Document:

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                                                                    EXHIBIT 10.6

                                                                               1

                                                                  EXECUTION COPY

                                    WAIVER, CONSENT AND AMENDMENT dated as of
                           August 13, 2001 to the Credit Agreement dated as of
                           August 4, 1999, as amended and restated as of April
                           3, 2000, as amended (the "Credit Agreement"), among
                           ON SEMICONDUCTOR CORPORATION (formerly known as SCG
                           HOLDING CORPORATION, "Holdings"), SEMICONDUCTOR
                           COMPONENTS INDUSTRIES, LLC (the "Borrower"), the
                           LENDERS party thereto, THE CHASE MANHATTAN BANK, as
                           administrative agent, collateral agent and
                           syndication agent, and CREDIT LYONNAIS NEW YORK
                           BRANCH, CREDIT SUISSE FIRST BOSTON and LEHMAN
                           COMMERCIAL PAPER INC., as co-documentation agents.

            A. Pursuant to the Credit Agreement, the Lenders have extended
credit to the Borrower, and have agreed to extend credit to the Borrower, in
each case pursuant to the terms and subject to the conditions set forth therein.

            B. Holdings and the Borrower have requested that the Lenders agree
to amend and waive certain provisions of the Credit Agreement pursuant to the
terms and subject to the conditions set forth herein.

            C. The undersigned Lenders are willing so to waive such provisions
and to amend the Credit Agreement pursuant to the terms and subject to the
conditions set forth herein.

            D. Capitalized terms used but not defined herein have the meanings
assigned to them in the Credit Agreement, as amended hereby.

            Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, and subject to the conditions set forth
herein, the parties hereto hereby agree as follows:

            SECTION 1. Waiver. The undersigned Lenders hereby waive any Default
arising from the failure of the Borrower to comply with the requirements of
Section 6.12 or 6.13 of the Credit Agreement during the period from and
including June 29, 2001 to and including December 31, 2002.

            SECTION 2. Amendments to Section 1.01 (Defined Terms). Section 1.01
of the Credit Agreement is hereby amended as follows:

            (a) by deleting in its entirety the definition of the term
"Applicable Rate" and substituting the following therefor:
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                                                                               2

            "Applicable Rate" means, for any day (a) with respect to any Loan,
            (i) 3.00% per annum, in the case of an ABR Loan, or 4.00% per annum,
            in the case of a Eurodollar Loan, plus (ii) either (A) 2.00% per
            annum prior to and including September 30, 2001, or (B) 3.00% per
            annum from and including October 1, 2001 to and including the
            Supplemental Interest Termination Date, or (C) 1.00% per annum on
            and after the date that the aggregate principal amount of
            outstanding Loans plus the LC Exposure is less than $750,000,000
            (notwithstanding whether clause (A) or (B) above would otherwise
            apply) to and including the Supplemental Interest Termination Date,
            and (b) with respect to the commitment fees payable hereunder, 0.50%
            per annum; provided that all Supplemental Interest shall cease to
            accrue on the Supplemental Interest Termination Date and, if the
            Supplemental Interest Termination Date does not occur on March 31,
            2003, then any Supplemental Interest that accrues after March 31,
            2003, shall be reduced to a rate per annum determined by multiplying
            the rate otherwise applicable pursuant to clause (a)(ii) above by a
            fraction, the numerator of which shall be equal to the total amount
            of Supplemental Interest accrued prior to March 31, 2003, that
            remains unpaid on March 31, 2003 (giving effect to any payments made
            on March 31, 2003), and the denominator of which shall be equal to
            the total amount of Supplemental Interest accrued prior to March 31,
            2003.

            (b) by deleting in its entirety the definition of the term
"Consolidated EBITDA" and substituting the following therefor:

            "Consolidated EBITDA" means, for any period (subject to Section
            1.05), Consolidated Net Income for such period plus (a) without
            duplication and to the extent deducted in determining such
            Consolidated Net Income, the sum of (i) consolidated interest
            expense for such period, (ii) consolidated income tax expense for
            such period, (iii) all amounts attributable to depreciation and
            amortization for such period, (iv) the aggregate amount of letter of
            credit fees accrued during such period, (v) all extraordinary
            charges during such period, (vi) noncash expenses during such period
            resulting from the grant of stock options to management and
            employees of Holdings, the Borrower or any of the Subsidiaries,
            (vii) the aggregate amount of deferred financing expenses for such
            period, (viii) all other noncash expenses or losses of Holdings, the
            Borrower or any of the Subsidiaries for such period (excluding any
            such charge that constitutes an accrual of or a reserve for cash
            charges for any future period), (ix) any non-recurring fees,
            expenses or charges realized by Holdings, the Borrower or any of the
            Subsidiaries for such period related to any offering of capital
            stock or incurrence of Indebtedness, (x) noncash dividends on the
            Cumulative Preferred Stock, (xi) cash restructuring charges (A)
            during the fiscal year ending on December 31, 2001 and the portion
            of the fiscal year ending on June 30, 2002 (or any fiscal quarter of
            such portion) not in excess of $131,000,000 in the aggregate (for
            all such periods), and (B) during any fiscal year (or any fiscal
            quarter of any such fiscal year) ending on or prior to December 31,
            2002 (or any quarter of such fiscal year) not in excess of an
            additional $10,000,000 in the aggregate (for all such periods),
            (xii) the amount of cash fees, service and product payments,
            dividends and other distributions actually paid to the Borrower or a
            Subsidiary by the
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                                                                               3

            OnMOS Joint Venture during such period and (xiii) fees and expenses
            of Alvarez & Marsal, Inc., paid by or reimbursed by the Borrower
            pursuant to Section 9.03 hereof and minus (b) without duplication
            and to the extent included in determining such Consolidated Net
            Income, (i) any extraordinary gains for such period, (ii) all
            noncash items increasing Consolidated Net Income for such period
            (excluding any items that represent the reversal of any accrual of,
            or cash reserve for, anticipated cash charges in any prior period)
            and (iii) all gains during such period attributable to any sale or
            disposition of assets (other than in the ordinary course of
            business), all determined on a consolidated basis in accordance with
            GAAP. For purposes of calculating the Leverage Ratio as of any date,
            if the Borrower or any consolidated Subsidiary has made any
            Permitted Acquisition or sale, transfer, lease or other disposition
            of assets outside of the ordinary course of business permitted by
            Section 6.05 during the period of four consecutive fiscal quarters
            ending on the date on which the most recent fiscal quarter ended,
            Consolidated EBITDA for the relevant period for testing compliance
            shall be calculated after giving pro forma effect thereto, as if
            such Permitted Acquisition or sale, transfer, lease or other
            disposition of assets outside of the ordinary course of business
            (and any related incurrence, repayment or assumption of Indebtedness
            with any new Indebtedness being deemed to be amortized over the
            applicable testing period in accordance with its terms) had occurred
            on the first day of the relevant period for testing compliance.

            (c) by deleting in its entirety the definition of the term "Interest
Payment Date" and substituting the following therefor:

            "Interest Payment Date" means (a) with respect to any ABR Loan
            (other than a Swingline Loan), the last day of each calendar month,
            (b) with respect to any Eurodollar Loan, the last day of the
            Interest Period applicable to the Borrowing of which such Loan is a
            part and, in the case of a Eurodollar Borrowing with an Interest
            Period of more than one month's duration, each day prior to the last
            day of such Interest Period that occurs at intervals of one month's
            duration after the first day of such Interest Period, and (c) with
            respect to any Swingline Loan, the day that such Loan is required to
            be repaid.

