EXHIBIT 10.54
EXECUTION COPY
SECURITY AGREEMENT dated as of
August 4, 1999, as amended and restated as
of March 3, 2003, among SEMICONDUCTOR
COMPONENTS INDUSTRIES, LLC, a Delaware
limited liability company (the "Borrower"),
ON SEMICONDUCTOR CORPORATION, a Delaware
corporation ("Holdings"), each subsidiary of
Holdings listed on Schedule I hereto (each
such subsidiary individually a "Subsidiary"
or a "Subsidiary Guarantor" and,
collectively, the "Subsidiary Guarantors";
Holdings, the Subsidiary Guarantors and the
Borrower are referred to collectively herein
as the "Grantors") and JPMORGAN CHASE BANK,
a New York banking corporation ("JPMCB"), as
collateral agent (in such capacity, the
"Collateral Agent") for the Secured Parties
(as defined herein).
W I T N E S S E T H:
WHEREAS, (a) the Companies, certain lenders from time to time
party thereto (the "Lenders"), and JPMCB, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent"), are parties to the
Credit Agreement dated as of August 4, 1999, as amended and restated as of April
3, 2000, and (b) Holdings, the Subsidiary Guarantors and the Administrative
Agent are parties to a Guarantee Agreement dated as of August 4, 1999 (as
amended, supplemented or modified from time to time, the "Guarantee Agreement");
WHEREAS, pursuant to the terms, conditions and provisions of
(a) the Indenture dated as of the date hereof (as amended, supplemented or
otherwise modified from time to time, the "Indenture"), among the Companies, the
Subsidiary Guarantors and Xxxxx Fargo Bank Minnesota, National Association, as
trustee (the "Trustee"), and (b) the Purchase Agreement dated as of February 26,
2003, among the Companies, the Subsidiary Guarantors and Xxxxxxx Xxxxx Barney
Inc., Credit Suisse First Boston LLC, X.X. Xxxxxx Securities Inc. and Xxxxxx
Xxxxxxx & Co. Incorporated (the "Initial Purchasers"), the Companies are issuing
$200,000,000 aggregate principal amount of 12% Senior Secured Notes due 2010 and
may issue, from time to time, additional notes in accordance with the provisions
of the Indenture (collectively, the "Notes") which will be guaranteed on a
senior secured basis by each of the Subsidiary Guarantors;
WHEREAS, the Companies and certain Lenders under the Credit
Agreement referred to above have entered into an Amendment and Restatement
Agreement dated as of February 14, 2003 (the "Amendment and Restatement
Agreement"), to amend and restate the Credit Agreement referred to above as of
February 14, 2003 (such Credit Agreement, as further amended, supplemented or
otherwise modified from time to time, the "Credit Agreement") in order to, among
other things, permit, subject to certain terms and conditions, (a) the issuance
of the Notes by the Companies and (b) the amendment of the Security Documents to
provide for securing the Note Obligations thereunder;
WHEREAS, the parties hereto are parties to the Security
Agreement dated as of August 4, 1999, as amended, supplemented and modified from
time to time prior to the date hereof, and are entering into this Agreement to
effect the securing of the Note Obligations
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hereunder and other related amendments contemplated by the Amendment and
Restatement Agreement and the Indenture;
WHEREAS, the Companies, the Collateral Agent and the Trustee
have entered into a Collateral Sharing Agreement dated as of the date hereof
(the "Collateral Sharing Agreement"); and
WHEREAS, each Grantor has duly authorized the execution,
delivery and performance of this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and for other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged,
each Grantor and the Collateral Agent, on behalf of itself and each Secured
Party (and each of their respective successors or assigns), hereby agree as
follows:
ARTICLE I
Definitions
SECTION 1.01. Definition of Terms Used Herein. Unless the
context otherwise requires, all capitalized terms used but not defined herein
shall have the meanings set forth in the Credit Agreement or the Indenture, as
applicable.
SECTION 1.02. Definition of Certain Terms Used Herein. As
used herein, the following terms shall have the following meanings:
"Account Debtor" shall mean any Person who is or who may
become obligated to any Grantor under, with respect to or on account of an
Account.
"Accounts" shall mean all "accounts" (as defined in the UCC)
of any Grantor and shall include any and all right, title and interest of any
Grantor to payment for goods and services sold or leased, including any such
right evidenced by chattel paper, whether due or to become due, whether or not
it has been earned by performance, and whether now or hereafter acquired or
arising in the future, including accounts receivable from Affiliates of the
Grantors.
"Accounts Receivable" shall mean all Accounts and all right,
title and interest in any returned goods, together with all rights, titles,
securities and guarantees with respect thereto, including any rights to stoppage
in transit, replevin, reclamation and resales, and all related security
interests, liens and pledges, whether voluntary or involuntary, in each case
whether now existing or owned or hereafter arising or acquired.
"Collateral" shall mean all (a) Accounts Receivable, (b)
Documents, (c) Equipment, (d) General Intangibles, (e) Inventory, (f) cash and
cash accounts, (g) Investment Property and (h) Proceeds; provided that the
Collateral shall not include (i) more than 65% of the issued and outstanding
voting stock of any Foreign Subsidiary, (ii) any Equity Interests in any Foreign
Joint Venture Company to the extent that such a pledge is prohibited by the
constitutive documents of such Foreign Joint Venture Company and (iii) to the
extent that applicable law requires that a Subsidiary issue directors'
qualifying shares, such qualifying shares.
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"Collateral Sharing Agreement" shall have the meaning assigned
to such term in the recitals to this Agreement.
"Commodity Account" shall mean an account maintained by a
Commodity Intermediary in which a Commodity Contract is carried out for a
Commodity Customer.
"Commodity Contract" shall mean a commodity futures contract,
an option on a commodity futures contract, a commodity option or any other
contract that, in each case, is (a) traded on or subject to the rules of a board
of trade that has been designated as a contract market for such a contract
pursuant to the federal commodities laws or (b) traded on a foreign commodity
board of trade, exchange or market, and is carried on the books of a Commodity
Intermediary for a Commodity Customer.
"Commodity Customer" shall mean a Person for whom a Commodity
Intermediary carries a Commodity Contract on its books.
"Commodity Intermediary" shall mean (a) a Person who is
registered as a futures commission merchant under the federal commodities laws
or (b) a Person who in the ordinary course of its business provides clearance or
settlement services for a board of trade that has been designated as a contract
market pursuant to federal commodities laws.
"Companies" means Holdings and the Borrower.
"Copyright License" shall mean any written agreement, now or
hereafter in effect, granting any right to any third party under any Copyright
now or hereafter owned by any Grantor or which such Grantor otherwise has the
right to license, or granting any right to such Grantor under any Copyright now
or hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following: (a) all
copyright rights in any work subject to the copyright laws of the United States
or any other country, whether as author, assignee, transferee or otherwise, and
(b) all registrations and applications for registration of any such copyright in
the United States or any other country, including registrations, recordings,
supplemental registrations and pending applications for registration in the
United States Copyright Office, including those listed on Schedule II.
"Credit Agreement" shall have the meaning assigned to such
term in the recitals to this Agreement.
"Documents" shall mean all instruments, files, records, ledger
sheets and documents covering or relating to any of the Collateral.
"Entitlement Holder" shall mean a Person identified in the
records of a Securities Intermediary as the Person having a Security Entitlement
against the Securities Intermediary. If a Person acquires a Security Entitlement
by virtue of Section 8-501(b)(2) or (3) of the UCC, such Person is the
Entitlement Holder.
"Equipment" shall mean "equipment" (as defined in the UCC) of
any Grantor and shall include all equipment, furniture and furnishings, and all
tangible personal property similar to any of the foregoing, including tools,
parts and supplies of every kind and description,
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and all improvements, accessions or appurtenances thereto, that are now or
hereafter owned by any Grantor. The term Equipment shall include Fixtures.
"Equity Interests" shall mean shares of capital stock,
partnership interests, membership interests in a limited liability company,
beneficial interests in a trust or other equity ownership interests in a Person.
"Event of Default" shall mean any "Event of Default" under the
Credit Agreement or any "Event of Default" under the Indenture (in each case, as
such term is defined in the Credit Agreement or the Indenture, as applicable).
