EXECUTION COPY
EXHIBIT 4.1
SCG HOLDING CORPORATION
SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC
12% Senior Subordinated Notes due 2009
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INDENTURE
Dated as of August 4, 1999
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State Street Bank and Trust Company,
as Trustee
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TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.................................................... 1
Section 1.02. Other Definitions..............................................21
Section 1.03. Incorporation by Reference of Trust Indenture Act..............22
Section 1.04. Rules of Construction..........................................22
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating................................................23
Section 2.02. Execution and Authentication...................................23
Section 2.03. Registrar and Paying Agent.....................................24
Section 2.04. Paying Agent to Hold Money in Trust............................25
Section 2.05. Holder Lists...................................................25
Section 2.06. Transfer and Exchange..........................................25
Section 2.07. Replacement Notes..............................................26
Section 2.08. Outstanding Notes..............................................26
Section 2.09. Temporary Notes................................................27
Section 2.10. Cancellation...................................................27
Section 2.11. Defaulted Interest.............................................27
Section 2.12. XXXXX and "ISIN" Numbers.......................................27
Section 2.13. Computation of Interest........................................28
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee.............................................28
Section 3.02. Selection of Notes To Be Redeemed..............................28
Section 3.03. Notice of Redemption...........................................28
Section 3.04. Effect of Notice of Redemption.................................29
Section 3.05. Deposit of Redemption Price....................................29
Section 3.06. Notes Redeemed in Part.........................................30
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes...............................................30
Section 4.02. Commission Reports.............................................30
Section 4.03. Limitation on Indebtedness.....................................30
Section 4.04. Limitation on Restricted Payments..............................34
Section 4.05. Limitation on Restrictions on Distributions from Restricted
Subsidiaries...................................................38
Section 4.06. Limitation on Sales of Assets and Subsidiary Stock.............40
Section 4.07. Limitation on Transactions with Affiliates.....................43
Section 4.08. Change of Control..............................................44
Section 4.09. Compliance Certificate.........................................46
Section 4.10. Further Instruments and Acts...................................46
Section 4.11. Future Note Guarantors.........................................46
Section 4.12. Limitation on Lines of Business................................46
Section 4.13. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries........................................46
ARTICLE 5
SUCCESSOR COMPANY
Section 5.01. When Company May Merge or Transfer Assets......................47
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default..............................................49
Section 6.02. Acceleration...................................................51
Section 6.03. Other Remedies.................................................51
Section 6.04. Waiver of Past Defaults........................................52
Section 6.05. Control by Majority............................................52
Section 6.06. Limitation on Suits............................................52
Section 6.07. Rights of Holders to Receive Payment...........................53
Section 6.08. Collection Suit by Trustee.....................................53
Section 6.09. Trustee May File Proofs of Claim...............................53
Section 6.10. Priorities.....................................................53
Section 6.11. Undertaking for Costs..........................................54
Section 6.12. Waiver of Stay or Extension Laws...............................54
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee..............................................54
Section 7.02. Rights of Trustee..............................................55
Section 7.03. Individual Rights of Trustee...................................56
Section 7.04. Trustee's Disclaimer...........................................56
Section 7.05. Notice of Defaults.............................................57
Section 7.06. Reports by Trustee to Holders..................................57
Section 7.07. Compensation and Indemnity.....................................57
Section 7.08. Replacement of Trustee.........................................58
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Section 7.09. Successor Trustee by Merger....................................59
Section 7.10. Eligibility; Disqualification..................................59
Section 7.11. Preferential Collection of Claims Against the Issuers..........59
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.01. Discharge of Liability on Notes;Defeasance.....................59
Section 8.02. Conditions to Defeasance.......................................61
Section 8.03. Application of Trust Money.....................................62
Section 8.04. Repayment to the Issuers.......................................62
Section 8.05. Indemnity for Government Obligations...........................62
Section 8.06. Reinstatement..................................................62
ARTICLE 9
AMENDMENTS
Section 9.01. Without Consent of Holders.....................................63
Section 9.02. With Consent of Holders........................................64
Section 9.03. Compliance with Trust Indenture Act............................65
Section 9.04. Revocation and Effect of Consents and Waivers..................65
Section 9.05. Notation on or Exchange of Notes...............................65
Section 9.06. Trustee to Sign Amendments.....................................66
Section 9.07. Payment for Consent............................................66
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement To Subordinate.......................................66
Section 10.02. Liquidation, Dissolution, Bankruptcy...........................66
Section 10.03. Default on Senior Indebtedness.................................67
Section 10.04. Acceleration of Payment of Notes...............................68
Section 10.05. When Distribution Must Be Paid Over............................68
Section 10.06. Subrogation....................................................68
Section 10.07. Relative Rights................................................68
Section 10.08. Subordination May Not Be Impaired by Company...................69
Section 10.09. Rights of Trustee and Paying Agent.............................69
Section 10.10. Distribution or Notice to Representative.......................69
Section 10.11. Article 10 Not To Prevent Events of Default or Limit Right To
Accelerate.....................................................69
Section 10.12. Trust Monies Not Subordinated..................................69
Section 10.13. Trustee Entitled To Rely.......................................70
Section 10.14. Trustee To Effectuate Subordination............................70
Section 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness.......70
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Section 10.16. Reliance by Holders of Senior Indebtedness on Subordination
Provisions.....................................................70
ARTICLE 11
NOTE GUARANTEES
Section 11.01. Note Guarantees................................................71
Section 11.02. Limitation on Liability........................................73
Section 11.03. Successors and Assigns.........................................74
Section 11.04. No Waiver......................................................74
Section 11.05. Modification...................................................74
Section 11.06. Execution of Supplemental Indenture for Future Note
Guarantors.....................................................74
Section 11.07. Non-Impairment.................................................74
ARTICLE 12
SUBORDINATION OF THE NOTE GUARANTEES
Section 12.01. Agreement To Subordinate.......................................75
Section 12.02. Liquidation, Dissolution, Bankruptcy...........................75
Section 12.03. Default on Designated Senior Indebtedness of a Note
Guarantor....................................................75
Section 12.04. Demand for Payment.............................................76
Section 12.05. When Distribution Must Be Paid Over............................77
Section 12.06. Subrogation....................................................77
Section 12.07. Relative Rights................................................77
Section 12.08. Subordination May Not Be Impaired by a Note Guarantor..........77
Section 12.09. Rights of Trustee and Paying Agent.............................77
Section 12.10. Distribution or Notice to Representative.......................78
Section 12.11. Article12 Not To Prevent Events of Default or Limit Right To
Accelerate.....................................................78
Section 12.12. Trustee Entitled To Rely.......................................78
Section 12.13. Trustee To Effectuate Subordination............................79
Section 12.14. Trustee Not Fiduciary for Holders of Senior Indebtedness of a
Note Guarantor.................................................79
Section 12.15. Reliance by Holders of Senior Indebtedness of a Note Guarantor
on Subordination Provisions....................................79
Section 12.16. Defeasance.....................................................79
ARTICLE 13
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls...................................79
Section 13.02. Notices........................................................79
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Section 13.03. Communication by Holders with Other Holders....................80
Section 13.04. Certificate and Opinion as to Conditions Precedent.............80
Section 13.05. Statements Required in Certificate or Opinion..................80
Section 13.06. When Notes Disregarded.........................................81
Section 13.07. Rules by Trustee, Paying Agent and Registrar...................81
Section 13.08. Legal Holidays.................................................81
Section 13.09. GOVERNING LAW..................................................81
Section 13.10. No Recourse Against Others.....................................82
Section 13.11. Successors.....................................................82
Section 13.12. Multiple Originals.............................................82
Section 13.13. Table of Contents; Headings....................................82
Appendix A - Provisions Relating to Initial Notes, Private Exchange Notes
and Exchange Notes
Exhibit A - Form of Initial Note
Exhibit B - Form of Exchange Note
Exhibit C - Form of Supplemental Indenture
Exhibit D - Form of Transferee Letter of Representation
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INDENTURE dated as of August 4, 1999, among SCG
HOLDING 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, SCG PUERTO RICO CORP. and
SCG INTERNATIONAL DEVELOPMENT LLC, as guarantors
(collectively, the "Note Guarantors"), and STATE STREET
BANK AND TRUST COMPANY, a Massachusetts trust company,
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 Subordinated Notes due 2009 issued on the date hereof (the "Initial
Notes"), (b) if and when issued as provided in the Registration Agreement (as
defined in Appendix A hereto (the "Appendix")), the Issuers' 12% Senior
Subordinated Notes due 2009 (the "Exchange Notes") issued in the Registered
Exchange Offer in exchange for any Initial Notes and (c) if and when issued as
provided in the Registration 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
the Private Exchange. Except as otherwise provided herein, the Notes will be
limited to $400,000,000 in aggregate principal amount outstanding.
ARTICLE 1
Definitions And Incorporation By Reference
SECTION 1.01. Definitions.
"Acquired Debt" means, with respect to any specified Person, (a)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including Indebtedness Incurred in connection with, or in contemplation of, such
other Person merging with or into or becoming a Restricted Subsidiary of such
specified Person) and (b) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Additional Assets" means (a) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Permitted Business; (b) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or another Restricted Subsidiary; or (c) Capital Stock
constituting a minority interest in any Person that at such time is a Restricted
Subsidiary; provided, however, that any such Restricted Subsidiary described in
clauses (b) or (c) above is primarily engaged in a Permitted Business.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of shares representing more than 10% of the total voting power
of the Voting Stock (on a fully diluted basis) of the Company or of rights or
warrants to purchase such Voting Stock (whether or not currently exercisable)
and any Person who would be an Affiliate of any such beneficial owner pursuant
to the first sentence hereof.
"Asset Disposition" means any sale, lease (other than an operating
lease), transfer or other disposition (or series of related sales, leases,
transfers or dispositions) by the Company or any Restricted Subsidiary,
including any disposition by means of a merger, consolidation or similar
transaction (each referred to for the purposes of this definition as a
"disposition"), of (a) any shares of Capital Stock of a Restricted Subsidiary
(other than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Subsidiary) that have
a Fair Market Value in excess of $5 million, (b) all or substantially all the
assets of any division or line of business of the Company or any Restricted
Subsidiary or (c) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such Restricted
Subsidiary (other than, in the case of (a), (b) and (c) above, (i) a disposition
by the Company to a Restricted Subsidiary or by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary, (ii) an issuance of Capital Stock
by a Subsidiary to the Company or to a Restricted Subsidiary, (iii) for purposes
of Section 4.06 only, a disposition that constitutes a Restricted Payment
permitted by Section 4.04, (iv) a disposition of assets with a Fair Market Value
of less than $5 million, (v) a Sale/Leaseback Transaction with respect to any
assets within 90 days of the acquisition of such assets, (vi) a disposition of
Temporary Cash Investments, the proceeds of which are used within five business
days to make another Permitted Investment, (vii) a disposition of obsolete,
uneconomical, negligible, worn out or surplus property or equipment in the
ordinary course of business and the periodic clearance of aged inventory, (viii)
any exchange of like-kind property of the type described in Section 1031 of the
Code for use in a Permitted Business, (ix) the sale or disposition of any assets
or property received as a result of a foreclosure by the Company or any of its
Restricted Subsidiaries of any secured Investment or any other transfer of title
with respect to any secured Investment in default, (x) the licensing of
intellectual property in the ordinary course of business or in accordance with
industry practice, (xi) the sale or discount, in each case without recourse, of
accounts receivable arising in the ordinary course of business, but only in
connection with the compromise or collection thereof and (xii) a sale of
accounts receivable and related assets pursuant to a Receivables Facility.
Notwithstanding the foregoing, the sale, lease, conveyance or other disposition
of all or substantially all of the assets of the Company and its Subsidiaries
taken as a whole will be governed by the provisions of Sections 4.08 and 5.01
and not by the provisions of Section 4.06.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate implicit in such
2
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.
"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.
"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.
"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
3
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 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 the governing body of SCI LLC,
as the case may be, or whose nomination for election by the
shareholders of the Company or the members of SCI LLC, as the case
may be, was approved by a vote of a majority of the directors of the
Company or a majority of the members of the governing body of SCI
LLC, as the case may be, then still in office who were either
directors or members of such governing body, as the case may be, at
the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority of the board of directors of the Company or a
majority of the members of the governing body of SCI LLC, as the
case may be, then in office;
(c) the adoption of a plan relating to the liquidation or
dissolution of the Company or SCI LLC (other than a plan with
respect to SCI LLC adopted solely for the purpose of reorganizing
SCI LLC as a corporation); or
(d) the merger or consolidation of the Company or SCI LLC with
or into another Person or the merger of another Person with or into
the Company or SCI LLC, or the sale of all or substantially all the
assets of the Company or SCI LLC to another Person (other than a
Person that is controlled by the Permitted Holders), and, in the
case of any such merger or consolidation, the securities of the
Company or SCI LLC that are outstanding immediately prior to such
transaction and which represent 100% of the aggregate voting power
of the Voting Stock of the Company or SCI LLC are changed into or
exchanged for cash, securities or property, unless pursuant to such
transaction such securities are changed into or exchanged for, in
addition to any other consideration, securities of the surviving
Person or transferee that represent immediately after such
transaction, at least a majority of the aggregate voting power of
the Voting Stock of the surviving Person or transferee or a Person
controlling such surviving Person or transferee.
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"Closing Date" means the date of this Indenture.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (a) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters for which internal financial statements
are available prior to the date of such determination to (b) Consolidated
Interest Expense for such four fiscal quarters; provided, however, that (i) if
the Company or any Restricted Subsidiary has Incurred any Indebtedness since the
beginning of such period that remains outstanding on such date of determination
or if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving effect on a
pro forma basis to such Indebtedness as if such Indebtedness had been Incurred
on the first day of such period (in each case other than Indebtedness Incurred
under any revolving credit facility, in which case interest expense shall be
computed based upon the average daily balance of such Indebtedness during the
applicable period) and the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of such period,
(ii) if the Company or any Restricted Subsidiary has repaid, repurchased,
defeased or otherwise discharged any Indebtedness since the beginning of such
period or if any Indebtedness is to be repaid, repurchased, defeased or
otherwise discharged (in each case if such Indebtedness has been permanently
repaid and has not been replaced, other than Indebtedness Incurred under any
revolving credit facility unless such Indebtedness is permanently reduced, in
which case interest expense shall be computed based upon the average daily
balance of such Indebtedness during the applicable period) on the date of the
transaction giving rise to the need to calculate the Consolidated Coverage
Ratio, EBITDA and Consolidated Interest Expense for such period shall be
calculated on a pro forma basis as if such discharge had occurred on the first
day of such period and as if the Company or such Restricted Subsidiary has not
earned any interest income actually earned during such period in respect of cash
or Temporary Cash Investments used to repay, repurchase, defease or otherwise
discharge such Indebtedness, (iii) if since the beginning of such period the
Company or any Restricted Subsidiary shall have made any Asset Disposition,
EBITDA for such period shall be reduced by an amount equal to EBITDA (if
positive) directly attributable to the assets that are the subject of such Asset
Disposition for such period or increased by an amount equal to EBITDA (if
negative) directly attributable thereto for such period and Consolidated
Interest Expense for such period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of the
Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period (or, if
the Capital Stock of any Restricted Subsidiary is sold, the
5
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale), (iv) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an Investment in
any Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary)
or an acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit of a business, EBITDA
and Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any Indebtedness)
as if such Investment or acquisition occurred on the first day of such period
and (v) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company or any
Restricted Subsidiary since the beginning of such period) shall have made any
Asset Disposition or any Investment or acquisition of assets that would have
required an adjustment pursuant to clause (iii) or (iv) above if made by the
Company or a Restricted Subsidiary during such period, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro forma
effect thereto as if such Asset Disposition, Investment or acquisition of assets
occurred on the first day of such period. For purposes of this definition,
whenever pro forma effect is to be given to an acquisition of assets, the amount
of income or earnings relating thereto and the amount of Consolidated Interest
Expense associated with any Indebtedness Incurred in connection therewith, the
pro forma calculations shall be determined in good faith by a responsible
financial or accounting Officer of the Company. Any such pro forma calculations
shall reflect any pro forma expense and cost reductions attributable to such
acquisitions, to the extent such expense and cost reduction would be permitted
by the Commission to be reflected in pro forma financial statements included in
a registration statement filed with the Commission. If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the interest
expense on such Indebtedness shall be calculated as if the rate in effect on the
date of determination had been the applicable rate for the entire period (taking
into account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term as at the date of determination in
excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its Consolidated Restricted Subsidiaries,
plus, to the extent Incurred by the Company or its Restricted Subsidiaries in
such period but not included in such interest expense, without duplication
(a) interest expense attributable to Capitalized Lease Obligations and the
imputed interest with respect to Attributable Debt, (b) amortization of debt
discount, (c) amortization of debt issuance costs (other than any such costs
associated with the Bank Indebtedness, the Notes, the Exchange Notes, the
Junior Subordinated Note or otherwise associated with the Transactions), (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 Notes, the
Exchange Notes, the Junior Subordinated Note or otherwise
6
associated with the Transactions), (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 SCG Holding Preferred Stock, (j) interest Incurred in
connection with investments in discontinued operations and (k) the cash
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or
fees to any Person (other than the Company) in connection with Indebtedness
Incurred by such plan or trust. Notwithstanding anything to the contrary
contained herein, commissions, discounts, yield and other fees and charges
Incurred in connection with any transaction (including in connection with a
Receivables Facility) pursuant to which the Company or any Subsidiary of the
Company may sell, convey or otherwise transfer or grant a security interest
in any accounts receivable or related assets as contemplated by the
definition of "Receivables Facility" shall be included in Consolidated
Interest Expense.