            (d)(i) by deleting the phrase "other than Indebtedness permitted by
Section 6.01" at the end of clause (c) of the definition of the term "Prepayment
Event" and substituting the phrase "excluding any Indebtedness (other than,
prior to the Transition Date, Permitted Convertible Debt) permitted by Section
6.01"; and

            (ii) by inserting the following text at the end of the definition
of the term "Prepayment Event":

            (d) prior to the Transition Date, the issuance by Holdings, the
            Borrower or any Subsidiary of any Equity Interests, other than (i)
            any such issuance by the Borrower or any Subsidiary to Holdings or
            the Borrower or to another Subsidiary, (ii) the issuance of Equity
            Interests expressly permitted by Section 6.01(d), (iii) the issuance
            of common stock or preferred stock of Holdings pursuant to the TPG
            Equity Purchase and (iv) Equity Interests issued in the form, or
            upon the exercise of, options to acquire common stock of Holdings
            issued to members of management and employees of Holdings, the
            Borrower or any Subsidiary and options or warrants in respect of the
            capital stock of Holdings issued as compensation to consultants to
            Holdings, the Borrower or any Subsidiary.

            (e) by adding the following text at the end of the definition of the
term "Consolidated Net Income":
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                                                                               4

            For purposes of calculating Consolidated EBITDA and Excess Cash
            Flow, Consolidated Net Income shall be calculated excluding all
            income, expenses, gains, losses and other items of the OnMOS Joint
            Venture.

            (f) by deleting in its entirety clause (a) of the definition of the
term "Excess Cash Flow" and substituting the following therefor:

            (a) Consolidated Net Income for such fiscal year, adjusted to
            exclude any gains or losses attributable to Prepayment Events, plus
            (without duplication) the amount of cash dividends or other
            distributions actually paid to the Borrower or a Subsidiary by the
            OnMOS Joint Venture during such period; plus

            (g) by adding the text "(plus, without duplication, any Supplemental
Interest deducted in calculating Consolidated EBITDA)" after the text
"Consolidated EBITDA" in the definition of the term "Leverage Ratio".

            (h) to add each of the following defined terms in the appropriate
alphabetical order:

            "Facilities Transfer" means the transfer by the Borrower and/or one
            or more of its Subsidiaries of the packaging and testing facilities
            located in Carmona, Philippines, Seremban, Malaysia and Guadalajara,
            Mexico, which transfer may involve one or more transactions or
            series of transactions taking the form of (i) sales, leases or other
            transfers or dispositions of assets, (ii) sales or other transfers
            or dispositions of capital stock and/or debt securities of
            Subsidiaries that directly or indirectly own such facilities, (iii)
            other types of transfers or dispositions, (iv) facilities closures
            or (v) any one or combination of the foregoing.

            "Interest Expense Coverage Ratio" shall have the meaning assigned to
            such term in Section 6.12.

            "Liquidity Amount" means, at any time, the aggregate amount of cash
            and Permitted Investments owned by the Borrower and its consolidated
            subsidiaries at such time, excluding (i) cash or Permitted
            Investments owned by the OnMOS Joint Venture and (ii) cash or
            Permitted Investments subject to any Lien in favor of any Person
            other than the Collateral Agent for the benefit of the Secured
            Parties.
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                                                                               5

            "OnMOS Joint Venture" means a Person organized (or to be organized)
            in a jurisdiction outside the United States to which Subsidiaries of
            Holdings will contribute the assets and operations of their TMOS
            business.

            "Partial Facilities Transfer" shall have the meaning assigned to
            such term in Section 6.15.

            "Permitted Convertible Debt" means Indebtedness of Holdings in
            respect of subordinated convertible debt securities (i) that is
            unsecured and subordinated to the Obligations on terms no less
            favorable to the Lenders than the terms of the Subordinated Debt,
            (ii) that does not provide for scheduled payments of principal
            earlier than 91 days after the final scheduled repayment of
            principal of the Term Loans, (iii) that is convertible into common
            equity of Holdings and (iv) the other terms (excluding the aggregate
            principal amount and conversion rate thereof) of which are
            reasonably satisfactory to the Administrative Agent in all material
            respects.

            "Qualified Liquidity Financing" means the issuance by Holdings of
            preferred stock, common stock or warrants in respect of preferred
            stock or common stock to TPG, or the incurrence by Holdings or the
            Borrower of Indebtedness for borrowed money owed to TPG, in each
            case for cash consideration; provided that (a) any such Indebtedness
            shall be unsecured, (b) the terms of any such preferred stock or
            Indebtedness shall not include any covenants, redemption provisions,
            events of default or other terms that would entitle the holder
            thereof to make any claim or assert any right or remedy prior to
            payment in full of the Obligations and termination of the
            Commitments and (c) prior to any such issuance of preferred stock or
            incurrence of Indebtedness, TPG and Holdings or the Borrower, as
            applicable, shall have entered into an agreement with the
            Administrative Agent, in form and substance reasonably satisfactory
            to the Administrative Agent, effectively subordinating any and all
            obligations in respect of such preferred stock or Indebtedness to
            the Obligations and providing that, prior to repayment in full of
            all the Obligations and termination of the Commitments, the holder
            or holders of such preferred stock or Indebtedness, as applicable,
            shall not be entitled to receive any cash payments in respect
            thereof or to exercise any rights or remedies (other than, in the
            case of clauses (b) and (c) above, rights and remedies the exercise
            of which would not constitute or result in a Default).

            "Senior Leverage Ratio" means, on any date, the ratio of (a) Total
            Senior Indebtedness as of such date to (b) Consolidated EBITDA
            (plus, without duplication, any Supplemental Interest deducted in
            calculating Consolidated EBITDA) for the period of four consecutive
            fiscal quarters of Holdings ended on such date.

            "Supplemental Interest" means the portion of any interest accrued in
            respect of any Loan attributable to clause (a)(ii) of the definition
            of the term Applicable Rate.
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                                                                               6

            "Supplemental Interest Termination Date" means (a) if all
            Supplemental Interest accrued to but excluding March 31, 2003, has
            been paid on or prior to March 31, 2003, then March 31, 2003, or (b)
            otherwise, June 30, 2003.

            "Total Senior Indebtedness" means, as of any date, the aggregate
            principal amount of Indebtedness of Holdings, the Borrower and the
            Subsidiaries outstanding on such date, determined on a consolidated
            basis, excluding the Subordinated Debt, any Permitted Convertible
            Debt, the Junior Subordinated Note, Qualified Liquidity Financing
            and any other Indebtedness that is effectively subordinated to the
            Obligations on terms no less favorable to the Lenders than the terms
            of the Subordinated Debt.

