opinion of Counsel,
reasonably satisfactory to the Trustee, that such Security Documents are valid,
binding and enforceable obligations of such Issuer or Guarantor, as the case may
be, subject to customary exceptions for bankruptcy, fraudulent conveyance and
equitable principles.
In addition, the Issuers shall, with respect to each parcel of
real property in the United States owned or leased by any Issuer or Guarantor
that secures (i) any Credit Agreement Obligations, (ii) so long as any Senior
Secured Notes due 2008 are outstanding, the Senior Secured Notes due 2008, (iii)
so long as the Senior Subordinated Notes are outstanding, the Senior
Subordinated Notes or (iv) any other obligations (other than, in the case of
this clause (iv), Permitted Liens), 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 that
secures the Notes, the Note Guarantees and any other Obligations on a
first-priority basis that is equal and ratable with any other
first-priority Mortgages on such real property, subject to
49
the terms of the Collateral Sharing Agreement if the Discharge of Credit
Agreement Obligations has not occurred;
(b) an opinion of local counsel reasonably acceptable to the
Initial Purchasers, in the case of Mortgaged Property referred to in
clause (a) of the definition of Mortgaged Property, and the Trustee;
(c) a fully-paid title insurance policy with no exceptions
other than (i) Permitted Liens, (ii) the Lien on such property securing
Credit Agreement Obligations and (iii) other changes reasonably
acceptable to the Initial Purchasers, in the case of Mortgaged Property
referred to in clause (a) of the definition of Mortgaged Property, and
the Trustee;
(d) with respect to Mortgaged Property referred to in clause
(b) of the definition of Mortgaged Property, 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 Trustee, in the facts
depicted in the survey; and
(e) such other related deliveries and deliverables as the
Trustee and, in the case of Mortgaged Property referred to in clause
(a) of the definition of Mortgaged Property, 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.
Any such Lien (including any Mortgage) granted in favor of the
Holders shall be subject to (i) if a Lien also is granted in favor of the
holders of Credit Agreement Obligations, the Collateral Sharing Agreement and
(ii) if a Lien also is granted in favor of the Senior Secured Notes due 2008,
the terms of the Intercreditor Agreement. In all other cases, the Issuers, such
Subsidiary, the Trustee and the agent for the holders of any other obligations
secured by a Lien on such property shall enter into a customary collateral
sharing or intercreditor agreement setting forth the respective rights of the
Holders and the holders of such other obligations.
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
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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
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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); 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.
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(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, any
Security Document or the Collateral Sharing Agreement (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 $25.0 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:
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(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;
(iv) makes a general assignment for the benefit of its
creditors; or
(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 $25.0 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.
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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.
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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.
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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,
57
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
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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.
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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 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, 2004, 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;
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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 they assume 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
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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.
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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
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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 have 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
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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 either of them as provided in this
Article 8 which, 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), 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 8.
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.
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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, the Collateral Sharing Agreement 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, subject to the provisions of this Indenture;
(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;
(ix) if necessary, in connection with any addition or release
of Collateral permitted under the terms of this Indenture or the
Security Documents; or
(x) prior to the Discharge of Credit Agreement Obligations, to
give effect to any amendment, waiver or consent in respect of any
Security Document or the Collateral Sharing Agreement that does not
materially affect the rights of the Holders.
The Issuers shall also be entitled to 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 the Collateral Sharing Agreement, any Security
Document or Note Guarantee that otherwise would require the consent of the
Holders of a majority in principal amount of the Notes then outstanding, the
Issuers may mail a written notice of their request to the Trustee and the
Holders, specifying the amendment,
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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; provided, however, that if
such amendment, waiver or consent is requested prior to the Discharge of Credit
Agreement Obligations, such amendment, waiver or consent shall not be
inconsistent with the terms of the Collateral Sharing Agreement. 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 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, the Collateral Sharing Agreement 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.