"Consolidated Net Income" means, for any period, the net income of
the Company and its Consolidated Subsidiaries for such period determined in
accordance with GAAP; provided, however, that:
(a) any net income of any Person (other than the Company), if
such Person is not a Restricted Subsidiary, shall be excluded from
such Consolidated Net Income, except that (i) subject to the
limitations contained in clause (d) below, the Company's equity in
the net income of any such Person for such period shall be included
in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the
Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other
distribution made to a Restricted Subsidiary, to the limitations
contained in clause (c) below) and (ii) the Company's equity in a
net loss of any such Person for such period shall be included in
determining such Consolidated Net Income;
(b) any net income (or loss) of any Person acquired by the
Company or a Subsidiary in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded
from such Consolidated Net Income;
(c) any net income (or loss) of any Restricted Subsidiary
to the extent that the declaration of dividends or similar
distributions by such Restricted Subsidiary of that income is not
at the date of determination permitted without any prior
governmental approval (that has not been obtained) or is,
directly or indirectly, restricted by operation of the terms of
its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to
such Restricted Subsidiary or its stockholders or other holders
of its equity, shall be excluded from such Consolidated Net
Income, except that (i) subject to the limitations contained in
clause (d) below, the Company's equity in the net income of any
such Restricted Subsidiary for such period shall be included in
such Consolidated
7
Net Income up to the aggregate amount of cash actually
distributed by such Restricted Subsidiary during such period to
the Company or another Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other
distribution made to another Restricted Subsidiary, to the
limitation contained in this clause) and (ii) the Company's
equity in a net loss of any such Restricted Subsidiary for such
period shall be included in determining such Consolidated Net
Income;
(d) any gain (or loss) realized upon the sale or other
disposition of any asset of the Company or its Consolidated
Subsidiaries (including pursuant to any Sale/Leaseback Transaction)
that is not sold or otherwise disposed of in the ordinary course of
business and any gain (or loss) realized upon the sale or other
disposition of any Capital Stock of any Person shall be excluded
from such Consolidated Net Income (without regard to abandonments or
reserves related thereto);
(e) any extraordinary gain or loss shall be excluded from such
Consolidated Net Income;
(f) the cumulative effect of a change in accounting principles
shall be excluded from such Consolidated Net Income;
(g) gains or losses due solely to fluctuations in currency
values and the related tax effects according to GAAP shall be
excluded from such Consolidated Net Income;
(h) only for the purposes of the definition of EBITDA,
one-time cash charges recorded in accordance with GAAP resulting
from any merger, recapitalization or acquisition transaction shall
be excluded from such Consolidated Net Income; and
(i) the amortization of any premiums, fees or expenses
incurred in connection with the Transactions or any amounts required
or permitted by Accounting Principles Board Opinions Nos. 16
(including noncash write-ups and noncash charges relating to
inventory and fixed assets, in each case arising in connection with
the Transactions) and 17 (including noncash charges relating to
intangibles and goodwill arising in connection with the
Recapitalization), in each case in connection with the Transactions,
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.
8
"Credit Agreement" means the credit agreement dated as of August 4,
1999, among SCI LLC, the Company and the Subsidiaries of the Company named
therein, the lenders named therein and The Chase Manhattan Bank, as
administrative agent, collateral agent and syndication agent, DLJ Capital
Funding, Inc., as co-documentation agent, Xxxxxx Commercial Paper Inc., as
co-documentation agent, and Credit Lyonnais New York Branch, as co-documentation
agent, including any 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.
"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.
"Designated Senior Indebtedness" of the Company means (a) the Bank
Indebtedness and (b) any other Senior Indebtedness of the Company that, at the
date of determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are committed to
lend up to, at least $25 million and is specifically designated by the Company
in the instrument evidencing or governing such Senior Indebtedness as
"Designated Senior Indebtedness" for purposes of this Indenture. "Designated
Senior Indebtedness" of SCI LLC and of a Note Guarantor has a correlative
meaning.
"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
9
holders of such Capital Stock than the provisions of Sections 4.06 and 4.08,
(ii) a class of Capital Stock shall not be Disqualified Stock hereunder solely
as a result of any maturity or redemption that is conditioned upon, and subject
to, compliance with the Section 4.04 and (iii) Capital Stock issued to any plan
for the benefit of employees shall not constitute Disqualified Stock solely
because it may be required to be repurchased by the Company in order to satisfy
applicable statutory or regulatory obligations.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company
other than a Foreign Subsidiary.
"EBITDA" for any period means the Consolidated Net Income for such
period, plus, without duplication, the following to the extent deducted in
calculating such Consolidated Net Income: (a) provision for taxes based on
income or profits of the Company and its Consolidated Restricted Subsidiaries,
(b) Consolidated Interest Expense, (c) depreciation expense of the Company and
its Consolidated Restricted Subsidiaries; (d) amortization expense (including
amortization of goodwill and other intangibles) of the Company and its
Consolidated Restricted Subsidiaries (excluding amortization expense
attributable to a prepaid cash item that was paid in a prior period), (e) all
other noncash expenses or losses of the Company and its Consolidated Restricted
Subsidiaries for such period, 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 any offering of Capital Stock or Incurrence of Indebtedness permitted
to be Incurred under this Indenture; (g) Recapitalization Related Special
Charges of the Company and its Restricted Subsidiaries incurred on or prior to
December 31, 2001 and in the aggregate not exceeding $50 million; (h) noncash
dividends on SCG Holding 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.
"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
10
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.
"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. The term "Guarantor" shall mean any
Person Guaranteeing any Indebtedness.
"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 Subsidiary 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.
11
"Indebtedness" means, with respect to any Person on any date of
determination, without duplication, the following items if and to the extent
that any of them (other than items specified under clauses (c), (h), (i) and (j)
below) would appear as a liability or, in the case of clause (f) only, Preferred
Stock on the balance sheet of such Person, prepared in accordance with GAAP, on
such date:
(a) the principal amount of and premium (if any) in respect of
indebtedness of such Person for borrowed money;
(b) the principal amount of and premium (if any) in respect of
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(c) all obligations of such Person in respect of letters of
credit or other similar instruments (including reimbursement
obligations with respect thereto but excluding obligations in
respect of letters of credit issued in respect of Trade Payables);
(d) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services (except Trade
Payables), which purchase price is due more than twelve months after
the date of placing such property in service or taking delivery and
title thereto or the completion of such services;
(e) all Capitalized Lease Obligations and all Attributable
Debt of such Person;
(f) the amount of all obligations of such Person with respect
to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary of such Person, any
Preferred Stock (but excluding, in each case, any accrued
dividends);
(g) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, whether or not such Indebtedness is assumed by
such Person; provided, however, that the amount of Indebtedness of
such Person shall be the lesser of (i) the Fair Market Value of such
asset at such date of determination and (ii) the amount of such
Indebtedness of such other Persons;
(h) Hedging Obligations of such Person;
(i) all obligations of such Person in respect of a Receivables
Facility; and
(j) all obligations of the type referred to in clauses (a)
through (i) of other Persons and all dividends of other Persons for
the payment of which, in either case, such Person is responsible or
liable, directly or indirectly, as obligor, guarantor or otherwise,
including by means of any Guarantee.
12
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations described above, at such
date; provided, however, that the amount outstanding at any time of any
Indebtedness issued with original issue discount will be deemed to be the face
amount of such Indebtedness less the remaining unaccreted portion of the
original issue discount of such Indebtedness at such time, as determined in
accordance with GAAP.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"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.
"Junior Subordinated Note" means the junior subordinated note of SCI
LLC to be issued as part of the Transactions in the principal amount of $91
million, which will be subordinated to the Notes.
"Issue Date" means the date on which the Initial Notes are
originally issued.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
13
"liquidated damages" means any liquidated damages payable under a
Registration Agreement.
"Motorola" means Motorola, Inc., a Delaware corporation.
"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.
"Note Guarantor" means any Subsidiary that has issued a Note
Guarantee.
"Notes" means the Notes issued under this Indenture.
"Offering Memorandum" means the offering memorandum relating to the
issuance of the Notes dated July 28, 1999.
"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 Note Guarantor has a correlative
meaning.
14
"Officers' Certificate" means a certificate signed by two Officers
of each Person issuing such certification. 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 Note 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 consistent with prudent business practice and not exceeding $5 million
in the aggregate outstanding at any one time; (g) in stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments; (h) in any Person to the extent such Investment
represents the noncash portion of the consideration received for an Asset
Disposition that was made pursuant to and in compliance with Section 4.06 or a
transaction not constituting an Asset Disposition by reason of the $1 million
threshold contained in the definition thereof; (i) that constitutes a Hedging
Obligation or commodity hedging arrangement entered into for bona fide hedging
purposes of the Company in the ordinary course of business and otherwise in
accordance with this Indenture; (j) in securities of any trade creditor or
customer received in settlement of obligations or pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade creditor or customer; (k) acquired as a result of a foreclosure by the
Company or such Restricted Subsidiary with respect to any secured Investment or
other transfer of title with respect to any secured Investment in default; (l)
existing as of the Closing Date or an Investment consisting of any extension,
modification
15
or renewal of any Investment existing as of the Closing Date (excluding any such
extension, modification or renewal involving additional advances, contributions
or other investments of cash or property or other increases thereof unless it is
a result of the accrual or accretion of interest or original issue discount or
payment-in-kind pursuant to the terms, as of the Closing Date, of the original
Investment so extended, modified or renewed); (m) consisting of purchases and
acquisitions of inventory, supplies, materials and equipment or licenses or
leases of intellectual property, in any case, in the ordinary course of business
and otherwise in accordance with this Indenture; (n) in a trust, limited
liability company, special purpose entity or other similar entity in connection
with a Receivables Facility permitted under Section 4.03; provided that, in the
good faith determination of the Board of Directors, such Investment is necessary
or advisable to effect such Receivables Facility; (o) consisting of intercompany
Indebtedness permitted under Section 4.03; (p) the consideration for which
consists solely of shares of common stock of the Company; and (q) so long as no
Default shall have occurred and be continuing (or result therefrom), in any
Person engaged in a Permitted Business having an aggregate Fair Market Value
(measured on the date made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to this
clause (q) that are at the time outstanding (and measured on the date made and
without giving effect to subsequent changes in value), not to exceed $15
million.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) 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.
"Public Equity Offering" means an underwritten primary public
offering of common stock of the Company pursuant to an effective registration
statement under the Securities Act, other than public offerings with respect to
the Company's common stock registered on Form S-8.
"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
16
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.
"Recapitalization Related Special Charges" means separately
delineated costs on the income statement of the Company that are characterized
as non-recurring expenses and are associated with the Recapitalization of the
Company consisting of costs related to (a) branding and marketing, (b)
consulting and information technology, (c) recruiting and employee retention
bonuses and (d) facility or office relocations.
"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" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) any Indebtedness of the Company or any
Restricted Subsidiary (including Indebtedness of the Company that Refinances
Refinancing Indebtedness); provided, however, that (a) the Refinancing
Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the
Indebtedness being Refinanced, (b) the Refinancing Indebtedness has an Average
Life at the time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being refinanced, (c) such
Refinancing Indebtedness is Incurred in an aggregate principal amount (or if
issued with original issue discount, an aggregate issue price) that is equal to
or less than the aggregate principal amount (or if issued with original issue
discount, the aggregate accreted value) then outstanding of the Indebtedness
being Refinanced and (d) if the Indebtedness being refinanced is subordinated in
right of payment to the Notes, such Refinancing Indebtedness is subordinated in
right of payment to the Notes at least to the same extent as the Indebtedness
being Refinanced; provided further, however, that Refinancing Indebtedness shall
not include (i) Indebtedness of a Restricted Subsidiary that Refinances
Indebtedness of the Company or (ii) Indebtedness of the Company or a Restricted
Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.
"Related Business" means any business related, ancillary or
complementary to any of the businesses of the Company and the Restricted
Subsidiaries on the Closing Date.
"Representative" means the trustee, agent or representative (if any)
for an issue of Senior Indebtedness as identified to the Trustee pursuant to a
written notice from either of the Issuers or any Note Guarantor.
17
"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.
"SCG Holding Preferred Stock" means mandatorily redeemable preferred
stock of the Company issued in connection with the Transactions.
"SCI LLC" means Semiconductor Components Industries, LLC until a
successor replaces it and, thereafter, means the successor.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien. "Secured Indebtedness" of a Note Guarantor has a correlative meaning.
"Securities Act" means the Securities Act of 1933.
"Senior Indebtedness" of the Company, SCI LLC or any Note Guarantor,
as applicable, means the principal of, premium (if any) and accrued and unpaid
interest on (including interest accruing on or after the filing of any petition
in bankruptcy or for reorganization of the Company, SCI LLC or any Note
Guarantor, regardless of whether or not a claim for post-filing interest is
allowed in such proceedings) and fees and other amounts owing in respect of,
Bank Indebtedness and all other Indebtedness of the Company, SCI LLC or any Note
Guarantor, whether outstanding on the Closing Date or thereafter Incurred,
unless in the instrument creating or evidencing the same or pursuant to which
the same is outstanding it is provided that such obligations are subordinated in
right of payment to the Notes or such Note Guarantor's Note Guarantee; provided,
however , that Senior Indebtedness shall not include (a) any obligation of the
Company or SCI LLC to any Subsidiary of the Company or any obligation of such
Note Guarantor to the Company, SCI LLC or any other Subsidiary of the Company,
(b) any liability for Federal, state, local or other taxes owed or owing by the
Company, SCI LLC or such Note Guarantor, (c) any accounts payable or other
liability to trade creditors arising in the ordinary course of business
(including Guarantees thereof or instruments evidencing such liabilities), (d)
any Indebtedness or obligation of the Company, SCI LLC or such Note Guarantor
(and any accrued and unpaid interest in respect thereof) that by its terms is
subordinated or junior in right of payment to any other Indebtedness or
obligation of the Company, SCI LLC or such Note Guarantor, including any Senior
Subordinated Indebtedness and any Subordinated Obligations, (e) any obligations
with respect to any Capital Stock or (f) any Indebtedness Incurred in violation
of this Indenture.
"Senior Subordinated Indebtedness" of the Company means the Notes
and any other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Notes in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company which is not Senior
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Indebtedness. "Senior Subordinated Indebtedness" of a Note Guarantor has a
correlative meaning.
"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.
"SMP" means Surface Mount Products Malaysia Sdn. Bhd., a company
organized under the laws of Malaysia.
"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 Obligation" 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 Obligation" of a Note 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., Xxxxxxx, a.s. and Leshan-Phoenix Semiconductor Co. Ltd, so
long as the Company directly or indirectly owns more than 50% of the Voting
Stock or economic interests of such Person.
"Temporary Cash Investments" means any of the following: (a) any
investment in direct obligations of the United States of America or any agency
thereof or obligations Guaranteed by the United States of America or any agency
thereof, (b) investments in time deposit accounts, certificates of deposit and
money market deposits maturing not more than one year from the date of
acquisition thereof, bankers' acceptances with maturities not exceeding one year
and overnight bank deposits, in each case with a bank or trust company that is
organized under the laws of the United States of America, any state thereof
(including any foreign branch of any of the foregoing) or any foreign country
recognized by the United States of America having capital, surplus and undivided
profits aggregating in excess of $250,000,000 (or the foreign currency
equivalent thereof), (c) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (a) above or
clause (e) below entered into with a bank meeting the qualifications described
in clause (b) above, (d) investments in commercial paper, maturing not more than
one year after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United States
of America having
19
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.
ss.ss.77aaa-77bbbb) as in effect on the Closing Date.
"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.
"Transactions" has the meaning assigned thereto in the Offering
Memorandum.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means any vice president, assistant vice president
or trust officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (a) any Subsidiary of the Company
that at the time of determination shall be designated an Unrestricted Subsidiary
by the Board of Directors in the manner provided below and (b) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any other Subsidiary of the Company that
is not a Subsidiary of the Subsidiary to be so designated; provided, however,
that either (i) the Subsidiary to be so designated has total Consolidated assets
of $1,000 or less or (ii) if such Subsidiary has Consolidated assets greater
than $1,000, then such designation would be permitted under Section 4.04. The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such
designation (a) the Company could Incur $1.00 of additional Indebtedness under
Section 4.03(a) and (b) no Default shall have occurred and be continuing. Any
such designation of a Subsidiary as a Restricted Subsidiary or Unrestricted
Subsidiary by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution of the Board of
Directors
20
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
"beneficially own".................................... 1.01
"Blockage Notice"..................................... 10.03
"Change of Control Offer"............................. 4.08(b)
"covenant defeasance option".......................... 8.01(b)
"Custodian"........................................... 6.01
"Definitive Notes".................................... Appendix
"Event of Default".................................... 6.01
"Exchange Notes"...................................... Preamble
"Global Notes"........................................ Appendix
"Guarantee Blockage Notice"........................... 12.03
"Guaranteed Obligations".............................. 11.01
"Guaranteed Payment Blockage Period".................. 12.03
"incorporated provision".............................. 13.01
"Initial Notes"....................................... Preamble
"legal defeasance option"............................. 8.01(b)
"Legal Holiday"....................................... 13.08
"Notice of Default"................................... 6.01
"Offer"............................................... 4.06(b)
"Offer Amount"........................................ 4.06(c)(ii)
"Offer Period"........................................ 4.06(c)(ii)
"pay its Guarantee"................................... 12.03
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Defined in
Term Section
---- --------------
"pay the Notes"....................................... 10.03
"Paying Agent"........................................ 2.03
"Payment Blockage Period"............................. 10.03
"Private Exchange".................................... Appendix
"Private Exchange Notes".............................. Appendix
"protected purchaser"................................. 2.07
"Purchase Date"....................................... 4.06(c)(i)
"Registered Exchange Offer"........................... Appendix
"Registrar"........................................... 2.03
"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 Note
Guarantors and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
22
(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) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of
its nature as unsecured Indebtedness;
(g) 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
(h) 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.