            "TPG Equity Purchase" means the purchase by TPG of common stock or
            preferred stock of Holdings for cash consideration in an amount
            equal to $100,000,000 and the immediate contribution by Holdings to
            the Borrower of such cash as common equity; provided that, in the
            case of any such purchase of preferred stock, (a) the terms of such
            preferred stock shall not include any covenants, redemption
            provisions, events of default or other terms that would entitle the
            holder thereof to make any claim or assert any right or remedy prior
            to payment in full of the Obligations and termination of the
            Commitments and (b) prior to any such issuance of preferred stock,
            TPG and Holdings shall have entered into an agreement with the
            Administrative Agent, in form and substance reasonably satisfactory
            to the Administrative Agent, effectively subordinating any and all
            obligations in respect of such preferred stock to the Obligations
            and providing that, prior to the repayment in full of all the
            Obligations and termination of the Commitments, the holder or
            holders of such preferred stock shall not be entitled to receive any
            cash payments in respect thereof or to exercise any rights (other
            than in the case of clauses (a) and (b) above, rights and remedies
            the exercise of which would not constitute or result in a Default).

            "Transition Date" means the date on which the Borrower shall have
            delivered to the Administrative Agent financial statements
            demonstrating that as of the end of the immediately preceding fiscal
            quarter of Holdings (a) the Leverage Ratio was less than or equal to
            3.75 to 1.00, (b) the Senior Leverage Ratio was less than or equal
            to 2.75 to 1.00 and (c) the Interest Expense Coverage Ratio for the
            period of four consecutive fiscal quarters ending on the last day of
            such quarter was greater than or equal to 2.50 to 1.00.

            SECTION 3. Amendments to Section 2.11 (Prepayment of Loans). Section
2.11 of the Credit Agreement is hereby amended as follows:

            (a) Paragraph (c) of Section 2.11 of the Credit Agreement is deleted
in its entirety and replaced with the following:

            (c) (i) Prior to the Transition Date, in the event and on each
            occasion that any Net Proceeds are received by or on behalf of
            Holdings, the Borrower or any Subsidiary in respect of any
            Prepayment Event, the Borrower shall, within ten Business Days after
            such Net Proceeds are received, prepay
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                                                                               7

            Term Borrowings in an aggregate amount equal to (A) 100% (or 50%, in
            the case of Net Proceeds from the sale of Equity Interests in the
            OnMOS Joint Venture) of such Net Proceeds if such Net Proceeds
            result from an event described in clause (a) of the definition of
            the term "Prepayment Event", (B) 100% of such Net Proceeds if such
            Net Proceeds result from an event (other than the issuance of
            Permitted Convertible Debt) described in clause (b) or (c) of the
            definition of the term "Prepayment Event" and (C) 75% of such Net
            Proceeds if such Net Proceeds result from the issuance of Permitted
            Convertible Debt or an event described in clause (d) of the
            definition of the term "Prepayment Event".

            (ii) After the Transition Date, in the event and on each occasion
            that any Net Proceeds are received by or on behalf of Holdings, the
            Borrower or any Subsidiary in respect of any Prepayment Event, the
            Borrower shall, within ten Business Days after such Net Proceeds are
            received, prepay Term Borrowings in an aggregate amount equal to
            such Net Proceeds, provided that, in the case of any event described
            in clause (a) of the definition of the term "Prepayment Event"
            (other than the sale, transfer or other disposition of Receivables
            in connection with a Permitted Receivables Financing), if the
            Borrower shall deliver to the Administrative Agent a certificate of
            a Financial Officer to the effect that Holdings, the Borrower and
            the Subsidiaries intend to apply the Net Proceeds from such event
            (or a portion thereof specified in such certificate), within 180
            days after receipt of such Net Proceeds, to acquire real property,
            equipment or other assets to be used in the business of the Borrower
            and the Subsidiaries, and certifying that no Default has occurred
            and is continuing, then no prepayment shall be required pursuant to
            this paragraph in respect of the Net Proceeds in respect of such
            event (or the portion of such Net Proceeds specified in such
            certificate, if applicable) except to the extent of any such Net
            Proceeds therefrom that have not been so applied by the end of such
            180-day period, at which time a prepayment shall be required in an
            amount equal to such Net Proceeds that have not been so applied.

            (b) Paragraph (d) of Section 2.11 of the Credit Agreement is amended
by deleting the text "50%" and replacing it with the text "75% (or, after the
Transition Date, 50%)".

            SECTION 4. Amendment to Section 2.13 (Interest). Paragraph (d) of
Section 2.13 of the Credit Agreement is hereby amended by adding the following
text at the end of such paragraph:

            Notwithstanding the foregoing, Supplemental Interest shall not be
            required to be paid at the time required by the preceding sentence,
            except that (A) 50% of the total amount of Supplemental Interest
            accrued prior to March 31, 2003 shall be payable on March 31, 2003
            (to the extent not previously paid) and (B) if the Supplemental
            Interest Termination Date does not occur on March 31, 2003, then all
            Supplemental Interest remaining unpaid on June 30, 2003, shall be
            payable in full on June 30, 2003; provided that all unpaid
            Supplemental Interest shall be payable upon repayment in full of the
            Loans.
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                                                                               8

            SECTION 5. Amendments to Section 5.01 (Financial Statements and
Other Information). Section 5.01 of the Credit Agreement is hereby amended as
follows:

            (a) Clause (c) of Section 5.01 is amended by deleting the text
"Sections 6.12 and 6.13" and inserting the text "Sections 6.12, 6.13, and, prior
to the Transition Date, 6.14, 6.15 and 6.16" therefor.

            (b) Clause (f) of Section 5.01 is amended by deleting the text "and"
following the ";".

            (c) Clause (g) of Section 5.01 is amended by substituting the text
"; and" for the text ".".

            (d) Section 5.01 is further amended by inserting the following new
clause (h):

            (h) in respect of each fiscal month ending on or prior to the
            earlier of (i) the Transition Date and (ii) March 31, 2003, (A)
            within 30 days after the end of each of the first two fiscal months
            of each fiscal quarter of Holdings, (1) Holdings' unaudited
            consolidated balance sheet and related statements of operations,
            stockholders' equity and cash flows as of the end of and for each
            such month in substantially the form of Schedule 5.01(h) and (2) a
            letter executed by a Financial Officer describing the results of the
            Borrower's business for such fiscal month and for the then elapsed
            portion of the fiscal year and (B) within 45 days after the end of
            the last fiscal month of each fiscal quarter of Holdings, (1)
            Holdings' unaudited consolidated balance sheet and related
            statements of operations, stockholders' equity and cash flows as of
            the end of and for such fiscal quarter, in substantially the form of
            Schedule 5.01(h), (2) a letter executed by a Financial Officer
            describing the results of the Borrower's business for such fiscal
            month and for the then elapsed portion of the fiscal year and (3) a
            variance analysis setting forth Holdings' consolidated financial
            results for such quarter relative to the figures set forth in
            Holdings' financial plan provided to the Lenders in attendance at
            the June 28, 2001 bank meeting held at the offices of the
            Administrative Agent, including an updated 6-month cash reforecast
            based upon Holdings' consolidated financial results for such
            quarter.

            SECTION 6. Amendments to Section 6.01 (Indebtedness; Certain Equity
Securities). Section 6.01 of the Credit Agreement is hereby amended as follows:

            (a) Clause (ix) of Section 6.01(a) is hereby deleted in its entirety
and replaced by "(ix) Permitted Convertible Debt;".

            (b) Section 6.01 is hereby further amended by inserting the
following new paragraphs (e) and (f):

            (e) Notwithstanding anything contained in Section 6.01(a), (b) or
            (c), (i) Holdings may issue preferred stock, or Holdings or the
            Borrower may incur Indebtedness, in each case pursuant to a
            Qualified Liquidity
<PAGE>   9
                                                                               9

            Financing and (ii) Holdings may issue preferred stock pursuant to
            the TPG Equity Purchase.