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The consent of the Holders under this Section 9.02 shall not
be necessary to approve the particular form of any proposed amendment. 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
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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 and
the Guarantors 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 define the terms of the Liens that secure the
Obligations and provide that the Liens granted thereunder secure the Obligations
on a first-priority basis equally and ratably with all Credit Agreement
Obligations, subject to the terms of the Collateral Sharing Agreement. Each
Holder, by its acceptance of a Note, consents and agrees to all of the terms of
the Security Documents and the Collateral Sharing Agreement (including the
provisions providing for the exercise of remedies and release of Collateral) as
the same may be in effect or may be amended from time to time in accordance with
their terms, and authorizes and directs the Trustee to enter into the Security
Documents and the Collateral Sharing Agreement 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 the Collateral Sharing Agreement, 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 the Liens upon 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 Obligations 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 first-priority Lien on all the Collateral, in favor of the
Collateral Agent for the ratable benefit of the Holders, after the Discharge of
Credit Agreement Obligations, and if the Discharge of Credit Agreement
Obligations has not occurred, for the ratable benefit of the Secured Parties (as
defined in the Collateral Sharing
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Agreement), equal in priority (subject to Permitted Liens) to any and all Liens
at any time granted upon the Collateral to secure Credit Agreement Obligations
or any other first-priority Liens. The Trustee and the Issuers hereby
acknowledge and agree that the Collateral Agent holds the Collateral for the
ratable benefit of the Holders and the Trustee and the other Secured Parties (as
defined in the Collateral Sharing Agreement) pursuant to the terms of the
Security Documents and subject to the terms of the Collateral Sharing Agreement.
SECTION 10.02. Recording and Opinions. (a) The Issuers will
furnish to the Trustee on May 15 in each year beginning with May 15, 2004, 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 Liens on 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 Trustee hereunder and the rights of the Holders, the Trustee and
the Collateral Agent under the Security Documents and the Collateral
Sharing Agreement with respect to the Liens on 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 Collateral Sharing 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) (A) if the aggregate principal amount of all Credit
Agreement Obligations outstanding, after giving effect to such release
and any transactions related thereto, is equal to or exceeds the
aggregate principal amount of the Notes then outstanding, if all other
Liens on that asset securing Credit Agreement Obligations (including
all commitments thereunder) then secured by that asset are released,
provided that the Senior Secured Notes due 2008 are not secured by a
Lien on that asset; or (B) if the aggregate
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principal amount of all Credit Agreement Obligations then outstanding
is less than the aggregate principal amount of Notes then outstanding,
if all other Liens on that asset securing Credit Agreement Obligations
(including all commitments thereunder) then secured by that asset are
released, provided that (1) the release is not made as direct or
indirect consideration for any prior, concurrent or contemplated
repayment, prepayment, refinancing or reduction in commitments under
the Credit Agreement Obligations and (2) the Senior Secured Notes due
2008 are not secured by a Lien on that asset;
(ii) if such asset is sold, transferred, leased or otherwise
disposed of in a transaction that is permitted or not prohibited by
(a) the "asset sale" covenant of the Credit Agreement and (b) Section
4.06;
(iii) 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;
(iv) if the Issuers provide substitute collateral with at
least an equivalent fair value, as determined in good faith by the
Board of Directors;
(v) in respect of assets subject to a permitted purchase money
lien;
(vi) 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 (in each
case, in accordance with the terms of this Indenture and the Security
Documents), such Subsidiary's assets will also be released;
(vii) 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
(viii) pursuant to an amendment, waiver or supplement in
accordance with Article 9 hereof.
Upon receipt of such Officers' Certificate, the Trustee shall,
if at such time it is the Collateral Agent, or otherwise shall direct the
Collateral Agent, to 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, the Security
Documents and the Collateral Sharing Agreement.
(b) Except as otherwise provided in the Collateral Sharing
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
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release of Collateral pursuant to the provisions of the Security Documents will
be effective as against the Holders, except as otherwise provided in the
Collateral Sharing 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, the Collateral Sharing Agreement 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, the Collateral Sharing
Agreement 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 and the Collateral Sharing Agreement:
(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 and the Collateral Sharing Agreement.
Subject to the provisions of Section 7.01 and 7.02 hereof and the Collateral
Sharing Agreement, the Trustee may, in its sole discretion and without the
consent of the Holders, take, on behalf of the Holders, or 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 the
Collateral Sharing Agreement; and
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(b) collect and receive any and all amounts payable in respect
of the Obligations of the Issuers and the Guarantors hereunder.