ARTICLE 2
The Notes
SECTION 2.01. Form and Dating. Provisions relating to the Initial
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) Initial Notes and the Trustee's certificate of authentication
and (b) Private Exchange 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 the Trustee's certificate of authentication shall be substantially in the
form of Exhibit B hereto, which is hereby incorporated in and expressly made a
part of this Indenture. The Notes may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Issuers or any
Note 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 2.02. 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.
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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 2.03. Registrar and Paying Agent. (a) The Issuers shall
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where Notes
may be presented for payment (the "Paying Agent"). The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Issuers may have
one or more co-registrars and one or more additional paying agents. The term
"Paying Agent" includes any additional paying agent, and the term "Registrar"
includes any co-registrars. The Issuers initially appoint the Trustee as (i)
Registrar and Paying Agent in connection with the Notes and (ii) the Notes
Custodian with respect to the Global Notes.
(b) The Issuers shall enter into an appropriate agency agreement
with any Registrar or Paying Agent not a party to this Indenture, which shall
incorporate the terms of the TIA. The agreement shall implement the provisions
of this Indenture that relate to such agent. The Issuers shall notify the
Trustee of the name and address of any such agent. If the Issuers fail to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Issuers or any of their domestically organized Wholly Owned Subsidiaries may act
as Paying Agent or Registrar.
(c) The Issuers may remove any Registrar or Paying Agent upon
written notice to such Registrar or Paying Agent and to the Trustee; provided,
however, that no such removal shall become effective until (i) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Issuers and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above. The Registrar or Paying Agent may
resign at any time upon written notice to the Issuers and the Trustee.
SECTION 2.04. Paying Agent to Hold Money in Trust. Prior to each due
date of the principal and interest 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
24
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 2.05. 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 2.06. 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 Note Guarantors, the Trustee, the Paying Agent, and the
Registrar may deem and treat the Person in whose name a Note is registered as
the absolute owner of such Note for the purpose of receiving payment of
principal of and (subject to paragraph 2 of the Notes) interest, if any, on such
Note and for all other purposes whatsoever, whether or not such Note is overdue,
and none of the Issuers, any Note 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
25
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 2.07. 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 2.07,
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 2.07 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 2.08. Outstanding Notes. Notes outstanding at any time are
all authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. Subject to Section 13.06, 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 2.07, it ceases to be
outstanding unless the Trustee and the Issuers receive proof satisfactory to
them that the replaced Note is held by a protected purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest and liquidated damages, if any, payable on that
date with respect to the Notes (or
26
portions thereof) to be redeemed or maturing, as the case may be, and the Paying
Agent is not prohibited from paying such money to the Holders on that date
pursuant to the terms of this Indenture, then on and after that date such Notes
(or portions thereof) cease to be outstanding and interest on them ceases to
accrue.
SECTION 2.09. 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 2.10. Cancellation. The Issuers at any time may deliver
Notes to the Trustee for cancelation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment or cancelation
and shall dispose of canceled Notes in accordance with its customary procedures
or deliver canceled Notes to the Issuers pursuant to written direction by an
Officer. The Issuers may not issue new Notes to replace Notes it has redeemed,
paid or delivered to the Trustee for cancelation. The Trustee shall not
authenticate Notes in place of canceled Notes other than pursuant to the terms
of this Indenture.
SECTION 2.11. 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 2.12. 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 2.13. Computation of Interest. Interest on the Notes shall
be computed on the basis of a 360-day year comprised of twelve 30-day months.
27
Article 3
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 Xxxxxx'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;
28
(v) if fewer than all the outstanding Notes are to be
redeemed, the certificate numbers and principal amounts of the
particular Notes to be redeemed;
(vi) that, unless the Issuers default in making such
redemption payment or the Paying Agent is prohibited from making
such payment pursuant to the terms of this Indenture, interest on
Notes (or portion thereof) called for redemption ceases to accrue on
and after the redemption date;
(vii) the CUSIP or ISIN number, if any, printed on the Notes
being redeemed; and
(viii) that no representation is made as to the correctness or
accuracy of the CUSIP or ISIN number, if any, listed in such notice
or printed on the Notes.
(b) At the Issuers' request, the Trustee shall give the notice of
redemption in the Issuers' name and at the Issuers' expense. In such event, the
Issuers shall provide the Trustee with the information required by this Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Notes shall be paid at the redemption price stated in
the notice, plus accrued interest and liquidated damages, 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 liquidated damages, 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 and liquidated damages, 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
and liquidated damages, 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 and liquidated damages, if any, on all Notes to be redeemed.
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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 4
Covenants
SECTION 4.01. Payment of Notes. The Issuers shall promptly pay the
principal of and interest on the Notes on the dates and in the manner provided
in the Notes and in this Indenture. Principal and interest shall be considered
paid on the date due if on such date the Trustee or the Paying Agent holds in
accordance with this Indenture money sufficient to pay all principal and
interest then due and the Trustee or the Paying Agent, as the case may be, is
not prohibited from paying such money to the 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. Notwithstanding that the Company
may not be 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, following a Public Equity Offering, 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 ss. 314(a).
SECTION 4.03. Limitation on Indebtedness. (a) The Company shall not,
and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; provided, however, that the Company, SCI LLC or
any Note 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:
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(i) Bank Indebtedness of the Company, SCI LLC or any Note
Guarantor and any Receivables Facility in an aggregate principal
amount not to exceed $1.025 billion less the aggregate amount of all
prepayments of principal applied to permanently reduce any such
Indebtedness;
(ii) Indebtedness in respect of a Receivables Facility in an
aggregate principal amount not to exceed the lesser of (1) the
amount of all prepayments of principal applied to permanently reduce
Indebtedness under Section 4.03(b)(i) and (2) $100 million;
(iii) Indebtedness of the Company owed to and held by any
Restricted Subsidiary or Indebtedness of a Restricted Subsidiary
owed to and held by the Company or any other Restricted Subsidiary;
provided, however, that (1) any subsequent issuance or transfer of
any Capital Stock or any other event that results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of any such Indebtedness (except to the Company
or another Restricted Subsidiary) shall be deemed, in each case, to
constitute the Incurrence of such Indebtedness by the issuer
thereof, (2) if the Company or SCI LLC is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to the
prior payment in full in cash of all obligations with respect to the
Notes and (3) if a Note Guarantor is the obligor, such Indebtedness
is subordinated in right of payment to the Note Guarantee of such
Note Guarantor;
(iv) Indebtedness represented by the Junior Subordinated Note,
the 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 Note 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'
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compensation claims, or the Incurrence of other Indebtedness with
respect to reimbursement type obligations regarding workers'
compensation claims, such obligations are reimbursed within 30 days
following such drawing or Incurrence;
(ix) Indebtedness under Interest Rate Agreements and Currency
Agreements entered into for bona fide hedging purposes of the
Company in the ordinary course of business;
(x) Purchase Money Indebtedness, mortgage financings and
Capitalized Lease Obligations, in each case Incurred by the Company,
SCI LLC or any Restricted Subsidiary for the purpose of financing
all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in a Permitted
Business, and in an aggregate principal amount not in excess of $25
million at any one time outstanding.
(xi) Indebtedness of the Company or any of its Restricted
Subsidiaries arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided,
however, that such Indebtedness is extinguished within five business
days of Incurrence;
(xii) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, Incurred or
assumed in connection with the disposition of any business, assets
or Capital Stock of the Company or any Restricted Subsidiary;
provided that (1) the maximum aggregate liability in respect of all
such Indebtedness shall at no time exceed the gross proceeds
actually received by the Company and its Subsidiaries in connection
with such disposition and (2) such Indebtedness is not reflected in
the balance sheet of the Company or any Restricted Subsidiary
(contingent obligations referred to in a footnote to financial
statements and not otherwise reflected on the balance sheet will not
be deemed to be reflected on such balance sheet for purposes of this
clause (2));
(xiii) Indebtedness of the Company or any of its Restricted
Subsidiaries that is Acquired Debt in an aggregate principal amount
at any time outstanding not to exceed $25 million; or
(xiv) Indebtedness (other than Indebtedness permitted to be
Incurred pursuant to Section 4.03(a) or any other clause of Section
4.03(b)) of the Company or any Restricted Subsidiary in an aggregate
principal amount (or accreted value, as applicable) on the date of
Incurrence that, when added to all other Indebtedness Incurred
pursuant to this clause (xiv) and then outstanding, shall not exceed
$50 million, of which up to $25 million may be Incurred by
Restricted Subsidiaries that are not Note Guarantors.
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(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 Obligations 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 Obligations.
Neither the Company nor SCI LLC shall Incur any Indebtedness if such
Indebtedness is subordinated or junior in right of payment to any Senior
Indebtedness unless such Indebtedness is Senior Subordinated Indebtedness or is
expressly subordinated in right of payment to Senior Subordinated Indebtedness.
In addition, neither the Company nor SCI LLC shall Incur any Secured
Indebtedness that is not Senior Indebtedness unless contemporaneously therewith
effective provision is made to secure the Notes equally and ratably with (or on
a senior basis to, in the case of Indebtedness subordinated in right of payment
to the Notes) such Secured Indebtedness for so long as such Secured Indebtedness
is secured by a Lien. A Note Guarantor shall not Incur any Indebtedness if such
Indebtedness is by its terms expressly subordinated or junior in right of
payment to any Senior Indebtedness of such Note Guarantor unless such
Indebtedness is Senior Subordinated Indebtedness of such Note Guarantor or is
expressly subordinated in right of payment to Senior Subordinated Indebtedness
of such Note Guarantor. In addition, a Note Guarantor shall not Incur any
Secured Indebtedness that is not Senior Indebtedness of such Note Guarantor
unless contemporaneously therewith effective provision is made to secure the
Note Guarantee of such Note Guarantor equally and ratably with (or on a senior
basis to, in the case of Indebtedness subordinated in right of payment to such
Note Guarantee) such Secured Indebtedness for as long as such Secured
Indebtedness is secured by a Lien.
(d) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that the Company or any Restricted Subsidiary may
Incur pursuant to this Section 4.03 shall not be deemed to be exceeded solely as
a result of fluctuations in the exchange rates of currencies. For purposes of
determining compliance with this Section 4.03, (i) Indebtedness Incurred
pursuant to the Credit Agreement prior to or on the Closing Date shall be
treated as Incurred pursuant to Section 4.03(b)(i), (ii) Indebtedness permitted
by this Section 4.03 need not be permitted solely by reference to one provision
permitting such Indebtedness but may be permitted in part by one such provision
and in part by one or more other provisions of this Section 4.03 permitting such
Indebtedness, (iii) in the event that Indebtedness meets the criteria of more
than one of the types of Indebtedness described in this Section 4.03, the
Company, in its sole discretion, shall classify such Indebtedness and only be
required to include the amount of such Indebtedness in one of such clauses and
(iv) the aggregate amount of any Indebtedness Guaranteed pursuant to Section
4.03(b)(vii) will be included in the calculation of Indebtedness, but the
corresponding amount of the Guarantee will not be so included.
(e) Accrual of interest, the accretion of accreted value and the
payment of interest in the form of additional Indebtedness will not be deemed to
be an Incurrence of Indebtedness for purposes of this covenant.
(f) For purposes of determining compliance with any U.S. dollar-
denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-
equivalent
33
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 August 1, 1999, 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 Junior Subordinated Note which (i) makes 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 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 the Junior Subordinated Note as in
effect on the Closing Date.
SECTION 4.04. Limitation on Restricted Payments. (a) The Company
shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on or in
respect of the Company's or any Restricted Subsidiary's Capital Stock (including
any payment in connection with any merger or consolidation involving the
Company) or similar payment to the direct or indirect holders of its Capital
Stock except dividends or distributions payable solely in its Capital Stock
(other than Disqualified Stock) and except dividends or distributions payable to
the Company or another Restricted Subsidiary (and, if such Restricted Subsidiary
has shareholders other than the Company or other Restricted Subsidiaries, to its
other shareholders on a pro rata basis), (ii) purchase, redeem, retire or
otherwise acquire for value any Capital Stock of the Company or any Restricted
Subsidiary held by Persons other than the Company or another Restricted
Subsidiary, other than the making of a Permitted Investment, (iii) purchase,
repurchase, redeem, defease or otherwise acquire or retire for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of acquisition), (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,
34
repurchase, defeasance, other acquisition, retirement or Investment described in
and not excluded from clauses (i) through (v) being herein referred to as a
"Restricted Payment"), if at the time the Company or such Restricted Subsidiary
makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) the Company could not Incur at least $1.00 of additional
Indebtedness under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments (the amount so expended, if other than in
cash, to be determined in good faith by the Board of Directors,
whose determination shall be conclusive and evidenced by a
resolution of the Board of Directors) declared or made subsequent to
the Closing Date would exceed the sum of, without duplication:
(A) 50% of the Consolidated Net Income accrued during
the period (treated as one accounting period) from the
beginning of the fiscal quarter immediately following the
fiscal quarter during which the Closing Date occurs to the end
of the most recent fiscal quarter for which internal financial
statements are available prior to the date of such Restricted
Payment (or, in case such Consolidated Net Income shall be a
deficit, minus 100% of such deficit);
(B) the aggregate Qualified Proceeds received by the
Company from the issue or sale of its Capital Stock (other
than Disqualified Stock) subsequent to the Closing Date (other
than an issuance or sale to (x) a Subsidiary of the Company or
(y) an employee stock ownership plan or other trust
established by the Company or any of its Subsidiaries for the
benefit of its employees to the extent that the purchase by
such plan or trust is financed by Indebtedness of such plan or
trust owed to the Company or any of its Subsidiaries or
Indebtedness Guaranteed by the Company or any of its
Subsidiaries);
(C) 100% of the aggregate Qualified Proceeds received by
the Company from the issuance or sale of debt securities of
the Company or Disqualified Stock of the Company that after
the Closing Date have been converted into or exchanged for
Capital Stock (other than Disqualified Stock) of the Company
(other than an issuance or sale to a Subsidiary of the Company
or an employee stock ownership plan or other trust established
by the Company or any of its Subsidiaries for the benefit of
its employees to the extent that the purchase by such plan or
trust is financed by Indebtedness of such plan or trust owed
to the Company or any of its Subsidiaries or Indebtedness
Guaranteed by the Company or any of its Subsidiaries (less the
amount of any cash or the Fair Market Value of any property
distributed by
35
the Company or any Restricted Subsidiary upon such conversion
or exchange); provided, however, that no amount will be
included in this clause (C) to the extent it is already
included in Consolidated Net Income;
(D) in the case of any Investment by the Company or any
Restricted Subsidiary (other than any Permitted Investment)
made after the Closing Date, the disposition of such
Investment by, or repayment of such Investment to, the Company
or a Restricted Subsidiary or the receipt by the Company or
any Restricted Subsidiary of any dividends or distributions
from such Investment, an aggregate amount equal to the lesser
of (x) the aggregate amount of such Investment treated as a
Restricted Payment pursuant to clause (iv) above and (y) the
aggregate amount in cash received by the Company or any
Restricted Subsidiary upon such disposition, repayment,
dividend or distribution; provided, however, that no amount
will be included in this clause (iv) to the extent it is
already included in Consolidated Net Income;
(E) in the event the Company or any Restricted
Subsidiary makes any Investment in a Person that, as a result
of or in connection with such Investment, becomes a Restricted
Subsidiary, an amount equal to the Company's or any Restricted
Subsidiary's existing Investment in such Person that was
previously treated as a Restricted Payment pursuant to clause
(iv) above; provided, however, that such Person is engaged in
a Permitted Business; and
(F) the amount equal to the sum of (x) the net reduction
in Investments in Unrestricted Subsidiaries resulting from
payments of dividends, repayments of the principal of loans or
advances or other transfers of assets to the Company or any
Restricted Subsidiary from Unrestricted Subsidiaries and (y)
the portion (proportionate to the Company's equity interest in
such Subsidiary) of the Fair Market Value of the net assets of
an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is redesignated a Restricted Subsidiary; provided,
however, that the foregoing sum shall not exceed, in the case
of any Unrestricted Subsidiary, the amount of Investments
previously made by the Company or any Restricted Subsidiary in
such Unrestricted Subsidiary and treated as a Restricted
Payment pursuant to clause (iv) above.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) any purchase, repurchase, redemption or other acquisition
or retirement for value of Capital Stock of the Company or any
Restricted Subsidiary made by exchange for, or out of the proceeds
of the substantially concurrent sale of, other Capital Stock of the
Company (other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary of the Company or an employee stock
ownership plan or other trust established by the Company or any of
its Subsidiaries
36
for the benefit of its employees to the extent that the purchase by
such plan or trust is financed by Indebtedness of such plan or trust
owed to the Company or any of its Subsidiaries or Indebtedness
Guaranteed by the Company or any of its Subsidiaries); provided,
however, that (1) such Restricted Payment shall be excluded from the
calculation of the amount of Restricted Payments and (2) the Net
Cash Proceeds from such sale applied in the manner set forth in this
clause (i) shall be excluded from the calculation of amounts under
Section 4.04(a)(3)(B);
(ii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of
the Company or any Restricted Subsidiary, other than the Junior
Subordinated Note, made by exchange for, or out of the proceeds of
the substantially concurrent sale of, Indebtedness that is permitted
to be Incurred pursuant to Section 4.03(b); provided, however, that
such purchase repurchase, redemption, defeasance or other
acquisition or retirement for value shall be excluded from the
calculation of the amount of Restricted Payments;
(iii) the repurchase, redemption or other acquisition or
retirement for value of Disqualified Stock of the Company or any
Restricted Subsidiary made by exchange for, or out of the proceeds
of the substantially concurrent sale of, Disqualified Stock of the
Company or any Restricted Subsidiary that is permitted to be
Incurred pursuant to Section 4.03; provided, however, that such
repurchase, redemption or other acquisition or retirement for value
will be excluded from the calculation of the amount of Restricted
Payments;
(iv) any purchase or redemption of Subordinated Obligations
from Net Available Cash to the extent permitted by Section 4.06;
provided, however, that such purchase or redemption shall be
excluded from the calculation of the amount of Restricted Payments;
(v) upon the occurrence of a Change of Control and within 60
days after the completion of the offer to repurchase the Notes
pursuant to Section 4.08 (including the purchase of the Notes
tendered), any purchase or redemption of Subordinated Obligations
required pursuant to the terms thereof as a result of such Change of
Control at a purchase or redemption price not to exceed the
outstanding principal amount thereof, plus any accrued and unpaid
interest; provided, however, that (1) at the time of such purchase,
no Default or Event of Default shall have occurred and be continuing
(or would result therefrom), (2) the Company would be able to Incur
at least $1.00 of additional Indebtedness under Section 4.03 (a)
above after giving pro forma effect to such Restricted Payment and
(3) such purchase or redemption will be included in the calculation
of the amount of Restricted Payments;
(vi) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend
would have complied with Section 4.04(a); provided, however, that
such dividend shall be included in the calculation of the amount of
Restricted Payments (without duplication for declaration);
37
(vii) the repurchase, redemption or other acquisition or
retirement for value of Capital Stock of the Company or any of its
Subsidiaries from employees, former employees, directors or former
directors of the Company or any of its Subsidiaries (or permitted
transferees of such employees, former employees, directors or former
directors), pursuant to the terms of the agreements (including
employment agreements) or plans (or amendments thereto) approved by
the Board of Directors under which such individuals purchase or sell
or are granted the option to purchase or sell, shares of such
Capital Stock; provided, however, that the aggregate amount of such
repurchases shall not exceed $2 million in any calendar year;
provided further, however, that such repurchases, redemptions and
other acquisitions or retirements for value shall be excluded from
the calculation of the amount of Restricted Payments;
(viii) the declaration and payment of any dividend (or the
making of any similar distribution or redemption) to the holders of
any class or series of Disqualified Stock of the Company, or SCI LLC
or a Note 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; and provided, further, that under no
circumstances shall this clause (viii) allow the payment of any
dividend (or the making of any similar distribution or redemption)
to the holders of any SCG Holding Preferred Stock;
(ix) cash payments in lieu of fractional shares issuable as
dividends on Preferred Stock of the Company or any of its Restricted
Subsidiaries; provided that such cash payments shall not exceed
$20,000 in the aggregate in any twelve-month period and no Default
or Event of Default shall have occurred and be continuing
immediately after such cash payments; and provided, further, that
such cash payments will be excluded from the calculation of the
amount of Restricted Payments;
(x) the payments described as uses of funds in connection with
the Transactions under the caption "Sources and Uses of Proceeds" in
the Offering Memorandum; or
(xi) other Restricted Payments in an aggregate amount not to
exceed $20 million.
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock or pay any Indebtedness or other obligations owed to the
Company or any of its Restricted Subsidiaries, (b) make any loans or advances to
the Company or any of its Restricted Subsidiaries or (c) transfer any of its
property or assets to the Company or any of its Restricted Subsidiaries, except:
38
(i) any encumbrance or restriction pursuant to applicable law,
regulation, order or an agreement in effect at or entered into on
the Closing Date;
(ii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by such Restricted Subsidiary prior to the
date on which such Restricted Subsidiary was acquired by the Company
(other than Indebtedness Incurred as consideration in, in
contemplation of, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was otherwise acquired by the
Company) and outstanding on such date;
(iii) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an
agreement referred to in clause (c) (i) or (c) (ii) of this Section
4.05 or this clause (iii) or contained in any amendment to an
agreement referred to in clause (c)(i) or (c)(ii) of this Section
4.05 or this clause (iii); provided, however, that the encumbrances
and restrictions contained in any agreement or amendment relating to
such Refinancing are no less favorable to the Holders than the
encumbrances and restrictions contained in the agreements relating
to the Indebtedness so Refinanced;
(iv) any encumbrance or restriction (1) that restricts in a
customary manner the subletting, assignment or transfer of any
property or asset that is subject to a lease, license or similar
contract or (2) that is contained in security agreements securing
Indebtedness of a Restricted Subsidiary to the extent such
encumbrance or restriction restricts the transfer of the property
subject to such security agreements;
(v) with respect to a Restricted Subsidiary, any restriction
imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or assets
of such Restricted Subsidiary pending the closing of such sale or
disposition;
(vi) contracts for the sale of assets containing customary
restrictions with respect to a Subsidiary pursuant to an agreement
that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary;
(vii) agreements for the sale of assets containing customary
restrictions with respect to such assets;
(viii) restrictions relating to the common stock of
Unrestricted Subsidiaries or Persons other than Subsidiaries;
39
(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, (ii) at least 80% of the consideration thereof received by the
Company or such Restricted Subsidiary is in the form of cash, Temporary Cash
Investments or other Qualified Proceeds (provided that the aggregate Fair Market
Value of Qualified Proceeds (other than cash and Temporary Cash Investments)
shall not exceed $10 million since the Closing Date) and (iii) an amount equal
to 100% of the Net Available Cash from such Asset Disposition is applied by the
Company (or such Restricted Subsidiary, as the case may be) (1) first, (A) to
the extent the Company elects (or is required by the terms of any Indebtedness),
to prepay, repay, redeem or purchase Senior Indebtedness of the Company or
Indebtedness (other than any Disqualified Stock) of a Wholly Owned Subsidiary
(in each case other than Indebtedness owed to the Company or an Affiliate of the
Company and other than Preferred Stock) or (B) to the extent the Company or such
Restricted Subsidiary elects, to acquire Additional Assets (including by means
of an Investment in Additional Assets by a Restricted Subsidiary with Net
Available Cash received by the Company or another Restricted Subsidiary), in
each case, within one year from the later of such Asset Disposition or the
receipt of such Net Available Cash; provided, however, that pending the final
application of any such Net Available Cash under clause (1), the Company or such
Restricted Subsidiary may temporarily reduce amounts available under revolving
credit facilities or invest such Net Available Cash in Temporary Cash
Investments; (2) second, to the extent of the balance of such Net Available Cash
after application in accordance with clause (1), to make an Offer to purchase
Notes pursuant to and subject to the conditions of Section 4.06(b); provided,
however, that if the Company elects (or is required by the terms of any Senior
Subordinated Indebtedness), such Offer may be made ratably to purchase the Notes
and other Senior Subordinated Indebtedness of the Company, and (3) third, to the
extent of the balance of such Net Available Cash after application in accordance
with clauses (1) and (2), for general corporate purposes; provided, however,
that in connection with any prepayment, repayment or purchase of Indebtedness
pursuant to clause (1), (2) or (3) above, the Company
40
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. Notwithstanding the
foregoing provisions of this Section 4.06, the Company and the Restricted
Subsidiaries shall not be required to apply any Net Available Cash in accordance
with this Section 4.06(a) except to the extent that the aggregate Net Available
Cash from all Asset Dispositions that is not applied in accordance with this
Section 4.06(a) exceeds $10 million.
For the purposes of clause (a)(ii) of this Section 4.06 only, the
following are deemed to be cash: (A) the assumption of any liabilities (as shown
on the Company's or a Restricted Subsidiary's most recent balance sheet) of the
Company or any such Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any Note
Guarantee) pursuant to a customary novation agreement that releases the Company
or such Restricted Subsidiary from further liability in connection with such
Asset Disposition and (B) any securities or other obligations received by the
Company or any Restricted Subsidiary from the transferee that are converted
within 90 days of receipt by the Company or such Restricted Subsidiary into
cash.
(b) In the event of an Asset Disposition that requires the purchase
of Notes (and other Senior Subordinated Indebtedness) pursuant to Section
4.06(a)(iii)(3), the Company shall be required to purchase Notes (and other
Senior Subordinated Indebtedness) tendered pursuant to an offer by the Company
to Holders for the Notes (and other Senior Subordinated Indebtedness) (the
"Offer") at a purchase price of 100% of their principal amount (without premium)
plus accrued and unpaid interest and liquidated damages, if any (or, in respect
of such other Senior Subordinated Indebtedness, such lesser price, if any, as
may be provided for pursuant to the terms thereof), to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) in accordance with
the procedures (including prorating in the event of oversubscription) set forth
in Section 4.06(c). If the aggregate purchase price of Notes (and other Senior
Subordinated Indebtedness) tendered pursuant to the Offer is less than the Net
Available Cash allotted to the purchase of the Notes (and other Senior
Subordinated Indebtedness), the Company shall apply the remaining Net Available
Cash in accordance with Section 4.06(a)(iii)(3). The Company shall not be
required to make an Offer for Notes (and other Senior Subordinated Indebtedness)
pursuant to this Section 4.06 if the Net Available Cash available therefor
(after application of the proceeds as provided in Section 4.06(a)(iii)(1) and
Section 4.06(a)(iii)(2)) is less than $10 million for any particular Asset
Disposition (which lesser amount shall be carried forward for purposes of
determining whether an Offer is required with respect to the Net Available Cash
from any subsequent Asset Disposition).
(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
41
purchase date not less than 30 days nor more than 60 days after the date of such
notice (the "Purchase Date") and shall contain such information concerning the
business of the Company which the Company in good faith believes will enable
such Holders to make an informed decision (which at a minimum shall include (1)
the most recently filed Annual Report on Form 10-K (including audited
consolidated financial statements) of the Company, the most recent subsequently
filed Quarterly Report on Form 10-Q and any Current Report on Form 8-K of the
Company filed subsequent to such Quarterly Report, other than Current Reports
describing Asset Dispositions otherwise described in the offering materials (or
corresponding successor reports), (2) a description of material developments in
the Company's business subsequent to the date of the latest of such reports, and
(3) if material, appropriate pro forma financial information) and all
instructions and materials necessary to tender Notes pursuant to the Offer,
together with the address referred to in clause (iii).
(ii) Not later than the date upon which written notice of an
Offer is delivered to the Trustee as provided above, the Company
shall deliver to the Trustee an Officers' Certificate as to (1) the
amount of the Offer (the "Offer Amount"), (2) the allocation of the
Net Available Cash from the Asset Dispositions pursuant to which
such Offer is being made and (3) the compliance of such allocation
with the provisions of Section 4.06(a). 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. 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 other Senior Subordinated 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 Xxxxxx 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 other Senior Subordinated
Indebtedness included in the Offer surrendered by holders thereof
exceeds the Offer Amount, the Company shall select the Notes and
other Senior Subordinated Indebtedness to be purchased on a pro rata
42
basis (with such adjustments as may be deemed appropriate by the
Company so that only Notes and other Senior Subordinated
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) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of
Notes pursuant to this Section. To the extent that the provisions of
any securities laws or regulations conflict with provisions of this
Section, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its
obligations under this Section by virtue thereof.
SECTION 4.07. Limitation on Transactions with Affiliates. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, enter into or conduct any transaction (including, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any Affiliate of the Company (an "Affiliate Transaction") unless such Affiliate
Transaction is on terms (i) that are no less favorable (other than in immaterial
respects) to the Company or such Restricted Subsidiary, as the case may be, than
those that could be obtained at the time of such transaction in comparable
arm's-length dealings with a Person who is not such an Affiliate, (ii) that, in
the event that such Affiliate Transaction involves an aggregate amount in excess
of $5 million, (1) are set forth in writing and (2) have been approved by a
majority of the members of the Board of Directors having no personal stake in
such Affiliate Transaction and (iii) that, in the event that such Affiliate
Transaction involves an amount in excess of $15 million, have been determined by
a nationally recognized appraisal or investment banking firm to be fair, from a
financial standpoint, to the Company and its Restricted Subsidiaries.
(b) The provisions of Section 4.07(a) shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to Section 4.04, (ii) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors, (iii) the
grant of stock options or similar rights to officers, employees, consultants and
directors of the Company pursuant to plans approved by the Board of Directors
and the payment of amounts or the issuance of securities pursuant thereto, (iv)
loans or advances to employees consistent with prudent business practice, but in
any event not to exceed $5 million in the aggregate outstanding at any one time,
(v) the payment of reasonable fees, compensation or employee benefit
arrangements to and any indemnity provided for the benefit of directors,
officers, consultants or employees of the Company or any Restricted Subsidiary
in the ordinary course of business, (vi) any transaction between the Company and
a Restricted Subsidiary or between Restricted Subsidiaries (SMP being deemed a
Restricted Subsidiary solely for purposes of this clause (vi) so long as the
Company continues to own, directly or indirectly, at least 40% of the Voting
Stock of SMP),(viii) payment of fees and expenses to TPG Partners II, L.P. or
its Affiliates in connection with the Transactions on the terms described in the
Offering Memorandum,
43
(ix) the payment of management, consulting and advisory fees to TPG Partners II,
L.P. or its Affiliates made pursuant to any financial advisory, financing,
underwriting or placement agreement or in respect of other investment banking
activities, including in connection with acquisitions or divestitures, in an
amount not to exceed $2 million in any calendar year and any related
out-of-pocket expenses, (x) the agreements to be entered into with Motorola or
its Affiliates as part of the Transactions as in effect on the Closing Date and
on the terms described in the Offering Memorandum or any amendment or
modification thereto or replacement thereof so long as any such amendment,
modification or replacement thereof is not more disadvantageous to the Holders
in any material respect than the related agreement as in effect on the Closing
Date, (xi) 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 (xii) any transaction effected in connection with a
Receivables Facility permitted under Section 4.03.
SECTION 4.08. Change of Control. (a) Upon a Change of Control, each
Holder shall have the right to require that the Issuers repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes at
a purchase price in cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest and liquidated damages thereon, if any, to the date
of purchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date), in
accordance with the terms contemplated in Section 4.08(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 offer to repay in full all Bank Indebtedness and repay the Bank
Indebtedness of each lender who has accepted such offer 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 and liquidated
44
damages, if any, to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest
due on the relevant interest payment date);
(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, 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 Xxxxxx 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 shall be delivered to the Trustee for cancelation, and the Company
shall pay the purchase price plus accrued and unpaid interest, if any, to the
Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section, 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
45
laws and regulations and shall not be deemed to have breached its obligations
under this Section by virtue thereof.
SECTION 4.09. Compliance Certificate. The Issuers shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Issuers an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Issuers they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Issuers are taking or propose to take
with respect thereto. The Issuers also shall comply with Section 314(a)(4) of
the TIA.
SECTION 4.10. Further Instruments and Acts. Upon request of the
Trustee, the Issuers shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.11. Future Note Guarantors. The Company shall cause (a)
each Domestic Subsidiary and (b) each Foreign Subsidiary that enters into or has
outstanding a Guarantee of any other Indebtedness of the Company or any Domestic
Subsidiary, if the aggregate principal amount of Indebtedness of the Company and
its Domestic Subsidiaries Guaranteed by all Foreign Subsidiaries exceeds $25
million, to become a Note Guarantor, and, if applicable, execute and deliver to
the Trustee a supplemental indenture substantially in the form of Exhibit C
pursuant to which such Restricted Subsidiary will Guarantee payment of the
Notes. Each Note Guarantee shall be limited to an amount not to exceed the
maximum amount that can be Guaranteed by that Restricted Subsidiary without
rendering the Note Guarantee, as it relates to such Restricted Subsidiary,
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer or similar laws affecting the rights of creditors generally.
SECTION 4.12. Limitation on Lines of Business. The Company shall
not, and shall not permit any Restricted Subsidiary (other than a Receivables
Subsidiary) to, engage in any business, other than a Permitted Business.
SECTION 4.13. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries. The Company shall not sell or otherwise dispose of any
shares of Capital Stock of a Restricted Subsidiary, and shall not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell or otherwise
dispose of any shares of its Capital Stock except: (a) to the Company or another
Restricted Subsidiary; (b) if, immediately after giving effect to such issuance,
sale or other disposition, neither the Company nor any of its Restricted
Subsidiaries own any Capital Stock of such Restricted Subsidiary; (c) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary and any Investment
in such Person remaining after giving effect thereto would have been permitted
to be made under Section 4.04 if made on the date of such issuance, sale or
other disposition; (d) directors' qualifying shares or shares
46
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.
Article 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets. (a) The
Company and SCI LLC each shall not consolidate with or merge with or into, or
convey, transfer or lease all or substantially all its assets to, any Person,
unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a corporation or, subject to the
proviso below, a partnership or a limited liability company, in each
case organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the
Successor Company (if not the Company or SCI LLC, as the case may
be) shall expressly assume, by a supplemental indenture hereto,
executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, all the obligations of the Company or
SCI LLC, as the case may be under the Notes and this Indenture;
provided, however, that at all times, at least one Issuer must be a
corporation organized and existing under the laws of the United
States of America, any State thereof or the District of Columbia;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the
Successor Company or any Restricted Subsidiary as a result of such
transaction as having been Incurred by the Successor Company or such
Restricted Subsidiary at the time of such transaction), no Default
shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur at least $1.00 of
additional Indebtedness pursuant to Section 4.03(a); 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.
47
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 Note 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 Note Guarantor
which 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 Note 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 Note
Guarantor under its Note Guarantee; (ii) immediately after giving effect to such
transaction (and treating any Indebtedness which becomes an obligation of the
resulting, surviving or transferee Person as a result of such transaction as
having been Incurred by such Person at the time of such transaction), no Default
shall have occurred and be continuing; and (iii) the Company shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer and such supplemental
indenture (if any) comply with this Indenture ; provided, however, that the
foregoing shall not apply to any such consolidation or merger with or into, or
conveyance, transfer or lease to, any Person if the resulting, surviving or
transferee Person will not be a Subsidiary of the Company and the other terms of
this Indenture, including Section 4.06 are complied with.
(c) Notwithstanding the foregoing, (i) any Restricted Subsidiary may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company or SCI LLC; (ii) the Company may merge with an Affiliate
incorporated or organized solely for the purpose of reincorporating or
reorganizing the Company in another jurisdiction to realize tax or other
benefits; (iii) nothing herein shall limit any conveyance, transfer or lease of
assets between or among any of the Company, SCI LLC and the Note Guarantors; and
(iv) 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 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(a) the Company, SCI LLC or any Note Guarantor defaults in any
payment of interest on any Note or in any payment of liquidated damages with
respect thereto,
48
whether or not such payment shall be prohibited by Article 10, and such default
continues for a period of 30 days;
(b) the Company, SCI LLC or any Note 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, whether or not such payment shall be prohibited by Article 10 or (ii)
fails to redeem or purchase Notes when required pursuant to this Indenture or
the Notes, whether or not such redemption or purchase shall be prohibited by
Article 10;
(c) the Company, SCI LLC or any Note Guarantor fails to comply with
Section 5.01;
(d) the Company, SCI LLC or any Note Guarantor fails to comply with
Section 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.11, 4.12 or 4.13 (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 Note Guarantor fails to comply with
any of its agreements in the Notes or this Indenture (other than those referred
to in (a), (b), (c) or (d) above) and such failure continues for 60 days after
the notice specified below;
(f) Indebtedness of the Company or any Restricted Subsidiary is not
paid within any applicable grace period after final maturity or the acceleration
by the holders thereof because of a default and the total amount of such
Indebtedness unpaid or accelerated exceeds $25 million or its foreign currency
equivalent at the time and such failure continues for 10 days after the notice
specified below;
(g) the Company, SCI LLC or any other Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in an
involuntary case;
(iii) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(iv) makes a general assignment for the benefit of its creditors; or
takes any comparable action under any foreign laws relating to insolvency;
49
(h) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company, SCI LLC or any other
Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company, SCI LLC or any other
Significant Subsidiary or for any substantial part of its property;
or
(iii) orders the winding up or liquidation of the Company, SCI
LLC or any other Significant Subsidiary;
or any similar relief is granted under any foreign laws and the
order or decree remains unstayed and in effect for 60 days;
(i) with respect to any judgment or decree for the payment of money
in excess of $25 million or its foreign currency equivalent against the Company
or any Restricted Subsidiary (i) an enforcement proceeding is commenced thereon
by any creditor if such judgment or decree is final and nonappealable and the
Company or such Restricted Subsidiary, as applicable, fails to stay such
proceeding within 10 days thereafter or (ii) the Company or such Restricted
Subsidiary, as applicable, fails to pay such judgment or decree, which judgment
or decree has remained outstanding for a period of 60 days following the entry
of such judgment or decree without being paid, discharged, waived or stayed; or
(j) any Note Guarantee of any Significant Subsidiary ceases to be in
full force and effect (except as contemplated by the terms thereof) or any
Significant Subsidiary that is a Note Guarantor or Person acting by or on behalf
of such Significant Subsidiary denies or disaffirms such Significant
Subsidiary's obligations under this Indenture or any Note Guarantee and such
Default continues for 10 days after receipt of the notice specified in this
Indenture.
The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (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 Note Guarantor, as applicable, do
not cure such Default within the time specified
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after receipt of such notice. Such notice must specify the Default, demand that
it be remedied and state that such notice is a "Notice of Default".
The Issuers shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice or the lapse of time would become an
Event of Default under clauses (c), (d), (e), (f), (i) or (j), its status and
what action the Issuers are taking or propose to take with respect thereto.
SECTION 6.02. Acceleration. (a) If an Event of Default (other than
an Event of Default specified in Section 6.01(g) or (h) with respect to the
Company or SCI LLC) occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the outstanding Notes, by notice to the
Issuers, may declare the principal of and accrued but unpaid interest on all the
Notes to be due and payable. Upon such a declaration, such principal and
interest shall be due and payable immediately. If an Event of Default specified
in Section 6.01(g) or (h) with respect to the Company or SCI LLC occurs, the
principal of and interest on all the Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders. The Holders of a majority in principal amount of the
Notes by notice to the Trustee may rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of acceleration. No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.
(b) In the event of a declaration of acceleration of the Notes
because an Event of Default has occurred and is continuing as a result of the
acceleration of any Indebtedness described in Section 6.01(f), the declaration
of acceleration of the Notes shall be automatically annulled if the holders of
any such Indebtedness have rescinded the declaration of acceleration in respect
of such Indebtedness within 30 days of the date of such acceleration and if (i)
the annulment of the acceleration of the Notes would not conflict with any
judgment or decree of a court of competent jurisdiction and (ii) all existing
Events of Default, except nonpayment of principal or interest on the Notes that
became due solely because of the acceleration of the Notes, have been cured or
waived.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative.
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SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Notes by notice to the Trustee may waive on behalf of
the Holders of all of the Notes an existing Default and its consequences except
(a) a Default in the payment of the principal of or interest on a Note, (b) a
Default arising from the failure to redeem or purchase any Note when required
pursuant to the terms of this Indenture or (c) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of each
Holder affected. When a Default is waived, it is deemed cured, but no such
waiver shall extend to any subsequent or other Default or impair any consequent
right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Holders or would involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion against all losses and expenses caused by taking or
not taking such action.
SECTION 6.06. Limitation on Suits. (a) Except to enforce the right
to receive payment of principal, premium (if any) or interest when due, no
Holder may pursue any remedy with respect to this Indenture or the Notes unless:
(i) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(ii) the Holders of at least 25% in principal amount of the
Notes make a written request to the Trustee to pursue the remedy;
(iii) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(v) the Holders of a majority in principal amount of the Notes
do not give the Trustee a direction inconsistent with the request
during such 60-day period.
(b) A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal
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of and liquidated damages and 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 Note
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 of Senior Indebtedness of the Issuers to the
extent required by Article 10 and to holders of Senior Indebtedness of the
Note Guarantors to the extent required by Article 12;
THIRD: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, and any liquidated damages without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, any liquidated damages and interest,
respectively; and
FOURTH: 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.
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SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Notes.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Issuers
nor any Note 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 Note 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 7
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:
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(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(iv) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuers.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Notes shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other paper or document unless requested in writing to do so
by the Holders of not less than a majority in principal amount of the Notes at
the time outstanding, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Issuers,
personally or by agent or attorney.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuers or their respective Affiliates with the same
rights it would have if it were not Trustee. Any Paying Agent, Registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, any Note Guarantee or the Notes, it shall not be accountable for
the Issuers' use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Issuers or any Note 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
13.02 hereof from the Issuers, any Note Guarantor or any Holder.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Holder notice of the Default within the earlier of 90 days after it occurs or 30
days after it is known to a trust officer. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant to
the mandatory redemption provisions of such Note, if any), the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of Holders.
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SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15th beginning with May 15, 2000, the Trustee shall
mail to each Holder a brief report dated as of such May 15th 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 Note Guarantor, jointly and severally
shall indemnify the Trustee against any and all loss, liability or expense
(including reasonable attorneys' fees) incurred by or in connection with the
administration of this trust and the performance of its duties hereunder. The
Trustee shall notify the Issuers of any claim for which it may seek indemnity
promptly upon obtaining actual knowledge thereof; provided, however, that any
failure so to notify the Issuers shall not relieve the Issuers or any Note
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 Note Guarantors, as applicable, shall pay the fees and expenses of such
counsel; provided, however, that the Issuers and the Note Guarantors shall not
be required to pay such fees and expenses if it assumes the Trustee's defense
and, in the reasonable judgment of the Trustee's outside counsel, there is no
conflict of interest between the Issuers and the Note 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 liquidated damages, 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
57
the Issuers, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. (a) The Trustee may resign at
any time by so notifying the Issuers. The Holders of a majority in principal
amount of the Notes may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Issuers shall remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee
or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns, is removed by the Issuers or by the
Holders of a majority in principal amount of the Notes and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuers shall promptly appoint a successor
Trustee.
(c) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.07.
(d) If a successor Xxxxxxx 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 ss.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.
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SECTION 7.09. Successor Trustee by Xxxxxx. 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 ss. 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
ss. 310(b), subject to its right to apply for a stay of its duty to resign under
the penultimate paragraph of TIA ss.310(b); provided, however, that there shall
be excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures
under which other securities or certificates of interest or participation in
other securities of the Issuers are outstanding if the requirements for such
exclusion set forth in TIA ss. 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against the Issuers.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
Article 8
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 2.07) 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
59
of, including interest thereon to maturity or such redemption date (other than
Notes replaced or paid pursuant to Section 2.07) and liquidated damages, 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 or 4.13 and the operation of
Section 5.01(a)(iii), 6.01(d), 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(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 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07,
7.08 and in this Article 8 shall survive until the Notes have been paid in full.
Thereafter, the Issuers' obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. Conditions to Defeasance. (a) The Issuers may exercise
their legal defeasance option or their covenant defeasance option only if:
(i) the Issuers irrevocably deposit in trust with the Trustee money
in an amount sufficient or U.S. Government Obligations, the principal of
and interest on which will be sufficient, or a combination thereof
sufficient, to pay the principal, premium (if any) and interest on the
Notes when due at maturity or redemption, as the case may be, including
interest thereon to maturity or such redemption date and liquidated
damages, if any;
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(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 and is not prohibited by Article 10;
(v) the Issuers deliver to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940;
(vi) in the case of the legal defeasance option, the Issuers shall
have delivered to the Trustee an Opinion of Counsel stating that (1) the
Issuers has received from, or there has been published by, the Internal
Revenue Service a ruling, or (2) since the date of this Indenture there
has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred;
(vii) in the case of the covenant defeasance option, the Issuers
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such covenant defeasance
had not occurred; and
(viii) the Issuers deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent to
the defeasance and discharge of the Notes as contemplated by this Article
8 have been complied with.
(b) Before or after a deposit, the Issuers may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article 3.
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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. Money and securities so
held in trust are not subject to Article 10 or 12.
SECTION 8.04. Repayment to the Issuers. The Trustee and the Paying
Agent shall promptly turn over to the Issuers upon request any money or U.S.
Government Obligations held by it as provided in this Article which, in the
written opinion of nationally recognized firm of independent public accountants
delivered to the Trustee (which delivery shall only be required if U.S.
Government Obligations have been so deposited), are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
discharge or defeasance in accordance with this Article.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Issuers upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Holders entitled to the money must look to the Issuers
for payment as general creditors and the Trustee, and the Paying Agent shall
have no further liability with respect to such monies.
SECTION 8.05. Indemnity for Government Obligations. The Issuers
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Issuers' obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to this Article 8 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with this Article 8; provided, however, that, if the Issuers have
made any payment of interest on or principal of any Notes because of the
reinstatement of its obligations, the Issuers shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
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Article 9
Amendments
SECTION 9.01. Without Consent of Holders. (a) The Issuers, the Note
Guarantors and the Trustee may amend this Indenture or the Notes 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 make any change in Article 10 or Article 12 that would limit
or terminate the benefits available to any holder of Senior Indebtedness
of the Issuers (or Representatives therefor) under Article 10 or Article
12;
(v) to add additional Note Guarantees with respect to the Notes;
(vi) to secure the Notes;
(vii) 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;
(viii) to comply with any requirement of the Commission in
connection with qualifying, or maintaining the qualification of, this
Indenture under the TIA;
(ix) to make any change that does not adversely affect the rights of
any Holder; or
(x) to provide for the issuance of the Exchange Notes or Private
Exchange Notes, which shall have terms substantially identical in all
material respects to the Initial Notes (except that the transfer
restrictions contained in the Initial Notes shall be modified or
eliminated, as appropriate), and which shall be treated, together with any
outstanding Initial Notes, as a single issue of securities.
(b) An amendment under this Section 9.01 may not make any change
that adversely affects the rights under Article 10 or Article 12 of any holder
of Senior
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Indebtedness of either Issuer then outstanding unless the holders of such Senior
Indebtedness (or any group or representative thereof authorized to give a
consent) consent to such change.
After an amendment under this Section becomes effective, the 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 Note
Guarantors and the Trustee may amend this Indenture or the Notes 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 liquidated damages 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) make any change in Article 10 or Article 12 that adversely
affects the rights of any Holder under Article 10 or Article 12;
(vii) impair the right of any Holder to receive payment of principal
of, and interest or any liquidated damages 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 Xxxxxx's Notes;
(viii) make any change in Section 6.04 or 6.07 or the second
sentence of this Section 9.02; or
(ix) modify the Note Guarantees in any manner adverse to the
Holders.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
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An amendment under this Section 9.02 may not make any change that
adversely affects the rights under Article 10 or Article 12 of any holder of
Senior Indebtedness of either Issuer then outstanding unless the holders of such
Senior Indebtedness (or any group or representative thereof authorized to give a
consent) consent to such change.
After an amendment under this Section 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 Xxxxxx'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.
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SECTION 9.06. Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture and that such amendment
is the legal, valid and binding obligation of the Issuers and the Note
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 10
Subordination
SECTION 10.01. Agreement To Subordinate. The Issuers each agree, and
each Holder by accepting a Note agrees, that the Indebtedness evidenced by the
Notes is subordinated in right of payment, to the extent and in the manner
provided in this Article 10, to the prior payment in full of all Senior
Indebtedness of the Issuers and that the subordination is for the benefit of and
enforceable by the holders of such Senior Indebtedness. The Notes shall in all
respects rank pari passu in right of payment with all other Senior Subordinated
Indebtedness of the Issuers and shall rank senior to all existing and future
Subordinated Obligations of the Issuers; and only Indebtedness of the Issuers
that is Senior Indebtedness of the Issuers shall rank senior to the Notes in
accordance with the provisions set forth herein. For purposes of this Article
10, the Indebtedness evidenced by the Notes shall be deemed to include any
liquidated damages payable pursuant to the provisions set forth in the Notes and
the Registration Agreement. All provisions of this Article 10 shall be subject
to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company or SCI LLC to their
respective creditors upon a total or partial liquidation or a total or partial
dissolution of the Company or SCI LLC or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property or SCI LLC or its property:
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(a) holders of Senior Indebtedness of the Company or SCI LLC, as the
case may be, shall be entitled to receive payment in full of such Senior
Indebtedness before Holders shall be entitled to receive any payment of
principal of or interest on the Notes; and
(b) until the Senior Indebtedness of the Company or SCI LLC, as the
case may be, is paid in full, any payment or distribution to which Holders would
be entitled but for this Article 10 shall be made to holders of such Senior
Indebtedness as their interests may appear, except that Holders may receive
shares of stock and any debt securities that are subordinated to such Senior
Indebtedness to at least the same extent as the Notes.
SECTION 10.03. Default on Senior Indebtedness. The Issuers may not
pay the principal of, premium (if any) or interest or liquidated damages, if
any, on the Notes, make any deposit pursuant to Section 8.01 or otherwise
repurchase, redeem or otherwise retire any Notes (collectively, "pay the Notes")
if (a) any Designated Senior Indebtedness of either of the Issuers is not paid
when due or (b) any other default on such Designated Senior Indebtedness occurs
and the maturity of such Designated Senior Indebtedness is accelerated in
accordance with its terms unless, in either case, (i) the default has been cured
or waived and any such acceleration has been rescinded or (ii) such Designated
Senior Indebtedness has been paid in full; provided, however, that the Issuers
may pay the Notes without regard to the foregoing if the Issuers and the Trustee
receive written notice approving such payment from the Representative of such
Designated Senior Indebtedness with respect to which either of the events set
forth in clause (a) or (b) of this sentence has occurred and is continuing.
During the continuance of any default (other than a default
described in clause (a) or (b) of the preceding sentence) with respect to any
Designated Senior Indebtedness of either Issuer pursuant to which the maturity
thereof may be accelerated immediately without further notice (except such
notice as may be required to effect such acceleration) or the expiration of any
applicable grace periods, the Issuers may not pay the Notes for a period (a
"Payment Blockage Period") commencing upon the receipt by the Trustee (with a
copy to the Issuers) of written notice (a "Blockage Notice") of such default
from the Representative of such Designated Senior Indebtedness specifying an
election to effect a Payment Blockage Period and ending 179 days thereafter (or
earlier if such Payment Blockage Period is terminated (a) by written notice to
the Trustee and the Issuers from the Person or Persons who gave such Blockage
Notice, (b) by repayment in full of such Designated Senior Indebtedness or (c)
because no default with respect to any Designated Senior Indebtedness is
continuing). Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in the first
sentence of this Section 10.03), the Issuers may resume payments on the Notes
after the end of such Payment Blockage Period, unless the holders of such
Designated Senior Indebtedness or the Representative of such holders shall have
accelerated the maturity of such Designated Senior Indebtedness, and such
Designated Senior Indebtedness has not been repaid in full.
Not more than one Blockage Notice may be given in any period of 360
consecutive days, irrespective of the number of defaults with respect to
Designated Senior Indebtedness during such period; provided, however, that if
any Blockage Notice within such 360-day period is given by or on behalf of any
holders of Designated Senior Indebtedness
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other than the Bank Indebtedness, the Representative of the Bank Indebtedness
may give another Blockage Notice within such period; provided further, however,
that in no event may the total number of days during which any Payment Blockage
Period or Periods is in effect exceed 179 days in the aggregate during any
period of 360 consecutive days. For purposes of this Section 10.03, no default
or event of default that existed or was continuing on the date of the
commencement of any Payment Blockage Period with respect to the Designated
Senior Indebtedness initiating such Payment Blockage Period shall be, or be
made, the basis of the commencement of a subsequent Payment Blockage Period by
the Representative of such Designated Senior Indebtedness, whether or not within
a period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 10.04. Acceleration of Payment of Notes. If payment of the
Notes is accelerated because of an Event of Default, the Trustee (provided, that
the Trustee shall have received written notice from the Issuers or a
Representative identifying the Designated Senior Indebtedness for which such
Representative is so designated, on which notice the Trustee shall be entitled
to rely conclusively) shall promptly notify the holders of each Issuer's
Designated Senior Indebtedness (or their Representative) of the acceleration. If
any such Designated Senior Indebtedness of the Issuers is outstanding, the
Issuers may not pay the Notes until five Business Days after such holders or the
Representative of such Designated Senior Indebtedness receive notice of such
acceleration and, thereafter, may pay the Notes only if this Article 10
otherwise permits payment at that time.
SECTION 10.05. When Distribution Must Be Paid Over. If a payment or
distribution is made to Holders that because of this Article 10 should not have
been made to them, the Holders who receive the payment or distribution shall
hold it in trust for holders of Senior Indebtedness of the Issuers and pay it
over to them as their interests may appear.
SECTION 10.06. Subrogation. After all Senior Indebtedness of the
Issuers is paid in full and until the Notes are paid in full, Holders shall be
subrogated to the rights of holders of such Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
Article 10 to holders of such Senior Indebtedness which otherwise would have
been made to Holders is not, as between the Issuers and Holders, a payment by
the Issuers on such Senior Indebtedness.
SECTION 10.07. Relative Rights. This Article 10 defines the relative
rights of Holders and holders of Senior Indebtedness of the Issuers. Nothing in
this Indenture shall:
(a) impair, as between the Issuers and Holders, the obligation of
the Issuers, which is absolute and unconditional, to pay principal of and
interest on and liquidated damages, if any, in respect of, the Notes in
accordance with their terms; or
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(b) prevent the Trustee or any Holder from exercising its available
remedies upon a Default, subject to the rights of holders of Senior Indebtedness
of the Issuers to receive distributions otherwise payable to Holders.
SECTION 10.08. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of the Issuers to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Issuers or by their failure to comply with this
Indenture.
SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Notes and shall not be charged with knowledge of the existence of facts that
would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives written notice satisfactory to it that payments may not be made under
this Article 10. The Issuers, the Registrar, the Paying Agent, a Representative
or a holder of Senior Indebtedness of the Issuers may give the notice; provided,
however, that, if an issue of Senior Indebtedness of either Issuer has a
Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness of the Issuers with the same rights it would have if it were not
Trustee. The Registrar and the Paying Agent may do the same with like rights.
The Trustee shall be entitled to all the rights set forth in this Article 10
with respect to any Senior Indebtedness of the Issuers which may at any time be
held by it, to the same extent as any other holder of such Senior Indebtedness;
and nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 10 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07 or any other Section of this
Indenture.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness
of the Issuers, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment pursuant to the Notes by
reason of any provision in this Article 10 shall not be construed as preventing
the occurrence of a Default. Nothing in this Article 10 shall have any effect on
the right of the Holders or the Trustee to accelerate the maturity of the Notes.
SECTION 10.12. Trust Monies Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Notes and liquidated damages, if
any, shall not be subordinated to the prior payment of any Senior Indebtedness
of the Issuers or subject to the restrictions set forth in this Article 10, and
none of the Holders shall be obligated to pay over
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any such amount to the Issuers or any holder of Senior Indebtedness of the
Issuers or any other creditor of the Issuers.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Holders shall be
entitled to rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (b) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the Holders or
(c) upon the Representatives for the holders of Senior Indebtedness of the
Issuers for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of such Senior Indebtedness and other
Indebtedness of the Issuers, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 10. In the event that the Trustee determines, in good faith,
that evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness of the Issuers to participate in any payment or distribution
pursuant to this Article 10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of such
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 10, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 10.
SECTION 10.14. Trustee To Effectuate Subordination. Each Holder by
accepting a Note authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holders and the holders of Senior Indebtedness of the
Issuers as provided in this Article 10 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Issuers and shall not be liable to any
such holders if it shall mistakenly pay over or distribute to Holders or the
Issuers or any other Person, money or assets to which any holders of Senior
Indebtedness of the Issuers shall be entitled by virtue of this Article 10 or
otherwise.
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Holder by accepting a Note acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness of
the Issuers, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Notes, to acquire and continue to hold, or to continue
to hold, such Senior Indebtedness and such holder of such Senior Indebtedness
shall be deemed conclusively to have relied on such subordination
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provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
Article 11
Note Guarantees
SECTION 11.01. Note Guarantees. (a) Each Note 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 liquidated damages,
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 Note 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 Note Guarantor, and that each
such Note Guarantor shall remain bound under this Article 11 notwithstanding any
extension or renewal of any Guaranteed Obligation.
(b) Each Note 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 Note Guarantor waives notice of
any default under the Notes or the Guaranteed Obligations. The obligations of
each Note 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 Note Guarantor; or (vi) any change in the
ownership of such Note Guarantor, except as provided in Section 11.02(b).
(c) Each Note Guarantor hereby waives any right to which it may be
entitled to have its obligations hereunder divided among the Note Guarantors,
such that such Note Guarantor's obligations would be less than the full amount
claimed. Each Note 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 Note Guarantor's obligations hereunder prior to any amounts
being claimed from or paid by such Note Guarantor hereunder. Each Note 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 Note Guarantor.
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(d) Each Note 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) The Note Guarantee of each Note Guarantor is, to the extent and
in the manner set forth in Article 12, subordinated and subject in right of
payment to the prior payment in full of the principal of and premium, if any,
and interest on all Senior Indebtedness of the relevant Note Guarantor and is
made subject to such provisions of this Indenture.
(f) Except as expressly set forth in Sections 8.01(b), 11.02 and
11.06, the obligations of each Note 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 Note 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 Note Guarantor or would otherwise operate as a discharge of any Note
Guarantor as a matter of law or equity.
(g) Each Note Guarantor agrees that its Note Guarantee shall remain
in full force and effect until payment in full of all the Guaranteed
Obligations. Each Note Guarantor further agrees that its Note Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any Guaranteed
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Issuers or otherwise.
(h) 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
Note 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 Note 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).
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(i) Each Note 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 and all obligations to which the Guaranteed Obligations are
subordinated as provided in Article 12. Each Note 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 Note
Guarantor for the purposes of this Section 11.01.
(j) Each Note 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.
(k) Upon request of the Trustee, each Note 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. (a) Any term or provision of
this Indenture to the contrary notwithstanding, the maximum aggregate amount of
the Guaranteed Obligations guaranteed hereunder by any Note Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Note Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
(b) A Note Guarantee as to any Note Guarantor shall terminate and be
of no further force or effect and such Note Guarantor shall be deemed to be
released from all obligations under this Article 11 upon (i) the merger or
consolidation of such Note Guarantor with or into any Person other than the
Company or a Subsidiary or Affiliate of the Company where such Note Guarantor is
not the surviving entity of such consolidation or merger, (ii) the sale by the
Company or any Subsidiary of the Company of the Capital Stock of such Note
Guarantor (or by any other Person as a result of a foreclosure of any Lien on
such Capital Stock securing Senior Indebtedness), where, after such sale, such
Note Guarantor is no longer a Subsidiary of the Company, (iii) the sale,
conveyance or transfer of all or substantially all the assets of such Note
Guarantor to another Person other than the Company or a Subsidiary or Affiliate
of the Company; provided, however, that each such merger, consolidation, sale,
conveyance or transfer shall comply with Sections 4.06 and 5.01. At the request
of the Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such release (in the form provided by the Company). Notwithstanding
the foregoing, if the Credit Agreement so requires, any Note Guarantor that has
Guaranteed Indebtedness under the Credit Agreement and is being released from
its Guarantee
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thereunder will be simultaneously released from its Note Guarantee hereunder
unless an Event of Default has occurred and is continuing.
SECTION 11.03. Successors and Assigns. This Article 11 shall be
binding upon each Note 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 11.04. No Waiver. Neither a failure nor a delay on the part
of either the Trustee or the Holders in exercising any right, power or privilege
under this Article 11 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article 11 at law,
in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or waiver of
any provision of this Article 11, nor the consent to any departure by any Note
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 Note Guarantor in any case shall entitle such Note
Guarantor to any other or further notice or demand in the same, similar or other
circumstances.
SECTION 11.06. Execution of Supplemental Indenture for Future Note
Guarantors. Each Subsidiary which is required to become a Note 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 Note 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 Note Guarantor
is a legal, valid and binding obligation of such Note Guarantor, enforceable
against such Note Guarantor in accordance with its terms and or to such other
matters as the Trustee may reasonably request.
SECTION 11.07. Non-Impairment. The failure to endorse a Note
Guarantee on any Note shall not affect or impair the validity thereof.
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Article 12
Subordination of the Note Guarantees
SECTION 12.01. Agreement To Subordinate. Each Note Guarantor agrees,
and each Holder by accepting a Note agrees, that the obligations of a Note
Guarantor hereunder are subordinated in right of payment, to the extent and in
the manner provided in this Article 12, to the prior payment in full of all
Senior Indebtedness of such Note Guarantor and that the subordination is for the
benefit of and enforceable by the holders of such Senior Indebtedness of such
Note Guarantor. The obligations hereunder with respect to a Note Guarantor shall
in all respects rank pari passu in right of payment with all other Senior
Subordinated Indebtedness of such Note Guarantor and shall rank senior to all
existing and future Subordinated Obligations of such Note Guarantor; and only
Indebtedness of such Note Guarantor that is Senior Indebtedness of such Note
Guarantor shall rank senior to the obligations of such Note Guarantor in
accordance with the provisions set forth herein.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of a Note Guarantor to creditors upon a
total or partial liquidation or a total or partial dissolution of such Note
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to such Note Guarantor and its property:
(a) holders of Senior Indebtedness of such Note Guarantor shall be
entitled to receive payment in full of such Senior Indebtedness before Holders
shall be entitled to receive any payment pursuant to any Guaranteed Obligations
from such Note Guarantor; and
(b) until the Senior Indebtedness of such Note Guarantor is paid in
full, any payment or distribution to which Holders would be entitled but for
this Article 12 shall be made to holders of such Senior Indebtedness as their
respective interests may appear, except that Holders may receive shares of stock
and any debt securities that are subordinated to such Senior Indebtedness to at
least the same extent as the Note Guarantees.
SECTION 12.03. Default on Designated Senior Indebtedness of a Note
Guarantor. A Note Guarantor may not make any payment pursuant to any of the
Guaranteed Obligations or repurchase, redeem or otherwise retire any Notes
(collectively, "pay its Guarantee") if (a) any Designated Senior Indebtedness of
such Note Guarantor is not paid when due or (b) any other default on Designated
Senior Indebtedness of such Note Guarantor occurs and the maturity of such
Designated Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, (i) the default has been cured or waived and any such
acceleration has been rescinded or (ii) such Designated Senior Indebtedness has
been paid in full; provided, however, that such Note Guarantor may pay its
Guarantee without regard to the foregoing if such Note Guarantor and the Trustee
receive written notice approving such payment from the Representative of the
holders of such Designated Senior Indebtedness with respect to which either of
the events in clause (a) or (b) of this sentence has occurred and is continuing.
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During the continuance of any default (other than a default
described in clause (a) or (b) of the preceding sentence) with respect to any
Designated Senior Indebtedness of a Note Guarantor pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the expiration of
any applicable grace periods, such Note Guarantor may not pay its Guarantee for
a period (a "Guarantee Payment Blockage Period") commencing upon the receipt by
the Trustee (with a copy to such Note Guarantor and the Issuers) of written
notice (a "Guarantee Blockage Notice") of such default from the Representative
of the holders of the Designated Senior Indebtedness of such Note Guarantor
specifying an election to effect a Guarantee Payment Blockage Period and ending
179 days thereafter (or earlier if such Guarantee Payment Blockage Period is
terminated (a) by written notice to the Trustee (with a copy to such Note
Guarantor and the Issuers) from the Person or Persons who gave such Guarantee
Blockage Notice, (b) by repayment in full of such Designated Senior Indebtedness
or (c) because no default with respect to any Designated Senior Indebtedness is
continuing). Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in the first
sentence of this Section 12.03), such Note Guarantor may resume payments with
respect to its Note Guarantee after the end of such Guarantee Payment Blockage
Period, unless the holders of such Designated Senior Indebtedness or the
Representative of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness and such Designated Senior Indebtedness has not
been repaid in full.
Not more than one Guarantee Blockage Notice may be given with
respect to a Note Guarantor in any period of 360 consecutive days, irrespective
of the number of defaults with respect to Designated Senior Indebtedness of such
Note Guarantor during such period; provided, however, that if any Guarantee
Blockage Notice within such 360-day period is given by or on behalf of any
holders of Designated Senior Indebtedness of such Note Guarantor other than the
Bank Indebtedness, the Representative of the Bank Indebtedness may give another
Guarantee Blockage Notice within such period; provided further, however, that in
no event may the total number of days during which any Guarantee Payment
Blockage Period or Periods is in effect exceed 179 days in the aggregate during
any period of 360 consecutive days. For purposes of this Section 12.03, no
default or event of default that existed or was continuing on the date of the
commencement of any Guarantee Payment Blockage Period with respect to the
Designated Senior Indebtedness initiating such Guarantee Payment Blockage Period
shall be, or be made, the basis of the commencement of a subsequent Guarantee
Payment Blockage Period by the Representative of such Designated Senior
Indebtedness, whether or not within a period of 360 consecutive days, unless
such default or event of default shall have been cured or waived for a period of
not less than 90 consecutive days.
SECTION 12.04. Demand for Payment. If payment of the Notes is
accelerated because of an Event of Default and a demand for payment is made on a
Note Guarantor pursuant to Article 11, the Trustee (provided that the Trustee
shall have received written notice from the Issuers, such Note Guarantor or a
Representative identifying such Designated Senior Indebtedness, on which notice
the Trustee shall be entitled to rely conclusively) shall promptly notify the
holders of the Designated Senior Indebtedness of such Note Guarantor (or the
Representative of such holders) of such demand. If any
76
Designated Senior Indebtedness of such Note Guarantor is outstanding, such Note
Guarantor may not pay its Guarantee until five Business Days after such holders
or the Representative of the holders of the Designated Senior Indebtedness of
such Note Guarantor receive notice of such demand and, thereafter, may pay its
Guarantee only if this Article 12 otherwise permits payment at that time.
SECTION 12.05. When Distribution Must Be Paid Over. If a payment or
distribution is made to Holders that because of this Article 12 should not have
been made to them, the Holders who receive the payment or distribution shall
hold such payment or distribution in trust for holders of the Senior
Indebtedness of the relevant Note Guarantor and pay it over to them as their
respective interests may appear.
SECTION 12.06. Subrogation. After all Senior Indebtedness of a Note
Guarantor is paid in full and until the Notes are paid in full, Holders shall be
subrogated to the rights of holders of Senior Indebtedness of such Note
Guarantor to receive distributions applicable to Designated Senior Indebtedness
of such Note Guarantor. A distribution made under this Article 12 to holders of
Senior Indebtedness of such Note Guarantor which otherwise would have been made
to Holders is not, as between such Note Guarantor and Holders, a payment by such
Note Guarantor on Senior Indebtedness of such Note Guarantor.
SECTION 12.07. Relative Rights. This Article 12 defines the relative
rights of Holders and holders of Senior Indebtedness of a Note Guarantor.
Nothing in this Indenture shall:
(a) impair, as between a Note Guarantor and Holders, the obligation
of a Note Guarantor which is absolute and unconditional, to make payments
with respect to the Guaranteed Obligations to the extent set forth in
Article 11; or
(b) prevent the Trustee or any Holder from exercising its available
remedies upon a default by a Note Guarantor under its obligations with
respect to the Guaranteed Obligations, subject to the rights of holders of
Senior Indebtedness of such Note Guarantor to receive distributions
otherwise payable to Holders.
SECTION 12.08. Subordination May Not Be Impaired by a Note
Guarantor. No right of any holder of Senior Indebtedness of a Note Guarantor to
enforce the subordination of the obligations of such Note Guarantor hereunder
shall be impaired by any act or failure to act by such Note Guarantor or by its
failure to comply with this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 12.03, the Trustee or the Paying Agent may continue to make payments on
the Notes and shall not be charged with knowledge of the existence of facts that
would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives written notice satisfactory to it that payments may not be made under
this Article 12. A Note Guarantor, the Registrar or
77
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness of a Note Guarantor may give the notice; provided, however, that if
an issue of Senior Indebtedness of a Note Guarantor has a Representative, only
the Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness of a Note Guarantor with the same rights it would have if it were
not Trustee. The Registrar and co-registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article 12 with respect to any Senior Indebtedness of a Note Guarantor
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness of such Note Guarantor; and nothing in Article 7 shall
deprive the Trustee of any of its rights as such holder. Nothing in this Article
12 shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.07 or any other Section of this Indenture.
SECTION 12.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness
of a Note Guarantor, the distribution may be made and the notice given to their
Representative (if any).
SECTION 12.11. Article 12 Not To Prevent Events of Default or Limit
Right To Accelerate. The failure of a Note Guarantor to make a payment on any of
the Guaranteed Obligations by reason of any provision in this Article 12 shall
not be construed as preventing the occurrence of a default by such Note
Guarantor under such obligations. Nothing in this Article 12 shall have any
effect on the right of the Holders or the Trustee to make a demand for payment
on a Note Guarantor pursuant to Article 11.
SECTION 12.12. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Holders shall be
entitled to rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (b) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the Holders or
(c) upon the Representatives for the holders of Senior Indebtedness of a Note
Guarantor for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of the Senior Indebtedness of a Note
Guarantor and other Indebtedness of a Note Guarantor, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 12. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness of a Note Guarantor to
participate in any payment or distribution pursuant to this Article 12, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of such Note
Guarantor held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 12, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 12.
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SECTION 12.13. Trustee To Effectuate Subordination. Each Holder by
accepting a Note authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holders and the holders of Senior Indebtedness of each
of the Note Guarantors as provided in this Article 12 and appoints the Trustee
as attorney-in-fact for any and all such purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness of a Note Guarantor. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of a Note Guarantor and
shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Holders or the relevant Note Guarantor or any other Person, money
or assets to which any holders of Senior Indebtedness of such Note Guarantor
shall be entitled by virtue of this Article 12 or otherwise.
SECTION 12.15. Reliance by Holders of Senior Indebtedness of a Note
Guarantor on Subordination Provisions. Each Holder by accepting a Note
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness of a Note Guarantor, whether such Senior Indebtedness was created
or acquired before or after the issuance of the Notes, to acquire and continue
to hold, or to continue to hold, such Senior Indebtedness and such holder of
Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Indebtedness.
SECTION 12.16. Defeasance. The terms of this Article 12 shall not
apply to payments from money or the proceeds of U.S. Government Obligations held
in trust by the Trustee for the payment of principal of and interest on the
Notes pursuant to the provisions described in Section 8.03.
Article 13
Miscellaneous
SECTION 13.01. 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 xx.xx. 310 to 318, inclusive,
such imposed duties or incorporated provision shall control.
SECTION 13.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Issuers:
c/o SCG Holding Corporation
0000 X. XxXxxxxx Xxxx
Xxxxxxx, XX 00000
79
Attention of: President
if to the Trustee:
State Street Bank and Trust Company
Xxxxxxx Square
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention of: Xxxxxx Xxxxxxxx
Corporate Trust Administration
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 13.03. Communication by Holders with Other Holders. Holders
may communicate pursuant to TIA ss. 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 ss. 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take or refrain
from taking any action under this Indenture (other than a request to
authenticate the Initial Notes in accordance with this Indenture), the Issuers
shall furnish to the Trustee:
(a) an Officers' Certificate in form reasonably satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have been
complied with; and
(b) an Opinion of Counsel in form reasonably satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture (other than pursuant to Section 4.09) shall
include:
80
(a) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual
matters on an Officers' Certificate or on certificates of public officials.
SECTION 13.06. 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 Note Guarantor or
by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuers or any Note 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 Note Guarantor or
by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuers or any Note 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 13.07. 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 13.08. 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 13.09. GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE
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WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 13.10. No Recourse Against Others. Neither Motorola nor any
director, officer, employee, stockholder or member, as such, of the Issuers, any
of the Note Guarantors or Motorola, shall have any liability for any obligations
of the Issuers or any of the Note 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 13.11. Successors. All agreements of each of the Issuers and
each Note Guarantor in this Indenture and the Notes shall bind its successors.
All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 13.12. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 13.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
SCG HOLDING 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,
by /s/ Xxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Assistant Secretary
STATE STREET BANK AND TRUST COMPANY,
as Trustee
by /s/ Xxxxxxx X. Xxxx, Xx.
-----------------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Vice President
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APPENDIX A
PROVISIONS RELATING TO INITIAL 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
Cedel, in each case to the extent applicable to such transaction and as in
effect from time to time.
"Cedel" means Cedel Bank, 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.
"Global Notes Legend" means the legend set forth under that caption
in Exhibit A to this Indenture.
"IAI" means an institutional "accredited investor" as described in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Chase Securities Inc., Xxxxxxxxx, Xxxxxx
& Xxxxxxxx Securities Corporation and Xxxxxx Brothers Inc.
"Notes Custodian" means the custodian with respect to a Global Note
(as appointed by the Depositary) or any successor person thereto, who shall
initially be the Trustee.
"Private Exchange" means an offer by the Issuers, pursuant to the
Registration 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 the
Private Exchange pursuant to the Registration Agreement.
"Purchase Agreement" means the Purchase Agreement dated August 4,
1999, among the Issuers, the Note Guarantors and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registered Exchange Offer" means the offer by the Issuers, pursuant
to the Registration 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.
"Registration Agreement" means the Exchange Offer and Registration
Rights Agreement dated August 4, 1999, among the Issuers, the Note Guarantors
and the Initial Purchasers.
"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 Notes Legend" means the legend set forth in Section
2.3(e)(i) herein.
"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.
"Rule 501" means Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"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 the Registration Agreement.
2
"Transfer Restricted Notes" means Definitive Notes and any other
Notes that bear or are required to bear the Restricted Notes Legend.
1.2 Other Definitions
Term: Defined in Section:
----- -------------------
"Agent Members"................................................ 2.1(c)
"IAI Global Note".............................................. 2.1(b)
"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 Initial Notes issued on the date hereof are being (i)
offered and sold by the Issuers pursuant to the 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 Initial Notes may thereafter be transferred to, among others, QIBs,
purchasers in reliance on Regulation S and, except as set forth below, IAIs in
accordance with Rule 501.
(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. One or more global securities in definitive, fully
registered form without interest coupons and bearing the Global Notes Legend and
the Restricted Notes Legend (collectively, the "IAI Global Note") shall also be
issued on the Closing Date, deposited 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 to
accommodate transfers of beneficial interests in the Notes to IAIs subsequent to
the initial distribution. Beneficial ownership interests in the Regulation S
Global Note shall not be exchangeable for interests in the Rule 144A Global
Note, the IAI Global Note or any other Note without a Restricted Notes Legend
until the expiration of the Restricted Period. The Rule 144A Global Note, the
IAI 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 a Registered Exchange Offer or Private
Exchange. The aggregate principal amount of the Global Notes may from time to
time be increased or decreased by adjustments
3
made on the records of the Trustee and the Depositary or its nominee and on the
schedules thereto as hereinafter provided.
(c) Book-Entry Provisions. This Section 2.1(c) shall apply only to a
Global Note deposited with or on behalf of the Depositary.
The Issuers shall execute and the Trustee shall, in accordance with
this Section 2.1(c) and Section 2.2 of this Appendix and pursuant to an order of
the Issuers signed by two Officers of each Issuer, authenticate and deliver
initially one or more Global Notes that (i) shall be registered in the name of
the Depositary for such Global Note or Global Notes or the nominee of such
Depositary and (ii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions or held by the Trustee as Notes
Custodian.
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) Initial Notes for original issue on the date hereof
in an aggregate principal amount of $400,000,000 (b) the (i) Exchange Notes for
issue only in a Registered Exchange Offer and (ii) Private Exchange Notes for
issue only in the Private Exchange, in the case of each of (i) and (ii) pursuant
to the Registration 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 Initial Notes, Exchange Notes or
Private Exchange Notes. The aggregate principal amount of Notes outstanding at
any time may not exceed $400,000,000 except as provided in Sections 2.07 and
2.08 of this Indenture.
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
4
transfer or make the exchange as requested if its reasonable requirements
for such transaction are met; provided, however, that the Definitive Notes
surrendered for transfer or exchange:
(1) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Issuers and the Registrar,
duly executed by the Holder thereof or his attorney duly authorized in
writing; and
(2) in the case of Transfer Restricted Notes, are accompanied by the
following additional information and documents, as applicable:
(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, (2) to an IAI that has furnished to the
Trustee a signed letter substantially in the form of Exhibit D or (3)
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
5
with the standing instructions and procedures existing between the
Depositary and the Notes Custodian, the aggregate principal amount of
Notes represented by the Global Note to be increased by the aggregate
principal amount of the Definitive Note to be exchanged and shall credit
or cause to be credited to the account of the Person specified in such
instructions a beneficial interest in the Global Note equal to the
principal amount of the Definitive Note so canceled. If no Global Notes
are then outstanding and the Global Note has not been previously exchanged
for certificated securities pursuant to Section 2.4 of this Appendix, the
Issuers shall issue and the Trustee shall authenticate, upon written order
of the Issuers in the form of an Officers' Certificate, a new Global Note
in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. (i) The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depositary, in 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 or the IAI 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 Cedel. In the case of a transfer of
a beneficial interest in either the Regulation S Global Note or the Rule 144A
Global Note for an interest in the IAI Global Note, the transferee must furnish
a signed letter substantially in the form of Exhibit D to the Trustee.
(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.
6
(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 the Registered Exchange Offer or the effectiveness of the 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 Cedel. During the Restricted Period,
beneficial ownership interests in the Regulation S Global Note may only be sold,
pledged or transferred through Euroclear or Cedel in accordance with the
Applicable Procedures and only (1) to the Issuers, (2) 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, (3) in an offshore transaction in
accordance with Regulation S, (4) pursuant to an exemption from registration
under the Securities Act provided by Rule 144 (if applicable) under the
Securities Act, (5) to an IAI purchasing for its own account, or for the account
of such an IAI, in a minimum principal amount of Notes of $250,000 or (6)
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 or the IAI
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 (1) a QIB within the meaning of
Rule 144A in a transaction meeting the requirements of Rule 144A or (2) an IAI
purchasing for its own account, or for the account of such an IAI, in a minimum
principal amount of the Notes of $250,000. Such written certification shall no
longer be required after the expiration of the Restricted Period. In the case of
a transfer of a beneficial interest in the Regulation S Global Note for an
interest in the IAI Global Note, the transferee must furnish a signed letter
substantially in the form of Exhibit D to the Trustee.
(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
7
substantially the following form (each defined term in the legend being
defined as such for purposes of the legend only):
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY
AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF
SUCH NOTE), ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE NOTE FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH
CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE NOTES OF $250,000, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS' AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE."
8
Each Definitive Note shall bear the following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS."
(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 Initial Notes or Private Exchange
Notes during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Notes or Private Exchange Notes, as
the case may be, all requirements pertaining to the Restricted Notes
Legend on such Initial Notes or such Private Exchange Notes shall cease to
apply and the requirements that any such Initial Notes or such Private
Exchange Notes be issued in global form shall continue to apply.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Notes pursuant to which Holders of such Initial
Notes are offered Exchange Notes in exchange for their Initial Notes, all
requirements pertaining to Initial Notes that Initial 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 Initial Notes in such Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Notes pursuant to which Holders of such Initial Notes are offered
Private Exchange Notes in exchange for their Initial Notes, all
requirements pertaining to such Initial Notes that Initial 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 Initial 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.
(f) Cancellation 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,
9
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 3.06, 4.06 and 4.08 of this Indenture).
(iii) Prior to the due presentation for registration of transfer of
any Note, the Issuers, the Trustee, the Paying Agent or the Registrar may
deem and treat the person in whose name a Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Note and for all other purposes
whatsoever, whether or not such Note is overdue, and none of the Issuers,
the Trustee, the Paying Agent or the Registrar shall be affected by notice
to the contrary.
(iv) All Notes issued upon any transfer or exchange pursuant to the
terms of this Indenture shall evidence the same debt and shall be entitled
to the same benefits under this Indenture as the Notes surrendered upon
such transfer or exchange.
(h) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Note, a member of, or a participant in the
Depositary or any other Person with respect to the accuracy of the records
of the Depositary or its nominee or of any participant or member thereof,
with respect to any ownership interest in the Notes or with respect to the
delivery to any participant, member, beneficial owner or other Person
(other than the Depositary) of any notice (including any notice of
redemption or repurchase) or the payment of any amount, under or with
respect to such Notes. All notices and communications to be given to the
Holders and all payments to be made to Holders under the Notes shall be
given or made only to the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Note). The rights of
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
10
information furnished by the Depositary with respect to its members,
participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any transfers between or
among Depositary participants, members or beneficial owners in any Global
Note) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if
and when expressly required by, the terms of this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
2.4 Definitive Notes
(a) A Global Note deposited with the Depositary or with the Trustee
as Notes Custodian pursuant to Section 2.1 or issued in connection with a
Registered Exchange Offer or Private Exchange shall be transferred to the
beneficial owners thereof in the form of Definitive Notes in an aggregate
principal amount equal to the principal amount of such Global Note, in exchange
for such Global Note, only if such transfer complies with Section 2.3 and (i)
the Depositary notifies the Issuers that it is unwilling or unable to continue
as a Depositary for such Global Note or if at any time the Depositary ceases to
be a "clearing agency" registered under the Exchange Act, and a successor
depositary is not appointed by the Issuers within 90 days of such notice or
after the Issuers become aware of such cessation, or (ii) an Event of Default
has occurred and is continuing or (iii) the Issuers, in their sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Notes under this Indenture.
(b) Any Global Note that is transferable to the beneficial owners
thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to
the Trustee, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Note, an equal aggregate principal
amount of Definitive Notes of authorized denominations. Any portion of a Global
Note transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depositary shall direct. Any certificated
Initial Note in the form of a Definitive Note delivered in exchange for an
interest in the Global Note shall, except as otherwise provided by Section
2.3(e), bear the Restricted Notes Legend.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Note may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a)(i), (ii) or (iii), the Issuers will promptly make available to
the Trustee a reasonable supply of Definitive Notes in fully registered form
without interest coupons.
11
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE AND PRIVATE EXCHANGE NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE ISSUERS OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS
WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE
ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE
FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR
ACQUIRING THE NOTE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF
THE NOTES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS' AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Each Definitive Note shall bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.
2
No. $__________
12% Senior Subordinated Note due 2009
CUSIP No. ______
ISIN No._____
SCG Holding, 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 August 1,
2009.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
----------
1 Use the Schedule of Increases and Decreases language if Note is in Global
Form.
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.
SCG HOLDING CORPORATION,
by______________________________________
Name:
Title:
SEMICONDUCTOR COMPONENTS
INDUSTRIES, LLC,
by______________________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
STATE STREET BANK AND TRUST COMPANY,
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".
2
[FORM OF REVERSE SIDE OF INITIAL NOTE AND PRIVATE EXCHANGE NOTE]
12% Senior Subordinated Note due 2009
1. Interest
(a) SCG Holding 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 February 1 and August 1 of each year.
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 August 4, 1999 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) Liquidated Damages. The Holder (as defined in the Indenture) of
this Note is entitled to the benefits of an Exchange Offer and Registration
Rights Agreement, dated as of August 4, 1999, among the Issuers, SCG (Malaysia
SMP) Holding Corporation, SCG (Czech) Holding Corporation, SCG (China) Holding
Corporation, Semiconductor Components Industries Puerto Rico, Inc. and SCG
International Development LLC (collectively, the "Note Guarantors") and the
Initial Purchasers named therein (the "Registration Agreement"). Capitalized
terms used in this paragraph (b) but not defined herein have the meanings
assigned to them in the Registration Agreement. If (i) the Shelf Registration
Statement or Exchange Offer Registration Statement, as applicable under the
Registration Agreement, is not filed with the Commission on or prior to 120 days
after the Issue Date, (ii) the Exchange Offer Registration Statement or the
Shelf Registration Statement, as the case may be, is not declared effective
within 180 days after the Issue Date, (iii) the Registered Exchange Offer is not
consummated on or prior to 210 days after the Issue Date, or (iv) the Shelf
Registration Statement is filed and declared effective within 180 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 Note
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 (iv), a
"Registration Default"), the Issuers shall pay liquidated damages to each Holder
of Transfer Restricted Notes, during the period of such Registration Default, in
an amount equal to $0.192 per week per $1,000 principal amount of the Notes
constituting Transfer Restricted Notes held by such Holder until the applicable
Registration Statement is filed or declared effective, the Registered Exchange
Offer is consummated or the Shelf Registration Statement again becomes
effective, as the case may be. All accrued liquidated damages shall be paid to
Holders in the same manner as interest payments on the Notes on semi-annual
payment dates which correspond to interest payment dates for the Notes.
Following the cure of all Registration Defaults, the accrual of liquidated
damages shall cease. The Trustee shall have no responsibility with respect to
the determination of the amount of any such liquidated damages. For purposes of
the foregoing, "Transfer Restricted Notes" means (i) each Initial
3
Note until the date on which such Initial Note has been exchanged for a freely
transferable Exchange Note in the Registered Exchange Offer, (ii) each Initial
Note or Private Exchange Note until the date on which such Initial Note or
Private Exchange Note has been effectively registered under the Securities Act
and is eligible to be disposed of in accordance with a Shelf Registration
Statement or (iii) each Initial Note or Private Exchange Note until the date on
which such Initial Note or Private Exchange Note is distributed to the public
pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule
144(k) under the Securities Act. Notwithstanding anything to the contrary in
this paragraph (b), the Issuers shall not be required to pay liquidated damages
(i) during any Suspension Period or (ii) to a Holder of Transfer Restricted
Notes if such Holder failed to comply with its obligations under the
Registration Agreement.
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 January 15 or July 15 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, liquidated
damages, if any, and interest in money of the United States of America that at
the time of payment is legal tender for payment of public and private debts.
Payments in respect of the Notes represented by a Global Note (including
principal, premium, liquidated damages, if any, 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, STATE STREET BANK AND TRUST COMPANY, a Massachusetts
trust company (the "Trustee"), will act as Paying Agent and Registrar. The
Issuers may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Issuers or any of their domestically incorporated Wholly
Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Issuers issued the Notes under an Indenture dated as of August
4, 1999 (the "Indenture"), among the Issuers, the Note 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. xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture (the
"TIA"). Terms defined in the Indenture and not defined herein have the
4
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 subordinated unsecured obligations of the
Issuers limited to $400,000,000 aggregate principal amount at any one time
outstanding (subject to Sections 2.07 and 2.08 of the Indenture). This Note is
one of the [Initial] [Private Exchange] Notes referred to in the Indenture. The
Notes include the Initial Notes and any Exchange Notes and Private Exchange
Notes issued in exchange for Initial Notes pursuant to the Indenture. The
Initial Notes, the Exchange Notes and the 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 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 Note Guarantors have, jointly and severally,
unconditionally guaranteed the Guaranteed Obligations on a senior subordinated
basis pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth in the following paragraph, the Notes shall not
be redeemable at the option of the Issuers prior to August 1, 2004. 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 and liquidated damages, 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 August 1 of the
years set forth below:
YEAR REDEMPTION PRICE
------------------------------------------------------------------------
2004..............................................................106.0%
2005..............................................................104.5%
2006..............................................................103.0%
2007..............................................................101.5%
2008 and thereafter...............................................100.0%
5
In addition, prior to August 1, 2002, the Issuers may, on one or
more occasions, redeem up to a maximum of 35% of the original aggregate
principal amount of the Notes with the Net Cash Proceeds of one or more Public
Equity Offerings by the Company at a redemption price equal to 112% of the
principal amount thereof, plus accrued and unpaid interest and liquidated
damages, 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); provided, however, that after giving effect to
any such redemption, (a) at least 65% of the original aggregate principal amount
of the Notes remains outstanding and (b) such redemption is made within 90 days
of the date of closing of the applicable Public 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.
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 and liquidated damages, 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 and liquidated damages, 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. Subordination
The Notes are subordinated in right of payment to Senior
Indebtedness, as defined in the Indenture. To the extent provided in the
Indenture, Senior Indebtedness must be paid before the Notes may be paid. Each
of the Issuers and each Note Guarantor agrees, and each Holder by accepting a
Note agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.
6
10. 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.
11. 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.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
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.
13. 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.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (a) the
Indenture or the Notes 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 of Notes, the Issuers and the Trustee may
amend the Indenture or the Notes (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; (iv)
to make any change in the subordination provisions of the Indenture that would
limit or terminate the benefits available to any holder of Senior Indebtedness
of the Issuers (or any representative thereof) under such subordination
provisions; (v) to add additional Note Guarantees with respect to the Notes;
(vi) to secure the Notes; (vii) to add to the covenants of the Issuers or to
surrender rights and powers conferred on the Issuers; (viii) to comply with the
requirements of the Commission in
7
order to effect or maintain the qualification of the Indenture under the TIA;
(ix) to make any change that does not adversely affect the rights of any Holder;
or (x) to provide for the issuance of the Exchange Notes or Private Exchange
Notes.
15. 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.
16. 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.
8
17. No Recourse Against Others
Neither Motorola, Inc. nor any director, officer, employee,
stockholder or member, as such, of the Issuers, any Note Guarantor or Motorola,
Inc. shall have any liability for any obligations of the Issuers or any of the
Note Guarantors under the Notes or the 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 waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Notes.
18. 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.
19. 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).
20. 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.
21. 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.
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.
9
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.
10
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 Issuers; or
(2) |_| to the Registrar for registration in the name of the Holder, without
transfer; or
(3) |_| pursuant to an effective registration statement under the Securities
Act of 1933; or
(4) |_| 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
(5) |_| 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 and Cedel
until the expiration of the Restricted Period (as defined in the
Indenture); or
(6) |_| to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that
has furnished to the Trustee a signed letter containing certain
representations and agreements; or
11
(7) |_| 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 thereof; provided, however , that if box
(5), (6) or (7) is checked, the Trustee may require, prior to registering
any such transfer of the Notes, such legal opinions, certifications and
other information as the Issuers have reasonably requested to confirm that
such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act of 1933.
________________________________________
Your Signature
Signature Guarantee:
Date: _____________________________ ________________________________________
Signature must be guaranteed Signature of Signature
by a participant in a recognized Guarantee
signature guaranty medallion
program or other signature
guarantor acceptable to the Trustee
________________________________________________________________________________
TO BE COMPLETED BY PURCHASER IF (4) 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
12
[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 Principal Signature of
Amount of increase in amount of this authorized
decrease in Principal Global Note signatory of
Principal Amount of following such Trustee or
Date of Amount of this this Global decrease or Notes
Exchange Global Note Note increase Custodian
13
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
14
EXHIBIT B
[FORM OF FACE OF EXCHANGE NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE ISSUERS OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
No. $__________
12% Senior Subordinated Note due 2009
CUSIP No. ______
ISIN No.
SCG Holding 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 August 1, 2009.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
----------
(2) Use the Schedule of Increases and Decreases language if Note is in Global
Form.
2
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.
SCG HOLDING CORPORATION,
by______________________________________
Name:
Title:
SEMICONDUCTOR COMPONENTS
INDUSTRIES, LLC,
by______________________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
STATE STREET BANK AND TRUST COMPANY,
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".
3
[FORM OF REVERSE SIDE OF EXCHANGE NOTE]
12% Senior Subordinated Note due 2009
1. Interest.
SCG Holding 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 February 1 and August 1 of each year.
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 August 4, 1999 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 January 15 or July 15 next preceding the interest payment date
even if Notes are canceled after the record date and on or before the interest
payment date. Holders (as defined in the Indenture) must surrender Notes to a
Paying Agent to collect principal payments. The Issuers shall pay principal,
premium, liquidated damages, if any, and interest in money of the United States
of America that at the time of payment is legal tender for payment of public and
private debts. Payments in respect of the Notes represented by a Global Note
(including principal, premium, liquidated damages, if any, 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, STATE STREET BANK AND TRUST COMPANY, a Massachusetts
trust company (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.
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4. Indenture
The Issuers issued the Notes under an Indenture dated as of August
4, 1999 (the "Indenture"), among the Issuers, SCG (Malaysia SMP) Holding
Corporation, SCG (Czech) Holding Corporation, SCG (China) Holding Corporation,
Semiconductor Components Industries Puerto Rico, Inc. and SCG International
Development LLC (collectively, the "Note 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. xx.xx.
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 subordinated unsecured obligations of the
Issuers limited to $400,000,000 aggregate principal amount at any one time
outstanding (subject to Sections 2.07 and 2.08 of the Indenture). This Note is
one of the Exchange Notes referred to in the Indenture. The Notes include the
Initial Notes and any Exchange Notes and Private Exchange Notes issued in
exchange for the Initial Notes pursuant to the Indenture. The Initial Notes, the
Exchange Notes and the 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 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 Note Guarantors have, jointly and severally,
unconditionally guaranteed the Guaranteed Obligations on a senior subordinated
basis pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth in the following paragraph, the Notes shall not
be redeemable at the option of the Issuers prior to August 1, 2004. 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 and liquidated damages, 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 August 1 of the
years set forth below:
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YEAR PRICE REDEMPTION
---------------------------------------------------------------------------
2004.................................................................106.0%
2005.................................................................104.5%
2006.................................................................103.0%
2007.................................................................101.5%
2008 and thereafter..................................................100.0%
In addition, prior to August 1, 2002, the Issuers may, on one or
more occasions, redeem up to a maximum of 35% of the original aggregate
principal amount of the Notes with the Net Cash Proceeds of one or more Public
Equity Offerings by the Company at a redemption price equal to 112% of the
principal amount thereof, plus accrued and unpaid interest and liquidated
damages, 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); provided, however, that after giving effect to any such
redemption, (a) at least 65% of the original aggregate principal amount of the
Notes remains outstanding and (b) such redemption is made within 90 days of the
date of closing of the applicable Public 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.
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 and liquidated damages, 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 and liquidated damages, 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.
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9. Subordination
The Notes are subordinated in right of payment to Senior
Indebtedness, as defined in the Indenture. To the extent provided in the
Indenture, Senior Indebtedness must be paid before the Notes may be paid. Each
of the Issuers and each Note Guarantor agrees, and each Holder by accepting a
Note agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.
10. 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.
11. 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.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
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.
13. 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.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (a) the
Indenture or the Notes 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 of Notes, the Issuers and the Trustee may
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amend the Indenture or the Notes (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; (iv)
to make any change in the subordination provisions of the Indenture that would
limit or terminate the benefits available to any holder of Senior Indebtedness
of the Issuers (or any representative thereof) under such subordination
provisions; (v) to add additional Note Guarantees with respect to the Notes;
(vi) to secure the Notes; (vii) to add to the covenants of the Issuers or to
surrender rights and powers conferred on the Issuers; (viii) to comply with the
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the TIA; (ix) to make any change that does not adversely
affect the rights of any Holder; or (x) to provide for the issuance of the
Exchange Notes or Private Exchange Notes.
15. Defaults and Remedies
If an Event of Default occurs (other than an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of the
Company or SCI LLC) and is continuing, the Trustee or the Holders of at least
25% in principal amount of the outstanding Notes may declare the principal of
and accrued but unpaid interest on all the Notes to be due and payable. If an
Event of Default relating to certain events of bankruptcy, insolvency or
reorganization of the Company or SCI LLC occurs, the principal of and interest
on all the Notes shall become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders. Under
certain circumstances, the Holders of a majority in principal amount of the
outstanding Notes may rescind any such acceleration with respect to the Notes
and its consequences.
If an Event of Default occurs and is continuing, the Trustee shall
be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the Holders unless such Holders
have offered to the Trustee reasonable indemnity or security against any loss,
liability or expense and certain other conditions are complied with. Except to
enforce the right to receive payment of principal, premium (if any) or interest
when due, no Holder may pursue any remedy with respect to the Indenture or the
Notes unless (i) such Holder has previously given the Trustee notice that an
Event of Default is continuing, (ii) Holders of at least 25% in principal amount
of the outstanding Notes have requested the Trustee in writing to pursue the
remedy, (iii) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense, (iv) the Trustee has not
complied with such request within 60 days after the receipt of the request and
the offer of security or indemnity and (v) the Holders of a majority in
principal amount of the outstanding Notes have not given the Trustee a direction
inconsistent with such request within such 60-day period. Subject to certain
restrictions, the Holders of a majority in principal amount of the outstanding
Notes are given the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee. The Trustee, however, may refuse to follow any
direction that conflicts with law or the Indenture or that the Trustee
determines is unduly prejudicial to the rights of any other Holder or that would
involve the Trustee in personal liability. Prior to taking any action under the
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by taking or not
taking such action.
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16. 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.
17. No Recourse Against Others
Neither Motorola, Inc. nor any director, officer, employee,
stockholder or member, as such, of the Issuers, any Note Guarantor or Motorola,
Inc. shall have any liability for any obligations of the Issuers or any of the
Note Guarantors under the Notes or the 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 waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Notes.
18. 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.
19. 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).
20. Governing Law
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITH OUT 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.
21. 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.
THE ISSUERS WILL FURNISH TO ANY HOLDER OF NOTES UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE
TEXT OF THIS NOTE.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on
the books of the Issuers. The agent may substitute another to act for him.
____________________________________________________________
Date: ________________ Your Signature: _____________________
____________________________________________________________
Sign exactly as your name appears on the other side of this Note. Signature must
be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.
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[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 Principal Signature of
Amount of increase in amount of this authorized
decrease in Principal Global Note signatory of
Principal Amount of following such Trustee or
Date of Amount of this this Global decrease or Notes
Exchange Global Note Note increase Custodian
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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.
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EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as
of , among [GUARANTOR] (the "New Note Guarantor"), a subsidiary of SCG
Holding 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, SCG Puerto Rico Corp., SCG International
Development LLC and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, 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. and SCG International Development LLC
(collectively, the "Existing Note Guarantors") have heretofore executed and
delivered to the Trustee an Indenture (the "Indenture") dated as of August 4,
1999, providing for the issuance of an aggregate principal amount of up to
$400,000,000 of 12% Senior Subordinated Notes due 2009 (the "Notes");
WHEREAS Section 4.11 of the Indenture provides that under certain
circumstances the Issuers are required to cause the New Note Guarantor to
execute and deliver to the Trustee a supplemental indenture pursuant to which
the New Note 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 Note 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
Note Guarantor, the Issuers, the Existing Note 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 Note Guarantor hereby agrees,
jointly and severally with all the Existing Note Guarantors, to unconditionally
guarantee the Issuers' obligations under the Notes on the terms and subject to
the conditions set forth in Articles 11 and 12 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 NOTE GUARANTOR],
by______________________________________
Name:
Title:
SCG HOLDING CORPORATION,
by______________________________________
Name:
Title:
SEMICONDUCTOR COMPONENTS INDUSTRIES LLC,
by______________________________________
Name:
Title:
2
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:
SCG INTERNATIONAL DEVELOPMENT LLC,
by______________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
by______________________________________
Name:
Title:
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EXHIBIT D
Form of
Transferee Letter of Representation
SCG Holding Corporation
Semiconductor Components Industries, LLC
0000 X. XxXxxxxx Xxxx
Xxxxxxx, XX 00000
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $________
principal amount of the 12% Senior Subordinated Notes due 2009 (the "Notes") of
SCG Holding Corporation and Semiconductor Components Industries, LLC (the
"Issuers").
Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:
Name:______________________________
Address:___________________________
Taxpayer ID Number:________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Notes, and we are acquiring the Notes not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act. We have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we invest
in or purchase securities similar to the Notes in the normal course of our
business. We, and any accounts for which we are acting, are each able to bear
the economic risk of our or its investment.
2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Notes to offer, sell or otherwise transfer
such Notes prior to the date that is two years after the later of the date of
original issue and the last date on which any of the Issuers or any affiliate of
either Issuer was the owner of such Notes (or any predecessor thereto) (the
"Resale Restriction Termination Date") only (a) to the Issuers, (b) pursuant to
a registration statement that has been declared effective under the Securities
Act, (c) in a transaction complying with the requirements of Rule 144A under the
Securities Act ("Rule 144A"), to a person we reasonably believe is a qualified
institutional buyer under Rule 144A (a "QIB") that is purchasing for its own
account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance
on Rule 144A, (d) pursuant to offers and sales that occur outside the United
States within the meaning of Regulation S under the Securities Act, (e) to an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act that is purchasing for its own account or
for the account of such an institutional "accredited investor," in each case in
a minimum principal amount of Notes of $250,000, or (f) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Notes is proposed to be made pursuant to clause (e) above
prior to the Resale Restriction Termination Date, the transferor shall deliver a
letter from the transferee substantially in the form of this letter to the
Issuers and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such Notes for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Issuers and the Trustee
reserve the right prior to the offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Notes pursuant to clause (d), (e) or (f)
above to require the delivery of an opinion of counsel, certifications or other
information satisfactory to the Issuers and the Trustee.
TRANSFEREE:____________________________,
by:_____________________________________
2