            (f) Notwithstanding anything contained in Section 6.01(a), the OnMOS
            Joint Venture may incur Indebtedness that is guaranteed by Mosel in
            an aggregate principal amount not exceeding $10,000,000 at any time
            outstanding, provided that such Indebtedness shall not be Guaranteed
            by, or otherwise be recourse to, any of Holdings, the Borrower or
            the Subsidiaries (other than the OnMOS Joint Venture or any
            subsidiaries of the OnMOS Joint Venture). Any such Indebtedness of
            the OnMOS Joint Venture shall be deemed not to be Indebtedness of
            Holdings, the Borrower and the Subsidiaries for the purpose of
            calculating Funded Indebtedness and Total Senior Indebtedness and
            any interest expense with respect to such Indebtedness shall be
            excluded from consolidated interest expense for the purpose of
            calculating Consolidated Cash Interest Expense.

            SECTION 7. Amendments to Section 6.04 (Investments, Loans, Advances,
Guarantees and Acquisitions). Section 6.04 of the Credit Agreement is hereby
amended as follows:

            (a) Clause (h) of Section 6.04 is hereby amended by adding the text
"after the Transition Date," at the beginning thereof.

            (b) Clause (s) of Section 6.04 is hereby amended by deleting the
text "and" at the end thereof.

            (c) Clause (t) of Section 6.04 is amended by (i) deleting the text
"$100,000,000" and replacing it with the text "$40,000,000 (or, after the
Transition Date, $100,000,000)" and (ii) by deleting the text "." at the end
thereof and replacing it with the text "; and".

            (d) Section 6.04 is further amended by adding the following new
Clause (u):

            (u) the creation by the Borrower of a limited liability company
            organized under the laws of a jurisdiction in the United States of
            America and the Borrower's contribution to the OnMOS Joint Venture
            through such limited liability company of (i) $51 in exchange for a
            51% interest therein and (ii) the assets and operations of the TMOS
            business of the Subsidiaries and Holdings; provided that promptly
            following the contribution of such assets and operations to the
            OnMOS Joint Venture contemplated by this clause (u), the Borrower
            shall deliver to the Administrative Agent copies of all definitive
            documentation regarding such investment, certified by a Financial
            Officer as complete and correct.

            SECTION 8. Amendments to Section 6.05 (Asset Sales). Section 6.05 of
the Credit Agreement is hereby amended as follows:

                        (a) by deleting clause (d) in its entirety and replacing
            it with the text "(d) the Borrower may consummate the Facilities
            Transfer;".
<PAGE>   10
                                                                              10

            (b) by deleting the text "$50,000,000" in clause (e) and replacing
it with the text "$30,000,000 (or, after the Transition Date, $50,000,000)".

            (c) by inserting the text ", except for sales of Equity Interests in
the OnMOS Joint Venture to the extent such sales do not result in the failure of
the Borrower to comply with Section 6.17" immediately following the text
"Subsidiary" and before the text ")" in clause (e).

            (d) by adding the text "and" at the end of clause (e) thereof;

            (e) by adding the following new paragraph at the end thereof:

            (f) sales, transfers and other dispositions of assets listed on
Schedule 6.05 hereto.

            (f) by deleting in its entirety the final proviso thereto and
substituting the following text therefor:

provided that (i) all sales, transfers, leases and other dispositions permitted
hereby shall be made for fair value (other than those permitted by clause (b)
above) and for consideration of at least 80% cash or cash equivalents (other
than those permitted by clause (b) and (f) above) and (ii) the fair value of all
consideration (other than cash and cash equivalents) received in respect of
dispositions permitted by clause (f) above does not exceed $15,000,000.

            SECTION 9. Amendment to Section 6.09 (Transactions with Affiliates).
Section 6.09 of the Credit Agreement is hereby amended:

                        (a) by deleting the text "and (i)" and replacing it with
            the text ", (i)" and deleting the text "." at the end thereof; and

                        (b) by adding the following new text at the end of
            Section 6.09:

            and (j) any ancillary agreements entered into between Holdings, the
            Borrower or any Subsidiary and the OnMOS Joint Venture at any time
            that Holdings owns directly and indirectly less than 80% of the
            economic interest of the OnMOS Joint Venture; provided, however,
            that, prior to the Transition Date, all management fees payable to
            TPG or its Affiliates shall accrue and not be payable in cash, it
            being understood that any such fees may be paid by the issuance of
            common stock of or warrants in respect of common stock of Holdings
            and any other fees may be paid in cash

            SECTION 10. Amendment to Section 6.12 (Interest Expense Coverage
Ratio). Section 6.12 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:

                        SECTION 6.12. Interest Expense Coverage Ratio. (a) The
            Borrower will not permit the ratio of (i) Consolidated EBITDA (plus,
            without duplication, any Supplemental Interest deducted in
            calculating Consolidated EBITDA) to (ii) Consolidated Cash Interest
            Expense (excluding any Supplemental Interest otherwise included
            therein) (the "Interest Expense
<PAGE>   11
                                                                              11

Coverage Ratio"), in each case for any period of four consecutive fiscal
quarters ending on any date during any period set forth below, to be less than
the ratio set forth below opposite such period:

<TABLE>
<CAPTION>
Period                                                                      Ratio
------                                                                      -----

<S>                                                                     <C>
January 1, 2003 to and including December 31, 2003                      2.00 to 1.00
January 1, 2004 to and including July 2, 2004                           2.25 to 1.00
July 3, 2004 to and including December 31, 2004                         2.50 to 1.00
January 1, 2005 to and including July 1, 2005                           2.75 to 1.00
July 2, 2005 and thereafter                                             3.00 to 1.00
</TABLE>

                        (b) For purposes of calculating the Interest Expense
            Coverage Ratio under clause (a) of this Section 6.12, Consolidated
            EBITDA for the period of four consecutive fiscal quarters of
            Holdings (i) ended March 31, 2003 shall be deemed to be equal to
            Consolidated EBITDA for the fiscal quarter then ended multiplied by
            4, (ii) ended June 30, 2003 shall be deemed to be equal to
            Consolidated EBITDA for the two consecutive fiscal quarters then
            ended multiplied by 2 and (iii) ended September 30, 2003 shall be
            deemed to be equal to Consolidated EBITDA for the three consecutive
            fiscal quarters then ended multiplied by 4/3.

            SECTION 11. Amendment to Section 6.13 (Leverage Ratio). Section 6.13
of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:

                        SECTION 6.13. Leverage Ratio. (a) The Borrower will not
            permit the Leverage Ratio as of the end of any fiscal quarter during
            any period set forth below to exceed the ratio set forth opposite
            such period:

<TABLE>
<CAPTION>
Period                                                            Ratio
------                                                            -----
<S>                                                               <C>
January 1, 2003 to and including June 30, 2003                    5.00 to 1.00
July 1, 2003 to and including December 31, 2003                   4.75 to 1.00
January 1, 2004 to and including July 2, 2004                     4.50 to 1.00
July 3, 2004 to and including December 31, 2004                   4.25 to 1.00
January 1, 2005 to and including July 1, 2005                     4.00 to 1.00
July 2, 2005 and thereafter                                       3.75 to 1.00
</TABLE>

                        (b) For purposes of calculating the Leverage Ratio under
            clause (a) of this Section 6.13, Consolidated EBITDA for the period
            of
<PAGE>   12
            four consecutive fiscal quarters of Holdings (i) ended March 31,
            2003 shall be deemed to be equal to Consolidated EBITDA for the
            fiscal quarter then ended multiplied by 4, (ii) ended June 30, 2003
            shall be deemed to be equal to Consolidated EBITDA for the two
            consecutive fiscal quarters then ended multiplied by 2 and (iii)
            ended September 30, 2003 shall be deemed to be equal to Consolidated
            EBITDA for the three consecutive fiscal quarters then ended
            multiplied by 4/3. In addition, for purposes of this Section 6.13,
            the Funded Indebtedness component of the Leverage Ratio shall be
            calculated excluding any Supplemental Interest otherwise included
            therein.