Subject to Section 3 of the Collateral Sharing 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 and Distribution of
Funds by the Trustee Under the Security Documents and the Collateral Sharing
Agreement. The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Security Documents and the Collateral Sharing
Agreement, 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 securing the Obligations
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 Trustee, if it is the
Collateral Agent, shall, or, if it is not the Collateral Agent, shall request
the Collateral Agent to, 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. Trustee Serving as Collateral Agent;
Amendments or Supplements to, or Replacements of, the Security Documents and the
Collateral Agency Agreement. (a) If the Trustee shall become the Collateral
Agent, it 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 or the Collateral Sharing Agreement, neither the Trustee 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 Trustee
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers, and neither the Trustee 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.
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(b) The Trustee, is authorized and directed to (i) if the
Trustee shall become the Collateral Agent, enter into the Security Documents,
(ii) enter into the Collateral Sharing Agreement, (iii) bind the Holders on the
terms as set forth in the Security Documents and the Collateral Sharing
Agreement and (iv) perform and observe its obligations under the Security
Documents and the Collateral Sharing Agreement.
(c) If at any time following the Discharge of Credit Agreement
Obligations any Issuer or any Guarantor (i) incurs Indebtedness under any Credit
Facility pursuant to Section 4.03(b)(i) and (ii) such Indebtedness constitutes
Credit Agreement Obligations, the Issuers shall deliver to the Trustee an
Officers' Certificate so stating and requesting the Trustee to enter into one or
more amendments or supplements to, or replacements of, the Security Documents,
as applicable, and the Collateral Sharing Agreement establishing and setting
forth the respective rights of the holders of such Credit Agreement Obligations
and the Holders in respect of their shared first priority Lien on the
Collateral. Any such amendment, supplement or replacement of the Collateral
Sharing Agreement shall include substantially the same terms as are set forth in
the Collateral Sharing Agreement. The Trustee shall (and is hereby authorized
and directed to) enter into such amendments or supplements to, or replacements
of, the Collateral Sharing Agreement, bind the Holders on the terms set forth
therein, and perform and observe its obligations thereunder.
SECTION 10.10. Designations. For purposes of the provisions
hereof and the Collateral Sharing Agreement requiring the Issuers to designate
Indebtedness for the purposes of the term "Credit Agreement Obligations",
"First-Lien Credit Facilities" or any other such designations hereunder or any
such similar designations under the Collateral Sharing 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 and the Collateral Agent. For all purposes hereof and the Collateral
Sharing Agreement, the Issuers hereby designate the Credit Facilities provided
pursuant to the Credit Agreement as a "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.
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(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
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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 may be released without any action required on the part of the Trustee
or any Holder 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, a Note Guarantee may be released
under any one of the following circumstances:
(a) (i) if the aggregate principal amount of all Credit
Agreement Obligations outstanding, after giving effect to such release and any
transactions related thereto, is equal to or
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exceeds the aggregate principal amount of the Notes then outstanding, the
Collateral Agent releases the guarantee of the Credit Agreement Obligations made
by such Guarantor, provided that such Guarantor does not remain a guarantor of
the Senior Secured Notes due 2008 or the Senior Subordinated Notes; or (ii) if
the aggregate principal amount of Credit Agreement Obligations outstanding is
less than the aggregate principal amount of the Notes then outstanding, the
Collateral Agent releases the guarantee of Credit Agreement Obligations made by
such Guarantor; provided that (A) the release of the guarantee is not made as
direct or indirect consideration for any prior, concurrent or contemplated
repayment, prepayment, refinancing or reduction in commitments under the Credit
Agreement Obligations and (B) such Guarantor does not remain a guarantor of the
Senior Secured Notes due 2008 or the Senior Subordinated Notes;
(b) (i) if 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 any of the Issuers or Domestic
Subsidiaries or (ii) if such Guarantor ceases to be a Restricted
Subsidiary, and the Issuers otherwise comply, to the extent applicable,
with Sections 4.06 and 5.01;
(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 Note Guarantee.