"Financial Asset" shall mean (a) a Security, (b) an obligation
of a Person or a share, participation or other interest in a Person or in
property or an enterprise of a Person, which is, or is of a type, dealt with in
or traded on financial markets, or which is recognized in any area in which it
is issued or dealt in as a medium for investment or (c) any property that is
held by a Securities Intermediary for another Person in a Securities Account if
the Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Article 8 of the UCC. As
the context requires, the term Financial Asset shall mean either the interest
itself or the means by which a Person's claim to it is evidenced, including a
certificated or uncertificated Security, a certificate representing a Security
or a Security Entitlement.
"Financial Officer" shall mean the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower or
Holdings, as applicable.
"Fixtures" shall mean all items of Equipment, whether now
owned or hereafter acquired, of any Grantor that become so related to particular
real estate that an interest in them arises under any real estate law applicable
thereto.
"General Intangibles" shall mean all "general intangibles" (as
defined in the UCC) of any Grantor and shall include choses in action and causes
of action and all other assignable intangible personal property of any Grantor
of every kind and nature (other than Accounts Receivable) now owned or hereafter
acquired by any Grantor, including corporate or other business records,
indemnification claims, contract rights (including rights under leases, whether
entered into as lessor or lessee, Hedging Agreements and other agreements),
Intellectual Property, goodwill, registrations, franchises, tax refund claims
and any letter of credit, guarantee, claim, security interest or other security
held by or granted to any Grantor to secure payment by an Account Debtor of any
of the Accounts Receivable.
"Hedging Agreement" shall have the meaning assigned to such
term in the Credit Agreement.
"Indemnitees" shall mean (a) the Collateral Agent, (b) the
Indemnitees specified in Section 9.03(b) of the Credit Agreement, and (c) the
Trustee, the Noteholders and each Affiliate of the Trustee and the Noteholders.
"Indenture Documents" shall mean (a) the Indenture and the
Notes and (b) any other related document or instrument executed and delivered
pursuant to any Indenture Document described in clause (a) above evidencing or
governing any obligations thereunder.
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"Intellectual Property" shall mean all intellectual and
similar property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including inventions, designs, Patents, Copyrights,
Licenses, Trademarks, trade secrets, confidential or proprietary technical and
business information, know-how, show-how or other data or information, software
and databases and all embodiments or fixations thereof and related
documentation, registrations and franchises, and all additions, improvements and
accessions to, and books and records describing or used in connection with, any
of the foregoing.
"Inventory" shall mean "inventory" (as defined in the UCC) of
any Grantor and shall include all goods of any Grantor, whether now owned or
hereafter acquired, held for sale or lease, or furnished or to be furnished by
any Grantor under contracts of service, or consumed in any Grantor's business,
including raw materials, intermediates, work in process, packaging materials,
finished goods, semi-finished inventory, scrap inventory, manufacturing supplies
and spare parts, and all such goods that have been returned to or repossessed by
or on behalf of any Grantor.
"Investment Property" shall mean all Securities (whether
certificated or uncertificated), Security Entitlements, Securities Accounts,
Commodity Contracts and Commodity Accounts of any Grantor, whether now owned or
hereafter acquired by any Grantor.
"Issuing Bank" shall have the meaning assigned to such term in
the Credit Agreement.
"Letter of Credit" shall have the meaning assigned to such
term in the Credit Agreement.
"Lien" shall have the meaning assigned to such term in the
Credit Agreement.
"License" shall mean any Patent License, Trademark License,
Copyright License or other license or sublicense to which any Grantor is a
party, including those listed on Schedule III (other than those license
agreements in existence on the date hereof and listed on Schedule III and those
license agreements entered into after the date hereof, which by their terms
prohibit assignment or a grant of a security interest by such Grantor as
licensee thereunder).
"Loan Parties" shall mean the Companies and the other
Grantors.
"Loans" shall have the meaning assigned to such term in the
Credit Agreement.
"Noteholder" shall mean the Person in whose name a Note is
registered on the books of the registrar for the Notes.
"Note Obligations" shall mean all obligations of the Companies
and the Subsidiary Guarantors under the Indenture Documents, including
obligations to the Trustee and the Collateral Agent, whether for payment of
principal of, interest on or additional interest, if any, on the Notes and all
other monetary obligations of the Companies and the Subsidiary Guarantors under
the Indenture Documents, whether for fees, expenses, indemnification or
otherwise.
"Obligations" shall mean all the obligations of the Borrower,
Holdings and the Subsidiary Guarantors under the Senior Loan Documents for (a)
the due and punctual payment of (i) the principal of and premium, if any, and
interest (including interest accruing during the
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pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) each payment required to be
made by the Borrower under the Credit Agreement in respect of any Letter of
Credit, when and as due, including payments in respect of reimbursement of
disbursements made by the Issuing Bank with respect thereto, interest thereon
and obligations to provide, under certain circumstances, cash collateral in
connection therewith and (iii) all other monetary obligations, including fees,
costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), of the Loan
Parties to the Secured Parties under the Credit Agreement and the other Senior
Loan Documents, (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Loan Parties under or pursuant to
the Credit Agreement and the other Senior Loan Documents, (c) unless otherwise
agreed to in writing by the applicable Lender party thereto, the due and
punctual payment and performance of all obligations of the Borrower or any other
Loan Party, monetary or otherwise, under each Hedging Agreement entered into
with a counterparty that was a Lender (or an Affiliate of a Lender) at the time
such Hedging Agreement was entered into and (d) the due and punctual payment and
performance of all obligations in respect of overdrafts and related liabilities
owed to the Administrative Agent or any of its Affiliates and arising from
treasury, depositary and cash management services in connection with any
automated clearing house transfers of funds.
"Patent License" shall mean any written agreement, now or
hereafter in effect, granting to any third party any right to make, use or sell
any invention on which a Patent, now or hereafter owned by any Grantor or which
any Grantor otherwise has the right to license, is in existence, or granting to
any Grantor any right to make, use or sell any invention on which a Patent, now
or hereafter owned by any third party, is in existence, and all rights of any
Grantor under any such agreement.
"Patents" shall mean all of the following now owned or
hereafter acquired by any Grantor: (a) all letters patent of the United States
or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or any other country,
including registrations, recordings and pending applications in the United
States Patent and Trademark Office or any similar offices in any other country,
including those listed on Schedule IV, and (b) all reissues, continuations,
divisions, continuations-in-part, renewals or extensions thereof, and the
inventions disclosed or claimed therein, including the right to make, use and/or
sell the inventions disclosed or claimed therein.
"Perfection Certificate" shall mean a certificate
substantially in the form of Annex 1 hereto, completed and supplemented with the
schedules and attachments contemplated thereby, and duly executed by an
executive officer or Financial Officer of Holdings and of the Borrower.
"Person" shall mean any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
entity or other party, including any government and any political subdivision,
agency or instrumentality thereof.
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"Proceeds" shall mean "proceeds" (as defined in the UCC) of
any Grantor and shall include any consideration received from the sale,
exchange, license, lease or other disposition of any asset or property that
constitutes Collateral, any value received as a consequence of the possession of
any Collateral and any payment received from any insurer or other Person or
entity as a result of the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property which constitutes
Collateral, and shall include (a) any claim of any Grantor against any third
party for (and the right to xxx and recover for and the rights to damages or
profits due or accrued arising out of or in connection with) (i) past, present
or future infringement of any Patent now or hereafter owned by any Grantor, or
licensed under a Patent License, (ii) past, present or future infringement or
dilution of any Trademark now or hereafter owned by any Grantor or licensed
under a Trademark License or injury to the goodwill associated with or
symbolized by any Trademark now or hereafter owned by any Grantor, (iii) past,
present or future breach of any License and (iv) past, present or future
infringement of any Copyright now or hereafter owned by any Grantor or licensed
under a Copyright License and (b) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Secured Obligations" shall mean, without duplication, (a) the
Obligations and (b) the Note Obligations.
"Secured Parties" shall mean (a) the Lenders, (b) the Issuing
Bank, (c) the Administrative Agent, (d) the Collateral Agent, (e) each
counterparty to a Hedging Agreement entered into with the Borrower or any Loan
Party if such counterparty was a Lender (or an Affiliate of a Lender) at the
time the Hedging Agreement was entered into, (f) the beneficiaries of each
indemnification obligation undertaken by any Grantor under any Senior Loan
Document, (g) the Trustee for the benefit of the Noteholders and (h) the
successors and assigns of each of the foregoing.