            SECTION 12. Amendment to Section 6.14 (Capital Expenditures).
Section 6.14 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

                        SECTION 6.14. Capital Expenditures. The Borrower and
            Subsidiaries shall not incur or make any Capital Expenditures:

                        (a) prior to the Transition Date, during any period set
            forth below in an amount exceeding the amount set forth opposite
            such period:

<TABLE>
<CAPTION>
                                                     Maximum
Period                                         Capital Expenditures
------                                         --------------------

<S>                                            <C>
July 1, 2001 to December 31, 2001                 $35,000,000
January 1, 2002 to March 31, 2003                 $52,500,000
April 1, 2003 to December 31, 2003                $87,500,000
Each fiscal year thereafter                       $150,000,000
</TABLE>

            Notwithstanding the foregoing, if the actual amount of Capital
            Expenditures incurred or made by the Borrower and its Subsidiaries
            during the period from July 1, 2001 to December 31, 2001, is less
            than $35,000,000, then the Borrower and its Subsidiaries may incur
            or make additional Capital Expenditures during the period January 1,
            2002 to March 31, 2003, in excess of $52,500,000, but such
            additional Capital Expenditures during such period shall not exceed
            the lesser of (i) $15,000,000 and (ii) the excess of $35,000,000
            over the actual amount of Capital Expenditures incurred or made from
            July 1, 2001, to December 31, 2001.

                        (b) after the Transition Date, in an amount exceeding
            $150,000,000 in any fiscal year, provided that such $150,000,000
            permitted amount shall be increased with respect to any fiscal year
            by an amount equal to the portion of Excess Cash Flow for the
            immediately preceding fiscal year that is not required to be applied
            to make prepayments of Loans pursuant to Section 2.11(d).
<PAGE>   13
                                                                              13

            After the Transition Date the amount of Capital Expenditures
            permitted to be made by the immediately preceding paragraph (b) in
            respect of any fiscal year shall be increased by (i) the unused
            amount of Capital Expenditures that were permitted to be made during
            the immediately preceding fiscal year pursuant to the immediately
            preceding paragraph (b) (without giving effect to the proviso to
            such paragraph) minus (ii) an amount equal to the unused permitted
            Capital Expenditures carried forward to such preceding fiscal year.

                        For purposes of determining compliance with this
            Section, Capital Expenditures incurred or made by the OnMOS Joint
            Venture and its subsidiaries shall be disregarded.

            SECTION 13. Addition of New Section 6.15 to the Credit Agreement.
The Credit Agreement is hereby amended by adding the following new section
following Section 6.14:

                        SECTION 6.15. Minimum Consolidated EBITDA. (a) The
            Borrower will not permit Consolidated EBITDA for any period set
            forth below to be less than the amount set forth opposite such
            period (subject to adjustment pursuant to paragraph (b) below):

<TABLE>
<CAPTION>
Period                                            Amount
------                                            ------

<S>                                               <C>
July 1, 2001 to and including                     $(15,000,000)
December 31, 2001

July 1, 2001 to and including                     $0.0
March 31, 2002

July 1, 2001 to and including                     $35,000,000
June 30, 2002

October 1, 2001 to and including                  $80,000,000
September 30, 2002

January 1, 2002 to and including                  $120,000,000
December 31, 2002
</TABLE>

                        (b) Following the completion of the Facilities Transfer,
            the amounts set forth in paragraph (a) above shall be reduced (i)
            for the period from July 1, 2001 to and including December 31, 2001,
            by $31,400,000, (ii) for the period from July 1, 2001 to and
            including March 31, 2002, by $47,100,000 and (iii) for each of the
            periods (A) from July 1, 2001 to and including June 30, 2002, (B)
            from October 1, 2001 to and including September 30, 2002 and (C)
            from January 1, 2002 to and including December 31, 2002, by
            $62,800,000.

            For purposes of this paragraph (b), Consolidated EBITDA for any
            period during which the Facilities Transfer is completed shall be
            calculated after giving pro forma effect to the Borrower's
            consummation of the Facilities
<PAGE>   14
                                                                              14

            Transfer, as if the consummation of the Facilities Transfer had
            occurred on the first day of the relevant period for testing
            compliance.

            Following any transfer in partial completion of the Facilities
            Transfer (a "Partial Facilities Transfer"), the Borrower and the
            Administrative Agent shall agree to reduce the amount set forth in
            paragraph (a) above in respect of the period during which such
            Partial Facilities Transfer occurred, provided that (i) any such
            reduction shall be based on the ratio of (A) Consolidated EBITDA
            attributable to all of the business of Holdings, the Borrower and
            the Subsidiaries transferred pursuant to such Partial Facilities
            Transfer to (B) the Consolidated EBITDA attributable to all assets
            of the business of Holdings, the Borrower and its Subsidiaries that
            may be transferred pursuant to the Facilities Transfer, (ii) any
            such reduction shall not exceed the amount of the reduction set
            forth for the relevant period in paragraph (b) above that would be
            allowed for the relevant period and (iii) there shall be such a
            reduction in respect of no more than one Partial Facilities
            Transfer.

            SECTION 14. Addition of New Section 6.16 to the Credit Agreement.
The Credit Agreement is hereby amended by adding the following new section
following Section 6.15:

                        SECTION 6.16. Minimum Cash and Cash Equivalents. Prior
            to the Transition Date, the Borrower will not permit the Liquidity
            Amount for any period of five consecutive Business Days ending on or
            after the date hereof (calculated at the close of business on each
            Business Day), to be less than $50,000,000.

            SECTION 15. Addition of New Section 6.17 to the Credit Agreement.
The Credit Agreement is hereby amended by adding the following new section
following Section 6.16:

                        SECTION 6.17. OnMOS Joint Venture Interest. At all times
            after consummation of its investment in the OnMOS Joint Venture the
            Borrower shall own (directly or indirectly) at least 51% of the
            voting power represented by the outstanding Equity Interests of the
            OnMOS Joint Venture.

            SECTION 16. Schedules. The Credit Agreement is hereby amended by
adding a new Schedule 5.01(h) and a new Schedule 6.05 in the respective forms
attached to this Amendment.

            SECTION 17. Amendments to Section 7.01 (Events of Default). Section
7.01 is hereby amended as follows:

                        (a) Clause (n) is hereby amended by deleting the text
            "or" at the end thereof.

                        (b) Clause (o) is hereby amended by adding the text "or"
            at the end thereof.
<PAGE>   15
                                                                              15

                        (c) Section 7.01 is hereby further amended by inserting
            the following new paragraph (p) at the end thereof:

                                    (p) the TPG Equity Purchase shall not have
                        been consummated on or prior to September 7, 2001;

            SECTION 18. Amendment to Section 9.04 (Successors and Assigns).
Paragraph (b) of Section 9.04 of the Credit Agreement is hereby amended by
deleting the text "$5,000,000" and replacing it with the text "$1,000,000".

            SECTION 19. Consent to Consultant. For the period from the date
hereof through the earlier of (a) the Transition Date and (b) March 31, 2003,
the Borrower consents to the engagement of (on terms to be agreed upon), and
agrees to pay (in accordance with Section 9.03 of the Credit Agreement) the
reasonable fees and reasonable out-of-pocket expenses (not to exceed $250,000 in
the aggregate) of, Alvarez & Marsal, Inc., a third party consulting firm engaged
by counsel to the Administrative Agent to evaluate and monitor the Borrower's
business plan and perform other services requested by counsel to the
Administrative Agent with respect to the Borrower. The Borrower will cooperate
with Alvarez & Marsal, Inc., in connection with its performance of services for
counsel to the Administrative Agent (including providing access to the records
(financial and otherwise), properties, books, contracts and personnel of the
Borrower and its Subsidiaries).

            SECTION 20. Amendment Fee. In consideration of the agreements of the
Lenders contained in this Amendment, the Borrower agrees to pay to the
Administrative Agent, for the account of each Lender that delivers an executed
counterpart of this Amendment at or prior to 12:00 (noon) on August 13, 2001, an
amendment fee in an amount equal to 0.25% of the sum of such Lender's Revolving
Commitment and outstanding Term Loans; provided that such fee shall not be
payable unless and until this Amendment becomes effective as provided in Section
20.

            SECTION 21. Representations and Warranties. Each of Holdings and the
Borrower represents and warrants to the Administrative Agent and to each of the
Lenders that:

            (a) This Amendment has been duly authorized, executed and delivered
by each of Holdings and the Borrower and constitutes a legal, valid and binding
obligation of Holdings and the Borrower, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

            (b) After giving effect to this Amendment, each of the
representations and warranties of Holdings and the Borrower set forth in the
Loan Documents is true and correct on and as of the date hereof, except to the
extent such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties are true and correct as of
such earlier date.

            (c) Immediately after giving effect to this Amendment, no Default
shall have occurred and be continuing.
<PAGE>   16
                                                                              16

            SECTION 22. Conditions to Effectiveness. This Amendment shall become
effective as of the date first above written when (i) the Administrative Agent
shall have received counterparts of this Amendment that, when taken together,
bear the signatures of (a) Holdings, (b) the Borrower and (c) the Required
Lenders, (ii) all fees and expenses required to be paid or reimbursed by the
Borrower under or in connection with this Amendment or the Credit Agreement and
(in the case of expenses to be reimbursed, including fees, charges and
disbursements of counsel or other advisors) invoiced in writing to the Borrower
on or prior to August 13, 2001, shall have been paid or reimbursed, as
applicable (including all fees and disbursements of counsel previously
invoiced), (iii) the Administrative Agent and the Borrower shall have received a
written acknowledgment from TPG that all management fees (other than fees
permitted by the final proviso to Section 6.09) payable to TPG or its Affiliates
by Holdings, the Borrower or any Subsidiary shall accrue and not be payable
until such time as the Obligations shall have been repaid in full and (iv)
Holdings shall have received a written commitment to make, on or prior to
September 7, 2001, the TPG Equity Purchase and a copy of such written commitment
shall have been delivered to the Administrative Agent.

            SECTION 23. Credit Agreement. Except as specifically waived or
amended hereby, the Credit Agreement shall continue in full force and effect in
accordance with the provisions thereof as in existence on the date hereof. After
the date hereof, any reference to the Credit Agreement shall mean the Credit
Agreement as amended or modified hereby. This Amendment shall be a Loan Document
for all purposes.

            SECTION 24. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

            SECTION 25. Counterparts. This Amendment 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 agreement. Delivery of an executed
signature page to this Amendment by facsimile transmission shall be effective as
delivery of a manually signed counterpart of this Amendment.

            SECTION 26. Expenses. The Borrower agrees to reimburse the
Administrative Agent for its reasonable out-of-pocket expenses in connection
with this Amendment, including the fees, charges and disbursements of Cravath,
Swaine & Moore, counsel for the Administrative Agent.

            SECTION 27. Headings. The Section headings used herein are for
convenience of reference only, are not part of this Amendment and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Amendment.
<PAGE>   17
                                                                              17

            IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized officers as of the day and year
first written above.

                                            ON SEMICONDUCTOR CORPORATION,

                                            by /s/
                                              ----------------------------
                                              Name:  Authorized Officer
                                              Title:

                                            SEMICONDUCTOR COMPONENTS
                                            INDUSTRIES, LLC,

                                            by /s/
                                              ----------------------------
                                              Name:  Authorized Officer
                                              Title:

                                            THE CHASE MANHATTAN BANK,
                                            individually and as administrative
                                            agent,

                                            by /s/
                                              ----------------------------
                                              Name:  Authorized Officer
                                              Title:

                                            CREDIT LYONNAIS NEW YORK BRANCH,
                                            individually and as co-documentation
                                            agent,

                                            by /s/
                                              ----------------------------
                                              Name:  Authorized Officer
                                              Title:

                                            CREDIT SUISSE FIRST BOSTON
                                            individually and as co-documentation
                                            agent,

                                            by /s/
                                              ----------------------------
                                              Name:  Authorized Officer
                                              Title:
<PAGE>   18
                                                                              18

                                            LEHMAN COMMERCIAL PAPER INC.,
                                            individually and as co-documentation
                                            agent,

                                            by /s/
                                              ----------------------------
                                              Name:
                                              Title: Authorized Officer

<PAGE>   19
                                                                              19

                                    SIGNATURE PAGE TO THE WAIVER, CONSENT AND
                                    AMENDMENT DATED AS OF AUGUST 13, 2001 TO THE
                                    CREDIT AGREEMENT AMONG ON SEMICONDUCTOR
                                    CORPORATION, SEMICONDUCTOR COMPONENTS
                                    INDUSTRIES, LLC, THE LENDERS PARTY THERETO,
                                    THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE
                                    AGENT, COLLATERAL AGENT AND SYNDICATION
                                    AGENT, AND CREDIT LYONNAIS NEW YORK BRANCH,
                                    CREDIT SUISSE FIRST BOSTON AND LEHMAN
                                    COMMERCIAL PAPER INC., AS CO-DOCUMENTATION
                                    AGENTS.

Name of Institution

                                            by /s/
                                              ----------------------------
                                              Name:
                                              Title: Authorized Officer<PAGE>   1
                                                                     EXHIBIT 4.7

NEITHER THIS WARRANT NOR THE STOCK FOR WHICH IT MAY BE EXERCISED HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"), OR
ANY OTHER FEDERAL OR STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT AS EXPRESSLY PROVIDED HEREIN. WITHOUT LIMITING THE
FOREGOING, THIS WARRANT MAY NOT BE TRANSFERRED FOR A PERIOD OF TWELVE (12)
MONTHS AFTER THE DATE OF ISSUANCE OF THIS WARRANT UNLESS PERMITTED BY THE TERMS
OF THIS WARRANT AND APPLICABLE LAW.

                               [SAF-T-HAMMER LOGO]

                            SAF-T-HAMMER CORPORATION

                           COMMON STOCK PURCHASE WARRANT                No. ____

      This certifies that, for value received, ____________ ("Holder"), is
entitled to subscribe for and purchase from Saf-T-Hammer Corporation, a Nevada
corporation ("Company"), ___________ shares, subject to adjustment as set forth
in ARTICLE II below ("Warrant Shares"), of Common Stock of the Company, par
value $0.001 per share ("Common Stock"), at the exercise price of $0.50 per
share, which price is subject to adjustment as set forth in ARTICLE II below
("Exercise Price"), at any time and from time to time beginning on the date of
this Warrant as set forth below ("Exercise Date"), and ending on the date that
is two (2) years after the date of this Warrant ("Expiration Date"), upon
written notice from the Holder to the Company ("Notice") and subject to the
terms provided herein.

      This Warrant is subject to the following provisions, terms and conditions:

                                  ARTICLE I.

                         EXERCISE; RESERVATION OF SHARES

      Section 1.01 Warrant Exercise. The rights represented by this Warrant may
be exercised by the Holder at any time and from time to time prior to the
expiration of this Warrant, upon Notice, by the surrender at the principal
office of the Company of this Warrant together with a duly executed subscription
in the form annexed hereto ("Subscription Form") and accompanied by payment, in
certified or immediately
<PAGE>   2
available funds, of the Exercise Price for the number of Warrant Shares
specified in the Subscription Form. The shares so purchased shall be deemed to
be issued to the Holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall be exercised as hereinabove
provided. No fractional shares or scrip representing fractional shares shall be
issued upon exercise of this Warrant and the number of shares that shall be
issued upon such exercise shall be rounded to the nearest whole share without
the payment or receipt of any additional consideration.

      Section 1.02 Certificates. Certificates for the shares purchased pursuant
to Section 1.01 shall be delivered to the Holder within a reasonable time after
the rights represented by this Warrant shall have been so exercised, and a new
Warrant in the name of the Holder representing the rights, if any, that shall
not have been exercised prior to the Expiration Date with respect to this
Warrant shall also be delivered to such Holder within such time, with such new
Warrant to be identical in all other respects to this Warrant. The term
"Warrant," as used herein, includes any Warrants into which this Warrant may be
divided or combined and any subsequent Warrants issued upon the transfer or
exchange or reissuance upon loss hereof.

      Section 1.03      Reservation of Shares.  The Company represents,
warrants, covenants and agrees:

               (a) That all shares of Common Stock that may be issued upon
      exercise of this Warrant will, upon issuance, be validly issued, fully
      paid and nonassessable and free from all taxes, liens and charges with
      respect to the issue thereof; and

               (b) That during the period the rights represented by this Warrant
      may be exercised, the Company will at all times have authorized, and
      reserved for the purpose of issue and delivery upon exercise of the rights
      evidenced by this Warrant, a sufficient number of shares of Common Stock
      to provide for the exercise of the rights represented by this Warrant.

                                 ARTICLE II.

                                   ADJUSTMENTS

      Section 2.01      Adjustment Events.

               (a) Capital Events. If any reorganization or reclassification of
      the capital stock of the Company, or any consolidation or merger of the
      Company with another corporation, or the sale of all or substantially all
      of its assets to another corporation (in any instance, a "Capital Event")
      shall be effected in such a way that holders of Common Stock shall be
      entitled to receive stock, securities or assets (including cash) with
      respect to or in exchange for their Common Stock, then, as a condition of
      such Capital Event, lawful and adequate provisions shall be made whereby
      the Holder hereof shall thereafter have the right to purchase and

                                       2
<PAGE>   3
      receive upon the basis and upon the terms and conditions specified in this
      Warrant and in lieu of the shares of the Common Stock of the Company
      immediately theretofore purchasable and receivable upon the exercise of
      the rights represented hereby, an amount of such shares of stock,
      securities or assets (including cash) as may have been issued or payable
      with respect to or in exchange for a number of outstanding shares of such
      Common Stock equal to the number of shares of such stock immediately
      theretofore purchasable and receivable upon the exercise of the rights
      represented hereby had such Capital Event not taken place.

               (b) Preservation of Value. In the case of any Capital Event,
      appropriate provision shall be made with respect to the rights and
      interests of the Holder of this Warrant to the end that the provisions
      hereof (including, without limitation, provisions for adjustment of the
      number of shares that may be issued upon exercise of this Warrant and the
      Exercise Price hereof) shall thereafter be applicable, as nearly as may
      be, in relation to any shares of stock, securities or assets (including
      cash) thereafter deliverable upon the exercise of the rights represented
      hereby.

               (c) Obligation Expressly Assumed. The Company shall not effect
      any consolidation, merger or sale of all or substantially all of its
      assets, unless prior to the consummation thereof the successor corporation
      (if other than the Company) resulting from such consolidation or merger,
      or the corporation into or for the securities of which the previously
      outstanding stock of the Company shall be changed in connection with such
      consolidation or merger, or the corporation purchasing such assets, as the
      case may be, shall assume by written instrument executed and mailed or
      delivered to the registered Holder at the last address of such Holder
      appearing on the books of the Company, the obligation to deliver to such
      Holder, upon exercise of this Warrant, such shares of stock, securities or
      assets (including cash) as, in accordance with the foregoing provisions,
      such Holder may be entitled to purchase.

      Section 2.02 Subdivision or Combination of Stock. In the event that the
Company shall at any time subdivide or split its outstanding shares of Common
Stock into a greater number of shares, the number of Warrant Shares subject to
issuance upon exercise of this Warrant at the opening of business on the day
upon which such subdivision becomes effective shall be proportionately
increased. In the event that the outstanding shares of Common Stock of the
Company shall be combined into a smaller number of shares, the number of shares
subject to issuance upon exercise of this Warrant at the opening of business on
the day upon which such subdivision becomes effective shall be proportionately
decreased. Any such increase or decrease, as the case may be, shall become
effective immediately after the opening of business on the day following the day
upon which such subdivision or combination, as the case may be, becomes
effective.

      Section 2.03 Stock Dividends. In the event that the Company shall at any
time declare any dividend or distribution upon its Common Stock payable in
stock, the number of Warrant Shares subject to issuance upon exercise of this
Warrant shall be increased by

                                       3
<PAGE>   4
the number (and the kind) of shares which would have been issued to the holder
of this Warrant if this Warrant were exercised immediately prior to such
dividend. Such increase shall become effective immediately after the opening of
business on the day following the record date for such dividend or distribution.

      Section 2.04 Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares of the Company owned or
held by or for the account of the Company.

      Section 2.05 Minimum Adjustment. No adjustment in the number of shares
that may be issued upon exercise of this Warrant as provided in this Article II
shall be required unless such adjustment would require an increase or decrease
in such number of shares of at least one percent (1%) of the then adjusted
number of shares of Common Stock that may be issued upon exercise of this
Warrant; provided, however, that any such adjustments that by reason of the
foregoing are not required to be made shall be carried forward and taken into
account and included in determining the amount of any subsequent adjustment; and
provided further, that if the Company shall at any time subdivide or combine the
outstanding shares of Common Stock or issue additional shares of Common Stock as
a dividend, said percentage shall forthwith be proportionately adjusted so as to
appropriately reflect the same.