Any Guarantor not released from its obligations under its Note
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,
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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
78
with a copy to:
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: 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.
79
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) 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
80
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, crossreference 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.
81
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 Xxxxxxx Xxxxx Barney Inc., Credit
Suisse First Boston LLC, X.X. Xxxxxx Securities Inc. and Xxxxxx Xxxxxxx & Co.
Incorporated.
"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
February 26, 2003, 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 March 3, 2003, 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.
3
1.2 Other Definitions
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
4
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.
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 $200,000,000, (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
5
(2) in the case of Transfer Restricted Notes, are accompanied
by the following additional information and documents, as applicable:
(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.
6
(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 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
7
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 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
8
UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted 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.
9
(vii) Any Additional Notes sold in a registered offering shall
not be required to bear the Restricted Notes Legend.
(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
10
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 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 of this Appendix A 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 of this
Appendix A 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, notify the Trustee in writing that they elect 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) above, bear the Restricted Notes Legend.
(c) Subject to the provisions of Section 2.4(b) above, 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.
11
(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]
[Definitive Notes Legend]
FOR PURPOSES OF SECTIONS 1273 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT. FOR
PURPOSES OF SECTION 1273 OF THE CODE, THE ISSUE PRICE IS $954.67 AND THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT IS $45.33, IN EACH CASE PER $1,000 PRINCIPAL AMOUNT
AT MATURITY OF THIS SECURITY. THE ISSUE DATE OF THIS SECURITY IS MARCH 3, 2003.
FOR PURPOSES OF SECTION 1272 OF THE CODE, THE YIELD TO MATURITY (COMPOUNDED
SEMI-ANNUALLY) IS 13.0% PER ANNUM.
[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
2
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 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 2010
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 March 15, 2010.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
------------------
(1) Use the Schedule of Increases and Decreases language if Note is in Global
Form.
4
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".
5
[FORM OF REVERSE SIDE OF INITIAL NOTE AND PRIVATE EXCHANGE NOTE]
12% Senior Secured Note due 2010
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.
The Issuers shall pay interest semiannually on March 15 and September 15 of each
year, commencing on September 15, 2003. 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 March 3, 2003 until the
principal hereof is due. Interest shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
(b) Additional Interest. The Holder of this Note is entitled
to the benefits of a Registration Rights Agreement, dated as of March 3, 2003,
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
120 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
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 Notes 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
6
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 by a person other than a
broker-dealer for a freely transferable Exchange Note in the Exchange Offer,
(ii) each Initial Note following the exchange by a broker-dealer in an Exchange
Offer until the date on which such Exchange Note is sold to a purchaser who
receives from such broker-dealer on or prior to the date of such sale a copy of
the prospectus contained in the Exchange Offer Registration Statement, (iii)
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 (iv) 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 March 1 or September 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 and interest,
including Additional Interest, if any, 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 and 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, including
Additional Interest, if any) 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).
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.
7
4. Indenture
The Issuers issued the Notes under an Indenture dated as of
March 3, 2003 (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 secured basis
pursuant to the terms of the Indenture.
The Notes, the Note Guarantees and all other Obligations of
the Issuers and the Guarantors are secured on a first-priority basis by the
Liens created by the Security Documents pursuant to, and subject to the terms
of, the Indenture and the Collateral Sharing Agreement, and such Liens are equal
and ratable with any and all Liens at any time granted to secure Credit
Agreement Obligations.
5. Optional Redemption
Except as provided in paragraph 5 hereof, the Notes shall not
be redeemable at the option of the Issuers prior to March 15, 2007. 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
8
date to receive interest due on the relevant interest payment date), if redeemed
during the 12-month period commencing on March 15 of the years set forth below:
REDEMPTION
YEAR PRICE
---- --------
2007 106.0%
2008 103.0%
2009 and thereafter 100.0%
In addition, on or prior to March 15, 2006, 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% 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 March 15, 2007, 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
(i) the present value at such time of (A) the
redemption price of such Notes at March 15, 2007,
plus (B) all accrued and unpaid interest required to
be paid on such Notes from the date of redemption
through March 15, 2007, computed using a discount
rate equal to the Treasury Rate plus 0.5% per annum,
over
9
(ii) the principal amount of such Notes.