"Securities" shall mean any obligations of an issuer or any
shares, participations or other interests in an issuer or in property or an
enterprise of an issuer which (a) are represented by a certificate representing
a security in bearer or registered form, or the transfer of which may be
registered upon books maintained for that purpose by or on behalf of the issuer,
(b) are one of a class or series or by its terms is divisible into a class or
series of shares, participations, interests or obligations and (c)(i) are, or
are of a type, dealt with or traded on securities exchanges or securities
markets or (ii) are a medium for investment and by their terms expressly provide
that they are a security governed by Article 8 of the UCC.
"Securities Account" shall mean an account to which a
Financial Asset is or may be credited in accordance with an agreement under
which the Person maintaining the account undertakes to treat the Person for whom
the account is maintained as entitled to exercise rights that comprise the
Financial Asset.
"Security Documents" means the Security Documents (as defined
in the Credit Agreement and the Indenture) and any other agreement, document or
instrument pursuant to which a Lien is granted securing any Secured Obligations
or under which rights or remedies with respect to such Liens are governed.
"Security Entitlements" shall mean the rights and property
interests of an Entitlement Holder with respect to a Financial Asset.
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"Security Interest" shall have the meaning assigned to such
term in Section 2.01.
"Security Intermediary" shall mean (a) a clearing corporation
or (b) a Person, including a bank or broker, that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Senior Loan Documents" shall mean the Credit Agreement, and
each of the other agreements, documents and instruments providing for or
evidencing the Obligations, and any other related document or instrument.
"Trademark License" shall mean any written agreement, now or
hereafter in effect, granting to any third party any right to use any Trademark
now or hereafter owned by any Grantor or which any Grantor otherwise has the
right to license, or granting to any Grantor any right to use any Trademark now
or hereafter owned by any third party, and all rights of any Grantor under any
such agreement.
"Trademarks" shall mean all of the following: (a) all
trademarks, service marks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, trade dress, logos, other source
or business identifiers, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all registration and recording applications filed in connection
therewith, including registrations and registration applications in the United
States Patent and Trademark Office, any State of the United States or any
similar offices in any other country or any political subdivision thereof, and
all extensions or renewals thereof, including those listed on Schedule V, (b)
all goodwill associated therewith or symbolized thereby and (c) all other
assets, rights and interests that uniquely reflect or embody such goodwill.
"UCC" shall mean the Uniform Commercial Code as in effect in
the State of New York.
SECTION 1.03. Rules of Interpretation. The definitions of
terms herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". The word "will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
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ARTICLE II
Security Interest
SECTION 2.01. Security Interest. As security for the
payment or performance, as the case may be, in full of the Secured Obligations,
each Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages,
pledges, hypothecates and transfers to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, and hereby grants to
the Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest in, all of such Grantor's right, title and
interest in, to and under the Collateral (the "Security Interest"). Without
limiting the foregoing, the Collateral Agent is hereby authorized to file one or
more financing statements (including fixture filings), continuation statements,
filings with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any other
country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantors, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as secured party.
SECTION 2.02. No Assumption of Liability. The Security
Interest is granted as security only and shall not subject the Collateral Agent
or any other Secured Party to, or in any way alter or modify, any obligation or
liability of any Grantor with respect to or arising out of the Collateral.
ARTICLE III
Representations and Warranties
The Grantors jointly and severally represent and warrant to
the Collateral Agent and the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good
and valid rights in and title to the Collateral with respect to which it has
purported to grant a Security Interest hereunder and has full power and
authority to grant to the Collateral Agent the Security Interest in such
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Agreement, without the consent or approval
of any other Person other than any consent or approval which has been obtained.
SECTION 3.02. Filings. (a) The Perfection Certificate has
been duly prepared, completed and executed and the information set forth therein
is correct and complete in all material respects. UCC financing statements
(including fixture filings, as applicable) or other appropriate filings,
recordings or registrations containing a description of the Collateral have been
delivered to the Collateral Agent for filing in each governmental, municipal or
other office specified in Schedule 6 to the Perfection Certificate, which are
all the filings, recordings and registrations (other than filings required to be
made in the United States Patent and Trademark Office and the United States
Copyright Office in order to perfect the Security Interest in Collateral
consisting of United States Patents, Trademarks and Copyrights) that are
necessary to publish notice of and protect the validity of and to establish a
legal, valid and perfected security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect
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of all Collateral in which the Security Interest may be perfected by filing,
recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or subsequent
filing, refiling, recording, rerecording, registration or reregistration is
necessary in any such jurisdiction, except as provided under applicable law with
respect to the filing of continuation statements.
(b) Each Grantor shall ensure that fully executed security
agreements in the form hereof (or short-form supplements to this Agreement in
form and substance satisfactory to the Collateral Agent) and containing a
description of all Collateral consisting of Intellectual Property shall have
been received and recorded within three months after the execution of this
Agreement with respect to United States Patents and United States registered
Trademarks (and Trademarks for which United States registration applications are
pending) and within one month after the execution of this Agreement with respect
to United States registered Copyrights have been delivered to the Collateral
Agent for recording by the United States Patent and Trademark Office and the
United States Copyright Office pursuant to 35 U.S.C. Section 261, 15 U.S.C.
Section 1060 or 17 U.S.C. Section 205 and the regulations thereunder, as
applicable, and otherwise as may be required pursuant to the laws of any other
necessary jurisdiction in the United States (or any political subdivision
thereof) and its territories and possessions, to protect the validity of and to
establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the ratable benefit of the Secured Parties) in respect of
all Collateral consisting of Patents, Trademarks and Copyrights in which a
security interest may be perfected by filing, recording or registration in the
United States (or any political subdivision thereof) and its territories and
possessions, or in any other necessary jurisdiction, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction (other than such actions
as are necessary to perfect the Security Interest with respect to any
Collateral consisting of Patents, Trademarks and Copyrights (or registration or
application for registration thereof) acquired or developed after the date
hereof).
SECTION 3.03. Validity of Security Interest. The Security
Interest constitutes (a) a legal and valid security interest in all the
Collateral securing the payment and performance of the Secured Obligations, (b)
subject to the filings described in Section 3.02 above, a perfected security
interest in all Collateral in which a security interest may be perfected by
filing, recording or registering a financing statement or analogous document in
the United States (or any political subdivision thereof) and its territories and
possessions pursuant to the UCC or other analogous applicable law in such
jurisdictions and (c) a security interest that shall be perfected in all
Collateral in which a security interest may be perfected upon the receipt and
recording of this Agreement with the United States Patent and Trademark Office
and the United States Copyright Office, as applicable, within the three month
period (commencing as of the date hereof) pursuant to 35 U.S.C. Section 261 or
15 U.S.C. Section 1060 or the one month period (commencing as of the date
hereof) pursuant to 17 U.S.C. Section 205 and otherwise as may be required to
pursuant to the laws of any other necessary jurisdiction in the United States
(or any political subdivision thereof) and its territories and possessions. The
Security Interest is and shall be prior to any other Lien on any of the
Collateral, other than Liens expressly permitted pursuant to Section 6.02 of
the Credit Agreement and Section 4.14 of the Indenture.
SECTION 3.04. Absence of Other Liens. The Collateral is
owned by the Grantors free and clear of any Lien, except for Liens expressly
permitted pursuant to Section 6.02 of the Credit Agreement and Section 4.14 of
the Indenture. The Grantor has not filed or consented to the filing of (a) any
financing statement or analogous document under the UCC or
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any other applicable laws covering any Collateral, (b) any assignment in which
any Grantor assigns any Collateral or any security agreement or similar
instrument covering any Collateral with the United States Patent and Trademark
Office or the United States Copyright Office or (c) any assignment in which any
Grantor assigns any Collateral or any security agreement or similar instrument
covering any Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except, in each case, for
Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement and
Section 4.14 of the Indenture.
ARTICLE IV
Covenants
SECTION 4.01. Records. Each Grantor agrees to maintain, at
its own cost and expense, such complete and accurate records with respect to the
Collateral owned by it as is consistent with its current practices, but in any
event to include complete accounting records indicating all payments and
proceeds received with respect to any part of the Collateral, and, at such time
or times as the Collateral Agent may reasonably request, promptly to prepare and
deliver to the Collateral Agent an updated Perfection Certificate, noting all
material changes, if any, since the date of the most recent Perfection
Certificate.
SECTION 4.02. Protection of Security. Each Grantor shall,
at its own cost and expense, take any and all actions necessary to defend title
to the Collateral against all Persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien not
expressly permitted pursuant to Section 6.02 of the Credit Agreement and Section
4.14 of the Indenture.
SECTION 4.03. Further Assurances. Each Grantor agrees, at
its own expense, to execute, acknowledge, deliver and cause to be duly filed
all such further instruments and documents and take all such actions as the
Collateral Agent may from time to time request to better assure, preserve,
protect and perfect the Security Interest and the rights and remedies created
hereby, including the payment of any fees and taxes required in connection with
the execution and delivery of this Agreement, the granting of the Security
Interest and the filing of any financing statements (including fixture filings)
or other documents in connection herewith or therewith. If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any promissory note or other instrument, such note or instrument shall be
immediately pledged and delivered to the Collateral Agent, duly endorsed in a
manner satisfactory to the Collateral Agent.
SECTION 4.04. Inspection and Verification. The Collateral
Agent and such Persons as the Collateral Agent may reasonably designate shall
have the right to inspect the Collateral, all records related thereto (and to
make extracts and copies from such records) and the premises upon which any of
the Collateral is located, at reasonable times and intervals during normal
business hours upon reasonable advance notice to the respective Grantor and to
verify under reasonable procedures the validity, amount, quality, quantity,
value, condition and status of the Collateral. The Collateral Agent shall have
the absolute right to share any information it gains from such inspection or
verification with any Secured Party in accordance with and subject to the
provisions set forth in Section 9.12 of the Credit Agreement.
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SECTION 4.05. Taxes; Encumbrances. At its option, the
Collateral Agent may discharge past due taxes, assessments, charges, fees,
Liens, security interests or other encumbrances at any time levied or placed on
the Collateral and not permitted pursuant to Section 6.02 of the Credit
Agreement and Section 4.14 of the Indenture, and may pay for the maintenance and
preservation of the Collateral, in each case to the extent any Grantor fails to
do so as required by the Credit Agreement or this Agreement, and each Grantor
jointly and severally agrees to reimburse the Collateral Agent on demand for any
payment made or any expense incurred by the Collateral Agent pursuant to the
foregoing authorization; provided that nothing in this Section 4.05 shall be
interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any
covenants or other promises of any Grantor with respect to taxes, assessments,
charges, fees, liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Security Documents, the Senior Loan
Documents or the Indenture Documents.
SECTION 4.06. Assignment of Security Interest. If at any
time any Grantor shall take a security interest in any property of an Account
Debtor or any other Person to secure payment and performance of an Account, such
Grantor shall promptly assign such security interest to the Collateral Agent to
the extent permitted by any contracts or arrangements to which such property is
subject. Such assignment need not be filed of public record unless necessary to
continue the perfected status of the security interest against creditors of and
transferees from the Account Debtor or other Person granting the security
interest.
SECTION 4.07. Continuing Obligations of the Grantors. Each
Grantor shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Collateral, all in accordance with the terms and
conditions thereof, and each Grantor jointly and severally agrees to indemnify
and hold harmless the Collateral Agent and the Secured Parties from and against
any and all liability for such performance.
SECTION 4.08. Use and Disposition of Collateral. None of
the Grantors shall make or permit to be made an assignment, pledge or
hypothecation of the Collateral or shall grant any other Lien in respect of the
Collateral, except as expressly permitted by Section 6.02 of the Credit
Agreement and Section 4.14 of the Indenture. None of the Grantors shall make or
permit to be made any transfer of the Collateral and each Grantor shall remain
at all times in possession of the Collateral owned by it, except that (a)
Inventory may be sold in the ordinary course of business and (b) unless and
until the Collateral Agent shall notify the Grantors that an Event of Default
shall have occurred and be continuing and that during the continuance thereof
the Grantors shall not sell, convey, lease, assign, transfer or otherwise
dispose of any Collateral (which notice may be given by telephone if promptly
confirmed in writing), the Grantors may use and dispose of the Collateral in any
lawful manner not inconsistent with the provisions of this Agreement, any other
Security Document, the Collateral Sharing Agreement, any Senior Loan Document or
any Indenture Document. Without limiting the generality of the foregoing, each
Grantor agrees that it shall not permit any material Inventory to be in the
possession or control of any warehouseman, bailee, agent or processor at any
time unless such warehouseman, bailee, agent or processor shall have been
notified of the Security Interest and shall have agreed in writing to hold the
Inventory subject to the Security Interest and the instructions of the
Collateral Agent and to waive and release any Lien held by it with respect to
such Inventory, whether arising by operation of law or otherwise.
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SECTION 4.09. Limitation on Modification of Accounts. None
of the Grantors will, without the Collateral Agent's prior written consent,
grant any extension of the time of payment of any of the Accounts Receivable,
compromise, compound or settle the same for less than the full amount thereof,
release, wholly or partly, any Person liable for the payment thereof or allow
any credit or discount whatsoever thereon, other than extensions, credits,
discounts, compromises or settlements granted or made in the ordinary course of
business and consistent with its current practices.
SECTION 4.10. Insurance. The Grantors, at their own
expense, shall maintain or cause to be maintained insurance covering physical
loss or damage to the Inventory and Equipment in accordance with Section 5.07 of
the Credit Agreement. Each Grantor irrevocably makes, constitutes and appoints
the Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent (and attorney-in-fact)
for the purpose, during the continuance of an Event of Default, of making,
settling and adjusting claims in respect of Collateral under policies of
insurance, endorsing the name of such Grantor on any check, draft, instrument or
other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event that
any Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or part
relating thereto, the Collateral Agent may, without waiving or releasing any
obligation or liability of the Grantors hereunder or any Event of Default, in
its sole discretion, obtain and maintain such policies of insurance and pay such
premium and take any other actions with respect thereto as the Collateral Agent
deems advisable. All sums disbursed by the Collateral Agent in connection with
this Section 4.10, including reasonable attorneys' fees, court costs, expenses
and other charges relating thereto, shall be payable, upon demand, by the
Grantors to the Collateral Agent and shall be additional Secured Obligations
secured hereby.
SECTION 4.11. Legend. If any Accounts Receivable of any
Grantor are evidenced by chattel paper, such Grantor shall legend, in form and
manner satisfactory to the Collateral Agent, such Accounts Receivable and its
books, records and documents evidencing or pertaining thereto with an
appropriate reference to the fact that such Accounts Receivable have been
assigned to the Collateral Agent for the benefit of the Secured Parties and that
the Collateral Agent has a security interest therein.
SECTION 4.12. Covenants Regarding Patent, Trademark and
Copyright Collateral. (a) Each Grantor agrees that it will not, nor will it
permit any of its licensees to, do any act, or omit to do any act, whereby any
Patent which is material to the conduct of such Grantor's business may become
invalidated or dedicated to the public, and agrees that it shall continue to
xxxx any products covered by a Patent with the relevant patent number as
necessary and sufficient to establish and preserve its maximum rights under
applicable patent laws pursuant to which each such Patent is issued.
(b) Each Grantor (either itself or through its licensees or
its sublicensees) will, for each Trademark material to the conduct of such
Grantor's business, (i) maintain such Trademark in full force free from any
claim of abandonment or invalidity for non-use, (ii) maintain the quality of
products and services offered under such Trademark sufficient to preclude any
findings of abandonment, (iii) display such Trademark with notice of Federal or
foreign registration to the extent necessary and sufficient to establish and
preserve its maximum rights
13
under applicable law pursuant to which each such Trademark is issued and (iv)
not knowingly use or knowingly permit the use of such Trademark in violation of
any third party rights.
(c) Each Grantor (either itself or through licensees) will,
for each work covered by a material Copyright, continue to publish, reproduce,
display, adopt and distribute the work with appropriate copyright notice as
necessary and sufficient to establish and preserve its maximum rights under
applicable copyright laws pursuant to which each such Copyright is issued.
(d) Each Grantor shall notify the Collateral Agent within 45
days after the end of each fiscal quarter of Holdings, if during the previous
fiscal quarter, such Grantor has obtained knowledge or had reason to know that
any Patent, Trademark or Copyright material to the conduct of its business may
become abandoned, lost or dedicated to the public, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, United States Copyright Office or any court or similar office
of any country) regarding such Grantor's ownership of any Patent, Trademark or
Copyright material to the conduct of its business, its right to register the
same, or to keep and maintain the same.
(e) In no event shall any Grantor, either itself or through
any agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or for the registration of any Trademark or Copyright)
with the United States Patent and Trademark Office, United States Copyright
Office or any office or agency in any political subdivision of the United States
or in any other country or any political subdivision thereof, unless, within 45
days after the end of the fiscal quarter of Holdings in which such application
is filed, it informs the Collateral Agent, and, upon request of the Collateral
Agent, executes and delivers any and all agreements, instruments, documents and
papers as the Collateral Agent may request to evidence and perfect the
Collateral Agent's security interest in such Patent, Trademark or Copyright, and
each Grantor hereby appoints the Collateral Agent as its attorney-in-fact to
execute and file such writings for the foregoing purposes, all acts of such
attorney being hereby ratified and confirmed; such power, being coupled with an
interest, is irrevocable.
(f) Each Grantor will take all necessary steps that are
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, United States Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
any Grantor's business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancelation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that
any Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor shall notify the
Collateral Agent within 45 days after the end of the fiscal quarter of Holdings
in which the Grantor forms such belief and shall, if consistent with good
business judgment, promptly xxx for infringement, misappropriation or dilution
and to recover any and all damages
14
for such infringement, misappropriation or dilution, and take such other actions
as are appropriate under the circumstances to protect such Collateral.
(h) Upon and during the continuance of an Event of Default,
each Grantor shall use its best efforts to obtain all requisite consents or
approvals from the licensor of each Copyright License, Patent License or
Trademark License to effect the assignment of all of such Grantor's right, title
and interest thereunder to the Collateral Agent or its designee for the benefit
of the Secured Parties in accordance with the Collateral Sharing Agreement.
ARTICLE V
Power of Attorney
Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent and attorney-in-fact,
and in such capacity the Collateral Agent shall have the right, with power of
substitution for each Grantor and in each Grantor's name or otherwise, for the
use and benefit of the Collateral Agent and the Secured Parties, upon the
occurrence and during the continuance of an Event of Default (a) to receive,
endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any
part thereof; (b) to demand, collect, receive payment of, give receipt for and
give discharges and releases of all or any of the Collateral; (c) to sign the
name of any Grantor on any invoice or xxxx of lading relating to any of the
Collateral; (d) to send verifications of Accounts Receivable to any Account
Debtor; (e) to commence and prosecute any and all suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in
respect of any Collateral; (f) to settle, compromise, compound, adjust or defend
any actions, suits or proceedings relating to all or any of the Collateral; (g)
to notify, or to require any Grantor to notify, Account Debtors to make payment
directly to the Collateral Agent; and (h) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Collateral
Agent were the absolute owner of the Collateral for all purposes; provided that
nothing herein contained shall be construed as requiring or obligating the
Collateral Agent or any Secured Party to make any commitment or to make any
inquiry as to the nature or sufficiency of any payment received by the
Collateral Agent or any Secured Party, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part thereof
or the moneys due or to become due in respect thereof or any property covered
thereby, and no action taken or omitted to be taken by the Collateral Agent or
any Secured Party with respect to the Collateral or any part thereof shall give
rise to any defense, counterclaim or offset in favor of any Grantor or to any
claim or action against the Collateral Agent or any Secured Party. It is
understood and agreed that the appointment of the Collateral Agent as the agent
and attorney-in-fact of the Grantors for the purposes set forth above is coupled
with an interest and is irrevocable. The provisions of this Section shall in no
event relieve any Grantor of any of its obligations hereunder or under any other
Security Document, any Senior Loan Document, Indenture Document or the
Collateral Sharing Agreement, with respect to the Collateral or any part thereof
or impose any obligation on the Collateral Agent or any Secured Party to proceed
in any particular manner with respect to the Collateral or any part thereof, or
in any way limit the exercise by the Collateral Agent or any Secured Party of
any other or further right which it may
15
have on the date of this Agreement or hereafter, whether hereunder, under any
other Security Document, any Senior Loan Document, Indenture Document or the
Collateral Sharing Agreement, by law or otherwise.
ARTICLE VI
Remedies
SECTION 6.01. Remedies upon Default. Upon the occurrence
and during the continuance of an Event of Default, each Grantor agrees to
deliver each item of Collateral to the Collateral Agent on demand, and it is
agreed that the Collateral Agent shall have the right to take any of or all the
following actions at the same or different times: (a) with respect to any
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Collateral by the applicable Grantors to the Collateral Agent (except to the
extent assignment, transfer or conveyance thereof would result in a loss of said
Intellectual Property), or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any such
Collateral throughout the world on such terms and conditions and in such manner
as the Collateral Agent shall determine (other than in violation of any
then-existing licensing arrangements to the extent that waivers cannot be
obtained), and (b) with or without legal process and with or without prior
notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral may be
located for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under the
UCC or other applicable law. Without limiting the generality of the foregoing,
each Grantor agrees that the Collateral Agent shall have the right, subject to
the mandatory requirements of applicable law, to sell or otherwise dispose of
all or any part of the Collateral, at public or private sale or at any broker's
board or on any securities exchange, for cash, upon credit or for future
delivery as the Collateral Agent shall deem appropriate. The Collateral Agent
shall be authorized at any such sale (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to Persons who will represent and
agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the property
sold absolutely, free from any claim or right on the part of any Grantor, and
each Grantor hereby waives (to the extent permitted by law) all rights of
redemption, stay and appraisal which such Grantor now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted.
The Collateral Agent shall give the Grantors 10 days' written
notice (which each Grantor agrees is reasonable notice within the meaning of
Section 9-611 of the UCC or its equivalent in other jurisdictions) of the
Collateral Agent's intention to make any sale of Collateral. Such notice, in the
case of a public sale, shall state the time and place for such sale and, in the
case of a sale at a broker's board or on a securities exchange, shall state the
board or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent may
fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as the Collateral
16
Agent may (in its sole and absolute discretion) determine. The Collateral Agent
shall not be obligated to make any sale of any Collateral if it shall determine
not to do so, regardless of the fact that notice of sale of such Collateral
shall have been given. The Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Section, any Secured Party may bid for or purchase, free (to
the extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any Secured
Obligation then due and payable to such Secured Party from any Grantor as a
credit against the purchase price, and such Secured Party may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to any Grantor therefor. For purposes hereof a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof; the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and no Grantor shall be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Collateral Agent shall have entered into such an agreement all Events
of Default shall have been remedied and the Secured Obligations paid in full. As
an alternative to exercising the power of sale herein conferred upon it, the
Collateral Agent may proceed by a suit or suits at law or in equity to foreclose
this Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.
SECTION 6.02. Application of Proceeds. The Collateral
Agent shall apply the proceeds of any collection or sale of the Collateral, as
well as any Collateral consisting of cash, in accordance with the terms of the
Collateral Sharing Agreement.
The Collateral Agent shall have absolute discretion as to the
time of application of any such proceeds, moneys or balances in accordance with
this Agreement and the Collateral Sharing Agreement. Upon any sale of the
Collateral by the Collateral Agent (including pursuant to a power of sale
granted by statute or under a judicial proceeding), the receipt of the
Collateral Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Collateral Agent or such officer or
be answerable in any way for the misapplication thereof.
SECTION 6.03. Grant of License to Use Intellectual
Property. For the purpose of enabling the Collateral Agent to exercise rights
and remedies under this Article at such time as the Collateral Agent shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to the Collateral Agent an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to the Grantors)
to use, license or sub-license any of the Collateral consisting of Intellectual
Property now owned or hereafter acquired by such Grantor, and wherever the same
may be located, and including in such license reasonable access
17
to all media in which any of the licensed items may be recorded or stored and to
all computer software and programs used for the compilation or printout thereof.
The use of such license by the Collateral Agent shall be exercised, at the
option of the Collateral Agent, upon the occurrence and during the continuation
of an Event of Default; provided that any license, sub-license or other
transaction entered into by the Collateral Agent in accordance herewith shall be
binding upon the Grantors notwithstanding any subsequent cure of an Event of
Default.
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices. All communications and notices
hereunder shall (except as otherwise expressly permitted herein) be in writing
and shall be delivered by hand or overnight courier service, mailed by certified
or registered mail or sent by telecopy, as follows:
(a) if to Holdings or the Borrower, to it at 0000 Xxxx
XxXxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, Attention of President (Telecopy No.
(000) 000-0000).
(b) if to the Collateral Agent, to JPMorgan Chase Bank, Loan
and Agency Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention of Xxxxxx Xxxxxx (Telecopy No. (000) 000-0000), with a
copy to JPMorgan Chase Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention of Xxxxxx XxXxxxxx (Telecopy No. (000) 000-0000).
(c) if to a Subsidiary Guarantor, to such Subsidiary Guarantor
at its address or telecopy number set forth on Schedule I, with a copy to the
Companies.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 7.02. Security Interest Absolute. All rights of
the Collateral Agent hereunder, the Security Interest and all obligations of the
Grantors hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of any other Security Document, the
Collateral Sharing Agreement, any Senior Loan Document, any Indenture Document,
any agreement with respect to any of the Secured Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Secured Obligations, or any other amendment or waiver of or any consent to any
departure from any Senior Loan Document, any other Security Document, the
Collateral Sharing Agreement, any Indenture Document or any other agreement or
instrument relating to any of the foregoing, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment or
waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Secured Obligations, or (d) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Secured Obligations or this
Agreement.
SECTION 7.03. Survival of Agreement. All covenants,
agreements, representations and warranties made by any Grantor herein and in the
certificates or other
18
instruments prepared or delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by the Secured Parties
and shall survive the making by the Lenders of the Loans and the issuance of
Letters of Credit by the Issuing Bank, the execution and delivery to the Lenders
of any notes evidencing such Loans, or the purchase and resale of the Notes by
the Initial Purchasers, regardless of any investigation made by the Secured
Parties or on their behalf, and shall continue in full force and effect until
this Agreement shall terminate.
SECTION 7.04. Binding Effect; Several Agreement. This
Agreement shall become effective as to any Grantor when a counterpart hereof
executed on behalf of such Grantor shall have been delivered to the Collateral
Agent and a counterpart hereof shall have been executed on behalf of the
Collateral Agent, and thereafter shall be binding upon such Grantor and the
Collateral Agent and their respective successors and assigns, and shall inure to
the benefit of such Grantor, the Collateral Agent and the other Secured Parties
and their respective successors and assigns, except that no Grantor shall have
the right to assign or transfer its rights or obligations hereunder or any
interest herein or in the Collateral (and any such assignment or transfer shall
be void) except as expressly contemplated by this Agreement, the other Security
Documents, the Collateral Sharing Agreement, the Senior Loan Documents or the
Indenture Documents. This Agreement shall be construed as a separate agreement
with respect to each Grantor and may be amended, modified, supplemented, waived
or released with respect to any Grantor without the approval of any other
Grantor and without affecting the obligations of any other Grantor hereunder.
SECTION 7.05. Successors and Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Grantor or the Collateral Agent
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses;
Indemnification. (a) Each Grantor jointly and severally agrees to pay upon
demand to the Collateral Agent the amount of any and all reasonable expenses,
including the reasonable fees, disbursements and other charges of its counsel
and of any experts or agents, which the Collateral Agent may incur in connection
with (i) the administration of this Agreement, (ii) the custody or preservation
of, or the sale of, collection from or other realization upon any of the
Collateral, (iii) the exercise, enforcement or protection of any of the rights
of the Collateral Agent hereunder or (iv) the failure of any Grantor to perform
or observe any of the provisions hereof applicable to it.
(b) Without limitation of its indemnification obligations
under the other Security Documents, the Collateral Sharing Agreement, the Senior
Loan Documents or the Indenture Documents, each Grantor jointly and severally
agrees to indemnify the Collateral Agent and the other Indemnitees against, and
hold each of them harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable fees, disbursements and
other charges of counsel, incurred by or asserted against any of them arising
out of, in any way connected with, or as a result of, the execution, delivery or
performance of this Agreement or any claim, litigation, investigation or
proceeding relating hereto or to the Collateral, whether or not any Indemnitee
is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
19
(c) Any such amounts payable as provided hereunder shall be
additional Secured Obligations secured hereby and by the other Security
Documents. The provisions of this Section 7.06 shall remain operative and in
full force and effect regardless of the termination of this Agreement, any other
Security Document, the Collateral Sharing Agreement, any Senior Loan Document or
any Indenture Document, the consummation of the transactions contemplated
hereby, the repayment of any of the Secured Obligations, the invalidity or
unenforceability of any term or provision of this Agreement, any other Security
Document, the Collateral Sharing Agreement, any Senior Loan Document or any
Indenture Document, or any investigation made by or on behalf of the Collateral
Agent or any other Secured Party. All amounts due under this Section 7.06 shall
be payable on written demand therefor and shall bear interest at the rate
specified in Section 2.13(c) of the Credit Agreement.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.08. Waivers; Amendment. (a) No failure or delay
of the Collateral Agent in exercising any power or right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent and the other Secured Parties under the other
Security Documents, the Collateral Sharing Agreement, the Senior Loan Documents
and the Indenture Documents, as applicable, are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any
provisions of this Agreement, any Senior Loan Document or any Indenture Document
or consent to any departure by any Grantor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, 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 Grantor in any case
shall entitle such Grantor or any other Grantor to any other or further notice
or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Collateral Agent and the Grantor or Grantors with
respect to which such waiver, amendment or modification is to apply, subject to
the terms of the Collateral Sharing Agreement.
SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER SECURITY
DOCUMENT, THE COLLATERAL SHARING AGREEMENT, ANY SENIOR LOAN DOCUMENT OR ANY
INDENTURE DOCUMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT, ANY OTHER SECURITY DOCUMENT, THE
COLLATERAL SHARING
20
AGREEMENT, ANY SENIOR LOAN DOCUMENT OR ANY INDENTURE DOCUMENT, AS APPLICABLE,
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
7.09.
SECTION 7.10. Severability. In the event any one or more
of the provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7.11. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall constitute an original but all
of which when taken together shall constitute but one contract (subject to
Section 7.04), and shall become effective as provided in Section 7.04. Delivery
of an executed signature page to this Agreement by facsimile transmission shall
be effective as delivery of a manually executed counterpart hereof.
SECTION 7.12. Headings. Article and Section headings used
herein are for the purpose of reference only, are not part of this Agreement and
are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 7.13. Jurisdiction; Consent to Service of Process.
(a) Each Grantor hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, any other Security Document, the Collateral Sharing
Agreement, the Senior Loan Documents or the Indenture Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Collateral Agent, the Administrative Agent, the Issuing Bank, any
Lender, the Trustee or any Noteholder may otherwise have to bring any action or
proceeding relating to this Agreement, any other Security Document, the
Collateral Sharing Agreement, the Senior Loan Documents or the Indenture
Documents against any Grantor or its properties in the courts of any
jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement, any other
Security Document, the Collateral Sharing Agreement, the Senior Loan Documents
or the Indenture Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
21
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 7.01. Nothing
in this Agreement will affected the right of any party to this Agreement to
serve process in any other manner permitted by law.
SECTION 7.14. Termination. (a) This Agreement and the
Security Interest shall terminate when all the Obligations (other than those
described in clauses (c) and (d) of the definition thereof) and the Note
Obligations have been indefeasibly paid in full and the Lenders have no further
commitment to lend under the Credit Agreement, the LC Exposure (as defined in
the Credit Agreement) has been reduced to zero and the Issuing Bank has no
further obligation to issue Letters of Credit under the Credit Agreement.
(b) A Grantor shall automatically be released from its
obligations hereunder and the Security Interest in the Collateral of such
Grantor shall be automatically released in the event that such Grantor ceases to
be a Subsidiary of Holdings pursuant to a transaction permitted under the Senior
Loan Documents and the Indenture Documents.
(c) Subject to the Collateral Sharing Agreement, upon any sale
or other transfer by any Grantor of any Collateral that is permitted or not
prohibited under the Senior Loan Documents and the Indenture Documents to any
Person that is not a Grantor, or upon the effectiveness of any written consent
to the release of the Security Interest granted hereby in any Collateral
pursuant to the Senior Loan Documents and the Indenture Documents, the Security
Interest in such Collateral shall be automatically released.
(d) In connection with any termination or release pursuant to
paragraph (a), (b) or (c), the Collateral Agent shall execute and deliver to any
Grantor, at such Grantor's expense, all documents that such Grantor shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 7.14 shall be without recourse to
or warranty by the Collateral Agent.
SECTION 7.15. Additional Grantors. If, pursuant to Section
5.12 of the Credit Agreement and Sections 4.11 and 11.07 of the Indenture,
Holdings is required to cause any Subsidiary of Holdings that is not a Grantor
to enter in to this Agreement as a Grantor, upon execution and delivery by the
Collateral Agent and such Subsidiary of an instrument in the form of Annex 2
hereto, such Subsidiary shall become a Grantor hereunder with the same force and
effect as if originally named as a Grantor herein. The execution and delivery of
any such instrument shall not require the consent of any Grantor hereunder. The
rights and obligations of each Grantor hereunder shall remain in full force and
effect notwithstanding the addition of any new Grantor as a party to this
Agreement.
SECTION 7.16. Subject to Collateral Sharing Agreement.
Notwithstanding anything herein to the contrary, the Security Interest granted
to the Collateral Agent pursuant to this Agreement and the exercise of any right
or remedy by the Collateral Agent hereunder are subject to the provisions of the
Collateral Sharing Agreement. Each Grantor agrees to be bound by the terms of
the Collateral Sharing Agreement and, without limiting the generality of the
foregoing, expressly agrees that all obligations and liabilities of a "Grantor"
thereunder apply to such Grantor with the same force and effect as if such
Grantor were a signatory thereto. In the event of any conflict between the terms
of the Collateral Sharing Agreement and this Agreement, the terms of the
Collateral Sharing Agreement shall govern.
22
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
SEMICONDUCTOR COMPONENTS
INDUSTRIES, LLC,
By: /s/ XXXX X. XXXXXXXXX
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Financial Officer
ON SEMICONDUCTOR CORPORATION,
By: /s/ XXXX X. XXXXXXXXX
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Financial Officer
EACH OF THE SUBSIDIARY
GUARANTORS LISTED ON SCHEDULE I
HERETO,
By: /s/ XXXX X. XXXXXXXXX
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Financial Officer
JPMORGAN CHASE BANK, AS
COLLATERAL AGENT,
By: /s/ XXXXXX XXXXXXXX
--------------------------------
Name: Xxxxxx XxXxxxxx
Title: Vice President
23
Schedule I to the
Security Agreement
SUBSIDIARY GUARANTORS
Subsidiary Guarantors Address
SCG International Development LLC 0000 Xxxx XxXxxxxx Xxxx
Xxxxxxx, XX 00000
Attention of General Counsel
Telecopy No. (000) 000-0000
SCG (Malaysia SMP) Holding Corporation 0000 Xxxx XxXxxxxx Xxxx
Xxxxxxx, XX 00000
Attention of General Counsel
Telecopy No. (000) 000-0000
SCG (Czech) Holding Corporation 0000 Xxxx XxXxxxxx Xxxx
Xxxxxxx, XX 00000
Attention of General Counsel
Telecopy No. (000) 000-0000
SCG (China) Holding Corporation 0000 Xxxx XxXxxxxx Xxxx
Xxxxxxx, XX 00000
Attention of General Counsel
Telecopy No. (000) 000-0000
Semiconductor Components Industries Puerto Rico, 0000 Xxxx XxXxxxxx Xxxx
Inc. Xxxxxxx, XX 00000
Attention of General Counsel
Telecopy No. (000) 000-0000
Semiconductor Components Industries of Rhode 5005 East XxXxxxxx Road
Island, Inc. Xxxxxxx, XX 00000
Attention of General Counsel
Telecopy No. (000) 000-0000
Semiconductor Components Industries International 0000 Xxxx XxXxxxxx Xxxx
xx Xxxxx Xxxxxx, Inc. Xxxxxxx, XX 00000
Attention of General Counsel
Telecopy No. (000) 000-0000
24
Schedule II to the
Security Agreement
COPYRIGHTS
25
Schedule III to the
Security Agreement
LICENSES
26
Schedule IV to the
Security Agreement
PATENTS
27
Schedule V to the
Security Agreement
TRADEMARKS
28
Annex 1 to the
Security Agreement
[Form of]
PERFECTION CERTIFICATE
Reference is made to (a) the Credit Agreement, dated as of
August 4, 1999, as amended and restated as of February 14, 2003 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among ON SEMICONDUCTOR CORPORATION ("Holdings"), SEMICONDUCTOR COMPONENTS
INDUSTRIES, LLC (the "Borrower"), the lenders from time to time party thereto
(the "Lenders"), and JPMORGAN CHASE BANK, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent"), (b) the Indenture dated
as of March 3, 2003 (as amended, supplemented or otherwise modified from time to
time, the "Indenture"), among the Companies, the Subsidiary Guarantors and XXXXX
FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as trustee, (c) the Security
Agreement, dated as of August 4, 1999, as amended and restated as of March 3,
2003 (as amended, supplemented or otherwise modified from time to time, the
"Security Agreement"), among the Grantors and JPMORGAN CHASE BANK, as collateral
agent (in such capacity, the "Collateral Agent") and (d) the Collateral Sharing
Agreement, dated as of March 3, 2003 (as amended, supplemented or otherwise
modified from time to time, the "Collateral Sharing Agreement"), among Holdings,
the Borrower, the Trustee and the Collateral Agent. Capitalized terms used
herein but not defined herein, unless otherwise specified, having the respective
meanings set forth in the Security Agreement.
The undersigned, a Financial Officer of each of Holdings and
the Borrower, hereby certify to the Collateral Agent and to each other Secured
Party as follows:
1. Names. (a) The exact corporate name of each Grantor,
as such name appears in its respective certificate of incorporation, is as
follows:
(b) Set forth below is each other corporate name each Grantor
has had in the past five years, together with the date of the relevant change:
(c) Except as set forth in Schedule 1 hereto, no Grantor has
changed its identity or corporate structure in any way within the past five
years. Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of corporate organization. If any such change has occurred, include
in Schedule 1 the information required by Sections 1 and 2 of this certificate
as to each acquiree or constituent party to a merger or consolidation.
(d) The following is a list of all other names (including
trade names or similar appellations) used by each Grantor or any of its
divisions or other business units in connection with the conduct of its business
or the ownership of its properties at any time during the past five years:
(e) Set forth below is the Federal Taxpayer Identification
Number of each Grantor:
1
2. Current Locations. (a) The chief executive office of each
Grantor is located at the address set forth opposite its name below:
Grantor Mailing Address County State
(b) Set forth below opposite the name of each Grantor are all
locations where such Grantor maintains any books or records relating to any
Accounts Receivable (with each location at which chattel paper, if any, is kept
being indicated by an "*"):
Grantor Mailing Address County State
(c) Set forth below opposite the name of each Grantor are all the places of
business of such Grantor not identified in paragraph (a) or (b) above:
Grantor Mailing Address County State
(d) Set forth below opposite the name of each Grantor are all the locations
where such Grantor maintains any Collateral not identified above:
Grantor Mailing Address County State
(e) Set forth below opposite the name of each Grantor are the names and
addresses of all Persons other than such Grantor that have possession
of any of the Collateral of such Grantor:
Grantor Mailing Address County State
3. Unusual Transactions. All Accounts Receivable have been originated
by the Grantors and all Inventory has been acquired by the Grantors in the
ordinary course of business.
4. File Search Reports. File search reports have been obtained from
each UCC filing office identified with respect to such Grantor in Section 2
hereof, and such search reports reflect no Liens against any of the Collateral
other than those permitted under the Credit Agreement and the Indenture.
5. UCC Filings. UCC financing statements in substantially the form of
Schedule 5 hereto have been prepared for filing or filed in the UCC filing
office in the jurisdiction in which
2
each Grantor is located and, to the extent any of the Collateral is comprised of
fixtures in the proper local jurisdiction, as set forth with respect to such
Grantor in Section 2 hereof.
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule
setting forth, with respect to the filings described in Section 5 above, each
filing and the filing office in which such filing is to be made. All filing fees
and taxes payable in connection with the filings described in Section 5 above
have been paid or provided for.
7. Equity Interests. Attached hereto as Schedule 7 is a true and
correct list of all the duly authorized, issued and outstanding Equity Interests
of each Subsidiary (including the Borrower) and the record and beneficial owners
of such Equity Interests. Also set forth on Schedule 7 is each Equity Interest
of Holdings and each Subsidiary (including the Borrower) that represents 50% or
less of the equity of the entity in which such investment was made.
8. Debt Instruments. Attached hereto as Schedule 8 is a true and
correct list of all instruments, including any promissory notes, and other
evidence of indebtedness held by Holdings and each Subsidiary (including the
Borrower) and all intercompany notes between Holdings and each Subsidiary
(including the Borrower) and between each Subsidiary (including the Borrower)
and each other such Subsidiary (including the Borrower).
9. Advances. Attached hereto as Schedule 9 is (a) a true and correct
list of all advances made by Holdings to any Subsidiary (including the Borrower)
or made by any Subsidiary (including the Borrower) to Holdings or to any other
Subsidiary (including the Borrower) (other than those identified on Schedule 8),
which advances will be on and after the date hereof evidenced by one or more
intercompany notes pledged to the Collateral Agent under the Pledge Agreement
(as defined in the Credit Agreement) and (b) a true and correct list of all
unpaid intercompany transfers of goods sold and delivered by or to Holdings or
any Subsidiary (including the Borrower).
10. Mortgage Filings. Attached hereto as Schedule 10 is a schedule
setting forth, with respect to each Mortgaged Property and each Restatement
Mortgaged Property (as such terms are defined in the Credit Agreement), (a) the
exact name of the Person that owns such property as such name appears in its
certificate of incorporation or other organizational document, (b) if different
from the name identified pursuant to clause (a), the exact name of the current
record owner of such property reflected in the records of the filing office for
such property identified pursuant to the following clause and (c) the filing
office in which a Mortgage (as defined in the Credit Agreement) with respect to
such property must be filed or recorded in order for the Collateral Agent to
obtain a perfected security interest therein.
11. Intellectual Property. Attached hereto as Schedule 11(A) is a
schedule setting forth all of each Grantor's Patents and registered Trademarks
and Patent and Trademark applications, including the name of the registered
owner or applicant, as applicable, and the registration or application number,
as applicable, of each Patent and registered Trademark or Patent or Trademark
application owned by any Grantor, in proper form for filing with the United
States Patent and Trademark Office, and a schedule setting forth all of each
Grantor's material Patent Licenses and material Trademark Licenses. Attached
hereto as Schedule 11(B) is a schedule setting forth all of each Grantor's
registered Copyrights, including the name of the registered owner and the
registration number of each Copyright owned by any Grantor, in proper form for
3
filing with the United States Copyright Office, and a schedule setting forth all
of each Grantor's material Copyright Licenses that grant right with respect to
registered Copyrights.
4
IN WITNESS WHEREOF, the undersigned have duly executed this certificate on this
[ ]th day of [ ].
ON SEMICONDUCTOR CORPORATION,
By__________________________________
Name:
Title: [Financial Officer]
SEMICONDUCTOR COMPONENTS
INDUSTRIES, LLC,
By__________________________________
Name:
Title: [Financial Officer]
5
Annex 2 to the
Security Agreement
SUPPLEMENT NO. [ ] dated as of [ ], to the
Security Agreement dated as of August 4, 1999, as
amended and restated as of March 3, 2003 (as amended,
supplemented or otherwise modified from time to time,
the "Security Agreement"), among SEMICONDUCTOR
COMPONENTS INDUSTRIES, LLC, a Delaware limited
liability company (the "Borrower"), ON SEMICONDUCTOR
CORPORATION, a Delaware corporation ("Holdings"),
each subsidiary of Holdings listed on Schedule I
thereto (each such subsidiary individually a
"Subsidiary" or a "Subsidiary Guarantor" and,
collectively, the "Subsidiary Guarantors"; Holdings,
the Subsidiary Guarantors and the Borrower are
referred to collectively herein as the "Grantors")
and JPMORGAN CHASE BANK, a New York banking
corporation ("JPMCB"), as collateral agent (in such
capacity, the "Collateral Agent") for the Secured
Parties.
A. Reference is made to (a) the Credit Agreement dated as of
August 4, 1999, as amended and restated as of February 14, 2003 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Borrower, Holdings, the lenders from time to time party thereto (the
"Lenders"), and JPMCB, as administrative agent for the Lenders (in such
capacity, the "Administrative Agent"), (b) the Guarantee Agreement dated as of
August 4, 1999 (as amended, supplemented or otherwise modified from time to
time, the "Guarantee Agreement"), among Holdings, the Subsidiary Guarantors and
the Administrative Agent, (c) the Indenture dated as of March 3, 2003 (as
amended, supplemented or otherwise modified from time to time, the "Indenture"),
among the Companies, the Subsidiary Guarantors and Xxxxx Fargo Bank Minnesota,
National Association, as trustee (the "Trustee"), and (d) the Collateral Sharing
Agreement dated as of March 3, 2003, among the Companies, the Trustee and the
Collateral Agent.
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Security Agreement.
C. The Grantors have entered into the Security Agreement in
order to induce the Lenders to make Loans, the Issuing Bank to issue Letters of
Credit, the Trustee to enter into the Indenture and the Initial Purchasers to
purchase the Notes. Pursuant to Section 5.12 of the Credit Agreement and Section
4.11 of the Indenture, Holdings is required to cause certain of its Subsidiaries
that are not Grantors to enter into the Security Agreement as Grantors. Section
7.15 of the Security Agreement provides that such Subsidiaries may become
Grantors under the Security Agreement by execution and delivery of an instrument
in the form of this Supplement. The undersigned Subsidiary (the "New Grantor")
is executing this Supplement in accordance with the requirements of the Credit
Agreement and the Indenture to become a Grantor under the Security Agreement as
consideration for Loans previously made, Letters of Credit previously issued and
for the purchase of the Notes by the Initial Purchasers and the Noteholders.
Accordingly, the Collateral Agent and the New Grantor agree as
follows:
SECTION 1. In accordance with Section 7.15 of the
Security Agreement, the New Grantor by its signature below becomes a Grantor
under the Security Agreement with the
1
same force and effect as if originally named therein as a Grantor and the New
Grantor hereby (a) agrees to all the terms and provisions of the Security
Agreement applicable to it as a Grantor thereunder and (b) represents and
warrants that the representations and warranties made by it as a Grantor
thereunder are true and correct on and as of the date hereof except to the
extent a representation and warranty expressly relates solely to a specific date
in which case such representation and warranty shall be true and correct on such
date. In furtherance of the foregoing, the New Grantor, as security for the
payment and performance in full of the Secured Obligations (as defined in the
Security Agreement), does hereby create and grant to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, their successors
and assigns, a security interest in and lien on all of the New Grantor's right,
title and interest in and to the Collateral of the New Grantor. Each reference
to a "Grantor" in the Security Agreement shall be deemed to include the New
Grantor. The Security Agreement is hereby incorporated herein by reference.
SECTION 2. The New Grantor represents and warrants to
the Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Supplement shall become effective when
the Collateral Agent shall have received counterparts of this Supplement that,
when taken together, bear the signatures of the New Grantor and the Collateral
Agent. Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Grantor hereby represents and
warrants that (a) set forth on Schedule I attached hereto is a true
and correct schedule of the location of any and all Collateral of the
New Grantor and (b) set forth under its signature hereto, is the true
and correct location of the chief executive office of the New Grantor.
SECTION 5. Except as expressly supplemented hereby, the
Security Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and in the Security Agreement shall not in any way
be affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
2
SECTION 8. All communications and notices hereunder
shall be in writing and given as provided in Section 7.01 of the Security
Agreement. All communications and notices hereunder to the New Grantor shall be
given to it at the address set forth under its signature below, with a copy to
the Borrower.
SECTION 9. The New Grantor agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.
3
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent
have duly executed this Supplement to the Security Agreement as of the day and
year first above written.
[NAME OF NEW GRANTOR],
By _________________________________
Name:
Title:
Address:
JPMORGAN CHASE BANK, AS
COLLATERAL AGENT,
By _________________________________
Name:
Title:
Address:
4
Schedule I
to Supplement No. [ ]
to the Security Agreement
LOCATION OF COLLATERAL
Description Location
1