      Section 2.06 Adjustment of Exercise Price. Whenever the number of shares
of Common Stock that may be issued upon exercise of this Warrant is adjusted,
and effective at the time such adjustment is effective, as provided in Sections
2.01, 2.02 and 2.03 of this Article II, the Exercise Price shall be adjusted (to
the nearest whole cent) by multiplying each such Exercise Price immediately
prior to such adjustment by a fraction (x) the numerator of which shall be the
number of shares of Common Stock which may be issued upon the exercise of each
such Warrant immediately prior to such adjustment, and (y) the denominator of
which shall be the number of shares of Common Stock so purchasable immediately
thereafter. The Company may retain a firm of independent certified public
accountants (which may not be the regular accountants employed by the Company)
to make any required computation, and a certificate signed by such firm shall be
conclusive evidence of the correctness of such adjustment.

      Section 2.07 Record Date. In the event that the Company shall not take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend payable in Common Stock, then such record date shall be
deemed for the purposes of this Article II to be the date of the issue or sale
of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend.

      Section 2.08 Officer's Certificate. Whenever the Exercise Price shall be
adjusted as provided in this Article II, the Company shall forthwith file with
its Secretary and retain in the permanent records of the Company, an officer's
certificate showing the adjusted Exercise Price determined as provided in this
Article II, setting forth in reasonable detail the facts requiring such
adjustment, including a statement of the number of additional or fewer shares of
Common Stock, and such other facts as may be

                                       4
<PAGE>   5
reasonably necessary to show the reason for and the method of computing such
adjustment. Each such officer's certificate shall be made available at all
reasonable times for inspection by the Holder.

      Section 2.09 Notice of Adjustment. Upon any adjustment of the number of
shares that may be issued upon exercise of this Warrant or the Exercise Price,
the Company shall give notice thereof to the Holder, which notice shall state
the increase or decrease, if any, in the number of shares that may be issued
upon the exercise of this Warrant and the Exercise Price, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.

      Section 2.10 Definition of "Common Stock". As used in this Article II, the
term "Common Stock" shall mean and include all of the Company's authorized
Common Stock of any class as constituted on the date of this Warrant as set
forth below, and shall also include any capital stock of any class of the
Company thereafter authorized that shall not be limited to a fixed sum or stated
value in respect of the rights of the holders thereof to participate in
dividends or the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of the Company.

      Section 2.11 Exclusion of Certain Stock. Notwithstanding anything in this
Article II, no adjustment of the Exercise Price or the number of shares to be
issued upon exercise of this Warrant shall be made upon, (i) the grant of
options under any stock option plan of the Company now existing or hereafter
adopted by the Company (as any such plan may be amended from time to time) or
(ii) the issuance of shares of Common Stock upon the exercise of options granted
under any such plan or (iii) other events where adjustment is not specifically
required by this Warrant.

                                  ARTICLE III.

                              TRANSFER RESTRICTIONS

      Section 3.01 Securities Law Transfer Restrictions. By taking and holding
this Warrant, the Holder (i) acknowledges that neither this Warrant nor any
shares of Common Stock that may be issued upon exercise of this Warrant have
been registered under the Securities Act or any applicable state securities or
blue sky law (collectively, "Securities Laws"); (ii) agrees not to sell,
transfer or otherwise dispose of this Warrant, and agrees not to sell, transfer
or otherwise dispose of any such shares of Common Stock without registration
unless the sale, transfer or disposition of such shares can be effected without
registration and in compliance with the Securities Laws; and (iii) agrees not to
sell, transfer or otherwise dispose of this Warrant or any portion thereof or
interest therein except as otherwise expressly permitted herein. No part of this
Warrant or any portion thereof or interest therein may be transferred, whether
voluntarily, involuntarily or by operation of law, except to a Permitted
Transferee as hereinafter defined. "Permitted Transferee" shall mean a successor
by inheritance or in testate succession to any interest in this Warrant or any
portion thereof and who accepts by written instrument reasonably acceptable to
the Company each of the terms and conditions that govern this Warrant.

                                       5
<PAGE>   6
Without limiting the foregoing, no rights in this Warrant may be transferred for
twelve (12) months after the date of issuance of this Warrant. Any certificate
for shares of Common Stock issued upon exercise of this Warrant shall bear an
appropriate legend describing the foregoing restrictions, unless such shares of
Common Stock have been effectively registered under the applicable Securities
Laws.

      Section 3.02 Provision of Information by Holder. The Holder shall make
available to the Company such written information, presented in form and content
satisfactory to the Company, as the Company may reasonably request, from time to
time, in order to make the determination provided for in Section 3.01.

                                   ARTICLE IV.

                                  MISCELLANEOUS

      Section 4.01 Transfer of Warrants.  No right or interest in this
Warrant shall be transferable except as provided in Article III.

      Section 4.02 Notices. Any notice or communication to be given pursuant to
this Warrant shall be in writing and shall be delivered in person or by
certified mail, return receipt requested, in the United States mail, postage
prepaid. Notices to the Company shall be addressed to the Company's principal
office. Notices to the Holder shall be addressed to the Holder's address as
reflected in the records of the Company. Notices shall be effective upon
delivery in person, or, if mailed, at midnight on the fifth business day after
mailing.

      Section 4.03 No Shareholder Rights.  This Warrant shall not
entitle the Holder to any voting rights or other rights as a shareholder of
the Company.

      Section 4.04  Governing Law.  This Warrant shall be governed by and
construed in accordance with the laws of the State of Arizona.

      Section 4.05 Headings; Interpretation. The section headings used herein
are for convenience of reference only and are not intended to define, limit or
describe the scope or intent of any provision of this Warrant. When used in this
Warrant, the term "including" shall mean "including, without limitation."

      Section 4.06 Successors. The covenants, agreements and provisions of this
Warrant shall bind the parties hereto and their respective successors and
permitted assigns.

      Section 4.07 Integrated Agreement; Modification. This Warrant is a
complete statement of the agreement of the parties with respect to the subject
matter hereof and may be modified only by written instrument executed by the
parties.

                                       6
<PAGE>   7
      IN WITNESS WHEREOF, the Company has caused this Warrant to be issued
effective as of the 19th day of March, 2001.

                                    SAF-T-HAMMER CORPORATION, a Nevada
                                    corporation

                                    By:   /s/ Mitchell A. Saltz
                                          ------------------------------
                                    Name:   Mitchell A. Saltz
                                           -----------------------------
                                    Its:   CEO
                                           -----------------------------

                                       7
<PAGE>   8
                                SUBSCRIPTION FORM

                (TO BE EXECUTED ONLY UPON EXERCISE OF WARRANT)

      The undersigned registered owner of this Warrant irrevocably exercises
this Warrant and purchases __________ shares of Common Stock of Saf-T-Hammer
Corporation, a Nevada corporation, that may be issued under this Warrant and
herewith delivers the sum of $____________ in full payment of the Exercise Price
for such shares, all on the terms and conditions specified in this Warrant. Such
shares are to be delivered to such holder at the address reflected in the
records of the Company unless contrary instructions are herein given.

Deliver certificates to:

________________________

Dated:____________      _____________________________________________
                         (Signature of Registered Owner)

                        _____________________________________________
                        (Street Address)

                        _____________________________________________
                            (City) (State) (Zip Code)

                                       8

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