The Trustee shall have no responsibility with respect to the
determination of the Applicable Premium.
"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 March 15, 2007; provided, however,
that if the period from the Change of Control Redemption Date to March 15, 2007
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
March 15, 2007 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.
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
10
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, the Collateral Sharing Agreement
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 of the Indenture; (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
11
(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; (ix) if
necessary, in connection with any addition or release of Collateral permitted
under the terms of the Indenture or the Security Documents; or (x) prior to the
Discharge of Credit Agreement Obligations, to give effect to any amendment,
waiver or consent in respect of any Security Document or the Collateral Sharing
Agreement that does not materially affect the rights of the Holders.
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.
15. Trustee Dealings with the Issuers
12
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.
13
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).
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.
14
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.
15
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
16
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 Guarantee
by a participant in a
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
17
[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:
Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Date of Principal amount of this Principal Amount of this Global Note following such signatory of Trustee or
Exchange Global Note Global Note decrease or increase Notes 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]
[Definitive Notes Legend]
FOR PURPOSES OF SECTIONS 1273 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT. FOR
PURPOSES OF SECTION 1273 OF THE CODE, THE ISSUE PRICE IS $954.67 AND THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT IS $45.33, IN EACH CASE PER $1,000 PRINCIPAL AMOUNT
AT MATURITY OF THIS SECURITY. THE ISSUE DATE OF THIS SECURITY IS MARCH 3, 2003.
FOR PURPOSES OF SECTION 1272 OF THE CODE, THE YIELD TO MATURITY (COMPOUNDED
SEMI-ANNUALLY) IS 13.0% PER ANNUM.
[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 2010
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 March 15, 2010.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 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 2010
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.
The Issuers shall pay interest semiannually on March 15 and September 15 of each
year, commencing on September 15, 2003. 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 March 3, 2003 until the
principal hereof is due. Interest shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
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 March 1 or September 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 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 and interest) 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).
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.
5
4. Indenture
The Issuers issued the Notes under an Indenture dated as of
March 3, 2003 (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 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 secured basis
pursuant to the terms of the Indenture.
The Notes, the Note Guarantees and all other Obligations of
the Issuers and the Guarantors are secured on a first-priority basis by the
Liens created by the Security Documents pursuant to, and subject to the terms
of, the Indenture and the Collateral Sharing Agreement, and such Liens are equal
and ratable with any and all Liens at any time granted to secure Credit
Agreement Obligations.
5. Optional Redemption
Except as provided in paragraph 5 hereof, the Notes shall not
be redeemable at the option of the Issuers prior to March 15, 2007. 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
6
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 March 15 of the years set forth below:
REDEMPTION
YEAR PRICE
---- -----
2007 106.0%
2008 103.0%
2009 and thereafter 100.0%
In addition, on or prior to March 15, 2006, 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% 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 March 15, 2007, 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
(i) the present value at such time of (A) the
redemption price of such Notes at March 15, 2007,
plus (B) all accrued and unpaid interest required to
be paid on such Notes from the date of redemption
through March 15,
7
2007, computed using a discount rate equal to the
Treasury Rate plus 0.5% per annum, over
(ii) the principal amount of such Notes.
The Trustee shall have no responsibility with respect to the
determination of the Applicable Premium.
"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 March 15, 2007; provided, however,
that if the period from the Change of Control Redemption Date to March 15, 2007
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
March 15, 2007 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.
8
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, the Collateral Sharing Agreement
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
9
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; (ix) if
necessary, in connection with any addition or release of Collateral permitted
under the terms of the Indenture or the Security Documents; or (x) prior to the
Discharge of Credit Agreement Obligations, to give effect to any amendment,
waiver or consent in respect of any Security Document or the Collateral Sharing
Agreement that does not materially affect the rights of the Holders.
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,
10
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 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.
11
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).
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:
Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Date of Principal amount of this Principal Amount of this Global Note following such signatory of Trustee or
Exchange Global Note Global Note decrease or increase Notes 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 March 3, 2003,
providing for the issuance of an unlimited aggregate principal amount of 12%
Senior Secured Notes due 2010 (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:
